Citi 18th Annual Latin America Conference
March 2010
1
Disclaimer
The information contained in this presentation may include statements which constitute
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.
2
Agenda
The Company
Market Positioning
Pulp and Paper Market
4Q09 Financials
Recent Events
3
The Company
4
VCP and Aracruz Merged to Create Fibria
Shareholder Structure
Votorantim
Industrial S.A.
BNDESPar
Free Float
33.6% (1)
29.3%
37.1%
50.0%
50.0%
Veracel
Celulose S.A.
Conpacel
Present value of R$4.5 billion of announced post-merger synergies
Up to 2012, 90% of actions to extract synergies are expected to be in place
Logistics
Tax
Commercial
Others
6%2%
11%
27%
Industrial
15%
23%
16%
SG&A
(1)
Forestry
Position as of Dec 30, 2009. BNDESPar has 21% linked to a shareholder’s agreement with VID during the first 3 years, and 10.9% during the following 2 years.
5
Improved Corporate Governance
Board of Directors
José Luciano Penido
Board Advisory Committees
Chairman of the Board
Raul Calfat
Indicated by Votorantim
Wang Wei Chang
Indicated by Votorantim
João Miranda
Indicated by Votorantim
Alexandre D’Ambrosio
Indicated by Votorantim
Armando Mariante Carvalho Junior
Indicated by BNDES
Eduardo Rath Fingerl
Indicated by BNDES
José Armando de Figueiredo Campos
Independent Member
Alexandre Gonçalves Silva
Independent Member
Auditing

Personnel and Remuneration

Finance

Sustainability

Executive Board
Board of
Directors
CEO
Carlos A. Aguiar
Ind. Ops &
Engineering
Comm. & Int’l
Logistics
Paper,
Planning,
Procurement,
and Forestry
Ops. & Tech
Controllershi
p & Risk
Management
Treasury & IR
Human and
Org.
Development
Francisco Valério
João Felipe Carsalade
Marcelo Castelli
Evandro Coura
Marcos Grodetzky
Miguel Caldas
Each officer with more than 20 years experience in the sector
6
Market Positioning
7
Creation of a Winning Player
Superior Asset Combination
Competitive Strengths
Pulp Mill
Paper Mill
Port Terminal
Leadership in Market
Pulp
Scale and Integrated
Operations
Três Lagoas
Conpacel
•
•
•
•
•
Belmonte
Veracel
Caravelas
Portocel
Aracruz
Piracicaba
Jacarei
Santos
Unique Forestry
Management:
Advanced Forestry
Techniques and
Short Harvest Cycle
Pulp production capacity: 5.4 MT / year
Low Production
Cost DNA
Strong / Reliable
Customer Base
Paper production capacity: 358 kT / year
Total area: 1.0 million ha(1)|Eucalyptus plantation: 585 thousand ha(1)
4 plants and operation of 3 port terminals, including the only specialized wood
pulp terminal in Brazil, owned by us
High yield in eucalyptus production (avg 45
m3/ha/year)
and certified forests
Forest to Port
Integration Trough
Efficient Logistics
Modern Industrial
Plants
– Short harvest cycle: 6 years vs. 25-70 years in Southern U.S., Canada
and Scandinavia
Data as of Dec 30, 2009.
(1)Does not include partnership program which represents 128 thousand ha.
8
Undisputable Leadership in the Global Market Pulp
Dominant Position in a Growing Market
Market Share (1)
Pulp Production Capacity
2009E in ktons
3%
1st
Fi bri a
5,400
11%
~ Twice
the size
Ara uco
APRIL
CMPC
Sodra
Total
Pulp:
188 million t
Botni a
Tembec
Suza no
Total Market Pulp:
48.5 million t
Weyerha eus er
APP
Ca nfor
22%
Domta r
32%
IP
Il i m
Georgi a Pa ci fi c
ENCE
Mercer
Total Hardwood Pulp:
25 million t
Wes t Fra s er
Ceni bra
BSKP
BHKP
UKP
Total Eucalyptus Pulp:
17 million t
Mech.
Stora Ens o
0
1.000
2.000
3.000
4.000
5.000
6.000
Source: PÖYRY, 2007 / As for Market Pulp: Pulp and Paper Products Council (PPPC) 2009 and Fibria.
(1) Market Share estimated considering 2009 nominal capacity.
