fixed income presentation 3q17 - suzanoir.suzano.com.br/enu/6636/fixed income presentation...
Post on 29-Aug-2019
220 Views
Preview:
TRANSCRIPT
1
Fixed Income
Presentation
3Q17
2
1. Company Overview
2. Investment Highlights
3. Operating and Financial Highlights
Agenda
3
Section 1
Company Overview
4
Suzano Papel e Celulose is a forestry based publicly held
company, controlled by Suzano Holding.
With over 90 years of operations, the Company produces
market pulp (paper grade and fluff) and paper, which portfolio is
composed by coated and uncoated printing & writing paper,
paperboard and tissue.
It is also the second largest eucalyptus pulp producer and the 5th
largest market pulp producer in the world.
Suzano has a leading position in all segments in which it
operates in the Brazilian Paper Industry.
Financial and Operational Highlights
Company Overview
Company Overview
Competitive Advantages
Forestry
Shorter Eucalyptus
cycle: 7 years
Biotechnology:
approved
eucalyptus GMO
with 20% yield
increase
Pulp
Low production
costs
Certified products
Energy self-sufficient
Diversified markets
Paper
Regional leader
Vertically integrated
industrial operations
Own distribution
Stronger relationship
with the end of the
value chain (Suzano
Mais Go to market
program)
Pulp
Production and sales optimization to maximize assets return
Source: Hawkins Wright and Company information
.
¹ Excludes non-recurring and/or non-cash items
Paperboard
Coated Uncoated
Printing &
Writing
68%32%
64%
36%
Exports Domestic Pulp Paper
Net Revenues
R$ 9.9bn
(R$ million), unless otherwise stated 2014 2015 2016 LTM 3Q17
Net Revenues 7,265 10,224 9,882 9,876
Gross Profit 1,909 4,040 3,311 3,501
Gross Margin 26.3% 39.5% 33.5% 35.5%
Adjusted EBITDA1 2,452 4,594 3,906 4,091
Adj. EBITDA Margin 33.8% 44.9% 39.5% 41.4%
Net Debt 10,326 12,469 10,317 9,283
Net Debt/Adj. EBITDA 4.2x 2.7x 2.6x 2.3x
Production Volume (thousand tons) 4,283 4,582 4,655 4,746
Product Portfolio
5
Strategy to maximize the return on invested
capital
• Anticipated return improvement
as result of cost reduction
initiatives coupled with
disciplined investments to
achieve optimal cost
• Investment in retrofitting and
debottlenecking should reduce
cash costs per ton by 19%1 by
2022
• Investments in adjacent
businesses such as FuturaGene
(biotech), Fluff, Lignin and
Tissue, leveraging on
Company’s current capabilities,
to improve margins by offering
high-value added products
• Transformational changes in
the industry should lead to
higher returns
• Suzano uniquely positioned to
have an active role with its
vertically integrated operation,
stablished commercial
relationships and consolidation
capacity, among other
opportunities
¹ The pulp cash cost was R$ 588/ton in the last 12 months ended on 09/30/2017.
