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Corporate Presentation

November, 2016

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 Expansion Project Horizonte 2
5 Dividends
Cost reduction initiatives and
6 industry statistics
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
NEW
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

* 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
End Use - 9M16

Region 9M16
N.
America
20%
Europe
39%

Tissue
Asia
30%

Printing &
Writing

52%

29%
Specialties

LatAm
11%

19%

Net Revenues by Region - Fibria


9%

10%

9%

24%

25%

24%

28%

24%

24%

39%

41%

43%

39%

2013

2014

2015

9M16

Europe

North America

Asia

11%
30%

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)

20%

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

The better than expected scenario has become a reality again in


2015
BHKP CAPACITY CHANGES
EXPECTED SCENARIO FOR 2015 IN DEC14
Suzano Maranho

750
265

Oji Nantong

Portucel Cacia

85

Sappi Cloquet
April Rizhao
Ence Huelva
Possible closures*
Net
BEKP demand growth**

500
200

Eldorado

30

Old Town (Expera)

265

CMPC Guaiba II

200

Eldorado

750

Montes del Plata


Oji Nantong

750

CMPC Guaiba II

400

Suzano Maranho

400

Montes del Plata

REALIZED SCENARIO IN 2015

115

Portucel Cacia

30

Old Town (Expera)

40

Ence Navia

40
115

Sappi Cloquet

-65

April Rizhao

-315

Ence Huelva

-400 to -800

Unexpected Downtimes
1,415 to 1,815

1,095

*Based on annual closures average (400,000 to 800,000 t/yr)


**Source: PPPC Outlook for Eucalyptus Market Pulp December 2014

-190
-315

-400

Net
BEKP demand growth**

Indonesia, China,
Uruguay and Brazil

1,450
1,232

**Source: PPPC Market Pulp World 20

12

and so has been the price scenario


BHKP Delivered to Europe (USD/t)
804

802
784

781

750

738

735
726

721
709

1Q15

2Q15

3Q15

Consultants average at the end previous year

4Q15

Annual 2015

Realized PIX/FOEX price

Consultants: Hawkins Wright, RISI and Brian McClay (published in the end 2014 for 2015 prices)

13

Better worldwide macroeconomics are the key drivers But the


special focus is on Europe
Real GDP % Annual Growth

7.7

7.7

7.3

6.9

6.2

3.4 3.3 3.4 3.1 3.4


1.5 2.4 2.4 2.5
0.9 1.5 1.4

2.2

-0,3

-0.8
World

Euro Area
2013

USA
2014

2015

2016

China

2017

Source: International Monetary Fund, World Economic Outlook Database, July 2016

14

But the special focus is on Europe


Hardwood and Eucalyptus Shipments (000 t and % annual growth)

400

6.0%
5.0%

3.8%
3.3%

200

0
-0.3%

-0.8%

-0.8%

-0.6%

-200
2012

2013

2014

BHKP

2015

BEKP

Source: PPPC World 20

15

Global Market BEKP Demand


Shipments of Eucalyptus Pulp
Operating Rate (shipments to capacity) - Hardwood (1)

9M16 vs. 9M15(1)

6%

20%

105%

97%

100%

11%
3% 1,004

95%

788 966
kt kt

676 kt
kt

90%
85%

3% 4%
173 166

80%
75%

-5% 1%
-114 21

-2% -3%
-171 -149

North America

Western
Europe

Min. = 78%

70%

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

Total

BHKP
(1)

(1)

Source: PPPC Global 100 September/2016

China

Others

BEKP

Source: PPPC Global 100 - September/2016

Paper Capacity increase in China


2014

2015

2016

FORECAST

REALIZED

PREVIOUS
FORECAST

LATEST
FORECAST

LATEST
FORECAST

Woodfree

256

256

760

980

1,000

Tissue

1,390

1,278

1,365

965

568

Cartonboard

2,100

1,326

730

900

630

Total

3,746

2,860

2,855

2,845

2,198

Source: Fibria and Independent Consultants

16

So, what can we expect for 2016?


