Ita BBAs 10th Annual LatAm CEO Conference

May, 2015

FIBRIA APP WITH THIS PRESENTATION IS AVAILABLE FOR DOWNLOAD AT APPLE STORE AND GOOGLE PLAY.

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
2 Pulp and Paper Market
3 Financial and Operational Highlights
4
Company Overview

Final Remarks

Agenda

Company Overview
4

A Winning Player
Superior Asset Combination

Belmonte
Veracel
Caravelas
Portocel
Aracruz
Trs Lagoas

Main Figures 1Q15 LTM

Pulp capacity

million tons

5,300

Net revenues

R$ billion

7.4

Total Forest Base(1)

thousand hectares

968

Planted area(1)

thousand hectares

561

R$ billion

9.0

Net Debt/EBITDA (in Dollars)(2)

2.3

Net Debt/EBITDA (in Reais)

2.9

Net Debt

Jacare
Santos

Port Terminal

Pulp Unit

Source: Fibria
(1) Including 50% of Veracel, excluding forest partnership areas and forest bases linked to the sales of Losango and forest assets in Southern Bahia State.
(2) 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 End Use - Fibria
End Use - 1Q15

Region - 1Q15
N.
America
17%

Europe
46%

Highlights

Printing &
Writing
35%

Tissue
48%

Asia
26%
Specialties
17%

Other
11%

Sales Mix by Region - Fibria

11% 9% 11% 10% 10% 10% 11% 10% 9% 10% 8% 8% 8% 9% 9% 10% 10% 11%
22% 25%

14% 20%

37%

46% 41%

30%

46%

20%

20% 23% 25% 26% 21% 26% 26% 26% 27% 25% 23% 26%
31% 28%

35% 44%

43% 41% 36%

42%

43% 35% 36%

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

Efficient logistics set up

Low dependence on volatile markets such as China

Low credit risk

100% certified pulp (FSC and PEFC/Cerflor)

39% 40%
46% 42%
46%

29% 29% 24%

26% 26% 30% 22% 28% 31% 30%
26% 27%
19% 22%
18%
17%

4Q101Q112Q113Q114Q111Q122Q123Q124Q121Q132Q133Q134Q131Q142Q143Q144Q141Q15
North America

Europe

Asia

Other

Pulp Supply Agreement: 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
8

Shareholder Structure and Corporate Governance

Votorantim
Industrial S.A. (1)

29.42%

BNDES
Participaes (1)

30.38%

Free
Float (2)

General
Meeting

40.20%
Fiscal
Council
20% independent
members
Role of CEO and
chairman is split

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%)

Finance
Committee

Statutory
Audit
Committee

Personnel and
Remuneration
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

Board of Directors with minimum 20% independent members

Corporate Governance

Financial Statements in International Standards IFRS

Related Parties Transactions

Adoption of Arbitration Chamber

Anti-Corruption

SEC Registered ADR Level III program

(1) Controlling group
(2) Free Float 40.14% + Treasury 0.06%

Information Disclosure
Securities Trading
Antitrust
Genetically Modified Eucalyptus

Pulp and Paper Market

10

In 2013, we stressed the difference between the expected scenario

and the realized one...

BHKP CAPACITY CHANGES

Expected scenario for 2013 in Nov2012
Eldorado

1,275

Suzano Maranho

Realized scenario in 2013

Eldorado

320

1,270

UPM Fray Bentos

100

DELAYED
Montes del Plata
Sappi Cloquet
Jari

555
-155

Sappi Cloquet

-410

Jari

Net
BEKP demand growth*

1,585
1,080

*Source: PPPC Outlook for Eucalyptus Market Pulp November 2012

-155
-410

Cellulose du Maroc

-140

Sodra Tofte

-60

Net
BEKP demand growth*

Unexpected
Closures
605
1,310

*Source: PPPC Outlook for Eucalyptus Market Pulp September 2014

11

As a result we had better prices than expected

BHKP Delivered to Europe (USD/t)

820

814

810
800
790

795
788

791
784

780

772
770

767

765

770

772

4Q13

Annual 2013

760

750
740
1Q13

2Q13

3Q13

Consultants average for 2013

Realized PIX/FOEX price

Consultants: Hawkins Wright, RISI and Brian McClay (published in the end 2012 for 2013 prices)

12

The better than expected scenario happened again last year...

