Suzano S.a. · BMFBOVESPA:SUZB3
Suzano — Investor Day (December 2024)
59 slides from Suzano's investor day presentation, Dec 12, 2024
Slide 1: Investor Day 2024
INVESTOR DQY 2024 SUZ Sz B3LISTEDNM NYSE \W 9 suzano “WG LA i | SS
Slide 2: Disclaimer
Disclaimer This presentation contains what are considered “forward-looking statements,” as defined in Section 27A of the 1933 Securities Act and Section 21E of the 1934 Securities Exchange Act, as amended. Some of these forward-looking statements are identified with words such as “believe,” “may,” “
Slide 3: Business Strategy, Financial Management, Q&A
Business Strategy Financial Management Q&A
Slide 4: Business Strategy
Business Strategy Advance in the links of the chain, always with competitive advantage Be “Best-in-Class” in the Total Pulp Cost vision Maintain relevance in Pulp Play a leading role in sustainability Expand boldly into New Markets avenues
Slide 5: Business Strategy avenues
Business Strategy avenues Play a leading role in sustainability Expand boldly into New Markets Advance in the links of the chain, always with competitive advantage Be “Best-in-Class” in the Total Pulp Cost vision Maintain relevance in Pulp
Slide 6: Main themes for Suzano's investment case
Currently... Capital allocation strategy Forward looking dynamics of the P&P sector Levers for greater structural competitiveness What are the main themes for Suzano's investment case?
Slide 7: A culture focused on safety
A culture focused on safety… Culture drivers It’s only good for us if it’s good for the world People who inspire and transform Create and share value -65% Accident Frequency (2014-2024) Lost Time Injury Frequency Rate¹ 4.4 3.2 3.1 2.7 2.8 1.9 1.8 1.9 1.6 1.7 1.5 2014 2015 2016 2017 2018 2019 2020 20
Slide 8: Engagement and leadership development
95% Feel proud to work at Suzano 95% Recommend Suzano as a good place to work 94% Understand how their role contributes to the company's strategy Source: Suzano 2023 Engagement Survey – Korn Ferry Market Ref. with a strong commitment with leadership development… 90% 81% 86% 75% 90% 85% Team developm
Slide 9: Gender diversity evolution
⚫ Linked with variable compensation for 100% leadership positions ⚫ Dedicated programs for female talent attraction and development 2025 goal: 30% women at leadership positions1 1Manager and above and gender diversity 74 98 114 135 149 2020 2021 2022 2023 2024 YTD 19% 23% 24% 25% 27% Source: Suzano'
Slide 10: Avenues: Maintain relevance in Pulp
Avenues Maintain relevance in Pulp Advance in the links of the chain, always with competitive advantage Expand boldly into New Markets Be “Best-in-Class” in the Total Pulp Cost vision
Slide 11: Overcoming a challenging environment
What we have been facing Climate change & impacts Labor shortage Higher logistics costs Limited Eucawood availability Overcoming a challenging environment A journey towards higher competitiveness 11 How we are addressing Third party Eucawood reduction More Eucawood per hectare Mechanized Eucatree pl
Slide 12: Effective fire protection system
% Total area impacted¹ (SP & MS) 0.61 0.38 2019-2023 (avg) 2024 Monitoring tower center A total of 133 towers among all sites real time monitoring Satellite coverage on 100% of the area Prediction models Forecast of fire direction to better allocate fire brigade fleet Average response time: 30 minut
Slide 13: Innovative strategy to increase Eucawood per hectare
