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BTG Pactual 10th Latin American CEO Conference September, 2019 1

BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

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Page 1: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

BTG Pactual 10th Latin American CEO Conference

September, 2019

1

Page 2: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

Disclaimer

This communication contains certain statements that are “forward-looking statements” within the meaning of Section 27A of the

Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. Some of these forward-looking statements are

identified with words like “believe,” “may,” “could,” “would,” “might,” “possible,” “will,” “should,” “expect,” “intend,” “plan,” “anticipate,”

“estimate”, “potential”, “outlook” or “continue,” the negative of these words, other terms of similar meaning or the use of future

dates. Forward-looking statements in this communication include, without limitation, statements regarding the implementation of

operating and financing strategies and initiatives, including with respect to the integration of Fibria’s operations and expected

potential synergies, plans with respect to capital expenditures, and factors or trends affecting financial condition, liquidity or

results of operations. Such statements reflect the current views of management and are subject to a number of risks and

uncertainties, including changes in prices and customer demand for our products, changes in raw material costs, pricing actions by

competitors, changes in the rates of exchange of the Brazilian real against the US dollar, and general changes in the economic

environment in Brazil, emerging markets or internationally. Such forward-looking statements are qualified by the inherent risks

and uncertainties surrounding future expectations generally, and actual results could differ materially from those currently

anticipated due to such risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur.

The statements information, opinions and forward-looking statements contained in this presentation speak only as at the date of

this presentation and should thus be considered in the context of the circumstances prevailing at the time. They are based on many

assumptions and factors, including general economic and market conditions, industry conditions, and operating factors, and are

subject to change without notice. Any changes in such assumptions or factors could cause actual results to differ materially from

current expectations. Suzano does not undertake any obligation to update any information, opinion or forward-looking

statements as a result of new information, future developments or otherwise, except as expressly required by law. All information,

opinions and forward-looking statements in this communication are qualified in their entirety by this cautionary statement.

2

Page 3: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

The New Suzano

3

Page 4: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

Our plantations

hectares of planted and certified areasequivalent to 200x Manhattan

m³/ha/yearaverage productivity

structural average radius

harvesting and inbound logistics

eucalyptus genetic base

areas

Geographically

An

first class assets base

4

Page 5: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

Our mills

tons of market pulp

MWmaverage

equivalent to 1.4 mnpeople town

tons of paper

pulp

supply chain

An

first class assets base

5

Page 6: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

An

first class assets base

Our logistics

served

exportpulp

fully

either close to shore or railway connected

mills

6

Page 7: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

pulp integrated

Paper business

clientsBrazilian brands

go-to-market model

Brazilian market share¹

¹ Addressable market.

An

first class assets base

7

Page 8: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

Fully integrated

Plantation

Port

Mill

Railway

8

Page 9: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

Cash Cost(¹)

1,8

2,0

2,1

2,6

2,7

2,8

3,1

3,7

3,8

10,9

Ilim

Mercer

Stora Enso

UPM

Metsa

April

Arauco

CMPC

APP + PE

Suzano

¹ Source: Hawkins Wright December 2018 (CIF Europe – USD/ton). ² Market pulp capacity production including hardwood and softwood volumes.

Undisputable

in the pulp industry

Top 10(²)

225

293

361 367391

435459

286

341

442 442462

Bra

zil

Ch

ile/U

rug

ua

y

Eu

rop

e

Ind

on

esi

a

Ca

na

da

/US

Oth

er

Asi

a/J

ap

an

Ch

ina

Ea

st E

uro

pe

Ch

ile

Oth

er

Eu

rop

e

Oth

er

Wo

rld

US

/Ca

na

da

Hardwood Softwood

9

Page 10: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

709 690 668622

2015 2016 2017 2018

Consistently

cash costR$/ton¹

¹ Cash production cost ex-downtimes. Pro forma basis of Suzano Papel e Celulose and Fibria Celulose cash production cost (R$/ton). Figures are adjusted by Brazilian inflation (IPCA) which represents R$ 104/t in 2015, R$ 52/t in 2016 and R$ 57/t in 2017.

