Morgan Stanley Latam Executive Conference

January, 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

VCP and Aracruz Merged to Create Fibria

Shareholder Structure

Votorantim Industrial S.A. 29.34%

BNDESPar 30.42(1)

Free Float 40.24%(2)

Level III
NYSE 34%

Bovespa 66%

Average Daily Trading Volume (LTM): US$ 37 million

(1) (2)

Position as of November 30, 2011. BNDESPar has 21% linked to a Shareholders Agreement with Votorantim Industrial S.A. during the first 3 years and 11% 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

Pulp capacity Net revenues(1) Total area(2) Planting area(2)

Belmonte Veracel Caravelas Portocel Aracruz Trs Lagoas Jacare Santos

million tons R$ billion thousand ha thousand ha

5.25 6.0 1,076 609 9.5 4.2

Net Debt(3)
Net Debt/EBITDA(3)

R$ billion
x

Port Terminal

Pulp Unit

Source: Fibria (1) Last Twelve Months as of September 30, 2011. (2) As of September 30, 2011, including 50% of Veracel and excluding forest partnership areas (124 thousand ha). (3) As of September 30, 2011.

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(1) Bahia 1.1 million t/year

(1) Veracel

is a jointure venture between Fibria (50%) and StoraEnso (50%).

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

37% Market Pulp 50 million t

63% Integrated Mills 84 million t 50% Softwood/Other 25 million t

Botnia/M-real UPM-Kymmene Domtar

50%
Hardwood 25 million t

Ilim
Mercer IP

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

ENCE
37% Acacia/Other 9 million t 63% Eucalyptus 16 million t

West Fraser Canfor Cenibra

32%

68% Other Eucalyptus Pulp producers: 11 million t

(1) (2)

1000

2000

3000

4000

5000

6000

RISI and PPPC (nov 2011): considers 2010 demand 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
11% 21%

Delivery

1000

800
600 400 200 464 500 501 493 120 70

SG&A Maintenance Capex Financial Expenses

39

41

85 423

42 456

33 426

57
359

69 316

51 310

55 288

Total Market Pulp: 49.8 million t

Total Hardwood Market Pulp: 24.9 million t

32%

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 20000 25000 30000 Bleached hardwood kraft

10 million t

Total Eucalyptus Market Pulp: 15.8 million t

Capacity ('000s t)

10

Pulp Price
Historical Pulp Price FOEX BHKP Europe (US$/t)
2.500

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

1.000 900 800 700 600 500

2.000

US$652/t Dec 27

1.500

400
300

3 months 3 months

5 months

1.000

Average: R$1,284/t

4 months
200 100 0 May-98 Nov-98 May-99 Dec-99 Jun-00 Dec-00 Jul-01 Jan-02 Jul-02 Jan-03 Aug-03 Feb-04 Aug-04 Feb-05 Sep-05 Mar-06 Sep-06 Apr-07 Oct-07 Apr-08 Oct-08 May-09 Nov-09 May-10 Nov-10 Jun-11 Dec-11 0 May-98 Nov-98 May-99 Dec-99 Jun-00 Dec-00 Jul-01 Jan-02 Jul-02 Jan-03 Aug-03 Feb-04 Aug-04 Feb-05 Sep-05 Mar-06 Sep-06 Apr-07 Oct-07 Apr-08 Oct-08 May-09 Nov-09 May-10 Nov-10 Jun-11 Dec-11 500

In December 27th, FOEX BHKP Index increased for the first time since June, indicating that FIBRIAs strategy to increase its pulp price was appropriate. 11

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 Jan-03 Mar-03 May-03 Jul-03 Sep-03 Nov-03 Jan-04 Mar-04 May-04 Jul-04 Sep-04 Nov-04 Jan-05 Mar-05 Jun-05 Aug-05 Oct-05 Dec-05 Feb-06 Apr-06 Jun-06 Aug-06 Oct-06 Dec-06 Feb-07 Apr-07 Jun-07 Aug-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Rupia: -2% Real: 90%

Canadian Dollar: 54% Chilean Peso: 38%

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

12

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
Speciali ties 22% Tissue 58%

End Use 3Q11

Over 20 years of relationship with many of the main clients

Global contracts
P&W 20%

N.America

29%

Europe

41%

Nyon Miami

Csomd

20%
Asia

Hong Kong

L.America

10%

So Paulo

Source: Fibria 3Q11

Fibria Sales Distribution

Fibria Offices

13

Focus on Premium End-Uses

Fibria's Pulp Destination

Printing&Writing 20%

Market Pulp Destination

43%

2010-2025 Demand Growth (CAGR)

1%

Tissue

58%

24%

4%

Specialities

22%

14%

3%

Newsprint

0%

Containerboard

8%

5%

Others

11%

3%

Source: Fibria 3Q11 Earnings Results, PPPC, RISI and Fibria

14

Innovation and Competitiveness

15

Enhanced Forestry Techniques

Current Elite Clone 2 years old

New Elite Clone 2 years old

16

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

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.