BHKP CAPACITY CHANGES
EXPECTED SCENARIO FOR 2016 IN NOV15

660

Klabin
Altri Celbi

Woodland
Verso Wickliffe
APRIL Kerinci

Possible closures*

Klabin

30

600
30

Altri Celbi

-40

APP South Sumatra

-90
-55

-400 to -800

385 to 785

930

1,200

*Based on annual closures average (400,000 to 800,000 t/yr)


**Source: PPPC Outlook for Eucalyptus Market Pulp May 2015 (930kt) and
Fibrias estimates

Woodland

-90

APRIL Kerinci

-120

Unexpected Downtime

-130

-120

Net
BEKP demand growth**

800

CMPC Guaiba II

800

CMPC Guaiba II

Old Town (Expera)

FIBRIAS EXPECTED SCENARIO FOR 2016

Net
BEKP demand growth**

1,090
1,200

Positive Supply/Demand Balance!


17

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

18

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 this year totaled 130kt (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) | 2017: Resolute Calhoun: -40kt, -400kt April Kerinci (Indonesia), -80kt Taiwan P&P | 2017/2018: -275kt
Arauco Valdivia (Chile)

19

Competitive Cash Production Cost


BHKP
capacity
(000 t)

1,130

1,105

2,075

2,290

BHKP (US$/t)

4,915

3,420

15,275

Total: 30,210

BHKP (US$/t)

505

491

52

54

461
110

453

USA

437

China

351

Canada

382
31

351

Iberia

365

356

60

57

305

Indonesia

Cash Cost (US$/t)

299

Chile/Uruguay

408
20
288

115
7

56

43
48

232

206

Brazil

WC=($31/t)

Fibria 9M16

359
20
91

39
57

Interest
Capex
Income tax
SG&A

145
Estimated Fibria
w/ H2 - 2021

Delivery CIF Europe

Source: Hawkins Wright (Price Forecast August 2016) and Fibrias 3Q16 Earnings Release -FX considered by the consultant at R$/US$ = 3.19.
Fibria with Horizonte 2 (H2) cash cost was estimated according to weighted average cost, after mill balance, converted at R$/US$=3.19. Includes energy sales. Income tax figure in 2021 considers the current
9M16 tax payment (Tax Shield).

20

Gross capacity addition should not be counted as the only factor


influencing pulp price volatility.(1)

Spread @Nov 15th: US$155/t(3)

1200

1000
Horizonte 2

2,5

Trs
Lagoas

800

Eldorado
Maranho
Montes Guaba II
del Plata

600
APP
Hainan

400
Valdivia

Fray
Bentos
Mucuri
Veracel Nueva Aldea
Santa F
Kerinci
PL3

1,5

APP South
Sumatra(2)

Klabin

1
Chenming
Zhanjiang

Oji
Nantong

APP Guangxi

200

Capacity Additions (000 ton)

Pulp prices - CIF Europe (US$/ton)

Rizhao

0,5

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

21

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
Apr-00
Aug-00
Dec-00
Apr-01
Aug-01
Dec-01
Apr-02
Aug-02
Nov-02
Mar-03
Jul-03
Nov-03
Mar-04
Jul-04
Nov-04
Mar-05
Jul-05
Nov-05
Mar-06
Jul-06
Nov-06
Mar-07
Jul-07
Nov-07
Mar-08
Jun-08
Oct-08
Feb-09
Jun-09
Oct-09
Feb-10
Jun-10
Oct-10
Feb-11
Jun-11
Oct-11
Feb-12
Jun-12
Oct-12
Feb-13
Jun-13
Oct-13
Jan-14
May-14
Sep-14
Jan-15
May-15
Sep-15
Jan-16
May-16
Sep-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 November 15th, 2016

Lowest volatility among commodities


230

100 = January 1, 2012

200

182

170
140
110

100
87
82

80

53
46

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

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%

35%

34%
27%

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 November 18th, 2016

2Since

January 1, 2009 up to November 18th, 2016

23

Financial and Operational Highlights


24

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

3.43(1)

528

508(2)

1,911

1,742

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 2016 (e)

(1) According to Focus Report (Brazilian Central Bank November 11th, 2016) I (2) 2016 market consensus

25

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%
26

Cash Production Cost in dollars saw a decrease over the past 7 years

Fibria Cash Production Cost(1) (US$/ton)

264

281
242

231

234

220
186

2009 (2) 2010 (2)

2011

2012

2013

2014

2015

184

Consistently
controlling the
cash
production
cost

3Q16
LTM

(1) Constant Currency. (2) Excludes Conpacel

27

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.

