Financial Highlights

Guilherme Cavalcanti - CFO

Main Achievements

US$ 1.4 billion debt reduction in twelve months Net debt/EBITDA ratio in US$ of 3.0x, the lowest level since Fibrias creation Cost of debt in US$ reduced to 4.7% p.a. (Jun/12: 5.4% p.a)

Free cash flow in the LTM totaled R$956 million, 7% FCF yield
Working Capital Improvements Hedging Strategy All rating agencies at one notch below Investment Grade:

Outlook upgrade by Fitch (Feb/2013) and Moodys (Sep/2013) Rating upgrade from BB/Positive to BB+/Stable by S&P (Mar/2013)
Selected as sector leader in Dow Jones Sustainability Indices

Focus on Investment Grade

2

Fibria delivers one of the highest EBITDA/t and FCF/t of the industry
LTM 2Q13 Results (R$/ton)
1,247

(648) (109) (5)

485
(220) (102)

FCF Yield 7% 36
(16)
Working Capital Taxes/ Others
(3)

183
LTM 2Q2013

Net revenues

COGS/ Freight
(1)

SG&A

Others

EBITDA

CAPEX
(2)

Interest

(1) On a cash basis, does not include depreciation, amortization and depletion (2) Includes advance to forest partner program (3) IR/CS and other

Acknowledgements
Valor 1000 Company of the year, among all industries, according to Valor Econmico. In the Pulp and Paper Sector: 1st place in Value Generation 1st place in Net Revenue

International Recognition by Corporate Governance Report

Fibria is one of the 5 Brazilian companies nominees to the Best Corporate Governance Award from London.

2013 Institutional Investor Latam Ranking - P&P Sector Fibria was ranked for the forth consecutive year (2010, 2011, 2012 and 2013). In 2013 Fibria was ranked in four categories: CEO, CFO, IR Team and IR Professional

Sustainability Investing Fibria was chosen by RobecoSAM as one of the 10 Game Changers of tomorrow among all the industries worldwide analyzed at Dow Jones Sustainability Index. Fibrias case was published in the Sustainability Investing Magazine.

poca Negcios 360 Fibria was elected by poca Negcios 360 as 1st place in the pulp & paper sector in the corporate governance and future's vision categories.

XVII ANEFAC-FIPECAFI - SERASA EXPERIAN Prize Fibria is among the most transparent public companies (with revenue of up to R$5 billions) in Brazil; recognized for the quality of its 2012 financial statements.

Share Performance
250

+118%
200

150

100

+2%

50

Fibria

Ibovespa

Base: 100

Source: Bloomberg

MARKET PULP ENTERING A NEW AGE OF COMPETITION

2ND FIBRIA INVESTOR TOUR

Trs Lagoas, MS, October 2, 2013
Joo Cordeiro Pyry Management Consulting

KEY QUESTIONS
What has fundamentally changed in the
business of market pulp during the last four decades ?

How to compete in the future given the

evolving dynamics of markets, clients and competitors ?

How to innovate and create competitive

advantage while coping with rising operating costs ?

COPYRIGHTPYRY

FIBRIA INVESTOR TOUR 02 OCT 2013

E-MEDIA KEVENNYS

COPYRIGHTPYRY

FIBRIA INVESTOR TOUR 02 OCT 2013

WE ARE WITNESSING A MAJOR STRUCTURAL SHIFT

Global Paper and Board Demand 1980-2025

500
400 300 200 100

Million tons

Structural Shift: Emerging Markets More Packaging & Hygiene More Specialties Graphic papers ? Mature markets Graphic paper sunset Diminishing availability of RCF

Emerging Graphic Papers Mature

Source: Pyry

*RCF: recycled fibre

COPYRIGHTPYRY

FIBRIA INVESTOR TOUR 02 OCT 2013

CHINA IN THE DRIVING SEAT OF FIBRE DEMAND

Market Pulp Demand
75 Million tons 250

Recycled Fibre Demand

Million tons

CAGR

CAGR 13.2%/a

60

200

China
45

15.1%/a
150

China

30

100

Rest of the World

15

0.7%/a
50

Rest of the World

1.8%/a

0 1996

2000

2004

2008

2012

0 1996

2000

2004

2008

2012

Source: Pyry

COPYRIGHTPYRY

FIBRIA INVESTOR TOUR 02 OCT 2013

10

WHILE THE SHARE OF MARKET PULP INCREASES.

