21st Santander Latin America Conference

January, 2017

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
companys 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.

1 Company Overview
2 Pulp and Paper Market
3 Financial and Operational Highlights
4 2017 Outlook CAPEX and Cash Cost
5 Expansion Project Horizonte 2
6 Back up
Agenda

Company Overview
4

Shareholder Structure and Corporate Governance

Votorantim
S.A. (1)

BNDES
Participaes (1)

Free
Float (2)

29.42%

29.08%

41.50%

General
Meeting
Fiscal
Council
Board of
Directors

Listed on Novo Mercado,

highest level at BM&FBovespa:

Only 1 class of shares 100% voting rights

100% tag along rights (Brazilian corporate law establishes 80%)

Board of Directors with minimum 20% independent members

Financial Statements in International Standards IFRS

Adoption of Arbitration Chamber

SEC Registered ADR Level III program

20% independent
members
Role of CEO and
chairman is split

Finance
Committee

Statutory
Audit
Committee

Personnel
and
Remuneratio
n Committee

Sustainability
Committee

Innovation
Committee

30%
independent
members

100%
independent
members

50%
independent
members

45%
independent
members

Policies approved
by the Board of Directors:

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

(1) Controlling group (2) Free Float 41.44% + Treasury 0.06%

A Winning Player
Superior Asset Combination

Belmonte
Veracel
Caravelas
Portocel
Aracruz
Trs Lagoas Unit
and
Horizonte 2 Project

Port Terminal

Main Figures 3Q16 LTM

Pulp capacity(1)

million tons

5.300

Net revenues

US$ billion

2.777

Total Forest Base(2)

thousand hectares

969

Planted area(2)

thousand hectares

568

US$ billion

3.272

2.64

Net Debt
Net Debt/EBITDA (in Dollars)(3)

Jacare
Santos

Pulp Unit

Source: Fibria
(1) Volume does not include Horizonte 2 project pulp capacity
(2) Including 50% of Veracel, excluding forest partnership areas and forest bases linked to the sales of Losango and forest assets in Southern Bahia State; As of December 31, 2015.
(3) For covenants purposes, the Net Debt/EBITDA ratio is calculated in Dollars.

Fibrias Units Industrial Capacity

Horizonte 2 Mato Grosso do Sul 1,950 thousand t/year

* Veracel is a joint venture between Fibria (50%) and Stora Enso (50%) and the total capacity is 1,120 thousand ton/year

Fibrias Commercial Strategy

Sales Mix by Region and by End Use - Fibria
Region 3Q16 LTM
N.
America
23%

End Use 3Q16 LTM

Tissue

Europe
40%
Asia
27%

Printing &
Writing

50%

33%
Specialties

LatAm
10%

17%

Net Revenues by Region - Fibria

9%

10%

9%

10%

24%

25%

24%

27%

28%

24%

24%

39%

41%

43%

40%

2013

2014

2015

3Q16 LTM

Europe

North America

Asia

Highlights

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

Lower dependence on volatile markets such as China

Efficient logistics set up

Low counterparty credit risk

100% certified pulp (FSC and PEFC/Cerflor)

23%

LatAm

Leadership Position
Industry Outlook(1)
Fiber Consumption
412 million t

59%

41%

Recycled Fiber
242 million t

Pulp
169 million t

18%

82%

Mechanical
30 million t

Chemical
140 million t

59%

41%

Integrated Mills
83 million t

Market Pulp
57 million t

54%

46%
Softwood/Other
26 million t

Hardwood
31 million t

30%

70%

Acacia/Other
9 million t

Eucalyptus
21 million t

75%
Other Eucalyptus
Pulp producers:
16 million t

25%

(1) Fiber Consumption, Recycled Fiber and Pulp: RISI | Market Pulp, Hardwood and Eucalyptus: PPPC Global 100 Report December 2015

Pulp Supply Agreement: Puma Project

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 by
Fibria at the Port of Paranagu (FOB Paranagu)
Sales destination: Globally, except for South America
Operational startup: Mar/2016
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
10

Pulp and Paper Market

11

What happened in 2016 ? Compared to our Forecast

BHKP CAPACITY CHANGES

FIBRIAS EXPECTED SCENARIO FOR 2016

Klabin

660

Klabin
Altri Celbi

800

CMPC Guaiba II

800

CMPC Guaiba II

Old Town (Expera)

YEAR-TO-DATE SCENARIO IN 2016

30
-40

600

Altri Celbi

30

Ence Navia

20

Woodland

-90

Old Town (Expera)

-40

Verso Wickliffe

-55

Woodland

-90

APRIL Kerinci
Unexpected Closures,
Conversions and Downtime
Net
BEKP demand growth**

**Source: Fibrias estimates

APRIL Kerinci

-120

Unexpected Closures,
Conversions and Downtime

-200

-100
-350

China, Uruguay, Chile,

Spain and Brazil

Net

985
1,500

BEKP demand growth**

870
1,119

1,300

**Source: Total year Fibria estimates and PPPC G100 BEKP demand growth Jan-Nov 2016

12

Actually...
2016 has been even more balanced than previous 2 years !

2012

2013

2014

2015

2016

1,770
1,450

1,305

1,300

1,619
1,088

870
Eucalyptus Demand Growth
(Kt)
Hardwood Net Capacity
Increase (Kt)

Ratio: Demand Growth /

Net Capacity Increase

370

605

30
12.33

2.16

0.91

Source: PPPC - Global 100 (historical demand), Outlook for Eucalyptus Market Pulp Oct 2016 and Fibrias estimates

0.75

1.50

13

Yet
Prices performance has been much worse than forecasted!
BHKP DELIVERED TO EUROPE (USD/T)

765

764

756

759

757

758

697

696
671
655

1Q16

2Q16

3Q16

4Q16

Consultants' average end 2015 for 2016

Consultants: Hawkins Wright, RISI and Brian McClay (published in the end 2015 for 2016 prices)

Annual 2016
Realized PIX/FOEX

14

In our view, there is one major reason for this lousy market price
scenario: 2016 Global growth has ONLY been relying on China
BHKP DEMAND (KT AND % CHANGE, Y-O-Y)
2013
1500
1200
900
600
300
0
-300

2014
5.3%

19.0%

5.5%
-0.2%
Global

NA

WE

China

2015
1500
1200
900
600
300
0
-300

1500
1200
900
600
300
0
-300

3.3%
5.2%

Global

5.2%

2.0%

NA

WE

China

2016, YTD Jan-Nov

3.3%
3.7%

Global

Source: PPPC Global 100

-3.5%
NA

WE

6.2%

China

1500
1200
900
600
300
0
-300

10.0%

2.5%

-6.0%
Global

NA

-3,1%
WE

China

15

SO WHAT CAN WE EXPECT IN 2017 ? SAME AS 2016 ?