BHKP CAPACITY CHANGES

Expected scenario for 2014 in Dec13

Realized scenario in 2014

230

Eldorado

1,275

Suzano Maranho
Montes del Plata

Suzano Maranho

830

1,100

Montes del Plata

560

Oji Nantong*

230

Eldorado

550

Oji Nantong*

235

UPM

100

Sappi Cloquet

-115

Sappi Cloquet

-70

Sodra Tofte

-120

Sodra Tofte

-120

APRIL Rizhao

2,660

Net
BEKP demand growth**

1,380

*Partly integrated to existing PM

**Source: PPPC Outlook for Eucalyptus Market Pulp November 2013

-65

Old Town

-85

Ence Huelva

-105

More unexpected
mill closures

Net

1,770

BEKP demand growth

1,734

*Approved license only for 500,000 t/y

13

 and also better prices than initially projected

BHKP Delivered to Europe (USD/t)

800

782
780

768
752

760
740

737

746
729

734
733

720

718
700

696
680
660
640
1Q14

2Q14

3Q14

Consultants average for 2014

4Q14

Annual 2014

Realized PIX/FOEX price

Consultants: Hawkins Wright, RISI and Brian McClay (published in the end 2013 for 2014 prices)

14

Then, what about 2015?

BHKP CAPACITY CHANGES

Expected scenario for 2015 in Dec14
Suzano Maranho

400
750

Montes del Plata

265

Oji Nantong

750

CMPC Guaiba II
200

Eldorado
Portucel Cacia

30

Old Town (Expera)

85

Sappi Cloquet
April Rizhao

Ence Huelva
Possible closures*
Net

115
-65
-315
-400 to -800

Realized scenario in 2015

1,415 to 1,815

BEKP demand growth**

1005

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

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

15

Global Market BEKP Demand

Shipments of Eucalyptus Pulp
2014 vs. 2013(1)

3M2015 vs. 3M2014(2)

11%
1,734 kt

18%
20%
6%
5%

32%

717 kt

386 kt

680 kt

13%
537 kt

92 kt

Total

(1)

North
America

Western
Europe

China

Others

Source: PPPC World 20 December/2014

January/2015

Total
(2)

23%

7%

78 kt

114 kt

264 kt

224 kt

North
America

Western
Europe

China

Others

23%

Source: PPPC World 20 March/2015

Paper Capacity increase in China

2014

2015

Total

FORECAST

REALIZED

PREVIOUS
FORECAST

LATEST
FORECAST

PREVIOUS

LATEST

Woodfree

256

256

760

760

1,016

1,016

Tissue

1,390

1,278

727

1,365

2,117

2,643

Cartonboard

2,100

1,326

380

730

2,480

2,056

Total

3,746

2,860

1,867

2,855

5,613

5,715

Source: Fibria and Independent Consultants

16

Technical Age and Scale in the Market Pulp Industry

Further closures are expected due to lack of adequate investments in the industry
Hardwood (BHKP) Market Pulp
3.000

Softwood (BSKP) Market Pulp

PM Capacity, 1000 t/a

3.000

Weighted average
technical age 12.3 years

PM Capacity, 1000 t/a

Weighted average
technical age 21 years

STRONG

2.500

STRONG

2.500
Aracruz

2.000

1.500

2.000

Weighted average
capacity 1,277,000 t/a

Trs Lagoas

1.500

Jacare

1.000

Veracel

1.000
Weighted average
capacity 527,000 t/a

Ence
Huelva

500

500

Old
Town

30

WEAK

20

10

0
30

WEAK

25

Technical Age, years

North American Pulp Mills

Other Pulp Mills

Closures

20
15
10
Technical Age, years

Grade Switch

On & Off

More than 7.7 million tons of capacity above 25 years and with annual capacity below 500,000 t/y.