9
Low Production Cost DNA
Unique Expertise Enabling the Lowest Cash Cost in the Market and High Profitability
Fibria’s Margin vs. Macroeconomic Fundamentals (1)
Cash Costs (2)
783
Average Price
BEKP (US$/ton) (1)
Cash Cost (US$/t)
705
680
530
497
641
583
254
565
2,44
175
322
276
Wood
456
207
249
454
303
151
443
177
266
416
239
408
103
290
269
261
259
119
135
155
163
171
135
106
96
305
177
2,18
37%
1,84
1,74
2.196
39%
EBITDA Margin
34%
37%
Iberia
Hardwood Cash Cost (US$/t) vs. Capacity (kT)
US$/ton
600
1.697
EBITDA (R$ million)
1.013
(3)
2,00
1,95
Exchange Rate
Average (RS/US$)(1)
Others
30%
28%
1.115
500
Iberia
400
880
300
259
503
200
100
0
0
2005
(1) Source:
2006
2007
2008
Companies’ earnings releases, RISI and Brazilian Central Bank
Source: Hawkins Wright Estimate for 4Q09
(3) Fibria's 4Q09 figures
2009
4Q09
2.000
4.000
6.000
8.000
10.000
12.000
Capacity (kT)
(2)
10
State-of-the-Art Production Facilities
Advanced Technology and Production Process Lead to Lower Usage of Raw Materials, Reducing Costs…
Modern Plants
Average Plant
Capacity
Competitive Advantages
Aracruz
Streamlined and efficient
operations due to modern
plants
Capacity 2.3 mt
Technical age: 9
(‘000 tons)
2,500
Três Lagoas
Capacity 1.3 mt
Technical age: 0
2,000
LARGEST SINGLE
LINE PULP
PRODUCTION
FACILITY IN THE
WORLD
Environmental-friendly
production process
Jacareí
1,500
Capacity 1.1 mt
Technical age: 5
Indonesia
Indonesi
a
Uruguay
1,000
Veracel
Capacity 1.1 mt
Technical age: 3
Brazil
500
Portugal
Canada
Russia
Chile
South
Finland
Africa
France
Spain
USA
Sweden
Japan
40
30
20
10
BEST YIELD PER
HECTARE OF THE
WORLD
Reduced emissions and
disposition of residues
China
Efficient use of chemicals
Technical age of the equipment (years)
… and Allowing for a Unique Track Record of Quality Products
11
Unique Brownfield Potential Growth
Fibria has the Best Sites Ready to Almost Duplicate Capacity
Historical and Planned Capacity Increase
In million of tones
•
1978: Start-up of mill "A" at Aracruz (Barra do Riacho)
unit
•
•
•
•
•
•
•
•
•
•
•
1988: Acquisition of Celpav
Best sites for additional capacity
5.3
10.7
1992: Acquisition of Papel Simão (Jacareí unit)
1996: New pulp line at Jacareí mill
Barra do Riacho IV
1991: Start-up of mill "B" at Barra do Riacho unit
2003: Expansion of Jacareí mill
2003: Acquisition of Riocell (Guaiba Unit)
2005: Start-up of Veracel
Losango I
2002: Start-up of mill "C" at Barra do Riacho unit
1.5
5.4
2007: Asset swap Luis Antônio for Três Lagoas
2008: Establishment of Conpacel consortium
2009: Start-up of Três Lagoas mill
Três Lagoas II
Veracel II
VCP
2009
2006
2003
2000
1997
1994
1991
1985
1982
1988
Ara cruz
1.5
0.8
Brownfield
1979
1.5
Brownfield
Greenfield
Brownfield
… Expansion …
Fi bri a
12
Long Term Relationship With Key Clients
Premium Paper Producers Value High Quality Pulp Customized Products…
Global Footprint
Uses of Fibria’s Pulp – 2009
Supplies customized pulp products to specific paper grades
Sole supplier to key customers focused on eucalyptus pulp to the tissue market
Specialty
Top 10 main customers represent on average 65% of sales
24%
43%
Europe
31%
33%
P&W
Switzerland
Hungary
North America
23%
Tissue
Asia
36%
Miami
Beijing
Hong Kong
Sales
Destination (1)
Brazil
10%
Offices
NY004GAK_1.wor
NY004GAK_1.wor
… Which Implies in Less Volatility in Sales
Volume Throughout Economic Cycles
1
Breakdown of sales destination in the last 12 months ending December 31, 2009.