BHKP CAPACITY CHANGES

FIBRIA EXPECTED SCENARIO FOR 2017 IN THE END 2016

500

Klabin

2015

2016

2017

1,305

1,619

1,300

1,350

1,088

-100

APRIL Kerinci

-300

Taiwan P&P

-80

Resolute Calhoun

-40

Navigator Cacia

-60

BEKP demand growth**

2014

1,450

100

Metsa

Net

2013

1,770

300

Fibria TLS II

Unexpected Closures,
Conversions and Downtime

2012
1,000

APP OKI

APRIL Rizhao

SCENARIO IN 2017

Eucalyptus
Demand Growth
(Kt)
Hardwood Net
Capacity Increase
(Kt)

-550
770
1,350

Ratio: Demand
Growth / Net
Capacity
Increase

870
370

770

605

30
12.33

2.16

0.91

** Fibrias estimates | Source: PPPC - Global 100 (historical demand), Outlook for Eucalyptus Market Pulp Oct 2016 and Fibrias estimates

0.75

1.50

1.75

16

We dont think so !
Because, we expect a combination of the following factors:
Not only, a good BEKP Demand/Net Capacity increase ratio: 1,75, which is well above the last 3 years
But also, a more WIDESPREAD demand between the regions!

Europe: a recovery of the HW demand due to increasing

USA: a recovery of the

demand for Eucalyptus

mainly triggered by a
few local HW closures
(temporarily or not)

competitiveness of the European papermakers

Euro devaluation... U$/Euro parity !?

U$ strengthening / loss
of competitiveness of
local pulp producers
(integrated or not)

China: an on-going increase of the demand for Eucalyptus Pulp

New paper capacities: 2,3 million tons/y of which:
Tissue = 600 kton/y
UWF = 400 Kton/y

On-going substitution of non wood fibers and old pulp mills

17

Global Market BEKP Demand

Shipments of Hardwood and Eucalyptus Pulp
11M16 vs. 11M15(1)
6%

CAGR 2012-2015(3)
8%

19%
10%

3% 1,119
712
kt

1,099

846 kt
kt

kt

-6% 0%
-181 -7 kt
Total
(1)

North
America

Source: PPPC Global 100 - November/2016

China
BHKP

19%

1,262 kt

6%

310 262
kt kt

-3% -3%
-263 -235
kt kt
Western
Europe

4%

3%

7%

Others

Total

BEKP
(3)

129 kt

221 kt

North
America

Western
Europe

660 kt

6%
253 kt

China

Others

Source: PPPC World 20 December/2015

Operating Rate (shipments to capacity) - Hardwood (2)

48

105%
100%
95%
90%
85%
80%
75%
70%

46
44
90%

42

40
38

Min.
Jan-13
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Jan-14
Mar-14
May-14
Jul-14
Sep-14
Nov-14
Jan-15
Mar-15
May-15
Jul-15
Sep-15
Nov-15
Jan-16
Mar-16
May-16
Jul-16
Sep-16
Nov-16

(2)

43

36
34

Source: PPPC Global 100 November/2016

18

Technical Age and Scale in the Pulp Industry

Further closures are expected due to lack of adequate investments in the industry
Hardwood (BHKP) Producers Integrated and Market
Pulp Mills
PM Capacity, 1000 t/a

1000

PM Capacity, 1000 t/a

STRONG

Aracruz

Weighted average
technical age 21 years

900

Weighted average
technical age 12.3 years

2000

Softwood (BSKP) Producers Integrated and Market

Pulp Mills

STRONG

800
700

1500

600

Veracel
Weighted average
capacity 1,350,000 t/a

Jacare

Trs Lagoas

1000

500
400
300

500

Weighted average
capacity 534,000 t/a

200
100

0
30

WEAK

25

0
20
15
10
Technical age, years

North American Pulp Mills

30 WEAK 25

20
15
10
Technical age, years

Other Pulp Mills

More than 6.6 million tons of capacity above 25 years and with annual capacity below 500,000 t/y.
Source: Poyry

19

Capacity closures DO happen

Closures of Hardwood Market Pulp Capacity Worldwide

(000 ton)
-85

-105
-315
-540

-445

-500

-985

-910

Potential
Additional
Conversions

-1,085
-1,260
2006

2007

2008

-1,180

2009

2010

2011

2012

2013

2014

2015

2016-2018

(1)

Closures do not include temporary movements.

Unexpected downtimes/closure in 2016 totaled 350kt (not included in the chart above).
Source: PPPC. RISI and Public information as of November, 1st
(1)

Realized closures: as of September 2016 | 2016: -90kt Woodland (USA), -100kt April Kerinci (Indonesia), -40kt Old Town (Expera) | 2017: Resolute Calhoun: -40kt, -400kt April Kerinci and Rizhao (Indonesia), 80kt Taiwan P&P, -60kt Navigator Cacia | 2017/2018: -275kt Arauco Valdivia (Chile)

20

Competitive Cash Production Cost

BHKP
capacity
(000 t)

1,130

508
52

1,105

2,075

2,290

481
54

15,275

451

TOTAL: 30,210

408 WC=($31/t)

369
30

20

351

336

56

57

427
343

USA

3,420

BHKP (USD/t)

108

456

4,915

China
Cash Cost (US$/t)

Canada

339

Iberia

Delivery CIF Europe

368

115

20

Interest

269

7
43

92

Capex

52

48

7
37

Income tax
SG&A

57
295

Chile/Uruguay

279

Indonesia

217

206

Brazil

Fibria 9M16

155

Estimated
Fibria w/ H2 2021

Source: Hawkins Wright (Production Costs December 2016) and Fibrias 3Q16 Earnings Release-FX considered by the consultant at BRL/USD = 3.19.
Fibria with Horizonte 2 (H2) cash cost was estimated according to weighted average cost, after mill balance, converted at BRL/USD=3.19. Includes energy sales.

