1Q10 Quarterly Report

EBITDA in 1Q10 of R$242 million, up 35% from 1Q09, with EBITDA margin of 29%
R$ Million Sales Volume - 1,000 t
% Exports

1Q10 433
38%

4Q09 435
34%

1Q09 356
42%

1Q10/4Q09

1Q10/1Q09

0%
4 p.p

22%
- 4 p.p.

Net Revenue
% Exports

844
25%

805
22%

722
31%

5%
3 p.p.

17%
- 6 p.p

EBITDA
EBITDA margin

242
29%

219
27%

180
25%

11%
2 p.p.

35%
4 p.p.

Net Income
Net margin

31
4%

-185
-23%

29
4%

N/A
- 27 p.p.

6%
0 p.p.

Net Debt
Net Debt/EBTIDA (LTM)

2,425
3,0 x

2,569
3,4 x

3,756
5,2 x

-6%
-12%

-35%
-42%

Capex
LTM - last twelve months N / A - Non applicable

46

35

79

31%

-42%

The quarterly information is presented in accordance with accounting practices adopted in Brazil, including amendments made by federal laws 11,638/07 and 11,941/09, by the Accounting Pronouncements Committee (CPC) and by the Securities and Exchange Commission of Brazil (CVM). Some figures in tables and charts can not express an accurate result due to rounding.

1Q10 Highlights
Sales volume: 433,000 tonnes, up 22% from 1Q09; Record-high board sales volume in a first quarter: 163,000 tonnes, up 32% from 1Q09; Coated boards domestic market share, excluding liquid packaging board, reached 27%, compared with 25% in 2009; Net Revenue: R$844 million, growing 17% from 1Q09; Solid cash position: short-term financial investments stood at R$2.3 billion, up from R$2.1 billion at year-end 2009; Net debt down R$144 million from end-2009, while net indebtedness reached R$2.4 billion; Net debt/EBITDA ratio improves from 5.2x at end-March 2009 and 3.4x at end-2009 to 3.0x at end-March 2010; On March 18th, 2010, Klabin's American Depositary Receipts began trading on the OTCQX.

Investor relations: Antonio Sergio Alfano Luiz Marciano Vinicius Campos Daniel Rosolen Lucia Reis

Conference call: Tuesday, May 4th, 2010 10:00am (NY) 11:00am (Brasilia) Password: Klabin US: 1-888-700-0802 Int.: 1-786-924-6977 Brazilian Participants: (+55 11) 4688-6331

Visit our website www.klabin.com.br

1Q10 Earnings Release May 3rd, 2010

Markets and Exchange Rate

Paper demand was strong in the first quarter of 2010. Data from the Brazilian Corrugated Boxes Association (ABPO) and the Brazilian Association of Pulp and Paper Producers (Bracelpa) pointed to solid growth in the domestic corrugated boxes and coated boards markets. Meanwhile, Brazils paper exports were benefited by limited supplies from international producers, reflecting plant closures in 2009, strikes and natural phenomena that disrupted world supplies (earthquake in Chile, freezing of the Baltic Sea, and severe winter weather in the Northern Hemisphere). Following pulp prices, paper prices increased during the quarter. FOEX data suggest the list price of kraftliner brown 175 g/m in Europe increased in the quarter by approximately 30/t from 4Q09. In other regions this increase was sharper, as indicated by the prices announced by Klabin at end-2009 and during the first quarter of 2010. In January, kraftliner prices increased by US$50/t in Latin America, Africa, the Middle East and Asia. In March, the Company announced new price increases for Europe (30/t in March and another 30/t in April) and for South America (US$50/t to be implemented during 2Q10). Recently, a 7% increase for the domestic market prices was announced and will take effect in May. According to Bracelpa, coated boards shipments in the domestic market (excluding liquid packaging board) in 1Q10 totaled 140,000 tonnes, setting a record in the first quarter. In the same period of 2009, coated boards sales totaled 99,000 tonnes, reflecting the impacts on Brazilian demand from the international crisis. In the first three months of 2008, domestic coated boards sales totaled 122,000 tonnes, which means that 1Q10 shipments were 41% and 14% higher than in 1Q09 and 1Q08, respectively, exceeding pre-crisis levels. Klabin expanded its share of the board market to 27% in 2010, compared with 25% in 2009 and 18% in 2008 In the packaging market, based on ABPO data, corrugated boxes shipments also set a record in a first quarter, reaching 602,000 tonnes. Sales in the domestic market in 1Q10 were 20% and 11% higher than in 1Q09 and 1Q08, respectively. Old corrugated containers prices remained at high levels in 2010. The Company continues to use more kraftliner to produce corrugated boxes. Domestic cement sales have been boosted by government programs to stimulate the homebuilding industry, the higher availability of credit and growing income and employment levels. According to preliminary data from the National Cement Industry Trade Union (SNIC), domestic cement consumption totaled some 14 million tonnes, increasing 16% and 18% from 1Q09 and 1Q08, respectively. The U.S. residential homebuilding industry has yet to reach pre-crisis levels, and U.S. Census Bureau estimates indicate that 626,000 homes were built in March 2010, increasing by 20% from a year earlier, though still down 41% from March 2008. Klabin changed its strategy and logistics for wood sales to focus on growing its sales volumes and consequently making more areas available for new forest planting. The foreign exchange rate (sell, end of period) closed at R$1.78/US$ on March 31, 2010, up 2% from December 31, 2009 and down 23% from March 31, 2009. In the first quarter, the average exchange rate in the period was R$1.80/US$, up 4% from 4Q09 and down 22% from 1Q09.