13
Pulp and Paper Market
14
Source: PPPC
Source: Utipulp
25
Jan-10
dec/09
79%
Sep-09
oct/09
85%
nov/09
87%
May-09
sep/09
aug/09
jul/09
89%
Jan-09
Sep-08
77%
jun/09
may/09
79%79%
May-08
apr/09
mar/09
76%
Jan-08
jan/09
feb/09
78%
Sep-07
May-07
77%
dec/08
83%
Jan-07
85%
nov/08
92%
oct/08
sep/08
98%
Sep-06
World pulp producers’ average days of supply
jul/08
88%
aug/08
86%
May-06
30
93%
jun/08
90%
Jan-06
88%
may/08
World market pulp shipments to capacity
Sep-05
Source: PPPC
apr/08
93%
mar/08
95%
May-05
jan/08
97%
feb/08
92%
Jan-05
60
50
40
30
20
10
jan/10
86%
Jan-10
dec/09
90%
Sep-09
oct/09
93%
92%
nov/09
90%
May-09
sep/09
95%
Jan-09
aug/09
jul/09
92%
Sep-08
jun/09
86%
may/09
apr/09
mar/09
94%
May-08
Jan-08
jan/09
feb/09
89%
Sep-07
May-07
dec/08
91%91%
Jan-07
nov/08
oct/08
sep/08
aug/08
jul/08
jun/08
may/08
apr/08
82%
Sep-06
May-06
Jan-06
feb/08
mar/08
93%
92%
Sep-05
May-05
Jan-05
jan/08
Positive Commodity Cycle and Demand Recovery
World P&W paper shipments to capacity
95%
97%
92%
89%
87%
86%
79%79%
78%
81%
73%
Source: PPPC
European pulp consumers’ days of supply
35
30
23
20
15
15
Pulp Supply / Demand Expected to Rebalance in the
Medium Term
Market Pulp: world demand growth
China: Eucalyptus pulp shipments (‘000 t)
55%
Average
305 k tons
458
368
318
307
307
307 323
299
256
247
238
233
419
Average
163 k tons
10%
2%
146
101
98 65 93
Dec/09
Oct/09
Nov/09
Sep/09
Jul/09
Aug/09
Jun/09
May/09
Apr/09
Jan/09
Feb/09
Mar/09
Nov/08
Dec/08
Oct/08
Sep/08
China
Aug/08
Japan
Jun/08
Jul/08
Latim
America
May/08
Europe
Mar/09
Apr/08
North
America
210
-17%
Jan/08
-11%
Feb/08
Total
-11%
192
186 181
132 134
2009 vs 2008
BHKP List pulp price (FOEX) vs BRL/US$
Global market recovery
140
+36%
130
120
110
Demand
• Paper demand recovery;
• China keeping up the pace.
Low consumers and producers inventories
• Market downtimes;
Currency
• Appreciation of local currencies against the US$.
100
90
80
-20%
70
Successive announcements of list price increases (as of Mar.10)
BRL/USD
FOEX BHKP List Price
Feb/10
Jan/10
Dec/09
Nov/09
Oct/09
Sep/09
Aug/09
Jul/09
Jun/09
May/09
Apr/09
Mar/09
Feb/09
Jan/09
60
•
•
•
North America: US$870/t
Europe: US$840/t
Asia: US$800/t
16
China's presence in the market pulp sector
China's Hardwood imports of BHKP by country
China's share of market pulp (%)
Pulp shipments ('000 t) and market share (%)
Growth in 2009
10.000
2008
7.000
Total Market Pulp
BHKP
9.000
6.000
+59%
21%
BEKP
8.000
7.000
5.000
6.000
14%
'ooo t
'ooo t
4.000
3.000
+107%
12%
5.000
22%
10%
4.000
26%
10%
3.000
2.000
2.000
+2%
Uruguay
Russia
Chile
Indonesia
Brazil
0
Tailândia
+38% +151% +142% +2%
Others
+12%
BHKP Total
1.000
+117%
USA
+51%
Canada
1.000
Brazil is the leading exporter of BHKP to
China, accounting to approximately 41% of China's
total imports in 2009.
Source: Hawkins Wright
9%
9%
7%
11%
10%
13%
12%
16%
0
2005
2006
2007
2008
2009
Between 2005 and 2009, Chinese market share
of eucalyptus shipments increased by
17 p.p. (total market pulp: +11 p.p.)
Source: PPPC – W20. Coverage for chemical market pulp is 80% of world capacity.