17

Capacity closures DO happen

Closures of Hardwood Capacity Worldwide

(000 ton)
-85

-105

-540

-445

-500

-750
-910
-1,085
-1,180
-1,260
2006

2007

2008

2009

2010

2011

2012

2013

2014

2015-2017 E

(1)

Source: PPPC and Fibria

(1)

As of April 2015

18

Among the industrys lowest cash cost producers

Total Cash Cost of BHKP delivered to Europe (US$/t)
Capacity
(k tons):

1,925

1,610

1,030

3,785

4,695

2,015

13,930

5,300

= 28,990

1Q15 net price:

US$ 560/t

70

W/K

87

Interest

105
44

453

64

72
419
351

China

Capex

27

USA

Canada

312

Indonesia

Cash Cost (US$/t)

286

Chile/Uruguay

Income Tax
SG&A
55

329

Iberia

207

199

Brazil

Fibria

Delivery (US$/t)

Source: Hawkins Wright (Outlook for Market Pulp, April 2015) | Fibrias 1Q15 considering a FX of R$/US$2.8737. | Brazil 2014 considering FX of R$/US$3.05.
Gray bar includes cash expenses as Interest, CAPEX, SG&A and Taxes (Source: RISI and Fibria).

19

Gross capacity addition should not be counted as the only factor

influencing pulp price volatility.(1)
List Price bottoming at US$650/t in 2011 and US$724/t in 2014
APP South
Sumatra(2)

1.000
900

1,8
1,6

Rizhao

Maranho

Trs
Lagoas

700
APP
Hainan

600
500

400

Eldorado

Fray
Bentos
Mucuri
Veracel Nueva Aldea
Santa F

Valdivia

1,4

Montes
del Plata Guaba II

1,2

Klabin

1,0
Chenming
Zhanjiang

Kerinci
PL3

Capacity (000 ton)

800

BHKP prices - CIF Europe (US$/ton)

2,0

0,8

APP Guangxi

300

0,6

Oji
Nantong

200

0,4

100

0,2

0,0
2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

(1) Source: Hawkins Wright , Poyry and Fibria Analysis. Pulp price estimates according to Hawkins Wright (Dec/14), Brian McClay (Jan/14) and RISI (Dec/14)
(2) Partially integrated production

20

Lowest volatility among commodities

100 = January 1st, 2012
180

Commodities Historical Volatility (US$)(1)

170

172

160
150
140
130
120

116

110
100
90

81

80
70

60

51
48

50
40

Iron Ore

Soy Bean

Crude Oil

Sugar

BHKP (FOEX Europe)

Mar-15

Jan-15

Nov-14

Sep-14

Jul-14

May-14

Mar-14

Jan-14

Nov-13

Sep-13

Jul-13

May-13

Mar-13

Jan-13

Nov-12

Sep-12

Jul-12

May-12

Mar-12

37
Jan-12

30

Exchange Rate (USD/BRL)

Source: Bloomberg

Low volatility of hardwood pulp price, even though new capacities have
come on stream in the period
21

Financial and Operational Highlights

22

FX and Pulp Price explain 80% of Fibrias EBITDA Margin

Each 10% depreciation of the Real increases EBITDA by approx. R$770 million
3.08(3)
Exchange Rate
Average (R$/US$)

Fibria net pulp price

(US$/t)

Fibria net pulp price

(R$/t)
Marginal producer cost
(US$/t)(4)

2.00

1.76

1.67

670

639

610

2.29

572

566

Market
Consensus

1,719
1,179
912
660

1,067
676

627

29%

34%

2,526
EBITDA (R$ million)

581

2.10

456

40%
EBITDA Margin

1.95

1,133
657

36%

1,964

2,253

2011

2012

1,281

1,310

680

676

40%

39%

2,796

2,791

2013

2014

1,522

2009 (1)

2010 (1)

2015

(1) Excludes Conpacel | (2) 2014 year end market consensus | (3) According to Focus Report (Brazilian Central Bank Apr. 30th, 2015) | (4) According to Poyry full cost estimate - includes
Manufacturing + Delivered costs to Rotterdam + Depreciation + ROCE of 9%

23

No exposure to eletricity shortage risks, in spite of which the

company has benefited from the sale of its surplus energy
Cash Production Cost (R$/t)
572

549
19

1Q14

Wood

10

( 11 )

(7)

(3)

Materials and
Services

Energy
Consumption

Utilities

Others

15

FX

1Q15

+ 4.2%
Management initiatives seeking to maintain the cash cost below inflation.
(Utilities: 1Q15: R$25/t I 4Q14: R$37/t I 1Q14: R$18/t)

Cash Production Cost Total and Ex-Downtime (R$/t)

524 549

1Q14

548 572
472 472

4Q14

Cash Cost ex-Downtime

1Q15
Cash Cost

24

Cash Production Cost saw a annual increase of 3.7% over the past
6 years
Fibria Cash Production Cost (1) (R$/ton)

CAGR: + 3.7%

505
432

2009 (2)

448

2010 (2)

471

473

2011

2012

2013

519

Consistently
controlling the
production
cash cost at a
level below
the inflation
pace.

