apresentaogs_dec09
TRANSCRIPT
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Goldman Sachs First Annual Global Emerging Markets Conference
December 2009
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The information contained in this presentation may include statements which constituteforward-looking statements, within the meaning of Section 27A of the U.S. SecuritiesAct of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of1934, as amended. Such forward-looking statements involve a certain degree of riskand uncertainty with respect to business, financial, trend, strategy and other forecasts,and are based on assumptions, data or methods that, although considered reasonableby the company at the time, may turn out to be incorrect or imprecise, or may not bepossible to realize. The company gives no assurance that expectations disclosed in
this presentation will be confirmed. Prospective investors are cautioned that any suchforward-looking statements are not guarantees of future performance and involve risksand uncertainties, and that actual results may differ materially from those in theforward-looking statements, due to a variety of factors, including, but not limited to, therisks of international business and other risks referred to in the companys filings withthe CVM and SEC. The company does not undertake, and specifically disclaims anyobligation to update any forward-looking statements, which speak only for the date onwhich they are made.
Disclaimer
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Agenda
The Company
Market Positioning
Pulp Market
3Q09 Financials
Recent Events
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The Company
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VCP and Aracruz Merged to Create Fibria
1 Aftertheconsummationofthestockswapmerger2 BNDESPar has21%linkedtoashareholdersagreementwithVIDduringthefirst3years,and10.9%duringthefollowing2years.
ShareholderStructure(1)
PresentvalueofR$4.5billionofannouncedpostmergersynergies
Upto2012,90%ofactionstoextractsynergiesareexpectedtobeinplace
16%
15%
6%
11%
2%
27%
23%
ForestrySG&A
Commercial
Tax
Logistics Others
Industrial
Votorantim
IndustrialS.A.BNDESPar FreeFloat
Conpacel
Veracel
Celulose S.A.
29.3% 34.9%(2) 35.8%
100.0% 50.0%
50.0%
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Improved Corporate Governance
Board Advisory CommitteesBoard of Directors
CEO
Boardof
Directors
Executive Board
Ind.Ops&
Engineering
FranciscoValrio
Comm.&Intl
Logistics
JooFelipeCarsalade
Paper,
Planning,
Procurement,
andForestry
Ops.&Tech
MarceloCastelli
Controllership
&Risk
Management
Evando Coura
HumanandOrg.
Development
MiguelCaldas
Treasury& IR
MarcosGrodetzkyEach officer with more than 20 years experience in the sector
Auditing
Personnel
and
Remuneration
Finance
Sustainability
CarlosA.Aguiar
BNDES RepresentativeEduardo Rath Fingerl
BNDES RepresentativeArmando Mariante Carvalho Junior
Votorantim RepresentativeJoo Miranda
Votorantim RepresentativeWang Wei Chang
Jos Luciano Penido Chairman of the Board
Raul Calfat Votorantim Representative
Alexandre DAmbrosio Votorantim Representative
Migration
to
BM&FBovespas Novo
Mercado level
of
Corporate
Governance
at
Bovespa to
occur
still
in
2009
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Market Positioning
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CompetitiveStrengths
Creation of a Winning Player
Pulpproductioncapacity:5.4MT/year(1)
Paperproductioncapacity:313kT /year(1)
Eucalyptusplantation:604thousandha(1)
4plantsandoperationof3portterminals,includingtheonlyspecializedwoodpulpterminalinBrazil,ownedbyus
Highyieldineucalyptusproduction(4055m3/ha/year)andcertifiedforests
Shortharvestcycle:6yearsvs.2570yearsinSouthernU.S.,CanadaandScandinavia
PulpMillPaperMill
BelmonteVeracelCaravelas
PortocelAracruz
PiracicabaJacareiSantos
Trs LagoasConpacel
SuperiorAssetCombination
PortTerminal
DataasofNov.30,2009.1 Note:ExcludingGuaba.
LeadershipinMarketPulp
ScaleandIntegratedOperations
UniqueForestryManagement:AdvancedForestryTechniquesand
ShortHarvestCycle
ForesttoPort
IntegrationTrough
EfficientLogistics
LowProductionCostDNA
Strong/ReliableCustomerBase
ModernIndustrialPlants
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MarketShare(1)
Undisputable Leadership in the Global Market Pulp
PulpProductionCapacity
0 1.000 2.000 3.000 4.000 5.000 6.000
Stora Enso
Cenibra
West Fraser
Mercer
ENCEGeorgia Pacific
Ilim
IP
Domtar
Canfor
APP
Weyerhaeuser
Suzano
Tembec
CMPC
Botnia
Sodra
APRIL
Arauco
Fibria
BSKP BHKP UKP Mech.
