Disclaimer Certain statements in this presentation may - - PowerPoint PPT Presentation

Certain statements in this presentation may constitute forward-looking

• statements. Such statements are subject to known and unknown risks and

uncertainties that could cause the Company’s actual results to differ materially from those set forth in the forward-looking statements. These risks include changes in customer demand for the Company’s products, changes in raw material costs, seasonal fluctuations in customer orders, pricing actions by competitors, significant changes in the applicable rates of exchange of the Brazilian real against the US dollar, and general changes in the economic environment in Brazil, emerging markets or internationally.

Disclaimer

2

Agenda

Corporate Overview Forestry Business Unit Pulp Business Unit Paper Business Unit Results New Growth Cycle

4 12 19 27 35 42

3

Corporate Overview

Suzano Pulp and Paper

Capital markets

• Management performance

assessment

• Transparency
• Funding for growth
• Second largest eucalyptus pulp

producer in the world and one of the top 10 market pulp producers.

• Leader in the regional paper

market

• Certified plantations and products.
• New growth cycle: from 2.8 to 7.2

million tons per year of paper and

pulp.

• Pulp production costs: one of the

lowest in the world.

• Solid business structure abroad.
• Capital markets presence: free

float of 46%.

Defined controlling group

• Reputation
• Long term vision

5

Ownership and Management

Professional management

• Capital discipline
• Rapid decision-making

process

Balanced and complementary portfolio

Market pulp (39% of net rev.) Papers (61% of net revenue) Printing and Writing (48% of net revenue) Paperboard (13% of net rev.) Uncoated (41% of net rev.) Coated (8% of net rev.)

2nd largest

eucalyptus pulp producer in the world

2nd in Brazil

Market share: 26%

1st in Brazil

Market share: 22%

1st in Brazil

Market share: 27%

R$ 4.0 billion in net revenue 58% in exports / 42% in domestic market

Diversified products and markets

Note: Market share figures include paper imports. Last twelve months until September, 2009.

6

775 784 915 1,080 1,100 1,100 1,100 1,100 425 456 570 640 820 1,650 1,750 1,750 1,300 1,300 1,700 2003 2004 2005 2006 2007 2008 2009 New growth cycle Paper Pulp

Note: The effective capacities will depend on the learning curves.

1,720 1,485 1,240 1,200 1,920 2,750 2,850 7,150

Piauí Unit Maranhão Unit New unit and Mucuri expansion

Sustainable growth

Suzano’s production capacity has increased by 130% in the last five years. The Company is prepared for a new growth cycle that will increase its capacity to 7.2

million tons per year of pulp and paper.

7

Corporate structure

BU: Business Unit SP: Service Providers

Board of Directors (BD) 9 members (4 independent)

BD committees

CEO

Objectives:

• Greater focus on customers
• Improved accountability
• Development of leaders

The Business Units model provides performance and returns assessments in each business

Management Sustainability and Strategy Audit SP Operations SP Finance SP Human Resources

SP Strategy, Corporate Dev. and IR

Forestry BU Paper BU Pulp BU

8

Management model

Operational Excellence

• Six Sigma
• Routine management
• Matrix budgeting

Awards and Certifications Corporate Risk Management

• COSO1 methodology
• Corporate governance structure

based on committees – direct report to the directors and Board.

Strategic Planning

• Focused on Value Based

Management (VBM)

• Innovation and R&D
• Sustainability

Alignment of Interests

• Executives compensation based on

EVA metrics

• Higher variable portion in total

compensation

9

¹Internal control methodology of the Committee of Sponsoring Organizations of the Treadway Commission .