…To 100% coverage NPV per ADDITIONAL wood cubic meter/ha¹ R$1 bn Leading the way in forest management with cutting-edge technology From… Sampling EARLIER RESPONSE TO ADDRESS UNEXPECTED EVENTS On time satellite monitoring for: ⚫ Better weed/diseases control ⚫ Faster forestry productivity assessment C
Slide 14: Mechanization to address rural population decline
Reducing labor intensity in 40% 2030 58% 85% 2024 2030 Mechanized Silviculture Level (%) Mechanized irrigationPlanting machineAutomated nursery 2024 - 2030 Challenge: Labor shortage Mechanization to address rural population decline 14 Suzano Ventures Accelerating development through strategic invest
Slide 15: Lower average distance and Eucawood self-sufficiency
71% 72% 83% 87% 29% 28% 17% 13% 2024e 2025 2026-2028 2029-2032 Average distance from Eucafarm to mill (km) 6% spot market 7% forest partnership Wood source breakdown (%) Challenges: Higher logistics costs and limited Eucawood availability Lower average distance and Eucawood self-sufficiency Own Thir
Slide 16: Competitive levers becoming reality: Mato Grosso do Sul case
WOOD CASH COST1 - RIBAS (R$/t - 100 basis) 100 78 74 66 3Q24 2025 2026-28 2029-32 Forests ≥ 3 yrs Forests between 2 & 3 yrs MATO GROSSO DO SUL: FORESTRY PRODUCTIVITY DISTRIBUTION 3Q24 inventory results +15% MAI 7 (m³/ha/yr)100 115 1. Real terms 2025 currency – Inflation 2025 -> IPCA: 4.0%, IGPM: 4.0
Slide 17: Avenues: Play a leading role in sustainability
Avenues Play a leading role in sustainability Advance in the links of the chain, always with competitive advantage Expand boldly into New Markets Be “Best-in-Class” in the Total Pulp Cost vision Maintain relevance in Pulp
Slide 18: Ribas confirms Suzano's excellence in project execution
18 Start-upProject approval 2022 2023 2024 Jul/2024Out/2021 Ribas confirms Suzano's excellence in project execution Global scenario instability 2020 Steel Rebar – R$/t Sources: S&P Global, CNN, BBC, Mynewsdesk, Trading Economics. 18 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500 6,000
Slide 19: Ribas: complexity on the ground
Ribas confirms Suzano's excellence in project execution Complexity on the ground 380,000 m³ of concrete Enough to build 4.7 Maracanã Stadiums 1,983 suppliers of contracted materials and services under contract 45,000 professionals over the course of the project (peak of 11,000 people on site) 22,000
Slide 20: Full capacity ahead of schedule
80% 2Q25 93% 100% Ribas confirms Suzano's excellence in project execution Execution highlights of Ribas do Rio Pardo: Delivery time Learning curve Cash cost Learning curve progress (%) Previously expected progressProgress achieved Current expected progress Previous: 9 months Current: 6 months (+77 k
Slide 21: Greater surplus clean energy generation
Greater surplus clean energy generation A well-defined long-term strategy 50 MWavg Sold @ ~R$3501/MWavg in the regulated market (2026-2045) 55 MWavg Spot market selling strategy Grid: 105 MWavg 90 195 Before Ribas mill After Ribas mill Chemical plants: 75 MWavg Total Suzano – Surplus Energy for the
Slide 22: Unmatched cash cost competitiveness
38 100 70 64 62 3Q24 2025 2026-2028 2029-2032 Unmatched cash cost competitiveness 22 Evolution of Ribas cash cost1 ex-downtimes (R$/t – 100 basis) Currency in real terms (2025) 1. Real terms 2025 currency – Inflation 2025 -> IPCA: 4.0%, IGPM: 4.0%, INPC: 3.0%. Fixed Cost 8% Energy 14% Input 36% Wood
Slide 23: Pulp overview
Pulp overview
Slide 24: BHKP demand drivers: Organic Growth
