tao Santander Jan10 Pendrive
Transcript of tao Santander Jan10 Pendrive
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Santander 14th Annual Latin America Conference
January 2010
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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 and Paper Market
3Q09 Financials
Recent Events
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The Company
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VCP and Aracruz Merged to Create Fibria
(1) Position as of Nov 30, 2009. BNDESPar has 21% linked to a shareholders agreement with VID during the first 3 years, and 10.9% during the following 2 years.
Shareholder Structure
Present value of R$4.5 billion of announced post-merger synergies
Up to 2012, 90% of actions to extract synergies are expected to be in place
16%
15%
6%
11%
2%
27%
23%
ForestrySG&A
Commercial
Tax
Logistics Others
Industrial
Votorantim
Industrial S.A.BNDESPar Free Float
Conpacel
Veracel
Celulose S.A.
29.3% 33.6% (1) 37.1%
50.0%50.0%
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Improved Corporate Governance
Board Advisory CommitteesBoard of Directors
CEO
Board of
Directors
Executive Board
Ind. Ops &
Engineering
Francisco Valrio
Comm. & Intl
Logistics
Joo Felipe Carsalade
Paper, Planning,
Procurement,
and Forestry
Ops. & Tech
Marcelo Castelli
Controllership
& Risk
Management
Evando Coura
Human and Org.
Development
Miguel Caldas
Treasury & IR
Marcos Grodetzky
Each officer with more than 20 years experience in the sector
Auditing
Personnel and Remuneration
Finance
Sustainability
Carlos A. Aguiar
Independent MemberJos Armando de Figueiredo Campos
BNDES RepresentativeEduardo Rath Fingerl
Independent MemberAlexandre Gonalves Silva
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
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Market Positioning
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Competitive Strengths
Creation of a Winning Player
Pulp production capacity: 5.4 MT / year (1)
Paper production capacity: 358 kT / year (1)
Total area: 1.1 million ha(1)|Eucalyptus plantation: 604 thousand ha (1)
4 plants and operation of 3 port terminals, including the only specialized woodpulp terminal in Brazil, owned by us
High yield in eucalyptus production (avg 45 m3/ha/year) and certified forests
Short harvest cycle: 6 years vs. 25-70 years in Southern U.S., Canadaand Scandinavia
Pulp MillPaper Mill
BelmonteVeracelCaravelas
PortocelAracruz
PiracicabaJacareiSantos
Trs LagoasConpacel
Superior Asset Combination
Port Terminal
Data as of Nov 30, 2009.(1) Note: Excluding Guaba.
Leadership inMarket Pulp
Scale and IntegratedOperations
Unique ForestryManagement:
Advanced ForestryTechniques and
Short Harvest Cycle
Forest to Port
Integration Trough
Efficient Logistics
Low ProductionCost DNA
Strong / ReliableCustomer Base
Modern IndustrialPlants
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Market Share (1)
Undisputable Leadership in the Global Market Pulp
Pulp Production Capacity
0 1.000 2.000 3.000 4.000 5.000 6.000
Stora Ens o
Cenibra
West Fras er
Mercer
ENCE
Georgia Pacific
I l im
IP
Domtar
Canfor
APP
Weyerhaeuser
Suzano
Tembec
Botnia
Sodra
CMPC
APRIL
Arauco
Fibria
BSKP BHKP UKP Mech.
2009E in ktons
Source: PYRY, 2007 / As for Market Pulp: Pulp and Paper Products Council (PPPC) 2009 and Aracruz.Note: Capacity above mentioned does not include the Guaba unit.(1) Market Share estimated considering 2009 nominal capacity.
