Suzano S.a. · BMFBOVESPA:SUZB3
Suzano — Non-Deal Roadshow (August 2021)
114 slides from Suzano's roadshow presentation, Aug 18, 2021
Slide 1: Non-Deal Roadshow with Morgan Stanley Aug 2021
Non-Deal Roadshow with Morgan Stanley Aug 2021
Slide 2: Disclaimer
2 Disclaimer This communication contains certain statements that are “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. Some of these forward-looking statements are identified with words like “belie
Slide 3: Agenda
Agenda 3 Company Overview 1 Business Strategy Addressable Market Operational & Financial Highlights 2Q21 2 3 4
Slide 4: Agenda
Agenda 4 Business Strategy Addressable Market Operational & Financial Highlights 2Q21 2 3 4 Company Overview 1
Slide 5: Robust governance in place
Robust governance in place Up to 10 members Assessment by Eligibility Committee 7 independent members (above min. req. of 20%), including 2 women Board of Directors Supported by Statutory Audit Committee People Committee Compensation Commission Sustainability Committee Strategy and Innovation Commit
Slide 6: An irreplicable 1st class asset base
An irreplicable 1st class asset base 1 – Addressable market ● 1.3 million hectares of planted and certified areas (equivalent to 200x Manhattan) ● Geographically Diversified areas ● 40 m³/ha/year average productivity ● 156 km structural average radius ● Unmatched eucalyptus genetic base ● Unique har
Slide 7: Undisputable competitiveness in the pulp industry
Undisputable competitiveness 7 in the pulp industry 1 Market pulp capacity production including hardwood and softwood volumes. Source: Hawkins Wright, December 2020. | 2 Source: Hawkins Wright, July 2021. 2.2 2.3 2.7 2.8 2.8 3.1 3.8 3.9 4.4 10.9 Mercer Ilim Stora Enso UPM Metsa April Arauco CMPC APP
Slide 8: Agenda
Agenda 8 Company Overview 1 Addressable Market Operational & Financial Highlights 2Q21 3 4 Business Strategy 2
Slide 9: Megatrends Opportunities for Suzano
Megatrends Opportunities for Suzano Reduce usage of plastics Renewable materials and inputs Carbon capture Growing and aging population Climate change Urbanization Technology and Digitalization Emerging economies growth Trends and Opportunities 9
Slide 10: Strategic vision
Strategic vision 10 1 2 3 Be a reference in sustainable and innovative solutions for the bioeconomy and environmental services, based on planted trees Continue being a benchmark in the sector in efficiency, profitability and sustainability, from the forest to the client Be a transformational agent i
Slide 11: Avenues
Avenues Play a leading role in sustainability Be “Best-in-Class” in the Total Pulp Cost vision Maintain relevance in Pulp, through good projects Expand boldly into New Markets Advance in the links of the chain, always with competitive advantage 11
Slide 12: Avenue: Be Best-in-Class in the Total Pulp Cost vision
Avenue Be “Best-in-Class” in the Total Pulp Cost vision 12
Slide 13: Forest planning
Forest planning 13 Be “Best-in-Class” in the Total Pulp Cost vision 219 156 2020 2024 36% 23% Third-party wood Average forest-mill distance (km)
Slide 14: Digital Forest and Biotechnology
Digital Forest 14 Be “Best-in-Class” in the Total Pulp Cost vision and Biotechnology From clone... .... to harvest and transportation MAICel Clonal allocation Wood quality Pests and diseases resistance Stresses tolerance Produce more with less More resilient forests
Slide 15: Modernization Projects
Modernization Projects Long-term targets related CO2 emissions reduction Increase renewable energy export Reduction of Bleaching Chemicals and Natural Gas Cash Cost Reduction of Natural Gas Reduction of Natural Gas and imported electricity Example of project¹: Energy Efficiency Master Plan (Jacareí
Slide 16: Total Operational Disbursement (TOD) - R$/ton
Total Operational Disbursement (TOD) - R$/ton 706 640 460 142 (244) 524 418 319 1,482 1,584 R$3.95/US$ R$5.16/US$ 2019 TOD Performance¹ 2020 FX SG&A + Freight Cash cost (incl. downtimes) Sustaining Capex 11% 69% 15% USD Exposure ¹ Includes improvement of capex indicator in the amount of R$36/t. TOD
