INSTITUTIONAL PRESENTATION 1Q15

JUNE, 2015
KLBN11

KLBN11 / KLBAY

DISCLAIMER
The statements contained in this presentation related to the business outlook, operating and financial projections, and growth prospects of
Klabin S.A. are merely projections, and as such are based exclusively on the expectations of the Companys management concerning the
future of the business.

These forward-looking statements depend substantially on the market conditions, the performance of the Brazilian economy, the industry
and international markets, and therefore are subject to change without prior notice.

This presentation on Klabins performance includes non-accounting and accounting data, such as operating and financial information, as
well as projections based on Managements expectations. Note that the non-accounting data has not been reviewed by the Companys
independent auditors.

The Companys management believes EBITDA may provide useful information on the Companys operating performance and allow for
comparisons with other companies in the same industry. Note however that EBITDA is not a measure established in accordance with
generally accepted accounting principles of the International Financial Reporting Standards IFRS, and may be defined and calculated
differently by other companies.

CONSISTENT
PERFORMANCE

INTEGRATED BUSINESSES
COMPETITIVENESS TROUGH ALL THE CHAIN
FOREST

PAPER and CONVERSION

PULP

243

1.7

thousand ha

million tonnes

COATED
BOARDS

750
thousand tonnes

220

INDUSTRIAL BAGS
and SACK KRAFT

thousand
tonnes

330
thousand
tonnes
EUCALYPTUS AND PINE
FORESTS

HIGH YIELD
FOREST

CORRUGATED BOXES
and KRAFTLINER

1,050
thousand tonnes

OLD CORRUGATED
CONTAINERS

INDUSTRIAL
EFFICIENCY

HIGH QUALITY
and FLEXIBILITY

DIVERSIFIED PRODUCT LINE

MARKET POSITION
LOW COST
QUALITY
COATED
BOARDS

50%

LEADER IN BRAZIL
IN ALL MARKETS
KRAFTLINER

68%

sole supplier of
liquid packaging
board in Latin
America
market share

INDUSTRIAL
BAGS

STRONGLY LINKED TO
RESILIENT MARKETS

installed capacity

40%

CORRUGATED
BOXES

7%
building

12%
others

50%

16%
market share

source: ABPO, IB

market share

food
13%
other
consumer
goods

SALES VOLUME DESTINATION

PAPER AND PACKAGING
5

BUSINESS EVOLUTION
TIMELINE

2011- 2013

2014 - 2015

2016

2016 on

PERFORMANCE
IMPROVEMENT

PAPER
EXPANSIONS COMPLETED

PUMA
PULP MILL

NEW GROWTH
OPPORTUNITIES

1,7 MILLION TONNES

2,0 MILLION TONNES

3,5 MILLION TONNES

INCREASED RESULTS AND

SET THE PATH FOR FUTURE GROWTH
6

EBITDA GROWTH
CONSISTENT RESULTS DESPITE CHALLENGING SCENARIOS
35%
31%
30%

% CHANGE VS PREVIOUS YEAR

25%
20%

16%
15%
10%

10%

7%

5%
0%
2011

-5%
-10% *LTM = Last twelve months

2012
EBITDA KLABIN

2013
BRL/US$

Brazil GDP

2014
World GDP

EBITDA GROWTH
SUSTAINABLE PERFORMANCE

1,755

1,718

1,652

1,602

1,562

1,504

1,452

1,424

1,351

1,180

1,089

939

800

922

1,000

1,027

1,200

1,286

1,400

LTM - R$ million

adjusted EBITDA

1,600

1,627

1,800

600

400

2011 - 2013
PERFORMANCE IMPROVEMENT

2014 - 2015
STABLE MARGINS +
EXPANSION OF CAPACITY
8

PUMA
PROJECT

10

LOW OPERATION
COST
ANNUAL PRODUCTION
CAPACITY

1.5 MILLION
TONNES OF PULP

1.1 MILLION
TONNES OF

SHORT FIBER

PRODUCTION OF

270 MWh
of ENERGY
SELF SUFFICIENT
120 MWh
FOR PUMA
USE

150 MWh
FOR SALE IN
THE MARKET

400 THOUSAND
TONNES OF

LONG FIBER
PART CONVERTED TO FLUFF

11

CURRENT STATUS
COMPLETION
areas delivered to
EPCs
100% of earthmoving
concluded

COST

EPCs with Klabin

coordination

dedicated team: strong

feedback and control

Assembly started

lower dependency on
imported equipments
EUR 365 million
(55% already paid)