2014

(1) Constant Currency (2) Excludes Conpacel

25

Net Results (R$ million) 1Q15

1,007
FX Debt

MtM
hedge
swap

ZCC

(1,685)
(123)

(44)

(22)

(566)

Others (1)

Net Income
(Loss)

179
(85)

deffered
current

(448)
Adjusted
EBITDA

(1)

FX Debt /

MtM

MtM Debt
Hedge

Operational
Hedge

Swap/ZCC
settlements

Net
Interest

Deprec.,
amortiz. and
depletion

643
Income
Taxes

Other FX and
monetary
variations

Includes non-recurring expenses/non-cash and other financial income/expenses.

26

Free Cash Flow (1) 1Q15 LTM (R$ million)

3,119

1,001

(1,645)

Adjusted EBITDA

Capex

(322)

( 149 )

(34)

32

Interest
(paid/received)

Working Capital

Taxes

Others

Free Cash Flow

FCF/ton: US$76

(1) Does not include non-recurring items.

27

Indebtdeness
Net Debt (Million)

Gross Debt and Interest Expenses (Million)

2.9

2.7

2.4
2.4

8,991

7,549
3,080

2,842

Mar/14

8,445

44

35

Mar/15

9,352

8,327
3,732

2,803

Dec/14
R$

3,135

Mar/14

- 22%
2,915

Dec/14
R$

US$

Mar/15

US$

Average Tenor (months) and Cost of Debt* in US$ (% p.a.)

Debt Amortization Schedule (US$ Million)

657

- 40%

58

2.3

2.4

6,970

Interest (US$)

Net Debt/EBITDA (US$)

Net Debt/EBITDA (R$)

623

600

3.7
3.4

3.5

438

545
(revolver)

363

339
241

84
2016

Pre-payment

54

Dec/14

Mar/15

47

205

(cash) 113

Liquidity 2015

55

2017

2018

BNDES

2019
ECN

2020
ACC/ACE

2021
Voto IV

19

2022

2023

Bond

2024

Mar/14

(*) Considering the portion of debt in reais fully adjusted by the market swap curves at the end
of each period.

28

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

14.8
13.2
11.7

4.8
3.6

4.5

4.5

3.7

3.6
3.1

2.9

3.1

2.4
1Q12

2Q12

3Q12

Fibria

4Q12
Suzano

1Q13

2Q13
Klabin

3Q13

4Q13

1Q14

CMPC

8.9

4.1
2.7
2.4

2.3

3.23.4
3.0
2.7

7.7

4.2
3.9
3.6
2.9

1.7

1.7
4Q11

11.1

2Q14

3Q14

Arauco

4Q14

1T15

Eldorado

Fibria

Arauco

CMPC

Klabin

Suzano

S&P

BBB-/Stable

BBB-/Stable

BBB-/Negative

BBB-/Negative

BB/Stable

Moodys

Ba1/Positive

Baa3/Stable

Baa3/Negative

Ba2/Stable

Fitch

BBB-/Stable

BBB/Stable

BBB+/Stable

BBB-/Negative

BB/Stable

(1)

Fibrias historical data in BRL.

29

A consistent and disciplined approach focused on reducing debt

and its cost
Debt (US$ million) x Leverage (US$)

Interest (US$ million) x Cost of Debt (US$)

7.5
8.6

4.1

6.3

4.2

3.3

2.4

2.6

2.3

473

6.3

5.9
414

5.5
408

5.2

4.6

3.4

3.5*

200

178

2014

LTM

350
268

2.9 2.8

2009

2010

2011

2012

Gross Debt

2013

2014

Mar/15

2009

2010

2011

2012

2013

Net Debt

Free Cash Flow

Increase

Interest
Reduction

Cost of Debt
Reduction

This dynamics
creates a virtuous
cycle

(*) Considering the portion of debt in reais fully adjusted by the market swap curves of Mar. 31, 2015.

30

New issuance better priced than Investment Grade issuers

Fibria 2024
Principal:

Highlights
US$ 600 million

Issuance Date:

May/2014

Coupon:

5.25% a.a.