2009Einktons
Source:PYRY,2007/AsfromMarketPulp:PulpandPaperProductsCouncil (PPPC)2009andAracruz.Note:Capacityabovementione doesnot includetheGuaba unit.1 MarketShareestimatedconsidering2009nominalcapacity.
5,400
Dominant Position in a Growing Market
1st
~Twicethesize
5,19,7 13,8
16,1
33,443,1
49,5 49,1
1995 2003 2007 2008BEKP Total Market Pulp
PulpDemand(inktons)
CAGR9508:9%
CAGR9508:3%
Growth0708:16%
Growth0708:(1%)
3%
11%
22%
34%
Total
Pulp:
188millionMT
TotalHardwood
Pulp:
25millionMT
TotalMarket
Pulp:
49millionMT
TotalEucalyptus
Pulp:
16millionMT
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253 296
139 177305
244 221157 123 93 82
233 159
279 239103
163 184
98 122 141 124
486455 418 416 408 407 405
255 245 234 206
Wood Others
Low Production Cost DNA
Unique Expertise Enabling the Lowest Cash Cost in the Market and High Profitability
1Source:Companies earningsreleases,HawkinsWrightandBanco CentraldoBrasil.2 Source:HawkinsWright,July2009.Note:EBITDAMarginconsidersAracruz andVCPcombined.
CashCost2Q09(US$/t)
HardwoodCashCost(US$/t)vs.Capacity(kT)2Q09
CashCosts(2)
2,35
2,933,07
2,93
2,43
2,18
1,951,84
2,08
2001 2002 2003 2004 2005 2006 2007 2008 LTM
6M09
45% 48%
50%
47%
43%42% 41%
36%
30%
EBITDAMargin(%)
Avg.BEKPPulpPrices(US$/ton)
Avg.FXRate(R$/US$)
Iberia
0
100
200
300
400
500
600
0 2.000 4.000 6.000 8.000 10.000 12.000
Iberia
206
479 468510
531
594648
711
778
611
Fibrias Marginvs.MacroeconomicFundamentals(1)
Capacity(kT)
US$/ton
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State-of-the-Art Production Facilities
ModernPlants
Advanced Technology and Production Process Lead to Lower Usage of Raw Materials,Reducing Costs
andAllowingforaUniqueTrackRecordofQualityProducts
Streamlinedandefficientoperationsduetomodernplants
Environmentalfriendly
productionprocess
Reducedemissionsanddispositionofresidues
Efficientuseofchemicals
CompetitiveAdvantages
AracruzCapacity2.3mtTechnicalage:9
Trs LagoasCapacity1.3mtTechnicalage:0
JacareCapacity1.1mtTechnicalage:5
AveragePlantCapacity(000tons)
2,500
2,000
1,500
1,000
500
40 30 20 10
Russia
Japan
USASweden
CanadaPortugalFinland
FranceSpain
ChileSouthAfrica China
Brazil
Indonesia
Uruguay
Technicalageoftheequipment(years)
LARGESTSINGLE
LINEPULP
PRODUCTION
FACILITYINTHE
WORLD
1 LasttwelvemonthsendingJune30,2009.
VeracelCapacity1.1mtTechnicalage:3
BESTYIELDPER
HECTARE OFTHE
WORLD
Indonesia
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1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Expected
Aracruz VCP Fibria
Unique Brownfield Potential Growth
Fibria has the Best Sites Ready to Almost Duplicate Capacity
Inmillionoftones
HistoricalandPlannedCapacityIncrease
1978:Startupofmill"A"atAracruz (Barra doRiacho)unit
1988:AcquisitionofCelpav 1992:AcquisitionofPapel Simo (Jacare unit) 1996:NewpulplineatJacare mill 1991:Startupofmill"B"atBarra doRiacho unit 2003:ExpansionofJacare mill 2003:AcquisitionofRiocell (Guaiba Unit) 2005:StartupofVeracel 2002:Startupofmill"C"atBarra doRiacho unit 2007:AssetswapLuisAntnio forTrs Lagoas 2008:EstablishmentofConpacel consortium 2009:StartupofTrs Lagoas mill
5.4
1,5
1,5
1,5
0,7
5,2
Veracel II
Trs Lagoas II
Expansion
BarradoRiacho IV
Losango I
10.6
Bestsitesforadditionalcapacity
Br ow nf iel d B row nfi el d Gr ee nfi el d Br own fiel d
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Long Term Relationship With Key Clients