Sustainability

FSC – Forest Stewardship Council CCX – Chicago Climate Exchange WBCSD - World Business Council for Sustainable Development

Triple Bottom Line – GRI approach Social

• Focus on education:

– Public libraries – Public schools remodeling – Educational programs

(with ECOFUTURO)

Environment

• FSC – forest management and custody

chain management

• CCX e WBCSD member
• ECOFUTURO (Parque das Neblinas)

Financial and Economic

• Growing scale and revenues
• Improving margins and returns
• Solid cash flow generation

10

Growth platform

Competitive assets with global scale Consolidated presence in the main pulp markets and leader in the regional paper market New growth cycle with competitive projects Consolidated management structure and model

11

Qualified team that combines diversity and focus on execution

Forestry Business Unit

Forestry competitiveness

Brazil: high productivity, forestry technology, low production costs and available areas for expansion

Forest Planted Planted Planted Native

Harvest cycle (years) 7 8 12 80 Main producers Brazil Indonesia, Malaysia and Vietnam Spain, Portugal, Chile and Uruguay Canada, Finland and Sweden

13

44 30 20 1

Eucalyptus Suzano Acacia Eucalyptus globulus Pinus

Forest yield (m³ /ha/year)

100% 1980 2008 5.5 11 Biotechnology Classic improvement

Evolution with state-of-the-art technology

Technology innovation

• More wood/ ha
• More pulp/ m3
• Higher quality
• Less planting areas
• Lower costs

Productivity (admt¹/ha/year)

29 31 44 21

Biotechnology Classic improvement Clones Monoprogeny planting Soils and nutrition

Forest yield evolution (m³/ha/year)

14 1960 1970 1991 1998 2008

¹admt: air dried metric ton

¹ Conpacel: corresponds to 50% of former Ripasa’s areas. ² Does not include infrastructure and available land for planting. ³ Does not include new sites announced, except for land acquired from Vale.

Total preservation area:

252 tsd ha2

Lands and forests

Forests average distance: 211 Km Forests average distance: 74 Km

State Own land (tsd ha) Total Planted

São Paulo 89 49 BA and ES 216 125 Minas Gerais 57 22 Maranhão 197 40 Conpacel¹ (SP) 51 36 Total SPC³ 610 272 Independent farmers3

• 92

Suzano’s production is based on 100% renewable eucalyptus planted forests. Preserved native forest area of approximately 40% of own land.

15

Plants Ports Forests

Soil and climate conditions similar to Australia’s facilitated the development of superior clones in Brazil (innovation and R&D)

DNA Suzano: pioneering and innovation

1980 1990 2000

10 25 35 40 1980 1990 2000 2013 Forest yield Maranhão (m³/ha/year)

E.camaldulensis E.pellita E.brassiana

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1% 63% 20% 1% 2% 2% 11% Land use in Brazil

Planted Forest Native Forest Cattle Sugarcane Corn Soybean Other

Source: BRACELPA / FAO / FBU

1980’s and 90’s: ES and South BA Last frontier: Semiarid (2010’s and 20’s): North and Northeast region 2000’s: Middle- west and farthest South

Growth cycles

New forest frontiers

2.0 1.9 2.3 3.6 4.3 5.2

1 2 4 8

2005 2008 2030

Planted forests in Brazil (area)

Pinus Eucalyptus

5.6 6.6 8.1

Planted areas (MM ha)

1960’s and 70’s: South and Southeast regions

North and Northeast: new expansion frontiers in eucalyptus’ plantations in

• Brazil. Suzano presents technological and

positioning advantage.

Source: IBGE,2007

Planted forests still represent a small part

• f the available area in

Brazil.

17

Forestry Business Unit priorities

Consolidate

• perations in

the Northeast region: states

• f Maranhão

and Piauí Explore new business

• pportunities

related to the forestry base and Suzano’s competences Focus on cost reductions, wood logistics and operational excellence Long term view in research and development and forestry technology

18

Pulp Business Unit

Minerals 391 Production 2008 (MM ton)

51% 49% 72% 28%

(13% of total fibers)

Million Tons Printing and Writing Tissue Paperboard Corrugated Newsprint Others

Source: Poyry, 2008

Market pulp still represents the smaller part of the fiber used for paper production. New paper capacities are being installed near to consumer markets, while cash cost drives implementation of new pulp capacities.

Overview of the pulp and paper production chain

Global production of paper and paperboard

8%

Total fiber needed 362

8%

Recycled 185 Virgin fiber 177 Market pulp 50 Integrated pulp 127 391

20

8%

204 27 45 115

2008 Global paper demand growth (2008-15) of 2.2% per year: Chinese and Latin American markets, including Brazil, outperform global growth rate.