21

Gross capacity addition should not be counted as the only factor

influencing pulp price volatility.(1)

1000

Pulp prices - CIF Europe (US$/ton)

Horizonte 2

2,5

Eldorado

800

Rizhao
Trs
Lagoas

600

Valdivia

VeracelNueva Aldea
Santa F

APP South
Sumatra(2)

Montes
Guaba II
del Plata

Fray
Bentos
Mucuri

APP
Hainan

400

Maranho

1,5

Klabin

1
Chenming
Zhanjiang

Kerinci
PL3

APP Guangxi

Oji
Nantong

Capacity Additions (000 ton)

Spread Europe Price @Jan 10th, 2017: US$158/t(3)

1200

0,5

200

0
2002

2003

2004

2005

2006

2007

2008

2009

2010
BHKP

2011

2012

2013

2014

2015

2016

2017

2018

BSKP

(1) Source: Hawkins Wright , Poyry and Fibria Analysis. Pulp price estimates according to Hawkins Wright (Apr/16), Brian McClay (Jun/16) and RISI (Apr/16)
(2) Partially integrated production.
(3) Source: Bloomberg

22

In the last 15 years, pulp volatility has been just 8%...why?

160

BHKP - FOEX Europe (base 100)

CPI (base 100)

120

80

40

Dec-99
Mar-00
Jul-00
Oct-00
Jan-01
Apr-01
Aug-01
Nov-01
Feb-02
Jun-02
Sep-02
Dec-02
Mar-03
Jul-03
Oct-03
Jan-04
May-04
Aug-04
Nov-04
Feb-05
Jun-05
Sep-05
Dec-05
Apr-06
Jul-06
Oct-06
Jan-07
May-07
Aug-07
Nov-07
Mar-08
Jun-08
Sep-08
Dec-08
Apr-09
Jul-09
Oct-09
Jan-10
May-10
Aug-10
Nov-10
Mar-11
Jun-11
Sep-11
Jan-12
Apr-12
Jul-12
Oct-12
Feb-13
May-13
Aug-13
Dec-13
Mar-14
Jun-14
Sep-14
Jan-15
Apr-15
Jul-15
Nov-15
Feb-16
May-16
Aug-16
Dec-16

Market price closer to producers 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 January 10th, 2016

Lowest volatility among commodities

230

100 = January 1, 2012

200
170

169

140
110

100
88
87
58
53

80

20

Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Dec-12
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
Jun-16
Jul-16
Aug-16
Sep-16
Oct-16
Nov-16
Dec-16
Jan-17

50

Iron Ore

Soy Bean

Crude Oil

Sugar

BHKP - FOEX Europe

Exchange Rate (R$/US$)

Historical Volatility of Commodities (US$) 2 Lower than FX

37%

34%

34%

28%

26%

25%

24%

23%
17%

14%

6%
WTI Crude Oil

Sugar

Nickel

Iron Ore

Copper

Soy

Ibovespa

LME Metals

Cattle

FX

BHKP

Low volatility of hardwood pulp price, even though

new capacities have come on stream during the period.
Source: Bloomberg January 13th, 2016

2Since

January 1, 2009 up to January 13th, 2016

24

Financial and Operational Highlights

25

Each 5% depreciation of the Real increases EBITDA by around

R$420m and FCF by R$550m

Exchange Rate
Average (R$/US$)

2.00

1.76
670

Fibria net pulp price

(US$/t)

Fibria net pulp price

(R$/t)

1.67

1.95

2.16

2.35

639

581

610

572

1,311

1,344

456

912

1,179

1,067

1,133

3.33

582

1,951

53%
EBITDA Margin

40%
29%

34%

36%

40%

3.62

3.36(1)

528

490(2)

1,911

1,646

48%

39%
1,560

1,488
1,173

1,153

2011

2012

1,295

1,185

2013

2014

1,241

815

EBITDA (US$ million)

2009

2010

2015

3Q16 LTM 2017 (e)

(1) According to Focus Report (Brazilian Central Bank January 13th, 2016) I (2) 2017 market consensus

26

Cash Production Cost (R$/t) 3Q16

- 4%

662

659

638

624

Ex-downtime
3Q15

2Q16

3Q16

Operational stability
Wood
FX

Cash Production Cost (R$/t) 3Q16 LTM

659
638

3Q15

(55)

27

Maintenance
downtimes

Wood

14

( 10 )

(7)

Utilities

Chemicals and
energy

FX

Materials and
Services

Others

3Q16

-3.2%
27

Cash Production Cost in dollars saw a decrease over the past 7 years
Fibrias Cash Production Cost(1) (USD/ton)

264

Consistently
controlling the cash
production cost

281

242

231

234

220
186

Average
FX

184

2009 (2) 2010 (2)

2011

2012

2013

2014

2015

3Q16
LTM

1.99

1.67

1.95

2.16

2.35

3.33

3.62

1.76

But lately, it has been

influenced
by non-recurring
effects:

Wood
Energy price
Input consumption

(BRL/USD)

(1) Excludes Conpacel

28

Net Results (US$ million) 9M16

(85)
192
827

deferred

(395)
493

current

494

(394)
(144)

Adjusted
EBITDA

FX Debt

MtM
hedge

Net
Interest

Deprec.,
amortiz. and
depletion

Taxes

Others (1)

Net
Income

Non-recurring effects
(1)

Includes other Exchange rate/monetary variations, other financial income/expenses and other operating income/expenses.

29

Free Cash Flow 3Q16 (1) (US$ million)

234
Klabin
Effect

124
( 21 )

( 172 )
Adjusted EBITDA

(1)
(2)

Capex
(ex-H2 project
and pulp logistics)

( 18 )

101

Net interest

Working capital

Income tax

(0)

Others (2)

FCF

Does not consider Horizonte 2 Project and pulp logistics projects.

Includes other financial results.