1Q10 Average Rate End Rate 1.80 1.78

4Q09 1.74 1.74

1Q09 2.31 2.32

1Q10/4Q09

1Q10/1Q09

4% 2%

-22% -23%

1Q10 Earnings Release May 3rd, 2010

Operating and Financial Performance

Paper sales volume
Sales volume excluding wood in the quarter was 433,000 tonnes, 22% higher than in 1Q09 and stable in relation to 4Q09. Domestic sales volume was 269,000 tonnes in the quarter, 29% higher than in 1Q09 and down 7% from 4Q09. Export sales volume in the quarter was 165,000 tonnes, growing by 11% from 1Q09 and by 12% from 4Q09. The growth in the export sales was driven by higher sales volume of liquid packaging board and kraftliner papers. Coated boards sales volume accounted for 38% of total paper sales, compared with 35% in 1Q09.

Sales volume (thousand tonnes)

Sales volume by product 1Q10

Ind. Bags 8% Others 1%

433
38%

435 356
34% 42% 66% 58%
Kraftliner 25%

Coated Boards 38%

62%

1Q10

4Q09

1Q09 Export Market

does not includes wood
Corrugat. Boxes 28%

Domestic Market

Note that this quarter, on an exceptional basis; this release presents certain comparisons with 1Q08, since demand in the first six months of 2009 was below historical levels as a result of the international crisis.
Thousand tonnes Domestic Market Export Market Total 1Q10 269 165 433 1Q09 208 148 356 1Q08 225 161 386
1Q10 / 1Q09 1Q10 / 1Q08

29% 11% 22%

19% 2% 12%

Net revenue
Net revenue, including wood, was R$844 million in 1Q10, up 17% and 5% from 1Q09 and 4Q09, respectively. Net revenue in the domestic market totaled R$630 million, up 27% from 1Q09 and flat in relation to 4Q09. Net revenue from exports came to R$215 million, down 5% from 1Q09 and up 24% from 4Q09. The increase from the prior quarter was due to higher wood logs, board and kraftliner sales volumes, as well as the price increases implemented for these papers. Net revenue from board sales accounted for 36% of total revenue, compared with 35% in 1Q09.