Pulp demand growth drivers

• 0.2%

1.7% 3.3% 3.5% 4.5% 2.2% North America Europe Latin America Brazil China Global 2008-15

Annual growth per paper segment

P&W 1.8% Tissue 3.2%

Million Tons Printing and Writing Tissue Paperboard Corrugated Newsprint Others

Source: Poyry, 2008

391

21

P&W: printing and writing

Paper demand growth (2008-15)

11.8 21.2 2.5

1Includes world total production of market pulp, not only the highlighted countries.

Source: Hawkins Wright, July/ 09 - Volumes do not include production of unbleached pulp and high yield pulp.

US$ / ton (CIF/ North Europe)

Hardwood Softwood High Cost 15.2 Low Cost High Cost

Chile West Europe Finland Canada (East) Sweden Canada (British Columbia) Chile Indonesia Canada

France and Belgium

Iberia, Norway e Sweden Brazil Finland USA

550 300 US$ 300 – 310 / t US$ 450 - 540 / t US$ 490 - 630 / t

SUZ

650 450 Low Cost

MM ton1

Brazilian pulp cash cost: structurally low

USA

22

549 615 799 1,320 1,368

84% 81% 78% 80% 88%

16% 19% 22% 20% 12%

23

• Total production capacity of 2.6 million tons per year. Market pulp represents 1.8 million

tons.

• Sales of 1,368 Kton in 9M09
• Net revenue of R$ 1,198 million in 9M09
• 88% of total sales destined to exports: more than 40 countries, China being the main

destination

• Production cash cost: one of the lowest worldwide
• Organic growth projects increasing capacity by 4.3 million tons per year in the next years

Pulp Business Unit highlights

80% 20%

Sales distribution

With contracts Without contracts

Commercial approach

42% 27% 13% 18%

Sales per segment -9M09

P&W Tissue Special Other

• Local presence in international markets: Asia, Europe and North America
• Technical support in each international office.
• Strong presence in China, with close market relationships and long term contracts
• FSC certified pulp
• More than 150 active clients

24

P&W: printing and writing

Pulp Business Unit priorities

Focus on

• perations:

cost and logistics efficiency Local presence in main global markets Start up of the MA and PI projects – new growth frontier in Brazil

25

Paper Business Unit

204 209 239

27 29 34

45 47 53 115 114 130 2008 2010 2015

Global paper demand (MM ton)

Other Tissue Paperboard P&W

• Global paper demand growth (2008-2015) of 2.2% per year:

– P&W: +1.8% p.y. – Paperboard: +2.3 % p.y.

• Industry is still considered fragmented, but with significant regional concentration
• Emerging markets lead the supply and demand growth

P&W – Printing and writing / Paperboard includes Liquid paperboard Source: Poyry – March, 2009

Suzano’s focus

456 398 391

Global paper demand

27

Paper consumption x GDP per capita

Historically, there is a high correlation between GDP per capita and paper

• consumption. In Brazil, the positive economic growth forecasts represent

an important driver for the domestic paper demand.

 Education  Digital printing  Customized

media

 Smart

packaging

 Electronic

media

 Plastics

Source: Poyry, 2008

50 100 150 200 250 300 350 5.000 10.000 15.000 20.000 25.000 30.000 35.000 40.000 45.000

GDP per capita, US$

Consumption, kg per capita

Japan China USA Sweden Spain Korea, Rep. UK Taiwan Brazil

India = 7kg USA = 300kg

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Demand growth drivers

¹P&W: printing and writing / PB: paperboard and liquid paperboard Source: RISI Latin America Forecast – August/09

Brazil and Latin America: Suzano’s main markets

8.2 7.8 8.0 9.4

2008 2009 2010 2014

P&W and PB¹ demand (MM ton) Latin America

• Economic growth and increase in the

industrial activity

• Education level improvement and

access to new technologies

• The P&W and PB demand is

expected to grow at a rate of 4.1%, from 2010 to 2014: outperforming the capacity increase in the region

• Latin America: net importing region
• Competitive advantage: geographic

proximity, lower logistic costs and shorter lead times

29

The markets in which Suzano

• perates correspond to 31%
• f total consumption, or

2.7 million tons.

