Investor Presentation December 2008 Disclaimer Certain statements - - PowerPoint PPT Presentation

Investor Presentation

December 2008

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Disclaimer

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.

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• Solid growth strategy
• One of the lowest cost producers in the world
• Market leader in the regional paper industry and one of the top 10 in the global

pulp industry

• Strong management team and organizational structure

Key Messages

• Adequate capital structure

Corporate Overview

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DEFINED CONTROLLING GROUP  Reputation  Long term vision PROFESSIONAL MANAGEMENT  Capital Discipline  Rapid decision-making Process CAPITAL MARKETS  Assessment of management performance  Transparency  Funding for growth

Ownership and Management: A Powerful Combination

Profitable and sustainable growth

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46% in free float

Free Float Controlling shareholders (Suzano Holding and Related Persons)

ON 95.0% PNA 28.6% PNB 0.6% TC 51.2% PNA 70.9% PNB 11.2% TC 46.3%

Note: ON = Voting Shares PNA = Non voting/Pref. A PNB = Non voting/ Pref. B TC = Total Capital

Ownership Structure

Note: In treasury, there are 5,428,955 of ON, 1,009,583 of PNA and 1,358,419 of PNB representing 2.5% of total shares. These shares were not included in free float.

Total Capital (# of shares) ON 107,821,512 PNA 205,120,105 PNB 1,540,879 Total 314,482,496

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Suzano

 Second largest eucalyptus pulp producer in the world and one of the top 10 in market pulp.  Regional leader in the paper market.  Plantations and products certified by the FSC.  New growth cycle: from 2.8 to 7.2 million tons per year of paper and pulp.  Solid business structure abroad: Argentina, England, United States, Switzerland and China.

New growth cycle

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46% in the domestic market #1 in Brazil market share 29% #2 in Brazil market share 28% #1 in Brazil market share 23% 54% in exports

R$ 4.1 billion in net revenue

Market pulp (38% of net revenue) Paper (62% of net revenue) Printing and writing (48% of net revenue) Uncoated (40% net rev.) Coated (8% net rev.) Cartonboard (14% net rev.)

High quality and technology

Diversified products and markets

Note: Market share numbers include paper imports.

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Owned land (tsd ha) State Total Planted

São Paulo BA e ES Minas Gerais Maranhão Conpacel* (SP) Total SPC** 89 194 77 112 53 525 49 117 29 1 38 233

* Conpacel: corresponds to 50% of Ripasa’s area. ** It does not include new sites announced.

Independent farmers 90

Average distance of forests: 74 Km Average distance of forests: 211 Km

Areas of Activity and Flow

• f Production

Portocel Vitória Port Santos Port

Lands and forests

 Suzano’s production is based on 100% of renewable eucalyptus planted forests, preserving a native forest area of 39% (19% above Brazilian environmental Legislation requirements).

Preservation: 201 tsd ha.

Note: 91 hectares are allocated to infrastructure or are available for planting.

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Performance

100% 70% a 100%

1980 2000

 Technologic Innovation  More wood/ ha  More pulp/ m3  Higher quality  Less Area  Lower Costs

Evolução do Rendimento em celulose (tsa/ha/ano)

2020 (projection)

1960 1970 1991 1998 2008

29 31 45 Biotechnology Classical improvement

Clones Monoprogeny planting Soils and nutrition Seeds

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Forest Yield Evolution (m3/ha/year) Productivity (mtons / ha / year)

Challenging goals and cutting-edge technology

5.5 11

Biotechnology Classical improvement

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BU: Business Unit SP: Service Providers SP Strategy, Corporate

• Dev. & IR

SP Finance SP

Operations

SP Human Resources

Paper BU Pulp BU Forest BU

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

Management Audit

BD Committees Sustainability & Strategy

Objectives:

• Greater customer focus
• Improved accountability
• Development of leaders

Organizational Structure

CEO

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Board of Directors experienced and active

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. Graduated in Business Administration in Brazil and attended specialization courses in Columbia University (USA) and IMD (Switzerland). 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. ( Independent)

DAVID FEFFER, 52 Chairman DANIEL FEFFER, 48 Vice Chairman BORIS TABACOF, 80 Vice Chairman CLÁUDIO SONDER, 66 ANTONIO MEYER, 62

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.

OSCAR BERNARDES, 62 MARCO BOLOGNA, 53 NILDEMAR SECCHES, 60 JORGE FEFFER, 47

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)

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Distinguished Management Team

Chief Executive Officer, 2,5 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 USP.

ANTONIO MACIEL NETO, 51

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, 4 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.

