Presentation 1Q18 1 Disclaimer The statements in this - - PowerPoint PPT Presentation

1

Institutional

Presentation

1Q18

Disclaimer

The statements in this presentation 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.

• 1. Overview
• 2. Industry
• 3. Competitiveness
• 4. Strategy
• 5. Operating and Financial Highlights

Agenda Agenda

3

• 1. Overview

4

Suzano Suzano

Data from 03/31/2018 ¹ SUZB3: R$33.36 | 2 Flexibility to produce either Fluff or Printing and Writing paper | 3 Last twelve months ended on 03/31/2018

With over 90 years of operations, the Company produces pulp, paper and tissue

Pulp

Market Pulp Eucafluff

Market Cap¹ R$ 36.9 billion Total Forest Base 1.2 million ha Market Pulp Capacity² 3.6 million tonnes Paper Capacity² 1.3 million tonnes Tissue Capacity 170k ton Adjusted EBITDA³ R$ 5,296 million Net Debt R$ 9,254 million Net Debt/EBITDA 1.7x 71% 29% 67% 33% Exports Domestic Pulp Paper

Net Revenues R$ 11.3bn³

Consumer Goods

Tissue

Paper

Printing & Writing

(Coated and Uncoated)

Paperboard

¹ Flexibility to produce either Fluff or Printing and Writing paper | ² Lignin start up in 2018

Productio Production n Capacity Capacity

Suzano is the second largest eucalyptus pulp producer and the fifth largest market pulp producer in the world. Suzano has also a leading position in the Paperboard and Printing & Writing segments in Brazil.

Pulp Paper Integrated Market Pulp Fluff Printing & Writing

Paperboard

Tissue Imperatriz Mucuri Limeira Suzano Rio Verde Unit Capacity (‘000 ton) Lignin Adjacent Business Total Consumer Goods 60 260 290 450

• 1,590

1,480 400 70

• 100¹
• 250

400 350¹ 50

• 200
• 60

60

• 20²
• 1,060

3,540 100¹ 1,050¹ 200 170 20 Facepa

• 50

Rob Robust ust Asset Asset Base Base Comp Competiti etitiveness veness

Commercial Presence

Suzano’s forestry competitiveness allows its operation in different regions with adequate yields

T

• tal Area1: 730k ha

Planted Area2: 299k ha Average Structural Distance: 184 km States s of Maranhão,

• , Pará,

, T

• cantins

s and d Piauí

Forest Assets Port Distribution Center Commercial Office

T

• tal Area1: 285k ha

Planted Area2: 201k ha Average Structural Distance: 74 km States s of Bahia, , Espí pírito Santo and d Minas s Gerais T

• tal Area1: 195k ha

Planted Area2: 133k ha Average Structural Distance: 190 km State of São Paulo Forest Areas

¹ Consider own and leased area ² Consider own, leased and third-parties areas

15 states in Brazil:

• 8 Regional Commercial Offices
• 4 Regional Distribution Centers
• 16 Local Distribution Centers

Plus commercial offices in USA, China, UK, Switzerland and Argentina.

Cerflor

Imperatriz (State of Maranhão) Mucuri (State of Bahia) Rio Verde (State of São Paulo) Suzano (State of São Paulo) Limeira (State of São Paulo) 1 2 3 4 5

1,210k 10k ha

• f tota

tal l area ea 633k ha

• f plan

anted ted area ea Productio ction Plan ants

1 2 3 5 4

Corporate Corporate Governa Governance nce

Members of the Board are well-known in the Brazilian Corporate landscape and are supported by the committees on the decision making

Board of Directors Sustainability and Strategy Committee Audit Committee Management Committee

Nine members, five independent

David Feffer President Dependent Claudio Thomaz Lobo Sonder Vice President Dependent Daniel Feffer Vice President Dependent Jorge Feffer Board Member Dependent Antonio de Souza Corrêa Meyer Board Member Independent Marco Antonio Bologna Board Member Independent Maria Priscilla Rodini Vanzetti Machado Board Member Independent Nildemar Secches Board Member Independent Rodrigo Kede de Freitas Lima Board Member Independent

Shareholder Shareholder Struc Structure ture and and Stock Performance Stock Performance

BNDES 7% Treasury 1% Controlling Shareholders 56% Free Float 43%

Daily Financial Volume SUZB3 (R$ million) Daily Trade Numbers SUZB3

Source: Bloomberg

As of November 2017, the Company's shares became part

• f the Novo Mercado, the highest level of corporate

governance of Brazilian Stock Exchange (B3)