10

Page 11: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

Synergies

11

Page 12: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

Structural competitiveness boosted by

¹ Total Steady State.

Capture Profile1

R$800MM R$900MM per year¹

2019 2020 2021

40%

90%100%

G&A

Supply Chain

Forestry

Industrial

Dec / Dec / Dec /

Operational Synergies

12

Page 13: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

Selected

examples

Benefit

InitiativeReduction in products (SKUs) per plant

Lower consumption of chemicals

Higher OEE¹

Industrial

Wood supply optimization

Wood logistics cost reduction

Forestry

Routes Optimization

Operational scale expansion

Transshipment costs reduction

Logistic /

Commercial

Contractual parameters equalization

Lower cost in industrial and forestry inputs and fuel

Procurement

Organizational Structure adjustment

Headcount reduction

G&A

Structural competitiveness boosted by

¹ Overall equipment effectiveness

13

Page 14: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

Preliminary Goodwill¹ R$ 8.1 bn

Total R$ 26.5 bn

Adjusted Balance Sheet to fair value¹ R$ 18.4 bn

Accounting effect: EBT reduction

Tax effect: taxable base reduction

¹ Based on preliminary PPA as disclosed on 2018 Financial Statements – Note 32 (ii).

² Estimate considering preliminary 10 years depreciation period.

³ Estimate considering preliminary 10 years fiscal amortization period.

Average² annual deductible expenses of R$1.2 bn¹

Average3 annual fiscal deduction of R$0.8 bn¹

14

Page 15: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

Resulting Company

15

Page 16: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

mostly from international markets

6.1 6.15.6

7.0

8.7

2014 2015 2016 2017 2018

Net revenues (US$ billion)

Asia

Europe

Americas

Note: Pro forma figures of Suzano and Fibria historical data.Average exchange rate of R$ 2.35 in 2014, R$ 3.33 in 2015, R$ 3.49 in 2016, R$ 3.19 in 2017 and R$ 3.65 in 2018.

Pulp

Others

P&W

25%Tissue

57%

Specialties

15%3%

Note: The data represents simple sum out of the sold volumes of Suzano + Fibria and also considers Klabin’s volumes.

16

Page 17: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

Adjusted EBITDA¹ and Margin¹R$ and US$ million and (%)

16,36114,799

4,477 3,830

52%48%

0%

10%

20%

30%

40%

50%

60%

0

5.000

10.000

15.000

20.000

25.000

2018 LTM2Q19

12,48110,920

3,415 2,826

0

0,1

0,2

0,3

0,4

0,5

0,6

0,7

0,8

0,9

1

0

5.000

10.000

15.000

20.000

2018 LTM2Q19

Operational Cash Generation²R$ and US$ million

¹ Excludes sales from the commercial agreement with Klabin. ² Operational Cash Generation = Adjusted EBITDA less Sustaining CAPEX. Note: for 2018 and LTM 2Q19 data is pro forma, considering the sum of the results of the companies, or weighted where applicable 17

Page 18: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

~ R$ 700 million EBITDA

Hedging Policy

Debt Hedge

Target: Net debt 100% denominated in USD

Operating Hedge

Target: up to 75% of the following 18 months

Current: 74% of net exposure²

¹ Sensitivity at each R$ 0.10/US$ variation

Revenue

COGS

SG&A

Sustaining Capex

88% USD

20% USD

27% USD

11% USD

~ R$ 600 million Operational Cash

Generation

Sensitivity¹

² Net exposure as of August 2019.

18

Page 19: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

2.080

761

51265

367797

1.916

841 581216 873 344

517

500

707

7,546

2,841

728938

711

1,314

2,416

1,548

8,128

Liquidity 2019 2020 2021 2022 2023 2024 2025onward

¹ PTAX of 3.8322 R$/US$ (06/30/2019)² Total average cost in US$ considering the debt in BRL adjusted by the market swap curve.3 Liquidity position as @2Q19

debt profile

Pro-forma³ Amortization Schedule (US$ million)¹ average debt maturity

US$ 15.8 bn

Average Cost (US$)²:

Figures from the closing of the 1Q19 for comparison purposes.