BERNARDO SZPIGEL, 63 ANDRÉ DORF, 36 ERNESTO POUSADA, 41 JOÃO COMÉRIO, 44 CARLOS ANIBAL, 38 CARLOS GRINER, 44 ALEXANDRE YAMBANIS, 57

Pulp Business Unit Executive Officer, joined Suzano in 2009. Former CEO of RGM Group and managing director of Aracruz. Graduated in Business Administration at Fundação Getúlio Vargas.

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Management model

 Operational Excellence:

 Six Sigma / Routine management  Revenue management  Matrix budgeting: fixed costs and SG&A

 Customer Oriented:

 New and clearer commercial policies  Improve customer satisfaction

 Alignment of interests:

 Compensation of executives focused on EVA metrics  Higher variable portion in total compensation

 Strategic Planning:

 Focused on Value-Based Management (EVA)  M&A opportunities  Enterprise risk management  Sustainability  R&D & Innovation

Awards and recognitions

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Sustainability

Notes: CCX – Chicago Climate Exchange WBCSD - World Business Council for Sustainable Development

Triple Bottom Line – GRI approach

Financial and Economic

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

Social

 Public libraries  Public schools remodeling  Educational programs (with ECOFUTURO)

Environment

 FSC – forest management and chain

• f custody certification

 CCX and WBCSD member  ECOFUTURO (Parque das Neblinas)

Expertise in Projects Management & New Growth Cycle

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Mucuri: successful implementation

US$ Million 2005R 2006R 2007R 2008E Total CAPEX 55 718 479 58 1,310

 World record: recovery boiler operating in 20.5 months  Construction concluded in 22 months  Startup 35 days ahead of schedule  Initial budget maintained despite appreciation of the Brazilian Real

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760 775 784 915 425 425 456 570 640 820 1,100 1,100 1,100 1,100 1,100 1,100 1,100 1,100 1,100 1,080 6,050 4,350 3,050 1,750 1,750 1,750 1,750 1,650 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 TBD

New growth cycle

 Based on the new projects, the annual pulp capacity will grow 4.3 million tons and the total installed capacity* will be 7.2 million tons per year of pulp and paper.

1,185 1,200 1,240 1,485 1,720 1,920 2,740 2,850 7,150 4,150 5,450

Maranhão Unit Piauí Unit New Unit and debottleneck

• f Mucuri

2,850

* The effective capacity will depend on the learning curves.

Pulp Paper 2,850 2,850

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New growth cycle

 Three new pulp lines and Mucuri Unit debottleneck  Maranhão State Unit  Piauí State Unit  Debottleneck of Mucuri Unit by optimizing the existing Lines 1 and 2  New line in one of the new units (Maranhão or Piauí States) or a new location  Capacity of 4.3 MM tons per year  New forest boundaries (Greenfield projects) - basis for new growth cycles.

2009-2015 2011-2017 US$ 700 million * US$ 3,6 billion Forestry Base Industrial New Lines Schedule of Investments

* It does not include forest basis of the third line

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New growth cycle

 Investments in the two new “greenfield” market pulp mills will continue:

• Maranhão State Unit: 2013
• Piauí State Unit: 2014

 Capex in the forestry base already started and the partnerships, previously announced, are evolving accordingly.  Management will analyze the global economic and pulp market outlooks and submit the Mucuri debottleneck and the new pulp line projects to the Board in the 2H09.  Definition of the new projects schedule and new start-up dates until the end of 2009.

Pulp Business Unit

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Bleached pulp capacity in 2008

Market Pulp Bleached hardwood pulp Eucalyptus pulp

Nordic Asia/Africa West Europe 14.020 8.870 8.055 6.305 5.465 4.985 Latin America United States Canada East Europe Japan Oceania 2.290 780 445

Market pulp capacity in 2008 Total 26.8 million Total 14.8 million Total 51.2 million

Source: Hawkins Wright - December, 2008Volumes don’t include production of unbleached pulp and high yield pulp. Canadá; 16% Asia/Africa ; 11% Nordic; 12% West Europe; 10% East Europe; 4% Brazil; 17% Oceania; 1% Japan; 2% Latin America - Others; 11% USA; 17% Canada; 8% Nordic; 8% West Europe; 11% East Europe; 3% Brazil; 32% Japan; 2% Asia/Africa ; 20% Latin America - Others; 11% USA; 6% Nordic; 1% Latin America; 21% Brazil; 58% Africa; 4% West Europe; 16%

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World demand

Source: Hawkins Wright – December, 2008.