Slide 17: Total Operational Disbursement (TOD) 2024 update
Total Operational Disbursement¹ (TOD) - R$/ton R$5.16/US$ ~560 ~560 ~400 120 40 (60) ~500 ~340 ~340 Inflation² FX Previous 2024 Management Initiatives ~1,300 R$3.95/US$ 11% 69% 15% USD Exposure Exogenous Factors ~1,400 Current 2024 ~272 US$/ton ~329 US$/ton ¹ Total Operational Disbursement at full c
Slide 18: Avenue: Maintain relevance in Pulp, through good projects
Avenue Maintain relevance in Pulp, through good projects 18
Slide 19: Maintain relevance in Pulp, through good projects
Maintain relevance in Pulp, through good projects Moving ahead with our long-term strategy ⚫ Improve competitiveness with the lowest cash production cost ⚫ Attractive returns even in more adverse scenarios ⚫ Economies of scale ⚫ Increase leadership position in the pulp market ⚫ Long-term demand for
Slide 20: Board approval subject to certain requirements
Board of Directors approval subject to certain requirements ⚫ Greenlight for significant capex disbursement in 2021: net debt/EBITDA at ~3.0x ⚫ Any time during investment cycle: net debt/EBITDA up to 3.5x CERRADO PROJECT Capex execution to meet Financial Policy 1st Achieve expected results with supp
Slide 21: Cerrado Project Highlights
Highlights CERRADO PROJECT Mato Grosso do Sul state Ribas do Rio Pardo municipality Santos Port Sao Paulo state Structural average radius: 60 km Around 85% of wood requirement already under contract 2.3 M tons/year Inside the fence Capex1 R$ 14.7 billion (~US$ 2.8 billion @ FX 5.25) 1Q24 Start-up 21
Slide 22: Attractive returns in challenging price and FX scenarios
Attractive returns, even in challenging commodity price and exchange rate scenarios 22 CERRADO PROJECT Sensitivity Analysis - Net Pulp Price (US$/ton) FX (US$/R$) IRR in real terms in BRL (% p.a.) 450 500 550 600 650 700 750 4.00 4.50 5.00 5.50 6.00 IRR > WACC
Slide 23: Cerrado Project in brief
In brief 23 CERRADO PROJECT Suzano will become even more competitive and relevant on the pulp market to serve robust demand growth Significant contribution to sustainability long-term goals achievement on: Dedicated team with proven experience in successful pulp projects management Financial discipl
Slide 24: Avenue: Advance in the links of the chain
Avenue Advance in the links of the chain, always with competitive advantage 24
Slide 25: Competitive environment
Competitive environment % Market Share by Type, in terms of Value (Revenue R$ Million and share %) Brazilian Market Share, in terms of Value 2020 vs. 2019 (p.p.) -2.3 -0.1 +2.5 Market Premiumization Changes from Lower tier (1 ply) to Upper Tier (+2 ply) 2018 2019 2020 30.9% 28.2% 25.2% 66.5% 68.3% 7
Slide 26: We continue to advance in the market
We continue to advance in the market, always preserving our competitive edge Suzano 2nd Player 61% 10% Suzano 2nd Player 28% 10% NORTH | 1% Market¹ NORTHEAST | 15% Market 1st Player Suzano 17% 8% 1st Player Suzano 20% 5% MIDWEST | 8% Market SOUTHEAST | 56% Market Market Share Value Source: Nielsen R
Slide 27: Avenue: Expand boldly into New Markets
Avenue Expand boldly into New Markets 27
Slide 28: Suzano Future
Suzano Future Resins FF, dispersants, plastics, elastomers, etc. Bio-chemicals Bio-oils, Bio-fules, Bio-chemicals Pirolysis Filters, hospital material, etc. Nonwovens Lignin Sugars Textiles, resins, etc. Sweeteners, furfural, etc. Dissolving Pulp Paper, textiles, paints, wood panels, etc. MFC Fiber/
Slide 29: Paper and Packaging growth avenue
63 Woodfree P&W 53 Boxboard Negative Trend Digitalization CAGR Trend Positive Trend E-commerce boom To Go Lifestyle Urbanization 2020 World consumption (Million Tonnes/year) 2040 World estimated consumption (Million Tonnes/year) Paper and Packaging Business Unit growth avenue Sources: Smithers, Suza
Slide 30: Suzano Biostrategy potential addressable markets
