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4th CS LatAm Commodities CEO/CFO ConferenceMarch, 2016
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2
The information contained in this presentation may include statements whichconstitute forward-looking statements, within the meaning of Section 27A of the U.S.
Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange
Act of 1934, as amended. Such forward-looking statements involve a certain degree of
risk and uncertainty with respect to business, financial, trend, strategy and other
forecasts, and are based on assumptions, data or methods that, although considered
reasonable by the company at the time, may turn out to be incorrect or imprecise, or
may not be possible to realize. The company gives no assurance that expectations
disclosed in this presentation will be confirmed. Prospective investors are cautioned
that any such forward-looking statements are not guarantees of future performance
and involve risks and uncertainties, and that actual results may differ materially from
those in the forward-looking statements, due to a variety of factors, including, but not
limited to, the risks of international business and other risks referred to in the
company’s filings with the CVM and SEC. The company does not undertake, and
specifically disclaims any obligation to update any forward-looking statements, which
speak only for the date on which they are made.
Disclaimer
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3
Pulp and Paper Market2Financial and Operational Highlights3
Agenda
Company Overview
1
Expansion Project – Horizonte 24Dividends5Cost reduction initiatives6
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4
Company Overview
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5
A Winning Player
Port Terminal Pulp Unit
Três Lagoas
Santos
AracruzPortocel
Caravelas
BelmonteVeracel
Jacareí
Superior Asset Combination Main Figures – 2015
Pulp capacity million tons 5.300
Net revenues US$ billion 3.021
Total Forest Base(1) thousand hectares 969
Planted area(1) thousand hectares 568
Net Debt US$ billion 2.821
Net Debt/EBITDA (in Dollars)(2) X 1.78
Source: Fibria
(1) Including 50% of Veracel, excluding forest partnership areas and forest bases linked to the sales of Losango and forest assets in Southern Bahia State.(2) For covenants purposes, the Net Debt/EBITDA ratio is calculated in Dollars.
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6
Fibria’s Units Industrial Capacity
* Veracel is a joint venture between Fibria (50%) and Stora Enso (50%) and the total capacity is 1,120 thousand ton/year
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Worldwide presence
Strong global customer base
Long-term relationships
Focus on customers with stable business
Customized pulp products and services
Sound forestry and industrial R&D
Focus on less volatile end-use markets such as tissue
Efficient logistics set up
Low dependence on volatile markets such as China
Low credit risk
100% certified pulp (FSC and PEFC/Cerflor)
Sales Mix by End Use - Fibria Highlights
Fibria’s Commercial Strategy
Net Revenues by Region - Fibria
Region - 4Q15 End Use - 4Q15
42% 37%43% 43%
35% 36%46% 42% 39% 40%
47% 42% 42% 42%
26%30% 22%
29%31% 31%
19% 23% 27% 27%17% 24% 25%
29%
22% 25% 26%21%
25% 26% 26% 27% 24% 23% 26% 26% 25%20%
10% 9% 10% 8% 9% 8% 10% 9% 10% 10% 10% 9% 8% 9%
3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15
Europe North America Asia Other
50%
35%
15%
Printing &Writing
Specialties
TissueEurope
42%
N.America
29%
Asia20%
LatAm9%
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Pulp Supply Agreement: Puma Project
► Pulp volumes:► Minimum of 900 kt of hardwood for the first 4 years
► 75% of 900 kt for the fifth year (phase out 1)
► 50% of 900 kt for the sixth year (phase out 2)
► Selling price based on the average net price charged byFibria at the Port of Paranaguá (FOB Paranaguá)
► Sales destination: Globally, except for South America
► Operational startup: Mar/2016
► Agreement benefits:
Puma Project
Mutual value creation, with better servicing for both Companies customer’s base
Logistics and commercial
structure synergies;
Ensure sales volumes;
Ensure pulp market access with
Klabin brand.
Logistics and commercial
optimization and synergies;
Support customers’ growth and
enhance customers’ needs;
Potential development of new customers.
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9Pulp and Paper Market
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The “better than expected scenario” has become a reality again in
2015…
BHKP CAPACITY CHANGES
EXPECTED SCENARIO FOR 2015 IN DEC’14 REALIZED SCENARIO IN 2015
1,095
-315
-65
115
85
30
200
750
265
750
400
BEKP demand growth**
Net
Possible closures*
Ence Huelva
April Rizhao
Sappi Cloquet
Old Town (Expera)
Portucel Cacia
Eldorado
CMPC Guaiba II
Oji Nantong
Montes del Plata
Suzano Maranhão
-400 to -800
1,415 to 1,815
*Based on annual closures average (400,000 to 800,000 t/yr)**Source: PPPC Outlook for Eucalyptus Market Pulp December 2014
1,232
1,450
-400
-315
-190
115
40
40
30
200
500
265
750
400
BEKP demand growth**
Net
Unexpected Downtimes
Ence Huelva
April Rizhao
Sappi Cloquet
Ence Navia
Old Town (Expera)
Portucel Cacia
Eldorado
CMPC Guaiba II
Oji Nantong
Montes del Plata
Suzano Maranhão
Indonesia, China,Uruguay and Brazil
**Source: PPPC Market Pulp World 20
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… and so has been the price scenario
BHKP Delivered to Europe (USD/t)
735
721
709
738
726
750
781
804 802
784
1Q15 2Q15 3Q15 4Q15 Annual 2015
Consultants average at the end previous year Realized PIX/FOEX price
Consultants: Hawkins Wright, RISI and Brian McClay (published in the end 2014 for 2015 prices)
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Better worldwide macroeconomics are the key drivers… But thespecial focus is on Europe
Real GDP % Annual Growth
Source: International Monetary Fund, World Economic Outlook Database, January 2016
3.4
-0.8
2.2
7.7
3.3
-0,3
1.5
7.7
3.4
0.9
2.4
7.3
3.1
1.5
2.4
6.9
3.5
1.7
2.4
6.3
World Euro Area USA China
2012 2013 2014 2015 2016
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But the special focus is on Europe
Hardwood and Eucalyptus Shipments (000 t and % annual growth)
Source: PPPC World 20
-0.3%
-0.8%
3.3%
3.8%
-0.8% -0.6%
6.0%
5.0%
-200
0
200
400
2012 2013 2014 2015
BHKP BEKP
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So, what can we expect for 2016?
