1Q18 Results - ir.suzano.com.brir.suzano.com.br/ptb/6834/613652.pdf · • Lower cash costs in LTM: R$573/ton, down 5.3% from LTM 1Q17 • Implementation of price increase and recovery

1Q18 Results

Record-high Operating Cash Generation¹ for the quarter of R$1.3 billion

São Paulo, April 26th, 2018. Suzano Pulp and Paper (B3: SUZB3), one of the largest integrated pulp and paper producers in Latin America, announces today its consolidated results for the first quarter of 2018 (1Q18).

1Q18 HIGHLIGHTS

• Strong Results: Adjusted EBITDA² of R$1.5 billion and ROIC of 17.4%

• Solid performance in the pulp segment: Adjusted EBITDA²/ton of R$ 1,467/ton (+ 103% vs. 1Q17)

• Lower cash costs in LTM: R$573/ton, down 5.3% from LTM 1Q17

• Implementation of price increase and recovery of paper segment: Adjusted EBITDA²/ton of R$ 855/ton (+22% vs. 1Q17)

• Investments: announcement of the combination with Fibria’s assets

• Tissue: integration of operations with Facepa and segmented results as from 2nd half of 2018

• Financial Solidity: reduction in net debt, with leverage ratio of 1.7x Net Debt/ Adjusted EBITDA (in BRL and USD)

• Credit rating: upgraded to Investment Grade by Standard & Poor's and reaffirmation of Investment Grade by Fitch Ratings

Financial Data (R$ million) 1Q18 1Q17 Δ Y-o-Y 4Q17 Δ Q-o-Q

Net Revenue 2,999 2,254 33.1% 3,142 -4.6%

Adjusted EBITDA2 1,528 847 80.4% 1,425 7.2%

Adjusted EBITDA Margin2 51.0% 37.6% 13.4 p.p. 45.4% 5.6 p.p.

Net Financial Result (157) 125 -225.7% (736) -78.6%

Net Income 813 450 80.6% 358 127.2%

Operating Cash Generation1 1,265 622 103.4% 1,077 17.4%

Net Debt /Adjusted EBITDA² (x) 1.7 x 2.8 x -1.1 x 2.1 x -0.3 x

Operational Data ('000 tons) 1Q18 1Q17 Δ Y-o-Y 4Q17 Δ Q-o-Q

Sales 1,160 1,180 -1.7% 1,287 -9.9%

Pulp 876 915 -4.3% 953 -8.1%

Paper 284 265 7.3% 334 -15.0%

Production 1,213 1,148 5.7% 1,183 2.5%

Pulp 918 874 5.1% 884 3.8%

Paper 295 274 7.5% 299 -1.2%

1 Operating cash generation corresponds to Adjusted EBITDA less Sustaining CAPEX. | 2 Excludes non-recurring items.

Page 2 of 26

1Q18 EARNINGS RELEASE

The consolidated interim financial statements were prepared in accordance with the standards of the Securities and Exchange Commission of Brazil (CVM) and the Accounting Pronouncements Committee (CPC) and comply with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standard Board (IASB). The operational and financial information is presented based on a consolidated basis and in Brazilian real (R$). Note that figures may present discrepancies due to rounding. Non-financial data, such as volume, quantity, average price and average quotes in Brazilian real and U.S. dollar, were not reviewed by our independent auditors.

