Goldman Sachs 4th Annual Latin America Conference

November, 2012

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

Shareholder Structure

Votorantim Industrial S.A. 29.42%

BNDESPar 30.38%(1)

Free Float 40.20%(2)

Level III
NYSE 26%

EQUITY OFFERING (April 2012)

Bovespa 74%

- 86 million shares issued - Unit price: R$15.83/share or US$8.43/ADR - VID and BNDESPar maintained their
previous stake in the company

Average Daily Trading Volume (LTM): US$ 30 million

(1)

Position as of October 31, 2012. BNDESPar has 21% linked to a Shareholders Agreement with Votorantim Industrial S.A. during the first 3 years (until October 2012) and 11% during the following 2 years (from October 2012 to October 2014). (2) Free Float 40.14% + Treasury 0.06%

Improved Corporate Governance

Highlights
Listed on Novo Mercado, highest level of Corporate Governance at BM&FBovespa
Only 1 class of shares 100% vo?ng 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 NYSE

Level III Board Advisory Committees(1)

Audit and Risks Personnel and Remuneration Finance Sustainability Innovation

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 3Q12 LTM

Pulp capacity Net revenues Total area(1) Planted area(1)

Belmonte Veracel Caravelas Portocel Aracruz Trs Lagoas Jacare Santos

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

5.25 5.7 958 559 8.6 4.2 4.5

Net Debt Net Debt/EBITDA (in Dollars)(2) Net Debt/EBITDA (in Reais)

Port Terminal

Pulp Unit

Source: Fibria (1) Including 50% of Veracel, excluding forest partnership areas and excluding the forest base linked to the sale of forest assets in Southern Bahia State and Losango. (2) For covenant purposes, the Net Debt/EBITDA ratio is calculated in Dollars.

Fibrias Strategy

Clear Leadership Position

Industry Outlook(1)
Paper & Board 402 million t

Market Pulp Capacity Ranking 2012(2) (000t)

Fibria APRIL Arauco

5,250

57% Recycled Fiber 228 million t

43% Pulp 174 million t

Georgia Pacific CMPC Sodra

80% Chemical 140 million t

20% Mechanical 34 million t

Suzano Paper Excellence Weyerhaeuser UPM-Kymmene

37% Market Pulp 53 million t

63% Integrated Mills 87 million t 50% Softwood/Other 26 million t

Stora Enso Domtar Ilim

50% Hardwood 27 million t

IP Mercer ENCE West Fraser

63% Eucalyptus 17 million t

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

37% Acacia/Other 10 million t

Canfor Metsa Fibre Cenibra

30%

70% Other Eucalyptus Pulp producers: 12 million t

(1) (2)

1000

2000

3000

4000

5000

6000

Paper&Board, Recycled Fiber and Pulp: RISI | Market Pulp, Hardwood and Eucalyptus: PPPC Special Research Note Feb 2012 considers 2011 demand Hawkins Wright Outlook for Market Pulp, July 2012

Relevant Market Share and Competitive Position in the Cost Curve

Fibrias Market Share (1)

1000
10% 19%

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

Mill Cash Delivery SG&A Maint Capex Interest Exp

800 600 70 400 200 0 489 427 124 86 422 40 456 41 425 33 411 33 388 53 323

61 303

52 269

55 242

Total Market Pulp: 52.6 million t

Total Hardwood Market Pulp: 26.7 million t

30%

Hardwood Cash Cost (US$/t) vs Capacity (mt)

700 600 Cash Cost (US$/t) 500 400 300 200 100 0 1000 5000 10000 15000 000 tons 20000 Low Cost producers: 15mt 6.0 mt of HW market pulp with total delivered cash cost above US$500/t

Total Eucalyptus Market Pulp: 17.2 million t

(1) (2)

PPPC Special Research Note Feb 2012 considers 2011 demand Source: Mill Cash and Delivery: Hawkins Wright July 2012 Report | SG&A, Maintenance Capex and Financial Expenses: Fibrias estimates | Fibria 3Q12 figures

25000

30000

1.000

200

300

400

500

600

700

800

900

Pulp Price

(1)

4 months

Source: Bloomberg

Historical Pulp Price FOEX BHKP Europe (US$/t)(1)

