INSTITUTIONAL PRESENTATION 2Q15

AUGUST, 2015
KLBN11

KLBN11 / KLBAY

DISCLAIMER
The statements contained in this presentation related to the business outlook, operating and financial projections, and growth prospects of
Klabin S.A. are merely projections, and as such are based exclusively on the expectations of the Companys management concerning the
future of the business.

These forward-looking statements depend substantially on the market conditions, the performance of the Brazilian economy, the industry
and international markets, and therefore are subject to change without prior notice.
This presentation on Klabins performance includes non-accounting and accounting data, such as operating and financial information, as
well as projections based on Managements expectations. Note that the non-accounting data has not been reviewed by the Companys
independent auditors.
The Companys management believes EBITDA may provide useful information on the Companys operating performance and allow for
comparisons with other companies in the same industry. Note however that EBITDA is not a measure established in accordance with
generally accepted accounting principles of the International Financial Reporting Standards IFRS, and may be defined and calculated
differently by other companies.

CONSISTENT
PERFORMANCE

INTEGRATED BUSINESSES
COMPETITIVENESS TROUGH ALL THE CHAIN

FOREST

PAPER and CONVERSION

PULP

243

1.7

thousand ha

million tonnes

COATED
BOARDS

750
thousand tonnes

220

INDUSTRIAL BAGS (160 k tonnes)

