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3rd Latin America One on One Conference

December 2011

Forward looking statement

The statements contained in this presentation related to the business outlook, operating and financial projections, and growth prospects of Klabin S.A. are merely projections, and as such are based exclusively on the expectations of the Companys management concerning the future of the business.

These forward-looking statements depend substantially on the market conditions, the performance of the Brazilian economy, the industry and international markets, and therefore are subject to change without prior notice.

This presentation on Klabins performance includes non-accounting and accounting data, such as operating and financial information, as well as projections based on Managements expectations. Note that the non-accounting data has not been reviewed by the Companys independent auditors.

The Companys management believes EBITDA may provide useful information on the Companys operating performance and allow for comparisons with other companies in the same industry. Note however that EBITDA is not a measure established in accordance with generally accepted accounting principles of the International Financial Reporting Standards IFRS, and may be defined and calculated differently by other companies.

Financial figures
Net revenue
(R$ million)
24%
3,663

3,097 2,960

22%

Sales volume
28% 24%

(thousand tonnes)

11%
1,716 1,579 1,544

78% 39% 72% 76% 36%

32%

61%

64%

68%

2008

2009

2010

2008

2009

2010

Domestic market
3

Export market

EBITDA

(R$ million)
500 450 400 350 300 250 200 150 100 50 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 5% 0% 180 150 10% 199 219 242 236 25% 22% 20% 252 231 249 190 277 27% 27% 29% 26% 26% 25% 26% 28% 35% 30% 25% 20% 15%

EBITDA
4

EBITDA Margin

Business units

Wood logs 7% *

Kraftliner 14% *

Coated boards 34% *

Total net revenue: R$ 2.9 billion in 9M11

Corrugated boxes 32% *

Industrial bags 12% *

Notes: * Percentage of 9M11 net revenue. In 9M11, 1% of sales volume was composed of other products.

A company 100% integrated

Domestic market

wood logs

planted forests: 243 thousand ha

pulp coated boards

Domestic & export markets


industrial bags

pine and eucalyptus

short fiber and long fiber pulp kraftliner

Domestic market
o.c.c. recycled paper corrugated boxes

paper capacity: 1.9 mi tonnes Notes: All figures refer to installed production capacity. OCC Old Corrugated Container

Forestry base November, 2011

95 Km *

95 Km * 51 Km * 51 Km *

So Paulo Paran

73 Km *
Santa Catarina

73 Km *

(thousand ha) Eucaliptus Pine Planted area Native Others Total

82 161 243 211 51 505

Note: All forests used in the paper production are certified by FSC (Forest Stewardship Council). * Average distance excluding Vale do Corisco.

Klabin Vale do Corisco

Business and Markets


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Coated boards
LPB + FBB

Sales volume
(thousand tonnes)

Net revenue
(R$ million)

656 488
Monte Alegre (PR)

499
46% 47%

531
40%

1247 972 941 988

46%

54% 54% 53%

60%

9M11

9M10

2010

2009

9M11

9M10

2010

2009

Note:

LPB Liquid packaging board FBB Folding box board

Domestic Market

Exports

Liquid packaging board


LPB Market Higher technology; Few producers in the world; Higher added value; Sharp growth in Brazil and China. Klabin in LPB 4th largest player in the world; Number 1 in Tetra Paks suppliers evaluation in 1Q11 and in 2Q11; Sales to Brazil, Argentina, China, Singapore, Pakistan and Spain.

Source: Pyry, 2010 and ABLV (Brazilian Association of UHT Milk) Notes: LPB Liquid Packaging Board / UHT Ultra High Temperature

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Folding box board (FBB)


FBB market Trend of substitution of recycled fiber for virgin fiber due to issues related to food contamination; High technology; Supplier / customer long-term relationship.

FBB Domestic Market


(thousand tonnes)

Klabins share
(%)

576 504 508 507 381

25% 18% 13%

27%

28%

2007

2008

2009

2010

9M11

2007

2008

2009

2010

9M11

Source: Brazilian Association of Pulp and Paper (Bracelpa), and Klabin.