1Q10 Earnings Release May 3rd, 2010

Net revenue (R$ million) 844

25%

Net Revenue by Product - 1Q10

805 722
22% 31%
Ind bags 13%

Wood 6%

Others 1%

Coated Boards 36%

75%

78%

69%
Kraftliner 14%

1Q10

4Q09

1Q09
includes wood

Domestic Market

Export Market

Corrugat. Boxes 30%

R$ million Domestic Market Export Market Total

1Q10 630 215 844

1Q09 495 227 722

1Q08 535 206 740

1Q10 x 1Q09

1Q10 x 1Q08

27% -5% 17%

18% 4% 14%

Export destinations
In 1Q10, exports to Latin America remained buoyant, driven by sales of board and industrial bags to the region. The share of export sales volume to Asia overtook that to Europe, going from 14% in 1Q09 to 30% in 1Q10, while the share of export sales volume to Europe fell to 19% in 1Q10, from 43% in the same period a year earlier. This shift reflects the higher allocation of liquid packaging board to Asia.
Volume - 1Q10
Afric a 7% North America 4%

Net Revenue - 1Q10

North Americ a 4%

Africa 5%

Europe 19%

Latin America 38%

Europe 17%

Latin Americ a 42%

Asia 30%

Asia 32%

1Q10 Earnings Release May 3rd, 2010

Operating results
Cost of goods sold totaled R$594 million in 1Q10, up 14% from 1Q09 due to the higher sales volume, and down 2% in relation to 4Q09. COGS per tonne in the quarter was 6% and 1% lower than in 1Q09 and 4Q09, respectively. Selling expenses in the quarter were R$73 million, down 18% from 1Q09 and 3% higher than 4Q09. In the first quarter of 2010, freight expenses were R$43 million, accounting for 60% of total selling expenses. General and administrative expenses totaled R$46 million in 1Q10, up 13% from 1Q09 and 6% lower than 4Q09. Other operating revenue (expenses) was a revenue of R$0.4 million in 1Q10, compared with an expense of R$1 million in 1Q09 and non-recurring revenue of R$29 million in 4Q09. Cash cost in the quarter was R$1,393/t, 10% less from 1Q09 and 4% up on 4Q09, reflecting the higher purchases of wood and fibers and the higher consumption of chemical products. Operating income before the financial result (EBIT) was R$132 million in the quarter, increasing by 87% from 1Q09 and 21% from 4Q09.

Operating Cash Generation (EBITDA)

Operating cash generation (EBITDA) was R$242 million in 1Q10, up 35% and 11% from 1Q09 and 4Q09, respectively. EBITDA margin was 29% in the period, compared with 25% in 1Q09 and 27% in 4Q09.

EBITDA Composition - R$ million Operational result (after financial result) (+) Financial result (+) Depreciation EBITDA EBITDA Margin

1Q10 51 81 110 242 29%

4Q09 34 75 109 219 27%

1Q09 32 38 109 180 25%

1Q10/4Q09

1Q10/1Q09

52% 7% 0% 11% 2 p.p.

59% 111% 0% 35% 4 p.p.

EBITDA and EBITDA margin R$ million

400 350 300 250 200 150 100 50 0 35%

25% 22%

27%

27%

29%

30% 25%

180

199 150

219

242

20% 15% 10% 5% 0%

1Q09

2Q09 EBITDA

3Q09

4Q09 EBITDA Margin

1Q10

1Q10 Earnings Release May 3rd, 2010

Indebtedness
Gross debt stood at R$4,761 million on March 31, 2010, compared with R$4,621 million on December 31, 2009, of which 59% or US$1,589 million was denominated in foreign currency (primarily export pre-payment facilities).

The average debt term was 44 months, or 39 months for debt denominated in local currency and 47 months for debt denominated in foreign currency. Short-term debt accounted for only 11% of total debt at end-March. At end-March, the balance of cash and short-term financial investments was R$2,336 million, which exceeds the amortizations coming due over the next 39 months.
Net debt stood at R$2,425 million on March 31, 2010, declining by R$1,330 million from March 2009 and by R$144 million from December 2009.

Debt (R$ million) Short term Local currency Foreign currency Long term Local currency Foreign currency Gross debt Local currency total Foreign currency total Cash Net debt Net debt / EBITDA (LTM)
LTM - last twelve months

03/31/10 538 315 223 4,223 1,616 2,607 4,761 1,931 2,830 2,336 2,425 3,0 x 11% 7% 5% 89% 34% 55% 100% 41% 59%

12/31/09 695 492 203 3,926 1,683 2,243 4,621 2,175 2,446 2,052 2,569 3,4 x 15% 11% 4% 85% 36% 49% 100% 47% 53%

As announced in the material fact notice published on February 18, 2010, Klabin is participating in the Federal Tax Debt Restructuring Program (REFIS). The amount payable after application of the program rules is approximately R$ 335 million, which was fully recognized in the 2009 financial statements. The company is awaiting availability of the specific program by the Federal Revenue of Brazil in order to pay the amount.

