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Klabins consolidated financial statements are presented in accordance with International Financial Reporting Standards (IFRS), as determined by CVM Instructions 457/07 and 485/10. Data for prior periods were adjusted for comparison purposes.
R$ million Sales volume - 1,000 t
% Domestic Market
1Q11 438
61%
4Q10 417
68%
1Q10 433
62%
1Q11/4Q10
1Q11/1Q10
5%
-7 p.p.
1%
-1 p.p.
Net revenue
% Domestic Market
957
74%
931
78%
844
75%
3%
-4 p.p.
13%
-1 p.p.
203 249
26%
315 231
25%
148 242
29%
-36% 8%
1 p.p.
37% 3%
-3 p.p.
140 2,002
2.1 x
225 2,128
2.2 x
42 2,528
3.1 x
Capex
LTM - last twelve months N/A - Non applicable
115
138
46
Note: Due to rounding, some figures in tables and graphs may not result in a precise sum.
1Q11 Highlights
Sales volume: 438 thousand tonnes, up 1% from 1Q10; Net revenue: R$ 957 million, up 13% from 1Q10; Net revenue from domestic sales: R$ 711 million, up 13% from 1Q10; Net revenue from exports: R$ 246 million, up 14% over 1Q10; Solid cash position: investments reach R$ 2.6 billion; Net debt down R$ 125 million from December 2010, ending the period at R$ 2.0 billion; Net debt/EBITDA ratio falls from 3.1x in March 2010 to 2.1x in March 2011; Net income: R$ 140 million in 1Q11, versus R$ 42 million in 1Q10.
Investor relations Antonio Sergio Alfano Luiz Marciano Vinicius Campos Daniel Rosolen Lucia Reis +55 11 3046-8401
Conference call Portuguese Friday, 04/29/11 9am (EDT) Phone: +55 11 4688-6331 Password: Klabin Replay: +55 11 46886312 Password: 1504511 English Friday, 04/29/11 10am (EDT) Phone US: 1-888-700-0802 Password: Klabin Replay: +55 11 46886312 Password: 1435076
1Q11 Summary
Klabin, Brazils largest paper producer, exporter and recycler and the leader in the paper, coated board for packaging, corrugated boxes, industrial bags and logs for sawmills and planer mills markets, closed 1Q11 with EBITDA (earnings before interest, tax, depreciation and amortization) of R$ 249 million, accompanied by EBITDA margin of 26%, for EBITDA growth of 3% and 8% from 1Q10 and 4Q10, respectively. In the first quarter, Klabins net income totaled R$ 140 million, boosted by the financial income in the period, given the appreciation in the Brazilian real, compared to a R$ 42 million result in first quarter of 2010,.
500 450 400 350 300 250 200 150 19% 100 50 0 17% 15%
Net income
(R$ milliion)
225 140
21%
42
1Q11
4Q10
1Q10
1Q11
4Q10
1Q10
Sales volume, excluding wood, reached 438 thousand tonnes in the first quarter, up 1% from 1Q10 and 5% from 4Q10, mainly reflecting the higher volumes from sales of kraftliner and coated boards, which jointly accounted for 64% of 1Q11 total sales. At the close of March 2011, the Companys net revenue amounted to R$ 957 million, up 13% and 3% from 1Q10 and 4Q10, respectively. The domestic market accounted for 74% of total net revenue, corresponding to R$ 711 million. This figure represents growth of 13% from 1Q10 and a reduction of 3% from 4Q10. Exports, on the other hand, grew significantly in the first three months of 2011, accounting for R$ 246 million of the periods consolidated net revenue, up 15% from 1Q10 and 23% from 4Q10.
Sales volume excluding wood
(tsd tonnes)
438 EM 169 957 417 133 433 EM 165 711 730 246
Net revenue
(R$ million)
931 201 844 215
DM
269
283
269
DM
630
1Q11
4Q10
1Q10
1Q11
4Q10
1Q10
Klabins ended the period with a strong cash position, with cash and cash equivalents totaling R$ 2.6 billion on March 31, 2011, for growth of approximately R$ 300 million from 1Q10 and a reduction of R$ 91 million from December 2010. This amount is equivalent to 3.1x the volume of short-term gross debt. Net debt stood at R$ 2,003 million on March 31, 2011, for a reduction of R$ 125 million from December 2010. The net debt/EBITDA ratio fell from 3.1x in March 2010 to 2.1x at the close of 1Q11. In the first quarter, Klabins Board of Directors elected Mr. Fabio Schvartsman as the Companys new CEO, due to the retirement of Mr. Reinoldo Poernbacher.