17

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

18

18

Pulp and Paper Market

19

Industry Outlook
World chemical market pulp shipments to capacity
102% 96% 92% 90% 86% 89% 95% 96% 98% 92% 87% 88% 83% 87% 94% 92% 87% 88%87% 85% 82% 101% 100% 88%88% 92% 84% 81% 82% 88%

World Printing&Writing paper shipments to capacity

90% 88% 87% 86% 91% 91% 87% 88% 88% 88% 87% 85% 85%85% 82% 87% 84%

90% 86%

85%

May-

May-

Nov-

Mar-

Feb-10

Sep-10

Apr-10

Apr-11

Aug-10

Nov-10

Dec-10

Mar-10

Mar-11

Nov-09

Aug-11

Dec-09

Sep-11

Jun-10

Oct-10

Jun-11

Jan-10

Jan-11

Fev-11

Nov-11

Oct-11

May-

Jul-10

Jul-11

Aug-10

Sep-10

Apr-11

May-11

Aug-11

Feb-10

Nov-10

Dec-10

Mar-11

Sep-11

Apr-10

Fev-11

Jun-11

Jun-10

Oct-10

Jan-11

Jul-10

Jul-11

Dec-09

Source: PPPC World 20 Total Chemical Market Pulp

Oct-09

Source: PPPC Global 100 World Printing & Writing Report

World pulp producers' average days of supply

Producers days of supply x FOEX BHKP Europe (US$)

Announced downtimes: - Sodra (Sweden) - Terrace Bay (Canada) - April (Indonesia)

50

1000
900

55
50 45 40 35 30 25 20

days

40
30 20 10 Nov-10 May-08 May-09 May-10 May-11 Nov-06 Nov-07 Nov-08 Nov-09

38

800 700 600 500 400 300

Nov-11

Mai-07

Oct-08

Jan-08

Dec-09

Aug-09

Jan-11

May-09

Mar-10

Nov-11

Jul-08

Apr-08

Jun-10

Feb-09

Sep-10

Apr-11

Jul-11

Oct-11

Jan-10

Source: PPPC World 20

Inventories

FOEX BHKP Europe (US$)

20

Industry Outlook
Market pulp: world demand growth (%)
458

China: Eucalyptus pulp shipments ('000 t)

32%
368 307 238 Average 305 ktons Average 225 ktons 420

11M2011 x 11M2010

4%

5%

318 332 323 311 300 310 299 283 256 233 247 242229 202 222 232 224 219 200 198 198 152 163 161 141 152 138 153 125 100

Average 193 ktons

-4%

-3%

-3% Latin America Japan China

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 Sep-11 Oct-11 Nov-11 Source: PPPC World 20 Chemical Market Pulp

Total

North America

Europe

Source: PPPC World 20 Chemical Market Pulp

European Price (BHKP) x Commodity Index (CRB)

Announced Downtimes
Nov 21, 2011: Sodra announces market driven downtime in response to weakened demand for pulp. Nov 24, 2011: Terrace Bay Pulp (Canada) plans extended shut at NBSK mill for explosion repairs, project work; downtime to shed 40,000-80,000 tons. Dec 07, 2011: APP to take downtime at Guangxi mill cutting pulp supply by 30,000 tons Dec 12, 2011: Tembec takes market-related downtime at 2 high-yield pulp mills in Quebec; Dec 12, 2011: APRIL shuts one BHK pulp line at Kerinci mill in Indonesia, curtailing 150,000 tonnes of output.
Source: RISI

Commodity Price Index (CRB)