Premium Paper Producers Value High Quality Pulp Customized Products
WhichImpliesinLessVolatilityinSalesVolumeThroughoutEconomicCycles
GlobalFootprint
Suppliescustomizedpulpproductstospecificpapergrades
Solesuppliertokeycustomersfocusedoneucalyptuspulptothe tissuemarket
Top10maincustomersrepresentonaverage65%ofsales
1 Breakdownofsalesdestinationinthe last12monthsupto 3Q09.
23%
52%
25%
P&W
Tissue
Specialty
UsesofFibrias Pulp
Europe
31%
NorthAmerica
Offices
Miami USA
NorthAmerica
25%Asia
34%
Brazil
9%
AsiaOffices
Beijing ChinaHongKong China
Europe
Offices
Nyon SwitzerlandHungary Csomad
SalesDestination(1)
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Efficient and Reliable Logistics Network
Efficient Supply Chain to the Customers
Average
of
145
km
from
forests
to
pulp
mills
Portocel portterminalintheStateofEsprito Santo,islocatedonly1.5kmfromBarra doRiacho plant
Longtermrelationshipwithleadingpapermanufacturersallowsforlowerfreightcost
EfficientandCompetitiveLogistics(1)CompetitiveTransportation(ForestMill Ports)
Base100=March2006Aracruz
(BarradoRiacho)
Jacare
Conpacel
Veracel
Trs Lagoas
Road
Rail
Road
Rail
10%Road90%Barge
1 Bloomberg.
0
100
200
300
400
Mar-06
Jun-0
6
Sep-0
6
Dec-0
6
Mar-07
Jun-0
7
Sep-0
7
Dec-0
7
Mar-08
Jun-0
8
Sep-0
8
Dec-0
8
Mar-09
Jun-0
9
Baltic Dry Index
Fibria's inland/ocean freight, insurance and other
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Pulp Market
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Positive Commodity Cycle and Demand Recovery
Worldmarketpulpshipmentstocapacity WorldP&Wpapershipmentstocapacity
Worldpulpproducers averagedaysofsupply Europeanpulpconsumers daysofsupply
Source: PPPC Source: Utipulp
25
10
20
30
40
50
60
J
an-0
4
M
ay-0
4
S
ep-0
4
J
an-0
5
M
ay-0
5
S
ep-0
5
J
an-0
6
M
ay-0
6
S
ep-0
6
J
an-0
7
M
ay-0
7
S
ep-0
7
J
an-0
8
M
ay-0
8
S
ep-0
8
J
an-0
9
M
ay-0
9
S
ep-0
9
23
15
20
25
30
35
J
an-04
M
ay-04
S
ep-04
J
an-05
M
ay-05
S
ep-05
J
an-06
M
ay-06
S
ep-06
J
an-07
M
ay-07
S
ep-07
J
an-08
M
ay-08
S
ep-08
J
an-09
M
ay-09
S
ep-09
93%
98%
93%95%
88%
92%
89%87%
97%
92%
85%
78%76%
79%77%
73%
79%
89%
78%79%79%
Jan-0
8
Mar-
08
May-0
8
Ju
l-08
Sep-0
8
Nov-0
8
Jan-0
9
Mar-
09
May-0
9
Ju
l-09
Sep-0
9
85%
93%94%
91%
89%
82%
86%
83%
79%
90%
77%
88%
92%
86%
95%93%
95%
92%
97%
92% 91%
Jan-08
Mar-08
May-08
Jul-08
Sep-08
Nov-08
Jan-09
Mar-09
May-09
Jul-09
Sep-09
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Listpulpprice(RISI)vs BRL/US$
Pulp Supply / Demand Expected to Rebalance in theMedium Term
MarketPulp:worlddemandgrowth China:Eucalyptuspulpshipments(000t)
Globalmarketrecovery
Demand
Paperdemandrecovery; Chinakeepingupthepace.
Lowconsumersandproducersinventories
Marketdowntimes;
Currency AppreciationoflocalcurrenciesagainsttheUS$.
Successiveannouncements oflistpriceincreases(asofNov.09)
NorthAmerica: US$730/t.
Europe: US$700/t; Asia: US$660/t;
101
146186181192
13213498
6593
210
419
238
307
368
307318307323
256
458
Jan/08
Feb/08
Mar/09
Apr/08
May/08
Jun/08
Jul/08
Aug/08
Sep/08
Oct/08
Nov/08
Dec/08
Jan/09
Feb/09
Mar/09
Apr/09
May/09
Jun/09
Jul/09
Aug/09
Sep/09
Average
320
k tons
Average: 163
k tons
-13%-21% -23%
-10%
-23%
62%
-14% -15%
5,5%
-21%
76%
-0,2%
Total North America Western
Europe
Latin America Japan China
Jan 2009 vs. Jan 2008 9M09 vs. 9M08
+27%
-26%
60
70
80
90
100
110
120
130
Jan
.09
Fe
b.0
9
Mar.