17
P&W Paper Capacity Changes
P&W paper capacity withdrawls 2009-2010 (1)
Company
Region/Date
000's
tonnes
M Real
Europe/2009
540
International Paper
Europe/2009
250
Others
Europe/2009
440
Domtar
North America/2009
International Paper
Others
China: P&W paper capacity changes 2009-2011(1)
Effective Date
000's tonnes
Puyang Longfeng
Jan 2009
350
Tralin, Gaotang
Feb 2009
150
MCC Yinhe Paper
Jul 2009
200
265
Guangxi Jindaxing Paper
Q3 2009
200
North America/2009
200
Yeuyang Paper
Oct 2009
200
North America/2009
255
Fujian Nanping Paper
Oct 2009
200
Stora Enzo
Europe/2010
520
Yeuyang Paper
2010
200
Sappi
Europe/2010
220
APP, Hainan Island
Q1 2010
1,200
Others
Europe/2010
80
Sun Paper/IP
Q2 2010
350
Domtar
North America/2010
200
Lee&Man
1H 2010
200
International Paper
North America/2010
340
Jiangsu Oji Paper
May 2010
400
China Metalurgical Meili
Paper
Q1 2011
300
Shandong Huatai Paper
Q1 2011
500
Shandong Chenming
Q1 2011
1,250
late 2011
340
Total P&W capacity withdrawls in Europe and
North America
3,300
Company / Mill
2009 = 1.9 million t
2010 = 1.4 million t
Guangxi Huajin Group
Total P&W capacity changes in China
(1)
Source: TerraChoice Dec 2009
2009 = 1.3 million t
2010 = 2.3 million t
2011 = 2.4 million t
6,040
18
4Q09 Financials
19
Paper Business
Paper: Sales volume ('000 t)
Paper market recovery
Market
123
110
•
•
111
Competition from imports
Demand starting to grow again, but apparent
consumption is still below 2008 levels
Fibria Performance
4Q08
3Q09
4Q09
•
Sales volume and revenue mix: focus on specialty
papers
•
Seasonality: positive impact on sales volume
Paper: Sales and Revenue mix
Sales Volume
27%
30%
Revenues
28%
Specialty/Other
Coated
21%
52%
4Q08
21%
23%
49%
49%
3Q09
4Q09
40%
43%
42%
19%
19%
20%
41%
38%
38%
4Q08
3Q09
4Q09
Uncoated
20
Financial Performance
Pulp: sales volume ('000 t)
Pulp: sales mix (‘000 t)
2008
2009
1.460
1.276
23%
30%
1.032
31%
40%
10%
8%
4Q08
3Q09
22%
36%
Asia
North America
4Q09
Net revenue (R$ million)
Brazil
Europe
Pulp Cash Cost (R$/t)
Cash cost w/o
stoppages (R$/t)
1.698
509
1.593
492
473
1.402
451
426
441
433
403
4Q08
3Q09
4Q09
4Q08
1Q09
2Q09
3Q09
4Q09
4Q08
3Q09
4Q09
21
Financial Performance
EBITDA (R$ million) and EBITDA margin (%)
CAPEX (R$ million)
1.609
546
503
1.247
426
34%
116
1.005
896
377
469
30%
216
30%
135
235
2009
2010E
129
32
4Q08
3Q09
4Q09
4Q09
Others
Manteinence
Expansion
Net Income (R$ million)
503
+22
+165
-79
424
+53
-30
-92
-193
-84
-41
-374
Adjusted
Ebitda
Nonrecurring
effects / noncash
Ebitda
Income tax
expense
Exchange
Variation on
Debt
Derivatives
(*) The amount is the sum of the Depreciation, Amortization and Exhaustion.
Other
Exchange
Variation
Interest on
loan
Income on
financial
instruments
Other
financial
income
Minority
Interest
Other (*)
-150
Net income
4Q09
22
Debt Profile
Maturity Schedule of Total Debt (R$ million)
Local Currency
3.908
Foreign Currency
824
1.924
1.741
1.696
3.084
453
1.402
1.076
1.028
910
1.370
1.471
2010
2011
1.130
811
262
272
326
289
2012
2013
2014
2015
Gross Debt by Index
553
787
766
348
130
508
99
45
2016
2017
2018
Gross Debt by type
2019
2020
Gross Debt by currency
4%
2%
3%
2%
50%
34%
3%
10%
6%
40%
60%
12%
36%
Pre Fixed
Libor
25%
15%
TJLP
Currency basket
CDI
Pre Payment
Families/OPA
Bonds
BNDES
Derivatives
ACC/ACE
NCE
Others
Local Currency
Foreign Currency
23
Recent Events
24
Recent Events
Event
Date
Acquisition by VCP of additional 28% of Aracruz common shares
Jan 20
VCP Capital Increase
Apr 14
VCP conversion of prefered into common shares
Jun 12
Tender Offer for Aracruz common shareholders
Jul 02
Incorporation proposal for the 0.1347 ratio
Aug 24
Merger of Aracruz shares into VCP approval
Aug 24
Shareholderes Agreement - VID and BNDES
Oct 29
End of withdrawal rights period
Nov 12
End of Aracruz trading
Nov 17
Fibria trading start (Bovespa: FIBR3 / NYSE: FBR)
Nov 18
Approval of the merger of Aracruz into Fibria
Dec 22
Source: Fibria
25
Investor Relations Team:
Marcos Grodetzky – IRO
André Gonçalves – IR General Manager
Fernanda Naveiro Vaz – IR Consultant
Anna Laura Linkewitsch – IR Specialist
Livia Baptista – IR Analyst
26