77% from 2023 onwards(vs. 55% 1Q19)

3

Cash on hand

RCF

Trade Finance

Non-Trade Finance

19

Page 20: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

and

Funding sources

Sources

Non Trade Finance Related Bank

Trade Finance Related Bank

32%International Capital Markets

44%Local Capital Markets

17%

7%30%

70%International

Counterpart

Local

As of June 30, 2019. 20

Page 21: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

Net Debt (US$ billion)

¹ Operational Cash Flow = Adjusted EBITDA – Sustaining Capex | ² Net Debt and Leverage on June 30, 2019. Considers the adjustments mentioned on amortization schedule slide. | . ³Closing rate (BRL/USD): Jun/19: R$3.83

Jun-19³

13.7

Long-Term Target

10

Leverage US$

(Net Debt / Adj. EBITDA)²

3.6x

IndebtednessNet Debt/EBITDA Ratio (in US$):

1.0x to 3.0xNormal Cycle

1.0x to 3.5xInvestment Cycle

Dividend

The lowest between:

25% of the net income or 10% of the Operational Cash Flow Generation¹

Policies

21

Page 22: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

Capital

¹ States of São Paulo and Maranhão.

2019e

Sustaining 4.0

Forest and Land

Total

Modernization and Expansion

Port Terminals¹

Capex (R$ billion) 2018

3.9

0.62.0

1.41.3

0.40.2

6.47.4

Old New

2019e

3.8

0.4

1.3

0.4

5.9

22

Page 23: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

Bonds

23

Page 24: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

¹ Issuances with no maturity in 2026 interpolated for comparative purposes; G-spread as of September 10, 2019.Source: Bloomberg.

G-spreads¹ in Brazil

One of the

Rating Outlook

BBB-

BBB-

Stable

Negative

Investment Grade 162

210 213 222

258 267 271288

BRAZIL VALE GERDAU SUZANO KLABIN PETROBRAS BRASKEM BRF

24

Page 25: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

Source: Bloomberg, as of 08/12/2019

2,5

3,0

3,5

4,0

4,5

5,0

5,5

6,0

Jun-18 Jul-18 Aug-18 Oct-18 Nov-18 Jan-19 Feb-19 Apr-19 May-19 Jul-19

IP 26 (BBB)

Arauco 27 (BBB-)

CMPC 27 (BBB-)

Suzano 26 (BBB-)

Peers

25

Page 26: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

Pulp Market

26

Page 27: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

on global pulp demand

Source: PPPC S&D 2019.

Hardwood

Softwood

42,8

55,058,9

66,0

2023E2005 2015 2018

+1.2/y

+1.3/y+1.4/y

21,8 24,3 24,9 27,0

2005 2015 2018 2023E

+0.2/y +0.2/y +0.4/y

21,130,8

34,0 39,0

2005 2015 2018 2023E

+1.0/y +1.1/y+1.0/y

By Grade

in million tons

Global Market Pulp Demand

in million tons

27

Page 28: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

Driven by end-uses

Global Market Pulp Demand by end use

Source: PPPC S&D 2019, Poyry, Hawkins Wright, Suzano BI.

47%

26%

20%

Breakdown

58.9 Demand Annual Growth until 2030million tons

Packaging

Tissue & Fluff

Printing & Writing

Specialty

+2.3%

+2.9%

-0.7%

+0.6%

Paper and paperboard

demand average growth of

until2030

28

Page 29: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

Source: RISI

China became the leading consumer of tissue

100

2.100

4.100

6.100

8.100

10.100

12.100

14.100

2017 2018 2019 2020 2021 2022 2023

Western Europe

North America

China

Tissue Demand by main regionin thousand tons

29

Page 30: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

market dynamics

Supported by

Chinese Market Pulp Demandin million tons

Source: PPPC S&D 2019, RISI, Hawkins Wright, Suzano BI.