58% OF THE PROJECT COMPLETED

0%

0%

95% of
equipment
supplies,
materials and
services
concluded

41%

100%

OF THE CAPEX DISBURSED 100%

12

46%

INDUSTRIAL CAPEX
TOTAL CAPEX
14%

national equipments and

materials

14%

R$ 7.2 BI
INDUSTRIAL CAPEX

imported
equipments

R$ 5.8 BI
27%

engineering
and other
services

NET OF
RECOVERABLE
TAXES

PROJECT

FULLY FUNDED
civil construction and
assembly

13

LOGISTICS
MULTIMODAL

72 Km

441 Km

forestry average
distance

FORESTS

railway to the port

PARANAGU
PORT

PULP MILL

INBOUND

OUTBOUND
14

EARNINGS
1Q15

HIGHLIGHTS
SALES VOLUME

NET REVENUE

excluding wood tsd tonnes

R$ million

ADJUSTED EBITDA
R$ million

1,308
443

437

1,203

35%

33%

26%

65%

67%

74%

1Q14

1Q15

exports

1Q14

28%

461
424

72%

1Q15

1Q15

1Q14

domestic
market
16

PAPER
BUSINESS UNIT

COATED
BOARDS
1%

161
thousand
tonnes

45%

474

163
thousand
tonnes

45%

415

R$ million

R$ million

105
thousand
tonnes

69%
55%

182

96
thousand
tonnes

171

R$ million

R$ million

66%

55%

31%

1Q14

KRAFTLINER

KRAFTLINER (3)
KRAFTLINER AND COATED
BOARDS (1)
RECYCLED (2)

1Q15

1Q14

1Q15

1Q14

exports

domestic
market

34%

1Q15

1Q14

1Q15
17

CONVERSION
MARKET POSITION
CORRUGATED BOXES (7)
CORRUGATED BOXES AND
INDUSTRIAL BAGS (1)
INDUSTRIAL BAGS (3)

525
R$ million

1Q14

173

536

thousand
tonnes

R$ million

1Q15

1Q14

169
thousand
tonnes

1Q15
18

CASH COST
UNIT
CASH COST

1,782
R$/tonne

1,900
R$/tonne

CASH COST
BREAKDOWN

Electricity
10%
Maintenance
materials /
stoppage
10%

Others
6%
Labor / third
parties
32%

Fuel Oil
3%
Wood / Fibers
13%

Freight
11%

1Q14

1Q15*

Chemicals
15%

*Excluding non-recurring effects of stoppages in Otaclio Costa mill (SC)

and in the Turbo Generator 8, in Monte Algre (PR) mill

19

NET DEBT
Net Debt
(R$ million)

.000

4,2

3,0
2,4

2,6

2,4
1,7

1,7

5.242

000

2,2

2,4

2.824

2,5

Jun-14

2,4

2.711

2,5

Mar-14

2,3

Mar-15

Dec-14

4.028
Sep-14

3.985

3.595
Sep-13

Dec-13

3.437

3.136
Mar-13

Net Debt

Jun-13

3.278

3.090
Sep-12

Dec-12

3.014
Jun-12

Mar-12

2.674

000

000

7.440

000

Net Debt / EBITDA (LTM)

20

6,0
5,5
5,0
4,5
4,0
3,5
3,0
2,5
2,0
1,5
1,0
0,5
0,0
-0,5
-1,0
-1,5
-2,0

DEBT PROFILE

5,600

MATURITY SCHEDULE
R$ million

1.755
772

1.421

1.454

971

894

1.193

1.055
983

1.407

1.413

673

1.351

897

585

734

398

560
470

2015

2016

2017

2018

Local currency : R$ 4.1 billion

Average tenor: 45 months

483
241

450

190

296

CASH
POSITION

613

2019

215

2020

2021

242

2022

70
120

62

2023

2024

Foreign currency: R$ 6.9 billion

Average tenor : 57 months
21

CAPEX
CAPEX
R$ million

2011

2012

2013

2014

2015E

maintenance

3T14
296

3T14
390

3T14
369

3T14
384

3T14
350

special projects and growth

159

264

431

319

385

vale do corisco

428

99

2,242

3,437

883

654

899

2,945

4,172

PUMA project
total

22

Investor Relations
www.klabin.com.br/ir
invest@klabin.com.br
Phone: +55 (11) 3046-8401

APPENDIX
EARNINGS1Q15
PUMA MARKET
COMMERCIAL CONTRACT

PUMA
PULP MARKET

PULP MARKET
2014

VIRGIN
FIBER
mm t PULP

164
112

PULP MARKET
DISTRIBUTION

45%

million tonnes

33%

52.6
million tonnes

eucalyptus

long fiber

22%
integrated pulp

Source: Hawkins Wright; RISI

market pulp

other
short fibers

26

PUMA: 6th LARGEST PULP MILL

LARGEST MARKET PULP MILLS OF THE WORLD

million tonnes per year in 2014

Fibria Aracruz

2,340

April Riau

2,200

April Rizhao

1,700

CMPC Guaba

1,690

Suzano Mucuri

1,565

Klabin

1,500

Suzano Maranho

1,500

Eldorado

1,500

Montes del Plata

Source: Hawkins Wright (jul/14)