Other 29% Mondrian 7%

Stock Performance- SUZB3

Base 100: (Mar/17 – Mar/18)

11,077 12,034 15,717

1Q17 4Q17 1Q18 52 71 137 1Q17 4Q17 1Q18

Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Ibovespa + 31% IBrX-50 +32% SUZB3 +152%

• 2. Industry

10

11

Pulp Industry

Pulp Market is driven by paper consumption

Total Fiber Consumption1 Recycled Virgin Fiber

Non-wood, Mechanical Pulp and Integrated Pulp

Market Pulp

427 245 182 118 64

Fiber Consumption

(million tonnes)

Paper Consumption by Region

(%)

North America 18% Europe 22% Asia 46% Latin America 7% Other 6%

Source: Poyry (2017), Hawkins Wright (Dec/2017) and internal analysis

Paper Paper Demand Demand

4 2 1 3

• 3
• 1
• 2

20 40 60 80 100 Share on total fiber consumption in 2016 (%)

Newsprint Uncoated Mechanical Coated Mechanical Uncoated Woodfree Coated Woodfree Tissue Containerboard Paperboard Packaging Other

Estimated demand growth until 2030 (%p.a.)

Average growth of 1.3% p.a. Estimated paper demand: 490MM/ton in 2030

Demand for pulp driven by tissue and paperboard consumption

Source: : Poyry (2017)

• 3. Competitiveness

13

Pulp Pulp Compe Competiti titivene veness ss

Seven year cycle of the eucalyptus forest in Brazil and higher productivity ensures lower costs

400 800

Other Asia Canada Iberia East Europe Sweden Chile/Uruguay Indonesia Bel/France Brazil Other World

• Int. West Canada

Finland Sweden Finland East Canada East Canada Coastal BC Japan US East Europe Chile JapanUS China Other Europe

Hardwoo

• od

Softwoo wood Cash Cost CIF / Europ

• pe

(US$/tonne)

FX of R$3.28/US$ Source: Hawkins Wright (Dec/17)

Pulp Competitiveness Pulp Competitiveness

Fiber volume

(million tonnes)

Source: Hawkins Wright (Dec/17)

The competitiveness of the eucalyptus fiber leads to the growth compared to other fibers

12 13 16 15 16 16 17 19 20 21 22 22 23 23 24 11 11 9 10 11 11 11 10 10 10 10 11 11 11 11 22 21 21 22 23 23 24 24 24 25 26 26 26 27 27 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017e 2018e 2019e 2020e BEKP¹ Other BHKP² BSKP³

CAGR GR

BEKP: +6.5% p.a. | Other BHKP: -1.6% p.a.

CAGR GR

BEKP: +2.3% p.a. | Other BHKP: +2.2% p.a.

Paper Paper Competitiveness Competitiveness

Suzano is an integrated paper producer, which leads to a higher contrib ibuti ution

• n margi

gin n per ton

Leadership position in Printing & Writing Segment in Brazil Leadership position in Paperboard Segment Paper Margin Inputs and Variable Costs Integrated Pulp Margin Pulp Cost Paper Market is less volatile

Federal Federal Taxes Competi Taxes Competitiv tiveness eness

Suzano's assets leads to a fiscal situation which allows low cash disbursement for income and social contribution taxes

Tax Benefits

75% of income tax reduction:

• Maranhão unit until 2024
• Bahia unit: Line 1 until 2024 | Line 2 until 2018

Tax Credits

Tax loss carry forward: R$2 billion Total of federal tax credits to be used: R$183 million

Data accumulated up to 03/31/2018

• 4. Strategy

18

Strategy to maximize the return

• n invested capital

Structural Competitiveness Adjacent Business Reshaping of the Industry

• Anticipated return

improvement as result of cost reduction initiatives coupled with disciplined investments to achieve

• ptimal cost
• Investments in adjacent

businesses such as FuturaGene (biotech), Fluff, Lignin and Tissue, leveraging

• n Company’s current

capabilities, to improve margins by offering high- value added products

• Transformational changes in

the industry should lead to higher returns

• Suzano uniquely positioned

to have an active role with its vertically integrated

• peration, stablished

commercial relationships and consolidation capacity, among other opportunities

Forestry

Average distance reduction and standardization and insourcing harvesting

Industry

Structural efficiency through retrofitting and debottlenecking

Logistics

Integrated logistics with synergy gains

Stru Structu ctural Comp ral Competiti etitiveness veness

Structural Competitiveness

Maximize the return on assets and cash generation

Commercial

Price discipline and expansion of client base (Suzano Mais)