Paper and Packaging Textile Plastics Fuels Chemicals Furniture Automotive Construction Animal Nutrition Agriculture Technology Partners 3.3 9.0 16.0 17.0 10.0 1.8 1.0 1.0 1.3 3.0 Application Partners Source: IHS, CCM Market Data, Rubber, Chamical Consultants, Unicamp, ABRAFATI, FGV, Mordor Intellige
Slide 31: Fossil to Fiber
Fossil to Fiber Relevant market growth The interest in sustainable products reinforces our differential Annual textile production per fiber (M tons) The textile industry today: 8%-10% of greenhouse effect emissions 20% of water pollution due to industrial waste USD500 Bn/year in lost value due to un
Slide 32: JV with Spinnova announced
JV with Spinnova announced Textile Fibers Building partnerships in a market with more than 100 Mt and looking for sustainable solutions Exclusive supply of MFC to the JV First project in Finland Start up 1Q22 Rights of 50% participation in wood based projects First project in Finland Start up 2Q22 M
Slide 33: Carbon markets advancing
0.1 0.2 2.0 1.0 3.0-4.0 2020 (actual) 2030 2050 Carbon Credits Demand – 2030 and 2050 scenarios (billion tonnes CO2eq per year) Carbon markets advancing Source: Network for Greening the Financial System (NGFS) - Taskforce on Scaling Voluntary Market Report 2021 Suzano can contribute to addressing th
Slide 34: Structured carbon project
Structured carbon project Structured carbon project Learning Process Understanding carbon markets and regulatory frameworks Advocacy Process Explaining our competitive advantage Screening Process Identifying opportunities within our value chain Negotiation Process Materializing opportunities for val
Slide 35: Avenue: Play a leading role in sustainability
Avenue Play a leading role in sustainability 35
Slide 36: Sustainability Strategy
Strategy Strategic Vision Approach Assumptions ENVIRONMENTAL SOCIAL BUSINESS Commitments Integrated to the business Driven by innovability Systemic Transparent and facilitating dialogue Generating shared value From the inside out Transforming the present Enabling the transition Bulding the future To
Slide 37: Sustainability area reports directly to the CEO
Suslrinabldy Aiea Repotls Diteclly Ic the 9 suzano (£6 Reports to Chief i ti id Sustainability [ gesacarian ] ( New Business | [soon | [ ] Officer * Coordinate the Sustainability Strategy * Integration of sustainability aspects throughout the company * Stakeholder relationship and engagement * Trans
Slide 38: LTG Governance and Variable Compensation
LTG Governance and Variable Compensation: (Management) Collective Goal: Diversity and Inclusion 100% wth at least one ESG target Individual Goals: Linked to LTG Since 2020... 38 Play a leading role in sustainability ESG Compensation ESG: 10% of short-term variable compensation in 2021
Slide 39: Commitments to Renewing Life
*All goals for 2030, except Diversity and Inclusion (2025). • Reduce by 70% the industrial solid waste sent to our own or third- party landfills, transforming them into by-products WASTE • 15% reduction in scope 1 and 2 emissions per ton of production • Net removal of 40 million tons of carbon from
Slide 40: Additional relevant topics
Additional relevant topics 40 Forestry Management Water Management Climate Strategy Social and Territorial Development Play a leading role in sustainability
Slide 41: Progress in Transparency and Accountability
2019 2020 GRI 187 241 SASB 23 46 Stakeholder capitalism metrics 62 100 Climate change 37 122 Additional Indicators 52 92 251 439 New guidelines Also Position Papers publicly available Annual Report third- party audited by Bureau Veritas Progress in Transparency and Accountability Reported Indicators
Slide 42: Moving forward on TCFD recommendations
68% June 2021 Also moving forward on TCFD recommendations Source: Compliance analysis using the criteria of the Recommendations Maturity Map of Accounting for Sustainability. Click here to access. Governance Strategy Metrics and Targets Risk Management 63% 75% 75% 67% 42
Slide 43: ESG Rankings