1,300

WORLD DEMAND

million tonnes per year in 2014

short fiber

28.6

52.6 market
pulp

17.5

eucalyptus

27

4th LARGEST IN FLUFF

WORLD CAPACITY OF FLUFF
thousand tonnes per year in 2014

2,296

GP
1,420

Weyco

1,045

IP
400

Puma
Klabin

334

Domtar

290

Resolute

250

Arauco

Rayonier
UPM

the only designed to produce

fluff from the start
WORLD DEMAND

million tonnes per year in 2014

255

Stora

Rock Tenn

mills
converted in
fluff mills

23,7

170
110

6,4
fibra longa

fluff and
SBSK

100
SBSK = pinus long fiber from USA

Source: Hawkins Wright

28

FOCUS ON CONSUMER MARKETS

MARKET PENETRATION IN
DISPOSABLE DIAPERS

SOPHISTICATION AND INNOVATION IN

HIGHER VALUE ADDED PRODUCTS

2013

USA

96%
high potential of
growth
BRA

50%

ARG

72%
Source: RISI, Euromonitor

29

BRAZIL IS THE 3RD LARGEST MARKET

OF DISPOSABLE DIAPERS IN THE WORLD
SALES OF DIAPERS
FOR ADULTS

SALES OF DIAPERS
FOR INFANT

1.2

R$ billion

R$ billion

1.0
0.8
0.6

0.4

0.5

6.5

6.0
5.7

4.9
2008

2009

2010

2011

2012

4.2

2013

3.3

2008

Source: Euromonitor

2009

2010

2011

2012

2013
30

COMPOSITION OF DIAPERS
30% TO 50% OF THE AVERAGE WEIGHT
OF A DIAPER IS COMPOSED OF FLUFF (20 TO 40G)

31

SPREADS AMONG DIFFERENT FIBERS

275

CIF EUROPE
US$/TONNE

60

fluff x short fiber

long fiber x short fiber

may
13

jun
13

jul
13

aug sep
13
13

Source: RISI, FOEX

oct
13

nov
13

dec
13

jan
14

feb
14

mar
14

apr may
14
14

jun
14

jul
14

aug sep oct nov dez jan feb mar

14
14 14 14 14 15 15 15
32

GLOBAL CASH COST (SHORT FIBER)

600

500

400

CIF EUROPE
US$/TONNE

PUMA

10

15

20

25

million
tonnes

million
tonnes

million
tonnes

million
tonnes

million
tonnes

Source: Hawkins Wright

CIF: COST, INSURANCE AND FREIGHT INCLUDED

ANNUAL
CAPACITY
33

KLABIN & FIBRIA

COMMERCIAL CONTRACT
HARDWOOD PULP

Contract Rationale
PumaProject

1.5

mt/year

1.1 mt

of hardwood

Sale minimum
900 kt

of hardwood / year

EXPORTS EXCEPT SOUTH

AMERICA

200 kt
of hardwood / year

400 kt
of softwood,
part converted to fluff

SOUTH AMERICA

+
400 kt
of softwood / year

ALL MARKETS

Sales dynamics

9 0 0 kt
hardwood

final
customer

pulp
plant
Paranagu Port
(PR)

forestry

Same price as Fibria

FOB Paranagu

KLABIN
industrial efficiency

FIBRIA
commercial expertise

Timeline

900 kt of
hardwood
pro rata of the
period

2016

Minimum of 900 kt of hardwood

Phase out 2
50% of the delivered
in 2019

End of the contract

2017
From start-up
date until December

Phase out 1 75% of

the delivered in
2019

Pro rata 50%

of the
delivered in
2019

2018
12 months

2019
12 months

The contract may be renewed

by agreement between the parties

2021

2020
12 months

12 months

2022
12 months

72 months
after start-up

Volumes may be reduced if Klabin decides to

integrate into paper for packaging

Agreement benefits

Logistics and commercial

structure synergies;

Logistics and commercial

optimization and synergies;

Ensure sales volumes;

Support customers growth and

enhance customers needs;

Ensure pulp market access with

Klabin brand.

Potential development of new

customers.

Mutual value creation, with better servicing for both Companies customers base.

Highlights

1
3

Klabin is going to sell most of the

Puma Project hardwood pulp to
Fibria.

Klabin is going to sell the remaining

hardwood pulp in South America,
and softwood and fluff pulp globally.

Fibria will continue to place its

hardwood pulp in all regions,
including South America, on a
competitive basis.

Innovative agreement exploring

core competences: Fibrias
commercial expertise and the
recognized Klabins industrial efficiency.