3 months 3 months 5 months

May-98 Dec-98 Aug-99 Apr-00 Nov-00 Jul-01 Feb-02 Oct-02 May-03 Jan-04 Aug-04 Apr-05 Dec-05 Jul-06 Mar-07 Oct-07 Jun-08 Jan-09 Sep-09 Apr-10 Dec-10 Aug-11 Mar-12 Nov-12

US$768/t Nov 20th

1.000

1.500

2.000

2.500

500

Historical Pulp Price FOEX BHKP Europe (R$/t)(1)

Average 1998 -2012: R$1,292/t

R$ 1,597/t Nov 20th

10

May-98 Dec-98 Aug-99 Apr-00 Nov-00 Jul-01 Feb-02 Oct-02 May-03 Jan-04 Aug-04 Apr-05 Dec-05 Jul-06 Mar-07 Oct-07 Jun-08 Jan-09 Sep-09 Apr-10 Dec-10 Aug-11 Mar-12 Nov-12

Exchange Rates and Inflation Affect the Cost Structure

Exchange Rate Currencies Evolution versus Dollar (Jan03 = 100)
230 210 190 170 150 130 110 90 70 50

Real: 110%

Canadian Dollar: 50% Chilean Peso: 29%

Rupia: 3%

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

Fibrias Commercial Strategy

Fibrias End Use Differentiation: Customized pulp products to specific paper grades Sole supplier to key customers: Top 5 clients represent 63% of total sales Long term contracts Competitive logistics set up
P&W 33% Tissue P&W 50% 32% 18%
Nyon Miami Hong Kong

Special ities 11% Tissue 56%

26%
[Link]

41%
Europe

Tissue

26% 61% 12%

Specialities

Csomd

23%
Asia

P&W Specialities

Tissue P&W Specialities

98% 0% 2%

10%
[Link]

So Paulo

Tissue P&W Specialities

43% 56% 1%

Source: Fibria 3Q12

Fibria Sales Distribution

Fibria Offices

12

Door to Door Operations

and an efficient and integrated logistics guarantee a competitive cost structure
Pulp mill Outbound Logistics Forest
Integrated logistics solutions Low forest to mill average distance

Easy access to the most efficient transportation network: rail, barging and road

Portocel: specialized port for the pulp and paper industry Efficient Logistics Setup

Client

Port

Sea Freight

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 14

Genetic and Technological Development at Fibria

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

[Link]

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, [Link] tropical and temperate eucalyptus, Chile temperate eucalyptus, Portugal/Spain temperate eucalyptus, USA/Canada aspen, Finland/Sweden betula.

16

Pulp and Paper Market

17

Global Paper Consumption

CAGR 1996 2006 CAGR Developed Markets: + 1.7% CAGR Emerging Markets : + 6.0%
117,611 85,291

CAGR 2007 2016 CAGR Developed Markets: - 4,0% CAGR Emerging Markets : + 4.1%
114,507

P&W Consumption (000 tons)(1)

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Developed Markets

Emerging Markets

CAGR 1996 2006 CAGR Developed Markets: + 2.4% CAGR Emerging Markets : + 6.9%
26,877 15,548

CAGR 2007 2016 CAGR Developed Markets: + 1.4% CAGR Emerging Markets : + 6.7%

37,250

Tissue Consumption (000 tons) (1)

199619971998199920002001200220032004200520062007200820092010201120122013201420152016

Developed Markets
(1) Source: RISI

Emerging Markets

18

Global Market Pulp Demand

Hardwood demand will continue to increase at a faster pace than Softwood
Hardwood (BHKP) vs Softwood (BSKP) (000 tons) Average Demand Growth Rate

35.000 30.000 25.000 20.000 15.000 10.000

2011 -2016 CAGR: Hardwood: +2.3% Softwood: +1.0%

000 ton

1996

2006

2016

Growth 19962006 56% 106% 35%

Growth 20072016 27% 67% 7%

Hardwood Eucalyptus Softwood Market Pulp

14.3 5.4 16.4 30.8

22.4 11.1 22.0 44.4

29.9 21.4 24.1 54.0

5.000 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Hardwood Softwood

Source: PPPC

19

Global Pulp Demand and Paper Capacity

Global Paper Net Capacity Change Tissue (million t)