28

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.

29

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
UDM

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
UDM

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

30

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

31

Liquidity
Liquidity(1) and Debt Amortization Schedule (US$ billion)
1.6

Pre-Payment
ECN
Voto IV
Finnvera

0.5

Revolver

0.9
Cash

0.7

1.1

(1)

0.5

0.6

0.6

0.3

0.2

0.3
0.1

Liquidity

Capex H2 (2):

2016

2017

0.4

0.9

BNDES
ACC/ACE
Bonds
CRA & Other

2018

2019

2020

2021

2022

2023

2024

0.0

0.0

0.0

2025

2026

2027

0.1

(1) Not including US$1 million related to MtM of hedging transactions. | (2) Financial execution of US$857 million capex until September 30th, 2016. Considering FX R$/US$ = 3.3326.

Horizonte 2 Funding (US$ billion)

0,1 - 2017
0,2 - 4Q16
0,5 - 2Q17
3Q15

3Q15

0,2 4Q16

0.2
0.1

0.1
0.3

0,2 - 4Q16
0,1 - 1Q17

2.4

0.3
0.1
1.3

Horizonte 2
Project US$
2.3 bi
Excess of
US$ 0.1 bi

0.7
1.1

0.2

0.4
Export Pre-Payment

CRA

BNDES (4)

FDCO

Funds withdrawn until September 30th, 2016.

ECA
Contracted funds to be withdraw.

Working capital
release Klabin

Total

(3) H2 Capex to be executed as of 3Q2016| (4) R$ 423 million disbursed in Oct 18th 2016.

32

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.

33

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


Historical G-spread (bps)
1400

Rating

Outlook

1200
1000

Negative

BBB-

800
600

BBB-

Stable

400
200
0

2010

2011

Fibria 2020 - 7.5%

2012

2013

2014

2015

Fibria 2021 - 6.75%

2016

Fibria 2024 - 5.25%


1,307

281

287

301

309

319

345

BRAZIL

BRFOODS

GLOPAR

EMBRAER

VALE

FIBRIA

(1) G-spread on November 17th, 2016

385

395

418

KLABIN

BRASKEM

SUZANO

471

GERDAU

512

PETROBRAS ELDORADO

34

CAPEX 2016
35

2016 Capex Reduction

2016 Total Capex (R$ billion)


R$2.0 billion
reduction

8.2
Pulp
Logistics

0.7

6.2

(0.6)
Horizonte 2

0.1

5.4
4.0

(1.4)

Maintenance
and others

2.1

2.1

Reported on
Jan. 31, 2016

Current

71% of capex reduction on pulp logistics projects


26% of capex reduction on Horizonte 2 project
36

Fibria is able to create value for its shareholders with capital discipline

FREE CASH FLOW

BIO-ENERGY AND

PULP

INDUSTRY
CONSOLIDATION ?

Growth with discipline

Best portfolio of projects

OTHER OPPORTUNITIES

DIVIDENDS

Complementary to pulp

Portocel

Land and forest

WITHOUT JEOPARDIZING CREDIT


METRICS
37

BACK UP
38

Expansion Project Horizonte 2


39

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

40

Why expand Trs Lagoas?


ESTIMATED BHKP CAPACITY RANKING 2017 (000T)

Brownfield Project, synergies with current


operations

Modern plant, prepared for potential


expansion

Availability of wood and low average


distance from forest to mill

Forest based on the optionality concept and


prioritizing lease and partnership models

Additional energy surplus of 130 MWh

Start-up: 4Q2017
Capacity: 1.95 million tons

8,150

Fibria
CMPC
RGE/APRIL
Suzano
APP
Eldorado
UPM
Stora Enso
Arauco
Cenibra
ENCE
Altri
IP
Marubeni
Mitsubishi
Oji
Mondi
Nippon Paper
Verso
Resolute
Georgia-Pacific
Portucel Soporcel
Lwart
Pulp Mill Holding
Domtar
Klabin
Others
0

2000

4000

6000

8000

Current Capacity

New Capacity Klabin Agreement

New Capacity

New Capacity Horizonte II Project

Source: Poyry and Fibria Analysis (as of May 2015)

41

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

42

Fibrias production volumes

Current Production ('000 t)

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

660

5,188

2009

(1)The

5,231

2010

5,184

2011

5,299

2012

5,259

2013

5,274

2014

5,185

2015

2016

2017

Horizonte 2 ('000 t)(1)

7,940

8,050

8,150

8,150

8,150

1,740

1,850

1,950

1,950

1,950

900

900

900

900

900

5,300

5,300

5,300

5,300

5,300

2018

2019

2020

2021

2022

volumes in 2016, 2017 and 2018 will depend on the learning curve of the plants. The agreement with Klabin may be renewed by mutual consent.