5,8

16,5

19,8

25,3

2005 2015 2018 2023E

+1.1/y

+1.1/y

+1.1/y

Tissue Machine Closures from Environmental Restrictionsin million tons

0,50,6

1,4 1,4 1,5

2018E20172015 2019E2016

Chinese Waste Paper Importsin million tons

29 28 26

17

20162015 20182017 2019-2023E

?

Woodchip Supply Restrictionsin million BDMT

12,4 13,3

6,5 4,5

3,1 3,3

2023E

Southeast Asia

3Chile

2018

Australia

Others25

23

2

Tissue Consumption per Capitain kgs per year

25,6

16,0 15,7

6,7 6,0

North America

West Europe

Japan Latin America

China

30

Page 31: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

Source: RISI

Chinese to hardwood chips sourcing

2009-2019YTD US dollars per BDMT, nominal prices CIF Share of pulp capacity based on imported HW chips

Imported HW chips by pulp grade Source of HW chips for the Asia-Pacific Markets, 2019YTD

31

Page 32: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

0

0,5

1

1,5

2

2,5

-

200

400

600

800

1.000

1.200

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

BHKP BHKP adjusted by CPI

Ca

pa

city

Ad

dit

ion

s (‘

00

0 t

on

)(2)

Pu

lp P

rice

s -

CIF

Eu

rop

e (

US

$/t

on

)(2)

No major new capacity in the short term

Metsa

Horizonte 2

APP South Sumatra(1)

Klabin

Guaíba II

Oji Nantong

Montes del Plata

Eldorado

Maranhão

ChenmingZhanjiang

APP Guangxi

Rizhao

TrêsLagoas

KerinciPL3

Fray BentosSanta Fé

Mucuri

Nueva Aldea

Veracel

APP Hainan

Valdivia

JacareiAracruz

7,650 kt 3,600 kt(1) Partially integrated production(2) Sources: Hawkins Wright, Poyry and Suzano(3) Gross capacity, does not consider the closure of Line 1 in Horcones plant (Source: RISI)

MAPA(3)

UPM Uruguay

32

Page 33: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

33

Page 34: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

34

Long term NPV maximization

1 Production capacity depending on conditions of global pulp market, according to Material Fact released on 05/09/2019.

Estimated Market Pulp Production in 20191

million tons

~9.0

2019 production guidance

Preservation of more productive forest base

Wood supply mix management

Gradual implementation during the year

Page 35: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

ESG for more valueand less risk

35

Page 36: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

a

aCEO

Sustainability Committee

Reports to

• Coordinate the Sustainability Strategy throughout the company• Integration of sustainability aspects throughout the company • Transparency and dialogue • Stakeholder relationship and engagement• Implementation social, environmental and sustainability projects• Reporting

Board of directors

Chief Sustainability

Officer

Innovation and Technology

New business Strategy, HR, IT ….

Forest Environment

Social Development

Instituto Ecofuturo

Corporate Sustainability

36

Page 37: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

April May June July August September October November December

Development of long-term goals and definition of institutional commitments and positions:

Carbon, Biodiversity and Conservation, Waste, Water, Productivity and Communities

1. GROUNDING 2 Engagement

3. LONG TERM GOALS

Benchmarking

Community favorability

Stakeholders consultation

Suzano’s leadership interviews

External Stakeholders:• EUA• Europe• Brazil

3. ROADMAP

Create the company's institutional roadmap and develop Sustainability strategies in conjunction with Business Units

JANUARY 2020

2020

Construction process

37

Page 38: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

- 100% of the wood used in the production process is controlled (traceability)

- Compliance with the chain of custody management systems Forest Stewardship Council® (FSC®) and Cerflor® / Programme for the Endorsement of Forest Certification (PEFC)

- Commitment to prevent sourcing and supply of wood from:

1Illegally harvested wood

2Wood harvested in violation of traditional and human rights

3Wood harvested in forests where high conservation values are threatened by management activities