Share of Market Pulp*

%

Global Market Pulp Demand

million tons

40

Total
1995 30 38

Share of BHKP
13
34% 49% 54%

2015
2025

65
78

32
42

20
1995 2000 2005 2010 2015 2020 2025

Source: Pyry

* share of market pulp out of total wood pulps

COPYRIGHTPYRY

FIBRIA INVESTOR TOUR 02 OCT 2013

11

WHAT HAVE BEEN THE MAIN CHANGES IN MARKET PULP BUSINESS DURING THE LAST 40 YEARS
and what is the future impact on Brazilian business ?

Technology and Mill Size

Wood Quality & Cost

Louder Client Voice

COPYRIGHTPYRY

FIBRIA INVESTOR TOUR 02 OCT 2013

12

CAPITAL AND WOOD COST INTENSITY

Savings from economies-of-scale were offset but higher wood costs ? Kraft Pulp Mill Capex
USD/ADt (real 2013)

Wood Cost
Pulp Price Assumed in Feasibility Study = 100%

4.000

25%

3.000

20%

15% 2.000 10% 1.000 5%

0 1974
Source: Pyry
COPYRIGHTPYRY

0% 1986 2002 2006 2013 1974 1986 2002 2006 2013

FIBRIA INVESTOR TOUR 02 OCT 2013

13

SIZE STILL MATTERS !

Illustrative NPV Sensitivity to WACC and Mill Size
USD million 1.250

1.5 M t/a
1.000

ILLUSTRATIVE

1.3 M t/a 1.0 M t/a 750 000 t/a

Net Present Value

750

500

250

IRR

-250

-500

5.0 %

6.0 %

7.0 %

8.0 %

9.0 %
WACC (%)

10.0 %

11.0 %

12.0 %

13.0 %

Source: Pyry
COPYRIGHTPYRY FIBRIA INVESTOR TOUR 02 OCT 2013

14

WHY WOOD COSTS ARE RISING ?

1979

COPYRIGHTPYRY

FIBRIA INVESTOR TOUR 02 OCT 2013

15

THE END OF CHEAP WOOD ?

Development of hardwood pulpwood cost delivered at mill
USD/msob, real terms 2012

120 110 100 90 80 70 60 50 40 30 20 10

Source: Pyry
COPYRIGHTPYRY

Finland Birch Brazil Euca US South Mixed HW

Note: Deflator used for real prices US WPI

FIBRIA INVESTOR TOUR 02 OCT 2013

16

WAR AGAINST WOOD COST INFLATION !

What are the main causes of rising wood costs ?
400
Index 2000=100

INCAF Real cost increase of: Labour Land Fertilizer Herbicides Fuel etc
Brazilian Wood Cost Index 300

200

IPCA
Brazilian inflation

100
2000
Source: Pyry
COPYRIGHTPYRY FIBRIA INVESTOR TOUR 02 OCT 2013

2003

2006

2009

2012

17

FOREST PRODUCTIVITYARE WE REACHING A CEILING?

Plantation Forest Productivity in Brazil

m3/ha.a

1970s
Source: Pyry
COPYRIGHTPYRY

2010s

FIBRIA INVESTOR TOUR 02 OCT 2013

18

GENETICS KEY ASSET FOR FUTURE DIFFERENTIATION

COPYRIGHTPYRY

FIBRIA INVESTOR TOUR 02 OCT 2013

19

NEW COMPETITION ON ASIA?

COPYRIGHTPYRY

FIBRIA INVESTOR TOUR 02 OCT 2013

20

THE WORLD IS FLAT

The model has been copied by manythe result is this !
Global BHKP Supply Cost Curve
1 600
1 400
USD/ADt, 2013 cost level

1991 1996 2001 2006 2012

1 200 1 000 800

600
400 200 0
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34

Cost position of marginal producer

Cummulative Capacity Million t/a

Source: Pyry
COPYRIGHTPYRY FIBRIA INVESTOR TOUR 02 OCT 2013

21

BRAZILIAN MILLS HAVE AN ADVANTAGE OVER CHINESE FOR DELIVERIES TO CHINA

Cash cost competitiveness of market BHKP mills delivered to Hong Kong

1200

USD/ADt

2013/II

1000

800
BEKP net price in China

Chinese mills

600

Brazilian mills
400

200

0 0 1000 2000 3000 4000 5000 6000 7000 8000

Cumulative Production Capacity 1000 ADt/a

Source: Pyry
COPYRIGHTPYRY FIBRIA INVESTOR TOUR 02 OCT 2013

22

INCREASING SHARE OF BRAZILIAN MARKET PULP

There is room to further consolidate the market pulp business !