• Integrated production
• Production of jumbo

rolls and final products

• First genetically

modified clone approved by CTNBio for commercial purposes

• Potential to increase

productivity by nearly 20%

• Replacement of

petroleum-based chemicals

Tissue

Adjacent Adjacent Businesse Businesses

Fluff FuturaGene

• First company in the

world to produce fluff from hardwood

• Flexibility to produce

either fluff or printing and writing paper

Adjacent Business

Lignin

Tiss Tissue ue

Modern ern and integ tegrated ed mills in Impera eratriz iz and Mucu curi Acquisiton of Facep epa – Fábrica de Papel da Amazônia S.A. Production capacity of 170k k tonnes Brands launched: Max Pure and Mimo 34.9 36.1 49.2 2015 2016e 2025e

Global Demand

(million tonnes)

1.2 1.2 1.9 2015 2016e 2025e

Brazilian Demand

(million tonnes)

Competitiveness on production and logistics adds value to pulp

Integrated production and control of more than 90% of cash cost

Operational

Production close to the North and Northeast markets in Brazil

Logistic

Fastest growing segment in Brazil, 5% p.a. in 2015 (RISI)

Market Potential

Structural solution for monetization

• f ICMS credits

Tax Strategy

Adjacent Business

Source: RISI

Demand

(million tonnes)

5.8 6.0 6.9 2015 2016e 2020e Diapers 38% Incontinence Products 26% Femine Hygiene Products 24% Other 12%

Products Breakdown

(%)

Suzano is the first Company in the world to produce fluff from hardwood

Adjacent Business

Eucafluff Eucafluff

Source: RISI

• Up to 70% softwood substitution for feminine

hygiene products and up to 30% for diapers

• Rewet quality and reduction of energy costs
• Capacity: up to 100 k tonnes/year

Replacement of petroleum-based chemicals from renewable source

Main applications:

• Cement Additives
• Phenolic Resins
• Rubber Components

Lignin Lignin

Adjacent Business

Capacity: 20k tonnes per year Capex: R$100 million Start Up: 2018 Mill: Limeira

Lignin Production Process

Fiber Ligni nin

Wood Wood Chips Bleaching Pulp/ Paper Digester Evaporation Recovery Boiler Lime Kiln Lignin Chemicals

Energy

Black Liquor

Adjacent Business

FuturaGene FuturaGene

First genetically modified clone approved by CTNBio for commercial purposes

Less Land Utilization Lower Forest Formation Cost Biotechnology is on the right side

• f Sustainability
• Less chemical expenditure
• Higher carbon sequestration

Reshaping of the Industry

Transformation changes in the industry should lead to higher returns

Suzano is strengthening its balance sheet to be an active player in the reshaping of the industry

Consolidation Verticalization

Internationalization

• 5. Operational and Financial Highlights

27

Pulp Production (‘000 tonnes) Pulp Sales (‘000 tonnes)

Pulp lp Revenue enue Brea eakd kdown wn

1Q18

Pulp lp Sale les Volu lume me per Segment ment

1Q18

Pulp Pulp Segm Segmen ent

874 884 918 3,435 3,585

1Q17 4Q17 1Q18 LTM 1Q17 LTM 1Q18

915 953 876 3,540 3,576

1Q17 4Q17 1Q18 LTM 1Q17 LTM 1Q18

Other 2% Printing & Writing 15% Packaging 10% Specialty 13% Tissue 60% Brazil 9% Asia 48% Europe 30% North America 14%

LTM: Last Twelve Month

Cash Cost (R$/ton)

Pulp Pulp Segment Segment

Pulp EBITDA (R$/ton) Operational Cash Flow (R$/ton)

642 623 599 573

2015 2016 2017 LTM 1Q18

723 1,222 1,467 693 1,202

1Q17 4Q17 1Q18 LTM 1Q17 LTM 1Q18

521 942 1,223 461 945

1Q17 4Q17 1Q18 LTM 1Q17 LTM 1Q18

LTM: Last Twelve Month

Paper Sales (‘000 tonnes)

Paper Paper Segment Segment

Paper Production (‘000 tonnes)