43

Horizonte 2 project site overview

Production capacity increase to 1.95 million t/year


Startup in the beginning of 4Q 2017
Ahead of schedule and below budget

60% physically
complete

2015

2016

Capex (R$ billion)(1)

Startup

2017

Acc. execution
up to 9M16

To be executed
until 2018

Total

2.9

4.6

7.5

38% financial
execution
(1) Capex disbursement (cash).

44

Forestry Base

Forestry base required:


H1:

120,000 ha

H2:

187,000 ha

Total:

307,000 ha

Average distance from forest to mill H1 + H2 -> up to 100 km (1st cycle)


2nd cycle average distance should decrease due to less need for 3rd party wood
45

Logistics

Mato Grosso
Brasilia

Gois
Mato
Grosso do
Sul

Port Terminal 32

46

Capex
Flexibility in the Timetable, without changing the startup date
Total Capex (R$ billion)
- R$ 1.2 billion
Capex timetable (R$ billion)

8.7
7.5

53%
4.0

41%
3.1

Previous forecast

Current forecast

US$ 2.4 bi (1)

US$ 2.3 bi (1)

3%

3%

0.2

0.2

2015

2016

2017

2018

(1) FX = 3.56 R$/US$ on previous forecast. FX = 3.33 R$/US$ on current forecast.

47

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

2Q16 + 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

48

Horizonte 2 project assumptions


UNIT

R$

US$

Pulp production/year

k tons

1,950

1,950

Expansion capex(1)

$ billion

7.5

2.3

Expansion capex(1)

$/t

3,854

1,159

Sustaining capex(2)

$/t

206

63

Cash production cost(3)

$/t

326

99

MWh

130

130

R$/US$

2.80

All in cash cost (estimated range)(4)

$/t

270-320

Net pulp price(5)

$/t

508

Free Cash Flow (estimated)

$/t

186-236

Payback period (estimated)

years

4.9-6.2

Energy surplus

Project approval FX

(1) Includes chemical leasing and investments in order to increase capacity to 1,950 kt/year (FX@3.30).
(2) Estimated sustaining capex in perpetuity (FX @ 3.30).
(3) Estimated weighted average cost, after mill balance. Includes energy sales (FX @3.21-3.30).
(4) Cash cost + freight + SG&A + Sustaining Capex + Interest + taxes (FX @ 3.30)
(5) 2016 market consensus.

49

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

50

Dividends
51

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

52

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.

53

Dividends
2015
April 28, 2015

May 14, 2015

OGM: Dividend
Dividend Payment of
distribution approval: US$49 million
minimum compulsory
+ additional

Oct. 22, 2015

Dividend Policy
Approval

Nov. 30, 2015

Dec. 9, 2015

Dec. 17, 2015

EGM: Interim Dividend Dividend Payment of Dividend


US$532 million
distribution
Payment Approval
proposal of US$78
million(2)
approved by the
Board of Directors

Dividend yield as of Dec, 31, 2015 = 7.5% (R$) | 8.3% (US$)


Dividend yield as of Dec, 31, 2014 = 11.6% (R$) | 8.7% (US$)

2016
April 27, 2016

Mid-May, 2016

OGM approved
Dividend payment of
dividend distribution
US$80 million.
of US$80 million(1)
(1.1% of dividend yield
as of Dec, 31, 2015).