Brazilian Share of Global Bleached Kraft Market Pulp

%

Top Bleached Kraft Pulp Producers in 2013

Fibria RGM/APRIL Arauco International Paper Stora Enso CMPC Georgia-Pacific Suzano

BHKP

BHKP BSKP

30

15

APP UPM Mets Group Weyerhaeuser

BSKP+BHKP

Domtar Mercer Int Eldorado

0
1980
Source: Pyry
COPYRIGHTPYRY

1990

2000

2013

FIBRIA INVESTOR TOUR 02 OCT 2013

23

NEW COMPETITION ON ASIA ?

Up to 2025, more than 30 million tons including integrated and market pulp.

Announced BHKP and BCTMP capacity changes in Asia and in Brazil

Million tons 25 25 Million tons

20

20

Mainly Market

15

15

10

10

Mainly Integrated

Planned
5 5

Many Plans BHKP

Decided Integrated Market

BCMTP Brazil China Rest of Asia

Source: Pyry
COPYRIGHTPYRY FIBRIA INVESTOR TOUR 02 OCT 2013

24

BUT SOME CAPACITY GETS CLOSEDEVERY YEAR

Not everyone remembers that on average some 3 million tons of bleached kraft pulp gets closed every year !

Global Annual Closures and Integration of Bleached Kraft Pulp Capacity

Million tons 0,0 BSKP Integrated

-1,0

BSKP Market
BHKP Integrated BHKP Market

-2,0

-3,0

-4,0

-5,0

-6,0 2000
Source: Pyry

2002

2004

2006

2008

2010

2012

COPYRIGHTPYRY

FIBRIA INVESTOR TOUR 02 OCT 2013

25

AN EYE ON THE FUTURE BIO-BASED FUELS, CHEMICALS AND NEW MATERIALS

Bioplastics
Coca Colas plant bottle Disposable plates & cups Automotive interior

Sugar platform

Lubricants
Marine oils Chainsaw lubricants Drilling fluids

Bio-based fuels & chemicals

Oil & Fats platform
e.g tall oil rosins, ethylene, lactic acid, propylene glycol, propanediol, farnesene, succinic acid, butanediol

Surfactants
Detergents Healthcare & cosmetics Industrial cleaners

Solvents
Paint & coatings Inks De-icing agents

COPYRIGHTPYRY

FIBRIA INVESTOR TOUR 02 OCT 2013

26

ENTERING A NEW AGE OF COMPETITION

Mill sizes will continue to increase. Declared war on wood cost inflation. Facing emerging competition from within Brazil and from South East Asia. More differentiation and innovation through intensive R&D from forest to product. Develop Fit-for-client product and service portfolio in order to differentiate Taking an active role on consolidation while bringing investment discipline to the industry.

Are we ready to reinvent our Industry?

COPYRIGHTPYRY

FIBRIA INVESTOR TOUR 02 OCT 2013

27

It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.
Charles Darwin

Questions ?

Mr. Joo Cordeiro joao.cordeiro@poyry.com

COPYRIGHTPYRY FIBRIA INVESTOR TOUR 02 OCT 2013

28

Competitive Strategy
Marcelo Castelli - CEO

Since its creation, Fibrias strategy has been executed based on:

OPERATING EXCELLENCE
Cost control Efficiency projects aiming at reducing Fibrias cash cost:
Jacare Energy Master Plan Aracruz Revit A

LIABILITY MANAGEMENT
Liquidity events Gross debt reduction Cost of debt reduction Leverage reduction

GROWTH WITH DISCIPLINE

Ready for organic growth (licenses and basic engineering) Continuous investment in forest for capacity growth Industrial project at the rigor moment for value creation

