BTG Pactual 2011 LatAm CEO Conference

October, 2011

Disclaimer

The information contained in this presentation may include statements which constitute forwardlooking statements, within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. Such forward-looking statements involve a certain degree of risk and uncertainty with respect to business, financial, trend, strategy and other forecasts, and are based on assumptions, data or methods that, although considered reasonable by the company at the time, may turn out to be incorrect or imprecise, or may not be possible to realize. The company gives no assurance that expectations disclosed in this presentation will be confirmed. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those in the forwardlooking statements, due to a variety of factors, including, but not limited to, the risks of international business and other risks referred to in the companys filings with the CVM and SEC. The company does not undertake, and specifically disclaims any obligation to update any forwardlooking statements, which speak only for the date on which they are made.

The Company

VCP and Aracruz Merged to Create Fibria

Shareholder Structure

Votorantim Industrial S.A. 29.34%

BNDESPar

Free Float 40.24%(2)

30.42(1)

NYSE 40% Bovespa 60%

Average Daily Trading Volume (LTM): US$ 45 million

(1) (2)

Position as of August 31, 2011. BNDESPar has 21% linked to a Shareholders Agreement with Votorantim Industrial S.A. during the first 3 years and 10.9% during the following 2 years. Free Float 40.17% + Treasury 0.07%

Improved Corporate Governance

Improved Corporate Governance

Listed on Novo Mercado, highest level of Corporate Governance at BM&F Bovespa
Only 1 class of shares 100% voting rights 100% tag along rights (Brazilian corporate law establishes 80%) Board of Directors with minimum 20% independent members Financial Statements in International Standards IFRS Adoption of Arbitration Chamber

Board and Committees

Shareholders Meeting

Fiscal Council

Board of Directors

9 Members: 20% Independent Chairman CEO

Listed in the most important sustainability indexes

Board Advisory Committees(1)

Audit and Risks Personnel and Remuneration Finance Sustainability

Policies approved by the Board of Directors

Liability and liquidity management Market risks

Corporate governance
Information disclosure Stock trading

Executive Officers

(1) Members performance assessed by independent consulting firm

A Winning Player
Superior Asset Combination Main Figures(1)

Pulp capacity Net revenues Total area Planted area

Belmonte Veracel Caravelas Portocel Aracruz

million tons R$ billion thousand ha thousand ha R$ billion X

5.25 6.2 1,062(2) 599(2) 7.9 3.2

Net Debt Net Debt/EBITDA

Trs Lagoas Jacare Santos

Port Terminal

Pulp Unit

Source: Fibria (1) Last Twelve Months as of 2Q11. (2) As of June 30, 2011, including 50% of Veracel and excluding forest partnership areas (124 thousand ha).

Modern Plants Lead to a Competitive Position in the Cost Curve

Trs Lagoas Mato Grosso do Sul 1.3 million t/year Jacare So Paulo 1.1 million t/year

Aracruz Esprito Santo 2.3 million t/year

Veracel Bahia 1.1 million t/year

Fibrias Strategy

Clear Leadership Position

Industry Outlook (1)

Paper & Board 392 million t

Market Pulp Capacity Ranking 2010(2) (000t)

Fibria APRIL Arauco

5,250

57% Recycled Fiber 224 million t

43% Pulp 167 million t

APP Georgia Pacific CMPC

80% Chemical 134 million t

20% Mechanical 33 million t

Sodra Stora Enso Weyerhaeuser Suzano

34% Market Pulp 46 million t

66% Integrated Mills 85 million t 46% Softwood/Other 22 million t

Botnia/M-real UPM-Kymmene Domtar

54% Hardwood 24 million t

Ilim Mercer IP ENCE

64% Eucalyptus 16 million t

Bleached Softwood Kraft Pulp (BSKP) Bleached Hardwood Kraft Pulp (BHKP) Unbleached Kraft Pulp (UKP) Mechanical

36% Acacia/Other 8 million t

West Fraser
Canfor Cenibra
31%

69%
Other Eucalyptus Pulp producers: 11 million t
(1) (2)

1000

2000

3000

4000

5000

6000

RISI and PPPC: considers 2010 capacity Hawkins Wright January 2011

Relevant Market Share and Competitive Position in the Cost Curve

Fibrias Market Share (1)