4Wood harvested in forests being converted to plantations or non-forest use

5Wood from forests in which genetically modified trees are planted

38

Page 39: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

In the concept of the new economic model, there is no way to exclude the role of the forest regarding climate change

Eucalyptus plantation + native forest preservation = carbon sequestration

Committed to CDP (Climate, Water, Forest) and TCFD

Public engagement

Positive Balance(capture – emissions)

➢ Greenhouse inventories – GHG Protocol methodology (http://www.ghgprotocolbrasil.com.br/?locale=en)

➢ About 90% of Company’s energy requirements based on renewable fuels (black liquor and biomass)

39

Page 40: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

Sustainable Forest Management Model

❖ Operation takes place in exclusively and already consolidated agricultural and degraded areas

❖ Commited to zero deforestation

❖ Wood purchase policy and forest management plans

❖ Aiming for biodiversity maintenance, soil productivity, water cycle preservation, carbon sequestration and stock, etc.

~40% of its total area devoted to conservation (~900 k hectares)

All Suzano industrial units are certified

- Forest Stewardship Council® (FSC®) and/orCERFLOR® / PEFC

- Traceability of 100% of the total raw material used in operations

40

Page 41: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

Water body (rivers)

Pulp and paper production

Evaporation

Pulp and paper – final product

20%

80%

- Suzano returns about 80% of the water withdrawn from the river as treated effluent

- High efficiency in the use of water – withdraw is below the BAT of IPPC (Integrated Pollution Prevention and Control), which is within 30-50m³/adt

Recirculation of around 5 times

Returns as treated effluent

Water withdraw22 – 32m³/adt

41

Page 42: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

❖ Suzano has no genetically modified trees deployed in commercial operations at this time.

❖ Plant biotechnology to improve forest yield and forest protection.

❖ FuturaGene undertakes extensive biosafety evaluation of new varieties, including human and animal safety and environmental impact, under normatives determined by the National Biosafety Technical Commission (CTNBio)

❖ Environmental impact assessment protocol of CTNBio includes studies to evaluate if the GM variety impacts the environment differently from conventional varieties

❖ Policy of open dialogue with multiple stakeholders with respect to the Suzano’s GM program (including NGOs, certification bodies, smallholder farmers, agricultural associations and customers).

42

Page 43: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

PDRT

Indigenous communities

- Risk and cost reduction: operational and reputational

- Certification demands adherence

- Income generation and education improvement as drivers for life quality increase and financial self-sufficiency

- Open dialogue and programs jointly developed with traditional communities, NGOs, social movements, government and other companies

- Examples:

PDRT

+4,000 familiesAttended

R$ 1,431 Families’ average income

111 communities Attended

Territorial Sustainability

R$ 881 Families’ average income

31 communities Attended9 different Indian ethnicities

2,976 familiesAttended

+1,000 familiesAttended

R$ 1,668 Families’ average income

76 communities Attended

1,664 tons of honey production (30% of São Paulo state production)

Beehives

43

Page 44: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

in place

Board of Directors Supported by

Up to 10 members

Eligibility assessment

20% independent members

Audit Statutory Committee

Management and Finance Committee

Innovation and Strategy Committee

Sustainability Committee

Talent and Compensation Committee+

Well-balancedManagement

44

Page 45: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

Our Future

45

Page 46: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

PulpConsumer Goods Paper

Fluff

Lignin

Nanocellulose

Dissolving Pulp

Bio fuel

Bio Composites

Geographic expansion in Brazil

Portfolio expansion

Organic

M&A

Innovation and New Businesses

International Expansion

46

Page 47: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

47

Page 48: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

Backup

48

Page 49: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

Mill – Pulp capacity2018 2019 2020

1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20

Aracruz - Line A (ES) – 590 kt

Aracruz - Line B (ES) – 830 kt

Aracruz - Line C (ES) – 920 kt

Imperatriz (MA)² – 1,650 kt

Jacareí (SP) – 1,100 kt

Limeira (SP)² – 690 kt

Mucuri - Line 1 (BA)² – 600 kt

Mucuri - Line 2 (BA) – 1,130 kt No downtimes

Suzano (SP)² – 520 kt No downtimes

Três Lagoas - Line 1 (MS) – 1,300 kt

Três Lagoas - Line 2 (MS) – 1,950 kt

Veracel (BA)¹ – 560 kt No downtimes

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Page 50: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