Bookbuilding:

- SEC registered;
- IG Documentation;

- Stretch Debt maturities;

11.5x

Spread over T10Y:

- Fibria 2021 early redemption of US$430 million (78%

of the total).

275.0 bps

Rating

Maturity

Volume

T-Spread

Coupon

Fibria

Ba1 / BBB- / BBB-

2024

US$ 600 MM

275 bps

5.25%

Braskem

Baa3/BBB-/BBB-

2024

US$ 500 MM

340 bps

6.45%

Petrobras

Ba2/BBB-/BBB-

2024

US$ 2,5 bi

350 bps

6.28%

BNDES

Baa2/BBB

2024

US$ 500 MM

362 bps

6.32%

Klabin

BBB-/BBB-

2024

US$ 500 MM

269 bps

5.25%

Baa3/BBB/BBB

2029

US$ 500 MM

263 bps

5.25%

Odebrecht
Data as of Aug 07, 2014:

31

and performing better than Investment Grade issuers

Secondary G-Spread to Maturity (bps) (1)

525

262

231

244

283

300

Fibria 24

Votorantim 24

333

431

372

381

Gerdau 24

Samarco 24

433

428

92

Globopar 22

Embraer 23 Brasil Foods 24

Vale 22

Klabin 24

Braskem 24

Petrobras 24 Odebrecht 25 Eletrobras 21

LatAm Investment Grade Loans Spread over Libor (bps) (1)

225
160

140

140

143

150

COPEC

Ecopetrol

Raizen

Fibria

Colbun

Braskem

4 years

5 years

4 years

5 years

6 years

5 years

175

113

Avg. Term

(1)

As of April 2015

Molymet

TGI (O&G)

5 years

5 years

32

Fibria has a low correlation with Brazil

G-Spread (bps) (1)

800

Bonds Correlation (1)

700

0.9
0.8
600

0.7
0.6

500

400

0.3
300

200

0.0
100

FIBRBZ '24 vs.

PETBRA '24

(1)

Fibria 2024

Braskem 2024

Klabin 2024

Odebrecht 2023

Petrobras 2024

Gerdau 2024

Samarco 2024

Brazil 2025

FIBRBZ '24 vs.

BRAZIL '25

Correlation Since May 2014

FIBRBZ '24 vs. CDS

Brazil

Correlation Since January 2015

Source: Bloomberg as of April 2015

33

Fibria has the simplest and most transparent call in the industry

Negative
Pulp supply

Neutral

Positive

Tissue

China

Closures/conversions
Inefficient capacities in China
Demand
Fiber and grade substitution

Pulp price
Brazil GDP

Energy crisis
FX
Capex inflation

Tax

Corporate Governance

Cost inflation
Rating

34

Final Remarks
35

Max Value Project Zero base budgeting

Budget developed primarily based on input

consumption indicators

Only one discussion cycle, initially based on

budgetary guidelines

Individual discussion for each expenditure package,

including Sustaining CAPEX and OPEX

Discussion details based on the materiality of the

expense within the package

Robust basis increasing the visibility of the rationale

for the proposed budget amounts

Zero Base Budgeting encourages a questioning and

challenging attitude of the status quo
36

Max Value Project Zero base budgeting

Value achievement share by category

23%

100%

NPV expected curve

80%

75%
65%

70%

43%

60%

50%

50%
40%

30%

30%

33%

20%

15%

10%
0%

Forestry

Industrial

Logistics/Other

Total

2015

2016

2017

2018

2019

Approx. R$1.5 billion NPV

Note: (1) Technical Limit potential reflecting 2013 conditions; (2) Coverage of expenses with established Technical Limits (e.g. 374/3233=12%).
Source: Fibria, ZBB team analysis.

37

Max Value Project A hidden asset value

Book Value of own Land as of Sep/14:

R$1.2 billion

Market Price of own Land as of Dec/14:

Sep/14:
R$3.9 billion

Fibrias
Owned Land
Total

Ha

Book Value*

Market Value

(000)

R$/ha

R$/ha

491

2,439

7,964

Land sold in 2013 The Parkia Deal:

- 206k ha;
- Up to R$1.65 billion (~R$8k per ha).

* As of March 31, 2015.