Net Results
Net income in 1Q10 was R$31 million, increasing by 6% from the same quarter of 2009. In 4Q09, the Company posted a net loss of R$ 185 million due to the non-recurring effects from the companys participation in the Federal Debt Tax Restructuring Program (REFIS).

1Q10 Earnings Release May 3rd, 2010

Business Performance
FORESTRY
Klabin handled 2.3 million tonnes of pine and eucalyptus logs, woodchips and biomass for energy generation in 1Q10, up 24% and 9% from 1Q09 and 4Q09. Of this amount, 1.7 million tonnes were transferred to the plants in the states of Paran, Santa Catarina and So Paulo. The volume of wood log sales to sawmills and laminators totaled 682,000 tonnes in the quarter, 64% and 27% higher than 1Q09 and 4Q09, respectively. Net revenue from wood log sales to third parties in 1Q10 was R$53 million, 44% and 26% up on 1Q09 and 4Q09, respectively.

Sales volume (thousand tonnes) 682 536 416

Net revenue (R$ milhes)

53 1Q10 4Q09 1Q09 1Q10

42 4Q09

37 1Q09

The U.S. residential homebuilding industry has yet to return to pre-crisis levels. However, the U.S. companies that have survived have captured existing demand and are supplying their operations using Klabins wood logs clients. The Company has modified its strategy and logistics for wood logs sales. Both the range of clients and the radius of operations were expanded, with a resulting increase in wood logs sales volume. Harvested areas are being made available for replanting with more productive species. In March, new-home starts in the United States fell to a seasonally adjusted annual rate of 626,000 units, increasing by 2% from February 2010 and by 20% from March 2009 (521,000).
Housing starts thousand units
1,460 1,464 1,297 1,151 1,053 1,025

868 658 528 540 587 559 617

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09

3Q09

4Q09

1Q10

Source: US Census Bureau

Quarter average

Housing starts

1Q10 Earnings Release May 3rd, 2010

At the end of March, own and third-party planted areas totaled 210,000 hectares, of which 143,000 hectares were planted with pine and 67,000 thousand with eucalyptus, as well as 191,000 hectares established as permanent preservation and legal reserve areas.

PAPERS
The volume of paper and coated board sales to third parties totaled 273,000 tonnes in 1Q10, up 27% on 2% from 1Q09 and 4Q09, respectively. Net revenue from paper and board sales totaled R$421 million in 1Q10, up 19% from 1Q09 and 10% from 4Q09. Exports in the quarter totaled 157,000 tonnes, growing by 13% and 14% in relation to 1Q09 and 4Q09. In the quarter, exports accounted for 58% of the units total sales volume.

Kraftliner
Kraftliner sales volume was 110,000 tonnes in 1Q10, increasing by 20% and 1% from 1Q09 and 4Q09, respectively. Kraftliner exports stood at 81,000 tonnes in 1Q10, representing 74% of total sales of this product. This volume of exports was 1% lower than in 1Q09, due to the higher volume of transfers to the corrugated box plants and the larger client portfolio in the domestic market. Domestic kraftliner sales rose to 29,000 tonnes in 1Q10, up 195% from 1Q09 and down 24% from 4Q09. Kraftliner net revenue was R$117 million in 1Q10, up 14% from 1Q09 and 11% from 4Q09.
Sales volume (thousand tonnes) Net revenue (R$ million)

110
74%

109
65%

92
89%

117

106

103

1Q10

4Q09

1Q09 Export market

1Q10

4Q09

1Q09

Domestic market

Kraftliner prices continued to recover during the quarter. According to FOEX, the average list price of kraftliner brown 175g/m in euros increased by 7% during 1Q10 in relation to the previous quarter. In the same comparison period, Klabins average price in Brazilian real increased by 10%. The strong demand in the international market has provided room for a series of price increases for packaging papers. Since September 2009, the company has implemented a cumulative increase of US$200/t. However, the kraftliner price has not yet returned to its pre-crisis level. The chart below shows the development in the Kraftliner price in euro and Brazilian real.