Emerging Markets
2012 Hawkins Wright Brian McClay 2,512 2,416 2013 950 1,003

Global Market Pulp Demand(1) 10M 2012 vs 10M 2011

Developed Markets
2012 160 180 2013

16% Total 3% 3%

360 352

3,982 3,951

-2%

-2% -9%

Printing&Writing (million t)
Emerging Markets 2012
Hawkins Wright Brian McClay PPPC 2,835 2,478 1,260

Developed Markets 2012

-2,400 -2,355 -2,575

Total

Total

North America

Europe

Latin America

Japan

China

2013
680 347 1,180

2013
50 -490 -140 1,165 -20 -275

(1) Source : PPPC World 20

20

NBSK vs. BHKP FOEX Price Spread CIF Europe (US$/t)

Main Questions: Softwood availability in the future? Certified Softwood availability in the future? Medium/long term, only Softwood substitution by Harwood will be sustainable Hardwood and Softwood prices will be more and more disconnected

250

200

150

100

50

mar-08 mar-09 mar-10 mar-11 mar-12 set-08 set-09 set-10 set-11 mai-08 mai-09 mai-10 mai-11 mai-12 jan-08 jan-09 jan-10 jan-11 jan-12 nov-08 nov-09 nov-10 nov-11 set-12 jul-08 jul-09 jul-10 jul-11 jul-12

21

Concentrated New Capacities Ineffective on Price.

1000

2,00

900 Eldorado Rizhao Trs Lagoas APP Hainan Fray Bentos Veracel Maranho Montes del Plata

1,80

800

1,60

700

1,40

Greenfield capacity (000 ton)

BHKP prices - cif Europe (US$/ton)

600

1,20

500

Nueva Mucuri Aldea

Santa F Kerinci PL3 Chenming Zhanjiang APP Guangxi

1,00

400

Valdivia

0,80

300

0,60

200

0,40

100

0,20

0 jan/02

0,00 jan/03 jan/04 jan/05 jan/06 jan/07 jan/08 jan/09 jan/10 jan/11 jan/12 jan/13 jan/14

22
Source: Hawkins Wright and Fibria

Capacity closures DO happen

Closures of Hardwood Capacity Worldwide (000 ton)

0 -85 -200 -105

-400 -500

-600

-540

-800 -910

-755

-1000

-1200 -1260 -1400 2006

Source: PPPC and FIbria

-1180

2007

2008

2009

2010

2011

2012

2013E

23

Pulp Projects Backlog

Even though there is an extensive pulp projects backlog, there are important question marks regarding new projects
Main Questions About Capacity
Minimum required return for new projects Closures due to increasing costs worldwide, reduction of maintenance Capex (higher technical age of recovery boilers) and exchange rates Fiber substitution: Softwood x Hardwood and Recycled x Virgin Fiber

Main Projects
Project Eldorado Montes del Plata Suzano Fibria Trs Lagoas II CMPC Guaba II Klabin Paran APP South Sumatra Suzano Piau Cenibra Belo Oriente II Country Brazil Uruguay Brazil Brazil Brazil Brazil Indonesia Brazil Brazil Capacity 1.5 Mt 1.3 Mt 1.5 Mt 1.5 Mt 1.5 Mt ~1.0 Mt 1.5 Mt 2.0 Mt 1.5 Mt 800 kt Timing 4Q2012 2H2013 4Q2013 3Q2014 4Q2014 2015 2015/16 2Q2016 2016 Status Confirmed Confirmed Confirmed Unconfirmed Unconfirmed Unconfirmed Unconfirmed Unconfirmed Unconfirmed

24

Technical Age and Scale in the Market Pulp Industry

Further closures are expected due to lack of adequate investments in the industry....
Hardwood (BHKP) Market Pulp Sotfwood (BSKP) Market Pulp

North American Pulp Mills

Source: Pory

Other Pulp Pulp Mills

25

China

26

China
Chinas Market Share of Market Pulp Shipments (%)(1)

8.000 26% 25% 6.000 21% 18% 4.000 14% 17% 2.000 12% 15% 16% 15% 19% 20% 25% 26% 26% 26%

Latin America is the main supplier to China

0
2005 2006 2007 2008 2009 2010 2011 9M 2012

Eucaplyptus ('000 t)

Hardwood ('000 t)