30

ROE and ROIC (R$)

ROE = Adjusted EBIT(1)/ Equity before IAS 41(2)

ROIC = Adjusted EBIT(3)/ Invested Capital before IAS 41(2)

25.1%
22.8%

16.1%

15.6%
9.2%

5.7%

6.2%

2013

2014

6.9%

8.0%

3.4%

2012

Average
FX
(R$/US$)
Average
Net Pulp
Price
(US$)

2015

3Q16
LTM

1.95

2.16

2.35

3.33

3.62

581

610

561

586

531

Average
FX
(R$/US$)
Average
Net Pulp
Price
(US$)

2012

2013

2014

2015

3T16
LTM

1.95

2.16

2.35

3.33

3.62

581

610

561

586

531

(1) Adjusted EBITDA CAPEX Net Interest Taxes

(2) International accounting standards for biological assets.
(3) Adjusted EBITDA CAPEX Taxes

31

Indebtdeness
Gross Debt and Cash Position (R$ million)

Net Debt (Million) and Leverage

Net Debt/EBITDA (R$)

2.33

14,192

12,705

1.82

1.58
9,578

Jun/16

Gross debt

3,272

3,029

2,411
Sep/15

10,620

9,722

3,572

2,983

818

2.64

2.10

2.07

12,526

Net Debt/EBITDA (US$)

Sep/16
Sep/15

Cash

Jun/16
R$

Sep/16
US$

Interest Expense/Income (US$ million) and Cost of Debt in US$(1)

6.3

5.9

5.5

5.2

473
414

4.6

408
350

3.4

3.3

3.3

268
200
96

2009
4.6

143

2010
Cost
Averageof
costdebt
in US$ (% p.a.)

108

2011

158

141
78

2012
Interest Expense (Gross)

(1) Considering the portion

reais(1)
fully adjusted by the market swap curves at the end of each period.
3.4 of debt in3.3

45
2013

39
2014

39
2015

54
3Q16 LTM

Interest on Financial Investments

32

Robust Liquidity USD million

(@October 31, 2016)
1,544

Export Prepayment

BNDES

ECN

ACC/ACE

Voto IV

Revolving 547

1,000

Cash on
hand (1) 997

Bonds

763

335
94

106

Capex H2 (2):

2016

2017

277

982

New Bond
+USD 0.7 bn

666

600

541

CRA and Others

New CRA
+USD 0.4 bn

323

Liquidity

Finnvera

2018

2019

2020

2021

2022

2023

2024

64

22

2025

2026

15
2027

80

Not including USD17 million related to MtM of hedging transactions. | (2) Capex disbursement of USD916 million up to October 31, 2016. Actual and forecast FX BRL/USD of 3.46 and 3.23, respectively.

H2 capex to be disbursed(1): USD 1.3 bn

Funding to be withdrawn: USD 1.2 bn

HORIZONTE 2 FUNDING (USD BILLION)

Funds withdrawn until Oct 31, 2016
Contracted funds to be withdrawn

3Q15

3Q15

0.2

0.1 - 2017
0.1 - 4Q16
0.5 - 2017

0.2 - 4Q16

0.2
0.1

0.1
0.3

0.3 - 4Q16

2.4

0.3
0.1
1.2

0.6
0.1

Excess of
USD 0.1 bn
Horizonte 2
Project
USD 2.3 bn

1.2

0.4
Export
Prepayment

ARC

BNDES (2)

FDCO

ECA

Working capital
release (3)

Total

(1) Horizonte 2 Project capex to be disbursed (cash). | (2) BRL423 million withdrawn on October 18, 2016. | (3) Related to the agreement with Klabin.

33

Zero refinancing risk up to 2018 not including FCF generation!

2016 - 2018

USD BILLION
0.7

H2 Funding

1.5

1.3

0.4

Revolving 0.5

0.3
Cash on
hand 1.0

0.2

0.1

1.0

Cash Position
Debt
Oct./2016 amortizations
2016-2018

1.0
0.6
BNDES

FDCO

ECA

Working
capital
release

4th CRA

Bond 2027
(Jan 2017)

Cash on
hand

Capex
Cash Position
Horizonte II
End 2018

34

Initiatives for Leverage Management

Initiatives expected to be implemented

in the short term

Initiatives under analysis

Amount

Net
Debt/EBITDA
reduction

Amount

Net
Debt/EBITDA
reduction

(USD
million)

(x)

(USD
million)

(x)

Working Capital Release

95

0.09x

Accounts payable (suppliers)

420

0.37x

Accounts receivable (customers)

40

0.04x

Others

110

0.12x

Accounts payable (suppliers)

55

0.05x

Total

530

0.49x

Capex

96

0.10x

Forestry

31

0.03x

Capex H2

65

0.07x

191

0.19x

Total

Total: USD 721 million (0.68x)

35

Waiver on 4.5x Covenant was Fully Negotiated

Horizonte 2 start up in 4Q17 boosts EBITDA and FCF generation

NET DEBT/EBITDA (USD)

Actual (in US$)

Waiver

Covenant level

4.5

4.5
3.5x
Indebtness and
Liquidity limits (1)

2.64

2.0x 2.5x
1.86

2.10

1Q16

2Q16

3Q16

4Q16

1Q17

Leverage guidelines:

2Q17

3Q17

4Q17

2018

2019

Highlights:

Range of 2.0x to 2.5x net debt/EBITDA

Maximum 3.5x net debt/EBITDA during expansion

cycles

Covenants only triggered if Fibria loses the

Investment Grade by 2 of the 3 rating agencies

During the most critical periods of expansion, 4.5x

covenant was waived

(1) As stated on the Liquidity and Indebtedness Policy and Shareholders Agreement

36

Capital Structure: Fibria has achieved the lowest leverage ratio among
its Latin American peers
Net Debt/EBITDA (x)(1)

8.1

5.1
4.2
3.6
3.4

2.4
2.3
1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16
Fibria

Suzano

Klabin

CMPC

Arauco

Eldorado

Fibria

Arauco

CMPC

Klabin

Suzano

S&P

BBB-/Negative

BBB-/Stable

BBB-/Stable

BB+/Stable

BB+/Stable

Moodys

Ba1/Negative

Baa3/Stable

Baa3/Stable

Ba2/Stable

BBB-/Stable

BBB/Stable

BBB+/Stable

BBB-/Negative

BB+/Positive

Fitch
(1)

Fibrias historical data in BRL.