1Q10 Earnings Release May 3rd, 2010

Kraftliner Brown 175 g/m List Price (/tonne and R$/tonne)

1,439 1,408 1,393 1,356 1,344 1,459 1,302 1,217 1,392 1,162 1,029 1,038 1,079

521

527

529

524 516

501 487 486

462

411

385

404

433

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09

3Q09

4Q09

1Q10

Source: FOEX and BACEN

Quarter average

Kraftliner ( / tonne)

Kraftliner (R$ / tonne)

Coated boards
The volume of coated board sales in 1Q10 was 163,000 tonnes, growing by 32% and 3% in relation to 1Q09 and 4Q09, respectively. Net revenue from board sales was R$304 million in the quarter, rising 22% and 10% from 1Q09 and 4Q09, respectively. Board exports totaled 76,000 tonnes in 1Q10, up 34% and 15% from 1T09 and 4Q09, respectively.

Sales volume (thousand tonnes)

Net revenue (R$ million)

304 163
47% 53%

277

158 124
42 % 58 % 46% 54%

249

1Q10

4Q09

1Q09 Export market

1Q10

4Q09

1Q09

Domestic market

According to Bracelpa, domestic sales volume of coated boards (excluding liquid packaging board) was 140,000 tonnes in the quarter, 41% higher than in 1Q09. Klabins share of the domestic coated boards market reached 27% in 1Q10, up from 19% in 1Q09. The Monte Alegre mill will carry out a scheduled maintenance stoppage from June 7 to 17.

CORRUGATED BOXES
Klabins shipments in the quarter totaled 119,000 tonnes, up 19% from 1Q09 and down 4% from 4Q09. Net revenue from corrugated boxes totaled R$249 million in 1Q10, up 17% from 1Q09 and down 3% from 4Q09.

1Q10 Earnings Release May 3rd, 2010

Sales volume (thousand tonnes)

Net revenue (R$ million)

249

256 212

119

124

101

1Q10

4Q09

1Q09

1Q10

4Q09

1Q09

According to the Brazilian Corrugated Boxes Association (ABPO), corrugated boxes and sheets shipments in the quarter totaled 602,000 tonnes, 20% higher than 1Q09. The chart below shows the historical record for Brazils shipments of these products in the first quarter.
CAGR 4% 602 464 492 497 526 544 542 503

1Q03

1Q04

1Q05

1Q06

1Q07

1Q08

1Q09

1Q10

Source: ABPO

INDUSTRIAL BAGS
Sales volume of industrial bags at the plants in Brazil and Argentina totaled 33,000 tonnes in 1Q10, up 10% from 1Q09 and down 4% from 4Q09. Net revenue from industrial bags in the quarter was R$109 million, 4% higher than in 1Q09 and flat in relation to 4Q09.

Sales volume (thousand tonnes)

Net revenue (R$ milhes)

109

108

105

33 1Q10

35 4Q09

30 1Q09 1Q10 4Q09 1Q09

10

10

1Q10 Earnings Release May 3rd, 2010

According to the National Cement Industry Trade Union (SNIC), the countrys main consumer of industrial bags, 14 million tonnes of cement were sold in the domestic market, up 16% from 1Q09. The chart below shows the trajectory of this market in recent years.