INCOME STATEMENT
(R$ thousand)

4Q14

3Q14

4Q13

4Q14/3Q14 4Q14/4Q13

2014

2013

2014/2013

Gross Revenue

1,518,233

1,540,725

1,485,726

-1%

2%

5,900,091

5,554,345

6%

Net Revenue

1,257,110

1,282,208

1,236,221

-2%

2%

4,893,882

4,599,337

6%

19,644

252,784

56,362

-92%

-65%

924,104

336,289

175%

Cost of Products Sold

(919,770)

(909,269)

(845,033)

1%

9%

Gross Profit

356,984

625,723

447,550

-43%

-20%

Change in fair value - biological assets

(3,573,609)

(3,206,917)

2,244,377

1,728,709

11%
30%

Selling Expenses

(95,853)

(98,218)

(96,777)

-2%

-1%

(379,726)

(362,638)

5%

General & Administrative Expenses

(83,171)

(69,367)

(76,666)

20%

8%

(298,350)

(280,526)

6%

42,985

15,384

(1,342)

179%

N/A

84,785

11,472

Other Revenues (Expenses)

Total Operating Expenses

(136,039)

(152,201)

(174,785)

-11%

-22%

220,945

473,522

272,765

-53%

-19%

1,651,086

1,097,017

51%

14,268

23,032

4,860

-38%

194%

48,649

22,235

119%

Financial Expenses

(224,971)

(226,856)

(119,667)

-1%

88%

(654,932)

(423,350)

55%

Financial Revenues

131,778

149,318

64,803

-12%

103%

535,340

212,957

151%

(357,697)

(420,970)

(193,655)

-15%

85%

(526,520)

(528,641)

0%

Net Financial Revenues

(450,890)

(498,508)

(248,519)

-10%

81%

(646,112)

(739,034)

-13%

Net Income before Taxes

(215,677)

(1,954)

10938%

N/A

380,218

177%

885%

N/A

(323,293)

Operating Income (before Fin. Results)

Equity pickup

Net Foreign Exchange Losses

Income Tax and Soc. Contrib.

Net income
Depreciation and amortization
Cost of carrying out assigned to property - land
Change in fair value of biological assets
Vale do Corisco
Adjusted EBITDA

88,306
(127,371)
295,216
3,169
(19,644)

8,963

29,106
(7,586)

(593,291)

639%

1,053,623

(631,692)

-6%

(90,121)

259%

7,009

21,520

N/A

N/A

730,330

290,097

152%

222,366

216,749

33%

36%

951,965

766,553

24%

N/A

N/A

3,169

-92%

-65%

(924,104)

(336,289)

(252,784)

(56,362)

N/A
175%

8,708

8,326

9,330

5%

-7%

35,972

34,400

5%

508,394

451,430

442,482

13%

15%

1,718,088

1,561,681

10%

numbers in thousand R$

40

BALANCE SHEET
Assets
Current Assets
Cash and banks
Short-term investments
Securities

dec-14

dez-13

7,899,676

4,826,148

400,684

130,836

4,845,149

2,599,036

Liabilities and Stockholders' Equity

Current Liabilities

1,779,513

1,479,788

1,124,976

Debentures

275,201

Suppliers

438,864

345,384

18,209

55,137

43,298

139,879

127,356

REFIS Adherence

50,400

50,400

Other accounts payable

79,604

69,890

Loans and financing

497,604

249,511

1,148,676

1,145,154

Inventories

563,709

495,852

Taxes payable

Recoverble taxes and contributions

331,968

120,050

Salaries and payroll charges

Other receivables

111,886

85,709

13,274,179

dez-13

2,518,873

Receivables

Noncurrent Assets

dec-14

Income tax and social contribution

10,093,348

Long term

11,596,659

7,747,316

Taxes to compensate

428,884

123,684

Loans and financing

8,160,320

5,838,621

Judicial Deposits

84,689

90,969

Debentures

1,070,263

Other receivables

236,050

171,322

Deferred income tax and social contribution

1,699,823

1,220,187

Other investments

Noncurrent Liabilities

494,747

466,581

Other accounts payable - Investors SCPs

131,526

125,767

Property, plant & equipment, net

8,351,387

5,909,507

REFIS Adherence

384,607

393,492

Biological assets

3,667,085

3,321,985

Other accounts payable

150,120

169,249

Intangible assets

11,337

9,300
StockholdersEquity

7,058,323

5,392,667

Capital

2,271,500

2,271,500

Capital reserve
Revaluation reserve

1,295,919
48,767

4,419
49,269

Profit reserve

2,534,302

2,159,949

Valuation adjustments to shareholders'equity

1,065,446
(157,611)

1,065,437
(157,907)

Treasury stock
Total

21,173,855

14,919,496

Total

numbers in thousand R$

21,173,855

14,919,496

41