and SACK KRAFT

thousand
tonnes

330
thousand
tonnes
EUCALYPTUS AND PINE
FORESTS

HIGH YIELD
FOREST

CORRUGATED BOXES
(650 k tonnes) and
KRAFTLINER

1,050
thousand tonnes

OLD CORRUGATED
CONTAINERS

INDUSTRIAL
EFFICIENCY

HIGH QUALITY
and FLEXIBILITY

DIVERSIFIED PRODUCT LINE

MARKET POSITION
LOW COST
QUALITY
COATED
BOARDS

50%

LEADER IN BRAZIL
IN ALL MARKETS
KRAFTLINER

68%

sole supplier of
liquid packaging
board in Latin
America

market share

INDUSTRIAL
BAGS

STRONGLY LINKED TO
RESILIENT MARKETS

installed capacity

40%

CORRUGATED
BOXES

7%
building

12%
others

50%

16%
market share

source: ABPO, IB

market share

food
13%
other
consumer
goods

SALES VOLUME DESTINATION

PAPER AND PACKAGING
5

BUSINESS EVOLUTION
TIMELINE

2011- 2013

2014 - 2015

2016

2016 on

PERFORMANCE
IMPROVEMENT

PAPER
EXPANSIONS COMPLETED

PUMA
PULP MILL

NEW GROWTH
OPPORTUNITIES

1,7 MILLION TONNES

2,0 MILLION TONNES

3,5 MILLION TONNES

INCREASED RESULTS AND

SET THE PATH FOR FUTURE GROWTH
6

EBITDA GROWTH
CONSISTENT RESULTS DESPITE CHALLENGING SCENARIOS
35%
31%
30%

% CHANGE VS PREVIOUS YEAR

25%
20%

16%
15%
10%

10%

7%

5%
0%
2011

-5%
-10% *LTM = Last twelve months

2012
EBITDA KLABIN

2013
BRL/US$

Brazil GDP

2014
World GDP

2011 - 2013

PERFORMANCE IMPROVEMENT

1.812

1,755

1,718

1,652

1,627

1,602

1,562

1,504

1,452

1,424

1,351

1,286

1,180

1,089

1,027

939

922

LTM - R$ million

adjusted EBITDA

EBITDA GROWTH

SUSTAINABLE PERFORMANCE

2014 - 2015

EXPANSION OF CAPACITY
8

PUMA
PROJECT

10

LOW OPERATION
COST
ANNUAL PRODUCTION
CAPACITY

1.5 MILLION
TONNES OF PULP

1.1 MILLION
TONNES OF

SHORT FIBER

PRODUCTION OF

270 MWh
of ENERGY
SELF SUFFICIENT
120 MWh
FOR PUMA
USE

150 MWh
FOR SALE IN
THE MARKET

400 THOUSAND
TONNES OF

LONG FIBER
PART CONVERTED TO FLUFF

11

CURRENT STATUS
COMPLETION
areas delivered to
EPCs

100% of earthmoving
concluded

COST
95% of
equipment
supplies,
materials and
services
concluded

EPCs with Klabin

coordination
dedicated team: strong
feedback and control

Assembly started
0%

0%

lower dependency on
imported equipments
EUR 365 million

75% OF THE PROJECT COMPLETED

54%

100%

OF THE CAPEX DISBURSED 100%

12

46%

INDUSTRIAL CAPEX
TOTAL CAPEX
14%

national equipments and

materials

14%

R$ 7.2 BI
INDUSTRIAL CAPEX

imported
equipments

R$ 5.8 BI
27%

engineering
and other
services

NET OF
RECOVERABLE
TAXES

PROJECT

FULLY FUNDED
civil construction and
assembly

13

LOGISTICS
MULTIMODAL

72 Km

441 Km

forestry average
distance

FORESTS

railway to the port

PARANAGU
PORT

PULP MILL

INBOUND

OUTBOUND
14

EARNINGS
2Q15

HIGHLIGHTS
SALES VOLUME

NET REVENUE

excluding wood tsd tonnes

R$ million

419

29%
71%

2Q14

435

32%
68%

2Q15

exports

ADJUSTED EBITDA
R$ million

1,338
1,151

22%
78%

2Q14

28%

391
334

72%

2Q15

2Q15

2Q14

domestic
market
16

PAPER
BUSINESS UNIT

COATED
BOARDS

149
thousand
tonnes

42%

457

156
thousand
tonnes

41%

KRAFTLINER

KRAFTLINER (3)
KRAFTLINER AND COATED
BOARDS (1)
RECYCLED (2)

189

R$ million

377

R$ million

98

R$ million

86
thousand
tonnes

thousand
tonnes

67%

134
R$ million

59%

59%
58%

41%

2Q14

2Q15

2Q14

2Q15

2Q14

exports

domestic
market

33%

2Q15

2Q14

2Q15
17

CONVERSION
MARKET POSITION
CORRUGATED BOXES (7)
CORRUGATED BOXES AND
INDUSTRIAL BAGS (1)
INDUSTRIAL BAGS (3)

534
R$ million

2Q14

178

551

thousand
tonnes

R$ million

2Q15

2Q14

172
thousand
tonnes

2Q15
18

CASH COST
UNIT
CASH COST

2,017
R$/tonne

2,193
R$/tonne

CASH COST
BREAKDOWN 2Q15

Others
Electricity 6%
7%
Maintenance
materials /
stoppage
14%

Labor / third
parties
32%

Fuel Oil
3%

Wood / Fibers
14%

Freight
11%

2Q14

2Q15*

Chemicals
13%

*Excluding non-recurring itens from other operating revenues and

expenses

19

4.2

3.0
2.3

2.5

2.4

2.5

6,000

2.2

2.4

2.4

2.6

2.4
1.7

5,242

1.7

4,028

2,711

2,824

Mar-14

Jun-14

3,985

3,595

3,136
Mar-13

Sep-13

3,278
Dec-12

3,437

3,090
Sep-12

Jun-13

3,014
Jun-12

2,674

4,000

2,000

7,440

8,000

4.5

8,144

in 06/30/15
R$ 13.3 billion
R$ 5.2 billion
R$ 8.1 billion

Gross Debt
Cash
Net Debt

10,000

NET DEBT

Net Debt (R$ million)

Net Debt / EBITDA (LTM)

Jun-15

Mar-15

Dec-14

Sep-14

Dec-13

Mar-12

6.0
5.5
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
-0.5
-1.0
-1.5
-2.0

20

CAPEX
CAPEX
R$ million

2011

2012

2013

2014

2015E

2016E

maintenance

3T14
296

3T14
390

3T14
369

3T14
384

3T14
350

3T14
413

special projects and growth

159

264

431

319

385

65

vale do corisco

428

99

2,242

3,437

1,844

883

654

899

2,945

4,172

2,322

PUMA project
total

21

Investor Relations
www.klabin.com.br/ir
invest@klabin.com.br
Phone: +55 (11) 3046-8401