Brazilian Market

Klabin's share

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Kraftliner

Goiana (PE)

URUGUAI

Sales volume

Net revenue
(R$ million)

(thousand tonnes)

Guapimirim (RJ) Piracicaba (SP) Angatuba (SP) Monte Alegre (PR) Correa Pinto (SC) Otaclio Costa (SC)

367 314 279


60% 64% 58%

393 399 343


78%

466 385

36%

42%

40% 22%

9M11

9M10

2010

2009

9M11

9M10

2010

2009

Kraftliner Recycled

Domestic Market

Exports

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Kraftliner
Latin America 7% Asia & Oceania 16% North America 56% Europe 18% Af rica & Middle East 3%

Containerboard World Capacity


(million tonnes)

Virgin fiber kraftliner Recycled Semi-chemical Total

34 104 9 147

Kraftliner market in Brazil Virgin fiber kraftliner capacity totals 2 million tonnes in Brazil; Klabins capacity: 800 thousand tonnes; Most producers of corrugated boxes are non-integrated and as a result they manufacture sheets with recycled paper; Non-integrated producers have their cost determined by the price of OCC (old corrugated containers).

Source: RISI World Containerboard Capacity Report (2010).

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Corrugated boxes
Domestic market only; Brazilian demand in 2010 was 3.1 million tonnes *; Klabins market share: 16%; Fragmented market with many players in Brazil.
Goiana (PE)

Feira de Santana (BA)

Sales volume
(thousand tonnes)

Net revenue
(R$ million)

Betim (MG)

Del Castilho (RJ) Jundia TP & DI (SP) Piracicaba (SP)

1157 512 457 379 386 919 853 946

Itaja (SC)

So Leopoldo (RS)

9M11

9M10

URUGUAI

2010

2009

9M11

9M10

2010

2009

* Source: ABPO Brazilian Association of Corrugated Boxes

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Industrial bags
Domestic and export markets; Few players; 80% cement
Goiana (PE)

Sales volume
(thousand tonnes)

Net revenue
(R$ million)

472 142
Lages 1 (SC) Lages 2 (SC)

130 101 108

359

356

429

Pillar

9M11

9M10

2010 2009 URUGUAI

9M11

9M10

2010

2009

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Performance
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High performance

Sustainable reduction in operational cost

1. Monte Alegre mill R$ 300 million (basis of fixed costs); 2. G&A R$ 150 million (basis of fixed costs); 3. Forestry benchmark; 4. Change in structure of the forestry area; 5. Forestry R$ 200 million (basis of fixed costs); 6. High return investments; 7. Reverse outsourcing.

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INDG *
50 coordination teams 8 fixed cost groups People Maintenance Stoppages Third parties Rent Transport Taxes and ensurance Comunication and general expenses Total Warehouse Shipments R$ R$ R$ R$ R$ R$ R$ R$ R$ Paper Machine R$ R$ Entities: R$ R$ R$ R$ R$ R$ R$ Wood yard ... Laws Total R$ R$ R$ R$ R$ R$ R$ R$ R$

Packages: groups of similar expenses

R$ R$ R$ R$ R$ R$ R$ R$ R$

R$ ... R$ R$ ... R$ where the expenses occur R$ ... R$ R$ ... R$ R$ ... R$ R$ ... R$ R$ ... R$ R$ ... R$ R$ ... R$ Crossed control: 18 Areas

6 variable cost groups Wood and fibers Energy and utilities Chemicals GRU/GFI Chemicals GPP Paints Packaging and other materials Total

PMAD R$ R$ R$ R$ R$ R$ R$

ESCO R$ R$ R$ R$ R$ R$ R$

FCC FRE ... 2 managers controlling R$ R$ R$ R$ R$ R$ R$

RVAP the R$ R$ R$ R$ R$ R$ R$

Total R$ R$ R$ R$ R$ R$ R$

same expense!
R$ R$ R$ R$ R$ R$ R$ ... ... ... ... ... ... ...

* INDG Institute for Managerial Development the largest organization in business management consultancy in Brazil.