37

One of the best performances among Brazilian corporate issuers(1)

Historical G-spread (bps)
1400

Rating

Outlook

1200
1000

BBB-

Negative

800
600

BBB-

Stable

400
200
0

2010

2011

2012

Fibria 2020 - 7.5%

2013

2014

Fibria 2021 - 6.75%

2015

2016

Fibria 2024 - 5.25%

988

238

256

279

290

VALE

BRAZIL

EMBRAER

RAZEN

(1) G-spread on January 13th, 2017

296

305

318

322

BRFOODS FIBRIA 2024 FIBRIA 2027 BRASKEM

324

GLOPAR

365

380

383

SUZANO

GERDAU

KLABIN

424

PETROBRAS ELDORADO

38

2017 OUTLOOK - CAPEX AND CASH COST

39

Fibria CAPEX 2017, except H2 Project BRL million

2,055
1,971

USD621 mn(2)
USD544 mn(1)

2016 Guidance
Update

(1) Converted at 3Q16 LTM FX BRL/USD 3.62

(3) Subject to Board approval

Inflation

FX

Others

2017 Guidance (3)

| (2) Converted at 2017 average FX - BRL/USD 3.40, according to Focus Report (Brazilian Central Bank November 18th, 2016)

40

Structural CAPEX BRL million

2,068

2,055

1,662
USD
608 M(1)

USD
621 M(1)
USD
489 M(1)

2017
Modernization Non-recurring
(2)
Guidance
wood purchase

Forestry
equipments

Non-recurring Turbogenerator
projects
overhaul

Structural
capex

H2 sustaining
Structural
capex
capex with H2

(1) Converted at 2017 average FX - BRL/USD 3.40 - According to Focus Report (Brazilian Central Bank November 18th, 2016)
(2) Subject to Board approval

41

Cash Cost update (USD/t) @2021

BRL/USD 3.19

206

(26)

LTM 3Q16

Horizonte 2
Project

155

(19)

(1)

(2)

Wood cost
reduction

Bleaching line B Maritime wood

shipping project

(3)

Others

2021

FX Sensitivity

(1) Converted at 3Q16 LTM FX at BRL/USD 3.19

FX

Cash cost (US$/t)

3.00

164

3.10

159

3.19

155

3.30

150

3.50

142
42

Expansion Project Horizonte 2

43

What is the importance of growth for Fibria?

Competitiveness

Commercial
positioning

Long-term growth
potential

Wider fixed costs dilution

Cost curve position improvement

Greater bargaining power with suppliers

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

44

Fibrias nominal capacity

ESTIMATED MARKET BHKP CAPACITY RANKING 2017 (000T)
8,150

8,150

7,940

8,050

8,150

6,500

1,740

1,850

1,950

1,950

1,950

300
900

900

900

900

900

900

5,300

5,300

5,300

5,300

5,300

5,300

2017

2018

2019

2020

2021

2022

Horizonte 2 ('000 t)(1)

Klabin's Puma Project ('000 t)(1)
Current Production ('000 t)

8,150

Fibria
APP
Suzano
April
CMPC
UPM
Eldorado
Arauco
Stora Enso
Cenibra
Ence
Altri
Mondi
Marubeni
Ilim
Nippon
Oji
Mets
Navigator
Woodland
Georgia Pacific
Verso
Resolute
Lwarcel
International Paper
Klabin
Soedra
Domtar
0

2000

4000

6000

8000

Current Capacity

New Capacity Klabin Agreement

New Capacity

New Capacity Horizonte II Project

Source: RISI, Hawkins Wright, PPPC and Fibria (Nov 2016)

(1)The

volumes in 2017 and 2018 will depend on the learning curve of the plants. The agreement with Klabin may be renewed by mutual consent.

45

Pulp sales destination: Fibria growing where the market grows

37%
40%
19%

23%

36%
27%

8%

10%

Total sales volume distribution

after H2 start up(2)
Current net revenue distribution(1)

(1) Considers 3Q16 last twelve months. | (2) Includes Klabins sales volume

46

Horizonte 2 Project
Site Overview(1)

Expansion
Capex of
USD2,254 M
(USD1,156/t)
(1)

@Fibria Day

Start-up
beginning of
4Q17

Energy Surplus
130 MWh

71%
overall completed

47%
of financial execution
- cash disbursement

(BRL 3.5 billion)

47

H2 Project Evolution S Curve

Execution performance better than forecasted

General Progress Curve Horizonte 2

% month

% accumulated

Update:
16-Oct-31

100

8,0

Startup
beginning
4Q17

6,0

80,0

60,0

4,0

40,0

2,0

20,0

0,0

0,0

mai jun jul ago set out nov dez jan fev mar abr mai jun jul ago set out nov dez jan fev mar abr mai jun jul ago set out
2015

2016

Forecast

Actual

2017

Projected accumulated.

Realized Ac accumulated
(1) Capex disbursement (cash).

48

H2 Project Timeline
Main next steps to startup

Purchase of the
industrial plants
Beginning of
assembly
Beginning of
infrastructure and
purchase of the TGs

Beginning of
forest
machinery
deliveries

Beginning of
construction

Definition of
outbound logistics
formats

3Q15

2015

Hydrostatic test of the

Recovery Boiler
(Apr 17)

Beginning of harvest
(Jan 17)

Hiring of
operational team

4Q15

Startup
(4Q2017)

Initial hiring of
harvest workers

Negotiations with
concession holders
and Port of Santos
tendering

2Q15

Commissioning and
testing of industrial
plant

Start of nursery
operations
(Mar 17)

1Q16

2Q16

Beginning of the commissioning

of water treatment station
(Dec 16)
3Q16

2016

4Q16

1Q17

2Q17

3Q17

4Q17

2017

49

Horizonte 2 Forestry Base

Forestry base secured as planned

Already planted since project approval

125,000 ha
To be planted

62,000 ha

7,000 ha to be planted in 2016

55,000 ha to be planted in 2017 and 2018

Total

187,000 ha
Wood purchased

5.0 million m3

Average distance from forest to mill H1 + H2

up to 100 km

50

Logistics

Mato Grosso
Brasilia

Gois
Mato
Grosso do
Sul

Port Terminal 32

51

Capex
Flexibility in the Timetable, without changing the startup date

TOTAL CAPEX (BRL BILLION)

- BRL 1,253 mn

8,745
8%

754

19%

1,657

CAPEX DISBURSEMENT TIMETABLE (BRL MILLION)

52%

7,492
5%
20%

337
1,526

3,859
1,122

73%

6,334

75%

5,629

3%

2,616

42%

3.170
380
2,686

257

205
Nov. 2015
Forecast
USD 2.396 bn(1)

Current
Forecast
USD 2.254 bn(1)
FX(2)
BRL

3%

2015

2016

2017

2018

USD 55 mn

USD 1,194 mn

USD 982 mn

USD 79 mn

3.72

3.39

3.23

3.26

EUR

USD

(1) FX = 3.65 BRL/USD on previous forecast. FX = 3.32 BRL/USD on current forecast. (2) Average FX according to capex execution.