BHKP CAPACITY CHANGES
EXPECTED SCENARIO FOR 2016 IN NOV’15 FIBRIA’S EXPECTED SCENARIO FOR 2016
930
-120
-55
-90
-40
30
660
800
BEKP demand growth**
Net
Possible closures*
APRIL Kerinci
Verso Wickliffe
Woodland
Old Town (Expera)
Altri Celbi
Klabin
CMPC Guaiba II
-400 to -800
385 to 785
1,200
*Based on annual closures average (400,000 to 800,000 t/yr)**Source: PPPC Outlook for Eucalyptus Market Pulp May 2015 (930kt) andFibria’s estimates
1,200
1,165
-200
-120
-55
-90
-40
180
30
660
800
BEKP demand growth**
Net
Possible closures*
APRIL Kerinci
Verso Wickliffe
Woodland
Old Town (Expera)
APP South Sumatra
Altri Celbi
Klabin
CMPC Guaiba II
Positive Supply/Demand Balance!
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1,232 kt
90 kt330 kt
611 kt201 kt
7%
5%5%
14%
4%
Total North
America
Western
Europe
China Others
Shipments of Eucalyptus Pulp
(1) Source: PPPC World 20 – January/2015
Global Market BEKP Demand
Paper Capacity increase in China
2014 2015 2016
FORECAST REALIZEDPREVIOUSFORECAST
LATESTFORECAST
LATESTFORECAST
Woodfree 256 256 760 980 1,000
Tissue 1,390 1,278 1,365 965 568
Cartonboard 2,100 1,326 730 900 630
Total 3,746 2,860 2,855 2,845 2,198
Source: Fibria and Independent Consultants
2015 vs. 2014(2)
(1) Source: PPPC World 20 – December/2014 (2) Source: PPPC World 20 – December/2015
1,734 kt
92 kt
386 kt717 kt
537 kt
11%
5%
6%
20%13%
Total North
America
Western
Europe
China Others
2014 vs. 2013(1)
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Technical Age and Scale in the Pulp IndustryFurther closures are expected due to lack of adequate investments in the industry…
Hardwood (BHKP) Producers – Integrated and MarketPulp Mills
Softwood (BSKP) Producers – Integrated and MarketPulp Mills
STRONG
Weighted average
technical age 12.3 years
Weighted average
capacity 1,350,000 t/a
Aracruz
Três Lago as
Veracel
Jacareí
WEAK
STRONGWeighted averagetechnical age 21 years
Weighted average
capacity 534,000 t/a
North American Pulp Mills Other Pulp Mills
WEAK
More than 6.6 million tons of capacity above 25 years and with annual capacity below 500,000 t/y.
PM Capacity, 1000 t/a
0
500
1000
1500
2000
051015202530
Technical age, years
PM Capacity, 1000 t/a
0
100
200
300
400
500
600
700
800
900
1000
051015202530
Technical age, years
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Source: PPPC and Fibria
Closures of Hardwood Capacity Worldwide
(000 ton)
Capacity closures DO happen
-910
-85
-1,260
-1,180
-540-500
-105
-1,085
-445
-315
-580
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016-2017 E (1)
(1) As of January 2016 | 2016: -40kt Old Town (USA), -90kt Woodland (USA), -55kt Verso Wickliffe (USA), -120 April Kerinci (Indonesia) | 2017: -275kt Arauco Valdivia (Chile)
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Even more competitive cash production cost w/ H2BHKP (US$/t)
Source: Hawkins Wright (Price Forecast January 2016) and Fibria’s 4Q15 Earnings Release - FX considered by the consultant at R$/US$3.80. H2 cash costwas estimated according to weighted average cost, after mill balance, converted at R$3.80. Includes energy sales.