6
Section 2
Investment Highlights
7
Investment Highlights
• Conservative Capital Structure and Strong Cash Generation
• Cost Efficient Operations and Disciplined Investments
to Improve Cash Generation
• Robust Asset Base with Unmatched Long Term
Competitive Advantages
• Best-Practices Governance
• Leading Position in the Industry
8
Conservative Capital Structure and Strong
Cash Generation
Note: ¹ Operational Cash Generation calculated as the difference between Adjusted EBITDA and Sustaining Capex2 Excludes non-recurring and/or non-cash items
Sustaining Capex
Adjusted EBITDA2
0.67
1.78 2.45
1.00 1.11
4.59
1.16
3.91
3.9 3.9 3.2 3.2 2.9
5.2x4.2x
2.7x 2.6x 2.3x
-5
-3
-1
1
3
5
0.0
5.0
10.0
15.0
20.0
25.0
30.0
2013 2014 2015 2016 Sep-17Net Debt (R$) Net Debt (US$) Net Debt/ Adjusted EBITDA (R$)
Continuous
leverage
reduction allows
Suzano to be
prepared for the
future
Operating
improvements
translated into
robust cash flow
generation
Net Debt and Leverage
Operational Cash Generation1
(R$ billion)
(R$ and US$ billion)
1.04
4.09
1.11.5
3.5
2.73.1
2013 2014 2015 2016 LTM 3Q17
9
Higher production and sales volume
Increasing utilization of own forest portfolio
Reduced operational costs
Long Term Commitment to Operational
Improvements
Cost Saving Initiatives
COGS
(R$/ton)
Inflation: +19.7%
Cost per tonne significantly below inflation
Ongoing initiatives to lead Suzano towards more profitable operations
Higher production and sales volume increased the
dilution of fixed costs
Decline in the share of third party wood purchases
Shorter distances between the forest and mills
contributed to reduce operational costs
SG&A
(R$/ton)
∆: +3.9%
∆: +10.9%
Industrial investment (modernization) to debottleneck1
Forest base increase and average distance reduction2
Cost reduction initiatives focused on operating efficiency coupled with
disciplined investments to achieve optimal cost in 2021E-2022E
Lower inputs consumption and fixed cost dilution3
Cash Cost (R$/ton)
¹ Nominal value in 2016.
1,283 1,368 1,391 1,333
2014 2015 2016 LTM 3Q17
166 191 177 184
2014 2015 2016 LTM 3Q17
642 623588 570
475
2015 2016 LTM 3Q17 2018¹ 2021-2022¹
10
Robust Asset Base with Unmatched Long Term
Competitive Advantages
1,197 k ha
of total area
579 k ha
of planted area
Commercial presence in 15 states in Brazil:
• 8 Regional Commercial Offices
• 4 Regional Distribution Centers
• 16 Local Distribution Centers
Plus commercial offices in USA, China, UK,
Switzerland and Argentina.
Highlights
Suzano’s forestry competitiveness allows its operation in different regions with adequate yields
Total Area1: 734k ha
Planted Area2: 256k ha
Average Structural Distance: 184 km
States of Maranhão, Pará, Tocantins and Piauí
Market Pulp: 1,650k tonnes
Tissue: 60k tonnes³
Imperatriz (State of Maranhão)
Notes
1. Figures consider own and leased area
2. Figures consider own, leased and third-parties areas
3. Start up in 4Q17 in Imperatriz (MA)
4. Start up in 2018
5. Flexibility to produce either Fluff or Printing and Writing paper
Forest Assets
Port
Distribution Center
Commercial Office
Total Area1: 270k ha
Planted Area2: 190k ha
Average Structural Distance: 74 km
States of Bahia, Espírito Santo and Minas Gerais
Total Area1: 193k ha
Planted Area2: 132k ha
Average Structural Distance: 190 km
State of São Paulo
Printing & Writing Paper: 50k tonnes
Rio Verde (State of São Paulo )
Market Pulp: 1,540k tonnes
Integrated Pulp: 200k tonnes
Printing & Writing Paper: 250k tonnes
Tissue: 60k tonnes
Mucuri (State of Bahia)
Market Pulp: 350k tonnes
Integrated Pulp: 300k tonnes
Printing & WritingPaper: 390k tonnes
Lignin: 20k tonnes4
Limeira (State of São Paulo )
Market Pulp: 70k tonnes
Integrated Pulp: 460k tonnes
Printing & Writing Paper: 360k tonnes5
Paperboard: 200k tonnes
Eucafluff: 100k tonnes5
Suzano (State of São Paulo )
Santos
Vitória
Itaqui
Portocel
1
2
3
4
6
57 8
Production PlantsForest Areas
1
2
3
4
5
6
7
8
11
Solid Leading Position in the IndustrySuzano has a leading position in all segments in which it operates
¹ Considers the total installed capacity as reported in the Companies’ public filings and investor relations, including of operations to be initiated.
² Data from September/2017 (PPPC). BEKP: Bleached Eucaliptus Kraft Pulp.
Source: Forestry Industry Association (IBA).
