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Goldman Sachs 3 Annual Latam Conference: December, 2011
Goldman Sachs 3 Annual Latam Conference: December, 2011
Goldman Sachs 3 Annual Latam Conference: December, 2011
December, 2011
Disclaimer
The information contained in this presentation may include statements which constitute forwardlooking 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 forwardlooking 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 forwardlooking statements, which speak only for the date on which they are made.
The Company
Shareholder Structure
BNDESPar 30.42(1)
Level III
NYSE 40% Bovespa 60%
(1) (2)
Position as of October 31, 2011. BNDESPar has 21% linked to a Shareholders Agreement with Votorantim Industrial S.A. during the first 3 years and 11% during the following 2 years. Free Float 40.17% + Treasury 0.07%
Shareholders Meeting
Fiscal Council
Board of Directors
Executive Officers
A Winning Player
Superior Asset Combination Main Figures
Net Debt(3)
Net Debt/EBITDA(3)
R$ billion
x
Port Terminal
Pulp Unit
Source: Fibria (1) Last Twelve Months as of September 30, 2011. (2) As of September 30, 2011, including 50% of Veracel and excluding forest partnership areas (124 thousand ha). (3) As of September 30, 2011.
(1) Veracel
Fibrias Strategy
5,250
Ilim
Mercer IP
Bleached Softwood Kraft Pulp (BSKP) Bleached Hardwood Kraft Pulp (BHKP) Unbleached Kraft Pulp (UKP) Mechanical
ENCE
36% Acacia/Other 8 million t 64% Eucalyptus 16 million t
69%
Other Eucalyptus Pulp producers: 11 million t
(1) (2)
1000
2000
3000
4000
5000
6000
RISI and PPPC: considers 2010 capacity Hawkins Wright January 2011
Mill Cash
11% 21%
Delivery
1000 800
600
120 400 200 464
70
39
41
85 423
42 456
33 426
57 359
69 316
51 310
500
501
493
55 288
33%
10 million t
Capacity ('000s t)
10
1.000
100
200
300
400
500
600
700
800
900
Pulp Price
4 months
3 months 3 months 5 months
May-98 Nov-98 May-99 Nov-99 May-00 Nov-00 May-01 Nov-01 May-02 Nov-02 May-03 Nov-03 May-04 Nov-04 May-05 Nov-05 May-06 Nov-06 May-07 Nov-07 May-08 Nov-08 May-09 Nov-09 May-10 Nov-10 May-11 Nov-11
US$673/t Nov 22
1.000
1.500
2.000
2.500
500
Average: R$1,284/t
11
May-98 Nov-98 May-99 Nov-99 May-00 Nov-00 May-01 Nov-01 May-02 Nov-02 May-03 Nov-03 May-04 Nov-04 May-05 Nov-05 May-06 Nov-06 May-07 Nov-07 May-08 Nov-08 May-09 Nov-09 May-10 Nov-10 May-11 Nov-11
150
130 110 90 70 50 jan-03 mar-03 mai-03 jul-03 set-03 nov-03 jan-04 mar-04 mai-04 jul-04 set-04 nov-04 jan-05 mar-05 mai-05 jul-05 set-05 nov-05 jan-06 mar-06 mai-06 jul-06 set-06 nov-06 jan-07 mar-07 mai-07 jul-07 set-07 nov-07 jan-08 mar-08 mai-08 jul-08 set-08 nov-08 jan-09 mar-09 mai-09 jul-09 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
Rupia: -2%
Cost Structure
Global producers have been impacted by: Wood: cost of land and minimum wage growth above inflation Chemicals / energy / water: global demand for commodities add pressure on main raw materials On top of that, Brazilian producers have also been impacted by: Freight: low governmental investment in infra-structure (ports, roads, etc) and higher oil prices Labor: cost in Brazil in dollar terms is higher than in some developed countries
12
Global Presence
Fibrias Commercial Strategy
Differentiation: Customized pulp products to specific paper grades Sole supplier to key customers focused on eucalyptus pulp to the tissue market The top 10 customers represent, on average, 70% of sales
Speciali ties 22% Tissue 58%
N.America
29%
Europe
41%
Nyon Miami
Csomd
20%
Asia
Hong Kong
L.America
10%
So Paulo
Fibria Offices
13
Tissue
58%
24%
4%
Specialities
22%
14%
3%
Newsprint
0%
Containerboard
8%
5%
Others
11%
3%
14
15
16
Forest Competitiveness
Fibria : Forest Competitiveness
45
14
30 - 40 years
11 10
25
25
25
15
15 - 25 years
10 - 12 years
12 - 15 years
8 5
Brazil (eucalyptus)
Indonesia
S.Africa
Chile
Portugal / Spain
USA / Canada
Finland / Sweden
70's
80's
90's
00's
Yield (m3/ha/year)
Source: ABRAF, STCP, Poyry and Fibria. Note: Pulp trees differ depending on the country: Indonesia acacia, S.Africa tropical and temperate eucalyptus, Chile temperate eucalyptus, Portugal/Spain temperate eucalyptus, USA/Canada aspen, Finland/Sweden betula.