APPENDIX
PUMA MARKET
COMMERCIAL CONTRACT

PUMA
PULP MARKET

PULP MARKET
2014

VIRGIN
FIBER
mm t PULP

164
112

PULP MARKET
DISTRIBUTION

45%

million tonnes

33%

52.6
million tonnes

eucalyptus

long fiber

22%
integrated pulp

Source: Hawkins Wright; RISI

market pulp

other
short fibers

25

PUMA: 6th LARGEST PULP MILL

LARGEST MARKET PULP MILLS OF THE WORLD

million tonnes per year in 2014

Fibria Aracruz

2,340

April Riau

2,200

April Rizhao

1,700

CMPC Guaba

1,690

Suzano Mucuri

1,565

Klabin

1,500

Suzano Maranho

1,500

Eldorado

1,500

Montes del Plata

Source: Hawkins Wright

1,300

WORLD DEMAND

million tonnes per year in 2014

short fiber

28.6

52.6 market
pulp

17.5

eucalyptus

26

4th LARGEST IN FLUFF

WORLD CAPACITY OF FLUFF
thousand tonnes per year in 2014

2,296

GP

1,420

Weyco

1,045

IP
400

Puma
Klabin

334

Domtar

290

Resolute

250

Arauco

Rayonier
UPM

the only designed to produce

fluff from the start
WORLD DEMAND

million tonnes per year in 2014

255

Stora

Rock Tenn

mills
converted in
fluff mills

23,7

170
110

6,4
fibra longa

fluff and
SBSK

100
SBSK = pinus long fiber from USA

Source: Hawkins Wright

27

FOCUS ON CONSUMER MARKETS

MARKET PENETRATION IN
DISPOSABLE DIAPERS

SOPHISTICATION AND INNOVATION IN

HIGHER VALUE ADDED PRODUCTS

2013

USA

96%
high potential of
growth
BRA

50%

ARG

72%
Source: RISI, Euromonitor

28

BRAZIL IS THE 3RD LARGEST MARKET

OF DISPOSABLE DIAPERS IN THE WORLD
SALES OF DIAPERS
FOR ADULTS

SALES OF DIAPERS
FOR INFANT

1.1

R$ billion

R$ billion

0.9
0.8
0.7

0.4

0.5

5.8

5.3
4.8
4.6

2009

2010

2011

2012

2013

4.0

2014

3.4

2009
Source: Euromonitor

2010

2011

2012

2013

2014
29

COMPOSITION OF DIAPERS
30% TO 50% OF THE AVERAGE WEIGHT
OF A DIAPER IS COMPOSED OF FLUFF (20 TO 40G)

30

SPREADS AMONG DIFFERENT FIBERS

235

CIF EUROPE
US$/TONNE

fluff x short fiber

15
long fiber x short fiber

jul
13

aug sep
13
13

oct
13

Source: RISI, FOEX

nov
13

dec
13

jan
14

feb
14

mar
14

apr may
14
14

jun
14

jul
14

aug sep oct nov dez jan feb mar apr may
14
14 14 14 14 15 15 15 15 15
31

GLOBAL CASH COST (SHORT FIBER)

600

500

400

CIF EUROPE
US$/TONNE

PUMA

10

15

20

25

million
tonnes

million
tonnes

million
tonnes

million
tonnes

million
tonnes

Source: Hawkins Wright

CIF: COST, INSURANCE AND FREIGHT INCLUDED

ANNUAL
CAPACITY
32

KLABIN & FIBRIA

COMMERCIAL CONTRACT
HARDWOOD PULP

Contract Rationale
PumaProject

1.5

mt/year

1.1 mt

of hardwood

Sale minimum
900 kt

of hardwood / year

EXPORTS EXCEPT SOUTH

AMERICA

200 kt
of hardwood / year

400 kt
of softwood,
part converted to fluff

SOUTH AMERICA

+
400 kt
of softwood / year

ALL MARKETS

Sales dynamics

9 0 0 kt
hardwood

final
customer

pulp
plant

Paranagu Port
(PR)

forestry

Same price as Fibria

FOB Paranagu

KLABIN
industrial efficiency

FIBRIA
commercial expertise

Timeline

900 kt of
hardwood
pro rata of the
period

2016

Minimum of 900 kt of hardwood

Phase out 2
50% of the delivered
in 2019

End of the contract

2017
From start-up
date until December

Phase out 1 75% of

the delivered in
2019

Pro rata 50%

of the
delivered in
2019

2018
12 months

2019
12 months

The contract may be renewed

by agreement between the parties

2021

2020
12 months

12 months

2022
12 months

72 months
after start-up

Volumes may be reduced if Klabin decides to

integrate into paper for packaging

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.

Highlights

1
3

Klabin is going to sell most of the

Puma Project hardwood pulp to
Fibria.

Klabin is going to sell the remaining

hardwood pulp in South America,
and softwood and fluff pulp globally.

Fibria will continue to place its

hardwood pulp in all regions,
including South America, on a
competitive basis.

Innovative agreement exploring

core competences: Fibrias
commercial expertise and the
recognized Klabins industrial efficiency.

INCOME STATEMENT
(R$ thousands)

2Q15

1Q15

2Q14

2Q15/1Q15

2Q15/2Q14

6M15

6M14

6M15/6M14

Gross Revenue

1,593,961

1,555,081

1,399,323

3%

14%

3,149,042

2,841,133

11%

Net Revenue

1,337,936

1,308,449

1,151,093

2%

16%

2,646,385

2,354,564

12%

155,230

55,538

129,604

180%

20%

210,768

651,676

-68%

(1,058,415)

(930,067)

(941,718)

14%

12%

(1,988,482)

Gross Profit

434,751

433,920

338,979

0%

28%

868,671

Selling Expenses

(105,594)

(94,461)

(87,474)

12%

21%

(200,055)

(185,655)

8%

(82,927)