Suzano’s Positioning in the Industry
Brazilian Pulp Production (2) Brazilian Paper Demand
Pulp Production Capacity – Top 20 (1)
Printing & Writing Paperboard
(thousand tons)(thousand tons)
With an installed capacity of 4.8 MM tons per
year(1), and sales volume of 4.7 MM tons of pulp &
paper, Suzano is a leading player in the Brazilian
pulp & paper market
- 2nd largest Eucalyptus Pulp player in the world
in terms of installed capacity
- Supplies 57.9% and 36.5% of the Brazilian
demand for printing & writing paper, and
paperboard, respectively
(million ton)
Brazilian
Companies
1,543 1,484
292 328
1,835 1,812
2016 LTM 3Q17
Domestic Sales Imports
505 508
35 40
540 548
2016 LTM 3Q17
Domestic Sales Imports
20,133 20,817
2016 LTM 3Q17
7.3
3.8 3.7 3.7 3.5 3.32.8 2.7 2.7 2.5 2.5
2.0 1.8 1.8 1.7 1.7 1.5 1.5 1.4 1.3
12
Section 3
Operating and Financial Highlights
13
Paper Production
Operating ResultsPulp Business: Presence in the main international markets and strategic relationships with clients
Paper Business: Operational excellence in paper: product portfolio and revenue management, optimization of
assets, and strengthening of distribution channels
Pulp Production Pulp Sales Volume Paper Sales Volume
Paper Revenue BreakdownPulp Revenue Breakdown
(LTM 3Q17)
Pulp Sales Volume per
Segment
(3Q17) (LTM 3Q17)
Pulp Business Paper Business
LTM: Last Twelve Months ending on 09/30/2017
(thousand tons) (thousand tons) (thousand tons) (thousand tons)
2,9823,373 3,473 3,592
2014 2015 2016 LTM 3Q17
2,3732,835 3,117 3,238
478
456413 3812,850
3,2913,530 3,619
2014 2015 2016 LTM 3Q17
Export Brazil
Asia
46%
Europe
30%
North America
14%South
America/Central
1%
Brazil
9%
Packaging
7%
Tissue
61%
Specialty
15% Printing &
Writing
13%
Other
2%
North America
8%
Central/South America
16%
Other
5%
Brazil
71%
1,301 1,209 1,182 1,154
2014 2015 2016 LTM 3Q17
389 403 362 368
934 827 834 795
1,322 1,230 1,196 1,163
2014 2015 2016 LTM 3Q17
Export Domestic Market
14
Suzano has posted strong operational cash generation
Average
R$/US$
Financial Results
Net Revenue Adjusted EBITDA
(R$ million)
Operational Cash Generation LTM 3Q17 Historic Operational Cash Flow
(R$ million) (R$ billion)
3.492.35 3.33 3.20
LTM: Last Twelve Months ending on 09/30/2017.
3,851
6,603 6,558 6,311
3,413
3,621 3,324 3,565 7,264
10,224 9,882 9,876
2014 2015 2016 LTM 3Q17
Pulp Paper
2,452
4,595
3,906 4,091
2014 2015 2016 LTM 3Q17
588
1,016 827 856
Adjusted EBITDA
(R$ million)
Adjusted EBITDA/ton
(R$/ton)
4,091
3,053(1,039)
Adjusted EBITDA Sustain Capex Operational Cash
Flow
1.5
3.5
2.73.1
2014 2015 2016 LTM 3Q17
15
Financial Results by Business
Pulp Business
Paper Business
Revenue diversification translated into lower volatility of results
Adjusted EBITDA (R$/ton) Operational Cash Flow (R$/ton)
Adjusted EBITDA (R$/ton) Operational Cash Flow (R$/ton)
1,109
778873
2015 2016 LTM 3Q17
833
506638
2015 2016 LTM 3Q17
768
970
786
2015 2016 LTM 3Q17
604
803
625
2015 2016 LTM 3Q17
LTM: Last Twelve Months ending on 09/30/2017
16
Solid Debt Position and Focus on DeleverageSuzano’s Debt Profile
By Type Secured vs. Unsecured
(6.3%)
Net Debt(R$ billion)
Gross Debt(R$ billion)
(10.0%)
2014 2015 2016 3Q17
Indebtedness
Gross Debt (R$ billion) 14.02 14.9 14.0 13.1
Net Debt (R$ billion) 10.32 12.5 10.3 9.3
Short Term Debt 13.0% 12.4% 11.4% 13.6%
Ratios
Net Debt / Adjusted EBITDA (R$) 4.2x 2.7x 2.6x 2.3x
Net Debt / Adjusted EBITDA (US$) 3.7x 2.3x 2.9x 2.3x
Average Cost BRL 91%CDI 84%CDI 87%CDI 98%CDI
Average Cost USD 4.7% 4.2% 4.7% 5.0%
Average Term (months) 47 40 42 80
Interest Coverage 2.3x 3.8x 3.6x 3.8x
Debt Breakdown Debt Maturity Profile
(% of Gross Debt) (By currency in R$ billion)1
Debt Overview Gross Debt and Net Debt
(R$ billion)