Total bleached softwood 21,8 21,4 20,7 20,7 20,9 20,9

• 1,9%
• 0,8%

Birch 1,2 1,1 1,0 0,9 0,8 0,8

• 10,8%
• 8,9%

Eucalyptus 11,8 13,3 13,4 14,0 14,7 15,4 13,1% 5,4%

Asian hardwood 3,2 3,2 3,3 3,7 4,0 4,2 1,4% 5,4% Northern mixed hardwood 4,4 4,4 3,9 3,7 3,6 3,5

• 4,2%
• 4,3%

Southern mixed hardwood 2,1 1,9 1,8 1,6 1,6 1,5

• 10,1%
• 5,8%

Total bleached hardwood 22,7 23,9 23,2 23,9 24,7 25,4 5,3% 2,3% Sulphite 0,8 0,6 0,6 0,5 0,4 0,4

• 18,6%
• 11,4%

Total white pulp 45,3 45,9 44,5 45,0 46,0 46,8 0,7% 1,4%

Million tons % p.y %p.y 2007 2008 2009 2010 2012 2007-12 2007/08 Forecast 2011

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US$ / t (CIF/ North Europe)

Pulp cash cost Brazil: structurally low

Source: Hawkins Wright, December 2008 - Volumes don’t include production of unbleached pulp and high yield pulp. * FOEX, March 24th, 2009

USA Hardwood Softwood Chile Europe Finland East Canada Sweden BC Interior High Cost 23.4 MM ton Chile Indonesia Canada Sweden France and Belgium Iberia e Norway Brazil 16.8 MM ton Low Cost High Cost 10.0 MM ton Finland USA

750 350

US$ 260 – 310 / t US$ 410 - 550 / t US$ 500 - 610 / t BC Coast

SUZ List price (Europe): US$499/t* List price (Europe): US$579/t*

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Capacity closures and downtimes

 Capacity closures and downtimes from 2005 to 2008 reached more than 4 million tons. Additional capacity reductions are expected in 2009. North America Europe Total 2005 (70) (390) 2006 (1,270) (1,340) 2008 (1,700) (2,530) 1H09 (1,160) (1,892) Total (4,450) (1,470) (6,152) (320) (70) (830) (500) Latin America Asia (196) (196) (36) (36)

Sources: Hawkins Wright, December 2008 and March 2009

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Pulp Sales Destination – 2008 Pulp Sales (thousand tons)

Pulp unit Solid track record of exports

 More than 120 customers in more than 47 countries

2004 2005 2006 2007 2008

Note: Consolidated figures of Suzano Pulp and Paper with proportional consolidation of Ripasa

490 549 615 799 1,320 84% 81% 78% 80% 82% 16% 19% 22% 20% 18% Domestic Market Exports

Brazil 18% Asia 28% North America 7% Europe 46% Latin America 1%

Paper Business Unit

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372 482 2006 2020

• Education in emerging markets
• New printing technologies (on demand)
• Broad access to home printers in emerging markets
• “Packaging substitution”: environment and printability

Global paper demand

P&PB demand (million tons / year)

Notes: P&PB – Paper and paperboard. CAGR = 1,9%

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Consumption x GDP per Capita

Drivers for growth in demand

 Historically there is a high correlation between per capita GDP and paper consumption. In Brazil, an expected higher growth of economy should stimulate the domestic demand for paper.

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

 Education  Digital printing  Customized media  Intelligent packaging 

Electronic media



Plastics

India = 7kg USA = 300kg

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• 1,5
• 1,0
• 0,5

0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5

Global demand growth by grade

Newsprint Uncoated mechanical Coated mechanical Uncoated woodfree * Coated woodfree * Tissue paper Corrugated board Kraft Paper Cartonboard * Others 100 20 40 60 80 Demand growth CAGR % / year Participation in volume, in % Average: 1.9%/a

 The grades that Suzano produces present higher growth rates. Projected growth (2006 a 2020), by segment

Source: Poyry, 2008 Note: * Grades that Suzano produces.

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Source: Bracelpa, including imported papers Note: P&W: Printing and Writing (Uncoated + Coated)

Demand growth in Brazil

 Brazilian market represents 60% of our paper sales.

Evolution of the Brazilian Consumption of P&W and Cartonboard

80% 20% 19%

100 110 120 130 140 150 160 170 180 190 2003 2004 2005 2006 2007 2008

Uncoated Coated Cartonboard

CAGR = 12,7% CAGR = 4,7% CAGR = 6,9% +17%

• 1,4%

+3,2%

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Suzano: focused in the region

 Brazil and Latin America are 75% of volume sold.  About 40% of Suzano's production is exported. A statistical risk / return analysis defines the sales breakdown among the regions.