Main seasonal factors in the domestic paper demand:

• Government purchases for textbooks
• Notebook exports
• Back to school season
• Year end holidays (packaging)

Paperboard does not include liquid paperboard Source: Bracelpa – 2008

Paper in Brazil

25% 6% 47% 10% 5% 7%

Brazilian paper consumption

Printing & Writing Paperboard Wrapping Tissue Other Newsprint

30

More than 90% integrated production (pulp + paper)

Paper Business in Suzano

• Fx hedge: approximately 60% of paper

revenue in local currency

• Hedge against the cyclicality of pulp prices
• Operational synergies: drying / repulping,

transport, taxes, environmental infrastructure synergies

• Production capacity of 1.1 million ton

per year

• Approximately 400 clients, 300 in Brazil
• 5 productive plants
• 10 paper machines
• Strong brands: Report, Reciclato,

Paperfect and others

• 2 paper merchants

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Paper Business Unit highlights

38% 37% 41% 43% 42% 51% 62% 58% 63% 59% 57% 49% 794 916 1,071 1,098 1,140 809

• Net revenue of R$ 1.7 billion in 9M09
• Brazil and Latin America represent approximately 70%¹ of total sales
• Profitability and risks define sales distribution in different regions
• Leadership in Printing & Writing and white paperboard in South America
• 2 own paper merchants – SPP NEMO (2nd largest in Brazil) and Stenfar (Argentina)
• Complementary graphic and consumption portfolio

¹Last 12 months until September/09

32

Paper Business Unit priorities

Portfolio management, sales and regional mix, focusing on

• perational margin

and return

Regional leadership in the main white paper segments Logistics and commercial approach excellence Discipline in growth

• pportunities

assessments

33

Results

Results 9M09 9M08 9M09/9M08

Sales volume (Kton) 2,176 1,850 17.6% Paper sales – domestic market (Kton) 422 487

• 13.6%

Pulp sales – exports (Kton) 1,180 811 45.6% Net revenue - R$ Million 2,933 2,963

• 1.0%

Net income - R$ Million 742 43 1,615.8% EBITDA - R$ Million 766 1,087

• 29.6%

EBITDA - US$ Million 367 644

• 43.0%

EBITDA margin 26.1% 36.7%

• 10.6 p.p.

Average exchange rate (R$/US$) 2.09 1.69 23.6% Net debt 4,019 4,775

• 15.8%

Net debt / EBITDA (LTM) 3.5 3.7 n.a.

Note: Since 2008, contemplates the adjustments of Law 11.638/07 LTM – last twelve months

Results 9M09

35

2,640 2,787 3,099 3,410 4,064 49% 47% 42% 47% 54% 51% 53% 58% 53% 46% 59% 41% 2,933

Note: the adjustments of Law 11.638/07 are contemplated since 2008.

Net revenue and EBITDA

36

Implementation

• f Mucuri project

(Line 2)

Debt profile

Note: the adjustments of Law 11.638/07 are contemplated since 2008. ¹ Debt 31/09/09 and EBITDA of the last twelve months until September/2009

Acquisition

• f Ripasa

Start up of line 2 at Mucuri

37

Adequate debt amortization schedule and liquidity profile:

• R$ 2.4 billion in cash (jun/09)
• Competitive debt costs
• Fitch affirms Suzano’s rating: AA- (bra) in May/09

Debt amortization schedule

178

Short term debt with renewal already agreed (R$178 million)

38

Capital markets

Increasing daily number of trades and recovery of higher average daily volumes

17 16 14 13 17 11 14 11 11 9 5 5 6 5 4 7 15 13 12 16 16 414 408 440 456 628 433 621 505 714 790 637 618 635 676 820 787 1.198 1.319 1.061 1.534 1.434 200 400 600 800 1000 1200 1400 1600 1800 2 4 6 8 10 12 14 16 18 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09

• Avg. Daily Volume

Number of Trades (Daily)

39

70% 80% 90% 100% 110% 120% 130% 140% 150% 160% 170%

Stock Performance

(Jan/09 to Sep/09)

Stock performance

155 (SUZB5) 164 (Ibov) 143 (IBrX50)

40

New Growth Cycle

1,100 1,100 1,100 1,100 1,100 1,100 1,100 1,750 1,750 1,750 1,750 3,050 4,350 6,050 2009 2010 2011 2012 2013 2014 tbd

Paper Pulp

2,850 2,850 2,850 2,850 4,150 5,450 7,150

Piauí Unit Maranhão Unit New unit and Mucuri expansion Mucuri Unit and new pulp line: analysis of the global economy and pulp market outlook

• Definition on the new implementation schedule and start up dates until the end of 2009

New growth cycle

Considering the new projects, pulp annual capacity will increase 4.3 million tons and the total installed capacity will reach 7.2 million tons per year.