5,400
Dominant Position in a Growing Market
1st
~ Twice
the size
510
16 17
33
4349 49
1995 2003 2008 2009BEKP Total Market Pulp
Pulp Demand
(in ktons)
CAGR 95-09e: 8%
CAGR 95-09e: 3%
Growth 08-09e: 6%
Growth 08-09e: (1%)
3%
11%
22%
32%
TotalPulp:
188 million MT
Total Hardwood
Pulp:
25 million MT
Total Market
Pulp:
48.5 million MT
Total Eucalyptus
Pulp:
17 million MT
e
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276 322 249151
266177
305171 135 106 84
254 175207
303177
239103
119 135 155 148
530497
456 454 443 416 408
290 269 261 232
Wood Others
Low Production Cost DNA
Unique Expertise Enabling the Lowest Cash Cost in the Market and High Profitability
(1) Source: Companies earnings releases, RISI and Brazilian Central Bank(2) Source: Hawkins Wright Estimate for 4Q09(3) Fibria's 3Q09 figures
Cash Cost (US$/t)
Hardwood Cash Cost (US$/t) vs. Capacity (kT)
Cash Costs (2)
2,35
2,92
3,08
2,93
2,44
2,18
1,951,84
2,09
2001 2002 2003 2004 2005 2006 2007 2008 9M09
45%48%
50%
47%
43%42% 41%
36%
28%
EBITDA Margin (%)
Avg. BEKP Pulp Prices (US$/ton)
Avg. FX Rate (R$/US$)
Iberia
0
100
200
300
400
500
600
0 2.000 4.000 6.000 8.000 10.000 12.000
Iberia
232
492458
505 520
587
642
707
782
524
Fibrias Margin vs. Macroeconomic Fundamentals (1)
Capacity (kT)
US$/ton
(3)
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State-of-the-Art Production Facilities
Modern Plants
Advanced Technology and Production Process Lead to Lower Usage of Raw Materials, Reducing Costs
and Allowing for a Unique Track Record of Quality Products
Streamlined and efficientoperations due to modernplants
Environmental-friendly
production process
Reduced emissions anddisposition of residues
Efficient use of chemicals
Competitive Advantages
AracruzCapacity 2.3 mtTechnical age: 9
Trs LagoasCapacity 1.3 mtTechnical age: 0
JacareCapacity 1.1 mtTechnical age: 5
Average PlantCapacity(000 tons)
2,500
2,000
1,500
1,000
500
40 30 20 10
RussiaJapan
USASweden
CanadaPortugalFinland
FranceSpain
ChileSouthAfrica China
Brazil
Indonesia
Uruguay
Technical age of the equipment (years)
LARGEST SINGLE
LINE PULP
PRODUCTION
FACILITY IN THE
WORLD
1 Last 12 months ending June 30, 2009.
VeracelCapacity 1.1 mtTechnical age: 3
BEST YIELD PER
HECTARE OF THE
WORLD
Indonesia
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1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
2009
Aracruz VCP Fibria
Unique Brownfield Potential Growth
Fibria has the Best Sites Ready to Almost Duplicate Capacity
In million of tones
Historical and Planned Capacity Increase
1978: Start-up of mill "A" at Aracruz (Barra do Riacho)unit
1988: Acquisition of Celpav 1992: Acquisition of Papel Simo (Jacare unit) 1996: New pulp line at Jacare mill 1991: Start-up of mill "B" at Barra do Riacho unit 2003: Expansion of Jacare mill 2003: Acquisition of Riocell (Guaiba Unit) 2005: Start-up of Veracel 2002: Start-up of mill "C" at Barra do Riacho unit 2007: Asset swap Luis Antnio for Trs Lagoas 2008: Establishment of Conpacel consortium 2009: Start-up of Trs Lagoas mill
5.4
1,5
1,5
1,5
0,7
5,2
Veracel II
Trs Lagoas II
Expansion
Barra do Riacho IV
Losango I
10.6
Best sites for additional capacity
Brow nfi el d B rownf iel d G reen fi el d Br ownf ield
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NY004GAK_1.worNY004GAK_1.worNY004GAK_1.worNY004GAK_1.worNY004GAK_1.worNY004GAK_1.worNY004GAK_1.worNY004GAK_1.wor
Long Term Relationship With Key Clients
Premium Paper Producers Value High Quality Pulp Customized Products
Which Implies in Less Volatility in Sales Volume Throughout Economic Cycles
Global Footprint
Supplies customized pulp products to specific paper grades
Sole supplier to key customers focused on eucalyptus pulp to the tissue market
Top 10 main customers represent on average 65% of sales
1 Breakdown of sales destination in the last 12 months ending September 30, 2009.
23%
52%
25%
P&W
Tissue
Specialty
Uses of Fibrias Pulp
Europe
31%
Offices
North America
25%Asia
34%
Brazil
9%
Beijing
Switzerland
Sales
Destination(1)
Miami Hong Kong
Hungary
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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 port terminal in the State of Esprito Santo, is located only 1.5 km from Barra do Riacho plant
Long term relationship with leading paper manufacturers allows for lower freight cost
Efficient and Competitive Logistics (1)Competitive Transportation (Forest > Mill > Ports)
Base 100 = March 2006Aracruz
(Barra do Riacho)