Average Cash Cost of BHKP delivered to Europe(2) (US$/t)

Mill Cash Cost Delivery Cost

11%

21%

584 120

570 70

540 39

534
41

508 85

498 42

459 33

416 57

385
69

361 51 310

343 55 288

464

500

501

493

423

456

426

359

316

Total Market Pulp: 49.8 million t

Total Hardwood Market Pulp: 24.9 million t

33%

Hardwood Cash Cost (US$/t) vs Capacity ('000 t)

800

700
Cash cost (US$/t) 600 500 400 300 200 100 0 5000 (1) (2) PPPC World Chemical Market Pulp Global 100 Report December 2010 (World Demand by Grade) Source: Hawkins Wright as July 2011 Report and Fibria 2Q11 10000 15000 Capacity ('000s t) Bleached hardwood kraft

10 million t

Total Eucalyptus Market Pulp: 15.8 million t

20000

25000

30000

10

Exchange Rates and Inflation Affect the Cost Structure

Exchange Rate Currencies Evolution versus Dollar (Index: Jan03 = 100)
230 210 190 170 150 130 110 90 70 50 set-03 set-04 set-05 set-06 set-07 set-08 set-09 set-10 jan-03 jan-04 jan-05 jan-06 jan-07 jan-08 jan-09 jan-10 mai-03 mai-04 mai-05 mai-06 mai-07 mai-08 mai-09 mai-10 jan-11 mai-11 set-11 Rupia: -2% Canadian Dollar: 53% Chilean Peso: 40% Real:91%

Cost Structure
Global producers have been impacted by: Wood: cost of land and minimum wage growth above inflation Chemicals / energy / water: global demand for commodities add pressure on main raw materials On top of that, Brazilian producers have also been impacted by: Freight: low governmental investment in infra-structure (ports, roads, etc) and higher oil prices Labor: cost in Brazil in dollar terms is higher than in some developed countries

11

Global Presence
Fibrias Commercial Strategy
Differentiation: Customized pulp products to specific paper grades Sole supplier to key customers focused on eucalyptus pulp to the tissue market The top 10 customers represent, on average, 70% of sales Over 20 years of relationship with many of the main clients Global contracts
P&W 23% Tissue 58% Speciali ties 19%

End Use 2Q11

Current List Pulp Price:

North America: US$900/t Europe: US$820/t Asia: US$730/t

N.America

29%

Europe

46%

Nyon Miami

Csomd

14%
Asia

Hong Kong

L.America

11%

So Paulo

Source: Fibria 2Q11

Fibria Sales Distribution

Fibria Offices

12

Focus on Premium End-Uses

Fibria's Pulp Destination

Printing&Writing

Market Pulp Destination

43%

2010-2025 Demand Growth (CAGR)

1%

23%

Tissue

58%

24%

4%

Specialties

19%

14%

3%

Newsprint

-0.1%

Containerboard

8%

5%

Others

11%

3%

Source: Fibria 2Q11 Earnings Results, PPPC, RISI and Fibria

13

Innovation and Competitiveness

14

Enhanced Forestry Techniques

Current Elite Clone 2 years old

New Elite Clone 2 years old

15

Forest Competitiveness
Fibria : Forest Competitiveness
45

Genetic and Technological Development at Fibria

14

30 - 40 years

11 10

25

25

25

15

15 - 25 years

7 - 15 years 6 years 7-8 years

10 - 12 years

12 - 15 years

8 5 6

Brazil (eucalyptus)

Indonesia

S.Africa

Chile

Portugal / Spain

USA / Canada

Finland / Sweden

70's

80's

90's

00's

Next decade (expected)

Harvesting Cycle (avg. years)

Yield (m3/ha/year)

Air Dry Ton / ha / year

Source: ABRAF, STCP, Poyry and Fibria. Note: Pulp trees differ depending on the country: Indonesia acacia, S.Africa tropical and temperate eucalyptus, Chile temperate eucalyptus, Portugal/Spain temperate eucalyptus, USA/Canada aspen, Finland/Sweden betula.