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Cost reduction
Forestry benchmark Harvest Increase length of the logs; Change in shift operation; Reverse outsourcing;

Timber transport Dryer wood; Utilize logistical potential of the forest;

Silviculture Mechanization of activities; Reverse outsourcing.

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Capex
(R$ million) 23%

Vale do Corisco
49%

Manuteno Maintenance Special projects Silvicultura Forestry


28%

587 247
2008 2009

386
2010

305
2011*

Improvements
Biomass boiler in Otaclio Costa mill Evaporation plant improvement in Otaclio Costa mill High voltage transmission line in Monte Alegre mill Biomass boiler in Correa Pinto mill Debottlenecking in Monte Alegre mill Mar/11 Oct/11 Nov/11 Jun/12 Oct/12 Investments R$ 290 million

Capacity growth
New industrial bags production line New corrugators in Jundia DI and Goiana mills
*From January to September 2011.

Dec/11 Jun/12

Investments R$ 135 million

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Reverse outsourcing

Industrial
Internal transportation (forklift trucks) Monte Alegre mill maintenance Fireman team in Santa Catarina State Otaclio Costa and Correa Pinto mills maintenance Aug/11 Sep/11
245 employees

Sep/11 Oct/11

Forestry
Angatuba (So Paulo State) Soil preparation and mechanization Santa Catarina State harvesting Jan/12 Feb/12 Jul/12
140 employees

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Unit cash cost reduction

Unit cash cost (excluding non recurring) INDG in Monte Alegre mill; Reverse outsourcing in Monte
-5%

Alegre mill; Biomass boiler in Otaclio Costa mill.

Total cash cost in 2011


R$ 2.8 billion Jul Aug/2011 Sep/2011

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Variable compensation
Change in compensation metrics for performance improvement

Klabin adopted new metrics of variable compensation according to the best practices of public companies in Brazil.

Focus in variable compensation; Aggressive individual and team goals; Long-term incentives through equity grants (matching); Starts with all executive officers and directors.
Better performance; Alignment; Improvement of strategic behavior.

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Strategy
24

Strategy

Kraftliner

To strengthen current businesses.

To support corrugated boxes growth in Brazil

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Vale do Corisco

Arapoti (Arauco)

Jaguariaiva (Arauco)

Monte Alegre (Klabin)

Klabin 26 Vale do Corisco

Vale do Corisco

Vale do Corisco acquisition


107 thousand hectares of forests; 63 thousand hectares planted; US$ 473.5 million to be paid in November 2011; Klabins part: 51%.

With this acquisition, Klabins planted forests will total 243 thousand hectares, in which 110 thousand hectares will be available for new industrial projects, being 60% pine and 40% eucalyptus.

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New pulp line Klabin

FSC Synergy

Average hauling distance

Domestic market and exports

Productivity

Flex

Energy generation

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Main uses

Tissue

Eucalyptus

Specialties

Less market volatility; Consumer goods;

Packaging

Long Fiber

Cash flow stability; Higher value added products;

Tissue

Fluff

Hygiene Domestic market

Fluff domestic market opportunity.

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Spread
US$/tonne
325

275

265

225

175

160

125

75

25

-25
jan/07 jan/08 jan/09 jan/10 jan/11

SBSK x BEKP
30
Note: SBSK: Southern Bleached Softwood Kraft ; BEKP: Bleached Eucalyptus Kraft Pulp.

Fluff x BEKP

Long fiber Brazil *

Lack of new long fiber capacities in Brazil and all over the world.

(thousand tonnes)

2,030
479

High production costs in North

Imported

Hemisphere Mills shutting down or converting.

1551

High yield of pine in Brazil enables competitive advantage also in this segment.