2 2
1Q11/4Q10
1Q11/1Q10
-2% -2%
-7% -9%
3 3
438
39%
417
32%
433
38%
Kraftliner 25%
61%
68%
62%
1Q11
4Q10
1Q10
Export Market
does not include wood
Domestic Market
Net Revenue
Net revenue in 1Q11, including wood, totaled R$ 957 million, up 13% from 1Q10 and 3% from 4Q10, reflecting the higher sales volume.
957
26%
931
22%
844
25%
74%
78% 75%
Kraftliner 15%
1Q11
Domestic Market
4Q10
1Q10
Export Market
includes wood
4 4
Europe 17%
Europe 17%
Asia 28%
Asia 29%
5 5
EBITDA Composition R$ million Operational result (after financial result) (+) Financial result (+) Depreciation, amortization, depletion (-) Biological assets adjust EBITDA EBITDA Margin
N / A - Not applicable
1Q11/4Q10
1Q11/1Q10
03/31/11 848
506 342
12/31/10 842
496 346
Long term
Local currency Foreign currency
3,793
1,421 2,372
4,015
1,506 2,509
Gross debt
Local currency total Foreign currency total
4,641
1,927 2,714
4,857
2,002 2,855
6 6
Net Income
Net income was R$ 140 million in 1Q11, versus R$ 42 million in 1Q10 and R$ 225 million in 4Q10. In addition to the factors mentioned earlier, 1Q11 net income was positively impacted by the variation of R$ 108 million in biological assets and negatively impacted by the depletion at fair value of biological assets of R$ 85 million.
Business Performance
Consolidated information by operational segment
Consolidation adjustments
Forestry
Papers
Conversion
Total
74 -
254 225
383 21
711 246
74
120
479
203
404
4
(327)
957
-
194
107 (213)
682
(501)
408
(323)
(327)
326
957
107 (711)
Gross income
Operating expenses
88
(16)
181
(82)
85
(48)
(1)
(4)
353
(150)
72
99
37
(5)
203
Note: The figures in the table for total net sales include sales of other products.
FORESTRY
In 1Q11, the volume of wood sales to third parties totaled 737 thousand tonnes, up 8% from 1Q10 and down 3% from 4Q10. The lower sales in relation to 4Q10 were basically due to the heavy rains in the period.
Sales Volume (thousand tons) 737 761 682 68 Net Revenue (R$ million)
66 53
1Q11
4Q10
1Q10
1Q11
4Q10
1Q10
7 7
Net revenue from log sales to third parties in 1Q11 came to R$ 68 million, up 27% and 3% from 1Q10 and 4Q10, respectively. In March, own and third-party planted areas totaled 211,000 hectares, of which 133,000 hectares were planted with pine and 78,000 hectares with eucalyptus. In addition to its planted areas, Klabin has 193,000 hectares of permanent preservation and legal reserve areas.
PAPER
The volume of paper and coated board sales to third parties totaled 279 thousand tonnes in 1Q11, up 13% and 2% from 1Q10 and 4Q10, respectively. Exports in the quarter totaled 162 thousand tonnes, growing by 29% and 4% in relation to 1Q10 and 4Q10, respectively. Net revenue from paper and board sales totaled R$ 473 million in 1Q11, up 10% from 1Q10 and 12% from 4Q10.
Kraftliner
Kraftliner sales volume was 111 thousand tonnes in 1Q11, increasing by 1% and 26% from 1Q10 and 4Q10, respectively. Kraftliner exports stood at 79 thousand tonnes in the quarter, representing 71% of total sales of this product. Domestic kraftliner sales reached 32 thousand tonnes in 1Q11, increasing by 12% and 10% in relation to 1Q10 and 4Q10, respectively. Kraftliner net revenue amounted to R$ 141 million in the first quarter, up 20% and 14% from 1Q10 and 4Q10, respectively.
Sales Volume (thousand tonnes) 111 88
71% 67% 74%
29%
33%
26%
1Q11
4Q10
1Q10
Exports
1Q11
4Q10
1Q10
Domestic Market
According to FOEX, the average list price in USD of kraftliner brown 175g/m2 in Europe rose 2% in both euro and dollar terms in 1Q11, reaching US$824 per metric ton.
8 8
1.364
1.373
516
501
487
486
462
411
385
404
433
478
533
592
602
1T08
2T08
3T08
4T08
1T09
2T09
3T09
4T09
1T10
2T10
3T10
4T10
1T11
Quarter average
Kraftliner ( / tonne)
Coated Board
In 1Q11, coated board sales volume totaled 168 thousand tonnes, growing by 3% from 1Q10 and 7% from 4Q10. Domestic sales volume stood at 84 thousand tonnes, contracting by 3% and 7% from 1Q10 and 4Q10, respectively. Coated board exports totaled 79 thousand tonnes in 1Q11, 3% lower than in 1Q10 and 33% higher than in 4Q10.