Jacare
Conpacel
Veracel
Trs Lagoas
Road
Rail
Road
Rail
10% Road90% Barge
1 Bloomberg.
0
100
200
300
400
Mar-06
Jun-06
Sep-06
Dec-06
Mar-07
Jun-07
Sep-07
Dec-07
Mar-08
Jun-08
Sep-08
Dec-08
Mar-09
Jun-09
Baltic Dry Index Fibria's inland/ocean freight, insurance and other
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Pulp and Paper Market
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Positive Commodity Cycle and Demand Recovery
World market pulp shipments to capacity World P&W paper shipments to capacity
World pulp producers average days of supply European pulp consumers days of supply
Source: PPPC Source: Utipulp
25
10
20
30
40
5060
Jan-0
4
Jun-0
4
Nov-0
4
Apr-05
Sep-0
5
Feb-0
6
Jul-06
Dec-0
6
May-0
7
Oct-07
Mar-08
Aug-0
8
Jan-0
9
Jun-0
9
Nov-0
9
93%
98%
93%95%
88%
92%
89%
87%
97%
92%
85%
78%76%
79%79%77%
73%
79%79%78%
89%
87%
jan/08
ab
r/08
ju
l/08
ou
t/08
jan/09
ab
r/09
ju
l/09
ou
t/09
85%
93%92%
94%
91%89%
82%
86%
83%
79%
90%
77%
88%
92%
97%
86%
95%
92%93%
95%
90%92%
91%
jan/08
ma
r/08
ma
i/08
ju
l/08
se
t/08
nov/08
jan/09
ma
r/09
ma
i/09
ju
l/09
se
t/09
nov/09
21
15
20
25
3035
jan-04
jun-04
nov-04
abr-05
set-05
fev-06
jul-06
d
ez-06
m
ai-07
out-07
m
ar-08
a
go-08
jan-09
jun-09
nov-09
Source: PPPC Source: PPPC
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BHKP List pulp price (FOEX) vs BRL/US$
Pulp Supply / Demand Expected to Rebalance in theMedium Term
Market Pulp: world demand growth China: Eucalyptus pulp shipments (000 t)
Global market recovery
Demand
Paper demand recovery; China keeping up the pace.
Low consumers and producers inventories
Market downtimes;Currency
Appreciation of local currencies against the US$.
Successive announcements of list price increases (as of Jan.10)
North America: US$760/t Europe: US$730/t
Asia: US$690/t
Average310 k tons
Average163 k tons
60
70
80
90
100
110
120
130
Jan/09
Feb/09
Mar/09
Apr/09
May/09
Jun/09
Jul/09
Aug/09
Sep/09
Oct/09
Nov/09
Dec/09
BRL/USD FOEX BHKP List Price
+25%
-24%
101146
186181192
132134 9865
93
210
419
238
307368
307318307323
256233
299
458
Jan/08
Mar/09
May/08
Jul/08
Sep/08
Nov/08
Jan/09
Mar/09
May/09
Jul/09
Sep/09
Nov/09
-13%-21% -23%
-10%-23%
62%
2%
-1%-12%
9%
-18%
73%
Total North America Western
Europe
Latin America Japan China
Jan 2008 vs. Jan 2009 11M08 vs. 11M09
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China's presence in the market pulp sector
China's Hardwood imports of BHKP by country
0
1.000
2.000
3.000
4.000
5.000
6.000
BHKP
Total
B
razil
Indon
esia
Chile
Ru
ssia
Uru
guay
Canada
USA
Others
Tha
iland
Source: PPPC W20. Coverage for chemical market pulp is 80% of world capacity.
China's share of market pulp (%)
Source: Hawkins Wright
+59%
+99%
+9%
+39%
+10%+165%
+41% +80% +134% +34%0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
8.000
9.000
2005 2006 2007 2008 11M09
BEKP
9%11%
13%
16%
26%
7%9%
10%
12%
23%
Growth in 2009
2008 BHKP
Brazil is the leading exporter of BHKP to China,accounting to approximately 40% of China's totalimports in the 11M09.
Between 2005 and 11M09, Chinese marketshare of eucalyptus shipments increased by17 p.p. (total market pulp: +11 p.p.)