Top 3 improvements Eco-efficiency Biodiversity Risk Management 2020 scores: DJSI Emerging Markets (Score: 71) Low Risk BBB B Ongoing action plan targeting ESG Rankings 2021 cycle Source: Suzano 43
Slide 44: Agenda
Agenda 44 Company Overview 1 Business Strategy Operational & Financial Highlights 2Q21 2 4 Addressable Market 3
Slide 45: Organic demand to grow 4.6 million tons in 5 years
2020 2025 35.8 40.4 Organic growth 4.6 Mt Tissue Packaging Specialties P&W China ➔ Europe ➔ N. America World over +1.5% 0.5% to +1.5% -0.5% to +0.5% below -0.5% (p.a.) Source: Suzano BI Mt Organic demand to grow 4.6 million tons in the next 5 years Global Hardwood D
Slide 46: Organic demand to grow 4.6 million tons
2020 2025 35.8 40.4 Organic growth 4.6 Mt Organic demand to grow 4.6 million tons in the next 5 years Global Hardwood Demand Mt Fiber to Fiber Fossil to Fiber to be boosted by Source: Suzano BI 46
Slide 47: BHKP has been gaining relevance over BSKP
2005 2020 49% 58% BHKP market share in BCP Demand 1% BHKP substitution of BSKP consumption in tissue production generates 90k tons annual opportunity Pillars supporting substitution More versatile paper machines Limited new BSKP supply Cost competitiveness Fiber improvements % Source: Suzano BI 2015
Slide 48: Fiber to Fiber: other factors
1.0 Mt in 5 years Fiber to Fiber: other factors ⚫ Reducing RCP/SOP availability ⚫ Reduction in nonwood pulp production in China ⚫ De-integration due to lack of wood availability increasing the addressable market New opportunities will bring potential for demand growth Source: Suzano BI 48
Slide 49: Fossil to Fiber unleashed potential
Some opportunities can even result in exponential growth over the years Fossil to Fiber 190 million tons single use plastic market Unleashed potential Brand owners aim to reduce plastic footprint and consumers are more engaged in acquiring sustainable products First estimates account for paper addre
Slide 50: Total pulp market will expand with major gain for BHKP
Global Market Hardwood Demand Mt 2020 Organic Growth Fiber to Fiber 2025 Fossil to Fiber 35.8 4.6 1.0 At least 41.4 Unleashed potential Total pulp market will expand with major gain coming for BHKP Source: Suzano BI 50
Slide 51: Capacity Investment Pipeline
Capacity Investment Pipeline 51 392 472 0 0.5 1 1.5 2 2.5 - 200 400 600 800 1,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Europe - BHKP China - BHKP China - BHKP (CPI Ajusted) Capacity Additions (‘000 ton ) (2) Pulp
Slide 52: Technical age and scale drive production planning
Technical age and scale 52 drive production planning PM capacity, 1000 t/a Hardwood (BHKP) Market Pulp Note: Domestic captive excluded Source: Pöyry | 3Q20 PM capacity, 1000 t/a Softwood (BSKP) Market Pulp WEAK STRONG Technical age, years WEAK STRONG Technical age, years 0 500 1000 1500 2000 2500 30
Slide 53: Agenda
Agenda 53 Company Overview 1 Business Strategy Addressable Market 2 3 Operational & Financial Highlights 2Q21 4
Slide 54: Revenues mostly from international markets
1 TOP 5 do Focus. Revenues mostly from international markets 54 25% 29% 35% 36% 39% 43% 32% 29% 26% 28% 24% 22% 42% 42% 39% 36% 37% 35% 6.1 5.6 7.0 8.7 6.6 5.9 2015 2016 2017 2018 2019 2020 Net revenues (US$ billion) Asia Europe Americas Note: Pro forma figures of Suzano and Fibria historical data (
Slide 55: Adjusted EBITDA and Operational Cash Generation
1 TOP 5 do Focus. Adjusted EBITDA and Operational Cash Generation 55 ¹ Excludes sales from the commercial agreement with Klabin. ² Operational Cash Generation = Adjusted EBITDA less cash Sustaining CAPEX. Adjusted EBITDA and Margin¹ R$ and US$ million and (%) 10,724 14,949 18,550 2,718 2,900 3,448 4
Slide 56: Pulp
1 TOP 5 do Focus. Pulp 56 1 Excluding Klabin sales revenue. Robust sales volume and higher prices provide record quarterly EBITDA BRL USD Net Average Price – Foreign Market (per ton) Sales Volume ('000 tons) R$ MM R$/ton Average FX Adjusted EBITDA1 and EBITDA Margin (%) R$ 5.39 R$ 5.47 R$ 5.30 R$ 5.