CONTENS Pulp Business Performance ................................................................................................................................... 3

Pulp Sales Volume and Revenue.................................................................................................................... 3 Pulp Cash Cost ............................................................................................................................................... 4 Pulp Segment EBITDA .................................................................................................................................... 5 Pulp Operating Cash Generation and ROIC ................................................................................................... 5

Paper Business Performance ................................................................................................................................. 6

Paper Sales Volume and Revenue ................................................................................................................. 6 Paper EBITDA ................................................................................................................................................. 7 Paper Operating Cash Flow and ROIC ........................................................................................................... 7

Financial Performance ............................................................................................................................................ 8

Net Revenue ................................................................................................................................................... 8 Production ....................................................................................................................................................... 8 Cost of Goods Sold ......................................................................................................................................... 9 Operating Expenses ........................................................................................................................................ 9 Adjusted EBITDA ............................................................................................................................................ 9 Financial Income and Expenses ................................................................................................................... 10 Net Income (Loss) ......................................................................................................................................... 11 Indebtedness ................................................................................................................................................. 11 Investments ................................................................................................................................................... 12 Cash Flow and ROIC .................................................................................................................................... 13 Dividends....................................................................................................................................................... 14

Capital Markets ...................................................................................................................................................... 15

Fixed Income .......................................................................................................................................................... 16

Rating ...................................................................................................................................................................... 16

Events ..................................................................................................................................................................... 17

Events in the Period ...................................................................................................................................... 17 Upcoming Events .......................................................................................................................................... 19

IR Contacts ............................................................................................................................................................. 19

Appendices ............................................................................................................................................................. 20

Appendix 1 – Operating Data ........................................................................................................................ 20 Appendix 2 – Consolidated Statement of Income ......................................................................................... 21 Appendix 3 – Consolidated Balance Sheet ................................................................................................... 22 Appendix 4 – Consolidated Statement of Cash Flow .................................................................................... 23 Appendix 5 – EBITDA ................................................................................................................................... 24 Appendix 6 – Segmented Statement of Income ............................................................................................ 25

Corporate Information ........................................................................................................................................... 26

Forward-looking Statements ................................................................................................................................ 26

Page 3 of 26


PULP BUSINESS PERFORMANCE PULP SALES VOLUME AND REVENUE

Data from the World 20 Report of the Pulp and Paper Products Council (PPPC) show that, in 1Q18, global pulp shipments remained stable (+0.3%) as compared with the 1Q17. Meanwhile, global eucalyptus pulp shipments grew 5.6%. Suzano sold 876.0 thousand tons of market pulp in 1Q18, which was 4.3% lower than in 1Q17 and 8.1% lower than the sales volume recorded in 4Q17. The level of pulp inventories reported by the PPPC ended February at 36 days.

The average net pulp price in USD in 1Q18 was US$ 731/ton, increasing US$ 52/ton (+7.7%) from 4Q17 and US$ 226/ton (+44.7%) from 1Q17. The higher net pulp price is mainly due to the industry’s positive and solid fundamentals. The average net price in BRL in 1Q18 was R$ 2,373/ton, increasing 7.6% and 49.4% compared to 4Q17 and 1Q17, respectively, driven mainly by the higher list price for pulp. Net revenue from pulp sales decreased 1.1% in 1Q18 compared to 4Q17, reflecting the lower sales volume resulting from the partial rebuilding of the Company’s inventories.

107 90 81

808 863 795

915 953 876

1Q17 4Q17 1Q18

Pulp Sales Volume ('000 ton)

Domestic Market Exports

150 172 177

1.3041.927 1.900

1.454

2.099 2.076

1Q17 4Q17 1Q18

Pulp Revenues (R$ million)


Europe30%

Asia48%

Brazil9%

North America

14%

Pulp Sales Revenue (1Q18)

-4.3%

-8.1%

-1.1%

+42.7%

Page 4 of 26


PULP CASH COST

The consolidated cash cost of market pulp production in 1Q18 was R$ 587/ton excluding downtimes and R$ 604/ton including downtimes.

Cash cost remained practically stable in 1Q18 compared to 1Q17 (+0.3%), due to the higher consumption of raw materials, which was offset by the shorter average supply radius and the reduction in fixed costs.

Consolidated cash cost of market pulp production in the last 12 months was R$ 573/ton excluding downtime (vs. R$ 605/ton in LTM 1Q17) and R$ 595/ton including downtime (vs. R$ 634/ton in LTM 1Q17).