Operating stability Capex discipline

30

The maturity of synergies captured since Fibrias creation improved its operating indicators
PRODUCTION VOLUME (000 t)
BEST PRACTICES AND OPERATING STABILITY +14%
578 5,054 4,600 2009* 2010* 2011 2012 2Q13 LTM 2009* 2010*
Historical Value

CASH COST (R$/ton)

TARGET TO FULLY ABSORB INFLATION -14%
556
448

534
471

507
473 497

5,184

5,299

5,246

432

2011

2012
Inflation Effect**

2Q13 LTM

SG&A (R$ million)

STRUCTURE AND PROCESS SIMPLIFICATION -24%
793 593 737 594 687 605 626

EBITDA (R$ million) - EBITDA MARGIN (%)

40% 29%
605 1,522 2,526 1,964

34%

36%
2,253

39%
2,537

584

2009*

2010*
Historical Value

2011

2012

2Q13 LTM

2009*

2010*

2011

2012

2Q13 LTM

Inflation Effect**

* Excludes Conpacel | ** IPCA index considered to calculate the inflation effect

31

 and reduced its debt.

Net Debt/EBITDA (x) US$*

7.1 6.5 3.8

Net Debt/EBITDA (x) R$

4.8 4.2 3.4 3.3 3.1 3.1 3.3 3.0

Market Consensus

3.6

2.7

NET DEBT (R$ BILLION)

11.0

9.8

9.5 7.7 7.5 8.3

2009

2010

2011

2012

1Q13

2Q13

2013**

FX RATE (R$/US$)
Average LTM End of Period 2.00 1.74 1.76 1.67 1.67 1.87 2.04 1.95

2.00
2.01

2.07 2.22

2.13 2.24

* From June 30, 2012 on, net debt/EBITDA ratio for covenant purposes are calculated in US Dollars and the limit is 4.5x ** 2013 year end market consensus

32

The demand for pulp reaches historical levels, driven by eucalyptus pulp
ACCUMULATED GROWTH IN THE DEMAND FOR PULP (1991 - 2012)
379%
48 49 54 51 53 52 52 56 57

GLOBAL DEMAND FOR PULP (IN MT)

31 29 30

33

35 35 36

38 38

41 41 42

44

46

89% 89% 68% 13%

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Softwood Other types of hardwood Eucalyptus pulp Other

Softwood Other types of hardwood

Eucalyptus pulp Other

Source: Hawkings Wright, Analysis of Fibrias Strategy Department

33

Growth prospects for the paper industry remain positive in almost every grade
CAGR OF DEMAND BY REGION AND TYPE OF PAPER 2012 - 2022 P&W
GLOBAL Oceania Africa Latin America Asia (ex-China) China Europe North America
-1.9% -0.5% 0.3%

TISSUE
4.2%

NEWSPRINT
2.3 %

PACKAGING
2.9%

GDP
3.7% 3.0%
4.3%

2.3%

-3.7% 1.6%

0.6%

3.6%

5.4%

4.7% 3.4% 4.6% 6.6% 1.4% 2.5%

2.7%

4.8%

0.7%

3.4%

1.2%

3.1%

-1.1%

3.5%

2.6%

8.8%

-1.8% -3.6% 1.6%

4.4%

3.2%

-2.9%

1.4%

-4.7%

1.1%

Source: RISI, LCA, Analysis of Fibrias Strategy Department

34

While the demand is not a problem, the industry scenario is challenging

Fragmented industry with lack of discipline in launching of new projects Scale of new projects keeps growing

Flattish industry cost curve

35

Fragmented industry with new ongoing projects

MARKET PULP CAPACITY RANKING 2013 (1) (000T)
Fibria APRIL Arauco Georgia Pacific CMPC UPM-Kymmene Sodra Suzano Paper Excellence Weyerhaeuser Stora Enso Domtar Ilim IP Mercer Metsa Fibre Eldorado West Fraser ENCE Canfor 0 Bleached Softwood Kraft Pulp (BSKP) Bleached Hardwood Kraft Pulp (BHKP) Unbleached Kraft Pulp (UKP) Mechanical 2000 4000 6000 APP South Sumatra Indonesia Fibria Trs Lagoas II Brazil 1.5 Mt 1.5 Mt 2.0 Mt Project Suzano Arauco / Stora CMPC Guaba II Klabin Paran Country Brazil Uruguay Brazil Brazil