Slide 57: Pulp Cash Cost
1 TOP 5 do Focus. Pulp Cash Cost 57 1 2016-2018 figures adjusted by inflation (IPCA). 2016-2018 consider pro-forma Suzano+Fibria cash-cost. Competitiveness improvement recently pressured by higher commodity prices 697 649 662 596 599 600 622 623 680 2017 2018 2019 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 Cash
Slide 58: Paper
1 TOP 5 do Focus. Paper 58 ¹ Excluding Consumer Goods. | 2 Excluding the impact of Management LTI. 1Q20: R$30/ ton | 4Q20: R$46/ ton | 1Q21: R$57/ ton | LTM 1Q21: R$ 44/ton. Solid operational and commercial performance, with improved price and sales mix, led to record EBITDA per ton Paper Sales¹ ('0
Slide 59: Financial Management
1 TOP 5 do Focus. Financial Management 59 Average Cost (in US$): Amortization Schedule (US$ billion) 4.4% p.y. 87 months Net Debt (billion) and Leverage (in times) Average Term: Jun/20 In US$ In R$ In US$ In R$ Mar/21 Jun/21 Jun/20 Mar/21 Jun/21 -1.0 -10.7 12.4 11.6 11.4 67.9 66.3 57.2 Jun/20 Mar/21
Slide 60: Financial Management: hedging and financial result
1 TOP 5 do Focus. Financial Management 60 1Considers other exchange and monetary variations and the result of commodity hedges and embedded derivative.. Hedging policy provides better protection and cash conversion for 2021 Portfolio renewal - Cash Flow Hedge (ZCC) 807 969 713 961 270 40 4.87 5.22 5
Slide 61: Global and diversified Funding sources
1 TOP 5 do Focus. Global and diversified Funding sources 61 Source: Suzano’s financial team, as of June 30, 2020. Adjusted by liability management transactions announced on 07/16/21 and 07/27/21| 1BOND 2026, BOND 2027, BOND 2031, BOND 2032, SLL 2021 Green Bond 9% Sustainability Linked 27% Traditiona
Slide 62: Greenium
Greenium Green Bonds SLB 2031 e 2032 Traditional Updated on August 16, 2021 62 2025 1.63% 2026 2.04% 2027 2.43% 2029 3.10% 2030 3.22% 2031 3.14% 2032 3.15% 2047 4.65% 1% 2% 2% 3% 3% 4% 4% 5% 5% 0 5 10 15 20 25 30 YTM (%) Avarege Term (Years) -7bps -8bps
Slide 63: Rating and G-Spread
Rating Outlook BBB- BBB- Stable Stable Investment Grade Baa3 Stable G-Spread Issues maturing in 2030/2031, IP 2029, were used for the purpose of comparison| G-spread updated on Aug 21, 2021. Source: Bloomberg 63 With a view to becoming even more competitive VALE IP GERDAU SUZANO SLB CMPC BRAZIL ARAU
Slide 64: Capital Allocation
Capital Allocation With a robust free cash flow no trade-off is needed… FREE CASH FLOW WITH FINANCIAL DISCIPLINE Play a leading role in sustainability Be “Best-in-Class” in the Total Pulp Cost vision Maintain relevance in Pulp, through good projects Expand boldly into New Markets Advance in the link
Slide 65: Capex Guidance Update
Update 65 CAPEX GUIDANCE 2021 Capex (R$ billion) 2Q21 6M21 2021e Sustaining 1.0 2.0 4.0 Forest and Land 0.1 0.2 0.7 Expansion, Modernization and Others¹ 0.0 0.2 0.5 CERRADO PROJECT 0.2 0.2 1.0 TOTAL 1.3 2.6 6.2 ¹ Includes Port Terminals and Others as detailed on the 2Q21 earnings release.
Slide 66: Agenda
Agenda 66 Company Overview 1 Business Strategy Addressable Market 2 3 Operational & Financial Highlights 2Q21 4 Backups Covid-19 Maintenance Schedule Pulp Market Finance ESG
Slide 67: Agenda: Backups
Agenda 67 Company Overview 1 Business Strategy Addressable Market 2 3 Operational & Financial Highlights 2Q21 4 Backups Covid-19 Maintenance Schedule Pulp Market Finance ESG
Slide 68: What we have learnt from Covid-19: society
Less exposed to social risk Socio-economically diverse What we have learnt from the Covid-19 pandemic... At the society level: To be even more connected and supportive Related SDGs Long Term Goals for Suzano Mitigate income inequality | Education Investments of R$185 million to protect people and so
Slide 69: What we have learnt from Covid-19: company
What we have learnt from the Covid-19 pandemic... At the company level: To be even more resilient and competitive % Source: Suzano and Ibá -60% -40% -20% 0% 20% 1Q20 2Q20 4Q20 3Q20 ∆% vs YoY - Rest of Brazilian Uncoated Paper Consumption ∆% vs YoY - Suzano Direct Sales Network 54% 1% Suzano % E-Comm
Slide 70: What we have learnt from Covid-19: planet
What we have learnt from the Covid-19 pandemic... At the planet level: To be even more guided by Purpose Our Purpose In action... ● Storing more tons of carbon, for an even more positive climate impact ● Production that preserves the native vegetation and biodiversity ● Using only raw materials from
Slide 71: Agenda: Backups
Agenda 71 Company Overview 1 Business Strategy Addressable Market 2 3 Operational & Financial Highlights 2Q21 4 Backups Covid-19 Maintenance Schedule Pulp Market Finance ESG