468414
321 348 295 265179
163 144
7087
97 2449
50
49 47
538501
418
372 344315
228364
83
2126379
China USA Canada Iberia Indonesia Chile/Uruguay Brazil Fibria 2015 Fibria w/ H2
Cash Cost (US$/t) Delivery CIF Europe
BHKP (US$/t)
Interest
Capex
SG&AIncome Tax
2,075 1,170 1,035 2,290 3,700 4,795 15,270 Total: 30,335BHKP
capacity(000’ t)
Working Capital
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Gross capacity addition should not be counted as the only factorinfluencing pulp price volatility….(1)
List Price bottoming at US$650/t in 2011 and US$724/t in 2014
C a p a c i t y ( 0 0 0 t o n )
0,0
0,2
0,4
0,6
0,8
1,0
1,2
1,4
1,6
1,8
2,0
0
100
200
300
400
500
600
700
800
900
1.000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Valdivia
APP
Hainan
Veracel Nueva Aldea
Santa Fé
Mucuri
Fray
Bentos
Kerinci
PL3
Três
Lagoas
Rizhao
APP Guangxi
Chenming
Zhanjiang
EldoradoMontes
del Plata
Maranhão
Guaíba II
APP South
Sumatra(2)
Klabin
Oji
Nantong
Horizonte II
B H K P p r i c e s - C I F E u r o p e
( U S $ / t o n )
(1) Source: Hawkins Wright , Poyry and Fibria Analysis. Pulp price estimates according to Hawkins Wright (Dec/15), Brian McClay (Feb/16) and RISI (Feb/16)(2) Partially integrated production.
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In the last 15 years, pulp volatility has been just 8%...why?
► Market price closer to producer’s marginal cost
► The marginal cost producers are based in Europe and North America
► Flattish industry cost curve
► Higher flexibility to adjust supply side during imbalanced market
► Lower dependency on Asian market (~25%) compared to hard commodities (70%+)
► Market end users are linked to consumer goods, such as tissue
► Incipient pulp price futures market and low liquidity
Source: Bloomberg – March 22th, 2016
0
40
80
120
160
D e c - 9 9
M a y - 0 0
O c t - 0 0
M a r - 0 1
A u g - 0 1
J a n - 0 2
J u n - 0 2
N o v - 0 2
A p r - 0 3
S e p - 0 3
F e b - 0 4
J u l - 0 4
D e c - 0 4
M a y - 0 5
O c t - 0 5
M a r - 0 6
A u g - 0 6
J a n - 0 7
J u n - 0 7
N o v - 0 7
A p r - 0 8
S e p - 0 8
F e b - 0 9
J u l - 0 9
D e c - 0 9
M a y - 1 0
O c t - 1 0
M a r - 1 1
A u g - 1 1
J a n - 1 2
J u n - 1 2
N o v - 1 2
A p r - 1 3
S e p - 1 3
F e b - 1 4
J u l - 1 4
D e c - 1 4
M a y - 1 5
O c t - 1 5
M a r - 1 6
BHKP - FOEX Europe (base 100) CPI (base 100)
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Lowest volatility among commodities
Source: Bloomberg – March 24, 2016
2535455565758595
105
115125135145155165175185195205215225
J a n - 1 2
M a r - 1 2
M a y - 1 2
J u l - 1 2
S e p - 1 2
N o v - 1 2
J a n - 1 3
M a r - 1 3
M a y - 1 3
J u l - 1 3
S e p - 1 3
N o v - 1 3
J a n - 1 4
M a r - 1 4
M a y - 1 4
J u l - 1 4
S e p - 1 4
N o v - 1 4
J a n - 1 5
M a r - 1 5
M a y - 1 5
J u l - 1 5
S e p - 1 5
N o v - 1 5
J a n - 1 6
M a r - 1 6
Iron Ore Soy Bean Crude Oil Sugar BHKP - FOEX Europe Exchange Rate (R$/US$)
113
198
7668
41
Low volatility of hardwood pulp price, even thoughnew capacities have come on stream during the period.
40
100 = January 1, 2012
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The only commodity with lower volatility than FX
Historical Volatility of Commodities (US$)
Since 2009
22
37%35% 34%
27%25% 26% 25% 24%
16%
14%
6%
WTICrude Oil
Sugar Nickel Copper Soy Iron Ore Ibovespa LMEMetals
Cattle FX FOEX PIXBHKP
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E h 5% d i ti f th R l i EBITDA b d
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Each 5% depreciation of the Real increases EBITDA by aroundR$420m and FCF by R$550m
815
1,488
1,173 1,1531,295 1,185
1,560
2009 2010 2011 2012 2013 2014 2015
Exchange Rate
Average (R$/US$)
EBITDA Margin
EBITDA (US$ million)
Fibria net pulp price(US$/t)
Fibria net pulp price(R$/t)
2.00 1.76 1.67 1.95 2.162.35
3.333.99(1)
456
670 639 581 610 572582
554(2)
29%
40%34% 36%
40% 39%
53%
912 1,179 1,067 1,133 1,3111,344
1,9512,210
(1) According to Focus Report (Br azilian Central Bank – March 24, 2016) I (2) 2016 market consensus
2016 E
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Cash Production Cost (US$/t) – 4Q15
186171
148
11
(56) 610
113
(14)(10)
4Q14 Inflation FX Lowerenergy price
Maintenancedowntime
Non recurringwood
Non recurringenergy
consumption
Cash cost4Q15
Total nonrecurring
Maintenancedowntime
4Q15 recurringcash cost
ex-downtime
Management initiatives gains partially offset the inflation impact
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Fibria Cash Production Cost(1) (US$/ton)
Consistentlycontrolling the
cashproduction
cost
26
Cash Production Cost in dollars saw a decrease over the past 7 years
231
264281
242
234 220
186
2009 (2) 2010 (2) 2011 2012 2013 2014 2015
(1) Constant Currency (2) Excludes Conpacel
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Net Results (US$ million) – 2015
1,600
107
(909)
(249)(101)
-0,227
155
-
(567)
178
AdjustedEBITDA FX Debt MtMHedge Net Interest Deprec., amortiz.and depletion
Taxes Others Net Income
Non-recurringeffects
(1) Includes other exchange rate/monetary variations, other financial income/expenses and other operating income/expenses.