Participation in volume sold Paper Exports 2008

62% 56% 62% 59% 57% 38% 44% 38% 41% 43% 2004 2005 2006 2007 2008

Sales Volume

Domestic Market Exports

North America 21% Asia 15% Latin America 41% Europe 23%

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Paper prices

Stable prices in the domestic market, in Reais.

1900 2100 2300 2500

Prices increasing in the international market, in Dollars.

400 600 800 1000 1200 1,0 1,5 2,0 2,5 3,0 3,5

Average Price (R$ / ton) Average Price (US$ / ton) 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 Exchange Rate

The price decrease in 4Q08 was more than compensated by the devaluation of the Real

4Q08

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Paper business in Suzano

1. Focused & Rational Portfolio

• Uncoated papers in the local and international markets
• Coated papers and board mainly in the LA Region

2. Significant Market Position

• World class scale and cost competitiveness in uncoated paper
• Leadership in P&W in South America
• Leadership in the most attractive segments in the local markets

3. High quality assets and infrastructure

• Competitive production cost and flexible finishing structure
• Excellence in logistics and sales approach
• 4. Paper priorities
• Optimization of products and regions mix
• Redefinition of the commercial approach and relationship with the market
• Growth with profitability

Corporate Results

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Results 2008

2008 2007 % 2008 / 2007 Sales volume (000 tons) 2,482

1,925

29.0% Paper volume domestic market (000 tons) 658 668*

• 1.6%

Pulp volume export market (000 tons) 1089 638 70.6% Net revenue - R$ million 4,064 3,410 19.2% Net income - R$ million (451)

537

n.a. EBITDA - R$ million 1,469 1,034 42,1% EBITDA - US$ million 800 531 50.7% EBITDA margin 36.2% 30.3% 5.8 p.p. Exchange Rate 1.84 1.95

• 5.8%

Net debt / EBITDA (LTM) 3.7 4.2 / 3.7** n.a.

Notes: i. For comparison purposes, information shown on the table above refer to variations of 2007, also adjusted according to Law 11.638/07. ii. n.a. – non applicable * Includes volumes from Limeira mill and Cubatão mill disposed in 4Q07 **The Net Debt/EBITDA ratio without the effects of Law 11.638 was 3.7 on 12/31/2007.

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EBITDA Net Revenue (R$ million)

Net revenue and Ebitda

 Improvement in EBITDA margin despite the unstable scenario.

2004 2005 2006 2007 2008 2,640 2,787 3,099 3,410 4,064 49% 47% 42% 47% 46% 51% 53% 58% 53% 54% Domestic Market Export s

1,469 1,034 1,040 913 1,039

2004 2005 2006 2007 2008 39.4% 32.8% 33.5% 30.3% 36.2% 1.84 1.95 2.18 2.44 2.93

Exchange rate Ebitda - R$ million Ebitda margin

R$/US$

Notes: i. For comparison purposes, information shown on the EBITDA graph above refer to variations of 2007, also adjusted according to Law 11.638/07. EBITDA without the effects of Law 11.638 was 1,146 in 2007. ii. Consolidated figures of Suzano Pulp and Paper with proportional participation of Ripasa

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913 5,459 4,385 3,919 2,475 1,616 1,665 1,469 1,034 1,040 1,039 1,000 1,6 2,7 3,8 3,7 3,7 1,7 1.000 2.000 3.000 4.000 5.000 6.000 7.000 2003 2004 2005 2006 2007 2008 0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0

Net Debt EBITDA Net Debt/EBITDA

Debt and leverage

R$ Million Net Debt / EBITDA

Acquisition of Ripasa Mucuri Project Startup Line 2 at Mucuri

Net Debt / EBITDA ratio 2008contemplates the accounting change introduced by Law 11.638/07.

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Amortization schedule

 Suzano’s debt amortization schedule and liquidity are comfortable.

• R$ 2.2 billion in cash (December/ 2008)
• Average maturity of long term debt: approximately 4 years

Amortization schedule (R$ million)

2176 1737 1375 1066 930 678 796 1053 Cash 2009 2010 2011 2012 2013 2014 2015 onwards

The short-term portion includes the financing of R$ 467 million which had the renewal already agreed

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Key Messages

Focus on sustainable and profitable growth

• Solid growth strategy
• One of the lowest cost producers in the world
• Market leader in the regional paper industry and one of the top 10 in the global

pulp industry

• Strong management team and organizational structure
• Adequate capital structure

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Investor Relations

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