Brazil 68% North America 4% Central/South America 18% Other 9%

274 299 295 1,160 1,178

1Q17 4Q17 1Q18 LTM 1Q17 LTM 1Q18

180 238 189 828 814 84 97 95 358 385

264 335 284 1,186 1,199

1Q17 4Q17 1Q18 LTM 1Q17 LTM 1Q18

Brazil Exports

Paper er Revenue enue Brea eakd kdown wn

1Q18

LTM: Last Twelve Month

31

Paper Paper Segment Segment

Paper EBITDA (R$/ton) Operational Cash Flow (R$/ton)

702 780 855 869 816

1Q17 4Q17 1Q18 LTM 1Q17 LTM 1Q18

546 538 680 706 635

1Q17 4Q17 1Q18 LTM 1Q17 LTM 1Q18

LTM: Last Twelve Month

Operating Cash Flow¹ (R$ million) ROIC (%)

¹ Operating Cash Flow = Adjusted EBITDA – Sustaining Capex | LTM: Last Twelve Month

Adjusted EBITDA (R$ million)

Avg R$/US$ /US$ Avg Euro rope FOEX EX

Consol Consolidated idated Results Results

847 1.425 1.528 3.484 5.296

1Q17 4Q17 1Q18 LTM1Q17 LTM1Q18

37.6% 45.4% 51.0% 37.0% 47.0%

3.30 3.24 3.22 3.25 3.14 675 1.009 902 902 941 680 680

622 1,077 1,265 2,467 4,158

1Q17 4Q17 1Q18 LTM1Q17 LTM1Q18

10.6% 14.5% 17.4%

LTM 1Q17 LTM 4Q17 LTM 1Q18

Net Debt (R$ and US$ billion) and Leverage (x)

Net Debt (R$) Net Debt (US$) Net Debt/Adjusted EBITDA (R$) Net Debt/Adjusted EBITDA (US$)

Debt Debt

Leverage at an adequate level

2.3x 2.4x 2.7x 2.9x 2.9x 2.7x 2.3x 2.0x 1.7x 2.3x 2.1x 2.4x 2.6x 2.8x 2.7x 2.3x 2.1x 1.7x 11.2 10.2 10.0 10.3 9.7 10.0 9.3 9.5 9.3 3.2 3.2 3.1 3.2 3.1 3.0 2.9 2.9 2.8 Mar/16 Jun/16 Sep/16 Dec/16 Mar/17 Jun/17 Sep/17 Dec/17 Mar/18

Debt Profile Debt Profile

Competitive debt profile and cost of debt

Amortization (R$ million) Gross Debt: R$12.6 billion Net Debt / Adjusted EBITDA: 1.7x Average debt maturity of 85 months Average Cost of Debt: 4.6% p.a. (in USD)

(considering market swap curve)

Data from 03/31/2018.

Bond 37% Certificates of Agribusiness Receivables 21% BNDES 4% Import Financing 7% Other 2% Export Financing 28%

Type Exposure

1,547 782 330 359 2,099 1,175 4,266 1,845 552 950 1,795 136 62 140 3,392 1,334 1,280 2,154 2,235 1,237 4,406

Cash 9M18 2019 2020 2021 2022 2023

• nward

Foreign Currency Local Currency

Klabin CMPC Arauco Fibria Suzano Standard & Poors BB+ BBB- BBB- BBB- BBB- Moody's

• Baa3

Baa3 Ba1 Ba1 Fitch Ratings BB+ BBB BBB BBB- BBB- Net Debt / Adjusted EBITDA LTM

² Last twelve months ending on 12/31/2017 in US$.

Rating Rating

3.8x 3.0x 2.7x 2.1x 1.7x

Klabin¹ CMPC² Arauco² Fibria¹ Suzano¹ BB+ BB/ BB- BB+/BB BB+/BBB- BBB-/BBB- BBB/BBB BB+/BB+ BB- /BB 2010 2012 2015 2017

Soberano

S&P / Fitch BBB-/BBB- BB- /BB- 2018

Suzano´s Ratings Evolution

Fitch Ratings and Standard & Poors upgraded the Company rating to Investment Grade

1. Capex 2017/2018

Capi Capital tal disci discipli pline ne and capex and capex flexi flexibil bility ity

2017 1T18

Sustaining Structural Competitiveness and Adjacent Businesses 0.7 1.1

1.8

0.2 0.3

0.7

Capex (R$ billion)

Total

2018e

0.6 1.2 Acquisition of land and forests 0.3 0.3 0.3

• Acquisition of Facepa
• 2.4

Investor Relations

2018 www.suzano.com.br/ir ri@suzano.com.br