Sales Volume (thousand tonnes) 168 158 163 332 306
50% 43% 47%
304
50%
57%
53%
1Q11
4Q10
1Q10
Exports
1Q11
4Q10
1Q10
Domestic Market
According to data from the Brazilian Association of Pulp and Paper Producers (Bracelpa), coated board sales volume in the domestic market, excluding liquid packaging board, totaled 119 thousand tonnes in 1Q11, down 13% from 1Q10. However, the increase in sales of coated board for liquid packaging partially offset the reduction in folding box and carrier boards.
9 9
Corrugated boxes
Shipments of corrugated boxes totaled 121 thousand tonnes in 1Q11, up 1% from 1Q10 and down 4% from 4Q10.
Sales Volume (thousand tonnes) 126 Net Revenue (R$ million)
121
119
288
304 249
1Q11
4Q10
1Q10
1Q11
4Q10
1Q10
Net revenue totaled R$ 288 million in 1Q11, up 16% from 1Q10 and down 5% from 4Q10. According to the Brazilian Corrugated Boxes Association (ABPO), corrugated box and sheets shipments in the quarter totaled 605 thousand tonnes, expanding 1% from 1Q10.
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
3Q09
4Q09
1Q10
2Q10
3Q10
4Q10
1Q11
Quarter average
Monthly volume
10 10
116 33 34 33
116
109
1Q11
4Q10
1Q10
1Q11
4Q10
1Q10
Preliminary data from the National Cement Industry Union (SNIC) and market estimates indicate that domestic cement sales totaled 14 million metric tons in 1Q11, an increase of 7% from 1Q10 and a reduction of 4% from 4Q10. During the first quarter the Company was selective in industrial bags sales, aiming better mix and better margin segments.
1Q08
2Q08
3Q08
3Q09
3Q10
4Q10
1Q11
Capital Expenditure
Capex came to R$ 115 million in 1Q11, of which 64% was allocated to the Paper Business Unit, 32% to the Forestry Business Unit and 4% to the Conversion Unit. These figures are shown in the chart below:
11 11
Klabin continues to invest to improve its energy matrix. In January 2011, the biomass boilers at the Otaclio Costa plant in Santa Catarina began operations, with satisfactory initial results in terms of the reduction in fuel oil consumption. The evaporation system of this industrial unit is currently being refurbished. The new biomass boiler at the plant in Correia Pinto, Santa Catarina continues to be expected to start operations in early 2Q12. The Companys corrugated boxes units received investments of approximately R$ 100 million, which was allocated to the installation of new corrugators at the plants in Goiana, Pernambuco and in JundiaDI, So Paulo. The industrial bags unit received a complete new line for the production of valve bags, which will be installed at the plant in Lages, Santa Catarina.
Capital Markets
Stock Performance
March 31st, 2011 Preferred shares Share price (KLBN4) Book value Average daily trading volume 1Q11 Market capitalization 600.9 million R$ 6.60 R$ 5.59 R$ 13.0 million R$ 5.8 billion
In 1Q11, the price of Klabin's preferred shares (KLBN4) gained 13%, while the Bovespa index declined by 1%. In the last 12 months, Klabins preferred shares (KLBN4) gained 37%, compared to 2% increase of the Bovespa index.
Performance KLBN4 x Brazilian Index (Ibovespa)
137
100
102
Mar10
Nov10
May10
Dec10
Sep10
Aug10
Klabin
Oct10
Ibovespa Index
12 12
Mar11
Apr10
Jul10
Jan11
Jun10
Feb11
Klabin stock was traded in all sessions on the BM&FBovespa, registering 146,553 transactions that involved 135 million shares, for average daily trading volume of R$ 13 million, 46% higher than in the previous quarter.
Average Daily Volume (R$ million/day)
22
17 15 14 12 9 6 4 6 7 9 9 10 9 9 8 9 10 8 7 12 14 14 13 12
Jun09
Aug09
Jun10
Apr09
Apr10
Aug10
Jul09
Jan10
Jul10
Mar09
Mar10
Jan11
May09
May10
Sep09
Sep10
Nov09
Klabin stock also trades in the U.S. market through Level I ADRs, which are listed on the over-thecounter market under the ticker KLBAY. Klabins capital is represented by 917.7 million shares, composed of 316.8 million common shares and 600.9 million preferred shares. Until March 31st, 2011, Klabin had 27.2 million preferred shares in treasury.