Brazilian cement consumption thousand tonnes

4.6 3.4 3.6 3.9 4.0 4.0 4.2 4.7 3.9 4.3 4.1 4.4 4.5

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09

3Q09

4Q09

1Q10

Quarter average
Source: Nation Labor Union of Cement Industry

Monthly consumption

Capital Markets
In 1Q10, Klabin preferred shares (KLBN4) gained 3.0%, while the Ibovespa index increased by 2.6%. The company's shares were traded in all sessions on the BM&FBovespa S.A. - Securities, Commodities and Futures Exchange, registering 94,913 transactions involving 102.6 million shares in the quarter, for average daily trading volume of R$ 8.7 million.
March 31 , 2010 Preferred shares Share price (KLBN4) Book value Average daily trading volume 1Q10 Market capitalization 600.9 million R$ 5.47 R$ 2.63 R$ 8.7 million R$ 4.9 billion
st

The following chart shows the performance of Klabins preferred shares and Ibovespa index:
120%
103 103

100%

80%

60% Dec-09

Jan-10 KLBN4

Feb-10 IBOVESPA index

Mar-10

Klabin shares also trades in the U.S. market through Level I ADRs, which are listed on the over-thecounter market under the ticker KLBAY. In order to boost the liquidity of the ADR program and attract new foreign investors to its shareholder base, on March 18, 2010, the companys ADRs began trading on the OTCQX, the leading trading platform for assets on the U.S. over-the-counter market.

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1Q10 Earnings Release May 3rd, 2010

Klabins capital is represented by 917.7 million shares, composed of 316.8 million common shares and 600.9 million preferred shares. On March 31, the company held 16.9 million preferred shares in treasury.

Dividends
The Annual Shareholders Meeting held on April 16, 2010 approved the payment of complementary dividends for fiscal year 2009 of R$59.43 per lot of thousand common shares and R$65.37 per lot of thousand preferred shares.

Capital Expenditure (Capex)

The main capex in the quarter are listed below:

R$ Million Forestry Papers Packaging Indutrial Bags Others Total

1Q10 26 13 2 5 0 46

1Q09 42 27 10 1 0 79

Capex in the first quarter totaled R$ 46 million, of which 52% was allocated to maintaining the existing forests.

Strategy
In accordance with its short and medium term strategy established in the preparation of its 2010 budget, Klabin advanced in the achievement of its objectives: 1. Acquisition of a biomass boiler for Otaclio Costa, Santa Catarina, with steam capacity of 60 t/hour. The planned capex is R$ 33 million, with production beginning in the first quarter of 2011; 2. Ordering of 4 new printers for the corrugated boxes conversion plants, with a capex of R$29 million, with installation slated for June and November 2010 at the conversion plants in Jundia (TP and DI), So Paulo; Feira de Santana, Bahia; and Itaja, Santa Catarina. The new equipment will boost production as of December 2010 by 4,000 t/month, and will make available a higher number of colors for meeting client demands; 3. Technological update of the conversion plants in Jundia (TP), So Paulo and Goiana, Pernambuco, providing an increase of 33% in the maximum operational speed, from 300 meters per minute to 400 meters per minute. Refurbishment of the corrugating box plant in Betim, Minas Gerais, with an increase of 25% in the maximum operational speed, from 240 meters per minute to 300 meters per minute. The corrugating box plant in Itaja, Santa Catarina will receive technological modernizations. The equipment is slated to arrive at end-2010, with conclusion of installation expected until March 2011. The planned investment is approximately R$ 19 million; 4. The new high-voltage transmission line for the Monte Alegre mill in Paran is in the bidding phase. The capex i is estimated at R$ 60 million, and will involve a step-down substation from 230 kV to 69 kV, as well as a 35-km transmission line. Operational startup is expected for May 2011, and will provide a reduction in the level of energy losses and lower transmission costs; 5. Increase in the volume of wood logs sales, which will result in more area for forest replanting, with extremely high yields;

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1Q10 Earnings Release May 3rd, 2010

6. The complete line for producing multilayered valve-type bags. acquired in late 2009 should begin operation in July this year, at the Lages conversion plant. The long-term strategic objectives are still in the planning phase and envisage: a) Construction of a global-scale pulp plant with capacity between 1.3 and 1.5 million t/year, to be installed at the Monte Alegre mill in Paran state, increasing Klabin's pulp production capacity to 3.2 million t/year; b) Installation of a new coated board machine with capacity of between 400,000 and 500,000 t/year, boosting coated board capacity to 1.2 million t/year and paper and paper packaging capacity to 2.6 million t/year. c) In 2010, we accelerated the pace of forest planting to assure the supply of raw materials for the new pulp plant.