Slide 72: Maintenance Downtimes - Schedule
Maintenance Downtimes - Schedule ¹ Veracel is a joint operation between Suzano (50%) and Stora Enso (50%) with total annual capacity of 1,120 thousand tons. ² Includes integrated capacities and fluff. 72 Mill – Pulp Capacity 2020 2021 2022 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22
Slide 73: Agenda: Backups
Agenda 73 Company Overview 1 Business Strategy Addressable Market 2 3 Operational & Financial Highligts 2Q21 4 Backups Covid-19 Maintenance Schedule Pulp Market Finance ESG
Slide 74: Paper & Board Production and Fiber Furnish
Paper & Board Production and Fiber Furnish Source: RISI, PPPC, Poyry, and Suzano BI 74 Total Paper Production (2019e) Fiber Consumption Virgin Pulp Market Pulp Bleached Chemical Pulp (BCP) Others 9 Packaging 262 Tissue: 40 Newsprint 17 Integrated 110 P&W 87 Softwood 21 Non-Wood:9 Recycled 201 Mechan
Slide 75: Paper & Board Production and Fiber Furnish
Paper & Board Production and Fiber Furnish Source: RISI and Suzano BI 68% 19% 5% 4% 4% Containerboard Tissue Packaging Paper P&W Others 242 RCP Global Demand by End-Use in million tons 69% 7% 31% 10% At-Home 27% 25% 19% Away from Home 7.4 3.0 7% N. America Europe LATAM Others Asia RCP usage by tissu
Slide 76: Chinese Growth
Chinese Growth Source: PPPC – W20 (Dec/2020) and Chinese Demand Report 76 China’s demand of BHKP by Country in million tons China’s Share of Market Pulp in million tons 0 5,000 10,000 15,000 20,000 2013 14% 2018 23% 2020 2008 21% 2009 17% 2010 2012 22% 2011 23% 2016 23% 2014 25% 2015 29% 29% 2017 29
Slide 77: Supported by Chinese and Tissue market dynamics
Supported by Chinese and Tissue Source: PPPC – W20 (Dec/2020) and Chinese Demand Report 77 Chinese Market Pulp Demand in million tons 2015 2020 2025e 2021e 17.1 25.8 26.0 29.9 +0.2/y +1.0/y +1.7/y market dynamics Tissue Consumption per Capita, 2020 in kgs per year Tissue Demand by main regions in mi
Slide 78: Risks to Southeast Asia woodchips supply
Risks to Southeast Asia woodchips supply 78 Vietnam 40% Australia 27% Chile 13% Thailand 6% S. Africa 6% Brazil 4% Others 4% 24.9 Million BDMT Woodchips Supply for Asia in 2018 2018x2023 2023x2028 Vietnam 22% -4% Australia -23% -19% Chile -34% -10% Thailand 39% 10% S. Africa -5% -3% Brazil 33% 8% Ot
Slide 79: Global End Use Consumption Growth
Global End Use Consumption Growth 79 1 Most recent update available, yet not considering Covid-19 potential impacts. Source: Source: AFRY (Dec, 2020) , Suzano BI Demand Growth 2018-2031 in million tons 56 56 56 56 56 56 56 56 56 56 56 56 48 50 51 52 53 54 55 56 57 58 59 60 169 175 180 185 190 195 19
Slide 80: Global End Use Consumption Growth
Global End Use Consumption Growth 80 1 Most recent update available, yet not considering Covid-19 potential impacts. Source: AFRY (Dec, 2020) Share on total fiber consumption 1 Packaging 20 40 60 80 100 0 2 1 3 -3 -1 -2 Estimated demand growth until 2031 (%p.a.) Uncoated Mechanical Emerging Markets:
Slide 81: Pulp: lower volatility than other commodities
Pulp 1Source: Bloomberg. March 26, 2021 2BHKP China Lower volatility when compared to other commodities 81 Historical Volatitlity of Commodities (US$)1 9% 16% 20% 20% 21% 24% 28% 28% 48% BHKP LME Metais Cattle Copper Soy Iron Ore Nickel Sugar Crude Oil
Slide 82: Agenda: Backups
Agenda 82 Company Overview 1 Business Strategy Addressable Market 2 3 Operational & Financial Highlights 1Q21 4 Backups Covid-19 Maintenance Schedule Pulp Market Finance ESG
Slide 83: Synergies Updated
Synergies Updated Steady state in full capacity Note: Include implementation costs (R$ 60 million) and do not include production reduction 2019a R$ 763 M 2020e 2021e R$ 1,000 – 1,000 M R$ 1,100 – 1,200 M 2019a R$ 763 M R$ 1,317 M 2020a Ebitda Cash Cost 76% 57% 19% Others 24% Non Ebitda Capex + Tax 8
Slide 84: Tax synergy
Tax synergy¹ ² Based on PPA as disclosed on 2019 Financial Statements – Note 1.2 (1.2). 3 Estimate considering 10 years fiscal amortization period. ¹ On top of the operational synergies. Goodwill² (tax base reduction) R$7.9 bn Total R$25.9 bn R$2.0 bn annually ~ R$0.6 bn of tax benefit/year Adjusted
Slide 85: Suzano's tax structure
Suzano’s tax structure ¹Based on PPA as disclosed on Financial Statements (ii) ²Benefit does not include CSLL (Social Contribution) reduction Description and Amount Maturity (-)Deductible accounting expense Annual deduction: R$1.2 bn (based on 10yr average) According to assets maturity (a) EBT As st
Slide 86: FX risk management