Total Market Pulp
10%10%
12%
14%
21%
'ooot
'ooot
Pulp shipments ('000 t) and market share (%)
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P&W Paper Capacity Changes
P&W paper capacity withdrawls 2009-2010 (1)
340late 2011Guangxi Huajin Group
1,250Q1 2011Shandong Chenming
500Q1 2011Shandong Huatai Paper
2002010Yeuyang Paper
200Oct 2009Yeuyang Paper
200Jul 2009MCC Yinhe Paper
350Jan 2009Puyang Longfeng
200Oct 2009Fujian Nanping Paper
200Q3 2009Guangxi Jindaxing Paper
150Feb 2009Tralin, Gaotang
Q1 2011
May 2010
1H 2010
Q2 2010
Q1 2010
Effective Date
6,040Total P&W capacity changes in China
300China Metalurgical MeiliPaper
200Lee&Man
350Sun Paper/IP
Company / Mill 000's tonnes
APP, Hainan Island 1,200
Jiangsu Oji Paper 400
2009 = 1.3 million t
2010 = 2.3 million t
2011 = 2.4 million t
(1) Source: TerraChoice Dec 2009
China: P&W paper capacity changes 2009-2011(1)
340North America/2010International Paper
200North America/2010Domtar
200North America/2009International Paper
255North America/2009Others
265North America/2009Domtar
440Europe/2009Others
80Europe/2010Others
3,300Total P&W capacity withdrawls in Europe andNorth America
540Europe/2009M Real
250Europe/2009International Paper
220Europe/2010Sappi
Europe/2010
Region/Date
520Stora Enzo
Company 000'stonnes
2009 = 1.9 million t
2010 = 1.4 million t
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3Q09 Financials
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Paper Business
Paper market recovery
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: Sales and Revenue mix
Paper: Sales volume ('000 t)
122
104
110
3Q08 2Q09 3Q09
49% 50% 49%
24% 20% 21%
28% 30% 30%
3Q08 2Q09 3Q09
38% 38% 38%
21% 19% 19%
41% 43% 43%
3Q08 2Q09 3Q09
Coated
Uncoated
Specialty/Other
Sales Volume Revenues
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Financial Performance
Pulp Cash Cost (R$/t)Net revenue (R$ million)
Pulp: sales volume ('000 t) Pulp: sales mix (000 t)
Cash cost w/o
stoppages (R$/t)
1.407
1.471
1.402
3Q08 2Q09 3Q09
946
1.3491.276
3Q08 2Q09 3Q09
521 509 473426 433
3Q08 4Q08 1Q09 2Q09 3Q09
487
422403
3Q08 2Q09 3Q09
21%
36%11%
30%
3Q09
38%
16%10%
37%
3Q08
BrazilNorth America EuropeAsia
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Financial Performance
CAPEX 9M09: R$1,232 millionEBITDA (R$ million) and EBITDA margin (%)
Net Income (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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241 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$/ BRL 62%/38% 62%/38%
Subordination structure
Original After plan Cash
No Collateral
With Collateral
Receivables
56%
1%
43%
79%
1%
20%
Indebtedness
Maturity Schedule 1 (R$ billion)
4,8
2,8
1,4 1,5
0,9 0,8
0,10,4
4,2
2,1
0,7
1,4 1,51,8 2,0
1,0
0,1
0,9
0,3
1,61,1
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
1,61,1
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Effects of the Liability Management Plan
Before the plan x After the plan
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Recent Events
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Recent Events
Dec 22Approval of the merger of Aracruz into Fibria
Nov 18Fibria trading start (Bovespa: FIBR3 / NYSE: FBR)
Nov 17End of Aracruz trading
Nov 12End of withdrawal rights period
Oct 29Shareholderes Agreement - VID and BNDES
Aug 24Merger of Aracruz shares into VCP approval
Aug 24Incorporation proposal for the 0.1347 ratio
Jul 02Tender Offer for Aracruz common shareholders
Jun 12VCP conversion of prefered into common shares
Apr 14VCP Capital Increase
Jan 20Acquisition by VCP of additional 28% of Aracruz common shares
Date/estimateEvent
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Investor Relations Team:
Marcos Grodetzky IRO
Andr Gonalves IR Manager
Fernanda Naveiro Vaz IR Consultant
Anna Laura Linkewitsch IR Specialist
Livia Baptista IR Analyst