MAIN PROJECTS
Capacity 1.5 Mt 1.3Mt 1.3 Mt 1.5 Mt(2) Timing 4Q2013 1Q2014 2Q2015 2Q2016 Fiber BEKP BEKP BEKP BEKP/ BSKP/Fluff BEKP BHKP Status Confirmed Confirmed Confirmed Unconfirmed Unconfirmed Unconfirmed

MAIN QUESTIONS ABOUT CAPACITY

Minimum required return for new projects

Closures due to increasing costs, higher technical age of recovery boilers and exchange rates Fiber substitution: Softwood x Hardwood and Recycled x Virgin Fiber

(1) Hawkins Wright Outlook for Market Pulp, January 2013 (2) About 1.0 Mt refers to hardwood market pulp

36

In addition, the scale of new projects represents a stronger impact on the industrys operating rate
EVOLUTION OF AVERAGE SCALE OF HARDWOOD PROJECTS (KT) AND % OVER DEMAND
6.5% 5.2% 3.8% 4.3% 3.4% 3.5% 1300 1100 900 700 450
2000 2002 2004 2005 2006 2007
% over Total Demand

5.5%
2000

4.7%

2.7%
780

1500

700

2009

2013

2017

Main Projects HW

Source: Analysis of Fibrias Strategy

37

Given the scenario, Fibria is diversifying its sources of value creation.

Drivers of continuous improvement and innovation

Continuous search for operating excellence and cost control initiatives

Forestry biotechnology
Development of customized products - fit for client Actions to reduce employed capital

Growth initiatives Complementary actions in the Value Chain

38

Fibrias operational strategies to competitiveness and growth

Specific Projects

Control of
Technologically

Advanced Workforce

Innovations

Incremental

Internal Inflation

for Cost and Productivity Performance

Stability

for Cost Reduction

39

Results of winner strategies and perspectives for near future

Products Development: AP Product, EucaStrong, High Kappa, Low Brightness are improved or new products

Technically Advanced Workforce

Engineers: 80% are Pulp Specialists Operators: 60% are Pulp Technician Maintenance: 70% Specific Training Qualifications: Continuous Program

I9 Program Quantitative Ideas (n)

NPV Captured = Mi R$350 Reward = Mi R$2.6

Raw Materials Internal Inflation (%)

Average official Inflation

6.1% per year

182

170

165

6.4

6.3

6.9

2010

2011

2012

NEAR FUT

2010

2011

2012

NEAR FUT

Operating Stability (%)

> 90 % Excellence > 87 % Good > 84 % Regular

Production (t/day, full year 354d)

Aracruz + Trs Lagoas + Jacare + 50% Veracel
STABLE

Cash Cost (R$/t)

STABLE

91.8

92.5
14.28

14.92 14.64 448

471

473

90.5

2010

2011

2012

NEAR FUT

2010

2011

2012

NEAR FUT

2010*

2011

2012

NEAR FUT

40

Operating Stability based on nonstop production Bright September!!

Trs Lagoas Production t/d Sep 2013 Jacare Production t/d Sep 2013

The biggest

OS =

97,4 %

Stability
&

OS =

97,5 %

Production
Veracel Production t/d Sep 2013 of the year Aracruz Production t/d Sep 2013

OS =

96,4 %

OS =

92,6 %
41

Specific projects for cost reduction (examples)

ARACRUZ Warm up D0 Stage at Mill C
Objectives (Investment = R$2.4 Million): Increase Kappa number Dig C CAT reduction Increase Tensile Index of Line C pulp Potential Gains: Cash Cost Unit = - 0.62 R$/t Cash Cost Fibria = - 0.31 R$/t Start-up: May/2014

Bleaching Line C

42

Specific projects for cost reduction (examples)

JACARE Improvements at Fiber Line C
Objectives (Investment = R$6.2 Million): Reduction of 3 kg/t of Chlorine Dioxide as TAC Potential Gains: Cash Cost Unit = - 2.90 R$/t Cash Cost Fibria = - 0.68 R$/t Start-up: Aug/2014 and Sep/2015