2010

Source: Bracelpa
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*Includes Fluff

Integrated

Market pulp

Synergy
Klabin: 50 years experience on that region enables project synergies
Energy supply

Klabins know how

Supply chain competitiveness

Forestry management

Average hauling distance optimized

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Average hauling distance

Average hauling distance Monte Alegre: 50 Km

Average hauling distance new mill: 80 Km

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Competitive advantage

Hardwood Rotation
(years)

Softwood Rotation
(years)

Klabin South Africa Chile Portugal Sweden Finland

7 9 11 13 37 37

Klabin South Africa Chile Australia USA Sweden

15 25 25 35 45 100

Source: Pyry and Klabin

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World pulp cash cost (FOB)

US$ / tonne
700 600 500 400 300 200 100

Bleached hardwood

Bleached softwood

Iberia & Norway

France / Belgium

Brazil

BC Interior

Fra / Aus / Ger

Finland

Indonesia

Sweden

Finland

Russia

Chile

Chile

USA

China

Japan

USA

Sweden

Eastern Canada

BC Coast

Source: Klabin and Hawkins Wright, July 2011 FOB - Hardwood 1Q11 Estimates / Softwood 2Q11 Estimates

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Eastern Canada

Canada

Strategy

Kraftliner

To support corrugated boxes growth in Brazil

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Appendix
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Shareholder structure 09/30/2011

Common
Monteiro Aranha 20% BNDES 15%

Preferred
Treasury 5%

Brazilian investors 44% Brazilian investors 20%

Klabin Irmos 60%

Foreign investors 36%

316,827,563 shares

600,855,733 shares

Level 1 of Corporate Governance at BM&FBovespa

Tag along rights of 70% for preferred shares

Average daily trading volume in 9M11 R$ 13 million

Dividends in 2010 R$ 191 million (yield 4%*)

Note:

* over the price of the beginning of 2010.

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9M11 Highlights

Sales volume: 1% higher than 9M10; Net revenue: 6% growth comparing to the 9M10;
Appreciation of the dollar at the end of September led Net debt / EBITDA ratio from 2,2x in December 2010 to 2,4x in September 2011;

Net income: R$ 60 million, affected by the exchange rate variation in September; Diversification of Klabin's coated boards line offset the weaker domestic market; Brazilian corrugated boxes shipments 1% higher; Large maintenance stoppage in Monte Alegre mill in June; Complete revision of Klabins executive compensation system approved by Board of Directors.

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Sales

Sales volume
(Thousand tonnes)

Net revenue
(R$ million)

1,306

1,299
32%

2,895
22%

2,732
22%

34%

434
29% 71%

435
34% 66%

436
29% 71%

66%

68%

991
19% 81%

947
22% 78%

983
21% 79%

78%

78%

3Q11

2Q11

3Q10

9M11

9M10 Total

3Q11

2Q11

3Q10

9M11 Export Market

9M10

Domestic Market

Export Market

Domestic Market Total

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Unit cash cost (R$ / tonne)

Cash cost (R$ / tonne)


-2%

Cash cost without stoppage and non-recurring effects (R$ / tonne)

-2% -6% -1%

1,742 1,644 1,676 1,612 1,635 1,650

3Q11

2Q11

3Q10

3Q11

2Q11

3Q10

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Net debt

Strong cash position R$ 3.0 billion in September 30th , 2011.

5,500 4,500 3,500

4.4 3.7
3,192

3.6

3.1

2.8 2.2 2.2


2,128

2.1
2,002

2,676

2,528

2,462

2,500 1,500 500 (500)

2,886

2.0

2.4
2,313

Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11

6.0 5.5 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 -0.5 -1.0 -1.5 -2.0

2,106

Net Debt (R$ million)

Net Debt / EBITDA (LTM)

42

1,893

Loan maturity schedule


3,030

Exports revenue: R$ 839 mi (US$ 509 mi) in the last 12 months

R$ Million 920 858 778 737

505

591 453 367

Gross debt
397 340 283 233 406

392
136 251 190 90 43
2017

R$ 5,343
367 397

353 256

329

325

369

230

53
2018

29
2019

9
2020 forward

CASH

4Q11

2012

2013

2014

2015

2016

Local Currency

Foreign Currency

Local currency: R$ 1.86 billion Average tenor: 30 months


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Foreign currency: R$ 3.49 billion Average tenor: 50 months