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

Mid-November, 2016

Extraordinary
dividend
appraisal

Mid-December, 2016

Extraordinary
dividend payment
(if approved)

54

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)

55

Historical Dividend Yield(1)

Considering
Market Cap
as of
December,
31st, 2015

(1) Source: Bloomberg Financial Analysis - Multiples

56

Best dividend yields of 2015 among Brazilian corporate issuers


Dividends per
share (R$)

Dividend Yield
(%)

Cesp

4.85

20.78

Fibria

3.88

11.60

Santander BR

0.46

9.81

Qualicorp

1.89

7.02

MRV

0.39

5.55

BBSeguridade

1.68

5.53

TelefBrasil

2.73

5.32

Natura

1.48

4.67

Braskem

0.61

4.64

CSN

0.41

4.48

Source: Economtica the dividend yield calculation considers share price at the beginning of 2015

57

Cost reduction initiatives and industry statistics


58

Structural Competitiveness

1. Third-party wood reduction

NPV: US$0.7 billion

2. Forestry operations productivity

NPV: US$0.6 billion

3. Industrial

NPV: US$0.1 billion


Total : US$1.4 billion

59

1. Third-party wood reduction

63%

73%

67%

68%

75%

67%

50%

400

45%

350

40%

300

CHALLENGES

200

350

164

166

167

170

150

173

278

311

242

194

181

788

187

197

10%

193

225

20%
15%

250

BENEFITS

25%

190

30%

239

35%

100

5%

50

0%

0
2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Average distance from forest to mill

2019

2020

2021

2022

2023

2024

Average distance from forest to mill (km)

Third-party wood (%)

% Planting 34%

2025

Third-party wood

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: R$1.3 billion (USD 0.4 million) | OPEX: R$0.9 billion (USD 0.3 million)
(1) Does not include Veracel but considers H2 Project forest base | (2) FX @ R$/USD3.33.

Total NPV:
R$2.2 Bi or
USD 0.7 Bi
63

1. 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

63

2. Forestry operations productivity


Structural change improving competitiveness

CLASSIFYING THE FOREST BASE BY CATEGORIES


45%
40%

40%

36%
33%

35%
30%
25%
20%

20%

20%
15%

15%
10%

10%

10%

10%
6%

5%
0%
01 - Diamond

02 - Gold

03 - Silver

Current effective area

04 - Bronze

05 - Lead

Future effective area

The distribution costs by classes help us to apply resources


in order to optimize wood production
64

2. Forestry operations productivity


Identifying opportunities based on these combinations

Possible Restrictions

Declivity
0: Higher than 35
1: Btw 24and 35
2: Btw 0 and 24

Conservation
Areas
CAs(1)

0: Within
1: Within EPA(2) and
EBZ(3)
2: Out of EPAs and
EBZ

Municipal
Restrictions
0: Total restrictions
1: Partial restrictions
2: No restrictions

Possible Impediments

EPA Altitude

Urban Zones

0: Higher than
1800m
1: Lower than
1800m

0: Urban Zones
1: Outside urban
areas

Remnants of
native
vegetation
0: Remnants areas
1: Outside remnants
areas

Possible combinations
X 0, 1 and 2, removed;
(1)
(2)
(3)

Conservation Areas
Envionmental Protection Areas
Environmental Buffer Zones

4 e 8, high potential
65

2. Forestry operations productivity


Cost and Capex KPIs were also included in this geo-model

Silviculture

Harvest

Roads
Transportation

66

2. Forestry operations productivity


Harvest
Mixed Harvest Mechanization (Hilly areas)

PROJECT DESCRIPTION (JACARE UNIT)

Mixed cutting operation with high


demand for MO and high risk to safety;
Harvest limitations in areas above
24 degrees;
Increase annual capacity to harvest in
areas up to 35 degrees , previously "locked up" by
harvesting capacity of manual staff;

NPV: R$71 million


Capex: R$5 million
Operational since Aug 2015

67

2. Forestry operations productivity


Transportation
PIFF
Woodchip transportation

Timber transportation

PROJECT DESCRIPTION (ARACRUZ, JACARE AND TRS LAGOAS UNITS)

Freight cost reduction;


Increased load box for timber/woodchip
transport
Use of lightweight steel;

Operational risk reduction (flipping);


Investment: R$33 million
NPV: R$139 million
Startup: 2015 / 2016

68

2. Forestry operations productivity


Transportation
Maritime Wood Shipping Project

PROJECT DESCRIPTION (ARACRUZ UNIT)


Capex and Opex reduction;

Capex: R$38 million

Increase in cargo handling due to increase in

NPV: R$95 million

stack height volume

Startup: Jan/2017

Reduction in heavy truck road traffic

69

2. Structural change in forestry operations productivity

Structural cost reduction of R$170 million per year (Capex + Opex) in 2020;