FX risk management ¹ Sensitivity at each R$ 0.10/US$ variation ² Net exposure as of December 2020. ~ R$ 500 million EBITDA Hedging Policy Debt Hedge Target: Net debt 100% denominated in USD Operating Hedge Target: 40% to 75% of the following 18 months Current: 74% of net exposure² Revenue COGS SG&A
Slide 87: Agenda: Backups
Agenda 87 Company Overview 1 Business Strategy Addressable Market 2 3 Operational & Financial Highlights 2Q21 4 Backups Covid-19 Maintenance Schedule Pulp Market Finance ESG
Slide 88: Initiatives: Capture even more carbon
Initiatives Increase in the forestry base and higher productivity Improved efficiency of industrial operations (~77% of Scope 1 and 2 emissions). Implementing of efficiency projects: 1 We are carbon negative and we want to go further: we will reduce emissions and increase the capture CO2 through euc
Slide 89: Initiatives: Provide clean energy
Initiatives Increase the efficiency in steam generation, allowing more availability for the turbines and, consequently, more energy generation. 2 We produce our own renewable energy and export the surplus to the grid Provide Clean Energy Use data science to determine the optimal steam generation and
Slide 90: Initiatives: Reuse waste
Initiatives Commercialization of industrial waste for usage in recycling industries, agriculture, and forestry. Waste o Reduce by 70% the industrial solid waste sent to our own or third-party landfills, transforming them into by- products Reuse the Implementation of Waste treatment plants Sending wa
Slide 91: Initiatives: Offer renewable products
Initiatives Yarn for fabrics and clothing: • Microfibrillated cellulose can be used to produce yarn with lower water consumption, without chemicals and lower CO2 footprint • Spinnova JV project under construction Paper instead of plastic: diverse types of paper packaging, cups and straws as more sus
Slide 92: Initiatives: Water
Initiatives Use of recycled water in machinery Selection of critical and manageable watersheds by environmental, social and forest occupation criteria. Definition of baselines for the critical watersheds Hydrological research and monitoring. Reduction of the planting density in critical watersheds.
Slide 93: Initiatives: Poverty and education
Initiatives Income generation and autonomy projects: 1) Rural Land Development Program 2) Beehives 3) Sustainable Extractivism 4) Crafts 5) Territorial Sustainability (indigenous) We invest in improving the quality of public education in municipalities considered to be priorities for our operations.
Slide 94: Initiatives: Promote Diversity and Inclusion
Initiatives Career Acceleration and Mentoring for Women and Black People Inclusive literacy for top leadership Adaptation of processes, language and infrastructure to promote inclusion Expansion of communication, training and internal engagement actions focused on respect for pluralities. Short list
Slide 95: Initiatives: LGBTI+ and people with disabilities
Initiatives Attraction and Hiring: - Creation of an LGBTQIA+ talent pool and inclusive positioning when advertising job openings to the market. - Mapping of positions and active hunting for PCDs Awareness and Literacy: - For middle managers and employees of all units with the objective of reducing c
Slide 96: Initiatives: Biodiversity conservation
Initiatives 8 Biodiversity Connect half a million hectares of priority areas for biodiversity conservation in the Cerrado (brazilian savannah), Atlantic Forest, and Amazon. conservation With the ambition of reversing biodiversity loss and generating a positive impact on nature, Suzano is committed t
Slide 97: Forestry base
Forestry base ~40% of its total area devoted to conservation (~900 k hectares) Sustainable Forest Management Model All Suzano industrial units are certified: o Forest Stewardship Council® (FSC®)¹ and/or CERFLOR® / PEFC o 87% of Certified Areas using mosaic technique and landscape management 97 32k h
Slide 98: Wood Purchase Policy
Wood Purchase Policy 98 ● 100% of the wood used in the production process is controlled (traceability) ● Compliance with the chain of custody management systems Forest Stewardship Council® (FSC®) and Cerflor® / Programme for the Endorsement of Forest Certification (PEFC) ● Commitment to prevent sour
Slide 99: Eucalyptus & Water
Eucalyptus & Water 1) Water Use Efficiency Public Source: Novais (1996), Atlas da Água (2005), Waterfootprint (2021) 0.4 1.3 2.5 1.2 1.7 2.5 4.3 6.0 10.0 15.4 Eucalyptus Atlantic Forest Cerrado Maize Soybean Rice Chicken Meat Pork Cotton Beef (m3 / Kg) Wood (Brazilian Savanna) Our partnerships 99
Slide 100: Eucalyptus & Water: land use target