17
1,500
1,000
Other Brazilian pulp mills Portugal Finland Canada France/ Spain Sweden 20 Chile South Africa
China
10
Source: PYRY
18
18
19
Industry Outlook
World chemical market pulp shipments to capacity
102% 96% 92% 90% 90% 86% 95% 89% 96% 98% 92% 92% 87% 88% 83% 87% 87% 88%87% 85% 82% 84% 81% 82% 94% 101% 100% 89% 88%88% 90% 88% 88% 87% 86%
90% 87%
85%
Aug-10
Nov-10
Nov-09
Mar-10
Mar-11
Aug-11
Oct-10
Dec-09
Dec-10
Sep-10
Oct-09
Fev-11
Jan-10
Jan-11
Feb-10
Apr-10
May-10
Apr-11
May-11
Sep-11
Oct-11
Jun-10
Jul-10
Jun-11
Jul-11
Aug-10
Mar-11
Nov-10
Aug-11
Jan-11
Dec-10
Sep-10
Oct-10
Fev-11
Apr-11
Nov-09
Dec-09
Mar-10
May-11
May-10
Sep-09
Feb-10
50 40 30 20 10 Oct-10 Out-06 Apr-07 Apr-08 Apr-09 Abr-10 Apr-11 Oct-07 Oct-08 Oct-09 Oct-11
1000
900
50 45 40 35 30 25 20
days
39
800 700 600 500 400 300 jan-08 jan-09 jan-10 abr-08 out-08 abr-09 out-09 abr-10 out-10 jan-11 abr-11 out-11 jul-08 jul-09 jul-10 jul-11
Sep-11
Jan-10
Oct-09
Jun-11
Apr-10
Jun-10
Jul-10
Jul-11
Inventories
20
Industry Outlook
Market pulp: world demand growth (%)
10M2011 x 11M2010 33%
4%
4%
Average 318 332 323 310 193 ktons 311 300 299 283 256 233 247 242 229 202 232 222 224 219 200 198 198 152 163 161 141 152 138 153 125 100
-3% Europe
-2%
Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Source: PPPC World 20 Chemical Market Pulp
Latin America
Japan
China
Announced Downtimes
650
US$920/t
1.000 900
550
US$700/t
Nov 21, 2011: Sodra announces market driven downtime in response to weakened demand for pulp. Nov 22, 2011: UPM is preparing for downtime at several of its Finnish paper plants. The firm will start negotiations regarding possible temporary layoffs in 2012. Nov 24, 2011: Terrace Bay Pulp (Canada) plans extended shut at NBSK mill for explosion repairs, project work; downtime to shed 40,000-80,000 tons.
May-09
Nov-09
CRB
May-10
Nov-10
May-11
300 Nov-11
21
% Annual growth
2009
23.5 '000 tons 21.4 91% 28.1 24.8 88% 17.0 15.9 93%
2010
23.8 22.3 93% 28.6 25.0 87% 17.6 15.9 90%
2011
25.2 23.0 92% 29.9 26.0 87% 18.9 16.6 88%
2012
25.5 23.0 90% 30.5 26.4 87% 19.8 17.5 88%
2010/2012
3.5% 1.6%
BSKP
Demand Ratio
Supply
3.3% 2.8%
BHKP
Demand Ratio
Supply
6.1% 4.9%
BEKP
Demand Ratio
BSKP: Bleached Softwood Kraft Pulp | BHKP Bleached Hardwood Kraft Pulp | BEKP: Bleached Eucalyptus Kraft Pulp Source: PPPC Special Research Note Nov 2011 and Fibria
22
Financial Highlights
23
3Q11 Performance
3Q11 Results
3Q11 Pulp Production (000t) Pulp Sales (000t) Net Revenue (R$ million) Pro Forma EBITDA1 (R$ million) EBITDA Margin (%) Financial Results (R$ million) Net Income (Loss) (R$ million) 1,296 1,244 1,449 476 33% (2,015) (1,114) 2Q11 1,271 1,230 1,459 490 34% 277 215 3Q10 1,293 1,160 1,581 648 41% 248 303 3Q11 vs 2Q11 2% 1% -1% -3% -1 p.p. 3Q11 vs 3Q10 0% 7% -8% -27% -8 p.p. -
Sales Mix
29%
Europe Asia
3Q10
2Q11
3Q11
1
3Q10
2Q11
3Q11
24
Sep/2011: Macroeconomic Worsening 3Q11 Dollar Appreciation : 19% FOEX BHKP Europe: US$789/t
3Q11 FX (R$/US$): Average: R$ 1.6360 1.8544 Sep Average FX: R$1.7399
1,90
1,80
May/2011: Indebtedness and Liquidity Management Policy Approval1 FX (R$/US$): R$1.6111 FOEX BHKP Europe: US$876/t
Closing: R$1.8544
1,70
1,60
1,50
1.5345
1,40
Indebtedness and Liquidity Management Policy: 2.0 and 2.5x Net Debt/EBITDA target, leverage cap: 3.5x during growth cycle. Policy available on: www.fibria.com.br/ir
25
Capex
2011E Current 68
Forest Expansion
Subtotal Expansion Safety/Environment Forestry Renewal Maintenance, IT, R&D and Modernization
243
311 75 602 356
1,033 96 1,440
R$ 201 million reduction vs original budget
26
Debt
Key Indicators
3Q11 vs 2Q11 3Q11 vs 3Q10
Debt
Short Term Debt (%)
19%
(R$ million)
3Q11
2Q11
3Q10
8% -29% 20%
14% 9% 3,9
4,2
3,2 2Q11
2 LTM
3Q11
3Q10
2Q11
3Q11
1Includes
the fair value of financial instruments of (R$ 332 million) as of Sep/2011. Excluding this effect, the cash position was R$2,104 million.