US$920/t

900 550 450 350 250

Nov-08 May-09 Nov-09 CRB May-10 Nov-10 May-11 Dec-11
US$700/t

800 700

600
500 400 300

BHKP List Price

European Price (US$/t) BHKP

650

1.000

21

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

Balanced Market Scenario for the Next 2 years

Forecast Million tons

Supply
1

% Annual growth

2009
23.5 '000 tons 21.4 91% 28.1 24.8 88% 17.0 15.9 93%

2010
23.8 22.3 93% 28.6 25.0 87% 17.6 15.9 90%

2011
25.2 23.0 92% 29.9 26.0 87% 18.9 16.6 88%

2012
25.5 23.0 90% 30.5 26.4 87% 19.8 17.5 88%

2010/2012
3.5% 1.6%

BSKP

Demand Ratio

Supply

3.3% 2.8%

BHKP

Demand Ratio

Supply

6.1% 4.9%

BEKP

Demand Ratio

BSKP: Bleached Softwood Kraft Pulp | BHKP Bleached Hardwood Kraft Pulp | BEKP: Bleached Eucalyptus Kraft Pulp Source: PPPC Special Research Note Nov 2011 and Fibria

22

Financial Highlights

23

3Q11 Performance
3Q11 Results
3Q11 Pulp Production (000t) Pulp Sales (000t) Net Revenue (R$ million) Pro Forma EBITDA1 (R$ million) EBITDA Margin (%) Financial Results (R$ million) Net Income (Loss) (R$ million) 1,296 1,244 1,449 476 33% (2,015) (1,114) 2Q11 1,271 1,230 1,459 490 34% 277 215 3Q10 1,293 1,160 1,581 648 41% 248 303 3Q11 vs 2Q11 2% 1% -1% -3% -1 p.p. 3Q11 vs 3Q10 0% 7% -8% -27% -8 p.p. -

Sales Mix

3Q10 12% 20% 27% 41%

2Q11 11% 14% 46% 20%

3Q11 10% 41%

29%

29% North America Others

Europe Asia

Cash Cost (R$/t)

w/o downtime with downtime 513 481 459 435 458 446 3Q11 vs 3Q10 (w/o downtime): +2.5% Inflation: +7.3%

Pro Forma EBITDA1 (R$ million) and EBITDA Margin (%)

41% 34% 648 490 476 33%

3Q10

2Q11

3Q11
1

3Q10

2Q11

3Q11

24

Excludes Conpacel and KSR results in 3Q10

Market Context Evolution

Exchange Rate (R$/US$)
2,00

Sep/2011: Macroeconomic Worsening 3Q11 Dollar Appreciation : 19% FOEX BHKP Europe: US$789/t
3Q11 FX (R$/US$): Average: R$ 1.6360 1.8544 Sep Average FX: R$1.7399

1,90

1,80

May/2011: Indebtedness and Liquidity Management Policy Approval1 FX (R$/US$): R$1.6111 FOEX BHKP Europe: US$876/t

Closing: R$1.8544

1,70

1,60

Jul-Aug Average FX: R$1.5809

1,50

1.5345

1,40

Indebtedness and Liquidity Management Policy: 2.0 and 2.5x Net Debt/EBITDA target, leverage cap: 3.5x during growth cycle. Policy available on: www.fibria.com.br/ir

25

Capex

2011 Capex Reduction

(R$ million) Industrial Expansion

2011E Current 68

Forest Expansion
Subtotal Expansion Safety/Environment Forestry Renewal Maintenance, IT, R&D and Modernization

243
311 75 602 356

Subtotal Maintenance 50% Veracel/Conpacel Total Fibria

1,033 96 1,440
R$ 201 million reduction vs original budget

26

Debt
Key Indicators
3Q11 vs 2Q11 3Q11 vs 3Q10

Debt
Short Term Debt (%)
19%

(R$ million)

3Q11

2Q11

3Q10

Net Debt/ EBITDA2 (x)

Gross Debt Cash1 Net Debt

11,314 1,772 9,542

10,448 2,496 7,952

12,296 2,184 10,112

8% -29% 20%

-8% -19% -6% 3Q10

14% 9% 3,9

4,2

3,2 2Q11
2 LTM

3Q11

3Q10

2Q11

3Q11

1Includes

the fair value of financial instruments of (R$ 332 million) as of Sep/2011. Excluding this effect, the cash position was R$2,104 million.