43

Specific projects for cost reduction (examples)

TRS LAGOAS Fiber Recovery on Drying Machine Objectives (Investment = R$6.6 Million): Recovery 120 t/m of pulp fiber Potential Gains: Cash Cost Unit = - 1.17 R$/t Cash Cost Fibria = - 0.32 R$/t Start-up: Sep/2015
Balano com Cleaners
Produo 3798 adt/d

Depurao Branqueada - Unidade Trs Lagoas

Primrio 3 x A72
Rm = 18 % 3986 / 2.84 / 50 1 4300 / 3.2 / 50
1
1 2 1 1

5184.1 / 2.67 / 50
46

1 0
2 1 1 2

1 0

1 4

1326.5 / 2.47 / 50

52

Secundrio 1 x A72
Rm = 23 %
1 1

53

14

1 1 3 2

492.7 / 2.04 / 50

21
2

24 33
2

24

Terceiro Estgio
Rm = 24 %
1 2

60

36

61

33
1 3 2 1

35
1

36
2

Quarto Estgio
63
Rm = 20.2 %
1 1 2

62

42

2 3

41
2 1

Quinto Estgio
1 2 3 1

42

Rm = 20.5 % 71.9 / 1.07 / 50

Perda de Fibras 0.02 % 0.03 odt/h 0.09 t/h a 33%

4 44

6 15

64
1

44

1 2

1 1 2 2

13

16 45

2.9 / 0.98 / 50

Cleaners

430 / 0.03 / 50

140 / 0.03 / 50

110 / 0.03 / 50

40 / 0.03 / 50

45 / 0.03 / 50

70 / 0.03 / 50

10 / 0.03 / 50

10 / 0.03 / 50

27 / 0.03 / 50

5 / 0.03 / 50

0/0/0

0/0/0

52

53

60

61

62

63

11

13

16

50

10

11

12

13

51

10

11

12

44

UAVs Unmanned Aerial Vehicle (DRONE)

3 years of development Operational Scale Oct/2013 Productivity increase up to 700 ha/h Forest view from above

45

UAVs Unmanned Aerial Vehicle (DRONE)

46

UAVs Unmanned Aerial Vehicle (DRONE)

PRODUCTS

Survival Weeds Management

Validation of Coppice
Cartographic survey
MAPPING COPPICING SURVIVAL REPORT

47

Harvester + Forwarder With Winch

Mooring system of forest machines in their own trees from the edge of the field

48

Harvester + Forwarder With Winch

+ 20% mechanized area (JAC) ~ 450 thousand m wood CAPEX: R$7 million (2013/2014) Cash Cost Fibria: ~ - 0.80 R$/adt Cash Cost Jacare: ~ - 4.00 R$/adt

NPV 66 million Annual Saving R$ 5 million

70 % Mechanized 90 % Mechanized

51

Hook Up System
"Hook up system" is a kit to optimize the flow of hydraulic oil from the base machine to the head (74 machines)

Reduction in diesel consumption Improved performance of the assembly.

Source: colheita ARA

52

Hook Up System

LITERS PER HOUR

- 12.4%

22.6 19.8

Before

After

Payback at the first month Annual savings R$ 1 million

53

Productivity gains
FIBRIAS GAINS IN IMACEL DUE TO INVESTMENTS IN BIOTECHNOLOGY (TONS OF PULP/HA/YEAR)

MAI* Pulp: (adt/ha/year)

12.1 10.6 10.9

15.0

15.0

15.0

15.0

15.0

Conservative assumption

2012 field trials = 11.9

2010
*MAI: Mean annual increment

2015

2020

2025

2030

2035

2040

2045

How:

Genetic improvement; forestry management; industrial yield. Availability of land for other purposes; increase in competitiveness; higher return to shareholders and to the society as a whole.
Expected results in the new forests planted in Fibrias own forests, adopting classical breeding + molecular markers technologies.

Benefits:

54

Innovation in the Core Business

The Technology Center (CT) operates within all company units and is directly involved with Fibrias main operations, from the production of seedlings to the development of new products and services.