BHKP demand drivers: Organic Growth A consumer driven market with a consistent growth overtime 24 -0.9% 37% 12% 37% 13% 2013 20% 10% 50% 19% 2023 17% 11% 52% 20% 2028e Printing & Writing Paperboard Tissue papers Specialty papers 29 41 46 Global Market BHKP demand per segment (Total demand in Mt and
Slide 25: BHKP demand drivers: Fiber-to-Fiber
BHKP demand drivers: Fiber-to-Fiber 25 Share in World Bleached Chemical Pulp Demand (%) BSKP 55% 45% 63% 37% BHKP Source: G100 Numera PPPC 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024e Hardwood is consistently gaining market share
Slide 26: Fiber-to-fiber trend accelerating
63% 37% BHKP used to gain an average ~0.6p.p. over BSKP per year BHKP gain has been performing at a new level >1.0 p.p BHKP annual share gain over BSKP 2013 - 2021 2022 2023 2024e 0.6 1.1 1.8 1.0 1.3 2022 – 2024 (e) average Source: PPPC | BSKP volumes includes fluff grade, for which BSKPs share exce
Slide 27: Fiber substitution by paper grade
66% 79% 57% Global Region with highest furnish Region with lowest furnish B S K P B H K PMarket BCP BHKP and BSKP shares1 (%) Tissue Specialties BHKP 5-year demand increase for every +1p.p. gain in furnish2 Region with highest furnish Region with lowest furnish P&W 69% 74% 39% Global Region with hig
Slide 28: BSKP substitution and capacity closures
28 BSKP Capacity Net Change1 (Mt) 2020 2021 2022 2023 2024e2 -0.4 -0.7 -1.0 -0.5 -0.6 Closures Capacity Net Changes Main drivers Higher technical age Uncertainty of wood availability Higher production cost 1. Afry. 2. New Capacities: Georgia Pacific 0.2 Mt; Ashdown (Domtar) 0.4 Mt; Monsteras (Sodra)
Slide 29: BSKP vs BHKP price spread
29 Main drivers Higher technical age Uncertainty of wood availability Higher production cost BSKP Capacity Net Change1 (Mt) 2020 2021 2022 2023 2024e2 -0.4 -0.7 -1.0 -0.5 -0.6 Closures Capacity Net Changes New Capacities 291. Afry. 2. New Capacities: Georgia Pacific 0.2 Mt; Ashdown (Domtar) 0.4 Mt;
Slide 30: Engaging customers on fiber substitution
30 Engagement on fiber-to-fiber initiatives within the Top Customers North America: 80% Asia: 70% Europe: 60% % of top 10 customers in each region − Knowledge sharing − Technical training Education Services Development Services Application Services 1 2 − Local support for application engineering wit
Slide 31: Headwinds from vertical integration in China
31 Shandong 1 Project 0.7 Mt Guanxi 3 Projects 2.6 Mt New BHKP integrated capacity - announced for next 5 years (Mt) 1.2 1.6 0.4 0.7 0.6 Player A Player B Player C Player D Player E 2024 2025 2026 Expected Start up date Start-up dates, production learning curves and operating rate levels The UNCERTA
Slide 32: Market BHKP demand growth
32 Hardwood market pulp demand (Mt) 2023 4.8 Organic Growth Fiber to Fiber 2028e Potential impact of Chinese P&P verticalization1 2028e 40.9 2.0 3.8 47.7 43.9 +6.8 +3.0 1. Estimated based on Suzano’s O.R. assumptions. Additional Fiber-to-Fiber Fossil- to-Fiber Additional demand from Integrated P&P P
Slide 33: BHKP supply perspective
33 Estimated market BHKP supply addition¹: (Mt) 2023 2028e 6.3 Main announced projects2: − Suzano Cerrado − Fujian Liansheng − APP OKI II − Arauco Sucuriú Main conversions: − Bracell to dissolving pulp − Suzano Limeira to fluff pulp − Altri Biotek to dissolving pulp 43.3 49.6 1. New capacities in li
Slide 34: Supply and demand balance