38

Max Value Project Turning areas per hectare into square meter

The targeted area represents only 0.6% of the land owned by Fibria;

Real estate thinking: minimum value creation of R$500 million NPV.

39

Fibria is seeking value creation for its shareholders with capital discipline

PULP

INDUSTRY

- Growth with discipline

CONSOLIDATION ?

- Best portfolio of projects

Potential
Growth
Prospects
BIO-ENERGY

OTHER OPPORTUNITIES

- Complementary to pulp

Portocel

- Ensyn

Land and forest

40

The maturity of synergies captured since Fibrias creation improved its

operating indicators
PRODUCTION VOLUME (000 t)

CASH COST (R$/ton)

BEST PRACTICES AND OPERATING STABILITY

+15%

-21%
656

5,054

5,299

5,184

5,271

624

596

432

448

2009*

2010*

5,274

549

545

471

473

505

519

2011

2012

2013

2014

4,600

2009*

2010*

2011

2012

2013

2014

Historical Value

SG&A (R$ million)

EBITDA (R$ million) - EBITDA MARGIN (%)

STRUCTURE AND PROCESS SIMPLIFICATION

900

593

-21%
826

593

766
605

40%
678
584

29%

699
648

Inflation Effect**

34%

2,526

651

1,964

36%

40%

39%

2,796

2,791

2013

2014

2,253

1,522

2009*

2010*

2011

Historical Value

2012

2013

2014

2009*

2010*

2011

2012

Inflation Effect**

* Excludes Conpacel | ** IPCA index considered to calculate the inflation effect.

41

Back up
42

Fibrias tax structure

Tax benefits (R$)
Fiscal - annual adjustment
Benefit

Amount

Maturity

Annual tax deduction:

R$89 million (tax)

Goodwill
(Aracruz
acquisition)

Remaining Balance Mar/15:

R$1,031 billion (base)

Forestry Capex in
Mato Grosso do
Sul state

Tax loss carry forward and tax credits

2015 tax deduction related to

depletion: R$ 4 million

Benefit
Tax loss
carryforward

2018

Amount
Balance up to Mar/15: R$ 628
million (base)
Balance Mar/2015:
- PIS/COFINS: R$571 million

Accumulated tax
credits

Undefined

- Withholding tax (IR and CSLL):

R$ 717 million
- Befiex: R$419 million
- Reintegra: R$ 57 million

Tax payment (cash basis)

2010

2011

2012

2013

2014

R$ 16 million

R$ 4 million

R$ 15 million

R$ 31 million

R$ 29 million

43

Due to productivity gains in its forests, Fibria had the opportunity to

explore this new ownership model
FIBRIAS GAINS IN IMACEL DUE TO INVESTMENTS IN BIOTECHNOLOGY (TONS OF PULP/HA/YEAR)

MAI* Pulp:
(adt/ha/year)

15.0
12.1
10.6

15.0

15.0

15.0

15.0

Conservative assumption

10.9

2012 field trials = 11.9

2010

2015

2020

2025

2030

2035

2040

2045

*MAI: Mean annual increment

Actions:
Genetic improvement
Excellence in forestry management
Superior industrial efficiency

44

Leadership position
Industry Outlook(1)
Fiber Consumption
406 million t

59%

41%

Recycled Fiber
238 million t

Pulp
168 million t

18%

82%

Mechanical
30 million t

Chemical
138 million t

59%

41%

Integrated Mills
82 million t

Market Pulp
56 million t

54%

46%
Softwood/Other
26 million t

Hardwood
30 million t

33%

67%

Acacia/Other
10 million t

Eucalyptus
20 million t

74%
Other Eucalyptus
Pulp producers:
15 million t

(1)

26%

Fiber Consumption, Recycled Fiber and Pulp: RISI | Market Pulp, Hardwood and Eucalyptus: PPPC Global 100 Report March 2015

45

Supply structural changes puts pressure on the industry

MARKET PULP CAPACITY RANKING 2014 (000T)

MAIN PROJECTS
Project

Fibria
APRIL
Arauco
Suzano
CMPC
UPM-Kymmene
Georgia Pacific
Paper Excellence
Metsa Group
Stora Enso
Weyerhaeuser
Ilim
Eldorado
Mercer
Domtar
IP
Sodra
Resolute Forest
Canfor
ENCE