The product portfolio is fully aligned with Fibrias strategy and is managed by a system based on the Stage and Gate methodology.
In 2013, projects are distributed in the following dimensions: Operating excellence Differentiation through disruptive technologies Business sustainability (social and environmental development) New businesses

55

Redirecting the innovation focus

6% 13% 52% 23% 36% 18% 35% 41% 47%

34%

2013

29%

47%
6% 18%

2011

2012

2013
Operating excellence New businesses

29%

Disruptive technologies Business sustainability

Business sustainability New businesses

Disruptive technologies Operating excellence

56

Biotechnology: Plant Propagation

Clone multiplication in laboratory: BIOUNITS

Successful Case 2013 XIII ANPEI Conference on Technological Innovation

Increase by 40 times in the clone multiplication rate 38% decrease in the seedling production time (cycle)

57

Forest Biotechnology: Genetic Transformation of Elite Clones

The Genetic Transformation of the elite clones is a technological rupture held by Fibria. 77 ha of field experiments already installed: focus on the technological bio-safety assessment. Fibria does not have commercial crops with transgenic eucalyptus.

58

Product Development

Fiber differentiation through chemical boosting

Fiber differentiation through forest and/or process tunning

Pulp application engineering:

Capabilities & Know-how

DRIVERS
1. Papermaking performance improvement 2. Paper performance improvement

3. Share increase by displacing RF, SWKP and/or other HWKP

59

Fiber Differentiation
Becames Possible Eucastrong

Bulk

Typical Behavior

Bulk
NSK Avg EU/NA EUCASTRONG BEKP

Tensile

Tensile

Tensile Development

NSK Avg EU/NA EUCASTRONG BEKP

Drainability through refining

60

Pulp Application Combination of Capability and Know-How

Fibria has protocols and commercial equipment dedicated to assist and to recommend optimized refining strategies.

BEKP refined as usual

BEKP refined at ULIR(1)

Source: Fibria and Eucalyptus Pulp for Tissue Making: A winning design, Tissue World 2009 Nice, France - Fernando S. Lafraya, AFINA Consulting (1) Ultra Low Intensity Refining

61

Fibrias BEKP Expertise: Anticipating Market Movements

Technologies had allowed the increase of BEKP up to 70% in NA premium bath tissue!

Premium Bath 2-Ply

Participation in the Furnish 80%
HW (other) % HW (euc) % Broke %

60% 40% 20% 0%

SW (BSK) %

1960s

1970s

1980s

1990s

2000s

2010

Source: Fisher International, Inc. January 2011

62

There are various options to reduce capital expenditures in Fibrias value chain
POTENTIAL ACTIONS TO REDUCE EMPLOYED CAPITAL LAND

Sales of areas with high real estate potential Real estate land funds
FOREST

Creation of planting funds, defining purchase options for wood

(new and current areas)

INDUSTRY AND LOGISTICS

Outsourcing of non-core production phases and logistics assets

63

Growth initiatives may take place through organic expansion or consolidation

Value drivers to improve on the current situation

Growth Initiative
Organic Expansion Consolidation

Complementary actions in the Value Chain

64

Fibria is preparing for its organic expansion, based on a model that creates different growth options
STRATEGY FOR POTENTIAL ORGANIC EXPANSION
1. Maintain forest formation through:

Implementation of new areas Renting Partnership with TIMOs Reinvestment of resources from assets divestments

2. 3.

Obtain licensing for all potential expansions Continuous investigation of new low cost areas

Usage of areas in M&A events

Usage of wood for organic growth

Wood sales in the market or usage in new businesses

65

Horizonte II Project a way to growing!

3 Wood Preparation Lines 17,200 m3/d

TRS LAGOAS LINE II

5,100 Adt/d

1 Digester

1 Fiber Line
4,750 Adt/d

2 Drying Machines
4 Baling Lines
2 x 2,500 Adt/d

1 Effluent Treatment
132,000 m3/d

1 Water Treatment
144,000 m3//d 1 Lime Kiln 1,200 t/d

3 Turbogenerator
3x 80 MW

1 Evaporation
1,600 t/h H2O

1 Recovery Boiler
6,800 TSS/d

1 Caustisizing
15,000 m3WL/d

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Electric Power Export tripled with Line II Low CO2 Emission Matrix
Green Matrix
Multiple Fuel Sources 81,5 MW TG1