52

Historical Horizonte 2 Project Capex (USD million)

8,745

7,492
To be
disbursed

Executed

November, 2015

Savings,
Contingencies
and indirect costs

FX

Inflation

Others

4,324

BRL/
USD
3.23

3,168

BRL/
USD
3.46

October, 2016

USD 2,214

USD 2,259

BRL/USD 3.95

BRL/USD 3.32

53

Funding
Cost and maturity

3Q16

H2

Average Cost (US$ p.a)(1)

3.3%

2.6%

3.1%

Average Maturity (years)

4.1

6.1

4.5

3Q16 + H2

Amortization Schedule (2) 3Q16 Proforma with TLS II US$ million

868
732

536

648
577

315

317
76

228
2016

2017

2018

2019
Pre-Payment

(1) Considering swap curves.

2020
BNDES

2021
ECN

Voto IV

2022
Bonds

46
2023
Finnvera

2024

2025

14

14

2026

2027

CRA & Other

| (2) FX considering new funding for the TLS II Project: 3.2098

54

Horizonte 2 project assumptions

Pulp production/year

k tons

1,950

1,950

Expansion capex (1)

$ billion

7,492

2,254

Expansion capex (1)

$/t

3,854

1,156

Sustaining capex (2)

$/t

208

63

Cash production cost(3)

$/t

340

103

MWh

130

130

BRL/USD

2.80

All in cash cost (estimated range)(4)

$/t

270-320

Net pulp price (5)

$/t

490

Free Cash Flow (estimated)

$/t

170-220

Payback period (estimated)

years

5.3-6.8

Energy surplus
Project approval FX

(1) Includes chemical leasing and to increase capacity to 1,950 kt/year (FX BRL/USD @3.32)
(2) Estimated sustaining capex in perpetuity (FX BRL/USD @ 3.30)
(3) Estimated weighted average cost, after mill balance. Includes energy sales (FX BRL/USD @3.30)

(4) Cash cost + freight + SG&A + Sustaining Capex + Interest + taxes (FX BRL/USD @3.30)
(5) 2017 market consensus.

55

Final Remarks

Economies of scale
Synergies with current operations

Wood availability and low distance from forest to mill

Fibrias total energy surplus to be increased by 130 MWh

Cash cost competitiveness

Meet customers demand growth
Attractive returns even in adverse scenarios of pulp price and BRL
Solid financial profile

56

BACK UP
57

Green Bond 2027

58

Bond Offering Summary

Issuer

Fibria Overseas Finance Ltd.

Guarantor

Fibria Celulose S.A.

Issue Format

SEC Registered

Ratings

BBB- (neg) / BBB- (stb)

Ranking

Senior Unsecured

Use of Proceeds

Eligible Green Projects

Issue Amount

US$700 million

Securities Offered

5.5% Senior Notes due 2027

Book

US$3.5 billion

Listing

New York Stock Exchange (NYSE)

Book

US$3.5 billion

59

Sustainable Forest Management

Production
and acquisition of eucalyptus
seedlings
Preparation of soil for the plantation of seedlings
including subsoiling and harrowing activity
Plantation of seedlings
Protection and maintenance of planted seedlings
up to harvest

Environmental

Benefit

Productivity index / year

Fibria sustainably manages forested areas to

FSC and PEFC standards, to include:

Impact:

With
management to these standards, Fibria is contributing
to:

Carbon sequestration;

Water quality and cycle regulation;

Erosion control, soil protection and nutrient

cycling;

Natural areas protection

Note: Fibria has long-term targets (1) to reduce by one third the
amount of land required for pulp production and (2) double carbon
sequestration from the atmosphere. These projects will help to
contribute to this end.
Source: Information previously disclosed in public Fibria reports

Neighboring
areas

Fibrias Forest
Management

FSC License Codes FSC-C100042, FSC-C100704, FSC-C110130

60

Restoration of Native Trees and Conservation of Biodiversity

Fibria invests in projects to restore natural vegetation

cover in degraded land, to include:

Acquisition of new native Brazilian seedlings

Planting native Brazilian seedlings in degraded land
Creation of ecological corridors and
mosaics in
eucalyptus plantations so they can serve as wildlife and
flora habitat conservation
Studies that evaluate and monitor the conservation of
HCV areas

Environmental Benefit / impact: Fibrias effort to restore

native forest areas has increased forest coverage and
biodiversity, led to improvements in ecosystem services,
including:

Carbon sequestration
Availability and quality of water
Erosion control, soil protection and
cycling
Habitat provision

nutrient

Note: This category contributes to Fibrias long-term targets to (1) double

carbon sequestration and (2) to promote the environmental restoration of 40
thousand hectares between 2012 and 2025. Since 2012, 13.9 thousand
hectares of environmental restoration has occurred, 35% of the target. 2,402
hectares were restored in 2015 alone. The goal for 2016 will be to restore
2,603 hectares.

Before (2012)

After (2016)

Source: Information previously disclosed in public Fibria reports

61

Waste Management

Conversion of Production Plant Waste to Soil

Corrective

Acidity

At Fibrias Jacarei and Trs Lagoas mills, there is a

system in place to collect byproducts of the industrial
process and convert this material into a soil acidity
corrective, to be used in Fibrias forest areas

The process collects ash, grits, dregs and lime mud from
the production process and the transformed product
replaces the use of calcium carbonate

Environmental Benefit & Impact: Fibrias process to

transform the mill byproducts in soil acidity corrective has
resulted in:

~30% reduction in waste sent to external landfills from

the mill sites

Note: Fibria has a long-term target to increase eco-efficiency, by reducing in 91% the quantity of industrial waste
disposed in own or third-party landfills. This project will contribute to meeting the companys long term goal to reduce
the amount of solid waste sent to landfill to 5kg/adt, by 2025.
Source: Information previously disclosed in public Fibria reports

62

Water Efficiency
Water Recycling and Re-use at Aracruz Mill
Fibria has a range of projects at the Aracruz Mill
that reduce water usage