25% 92% 318 4Q11 1,000 599 2013 926 689 2015 635 2016 2017-2021 Local currency Foreign currency Bond BNDES Others Pre payment NCE
2012
2014
27
Liability Management
Promises delivered, now more ahead to go
Net Debt/EBITDA (x)
11.0
10.9
10.8
10.2
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11
Fibria20 Bond: US$ 750MM Sale of Guaba: US$ 1.4bn 7.5% 10NC5 Fibria19 Bond: US$ 1.0bn Exchange Bond Fibria19: 94% 9.25% 10NC5 to Fibria20 Export pre-payment facilities: Operational cash generation US$ 1.175bn Derivatives debt settlement: US$ 2.6bn Debt: lower cost longer tenor Sale of Conpacel/KSR: R$ 1.5bn Fibria21 Bond Fibria21: US$ 750MM 6.75% 10NC5 US$ 500MM Revolving facility + US$ 300MM EPP Covenants: 4.0x YE2011 Tight cost and Capex control 2011 Capex reduced by R$ 201 million Sale of Piracicaba: US$ 313MM
28
Fibria in Summary
Larger scale
Innovation
Growth
Sustainability
Investor Relations
E-mail: ir@fibria.com.br Phone: +55 (11) 2138-4565 Website: www.fibria.com.br/ir
30
Backup
31
China
Chinas Hardwood Imports of BHKP by Country(1)
6,0 5,0 4,0 3,0 2,0 1,0 0,0 BHKP Total Latin America Others* Indonesia USA Canada Western Europe
2,3 2,0 1,1 1,6 1,0 1,1 0,4 0,3 0,2 0,3 0,0
5,0
5,3
2010
10M 2011
(Million tons)
Company / Mill Shandong Huatai Paper Nine Dragons Zhumadian Baiyun Paper China Metalurgical Meili Paper Sun Paper Shandong Chenming
Effective Date Jan 2011 Jul 2011 Apr 2011 Mar 2011 Ju 2011 Aug 2011 Q3 2011 Q4 2011
Pulp(2)
Others
Guangxi Tianyi Paper
2011
Mar 2012 Sep 2012 Q1 2013 2013
810
130 125 450 600 6,200
2012/2013 = 1.5mt
Hengfeng Paper April Chengton Group Total P&W capacity changes in China
22% 26%
16% 17%
18% 18%
9%7%
11% 9%
2009 Total
2010
10M2011
(1) PPPC Chinese Market Pulp Demand (2) PPPC World 20 October 2011 (3) Source: TerraChoice Monthly Report Aug 2011
Eucaplyptus
Hardwood
32
Tissue Market
Per Capita Consumption of Tissue by Region, 2010(1)
Kg/capita
25 20
23,5
15,6
25
14,6 11,2
15 10
20 15 10
5 0 W. Europe Oceania
3,6
5 0
1991 N.America Japan 1996 W.Europe China 2001 E.Europe Asia FE 2006 2009 NME Africa 2010 L.America Oceania
E. Europe
N&M East
N. America
L. America
Africa
Japan
China
(1)
RISI
33
Historical Ratings
S&P
Aracruz VCP (2007-08) / Fibria (2009 on) Aracruz
Moodys
VCP (2007-08) / Fibria (2009 on)
2005
BBB-
N.A.
2005
Baa3
N.A.
2006
BBB-
N.A.
2006
Baa3
N.A.
2007
BBB-
BBB
2007
Baa2
Baa3
2008
BBB
BBB
2008
Baa2
Baa3
2009
BB
BB
2009
Ba2
Ba1
2010
N.A.
BB
2010
N.A.
Ba1
2011
N.A.
BB
2011
N.A.
Ba1
34
Market Perception
5,2 Fibria'2019
5,7
6,7
7,2
7,7
8,2
8,7
9,2
9,7
6,2
Fitch
8,7
Mar-11 Apr-11 May-11 Jun-11
80bps
Moodys
Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Fibria'2021
Fibria2021
Fibria'2020 Fibria'2021
Yield (%)
Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11