Source: Poyry, Hawkins Wright, Suzano BI

Demand Growth 2018-2030

in million tons

60 60 60 61 61 61 62 62 62 63 63 64 64

49 50 51 52 53 54 55 56 58 59 60 61 62

166 169 174 178 182 186 191 195 200 205 210 215 220

41 43 44 45 46 48 49 51 52 54 55 57 5999 98 97 96 96 95 94 93 93 92 91 91 90

2025

Tissue & Fluff

2018 20202019

426

P&W

Containerboard

414

2021 2022

479

2023 2024

420

2028 2029 2030

495

Specialty

432 438

Cartonboard

445458451

465 472487

20272026

+80(+1.5%/yr)

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Page 51: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

Share on total fiber consumption

Other

Packaging

Paperboard

ContainerboardTissue

CoatedWoodfree

UncoatedWoodfree

CoatedMechanical

Newsprint

20 40 60 80 1004

0

2

1

3

-3

-1

-2

Average growth of

Source: Poyry(2017)

Est

ima

ted

de

ma

nd

gro

wth

un

til 2

03

0

(%p

.a.)

UncoatedMechanical

Emerging Markets: 2.2% p.a.Mature Markets: -0.2% p.a.

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Page 52: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

Source: Poyry, Hawkins Wright and Suzano BI

Others34

Packaging222

Newsprint23

Virgin Pulp

Non-Wood6

Tissue35

2018 Total Paper

Production

Hardwood34

P&W100

Bleached Chemical Pulp (BCP)

Recycled217

Virgin175

Fiber Consumption

Integrated110

Market Pulp65

59Unbleached2

Fluff6

Mechanical4

BCP59

Market Pulp

Softwood20

413 398175

65

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Page 53: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

Suzano’s tax structureDescription and Amount Maturity

(-)Deductible accounting expense Annual deduction: R$ 1.2 bn (based on 10yr average) According to assets maturity

(a) EBT As stated in the income statement

(-)(b) Goodwill (Fibria acquisition)Annual deduction: R$ 790 mn (based on 10yr average)

Tax benefit: ~R$ 270 mn2029(1)

(+/-)(c) Exchange variation (cash) ---------- ----------

(+/-)(d) Other ---------- ----------

Tax base before compensations (a) + (b) + (c) + (d)

(e) (-) Tax loss carryforward- Up to 30% of tax base before compensations

- Balance up to jun/19: R$ 1.0 billion (base)Undefined

(f) Tax base Tax base before compensations – tax loss carryforward (e) ----------

(g) Income tax Tax base (f) * 34% ----------

(h) (-) SUDENE 75% reduction of the annual payable Income Tax²2024 - Mucuri line 1 and Imperatriz

2027 – Mucuri line 2

(i) (-) Federal tax credits

Balance jun/2019:- PIS/COFINS: R$ 758 million

- Withholding tax (IR and CSLL): R$ 820 million- Reintegra: R$ 113 million

Undefined

Cash Tax Income Tax (g) – SUDENE (h) - Tax Credits (i)

¹ Based on PPA as disclosed on Financial Statements (ii) | ²Benefit does not include CSLL (Social Contribution) reduction 53

Page 54: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

and monitoring of its forest

base and efficient firefighting mechanism

❖ Forest monitoring towers, communication network, fire brigades, video monitoring

❖ Fire awareness and environmental education awareness activities

❖ Community workers and stakeholders involvement

❖ Commitment to native forest conservation

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Page 55: BTG Pactual 10th Latin American CEO Conference€¦ · Our mills tons of market pulp MWm average equivalent to 1.4 mn people town tons of paper pulp supply chain An first class assets

Investor Relations

www.suzano.com.br/ir

[email protected]

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