Reduce the consumption of sealing water of

vacuum pumps of the dryer;
Reuse water in the hydraulic units of the presses
and baling units;
Reuse of the cooling water of furnaces in the
Water Treatment Plant currently released as
effluent;
Connect the cooling tower to the causticizing
tower, so that water expelled from the cooling
tower is then used in the causticizing tower

Environmental Benefit & Impact: The various water efficiency projects are designed to achieve:
310 m3/h reduction in the water withdrawn from the total intake water to the industrial operation.
This reduction is equivalent to 3.9% in industrial water intake at the mill

Source: Information previously disclosed in public Fibria reports

63

Cost reduction initiatives and industry statistics

64

THIRD-PARTY WOOD REDUCTION

Non-recurring impacts starting to decrease

Third-party wood (%)

34%

63%

73%

67%

68%

75%

67%
350

45%

Average distance from forest to mill

40%

Third-party wood

300

35%

250

30%

200

25%

311

20%
15%

225

10%

193 788197

187

181

194

307

242

290

150

239

190

173

170

167

166

164

100
50

5%

0%

0
2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

Average distance from forest to mill (km)

% Planting
50%

2025

Third party wood increase from previous forecast due to recent rain shortage at Aracruz Unit forest
base and optimization of Trs Lagoas forest base
The average distance will drop sharply generating an Opex reduction
NPV from peak to normalized level(2):
CAPEX: BRL1.5 billion (USD 0.5 million) | OPEX: BRL 1.0 billion (USD 0.3 million)
(1) Does not include Veracel but considers H2 Project forest base | (2) FX @ BRL/USD3.30.

Total NPV:
BRL2.5 Bn or USD0.8 Bn
65

Third-party wood reduction

Losango
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 Esprito Santo and Bahia States

Positive impact over industrial costs due to better productivity

68

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

76

Global Market Pulp Demand

Hardwood demand will continue to increase at a faster pace than Softwood
Hardwood (BHKP) vs. Softwood (BSKP) (000 ton)

Demand growth rate

40.000
35.000

000 ton

1999

2009

2019

Growth
19992009

Growth
20092019

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%

30.000
25.000
20.000
15.000

2014 - 2019 CAGR:

Hardwood: +2.5%
Softwood: +0.8%

10.000
5.000

Hardwood

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

Softwood

Source: PPPC report (Sept. 2015)

Source: PPPC reports. Excludes Sulphite and UKP market pulp (Sept./15)

Paper Production Runnability with BHKP

Source: RISI conference, August 2014.

68

Benefiting From Chinas Growth

Chinas Hardwood Imports of BHKP by Country(1)
(000s t)

World Tissue Consumption, 1995-2015(3)

(million t)

Latin America is the

leading exporter of BHKP
to China, accounting to
approximately 55% of
China's total imports in
10M16.

10M15

8.465

10M16

7.651

4.058

4.647

(kg/person/year)

40
Annual Growth
Rate +3.7%

35
30
25

20
15

BHKP Total

10

1.522 1.855

1.7401.583

Latin
Indonesia Others(2)
America (1)

169 170

156 159

USA

Canada

51

Western
Europe

1995 2000 2005 2010 2011 2012 2013 2014 2015

N.America
China
Africa

(1) includes South Africa and New Zealand. | (2) Includes China, Japan, Malaysia, Russia, Thailand and Vietnam.

China's Share of Market Pulp(2)

30%
25%

Between 2005 and 2015,

the Chinese market share
of eucalyptus shipments
increased by 20 p.p. (total
21%
market pulp: + p.p.)

22%

23%

23%

25%

26%

10%

10%

12% 14%

12

10%

5%

0%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Nov.
2016
Eucalyptus
(1)
(2)
(3)

Hardwood

Total

(Kg/capita/year)

14

8
15%

Japan
LatAm

25

10

17%

20%

E.Europe
Middle East

Per Capita Consumption of Tissue by World Region(3)

(million t)

24%

W.Europe
Asia FE
Oceania

% Compared to the global Market Pulp

15

15
11
6

5
1

N.
West Japan Oceania East LatAm
America Europe
Europe

China

Africa

PPPC Pulp China Flash Report October 2016

PPPC W20. Coverage for chemical market pulp is 80% of world capacity
RISI

69

set-09
nov-09
jan-10
mar-10
mai-10
jul-10
set-10
nov-10
jan-11
mar-11
mai-11
jul-11
set-11
nov-11
jan-12
mar-12
mai-12
jul-12
set-12
nov-12
jan-13
mar-13
mai-13
jul-13
set-13
nov-13
jan-14
mar-14
mai-14
jul-14
set-14
nov-14
jan-15
mar-15
mai-15
jul-15
set-15
nov-15
jan-16
mar-16
mai-16
jul-16
set-16
nov-16

Growth rate Chinese GDP vs. Eucalyptus Shipments to China

(Sept-09 = base 100)

250

200

175

150

100

74

50

China GDP
Eucalyptus Shipments

Source: Bloomberg and PPPC W20 report (nov/2016).

70

Commodities Differentiation
China GDP breakdown
8%

4%

4%

3%

3%

2%

2%

2%

2%

2%

2%

44%

47%

48%

48%

48%

48%

48%

46%

47%

45%

45%

49%

49%

48%

49%

49%

50%

50%

52%

51%

53%

53%

2008A

2009A

2010A

2011A

2012A

2013A

2014A

2015E

2016E

2017E

2018E

Consumption

Investment

Net Exports

China commodity demand - basis 100

Corn

Soybeans

Wheat

Crude oil

Iron ore

Sugar

BHKP
248
201
194
172
152
124
115

100
2008A

2009A

2010A

2011A

2012A

2013A

2014A

2015E

2016E

2017E

2018E

Source: Ita Macroeconomic Department and PPPC Oct/15

71

Global Paper Consumption

CAGR 2010 2020
Developed Markets: - 3.1%
Emerging Markets : + 0.9%

CAGR 2000 2010

Developed Markets: - 2.1%
Emerging Markets : + 5.6%

Developed Markets

2020E

2019E

2018E

2017E

2016E

2015E

2014

2013

99,977

2012

2011

2010

2009

109,758

2008

2006

2005

2004

2003

2002

2001

2000

P&W
Consumption
(000 tons)(1)