∆∆(1)
Dividend proposal of US$90 million, representing 84% of net income.
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Free Cash Flow
28(1) Before expansion capex
US$ million
EBITDA Margin
Average FX
-256
-77
-7
125
29 77
194
84113
53
329
4
11151
103130
112
317225
2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15
34% 33% 28% 30% 37% 37% 41% 39% 39% 41% 42% 41% 35% 35% 45% 50% 50% 56%
1.60 1.63 1.80 1.77 1.96 2.03 2.06 2.00 2.07 2.29 2.27 2.37 2.23 2.27 2.55 2.87 3.07 3.54
54%
3.84
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Free Cash Flow(1) – 2015
US$ million
1,600
859636
(484) (89)(151) (23) 6
( 223 )
AdjustedEBITDA
Capex(ex-H2 project &
land deal)
NetInterest
WorkingCapital
Taxes Others FCF(ex-H2 project &
land deal)
CapexH2 &
land deal
FCF
(3)
(1) Notconsidering dividend payments, capex related to theHorizonte 2 Project and theland acquisition in December 2015.
(2) Not considering dividendpayments.
(3) Includes other financial results.
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ROE and ROIC (US$)
30
ROE = Adjusted EBIT(1)/ Equity before IAS 41(2)
4.8%3.4%
5.7% 6.2%
25.1%
32.0%
2011 2012 2013 2014 2015 Annualized4Q15 US$
ROIC = Adjusted EBIT(3)/ Invested Capital before IAS 41(2)
(1) Adjusted EBITDA – CAPEX – Net Interest – Taxes(2) International accounting standards for biological assets.
(3) Adjusted EBITDA – CAPEX – Taxes
3.9%
6.9%9.2%
8.0%
22.8%
29.2%
2011 2012 2013 2014 2015 Annualized4Q15 US$
1.67 1.95 2.16 2.35 3.34 3.84 1.67 1.95 2.16 2.35 3.34AverageFX
3.84AverageFX
Capital Structure: Fibria has achieved the lowest leverage ratio among
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Capital Structure: Fibria has achieved the lowest leverage ratio amongits Latin American peers
Net Debt/EBITDA (x)(1)
Fibria Arauco CMPC Klabin Suzano
S&P BBB-/Stable BBB-/Stable BBB-/Stable BBB-/Negative BB+/Stable
Moody’s Ba1/Negative Baa3/Stable Baa3/Stable - Ba2/Positive
Fitch BBB-/Stable BBB/Stable BBB+/Stable BBB-/Stable BB/Positive
(1) Fibria’s historical data in BRL.
2.12.7
6.3
3.23.0
4.2
4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15
Fibria Suzano Klabin CMPC Arauco Eldorado
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One of the best performances among Brazilian corporate issuers(1)
(1) G-spread on March 24, 2016
381 399 401
445 450 463517 537
630
801 818
Brazil Fibria BRF Suzano Globopar Klabin Embraer Braskem Vale Gerdau Petrobras
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200
400
600
800
1.000
1.200
1.400
2010 2011 2012 2013 2014 2015
Fibria 2020 Fibria 2021 Fibria 2024
Interest expense, leverage and average cost of debt in US$ Historical G-spread (bps)
Strong credit quality
7.29
4.11 4.25
3.32
2.60 2.41
1.78
Leverage(x)
6.3 5.95.5
5.24.6
3.4 3.3(1)
473414 408
350
268200
141
2009 2010 2011 2012 2013 2014 2015
Interest Expense(US$ million)
Cost of debt (%)
BBB- BBB- Ba1
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34Expansion Project – Horizonte 2
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• Follow the growth of strategic customers
• Developing new customers
• Distribution to new geographic markets
• Efficiency and competitiveness gains in logistics
• Higher quality in customer service
• Greater ability to capture new expansion market windows
• Strong M&A position
Competitiveness
Commercialpositioning
Long-term growthpotential
What is the importance of growth for Fibria?
• Wider fixed costs dilution
• Cost curve position improvement
• Greater bargaining power with suppliers
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Why expand Três Lagoas?