Country

Capacity

Timing

Fiber

Status

CMPC Guaba II

Brazil

1.3 Mt

2Q2015

BEKP

Confirmed

Klabin Paran

Brazil

1.5 Mt

2Q2016

BEKP/
BSKP/Fluff

Confirmed

APP South Sumatra

Indonesia

2.0 Mt

1Q2017

BHKP

Confirmed

Fibria Trs Lagoas II

Brazil

1.75 Mt

BEKP

Unconfirmed

USD/Adt, 2013 cost level

COST CURVE EVOLUTION

2000

4000

Bleached Softwood Kraft Pulp (BSKP)

6000

Cost position
of marginal
producer

Cumulative Capacity Million t/a

Bleached Hardwood Kraft Pulp (BHKP)

Unbleached Kraft Pulp (UKP)
Mechanical Pulp (MP)
Source: Hawkins Wright , Poyry and Fibria Analysis (as of December 2014).

46

Global Market Pulp Demand

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

Paper Production Runnability with BHKP

40.000
35.000
30.000
25.000
20.000

2014 - 2019 CAGR:

Hardwood: +2.5%
Softwood: +0.8%

15.000
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

Source: RISI conference, August 2014.

Softwood

Source: PPPC

NBSK vs. BHKP - Prices(1)

Demand growth rate

000 ton
Hardwood

1999
16.3

2009
24.8

2019
33.6

Growth
19992009

Growth
20092019

52%

35%

Spread Apr./15:
US$99

200

6.0

15.9

23.9

165%

50%

1000

150

900
800

100

Eucalyptus

1100

700

Average spread:
US$ 111

50

600
500

19.0

21.4

24.8

Market Pulp

35.3

62.1

58.5

13%

16%

400
Jan/10
Mar/10
May/10
Jul/11
Sep/11
Nov/11
Jan/11
Mar/11
May/11
Jul/11
Sep/11
Nov/11
Jan/12
Mar/12
May/12
Jul/12
Sep/12
Nov/12
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

Softwood

Spread
Source: PPPC. Excludes Sulphite and UKP market pulp (Mar/15)

(1)

Average spread

BHKP

NBSK

Source: FOEX |Average spread in the last 5 years.

47

Benefiting From Chinas Growth

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

World Tissue Consumption, 1991-2013 (3)

(million t)

Latin America is the

leading exporter of BHKP
to China, accounting to
approximately 47% of
China's total imports in
1Q15.

1Q2014

2.254

1Q2015

1.856

1.062
525 503

Latin
America

LTM Growth
Rate +4.2%

30
25
20
15

805

BHKP Total

(kg/person/year)

35

Indonesia

460

10

599

Others*

47 49

10 40

USA

Canada

5
9

Western
Europe

1991 1996 2001 2006 2009 2010 2011 2012 2013

N.America
Middle East
Oceania

* includes Russia, China, Thailand and New Zealand.

China's Share of Market Pulp (2)

25%
20%

Between 2005 and 2014,

the Chinese market share
of eucalyptus shipments
increased by 19 p.p. (total
market pulp: + p.p.)

22%

21%

23%

23%

W.Europe
Japan
Africa

E.Europe
China

L.America
Asia FE

Per Capita Consumption of Tissue by World Region (3)

23%

(million t)

12
10

17%

(Kg/capita/year)

24

8
15%

12%
10%

14%

15
6

10%

10%
4
5%

15
12
7

0%

5
1

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Eucalyptus

Hardwood

Total

% Compared to the global Market Pulp

N.
West Japan Oceania East LatAm
America Europe
Europe

China

Africa

(1) PPPC Pulp China Flash Report March 2015

(2) PPPC W20. Coverage for chemical market pulp is 80% of world capacity
(3) RISI

48

Global Paper Consumption

CAGR 1996 2006
Developed Markets: + 1.7%
Emerging Markets : + 6.0%

117,611

CAGR 2007 2016

Developed Markets: - 4.0%
Emerging Markets : + 4.1%

114,507

85,291

P&W
Consumption
(000 tons)(1)

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Developed Markets

Emerging Markets

CAGR 2007 2016

Developed Markets: + 1.4%
Emerging Markets : + 6.7%

CAGR 1996 2006

Developed Markets: + 2.4%
Emerging Markets : + 6.9%

37,474

26,877

15,548

Tissue
Consumption
(000 tons)(1)

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Developed Markets

Emerging Markets

Source: RISI

49