Escelsa
10 MW

RB1
81,5MW TG2

LINE I + IP PM1 90 MW

Licor

PB1

Export 50 MW
Total LI + LII
80 MW TG3

85%

Export

150 MW
80 MW

RB2
TG4

Export 100 MW
LINE II + IP PM2 104 MW

Biom

8%

PB2
TG5

Gas

80 MW

7%

LK

Legend:

Stean

Power

TG - Turbo Generator PB - Power Boiler RB - Recovery Boiler LK - Lime Kiln

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Fibria is prepared to grow

Installation License: L I n. 84/2011 revalidated to 2017 Authorized Capacity: 1,750,000 ADtB/year (4,794 tpd) Total Capacity: 3,050,000 ADtB/year (8,616 tpd) Other Authorizations:

Co-generation: 259,5 MW
Expansion & New Capacity of Landfill: 204,800 + 750,000 m3 Production of Soil Corrective from Residues: 31,000 t/year Burns of Secondary Mud from ETE in Biomass Power Boiler

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Growth from consolidation present challenges, but benefits are undisputed

CHALLENGES
Strategic motivation and timing of the other party Relative valuation Governance, control issues Debt level of players

BENEFITS
Huge potential synergies Market and client portfolio consolidation

Rationalization of pipeline of new project

GROWTH FROM CONSOLIDATION IS KEY DRIVER FOR VALUE CREATION

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Complementary actions include assessing opportunities in biotechnology and in the logistics chain

Value drivers to improve on the current situation Growth Initiatives

Complementary actions in the value chain

Opportunities in the Bio-market Actions in the Logistics Chain

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The value chain of the Forestry Industry has opportunities to be explored

VALUE CHAIN OF THE FORESTRY INDUSTRY
LAND FOREST FINAL USES
Standing timber
Sale to third parties

Land

Other Businesses

Charcoal

Forestry
What is the best final use for investments in land?

What is the best final use for wood ?

Furniture Ind.

MDF, particle board Pellets

Lease land

Power
Biofuels

Bio-Products

Wind power
Pulp
Paper

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Aware of these opportunities, Fibria has been investigating a series of technologies

Technology
Pyrolysis
P-Oil

Priority 1

Fibria
Effective participation: Ensyn investment

Technological Maturity

Gasification
Pelletization

On going studies
Little attractive under current conditions On going studies On going studies On going studies Pilot equipment Strategic partnership

Priority 2

Cellulosic Ethanol Bio-chemicals Bio-polymers Lignoboost Carbon Fiber

Economic Attractiveness Economic Attractiveness

Technology A Technology B Pyrolysis Technology D
Relative Market Size Source: Fibria Bio-Strategy Project

Technology E Technology F

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Conceptual Layout Bio-Oil Plant

73

Fibria can add value by taking advantages of the opportunities in the logistics chain
OPPORTUNITIES IN THE LOGISTICS CHAIN
Taking advantage of Portocels opportunities (current operations and expansion)

PORTOCEL I

PORTOCEL II

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Portocel Expansion: many opportunities of value creation

Study area illustration The Portocel Expansion Project study area consists of 4 states plus parts of 3 other states, reaching regions up to 1.500 km far from the future terminal

Criteria for defining the study area

BA MT GO

Ilhus
MG ES

Barra do Riacho

SP

Vitria/Tubaro/ RJ Praia Mole Porto de Ubu Forno Rio de Janeiro/Niteri Itagua/Angra dos Reis So Sebastio

1.000 km radius by road from Barra de Riacho; Additional 500 km radius from Anpolis (influence of the rail system) ; The study area covers the states of Rio de Janeiro, Esprito Santo, Minas Gerais, Goias and part of Mato Grosso, Sao Paulo and Bahia; 67% of Brazil's GDP is generated in the study area.

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Fibrias Strategy at a glance

Financial Discipline Solid Governance Sustainability Transparence Talent Retention, Professional Development and Succession Good Organizational Climate
CONTINUOUS IMPROVEMENT
Operational Excellence Asset light Biotechnology

Immediate

Short Term

Medium Term

Long Terms

Forest Base formation

GROWTH

Organic Growth
Consolidation

INITIATIVES IN THE VALUE CHAIN

Bio industry
Logistics
Options

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