34 89 87 88 91 89 BHKP Demand to Capacity ratio (%) 2024e 2025e 2026e 2027e 2028e Demand (Mt) Capacity1 (Mt) 41 46 41 48 41 47 43 47 44 50 Unplanned supply shortage – BCP (Mt) Supply & Demand balance 66 69 70 70 70 70 72 74 1 1 1 2 2 3 3 2 2 2 2 1 2 2 4 3 2023 2024e2017 2018 2019 2020 2021 2022 Perm
Slide 35: Supply & Demand balance for 2025
35 Supply & Demand balance for 2025 Marginal cash cost producers are expected to support price floors, even amid market volatility Market BHKP marginal production cost, CIF China $/t - CIF China Current supply underwater: ~2.9 Mt 580 560 400 450 500 550 600 650 700 750 800 850 900 Jan-15 Nov-24 Dec-
Slide 36: Strategic avenues
Maintain relevance in Pulp Expand boldly into New Markets Play a leading role in sustainability Be “Best-in-Class” in the Total Pulp Cost vision Avenues Advance in the links of the chain, always with competitive advantage
Slide 37: Paper & Packaging
37 Paper & Packaging
Slide 38: Improving resilience with cost competitiveness and Go-To-Market
38 Improving resilience with cost competitiveness and Go-To-Market Enhancing EBITDA above pre-pandemic levels Evolution of EBITDA¹ level (EBITDA/t) Pre-pandemic Pandemic 1,040 1,770 2,167 287 338 426 2017 2018 2019 2020 2021 2022 2023 2024 YTD09 R$/t US$/t Post-pandemic 1. Excluding Consumer Goods a
Slide 39: New investment in largest P&W mill
39 New investment in the largest P&W mill boosts cost efficiency and reduces carbon emissions Higher profitability ensured with continued advances in value chain Reduction of ~25 kt of CO2eq per year in emissions Investment of R$300 million to enhance Limeira's competitiveness Reduction of consolida
Slide 40: Stepping up in the packaging business
40 Stepping up in the packaging business: Leveraging current P&W assets and expanding capacity Global paper demand and forecast growth by segment Mt and %, 2022-2030E 2.3%1.8% -2.4% -5 .7 % Newsprint P&W Containerboard Cartonboard Use of current P&W assets to advance in the packaging market with LIN
Slide 41: Acquisition of paperboard mill in North America
41 Acquisition of paperboard mill in North America Largest extrusion capacity in the region allows growth in cupstock and food service Paperboard Consumption in the United States Mt and CAGR % 8.3 8.8 9.0 9.8 2020 2022 2025e 2030e 2.9% 1.3% Wood consumption region Heatmap softwood chips price (US$/t
Slide 42: Value creation roadmap
⚫ Increase operational stability ⚫ Cash cost reduction (fixed costs, procurement, etc.) ⚫ Renegotiate commercial contracts for LPB ⚫ Increase sales volume to cupstock and food services (more profitable) Acquisition of paperboard mill in North America Value creation roadmap Phase I Short-term – up to
Slide 43: Consumer Goods
YD SUZaNO CONSUMER GOODS
Slide 44: Consolidated leadership in toilet paper
44 Consolidated Leadership¹ Toilet Paper Value Market Share Brazil Jul’Ago’24 24% Market Share evolution South and Southeast vs. Pre-Acquisition2 Distribution Expansion² ⚫6% increase in the number of points of sale over the past 12 months. ⚫ Leadership in Weighted Distribution (94%) Synergies breakd
Slide 45: Consolidation of synergies and competitive advantages
45 Consolidation of synergies and competitive advantages Underpinning business growth 1. NEW TISSUE MILL AT ARACRUZ (ES) +60kt/year | +20% capacity Footprint allows lower distribution cost and better service level compared to the competition ➢ Start-up brought forward: 1T26 to 4T25 1. Discount rate
Slide 46: Portfolio evolution and new tissue mill