Income statement
3Q11
Gross Revenue Net Revenue Change in fair value - biological assets Cost of Products Sold Gross Profit Selling Expenses General & Administrative Expenses Other Revenues (Expenses) Total Operating Expenses Operating Income (before Fin. Results) Financial Expenses Financial Revenues Net Foreign Exchange Losses Net Financial Revenues Net Income before Taxes Income Tax and Soc. Contrib. Net income (loss) from continuing operations . Owners of the Company . Noncontrolling interests Depreciation and amortization Change in fair value of biological assets EBITDA 1,199,418 990,623 19,255 (729,482) 280,396 (76,594) (64,311) 7,359 (133,546) 146,850 (105,533) 89,135 (500,955) (517,353) (370,503) 134,487 (236,016) (243,055) 7,039 149,811 (19,255) 277,406

2Q11
1,145,202 947,447 145,084 (772,704) 319,827 (76,652) (56,715) (9,603) (142,970) 176,857 (116,888) 84,090 102,273 69,475 246,332 (76,956) 169,376 163,143 6,233 158,630 (145,084) 190,403

3Q10
1,187,347 982,593 124,461 (767,347) 339,707 (77,427) (57,494) (1,490) (136,411) 203,296 (73,666) 66,203 151,385 143,922 347,218 (115,664) 231,554 225,706 5,848 173,271 (124,461) 252,106

9M11
3,489,050 2,895,075 272,146 (2,213,520) 953,701 (238,996) (176,367) (11,368) (426,731) 526,970 (316,344) 241,978 (339,954) (414,320) 112,650 (30,311) 82,339 60,290 22,049 462,335 (272,146) 717,159

9M10
3,305,865 2,732,377 301,013 (2,149,524) 883,866 (222,718) (158,334) 3,235 (377,817) 506,049 (231,591) 167,416 81,786 17,611 523,660 (175,767) 347,893 334,634 13,259 525,337 (301,013) 730,373

Note: Due to rounding, some figures in tables may not result in a precise sum.

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Wood
Forests (thousand hectares)
thousand ha Pine Eucalyptus Native Others Total Paran * 106 70 144 37 357 Santa Catarina 55 7 64 13 139 So Paulo 5 3 1 9 Total 161 82 211 51 505

Sales volume
(thousand tonnes)

Net revenue
(R$ million)

So Paulo Paran

3113
Santa Catarina

260 201 1892 194 158

2352 2091

9M11

9M10

2010

2009

9M11

9M10

2010

2009

Notes:

Forestry base in September 30th, 2011. Includes Vale do Corisco acquisition.

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OCC Price

OCC - Domestic delivered price


(R$ / tonne)

518 465 401 346 317 255 240 216 256 355 383

493 379 367 340

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

Quarter average

Monthly price

OCC Old Corrugated Containers. Last update: August 31st

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Corrugated boxes shipments

Annual shipments
(Thousand tonnes)

Quarterly shipments
(Thousand tonnes)

3,162 2,871 2,879 2,365 2,397


271 249 268 266 270 253 276

2008

2009

2010

2010 *

2011 *

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

Quarter average

Monthly shipments

Source: ABPO (Brazilian Association of Corrugated Boxes. Last update: September 30th January to September

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Imports

Share of imported paper in Brazil Apparent consumption 2010 * 2011 * 366 461 344 346 820 344 496 352 308 843 Share of imports 2010 * 2011 * 79.8% 11.5% 54.3% 5.6% 0.3% 78.7% 12.2% 61.8% 7.0% 0.2%

(thousand tonnes) Newsprint Uncoated printing and writing Coated printing and writing Coated boards FBB Kraftliner

Effective imports of goods packed (monthly average - tonnes) Industrialized food Pharmaceutical Toys Hygiene Footwear 2009 ** 252,571 2,727 2,550 3,846 1,506 2010 ** 286,043 3,201 3,611 5,761 1,320 2011 ** 334,603 3,116 3,145 6,995 1,757
2011 ** / 2010 **

17% -3% -13% 21% 33%

Note:

* January to July 2011. Source: Bracelpa (Brazilian Association of Pulp and Paper) ** January to June 2011. Source: SECEX / MDIC - Receita Federal SP. 07/26/2011

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IR Team Phone: +55 11 3046-8401 www.klabin.com.br/ir


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invest@klabin.com.br

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