16

State of the Art Facilities

Average mill capacity (000 tons)

2,500 Fibria (Aracruz)

2,000

1,500

Fibria (Trs Lagoas) Indonesia Fibria (Jacare) Fibria (Veracel 50%)

1,000

500 Russia 40 USA Japan 30

Other Brazilian pulp mills Portugal Finland Canada France/ Spain Sweden 20 Chile South Africa

China

10

Technical age of the equipment (years)

Source: PYRY

17

17

Trs Lagoas II and Veracel II

Trs Lagoas II

Veracel II

Production capacity: 1.5 million tons Forestry Base : - Total area: 230,000 ha - Planted area: 150,000 ha Status:

Production capacity: 1.5 million tons Forestry Base: - Total area: 220,000 ha - Planted area: 120,000 ha

Environmental Licensing in progress Trs Lagoas I surplus: 30,000 ha of effective planting Leasing: 70,000 ha of effective planting Change on the forestry base model: leased areas increased to 70% Negotiation between partners in satisfactory progress

Social and environmental license granted on Aug 18th

Possible Start up: from 2014 on

18

Pulp and Paper Market

19

Industry Outlook

World chemical market pulp shipments to capacity

98% 95% 93% 96% 92% 90% 90% 86% 95% 96% 102% 101% 94% 88%87%

World Printing&Writing paper shipments to capacity

91% 91% 88% 86% 87% 85% 88% 87% 85% 82% 85% 85% 88% 87% 84%

89%

92%
87% 88% 83%

92% 87%

89% 88%88% 84% 81%

88% 88% 87%

90%

87%

85% 82%

82%

Dec-09

Nov-09

Nov-10

Dec-10

Jun-10

Oct-10

Jun-11

Jan-10

Jan-11

Jul-10

Sep-10

Oct-09

Apr-10

Sep-09

Feb-10

Mar-10

May-10

Mar-11

Apr-11

Fev-11

May-11

Aug-09

Aug-10

Jul-11

Aug-11

Aug-09

Jan-10

May-11

Dec-09

Nov-09

Nov-10

Dec-10

Jun-10

Oct-10

Jun-11

Jul-10

Sep-10

Apr-10

Sep-09

Feb-10

Aug-10

Apr-11

Oct-09

Fev-11

Jul-11

Mar-10

May-10

Source: PPPC World 20 Total Chemical Market Pulp

Source: PPPC Global 100 World Printing & Writing Report

World pulp producers' average days of supply

50 40 30 20 10 Fev-07 Fev-09 Aug-06 Aug-07 Feb-08 Aug-08 Aug-09 Fev-10 Aug-10 Feb-11 Aug-11
35

World pulp consumers' days of supply

days

days

41

30

25

Mar-11

21
20

15

Fev-07

Fev-09

Aug-06

Aug-07

Feb-08

Aug-08

Aug-09

Fev-10

Aug-10

Feb-11

Aug-11

Aug-11

Jan-11

Source: PPPC World 20

Source: Utipulp

20

Industry Outlook
Market pulp: world demand growth (%)
8M2011 x 8M2010 36%

China: Eucalyptus pulp shipments ('000 t)

458 368 307 238 Average 305 ktons 318 323 300 310 299 256 233 247 Average 193 ktons 242 229 202 219 152 163 198 125 332 222 198 141 152 138 232 Average 197 ktons 311 224

5%

5%

153

161

100

-4% Total North America

-1% Europe

-3%
Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Source: PPPC World 20

Latin America

Japan

China

Source: PPPC World 20 Chemical Market Pulp

European List Price (BHKP) x Commodity Index (CRB)

Commodity Price Index (CRB)

Announced List Pulp Price

European List Price (US$/t) BHKP

650 550 450 350 250 Jun-09 Jun-10 Mar-09 Mar-10

US$840/t

US$920/t

1.000 900 800 700 600 500 400 300 Mar-11

Current List Pulp Price:

North America: US$900/t

Europe: US$820/t Asia: US$730/t

Dec-08

Dec-09

Dec-10

Sep-08

Sep-09

Sep-10

Jun-11

CRB

BHKP List Price

Sep-11

21
Source: Fibria

Source: CRB (Commodity Research Bureau) Bloomberg | BHKP: FOEX

Balanced Market Scenario for the Next 2 years

Forecast Million tons

Supply

% Annual growth

2009
23.5 '000 tons 21.4

2010
23.8 22.3

2011
25.0 23.0

2012
25.3 23.3

2010/2012
3.2% 2.1%

BSK

Demand

Ratio

91%
28.1 24.8

93%
28.6 25.0

92%
30.0 26.5

92%
30.6 27.4 2.9% 4.7%

Supply

BHK

Demand

Ratio

88%
17.0 15.9 93%

87%
17.6 15.9 90%

88%
18.8 17.1 91%

90%
19.6 18.3 94% 5.4% 7.4%

Supply

BEKP

Demand Ratio

Source: PPPC and Fibria

22

Financial Highlights

23

2Q11 Performance

Key Indicators
2Q11 Pulp Production (000 t) Pulp Sales (000 t) Paper Production (000 t) 1,271 1,230 31 1Q11 1,319 1,259 29 2Q10 1,164 1,214 31 2Q11 vs 1Q11 -4% -2% 9% 2Q11 vs 2Q10 9% 1% 2%

Pulp Sales Mix

2Q10
11% 38% 24% 25%

1Q11
9%
14% 46%

2Q11
11% 46%

Paper Sales (000 t)

31

36

29

-15%

5%

Net Revenue (R$ million)

1,459

1,548

1,628

-6%

-10%

27% Europe

20%
North America Asia

29%

Pro Forma EBITDA (R$ million)

EBITDA Margin (%) Financial Income (R$ million)

490
34% 277

607
39% 11

672
41% (310)

-19%
-5 p.p. -

-27%
-7 p.p. -

Brazil/Others

Net Income (R$ million)

215

389

130

-45%

66%

Cash Cost without downtimes(R$/t)

EBITDA (R$ million) and EBITDA Margin (%)

41% 462 672 607 39% 34%

448

446 490

2Q10

1Q11

2Q11

2Q10

1Q11

2Q11

24

Competitiveness Project

Actions for increased operating efficiency

Action 2011 Capex reduction of R$201 million New bleaching line of Plant A Aracruz Unit Higher operating stability Optimization of wood transportation by barges Aracruz Unit Energy Matrix Jacare Unit Global Sourcing Rail Extension Trs Lagoas Unit Long-term international logistics contract (STX) Future Forestry Project

2011

2012

2013

Pulp Production ('000 t)

Production gain: +9% 1,271

1,164

2Q10

2Q11

Cash Cost without downtimes (R$/t)

+3% (lower than Brazilian inflation: 462 +6.5%)
448

2Q10

2Q11

25

Capex

2011 Capex Reduction

(R$ million)
Industrial Expansion Forest Expansion Subtotal Expansion Safety/Environment Forestry Renewal Maintenance, IT, R&D and Modernization Subtotal Maintenance 50% Veracel/Conpacel Total Fibria

2011E Current
68 243 311 75 602 356 1,033 96 1,440
R$ 201 million reduction vs original budget

26

Debt

Debt Indicators
Short Term Debt (%)
(R$ million) Gross Debt Cash(1) Net Debt 2Q11 10,448 2,496 7,952 1Q11 10,256 2,297 7,959 2Q10 13,209 2,364 10,846 2Q11 vs 1Q11 2% 9% 0% 2Q11 vs 2Q10 -21% 6% -27% 2Q10
(1) Includes

Net Debt/ EBITDA(2) (x)

16% 12%

14%

4.7 3.2 2.9

1Q11

2Q11
(2) LTM

2Q10

1Q11

2Q11

the MTM of the hegding instruments

EBITDA includes the results from Conpacel and KSR

Debt Amortization Schedule (R$ billion)

6.6

Debt by currency and instrument (%)

Debt by Currency Debt by Instrument
44% 16%

Short term debt: 14% of total debt

1.9 1.0 0.9 0.8 1.3 0.6 1.8 0.8 1.2 0.6

5.1

16%

84% 2016-2021 Domestic Foreign

7% 4%

6%
23%
BNDES Pre-Payment Others

2011

2012

2013 Jun/10

2014

2015

Jun/2011

Bonds Former Aracruz Shareholders NCE

27

Liability Management
Promises delivered, now more ahead to go
Net Debt/EBITDA (x)

7.8 7.2 7.2 6.5 5.6

Net Debt (R$ bi)

15.7 13.2 13.1 11.0 10.9

4.7 3.9 10.8

3.6
2.9 9.9 7.9 7.9
Commitment to investment grade level

3.2

10.2

1Q09

2Q09

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

Sale of Guaba: US$ 1.4bn Fibria19 Bond: US$ 1.0bn 9.25% 10NC5 Export pre-payment facilities: US$ 1.175bn