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1Q10 Earnings Release May 3rd, 2010

Conference Call
Tuesday, May 4, 2010 at 10:00 a.m. (Brazil) Code: Klabin Dial-in: +55 (11) 4688-6331 Replay: +55 (11) 46886312 Password: 46592

Conference Call
Tuesday, May 4, 2010 10:00 a.m. (N.Y.) / 11:00 a.m. (Braslia) Code: Klabin Dial-in: U.S. participants: +1 (888) 700-0802 International participants: +1 (786) 924-6977 Brazilian participants: +55 (11) 4688-6331 Replay: +55 (11) 46886312 Code: 46593

Webcast
An audio webcast of the conference call will also be available on the internet. Access: www.ccall.com.br/klabin

With gross revenue of R$ 3.6 billion in 2009, Klabin is the largest integrated manufacturer of packaging paper in Brazil, with annual production capacity of 1.9 million tonnes. Klabin has adopted a strategic focus on the following businesses: paper and coated board for packaging, corrugated boxes, industrial bags and wood logs. Klabin is the leader in all market segments in which it operates.
The statements made in this earnings release concerning the Company's business prospects, projected operating and financial results and potential growth are merely projections and were based on Managements expectations of the Companys future. These expectations are highly susceptible to changes in the market, in the state of the Brazilian economy, in the industry and in international markets, and therefore are subject to change.

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1Q10 Earnings Release May 3rd, 2010

Appendix 1 Consolidated Income Statement BR GAAP (thousands of R$)

1Q10 Gross Revenue Net Revenue Cost of Goods Sold Gross Profit Selling Expenses General & Administrative Expenses Other Revenues (Expenses) Total Operating Expenses Operating Income (before Fin. Results) Financial Expenses Financial Revenues Net Foreign Exchange Losses Net Financial Revenues Net Income before Taxes Income Tax and Soc. Contrib. Minority Interest Net Income Depreciation/Amortization/Exhaustion EBITDA 1,022,474 844,385 (594,317) 250,068 (72,565) (45,934) 465 (118,034) 132,034 (81,755) 42,449 (41,280) (80,586) 51,448 (17,422) (3,290) 30,736 110,045 242,079 4Q09 980,881 805,338 (605,590) 199,748 (70,482) (48,723) 28,698 (90,507) 109,241 (169,815) 41,757 52,746 (75,312) 33,929 (218,144) (934) (185,149) 109,296 218,537 1Q09 1Q10 863,482 721,774 (520,555) 201,219 (89,050) (40,587) (1,011) (130,648) 70,571 (98,523) 46,969 13,318 (38,236) 32,335 (2,896) (495) 28,944 109,387 179,958 100.0% 70.4% 29.6% 8.6% 5.4% 0.1% 14.0% 15.6% 9.7% 5.0% 4.9% 9.5% 6.1% 2.1% 0.4% 3.6% 13.0% 28.7% 100.0% 75.2% 24.8% 8.8% 6.1% 3.6% 11.2% 13.6% 21.1% 5.2% 6.5% 9.4% 4.2% 27.1% 0.1% 23.0% 13.6% 27.1% 100.0% 72.1% 27.9% 12.3% 5.6% 0.1% 18.1% 9.8% 13.7% 6.5% 1.8% 5.3% 4.5% 0.4% 0.1% 4.0% 15.2% 24.9% % of Net Revenue 4Q09 1Q09

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1Q10 Earnings Release May 3rd, 2010

Appendix 2 Consolidated Balance Sheet BR GAAP (thousands of R$)