• Brownfield Project, synergies with currentoperations
• Modern plant, prepared for potentialexpansion
• Availability of wood and low average
distance from forest to mill
• Forest based on the optionality concept andprioritizing lease and partnership models
• Additional energy surplus of 120 MWh
Start-up: 4Q2017
Capacity: 1.85 million tons
ESTIMATED BHKP CAPACITY RANKING 2017 (000T)
Source: Poyry and Fibria Analysis (as of May 2015)
0 2000 4000 6000 8000
OthersKlabin
Domtar
Pulp Mill Holding
Lwart
Portucel Soporcel
Georgia-Pacific
Resolute
Verso
Nippon Paper
Mondi
Oji
MitsubishiMarubeni
IP
Altri
ENCE
Cenibra
Arauco
Stora Enso
UPM
Eldorado
APP
Suzano
RGE/APRILCMPC
Fibria 7,950
Current Capacity
New Capacity
New Capacity – Klabin Agreement
New Capacity – Horizonte II Project
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Pulp sales destination: Fibria growing where the market grows
(1) Considers 4Q15 last twelve months. | (2) Includes Klabin’s sales volume
37%
36%
43%
24%
19%25%
8%8%
Total sales volume distributionafter H2 start up(2)
Current net revenue distribution(1)
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Schedule
Startup
Utilities clearanceand commissioningL1 interconnections
during maintenancedowntime
Initial hiring of harvestworkers
Hiring of operationalteam
Negotiations withconcession holders and
Port of Santos tendering
2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17
2015 2016 2017
Beginning ofinfrastructure and
purchase of the TGs
Purchase of theindustrial plants
Beginning of construction
Beginning of assembly
Beginning of forest
machinery deliveries
Beginning ofharvest
Definition of outboundlogistics formats
Updated video
H2 P j t ill h th f t b d f th t t
https://www.youtube.com/watch?v=h3zALXVhRg0&feature=youtu.behttps://www.youtube.com/watch?v=h3zALXVhRg0&feature=youtu.be
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H2 Project will have the forest base ready for the start-up
Forestry base required:
H1: 120,000 ha
H2: 174,000 ha
Total: 294,000 ha
Forestry Logistics
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y gLow average distance from forest to mill
FOREST MILL
95 km
H1 + H2 consolidated
Outbound logistics
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Outbound logisticsFibria has logistical alternatives on a competitive basis
Ports Highways Railroads Waterways
Data Collection / PreliminaryAnalysis Logistics Costs
Opex - Rates Capex
Qualitative Modal conditions
Analysis
Mato Grosso
Mato
Grosso do
Sul
Goiás
Brasilia
Expansion CAPEX update
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From US$2.5 bi to US$2.2 bi
0.65
0.32
0.05
0.20
2.5
2.2
Original Revised
BRL EUR USD and others
72%
26%
2%
72%
19%
9%
FX and inflation partially offset by the negotiation with suppliers
CAPEX (US$ billion)
3%
60%
33%
3%1%
2015 2016 2017 2018 2019 andthereafter
Timetable
F di
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Funding
Amortization Schedule – 4Q15 Proforma with TLS II – US$ million
Cost and maturity:
4Q15 4Q15 + H2
Average Cost (US$ p.a)
Average Maturity (years)
3.3%
4.3
2.8%
5.0
H2
2.0%
6.3
(1) Considering swap transactions. | (2) Debt FX 3Q15: 3.9729 / FX considering new funding for the TLS II Project: 3.90
275 274
581
1.113
482
668
140 126
721
115 10345 13
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
BNDES Bond PPE NCE ACC/ACE CRA ECA Outros FDCO Total
Capex H2: 1,350 668
F di S (1)(2)
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Funding – Sources(1)(2)
(1)Cash on hand above minimum cash balance at end of Dec-2015
(2)Working capital to be released in 2016 and 2017 in commercial deal with Klabin
Even with expansion capex at current levels of FX, leverage ratios cancontinue to decrease
R$ 8.7 billion
BNDES CRA FDCO ECAs Banks WK release Total
Rating agencies understand that the Project will not jeopardize
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g g j j pFibria’s credit metrics
“We expect Fibria to continue benefiting from higher operating cash flows whichwould allow it to enlarge its Três Lagoas industrial complex while keeping its debt at
reasonable levels for a low investment-grade rating”
“Fitch’s base case, which assumes that the company builds a new pulp mill (TrêsLagoas II) starting in 2015 and uses net pulp prices of between USD575 and USD675
per ton during the construction period, results in net leverage reaching 3.5x(1)
. Netleverage would quickly decline to around 2.5x(1) once the mill becomes operationalin the second half of 2017”
(1) According to rating agency methodology
Project financials at a glance
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Project financials at a glance
UNIT R$ US$
Pulp production/year k tons 1,850 1,850
Expansion capex(1) $ billion 8.7 2.2
Expansion capex(1) $/t 4,702 1,204
Sustaining capex(2)
$/t 193 49
Cash cost(3) $/t 341 87
Energy surplus MWh 120 120
(1) Includes chemical leasing and investments in order to increase capacity to 1,850 kt/year.(2) Estimated sustaining capex in perpetuity considering capacity of 1,850 kt/year.
(3) Estimated weighted average cost, after mill balance. Includes energy sales .