EBITDA excludes the results from Conpacel and KSR

Debt Amortization Schedule (R$ million)

7,147

Debt by Currency and Instrument (%)

Debt by Currency
8%
6,718

Short term debt: 9% Cash: 1.7x short term debt

Local Currency

Foreign Currency

Debt by Instrument 4% 15% 9% 47%

318
166 152

1,000
711 299

25% 599
302 297

926
571 355

689
324 365

635
415 220 429

92% Local currency Foreign currency Bond BNDES Others Pre payment NCE

4Q11

2012

2013

2014

2015

2016

2017-2021

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

4.2 3.2 9.5

10.2

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11
Fibria20 Bond: US$ 750MM Sale of Guaba: US$ 1.4bn 7.5% 10NC5 Fibria19 Bond: US$ 1.0bn Exchange Bond Fibria19: 94% 9.25% 10NC5 to Fibria20 Export pre-payment facilities: Operational cash generation US$ 1.175bn 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 Tight cost and Capex control 2011 Capex reduced by R$ 201 million Sale of Piracicaba: US$ 313MM

28

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

29

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

30

Backup

31

China
Chinas Hardwood Imports of BHKP by Country(1)
6,0 5,0 4,0 3,0 2,0 1,0 0,0 BHKP Total Latin America Others* Indonesia USA Canada Western Europe
2,3 2,0 1,1 1,6 1,0 1,1 0,4 0,3 0,2 0,3 0,0

China P&W Capacity Changes 2011-2013(3)

5,0

5,3

2010

10M 2011
(Million tons)

Company / Mill Shandong Huatai Paper Nine Dragons Zhumadian Baiyun Paper China Metalurgical Meili Paper Sun Paper Shandong Chenming Shandong Chenming April

Effective Date Jan 2011 Jul 2011 Apr 2011 Mar 2011 Ju 2011 Aug 2011 Q3 2011 Q4 2011

'000 t 800 450 250 300 350 800 450 450

2011 = 4.7 mt

* includes Russia, China, Thailand and New Zealand

China's Share of Market

10.000 8.000 6.000 4.000 2.000 0 2005 2006 2007 2008
10% 10% 10% 13% 12% 16% 14% 12%

Pulp(2)

Others
Guangxi Tianyi Paper

2011
Mar 2012 Sep 2012 Q1 2013 2013

810
130 125 450 600 6,200
2012/2013 = 1.5mt

21% 17%

Hengfeng Paper
21%

April Chengton Group Total P&W capacity changes in China

22% 26%

16% 17%

18% 19%

9%7%

11% 9%

2009 Total

2010

11M2011
(1) PPPC Chinese Market Pulp Demand (2) PPPC World 20 November 2011 (3) Source: TerraChoice Monthly Report Aug 2011

Eucaplyptus

Hardwood

32

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.

25
15,6 14,6 11,2

15 10

20 Huge potential growth

5,6 4,4

15

10
3,6
3,0 0,7 0,5

5 0 W. Europe Japan Oceania

5 0
1991 N.America Japan 1996 W.Europe China 2001 E.Europe Asia FE 2006 2009 NME Africa 2010

E. Europe

N&M East

N. America

L. America

Asia Far East

Africa

China

L.America Oceania

(1)

RISI

33

Historical Ratings
S&P
Aracruz VCP (2007-08) / Fibria (2009 on) Aracruz

Moodys
VCP (2007-08) / Fibria (2009 on)

2005

BBB-

N.A.

2005

Baa3

N.A.

2006

BBB-

N.A.

2006

Baa3

N.A.

2007

BBB-

BBB

2007

Baa2

Baa3

2008

BBB

BBB

2008

Baa2

Baa3

2009

BB

BB

2009

Ba2

Ba1

2010

N.A.

BB

2010

N.A.

Ba1

2011

N.A.

BB

2011

N.A.

Ba1

Last Report Date: November 2011 / Rating: BB / Outlook: Stable

Last Report Date: December 2011 / Rating: Ba1 / Outlook: Stable

34

Market Perception

5,2 Fibria'2019

5,7

6,2

6,7

7,2

7,7

8,2

8,7

9,2

9,7

S&P Rating BB/stable 35 BB+/stable Ba1/stable

5,2 5,7 6,2 6,7 7,2 7,7 8,2

Fitch
8,7
Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11
80bps

Moodys
Fibria'2021

Fibria2021
Nov-11
Dec-11

Fibria'2020 Fibria'2021

Yield (%)

Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-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 Sep-11 Oct-11 Nov-11