Dividends
The Annual Shareholders Meeting held on April 4, 2011 approved the payment of complementary dividends for fiscal year 2010 of R$ 73.85 per lot of thousand common shares and R$ 81.24 per lot of thousand preferred shares. As a result, the dividends distributed relative to fiscal year 2010 will total R$ 190 million.
13 13
Nov10
Mar11
Dec09
Dec10
Feb10
Feb11
Oct09
Oct10
Conference Call
Friday, April 29, 2011 at 10:00 a.m. (Braslia). Code: Klabin Dial-in: +55 (11) 4688-6331 Replay: +55 (11) 46886312 Code: 1504511 Conference Call Friday, April 29, 2011 at 9:00 a.m. (Eastern time). Code: Klabin Dial-in: U.S. participants: 1-888-700-0802 International participants: 1-786-924-6977 Brazilian participants: +55 (11) 4688-6331 Replay: +55 (11) 46886312 Code: 1435076 Webcast An audio webcast of the conference call will also be available on the internet. The conference call will also be broadcast over the internet. Access: www.ccall.com.br/klabin
With gross revenue of R$ 4.4 billion in 2010, Klabin is the largest integrated manufacturer of packaging paper in Brazil, with annual production capacity of 1.9 million metric tons. Klabin has adopted a strategic focus on the following businesses: paper and coated board for packaging, corrugated boxes, industrial bagss and wood. Klabin is the leader in all its market segments.
The statements made in this earnings release concerning the Company's business prospects, projected operating and financial results and potential growth are merely projections and were based on Managements expectations regarding the Companys future. These expectations are highly susceptible to changes in the market, in the state of the Brazilian economy, in the industry and in international markets, and therefore are subject to change.
14 14
4Q10
1Q10
% of Net revenue
1Q11
4Q10
1Q10
1,144,430 957,005 107,807 (711,334) 353,478 (85,750) (55,341) (9,124) (150,215) 203,263 (93,923) 68,753 58,728 33,558 236,821 (87,842) (8,777) 140,202 153,894 (107,807) 249,350
1,125,347 930,940 147,612 (591,580) 486,972 (77,435) (56,542) (37,656) (171,633) 315,339 (76,722) 66,695 43,010 32,983 348,322 (114,063) (9,117) 225,142 63,599 (147,612) 231,326
1,022,474 844,385 87,523 (665,405) 266,503 (72,565) (45,934) 465 (118,034) 148,469 (81,755) 42,449 (41,280) (80,586) 67,883 (23,010) (3,290) 41,583 181,133 (87,523) 242,079 26.1% 24.8% 28.7% 74.3% 36.9% 9.0% 5.8% 1.0% 15.7% 21.2% 9.8% 7.2% 6.1% 3.5% 24.7% 9.2% 0.9% 14.7% 16.1% 63.5% 52.3% 8.3% 6.1% 4.0% 18.4% 33.9% 8.2% 7.2% 4.6% 3.5% 37.4% 12.3% 1.0% 24.2% 6.8% 78.8% 31.6% 8.6% 5.4% 0.1% 14.0% 17.6% 9.7% 5.0% 4.9% 9.5% 8.0% 2.7% 0.4% 4.9% 21.5% 100.0% 100.0% 100.0%
15
Mar-11
4.015.790 19.063 2.415.810 203.465 770.979 475.446 86.880 44.147
Dec-10
4.127.147 39.880 2.491.225 198.222 753.961 460.128 131.102 52.629
Mar-11
1.673.997 847.781 272.144 10.724 40.387 64.903 373.182 64.876 5.232.998 3.793.117 1.275.130 164.751 5.132.943 1.500.000 84.491 51.224 2.403.120 1.082.079 (128.353) 140.382 180.977 12.220.915
Dec-10
1.690.913 842.121 269.839 37.013 40.669 93.542 2.584 349.340 55.805 5.415.828 4.014.976 1.235.635 165.217 4.994.085 1.500.000 84.491 51.404 2.365.900 1.120.643 (128.353) 160.417 12.261.243
Noncurrent Assets
8.205.125
8.134.096
Deferred income tax and social contribution Other accounts payable Stockholders' Equity
Taxes to compensate Judicial Deposits Other receivables Other investments Property, plant & equipment, net Biological assets Intangible assets
Capital Capital reserves Revaluation reserve Profit reserve Valuation adjustments to shareholders' equity Treasury stock Accumulated Profits Minority Interests
Total
12.220.915
12.261.243
Total
16
3Q11 84 0 84 55 1 25 80 165
After 2018
440
495
341
98
303
423 338 314 310 354 221
179
84 95
2Q11
165
80 84
3Q11 4Q11
164
130
243
82
2012 2013 2014 2015 2016
35
2017
17
1Q10
227.171 159.842 41.583 54.217 126.916 (87.523) 238 3.618
18