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3 q10 earnings presentation


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3 q10 earnings presentation

  1. 1. 3Q10 Consolidated Results October 29th, 2010
  2. 2. 3Q10 Highlights – Pulp and Paper Markets • Global market pulp production of 10.8 MMt in 3Q10: +9.2% vs. 2Q10 and +5.7% vs. 3Q09 • Global pulp sales volume: (MMt) 3Q10 3Q10 x 2Q10 3Q10 x 3Q09 Market Pulp: 10.1 +0.8% -4.9% Pulp Eucalyptus: 3.4 -0.2% -6.5% • Global inventories at 32 days1 (Sep/10): below the historical average of 33 days • Price decreases in 3Q10: US$ 870/ton (September, CIF Europe) • Market pulp shipments to China in September: Market pulp: 685 thousand tons (+72.1% vs. Aug/10 and + 46.7% vs. Jul/10) Eucalyptus: 198 thousand tons (+98.0% vs. Aug/10 and +21.5% vs. Jul/10) • Domestic demand2: growth post-crisis recovery 3Q10 3Q10 x 2Q10 3Q10 x 3Q09 Printing & Writing 528.6 +15.5% +6.3% Paperboard 166.7 +8.4% +10.8% Paper • Increase of P&W paper imports in the domestic market (25.4% vs. 23.4% in 2Q10) • Brazilian exports accounted for 34.3% of total sales compared to 40.0% in 2Q10 • Recovery of the main P&W markets in 3Q103 vs. 3Q09: Western Europe: -2.6% vs. 2Q10 and +7.6% vs. 3Q09 North America: -0.1% vs. 2Q10 and +4.1% vs. 3Q091PPPC 2Bracepla 3RISI 02/09
  3. 3. 3Q10 Highlights - Suzano • Total market pulp and paper production of 680 thousand tons • Sales volume of 675 ktons: 390 ktons of pulp and 285 ktons of paper • Net revenue of R$1.2 billion • Pulp production cash cost of R$458/ton1 • EBITDA of R$ 408 million, with EBITDA margin of 35.2% • Net income of R$273 million • Net debt / EBITDA ratio of 2.4x. Cash and cash equivalents of R$ 3.6 billion and net debt of R$ 7.5 billion in September/10 • Reduction of US$ 50/ton in pulp prices in August and maintenance of prices in September and October. • New increases in paper prices in both domestic and export markets • US$ 650 million raised through notes rated Baa3 (Investment Grade, Moody’s) and BB+ (Standard & Poor’s).1 Excluding maintenance downtime costs 03/09
  4. 4. Pulp Business Unit• Sales: 389.5 thousand tons in 3Q10: 7.3% lower than 2Q10 2.4% lower than 3Q09• Average net price in 3Q10 (domestic and exports) of US$ 748.1/ton, +0.9% vs.2Q10. In R$: 1.5% lower than 2Q10 50.3% higher than 3Q09• Net revenue of R$ 509.7 million. 8.8% lower than 2Q10 46.7% higher than 3Q09 Pulp Sales (ktons) Pulp Sales Destination 3Q10 2Q10 389.5 thousand tons 420.2 thousand tons 04/09
  5. 5. Paper Business Unit• Sales volume of 285.4 thousand tons in 3Q10: 3Q10 x 2Q10 3Q10 x 3Q09 Printing & Writing -3.5% +10.0% Paperboard -5.2% +5.2% Average paper price (domestic) +3.7% +4.7%• Domestic sales: 61.6% of total sales in 3Q10• Exports average net price: 3Q10 x 2Q10 3Q10 x 3Q09 In US$ +9.5% +25.8% In R$ +6.9% +17.9% Paper Sales (ktons) Paper Sales Destination 3Q10 2Q10 285.4 thousand tons 296.9 thousand tons 05/09
  6. 6. Operational Performance Highlights • Higher share of paper in Suzano’s revenue: 56% in 3Q10 vs. 53% in 2Q10 • Pulp cash cost ¹ 1.3% lower than 2Q10: Lower costs related to wood from third parties Lower chemicals cost Higher fixed cost • EBITDA margin of 35.2%: 0.5 p.p. higher than 2Q10 No non-recurring items in 3Q10 Pulp cash cost¹ (R$/ton) Net Revenue Breakdown1 Mucuri Unit 06/09
  7. 7. Debt and leverage 1 Debt Breakdown - R$ Million September-10 June-10 September-09 Gross Debt 7.476 6.427 6.611 (-) Cash and Cash Equivalents -3.625 -2.544 -2.447 Net Debt 3.850 3.883 4.164 Net Debt / EBITDA 2,4x 2,7x 3,6x1All amounts in the table above include the adjustments introduced by the IFRS standards. 07/09
  8. 8. Key Messages• Demand recovery in pulp and paper markets: Paper: new price hikes and bigger domestic sales in the sales mix Pulp: sales volume recovery in Sep/10 in China and global inventories below the historical average• Operational margins recovery• Solid financial position Adequate debt profile and competitive debt cost Leverage reduction: from 2.7x in Jun/10 to 2.4x in Sep/10 US$ 650 million raised through notes rated Baa3 (Investment Grade, Moody’s) and BB+ (Standard & Poor’s).• Consistent growth strategy Evolution in Maranhão and Piauí projects: − Obtained prior license of Maranhão’s industrial facility Acquisition of FuturaGene concluded, by the amount of US$ 84 million 08/09
  9. 9. Investor 11 09/09