2007

117,611

103,286

Emerging Markets

CAGR 2000 2010

Developed Markets: + 1.5%
Emerging Markets : + 6.6%

CAGR 2010 2020

Developed Markets: + 1.4%
Emerging Markets : + 5.9%
41,712
30,357

Developed Markets

2020E

2019E

2018E

2017E

2016E

2015E

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

Tissue
Consumption
(000 tons)(1)

2000

20,979

Emerging Markets

Source: RISI

72

mai-10
jun-10
jul-10
ago-10
set-10
out-10
out-10
nov-10
dez-10
jan-11
fev-11
mar-11
abr-11
mai-11
jun-11
jul-11
ago-11
set-11
out-11
nov-11
dez-11
jan-12
fev-12
mar-12
abr-12
mai-12
jun-12
jul-12
ago-12
set-12
out-12
nov-12
dez-12
jan-13
fev-13
mar-13
abr-13
mai-13
jun-13
jul-13
ago-13
set-13
out-13
nov-13
dez-13
jan-14
fev-14
mar-14
abr-14
mai-14
jun-14
jul-14
ago-14
set-14
out-14
nov-14
dez-14
jan-15
fev-15
mar-15
abr-15
mai-15
jun-15
jul-15
ago-15
set-15
out-15
nov-15
dez-15
jan-16
fev-16
mar-16
abr-16
mai-16
jun-16
jul-16
jul-16
ago-16
set-16
out-16
nov-16
dez-16

BHKP prices - CIF China (US$/ton)

Source: PPPC Global 100

900
Shipments

800
800

700
700

600
600

500
500

400
400

300
300

200
200

100
100

2010
average:
250 ktons
2011
Average
379 ktons
2012
Average
370 ktons
2013
Average
439 ktons
2014
Average
504 ktons
2015
Average
531 ktons

Shipments (000 ton)

Benefiting From Chinas Growth

China: Eucalyptus pulp shipments

(000s t)

BHKP Price

900

2016
Average
612 ktons

73

Global BHKP Market Pulp Supply Cost Curve

USD/Adt, 2013 cost level

COST CURVE EVOLUTION

Cost position
of marginal
producer

Cumulative Capacity Million t/a

Source: Pyry.

74

Tightening plantation wood and chip supply could add to the cash
cost of Asian pulp mills

Source: Pyry.

75

Current Zero Cost Collars

ZCC Position
Notional (USD MM)
Strike put (avg.)
Strike call (avg.)
FWD (BRL/USD) EoP

*forward curve Dec/2016.

1Q17

2Q17

3Q17

4Q17

1Q18

2Q18

3Q18

Total

391
3.29
5.04
3.31

334
3.34
5.26
3.38

395
3.30
5.35
3.46

330
3.46
6.03
3.52

215
3.43
5.04
3.58

55
3.48
5.38
3.64

40
3.49
5.35
3.71

1,760
3.36
5.36
3.71

Notional (Total):
USD 1,760
Million

76

FREE CASH FLOW(1)

Positive quarterly FCF in the last 5 years, even during appreciated FX
USD million
329

317
225

194
125

84

77

113

111
53

29

103

130

158
112

118 124

51

-7
-77

3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16

EBITDA Margin
33%

28%

30%

37%

37%

41%

39%

39%

41%

42%

41%

35%

35%

45%

50%

50%

56%

54%

52%

43%

43%

2.03

2.06

2.00

2.07

2.29

2.27

2.37

2.23

2.27

2.55

2.87

3.07

3.45

3.84

3.90

3.51

3.25

Average FX
1.63

1.80

1.77

1.96

(1) Excluding H2 Project, dividends, pulp logistics and land purchase effects.

77

Fibrias tax structure

Description and Amount
(a) Operating income
(-)(b) Goodwill (Aracruz
acquisition)

(-)(c) Forestry Capex in MS

Maturity

As stated in the income statement

- Annual tax deduction: US$ 27 million (tax)
2018
- Remaining Balance Sept/16: US$ 0.196 billion (base)
2016 tax deduction related to depletion: US$ 21 million

Undefined

(+/-)(d) Exchange variation

(cash)

----------

----------

(+/-)(e) Other

----------

----------

state (net)

Tax base before

compensations

(a) + (b) + (c) + (d) + (e)

- Up to 30% of tax base before compensations

(f) (-) Tax loss carryforward

Undefined
- Balance up to Sept/16: US$ 382 million (base)

(g) Tax base

Tax base before compensations tax loss carryforward (f)

----------

Tax base (g) * 34%

----------

Balance June/2016:
-PIS/COFINS: US$ 218 million
-Advanced tax payment (IR and CSLL): US$ 315 million
- Reintegra: US$ 26 million

Undefined

(h) Income tax

(i) (-) Federal tax credits

Cash Tax

Income Tax (h) tax credits (i)

TAX PAYMENT(2) (cash basis)

2010

2011

2012

2013

2014

2015

9M16

US$ 9 million

US$ 2 million

US$ 8 million

US$ 14 million

US$ 12 million

US$ 23 million

US$ 28 million

(1) Considering FX 3.2460 | (2) Considering average FX for the period

78

Dividends
79

Policies approved by the Board of Directors

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

80

Approval of Dividend Policy

Commitment to Corporate Governance best practices.

Proposed dividends based on cash generation, taking into consideration

the companys strategic planning and in line with its policies, notably the
Indebtness and Risk Management policies.
Preserving Investment Grade.

Extraordinary dividend if Policy criteria are met.

81

Dividends

2016
April 27, 2016

Mid-May, 2016

Mid-November, 2016

Extraordinary
dividend
appraisal
(not approved)

GSM approved dividend

Dividend payment
(1)
distribution of USD80 million of USD 80 million.
(1.1% of dividend yield as at
Dec. 31, 2015).

2017
April, 2017

Mid-May, 2017

OGM to approved
dividend
distribution

(1) Considering March 7, 2016 FX R$/US$3.7714

Dividend payment
to occur from May
onwards

Mid-November, 2017

Extraordinary
dividend
appraisal

Mid-December, 2017

Extraordinary
dividend
payment
(if approved)

82

Dividends vs. Leverage

3,00

2,50

2.64

2,000
2.30
2.10
1.95

2,00

1,50

1.78

1.86

1.58

1,00

0,50

304
148

0,00

1Q15

2Q15

3Q15

4Q15

Dividends (R$ million)

1Q16

2Q16

3Q16

Leverage (x)

83