(1) Source: PPPC Global 100 Report

27

China: a Major Player

P&W Grades Expansion in China (000 tons)

+4.8 million tons until 2015

Increasing Tissue Consumption with Wealth Distribution

+ 3.2 million tons until 2016

14,600

100
(%) of population not poor (McKinsey) (RHS)

31,986

13,600 12,600

30,587 29,647 28,782

11,600 10,600 9,600 8,600 7,600

27,200
6,600 5,600 4,600 3,600 2,600

50
Production (LHS) Consumption (LHS)

2011

2012

2013

2014

2015

1,600

600 1990 1995 2000 2005 2010 2015 2020 2025

Source: RISI and McKinsey, PPPC Chinese Market Pulp Demand.

28

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

World Tissue Consumption, 1991-2011(1)

Million tons

25 20

23,5

35 30 25

Average Growth Rate +3.8%a.a.

15,6

15 10

14,6 11,2

Huge potential growth

5,6 4,4

20 15 10

5 0

3,6

3,0 0,7 0,5

5
Africa

L. America

N&M East

Asia Far East

Oceania

W. Europe

Japan

N. America

E. Europe

China

0
1991 1996 2001 2006 [Link] Asia FE 2009 [Link] Oceania 2010 NME Africa 2011 [Link] Japan [Link] China

(1) Source:

RISI

29

Financial Highlights

30

3Q12 Key Messages

Operating Excellence Cost Control Capex Discipline Working Capital Improvement Free Cash Flow Generation

Liability Management Losango Sale (R$ 615mn) Leverage reduction Other liquidity events Liability and Liquidity Policy Debt cost reduction

Growth with Discipline Brownfield projects on hold Ensyn equity acquisition: portfolio diversification

Focus on Investment Grade Recovery

31

3Q12 Results
Pulp Sales Volume (000 t)
5,255
LTM sales close to nominal production capacity

Net Revenues (R$ million)

1,449 1,491 1,556
Europe: 41% North Am: 26% Asia: 23% Others: 10%

1,244

1,265

1,268

3Q11
(1) LTM: Last twelve months

2Q12

3Q12

LTM(1)

3Q11

2Q12

3Q12

Cash Cost(2) and COGS on a cash basis(3) (R$/t)

Inventories Turnover
3Q12 vs 3Q11 Cash Cost :

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

481

533

(4)

37% 33% 476 550

37%

505 493

491 515

- FX effect +R$ 15/t - Inflation: 5.3%

573

3Q11 Cash Cost

2Q12

3Q12

3Q11

2Q12

3Q12 32

COGS on cash basis

(2) Cash Cost including downtimes | (3) COGS: Cost of good sold excluding depreciation, amortization and depletion, freight and accruals for losses on ICMS credits | (4) 3Q11 COGS on a cash basis is not comparable with 2Q12 and 3Q12 as it includes paper production of Piracicaba Unit, sold in Sep 2011

Debt
Key Figures
(R$ million) Gross Debt Cash(1) Net Debt Net Debt/EBITDA (R$) Net Debt/EBITDA (US$)(2) 3Q12 10,955 2,398 8,557 4.5 4.2 2Q12 11,882 3,420 8,462 4.7 4.2 3Q11 11,314 1,772 9,542 4.2 3.8 3Q12 vs 2Q12 -8% -30% 1% -0.2 0.0 3Q12 vs 3Q11 -3% 35% -10%

Debt Amortization Schedule (R$ million) Sep/2012

2020 Notes Tender Offer reduced gross debt by 8% Cash position = 2.2x short term debt

3,270

1,181
0.3 0.4 2012
(1) Includes

1,521 709 662 981 783 610

485

753

2013

2014

2015

2016

2017

2018

2019

2020

2021

the hedge fair value (2) Ratio considered for covenants verification

Debt Profile
Cost of Debt Foreign Currency (% p.a.)
5.4% 5.2% 93% Local currency Foreign currency Bond BNDES Others 27% Pre-payment NCE

Average Maturity (months)

69 65

By Currency
7% 17%

By Type
6%5% 45%

2Q12

3Q12

2Q12

3Q12

33

Liability Management
6.5
Net Debt/EBITDA (x) in Reais

4.8 4.2 4.2

5.2 4.7 4.8 4.2 4.5 4.2

Net Debt/EBITDA (x) in Dollars*

From June 30 2012 on, net debt/EBITDA ratio for covenant purposes are calculated in US Dollars