Eucalyptus & Water A pioneering target on land use We are committed to keep on searching for improvements to optimize the use of natural resources. LTG: we will increase water supply in environmentally sensitive areas (6% of our planted areas) Eucalyptus and Natural Forests mosaic model promotes wat
Slide 101: Water in industrial operations
Water in industrial operations 101 Water body (rivers) Pulp and paper production 20% 80% ● Suzano returns about 80% of the water withdrawn from the river as treated effluent. ● High efficiency in the use of water – withdraw is below the BAT of IPPC (Integrated Pollution Prevention and Control), whic
Slide 102: Climate Strategy
Climate Strategy Public engagement 102 • Support to TCFD: First Latam non-financial company case study in TCFD Hub • Climate change discussion in the board • GHG inventory verified by third party • Corporate Risk Matrix includes climate change risks • 15.2 million tons of CO2 of positive balance rea
Slide 103: Climate Strategy
Climate Strategy In the concept of the new economic model, there is no way to exclude the role of the forest regarding climate change • Even more climate positive – Remove 40 million tons of CO2 from atmosphere (Scopes 1, 2 and 3) • Reduce specific emissions by 15% (Scopes 1 and 2) About 86% of the
Slide 104: Main leverages to the Long-term goal
Main leverages to the Long-term goal 104 Improve Removals • Forestry base expansion • Adaptation research to Climate stress • Increase of forestry productivity • Forestry protection (prevention of forestry loss – native and eucaliptus) • Environmental restoration (protection and conservation area) E
Slide 105: Suzano @ COP26
Engagement Agreement expectations Challenging Commitments Suzano is deeply engaged on COP26 agenda both in Brazil and international scope, actively participating of several discussions on prioritary topics: • Carbon markets • Nature Based Solutions • Innovative fundings We have the expectation that
Slide 106: Carbon intensity
Carbon intensity: tonnes of CO2 per tonne of pulp, paper and paperboard Suzano is already well below 2 degrees scenario 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 0.64 0.41 0.35 0.37 0.21 0.19 0.27 0.48 0.18 IP UPM CMPC Stora Enso Mondi Paris Pledges 2 degrees Be
Slide 107: 2030 emissions target classification
1,6°C <1,5°C <2,0°C 2030 Target: 0.1813 tCO₂e/t Target classification Paris Agreement Note: 2015 baseline: 0.2133 tCO₂e/t, 2030 target: 0.1813 tCO₂e/t, 2020 progress: 0.1929 tCO₂e/t Commitments to Renewing Life: Reduce 15% of GHG emissions (Scope 1 and 2) by ton of product by 2030 107
Slide 108: Social and Territorial Development
108 Social and Territorial Development ● Risk and cost reduction: operational and reputational ● Certification demands adherence ● Income generation and education improvement as drivers for life quality increase and financial self-sufficiency ● Open dialogue and programs jointly developed with tradi
Slide 109: Resilient Territories
Developed together with stakeholders Resilient Territories Connect arrangements of economic and educational development: Territorial Innovation Laboratories Communication Management of the Multidimensional Poverty Index Education Strengthening of the Social Fabric Income Generation and Diversificati
Slide 110: Rural Land Development Program (PDRT)
Rural Land Development Program (PDRT) PDRT participates in territorial development through dialogue with neighboring rural communities, strengthening their organizations and networks. Its purpose is to enhance the activities in each territory with technical support in three pillars: management, prod
Slide 111: Beehives
This initiative aims to foster the honey production chain in the regions where the company operates, contributing to income generation and improving the quality of life of the communities involved. Partner beekeepers receive support in the implementation of new technologies, technical assistance in
Slide 112: Indigenous communities
INDIGENOUS COMMUNITIES 3,000 families served 31 communities 5 indigenous ethnicities R$ 806,009.00 Revenue generated in 2019 Restore the conditions to exercise socio-cultural habits, affirm their ethnic identity and carry out sustainable economic practices 221 families 8 communities R$ 1,477 Average
Slide 113: GMO
GMO 113 ● Suzano has no genetically modified trees deployed in commercial operations at this time. ● Plant biotechnology to improve forest yield and forest protection. ● FuturaGene undertakes extensive biosafety evaluation of new varieties, including human and animal safety and environmental impact,
Slide 114: Investor Relations
Investor Relations www.suzano.com.br/ir ir@suzano.com.br