42

1 The effective capacity will depend on the learning curves

25% 40% 35%

Vale Forestry Assets Vale Florestar Program Own Land

Wood supply

(2013-2028)

• Acquisition of Vale’s forestry assets in

Maranhão: 84,5 thousand ha of land (34,5 thousand ha already planted)

• Acquisition of eucalyptus timber from the

Vale Florestar Program, starting in 2014 until 2028

• Technology cooperation agreement
• Railroad transportation for the pulp
• utput to the port region of São Luiz until

2043.

• Start up in 2013 ensured with Vale’s

forestry assets (planted forest) – on a competitive basis

Necessary planted area: 133 tsd ha

US$ 1,8 Billion

2009 to 2015

Forestry Capex Industrial Capex US$ 200 Million

2011 to 2014

Maranhão Unit

Final agreements with Vale in July 2009:

43

Own lands 70%

Independent farmers 30%

Wood supply

(2015 onwards)

• Final agreement with

Transnordestina in July 2009:

• Railroad transportation for the

pulp output from Piauí to the port region of São Luiz until 2028

• Planting already started in MA

licensed area

• Start up of Piauí unit scheduled for

2014, ensured with 5.5 years old forest

US$ 1,8 Billion

2009 to 2015

Forestry Capex Industrial Capex US$ 370 Million

2012 to 2015 Necessary planted area: 160 tsd ha

Piauí Unit

44

Maranhão Unit Piauí Unit

Maranhão and Piauí units

45

Leadership Competitiveness Vision Management Capital structure

Key messages

Leading player in the regional paper market and one of the top 10 market pulp producers One of the lowest cash costs in the world Solid organic growth strategy Consolidated management structure/model and alignment with shareholders Disciplined capital structure management

46

Investor Relations

www.suzano.com.br/ri +55 (11) 3503-9061 ri@suzano.com.br

47

Experience of 35 years in the pulp and paper industry. CEO of Suzano Holding S/A and Chairman of the Board of Directors of Suzano Pulp and Paper S/A. CEO of IPLF Holding. CEO and Vice President of the Board of Directors of Polpar S/A. Vice President of Premesa S/A and Vocal. Experience of 34 years in the pulp and paper industry. Vice President FIESP. Member of ABRINQ and EMBRAER’s Board of

• Directors. Member of BRACELPA’s Advisory Board. Former member of the Association Committee of Foreign Trade of Brazil and

Chairperson of the Advisory Committee on Paper and Wood Products of Food and Agriculture UN organization in Rome. Coordinator of Sustainability and Strategy Committee and member of Audit Committee and member of the Compensation Commission of the Board of Directors; Former president of the board and CEO of Hoechst of Brazil and senior executive of Hoechst AG, Frankfurt. Member of RBS Group’s Board of Directors, of Cyrela Brazil Realty, of OGX, of Chemical Group DSM/Holanda, President of Renner Stores’ Board of Directors. Experience of 31 years in the pulp and paper industry. Member of Sustainability and Strategy Committee, Chairman of Polpar’s Board of Directors, President of Premesa, Corporate VP of Suzano Holding, the IPLF Holding, President of Vocal, Chairman of Lazam-MDS Insurance Brokers and Administrator’s Board of Directors, Chairman of Ecofuturo Institute’s Board of Directors. Experience of 30 years in the pulp and paper industry. Member of the Board and the Committee of Sustainability and Strategy; Director of Premesa, Corporate VP of Suzano Holding, a member of Lazam MDS Insurance Brokers and Administrator’s Board of Directors and VP and Director of the Council of Ecofuturo Institute. Senior partner of Machado, Meyer, and Sendacz Opice Lawyers and Director of OAB, Brazil. President of CESA.Former Legal Adviser and Chairman of the Legislative Committee of the American Chamber of Commerce and Director of ABRASCA’s Legislative