We don’t think that such competitiveness is easily replicable, since the
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Although some potentialbrownfields are listed,
there are significantchallenges.
scenario is becoming more complex…
Land
Infrastructure/Logistics
Certified wood availability
Environmental requirements
Public funding constraints
Governance standards
Cost of capital
Credit rating
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48Dividends
Policies approved by the Board of Directors
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►Indebtedness and Liquidity►Market Risk Management
►Risk Management
►Corporate Governance
►Related Parties Transactions
►Anti-Corruption►Information Disclosure
►Securities Trading
►Antitrust
►Genetically Modified Eucalyptus
►
Dividend Policy►Sustainability
Policies approved by the Board of Directors
Approval of Dividend Policy
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Approval of Dividend Policy
►Proposed dividends based on cash generation, taking into considerationthe company’s strategic planning and in line with its policies, notably the
Indebtness and Risk Management policies.
►Preserving Investment Grade.
Commitment to Corporate Governance best practices.
Extraordinary dividend if Policy criteria are met.
Dividends
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Dividends
Dividend yield as of Dec, 31, 2015 = 7.5% (R$) | 8.3% (US$)Dividend yield as of Dec, 31, 2014 = 11.6% (R$) | 8.7% (US$)
OGM: Dividend
distribution approval:
minimum compulsory
+ additional
April 28, 2015 May 14, 2015
Dividend Paymentof
US$49 million
EGM: Interim Dividend
Payment Approval
Nov. 30, 2015 Dec. 9, 2015
Dividend Paymentof
US$532 million
Oct. 22, 2015
Dividend Policy
Approval
April 27, 2016
Dec. 17, 2015
Dividend
distribution
proposal of US$78
million(2)
approved by the
Board of Directors
OGM to approve
dividend distribution
of US$80 million(1)
(1.1% of dividend yield
as of Dec, 31, 2015).
Mid-May, 2016
Dividend payment of
US$80 million.
2015
2016
Mid-November, 2016
Extraordinary
dividend
appraisal
Mid-December, 2016
Extraordinary
dividend payment
(if approved)
(1) Considering March 7, 2016 FX – R$/US$3.7714
Dividends vs Leverage
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Dividends vs. Leverage
0
148
0
2.000
2,30
1,95
1,58
1,78
0,00
0,50
1,00
1,50
2,00
2,50
1T15 2T15 3T15 4T15
0,0
500,0
1.000,0
1.500,0
2.000,0
2.500,0
Dividends (R$ million) Leverage (x)
Historical Dividend Yield(1)
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Historical Dividend Yield( )
(1) Source: Bloomberg – Financial Analysis - Multiples
Considering
Market Capas of December,31st, 2015
Best dividend yields of 2015 among Brazilian corporate issuers
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Best dividend yields of 2015 among Brazilian corporate issuers
Source: Economática – the dividend yield calculation considers share price at the beginning of 2015
Dividends pershare (R$)
Dividend Yield(%)
Cesp 4.85 20.78
Fibria 3.88 11.60
Santander BR 0.46 9.81
Qualicorp 1.89 7.02MRV 0.39 5.55
BBSeguridade 1.68 5.53
TelefBrasil 2.73 5.32
Natura 1.48 4.67
Braskem 0.61 4.64
CSN 0.41 4.48
Fibria is able to create value for its shareholders with capital discipline
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Fibria is able to create value for its shareholders with capital discipline
INDUSTRY
CONSOLIDATION ?
PULP
Growth with discipline
Best portfolio of projects
DIVIDENDS
BIO-ENERGY AND
OTHER OPPORTUNITIES
Complementary to pulp
Portocel
Land and forest
FREE CASH FLOW
WITHOUT JEOPARDIZING CREDITMETRICS
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56Cost reduction initiatives
Structural Competitiveness
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Structural Competitiveness
1. Third-party wood reduction
2. Forestry operations productivity
3. Industrial
NPV: US$0.4 billion
NPV: US$0.6 billion
NPV: US$0.1 billion
Total : US$1.1 billion
1. Third-party wood reduction
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0%
20%
40%
60%
80%
100%
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
. d pa ty ood educt o
Wood supply recovering to normal condition
► Peaking in 2016;
► Returning to 2012’s levels by the end of 2017;
► NPV of R$1.4 billion from peak to normalized level.