NPV of approximately R$2 billion

Seek opportunities for purchase / lease of more attractive areas, divest from unattractive land/forest, as well as the implementation of
technologies that will lead us to the structural cost

NPV Expected Curve


100%

100%

90%

80%

70%

60%

50%

40%
20%

30%
10%

0%
2015

2016

2017

2018

2019

2020

70

3. Industrial: maintenance downtimes schedule change

Regulatory Standard 13 (Boiler and Pressure Vessel Inspection) extended the maximum period between
recovery boiler inspections from 12 to 15 months.

Fibria was the first company to use the extended period benefit
NPV: R$385 million

71

3. Industrial: Biological Sludge Dryer


Biological Sludge Dryness Process
Operational Flow Conditioning and biological sludge burn
Sludge drying and burn in biomass boiler

00

Effluent+Sludge
Aeration Tank

Sludge Dryer
Biological
Sludge Tank

00

Biomass
Boiler

Biomass Pile

PROJECT DESCRIPTION (JACARE UNIT)


Variable cost reduction associated
with the disposal of sludge operations
in external landfill

Capex: R$18 million


NPV: R$100 million
Startup: Dec./2016

72

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.

71

Benefiting From Chinas Growth


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

World Tissue Consumption, 1995-2015(3)


(million t)

9M15

7.725

Latin America is the


leading exporter of BHKP
to China, accounting to
approximately 55% of
China's total imports in
9M16.

9M16

6.937

3.701

Annual Growth
Rate +3.7%

35
30
25
20

4.266

15
1.5581.465

BHKP Total

(kg/person/year)

40

10

1.374 1.667

Latin
Indonesia Others(2)
America (1)

147 142

151 145

USA

Canada

40

Western
Europe

5
0

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
market pulp: + p.p.)

(million t)

10%

10%

12%

22%

21%

23%

23%

25%
12

14%
6
4

5%

0%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Eucalyptus

Hardwood

(Kg/capita/year)

Total

25

10

10%

(1)
(2)
(3)

Japan
LatAm

14
24%

15%

E.Europe
Middle East

Per Capita Consumption of Tissue by World Region(3)

17%

20%

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 September 2016


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

72

Growth rate Chinese GDP vs. Eucalyptus Shipments to China


(Sept-09 = base 100)
250

200

199

150

100

74
50

China GDP

Eucalyptus Shipments

Source: Bloomberg and PPPC W20 report.

73

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

74

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

75

Global Market BEKP Demand


Shipments of Eucalyptus Pulp
CAGR 2012-2015

8%

(1)

19%

Source: PPPC World 20 January/2015

3,787kt

3%

1,980 kt

6%

7%
387 kt

Total
(1)

North America

758 kt

662 kt

Western Europe

China

Others

Source: PPPC World 20 December/2015

76

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

BHKP prices - CIF China (US$/ton)


Source: PPPC Global 100

900
900

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
538 ktons

Shipments (000 ton)

Benefiting From Chinas Growth


China: Eucalyptus pulp shipments

(000s t)

2016
Average
619 ktons

77

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.

78

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

Source: Pyry.

79

Current Zero Cost Collars

4T16

1T17

2T17

3T17

4T17

1T18

2T18

3T18

295
3,30
3,36
6,62

291
3,39
3,40
5,38

239
3,47
3,45
5,70

255
3,55
3,40
5,96

245
3,62
3,56
6,60

105
3,69
3,62
5,50

30
3,76
3,62
5,77

15
3,83
3,70
5,67

Notional (USD MM)


Fwd (BRL/USD)
Put
Call

Notional (Total):
US$ 1,475 million

*forward curve Sept/2016.

80

Free Cash Flow(1)


US$ million
329

317
225

194
125
84

77

113

111
53

29

103

130

158
118

112

124

51
4

-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%

4'2%

2.03

2.06

2.00

2.07

2.29

2.27

41%

35%

35%

45%

2.23

2.27

2.55

50%

50%

56%

54%

52%

43%

43%

3.51

3.25

Average FX
1.63

1.80

1.77

1.96

2.37

2.87

3.07

3.54

3.84

3.90

(1) Before expansion capex

81

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

82