47 Consolidation of synergies and competitive advantages Underpinning business growth 1. NEW TISSUE MILL AT ARACRUZ (ES) +60kt/year | +20% capacity 2. PORTFOLIO EVOLUTION Toilet Paper #1 Leader2 Paper Towels Napkins Facial Tissues #1 Leader3 Reusable Wipes #1 Leader3 Perineal Wipes #1 Leader2 Expans
Slide 47: Financial Management
FINGNCICL MONGGeMeNT —
Slide 48: Capital Allocation Strategy
Capital Allocation Strategy Focused on creating value for shareholder Suzano’s Main Capital Allocation (cycle of 2018+) Facepa R$0,3 bn M&As R$46 bn Organic growth R$22 bn Share buyback R$6 bn Cerrado R$22.2 bn Fibria R$37.2 bn Lenzing R$1.4 bn KC Tissue Brazil R$1.1 bn Pine Bluff Mill R$0.5 bn Divi
Slide 49: M&A guidelines
M&A guidelines Pre-established reservation value for transactions, ensuring deals under attractive conditions Strong track record on value creation Proven success on synergies extraction Value creation Commitment with IG Management will always ensure investment grade rating will be maintained 50 Cap
Slide 50: Robust and efficient debt profile
Robust and efficient debt profile Constantly focused on liquidity risk mitigation Financial management metrics Average tenor (months) >70 Debt maturing in 36 months <30% Cash coverage of financial obligations (minimum # of months) 24 RCF for tail scenarios Sizable, longer than 1 year Financial coven
Slide 51: Diversification of funding sources
59% 52% 27% 24% 5% 11% 9% 13% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 3Q21 3Q24 Traditional Alternatives Robust and efficient debt profile Diversification to reduce cost and expand funding options Breakdown of funding sources (% of total gross debt) Trade Finance Related Bank ⚫ LMs postponed dur
Slide 52: Conservative financial policy
12.9 12.0 3.1x 3.5x 3.0x 0.0x 1.0x 2.0x 3.0x 4.0x 5.0x 0 5 10 15 20 25 30 35 40 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 " "5 " "6 " "7 " "8 Cerrado announcement ~US$7bn in discretionary capital allocation1 since 3Q21 Guidelin
Slide 53: Aiming for rating improvement
Conservative financial policy Aiming for rating improvement Strong business profile ⚫ Global leader in market pulp ⚫ Increased earnings from ex-pulp businesses ⚫ Unmatched asset base ⚫ Enhanced diversification: global footprint and end-use ⚫ Structural cost competitiveness increased by Cerrado Proje
Slide 54: Total Operational Disbursement 9M24 vs. 2027
Total Operational Disbursement TOD 9M24 vs. 2027¹ (R$/t) 872 746 651 69 12 (30) (364) 654 690 500 2,213 1,900 TOD 9M24 Inflation 2025¹ FX Commodities Effect (assumptions) Competitiveness Initiatives and Growth TOD 2027 Cash cost SG&A + Freight Sustaining Capex FX 5.24 Brent US$83/bbl Caustic soda US
Slide 55: Total Operational Disbursement 2027 current vs. previous
Total Operational Disbursement TOD¹ 2027 current vs. TOD 2027 previous (R$/t) FX 5.35 Brent US$70/bbl Caustic soda US$400/t Forestry radius 150 km Third-party wood 17% US$355/t FX 5.00 Brent US$70/bbl Caustic soda US$400/t Forestry radius 137 km Third-party wood 17% US$351/t 56 685 746 584 69 34 44
Slide 56: Takeaways
(ZZ SUZANO TakeawaYyS
Slide 57: What to expect in the coming years
What to expect in the coming years… Structural competitiveness Disciplined capital allocation Free cash flow generation Balance sheet strength Addressable market Human capital development
Slide 58: Investor Day 2024
9 svzano INVESTOR Day 2024
Slide 59: Investor Day 2024
9 suzano INVESTOR DQY 2024 Nee ES YOU IRSSUZQNO.COM.BR