1 FX USD/BRL of 3.17 on 09/30/2017.
Bond
41%
Certificates of
Agribusiness
Receivables
20%
BNDES
5% Import Financing
7%
Other
2%
Export
Financing
24%
Secured, 14%
Unsecured, 86%
14.013.1
Dec-16 Sep-17
10.39.3
Dec-16 Sep-17
994 175
1,421 1,146 748 2,078 3,882
2,856
142
545 910 1,749 149
189
3,850
316
1,966 2,055 2,497
2,227
4,071
Cash 4Q17 2018 2019 2020 2021 2022
onward
USD BRL
72% 28%
17
Net Debt /
Adjusted EBITDA
LTM
Klabin Arauco Fibria CMPC Suzano
Standard & Poors BB+ BBB- BBB- BBB- BB+ (Positive)
Fitch Ratings BB+ BBB BBB- BBB BB+ (Positive)
Ratings Overview
¹ Last twelve months ending on 09/30/2017 in R$. | ¹ Last twelve months ending on 09/30/2017 in US$. | ² Last twelve months ending on 06/30/2017 in US$ .
BB+BB/ BB-
BB+/BB
BB+/BB+BBB-/BBB-
BBB/BBB
BB+/BB+
BB /BB
2010 2012 2015 2017
SovereignS&P / Fitch
Suzano´s Ratings Evolution
4.4x3.3x 3.2x 3.1x
2.3x
Klabin¹ Arauco³ Fibria¹ CMPC² Suzano¹
18
CAPEX
18Note: ¹ Estimated CAPEX
9M17 2018¹
Sustain
Structural Competitiveness
and Adjacent Business
0.8
0.5
1.3 1.8
0.6
1.2
R$ billion
Total
2017¹
1.8
0.7
1.1
19
ROIC
It is the most appropriate metric to measure
the industry returns, which is capital intensive
ROIC = (Adjusted EBITDA – Sustaining CAPEX – Tax cash account) /Capital Employed
Note: * Last Twelve months ended on 09/30/2017
9.3%
11.8%
15.6%
12.7%
5.2%
15.7%
10.5%
12.9%
6.4%
14.7%
11.9%13.0%
2014 2015 2016 LTM 3Q17
Paper Pulp Total
20
Suzano’s Bonds
Bond 2047 Performance
Bond 2026 Performance
0
5,000
10,000
15,000
20,000
25,000
12-Jul-16 12-Aug-16 12-Sep-16 12-Oct-16 12-Nov-16 12-Dec-16 12-Jan-17 12-Feb-17 12-Mar-17 12-Apr-17 12-May-17 12-Jun-17 12-Jul-17 12-Aug-17 12-Sep-17
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
Suzano 2026
Volume (USD MM) Yield (%)
0.00
5,000.00
10,000.00
15,000.00
20,000.00
25,000.00
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
Suzano 2047
Volume (USD MM) Yield (%)
21
www.suzano.com.br/ir
ri@suzano.com.br
Investor Relations
top related