Estimated level for
2015
Third-party wood decrease will benefitopex and capex
10
1. Third-party wood reduction
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► Most part of the standing wood was already paid
► Despite the higher forest to mill distance, the wood from Losango is less expensive than the
available wood from around Espírito Santo and Bahia States
► Positive impact over industrial costs due to better productivity
11
Losango
2. Forestry operations productivity
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The distribution costs by classes helps us to apply resources
in order to optimize wood production
10%
20%
40%
20%
10%10%
36%33%
15%
6%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
01 - Diamond 02 - Gold 03 - Silver 04 - Bronze 05 - Lead
Current effective area Future effective area
2. Forestry operations productivity
CLASSIFYING THE FOREST BASE BY CATEGORIES
12
Structural change improving competitiveness
2. Forestry operations productivity
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Possible Restrictions
Declivity
0: Higher than 35°
1: Btw 24°and 35°
2: Btw 0° and 24°
ConservationAreas
0: Within CAs(1)
1: Within EPA(2) and
EBZ(3)
2: Out of EPAs and
EBZ
MunicipalRestrictions
0: Total restrictions
1: Partial restrictions
2: No restrictions
EPA Altitude
0: Higher than1800m
1: Lower than
1800m
Urban Zones
0: Urban Zones
1: Outside urban
areas
Remnants of native
vegetation
0: Remnants areas
1: Outside remnants
areas
Possible Impediments
Possible combinations
X 0, 1 and 2, removed;
4 e 8, high potential(1) ConservationAreas
(2) EnvionmentalProtection Areas
(3) Environmental Buffer Zones
13
Identifying opportunities based on these combinations
2. Forestry operations productivity
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Roads
Transportation
SilvicultureHarvest
14
Cost and Capex KPI’s were also included in this geo-model
2. Forestry operations productivity
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Mixed Harvest Mechanization (Hilly areas)
► Mixed cutting operation with high
demand for MO and high risk to safety;
► Harvest limitations in areas above
24 degrees;
► Increase annual capacity to harvest in
areas up to 35 degrees , previously "locked up" by
harvesting capacity of manual staff;
► NPV: R$71 million
► Capex: R$5 million
► Operational since Aug 2015
PROJECT DESCRIPTION (JACAREÍ UNIT)
15
Harvest
2. Forestry operations productivity
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PIFF
► Freight cost reduction;
► Increased load box for timber/woodchiptransport
► Use of lightweight steel;
► Operational risk reduction (flipping);
► Investment: R$33 million
► NPV: R$139 million
► Startup: 2015 / 2016
PROJECT DESCRIPTION (ARACRUZ, JACAREÍ AND TRÊS LAGOAS UNITS)
Timber transportation Woodchip transportation
16
Transportation
2. Forestry operations productivity
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Maritime Wood Shipping Project
► Capex and Opex reduction;
► Increase in cargo handling due to increase in
stack height volume
► Reduction in heavy truck road traffic
► Capex: R$38 million
► NPV: R$95 million
► Startup: Jan/2017
PROJECT DESCRIPTION (ARACRUZ UNIT)
17
Transportation
l h i f i d i i
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10%
30%
50%
70%
90%
100%
0%
20%
40%
60%
80%
100%
2015 2016 2017 2018 2019 2020
2. Structural change in forestry operations productivity
• Structural cost reduction of R$170 million per year (Capex + Opex) in 2020;
• NPV of approximately R$2 billion
• Seek opportunities for purchase / lease of more attractive areas, divest from unattractive land/forest, as well as the implementation of
technologies that will lead us to the structural cost
NPV Expected Curve
18
3 I d i l i d i h d l h
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3. Industrial: maintenance downtimes schedule change
► Regulatory Standard 13 (Boiler and Pressure Vessel Inspection) extended the maximum period between
recovery boiler inspections from 12 to 15 months.
► Fibria was the first company to use the extended period benefit
► NPV: R$385 million
19
1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
Mills
Aracruz A
Aracruz B
Aracruz C
Jacareí
Três Lagoas
Veracel
12 months 15 months
No maintenance downtime
No maintenance downtime
No maintenance downtime
No maintenance downtime
No maintenance downtime
2014 2015 2016 2017 2018
3 I d t i l Bi l i l Sl d D
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Biological Sludge Dryness Process
3. Industrial: Biological Sludge Dryer
► Variable cost reduction associated
with the disposal of sludge operations
in external landfill
► Capex: R$18 million
► NPV: R$100 million
► Startup: Dec./2016
PROJECT DESCRIPTION (JACAREÍ UNIT)
Operational Flow –
Conditioning and biological sludge burn
•00Effluent+Sludge
Aeration Tank
Biological
Sludge Tank
•00Biomass Pile
Sludge Dryer
Biomass
Boiler
Sludge drying and burn in biomass boiler
20
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69Back up
Fibria’s tax structure
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Fiscal - annual adjustment
Benefit Amount Maturity
Goodwill(Aracruzacquisition)
Annual tax deduction:US$23 million (tax)
Remaining Balance Sept/15:US$ 0.213 billion (base)
2018
Forestry Capexin Mato Grossodo Sul state
2015 tax deduction relatedto depletion: US$9.4 million
Undefined
Tax loss carry forward and tax credits
Benefit Amount
Tax losscarryforward
Balance up to Dec./15: US$33million (base)
Accumulated taxcredits
Balance Dec./15:- PIS/COFINS: US$186 million
- Withholding tax (IR and CSLL):R$195 million
- Befiex: US$91 million
- Reintegra: US$23 million
2010 2011 2012 2013 2014 2015
US$ 9 million US$ 2 million US$ 8 million US$ 14 million US$ 12 million US$ 23 million
TAX BENEFITS
TAX PAYMENT (cash basis)
(1)
(2)
(1) Considering FX 3.9048 | (2) Considering average FX for the period.