3.6 2.9 11.0 9.8 8.0

3.2

3.8

9.5 8.0

9.5

9.0

8.5

8.6

Net Debt (R$ mn)

2009
Average End of Period 2.00 1.74

2010
1.76 1.67

1Q11
1.73 1.63

2Q11
1.69 1.56

3Q11
1.65 1.85

4Q11
1.67 1.88

1Q12
1.70 1.82

2Q12
1.96 2.02

3Q12

2.03 2.03

FX Rate (R$/US$)

*From June 30 2012 on, net debt/EBITDA ratio for covenant purposes are calculated in US Dollars and the limit is 4.5x

34

Free Cash Flow

Free Cash Flow Generation 9M2012 (R$ million)

1,500

(812) 114 (362) (4)

EBITDA
* Including partnership program

436

CAPEX*

Interest Paid/Received

Tax

Working Capital Free Cash Flow 9M2012

35

Cash Flow Sources and Uses

Sources and Uses (R$ million) 9M2012

3,244
Other(1) Asset Sale(3)

3,244 110 362

Derivatives Interest Paid/Received

88 200

Operating Cash Flow

812 1,498

Capex

Tender offer for US$ 514mn of Fibria 2020 Notes @ 7.5% a.a.

582
Working Capital

Cash Tax

114

Debt service reduction of approx R$ 80mn/year Losango sale for R$ 615 mn(3)
(proceeds not included in the Sources of Funds)

Equity Offering(2)

1,344

1,374

Net Borrowings

Sources

Uses

(1)

Other: FX variation on cash position (R$ 67 million) + Other asset sale (R$ 21 million) assets in Southern Bahia State : advance payment received on June 29, 2012 | Equity Offering: net amount (3) Proceeds to be received in 3 installments (i) R$ 488 million after the approval by the Administrative Council for Economic Defense (CADE); (ii) R$ 122 million by the time of CADEs approval, on an escrow account to be opened before a leading financial institution, which will be released upon other applicable governmental approvals and other condition precedent and (iii) R$ 5 million by the effective assignment of the existing agreements related to the assets and the applicable governmental approvals
(2) Forest

36

Hedging Policy and Strategy

Hedging Strategy Main goals: Minimum cash: protect our short-term debt amortization + cash conversion cycle Avoid EBITDA margin reduction below a set level 1,230 1,084 -65% Derivatives Notional(1) (US$ mn)

923

791 433

Hedging Policy 3Q11 Guidelines: No leverage Limits per counterpart Derivative instrument linked to the effective exposure Maximum hedging limits: Currency: up to 75% of the 12 month exposure All contracts registered in DTC
% of exposure hedged 56% 53% 54% 44% 18%

4Q11

1Q12

2Q12

3Q12

Macroeconomic fundamentals indicate a floor for FX rate @ R$2.00 In this context, Fibria reviewed its Hedging Strategy to become more exposed to the Dollar

(1)

Includes Non Deliverable Forwards and US Dollar Option

37

Liquidity Events

Event

Amount

Conclusion Date Jan-Feb 2011

Status

Conpacel and KSR Asset Sale

R$ 1,500 mn

Piracicaba Asset Sale

R$ 567 mn

Sep 2011

Equity Offering

R$ 1,361 mn

Apr 2012

Forest and Land asset sale(1)

R$ 235 mn

Jun 2012

Losango Forestry Base(2)

R$ 615 mn

Sep 2012

Total

R$ 4,278 mn

(1) R$ 200 million received on June 29, 2012. Outstanding balance to be received until Nov 14 subject to due diligence. (2) Proceeds to be received in 3 installments (i) R$ 488 million after the approval by the Administrative Council for Economic Defense (CADE); (ii) R$ 122 million by the time of CADEs approval, on an escrow account to be opened before a leading financial institution, which will be released upon other applicable governmental approvals and other condition precedent and (iii) R$ 5 million by the effective assignment of the existing agreements related to the assets and the applicable governmental approvals 38

Investor Relations E-mail: ir@[Link] Phone: +55 (11) 2138-4565 Website: [Link]/ir

39