Assets Current Assets Cash and banks Short-term investments Securities Receivables Inventories Recoverble taxes and contributions Other receivables mar-10 3,639,418 6,330 2,141,160 188,422 593,961 427,021 234,235 48,289 dez-09 3,389,115 12,356 1,829,296 209,874 553,614 431,047 294,268 58,660 Liabilities and Stockholders' Equity Current Liabilities Loans and financing Suppliers Income tax and social contribution Taxes payable Salaries and payroll charges Dividends to pay Provision REFIS Other accounts payable Noncurrent Liabilities Loans and financing Other accounts payable Noncurrent Assets Deferred income tax and soc. Contrib. Taxes to compensate Judicial Deposits Other receivables Other investments Property, plant & equipment, net Intangible assets 4,529,598 142,646 148,331 40,034 120,695 11,542 4,007,265 59,085 4,608,617 149,533 164,673 37,239 113,120 11,552 4,077,402 55,098 Stockholders' Equity Capital Capital reserves Revaluation reserve Profit reserve Valuation adjustments to shareholders' equity Treasury stock 2,417,738 1,500,000 84,491 78,694 846,766 (12,403) (79,810) 2,387,018 1,500,000 84,491 78,964 815,851 (12,478) (79,810) Minority Interests mar-10 1,329,881 537,452 217,175 18,750 57,273 49,618 57,002 334,236 58,375 4,355,776 4,223,437 132,339 65,621 dez-09 1,454,107 694,798 189,696 1,622 50,399 68,859 57,002 331,685 60,046 4,099,942 3,925,637 174,305 56,665

Total

8,169,016

7,997,732

Total

8,169,016

7,997,732

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1Q10 Earnings Release May 3rd, 2010

Appendix 3 Loan Maturity Schedule March 31, 2009

R$ Million BNDES Others Local Currency Trade Finance Fixed Assets Others Foreign Currency Gross Debt 2Q10 83 3 86 57 1 6 63 149 3Q10 76 0 76 34 0 28 62 138 4Q10 76 0 76 50 0 50 126
R$ Million Short term = 11% 858 796 719 683 641
565 430 350

1Q11 76 0 76 22 0 25 47 123

2011 310 17 327 262 3 49 314 641

2012 301 17 318 427 4 47 478 796

2013 275 18 293 492 4 69 565 858

2014 268 21 290 361 2 67 430 719

2015 302 31 333 281 2 67 350 683

2016 47 25 72 110 1 130 241 313

After 2017

Total 1,776 155 1,931 2,209 25 596 2,830 4,761

36 23 60 137 7 135 279 339

Local Currency Foreign Currency Gross Debt

Average Cost 10.0 % p.y. 3.5 % p.y.

Average Tenor 39 months 47 months 44 months

Foreign Currency 2,830

478 314

Gross Debt 4,761

313 339

149
63 86
2Q10

138
62 76
3Q10

241

279

126
50 76
4Q10

123
47 76
1Q11

327

318

293

290

333

Local Currency 1,931

72
2011 2012 2013 2014 2015 2016

60
After 2017

Local Currency

Foreign Currency

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1Q10 Earnings Release May 3rd, 2010

Appendix 4 Consolidated Cash Flow Statement BR GAAP (thousands of R$)

1Q10
Cash flow from operating activities Operating activities . Net income . Depreciation, amortization and depletion . Equity results . Deferred income taxes and social contribution . Interest and exchange variation on loans and financing . Interest Payment . Minority interest . Others Variations in Assets and Liabilities . Receivables . Inventories . Recoverable taxes . Judicial deposists . Marketable Securities . Prepaid expenses . Other receivables . Suppliers . Taxes and payable . Income and social contribution . Salaries, vacation and payroll charges . Other payables Net Cash Investing Activities . Purchase of property, plant and equipment . Increase in intangible . Sale of property, plant and equipment Net Cash Financing Activities . New loans and financing . Amortization of financing . Payment of capital at subsidiaries by minority shareholders . Acquisition of minority shares in subsidiaries Increase (Decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period 222,269 159,842 30,736 110,045 238 (1,970) 113,359 (95,863) 3,290 7 62,427 (40,347) 4,226 76,375 (2,795) 21,452 3,024 714 27,975 6,874 17,037 (19,241) (32,867) (45,055) (42,618) (3,013) 576 128,624 377,479 (254,521) 5,751 (85) 305,838 1,841,652 2,147,490

1Q09
7,555 119,376 28,944 109,387 (257) 611 63,829 (85,207) 495 1,574 (111,821) (40,096) (10,645) 14,405 (2,415) (11,881) 12,394 14,376 (80,188) (1,247) 1,284 (11,391) 3,583 (48,865) (49,832) 967 (56,359) 4,597 (61,421) 730 (265) (97,669) 1,295,177 1,197,508

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