Fibria20 Bond: US$ 750MM 7.5% 10NC5 Exchange Bond Fibria19: 94% to Fibria20 Operational cash generation Derivatives debt settlement: US$ 2.6bn Debt: lower cost longer tenor

Sale of Conpacel/KSR: R$ 1.5bn Fibria21 Bond Fibria21: US$ 750MM 6.75% 10NC5 US$ 500MM Revolving facility + US$ 300MM EPP Covenants: 4.0x YE2011 Tight cost and Capex control 2011 Capex reduced by R$ 201 million Sale of Piracicaba: US$ 313MM

28

Market Perception
Yield (%)

Fibria'2019 9,7 9,2 8,7 8,2 7,7 7,2 6,7 6,2 5,7 5,2 Dec-09

Fibria'2020

Fibria'2021

8,2 7,7 7,2 6,7 6,2 5,7 5,2 May-11 Mar-11 Apr-11

Fibria'2021

80bps

Aug-11

Jun-11

Dec-10

May-10

May-11

Apr-10

Nov-09

Feb-10 Mar-10

Feb-11 Mar-11

Aug-10

Apr-11

Oct-09

Oct-10

Jun-11

Jun-10

Jan-10

Jan-11

Nov-10

Aug-11

Sep-10

Jul-11

Fibria2021
Moodys Fitch S&P

Ba1/positive BB+/stable BB/positive 29

Sep-11

Jul-10

Rating

Sep-11

Jul-11

Fibria in Summary

ROI above WACC

Larger scale

Global and strong market positioning

Innovation

HIGHER SHAREHOLDER RETURNS

Growth

Solid financial performance

Sustainability

Low cost structure

30

Investor Relations E-mail: ir@fibria.com.br Phone: +55 (11) 2138-4565

Website: www.fibria.com.br/ir

31

Backup

32

China
Chinas Hardwood Imports of BHKP by Country (1)
6,0 5,0 4,0 3,0 2,0
2,3 1,5 1,1 1,3 1,0 0,8 0,4 0,2 0,2 0,2 0,0

China P&W Capacity Changes 2011-2013(2)

5,0 4,1

2010

8M 2011
(Million tons)

Company / Mill Shandong Huatai Paper Nine Dragons

Effective Date Jan 2011 Jul 2011

'000 t 800 450

1,0
0,0 BHKP Total Latin America

Zhumadian Baiyun Paper

China Metalurgical Meili Paper Sun Paper Shandong Chenming

Apr 2011
Mar 2011 Ju 2011 Aug 2011 Q3 2011 Q4 2011 2011 Mar 2012 Sep 2012 Q1 2013 2013

250
300 350 800 450 450 810 130 125 450 600
2012/2013 = 1.5mt 2011 = 4.7 mt

Others* Indonesia

USA

Canada

Western Europe

* includes Russia, China, Thailand and New Zealand

Shandong Chenming April

(1)

China's Share of Market Pulp

10.000 8.000 6.000 4.000 2.000 0
10% 10% 10% 13% 12% 16% 14%

Others Guangxi Tianyi Paper

21% 17% 20% 22% 26%

Hengfeng Paper April Chengton Group

12%

Total P&W capacity changes in China

6,200

16% 17%

9%7%

11% 9%

17% 17%

2005

2006

2007

2008
Hardwood

2009
Total

2010

8M 2011

Eucaplyptus
(1) PPPC

33
(2) Source: TerraChoice Monthly Report Aug 2011

Tissue Market
Per Capita Consumption of Tissue by Region, 2010(1)
Kg/capita

World Tissue Consumption, 1991-2010(1)

35 30
Million tons

25 20

23,5

Average Growth Rate +3.8%a.a.

15,6

25
14,6 11,2

15 10

Huge potential growth

5,6 4,4

20 15 10

5 0 L. America

3,6

3,0 0,7 0,5

5 0
1991 1996 2001 2006 2009 2010

N&M East

Oceania

Asia Far East

N. America

W. Europe

E. Europe

Africa

Japan

China

N.America Japan

W.Europe China

E.Europe Asia FE

L.America Oceania

NME Africa

(1)

RISI

34