(74,964)

(72,882)

11%

14%

(157,891)

(145,812)

8%

(9,912)

(6,033)

17,459

64%

N/A

(15,945)

26,416

N/A

(198,433)

(175,458)

(142,897)

13%

39%

(373,891)

(305,051)

23%

236,318

258,462

196,082

-9%

21%

494,780

956,619

-48%

5,804

7,535

5,807

-23%

0%

13,339

11,349

18%

-24%

68%

(379,126)

(203,105)

87%

244,616

254,244

-4%

Change in fair value - biological assets

Cost of Products Sold

General & Administrative Expenses

Other Revenues (Expenses)
Total Operating Expenses
Operating Income (before Fin. Results)
Equity pickup

(1,744,570)

14%

1,261,670

-31%

Financial Expenses

(163,412)

(215,714)

(97,103)

Financial Revenues

125,770

118,846

133,008

6%

-5%

Net Foreign Exchange Losses

239,104

(1,287,743)

101,614

-119%

135%

(1,048,639)

252,147

N/A

Net Financial Revenues

201,462

(1,384,611)

137,519

N/A

46%

(1,183,149)

303,286

N/A

Net Income before Taxes

443,584

(1,118,614)

339,408

N/A

31%

(675,030)

1,271,254

N/A

Income Tax and Soc. Contrib.

(147,988)

N/A

54%

Net income

295,596

243,518

N/A

21%

257,832

17%

14%

544,301

N/A

N/A

7,453

180%

20%

(210,768)

(651,676)

-68%

Depreciation and amortization

Cost of carrying out assigned to property - land
Change in fair value of biological assets
Vale do Corisco
Adjusted EBITDA

293,985
7,453
(155,230)

390,048
(728,566)
250,316
(55,538)

(95,890)

(129,604)

242,060
(432,970)

(420,562)

N/A

850,692

N/A

434,383

25%

N/A

8,719

8,167

9,550

7%

-9%

16,886

18,938

-11%

391,245

461,407

333,860

-15%

17%

852,652

758,264

12%

numbers in thousand R$

39

BALANCE SHEET
Assets

jun-15

mar-15

Current Assets

7,802,555

7,992,082

Cash and banks

39,881

41,968

4,678,747

5,027,182

521,209

505,934

Short-term investments
Securities
Receivables

Liabilities and Stockholders' Equity

Current Liabilities

3,030,685

1,697,824

1,620,937

Debentures

502,065

378,709

Suppliers

663,730

627,378

Loans and financing

1,240,197

1,273,769

607,449

599,794

Taxes payable

Recoverble taxes and contributions

579,025

429,433

Salaries and payroll charges

Other receivables

136,047

114,002

Dividends to pay

Income tax and social contribution

REFIS Adherence
15,342,872

14,282,475

mar-15

3,209,847

Inventories

Noncurrent Assets

jun-15

Other accounts payable

36,253

38,330

165,491

111,670

101,981

50,400

50,400

94,084

101,280

Long term
Taxes to compensate

913,338

678,504

Noncurrent Liabilities

13,424,620

13,010,927

Judicial Deposits

84,426

84,879

Loans and financing

9,796,361

9,850,126

Other receivables

201,959

241,304

Debentures

1,387,647

1,165,761

Deferred income tax and social contribution

Other investments

504,635

502,283

1,428,556

1,282,760

10,096,021

9,194,472

Other accounts payable - Investors SCPs

136,445

133,760

Biological assets

3,531,080

3,568,934

REFIS Adherence

377,530

381,847

Intangible assets

11,413

12,099

Other accounts payable

298,081

196,673

Property, plant & equipment, net

StockholdersEquity

6,510,960

6,232,945

Capital

2,376,000

2,376,000

Capital reserve

1,301,030

1,301,030

Revaluation reserve

48,730

48,746

Profit reserve

1,879,743

1,599,276

Valuation adjustments to shareholders'equity

1,069,759

1,072,603

Treasury stock
Total

23,145,427

22,274,557

Total

numbers in thousand R$

(164,302)

(164,710)

23,145,427

22,274,557

40

LOAN MATURITY SCHEDULE

1,813

R$ million

1,173

1,880

1,920

1,162

977

1,744

1,565

1,467

Foreign
Currency
8,139

1,088

674
1,103

966

436
944

740
793

261
479

666

640

577

718
477

389

176

268

187
3Q15

4Q15

586
318

363

2015

2016

2017

2018

2019

2020

Local currency : R$ 5.2 billion

Average tenor: 40 months

Gross Debt
13,384

1,612

2021

2022

335
117
217
2023

132
2024

Local
Currency
5,245

2025

Foreign currency: R$ 8.1 billion

Average tenor : 54 months

numbers in R$ million

41