09
Apr.
09
May
.09
Jun
.09
Ju
l.09
Aug
.09
Sep
.09
Oc
t.09
Nov
.09
Europe Lis t Price BRL/USD
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3Q09 Financials
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Paper Market
Papermarketrecovery
Market
Imports more attractive with the US$ devaluation; Demand starting to grow again, but apparent
consumption is still below 2008 levels.Fibria Performance
Sales volume and revenue mix: focus on specialtypapers;
Seasonality: positive impact on sales volume
Paper:SalesandRevenuemix
Paper:Salesvolume(000t)
122
104
110
3Q08 2Q09 3Q09
Sales Volume
50% 49%
20% 21%
28% 30% 30%
49%
24%
3Q08 2Q09 3Q09
Revenues
38% 38%
19% 19%
41% 43% 43%
38%
21%
3Q08 2Q09 3Q09
Specialty/Other
Coated
Uncoated
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Financial Performance
PulpCashCost(R$/t)Netrevenue(R$million)
Pulp:salesvolume(000t) Pulp:salesmix(000t)
Cash cost w/o
stoppages (R$/t)
3Q09
21%
36%11%
30%
North America Asia Brazil Europe
3Q08
38%
16%10%
37%
509
473
426 433
487
422403
521
3Q08 4Q08 1Q09 2Q09 3Q09 3Q08 2Q09 3Q09
1.402
1.471
1.407
3Q092Q093Q08
946
1.3491.276
3Q08 2Q09 3Q09
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Financial Performance
CAPEX9M09:R$1,232millionEBITDA(R$million)andEBITDAmargin(%)
NetIncome(R$million)
-148
-188
-178
181
+47
+52+875
327-99-77
426-204
-325
Adjusted
Ebitda
Non-
recurring
effects / non-
cash
Ebitda Income tax
expense
Exchange
Variation on
Debt
Derivatives Other
Exchange
Variation
Interest on
loan
Income on
financial
instruments
Other
financial
income
Minority
Interest
Other (*) Net income
3Q09
(*) The amount is the sum of the Depreciation, Amortization and Exhaustion.
426389
498
35%
26%30%
3Q092Q093Q08
41%
59%
69%31%
25%
17%
13%
5%
7%
14%
10%
7%
1Q09 2Q09 3Q09
Expansion Forestry Maintenance Other
576
387
269
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221 FX of September 30, 2009 R$ / US$ 1.7781
2 Does not include Sellers Financing
3T09 Cash position R$ 2.6 bi R$ 4.8 bi
Average Maturity 37 months 47 months
Average Cost 2 7.42% p.a. 7.50% p.a.
US$/ BRL 62%/38% 62%/38%
Subordination structure
Original After plan Cash
No Collateral
With Collateral
Receivables
56%
1%
43%
79%
1%
20%
Indebtedness
MaturitySchedule1
4,8
2,8
1,4 1,5
0,9 0,8
0,10,4
4,2
1,81,61,1
1.0
1,41,7
1,1
1,2
0,9
0,60,1
0,4
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
4,8
2,8
1,4 1,5
0,9 0,8
0,10,4
4,2
1,81,61,1
1.0
1,41,7
1,1
1,2
0,9
0,60,1
0,4
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
EffectsoftheLiabilityManagementPlan
Before the plan x After the plan
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Recent Events
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Recent Events
Dec.09*Fibria listing at Novo Mercado level of Corporate Governance
Nov18Fibria trading start (Bovespa: FIBR3 / NYSE: FBR)
Nov17End of Aracruz trading
Nov12End of withdrawal rights period
Oct29Shareholderes Agreement - VID and BNDES
Aug24Merger of Aracruz shares into VCP approval
Aug24Incorporation proposal for the 0.1347 ratio
Jul02Tender Offer for Aracruz common shareholders
June
12VCP conversion of prefered into common shares
Apr14VCP Capital Increase
Jan20Acquisition by VCP of additional 28% of Aracruz common shares
Date/estimateEvent
*Estimate
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Investor Relations Team:
Marcos Grodetzky IRO
Andr Gonalves IR Manager
Fernanda Naveiro IR Consultant
Anna Laura Linkewitsch IR Specialist
Livia Baptista IR Analyst