Leadership Position
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71(1) FiberConsumption, Recycled Fiberand Pulp: RISI | Market Pulp, Hardwoodand Eucalyptus: PPPC Global 100 ReportDecember2015
Recycled Fiber
242 million t
46% 54%
59%
18% 82%
59% 41%
41%
30% 70%
25%75%
Fiber Consumption
412 million t
Pulp
169 million t
Chemical
140 million t
Mechanical
30 million t
Integrated Mills
83 million t
Market Pulp
57 million t
Hardwood
31 million t
Other Eucalyptus
Pulp producers:
16 million t
Softwood/Other
26 million t
Acacia/Other
9 million t
Eucalyptus
21 million t
Industry Outlook(1)
Global Market Pulp Demand
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Demand growth rateHardwood (BHKP) vs. Softwood (BSKP) (000 ton)
Hardwood demand will continue to increase at a faster pace than Softwood
Source: PPPC report (Sept. 2015) Source: PPPC reports. Excludes Sulphite and UKP market pulp (Sept./15)
0
5.000
10.000
15.000
20.000
25.000
30.000
35.000
40.000
1 9 9 8
1 9 9 9
2 0 0 0
2 0 0 1
2 0 0 2
2 0 0 3
2 0 0 4
2 0 0 5
2 0 0 6
2 0 0 7
2 0 0 8
2 0 0 9
2 0 1 0
2 0 1 1
2 0 1 2
2 0 1 3
2 0 1 4
2 0 1 5
2 0 1 6
2 0 1 7
2 0 1 8
2 0 1 9
Hardwood Softwood
2014 - 2019 CAGR:Hardwood: +2.5%Softwood: +0.8%
000 ton 1999 2009 2019Growth1999-2009
Growth2009-2019
Hardwood 16.3 24.8 33.8 52% 36%
Eucalyptus 6.0 15.9 24.1 165% 52%
Softwood 19.0 21.4 24.9 13% 16%
Market Pulp 35.3 46.2 58.7 30% 27%
Paper Production – Runnability with BHKP
Source: RISI conference, August 2014.
Benefiting From China’s Growth
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World Tissue Consumption, 1991-2013 (3)
Per Capita Consumption of Tissue by World Region (3)China's Share of Market Pulp (2)
24
15 15
12
7 65
1
N.
America
West
Europe
Japan Oceania East
Europe
LatAm China Africa
10% 10%12% 14%
21%
17%
22%23% 23%
24%25%
0
2
4
6
8
10
12
14
0%
5%
10%
15%
20%
25%
30%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Eucalyptus Hardwood Total % Compared to the global Market Pulp
(Kg/capita/year)
(million t) (kg/person/year)
Between 2005 and 2015,
the Chinese market share
of eucalyptus shipments
increased by 20 p.p. (total
market pulp: + p.p.)
0
5
10
15
20
25
30
35
1991 1996 2001 2006 2009 2010 2011 2012 2013
N.America W.Europe E.Europe L.America
Middle East Japan China Asia FE
Oceania Africa
LTM GrowthRate +4.2%
(1) PPPC – Pulp China – Flash Report – December 2015
(2) PPPC – W20. Coverage for chemical market pulp is 80% of world capacity
(3) RISI
(million t)
8.724
4.301
2.154 2.029
166 59 15
9.185
4.898
2.041 1.849
201 189 8
BHKP Total Latin
America (1)
Indonesia Others(2) USA Canada Western
Europe
2014 2015
Latin America is the
leading exporter of BHKP
to China, accounting to
approximately 53% ofChina's total imports in
2015.
(‘000s t)
(1) includes South Africa and New Zealand. | (2) Includes China, Japan, Malaysia, Russia, Thailand and Vietnam.
China’s Hardwood Imports of BHKP by Country (1)
Growth rate Chinese GDP vs. Eucalyptus Shipments to China
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yp p(Sept-09 = base 100)
Source: Bloomberg and PPPC.
180
-
50
100
150
200
250
China GDP Eucalyptus Shipments
76
Commodities Differentiation
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China GDP breakdown
China commodity demand - basis 100
49% 49% 48% 49% 49% 50% 50% 52% 51% 53% 53%
44% 47% 48% 48% 48% 48% 48% 46% 47% 45% 45%
8% 4% 4% 3% 3% 2% 2% 2% 2% 2% 2%
2008A 2009A 2010A 2011A 2012A 2013A 2014A 2015E 2016E 2017E 2018E
Consumption Investment Net Exports
2008A 2009A 2010A 2011A 2012A 2013A 2014A 2015E 2016E 2017E 2018E
Corn Soybeans Wheat Crude oil Iron ore Sugar BHKP
100
248
201194172
152
124115
Source: Itaú Macroeconomic Department and PPPC – Oct/15
Global Paper Consumption
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1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Developed Markets Emerging Markets
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Developed Markets Emerging Markets
CAGR 1996 – 2006Developed Markets: + 1.7%Emerging Markets : + 6.0%
85,291
117,611
15,548
37,474
P&WConsumption(000 tons)(1)
TissueConsumption(000 tons)(1)
114,507
CAGR 2007 – 2016Developed Markets: - 4.0%Emerging Markets : + 4.1%
CAGR 1996 – 2006Developed Markets: + 2.4%Emerging Markets : + 6.9%
CAGR 2007 – 2016Developed Markets: + 1.4%Emerging Markets : + 6.7%
26,877
Source: RISI
Global Market BEKP Demand
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Shipments of Eucalyptus Pulp
(1) Source: PPPC World 20 – January/2015
CAGR 2012-2015
3,787kt
387 kt662 kt
1,980 kt
758 kt
8%
7%3%
19%
6%
Total North America Western Europe China Others
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