• Committee. Former Justice Secretary for the State of São Paulo. (Independent)

Senior partner of Integra Associates. Member of Gerdau SA’s Board of Directors, Gerdau Metallurgical, Satipel Industrial SA, RBS Group, Sao Paulo Alpargatas, Locates, Delphi Corporation (USA) and Johnson Electric (Hong Kong); Board Member of Brazil's Bunge, Brazil and Alcoa Veirano Assoc. Oscar was President of Bunge International and managing partner in Booz-Allen & Hamilton. (Independent) Coordinator of Suzano Pulp and Paper’s Audit Committee. Former General Manager of WTORRE and President of TAM Airlines. Member of TAM and Daycoval Bank Board of Directors. (Independent) Chairman of Board of Directors of Perdigão. Board member of WEG SA, Ultrapar Participações SA and Iochpe-Maxion SA. Former Director of the National Bank for Economic and Social Development - BNDES, and General Director of Corporate Group Iochpe- Maxion Industrial Holding. (Independent)

Experienced and active Board of Directors

DAVID FEFFER, 52 Chairman DANIEL FEFFER, 49 Vice Chairman BORIS TABACOF, 81 Vice Chairman CLÁUDIO SONDER, 67 ANTONIO MEYER, 63 OSCAR BERNARDES, 63 MARCO BOLOGNA, 54 NILDEMAR SECCHES, 60 JORGE FEFFER, 48

48

Chief Executive Officer, 3 years at Suzano. Board of Directors’ Member of Archer Daniels Midland Company – ADM and of Marfrig. BRACELPA’s VP. Former Board of Directors’ member of SEBRAE, Gradiente, Crecisa and Amcham. Former chaiman of Ford Brasil and Ford Latin America, Itamarati Group, Ferronorte and Cecrisa and Executive of Petrobrás and of the Federal Government. Mechanical Engineer graduated at UFRJ. Strategy, Corporate Development and Investor Relations Executive Officer, 6 years at Suzano. Former Paper Business Unit Executive Officer (2005-08). Former Executive of JPMorgan in Brazil and NY (Investment Banking Global and Latin America), Chase Manhattan and Banco Patrimônio/Salomon Brothers. Graduated in Business Administration at FGV. Chief Operation Officer, 5 years at Suzano. Has worked as Expansion Project Director of Mucuri Unit. Former executive of Dow Chemical Company, in Brazil, USA and Europe. Post-Graduated in Business Administration at FIA/USP. Chief Financial Officer, responsible for Legal, 14 years at Suzano. Has worked at pulp and paper sector for 29 years. Former Director, Executive Vice-President and member of the Board of Directors of Vale. PhD in Business Administration graduated at University of California, Berkeley. Forest Business Unit Executive Officer, 2 years at Suzano. Former executive of Champion Pulp and Paper and International Paper in Brazil and USA. Post graduated in Forest Science and Wood Technology at USP – Piracicaba. Paper Business Unit Executive Officer, 6 years at Suzano. Former Executive Manager of Suzano’s Pulp Business Unit and Sales General Manager for Latin America at General Electric, at the Industrial Systems Division. MBA degree at Ibmec São Paulo. Human Resources Area Executive Officer, joined Suzano in 2008. Former Human Resources Manager of Operations in General Electric in Brazil and abroad, Global HR Director for Information Technology in the United States and HR Director for Mexico and Latin America. Former Executive of Carioca Engenharia, CR Almeida, and Bureau Veritas. Post Graduated in Business Administration at COPPEAD. Pulp Business Unit Executive Officer, joined Suzano in 2009. Former CEO of European operations of RGM Group and commercial director of Aracruz. Graduated in Business Administration at Fundação Getúlio Vargas.

ANTONIO MACIEL NETO, 51 BERNARDO SZPIGEL, 63 ANDRÉ DORF, 36 ERNESTO POUSADA, 41 JOÃO COMÉRIO, 44 CARLOS ANIBAL, 39 CARLOS GRINER, 45 ALEXANDRE YAMBANIS, 57

49

Distinguished management team