1 In line with the market and for comparison purposes, the methodology for calculating the cash cost has been changed and does not consider the depletion of wood of third-party suppliers.

585 614 587 605 573

1Q17 4Q17 1Q18 LTM 1Q17 LTM 1Q18

Consolidated Pulp Cash Cost ex-maintence downtime (R$/ton)

272

(14)

258

184

25

209

129 (9) 120

585 587

1Q17Cash Cost

Δ Wood Δ Chemicals Δ Fixed Cost 1Q18Cash Cost¹

Consolidated Pulp Cash Cost ex-maintenance (R$/ton)

Wood Chemicals Fixed Cost

289

(31)

258

185 185

131 (2) 130

605 573

LTM 1Q17Cash Cost

Δ Wood Δ Chemicals Δ Fixed Cost LTM 1Q18Cash Cost¹

Consolidated Pulp Cash Cost ex-maintenance (R$/ton)

Wood Chemicals Fixed Cost

-5.3% -4.4%

+0.3%

+R$2/ton

-R$32/ton

Page 5 of 26


PULP SEGMENT EBITDA

Pulp Business 1Q18 1Q17 Δ Y-o-Y 4Q17 Δ Q-o-Q LTM 1Q18 LTM 1Q17 Δ Y-o-Y

Adjusted EBITDA (R$ '000) 1,285,290 661,688 94.2% 1,164,386 10.4% 4,299,067 2,453,627 75.2%

Sales Volume (ton) 876,037 915,390 -4.3% 953,004 -8.1% 3,575,512 3,539,620 1.0%

Adjusted EBITDA (R$/ton) 1,467 723 103.0% 1,222 20.1% 1,202 693 73.5%

The performance of Adjusted EBITDA from pulp in the above periods reflects primarily the higher pulp list price.

PULP OPERATING CASH GENERATION AND ROIC

The profitability of the pulp business was leveraged by the pulp price, however, the result was partially influenced by exchange variation.

Pulp Business (R$ '000) 1Q18 1Q17 Δ Y-o-Y 4Q17 Δ Q-o-Q LTM 1Q18 LTM 1Q17 Δ Y-o-Y

Adjusted EBITDA 1,285,290 661,688 94.2% 1,164,386 10.4% 4,299,070 2,453,627 75.2%

Sustaining Capex (213,801) (184,396) 15.9% (266,910) -19.9% (919,777) (823,288) 11.7%

Operating Cash Flow 1,071,489 477,292 124.5% 897,475 19.4% 3,379,292 1,630,340 107.3%

Cash Taxes2 (32,475) (4,231) 667.6%

Monetization of ICMS 25,820 - n.a.

Capital Employed 17,967,607 17,375,566 3.4%

Asset 18,635,853 18,212,030 2.3%

Liabilities 668,246 836,465 -20.1%

ROIC1 (%) 18.8% 9.4% 9.4 p.p.

1 ROIC = (Operating Cash Generation – Cash taxes) / Capital Employed (assets – liabilities).

2 Income and Social Contribution taxes.

6621.164 1.285

2.454

4.299

45,5%

55,5%

61,9%

42,6%

57,2%

-10,0%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

-500

500

1.500

2.500

3.500

4.500

5.500

1Q17 4Q17 1Q18 LTM 1Q17 LTM 1Q18

Adjusted EBITDA (R$ million) and Adjusted EBITDA Margin (%) dof Pulp

521942

1.223

461945

1Q17 4Q17 1Q18 LTM 1Q17 LTM 1Q18

Operational Cash Generation of Pulp per ton (R$/ton)

+29.9% +105.2%

+134.6%

Page 6 of 26


PAPER BUSINESS PERFORMANCE PAPER SALES VOLUME AND REVENUE

According to the Forestry Industry Association (Ibá), domestic sales of Printing & Writing paper and Paperboard advanced 2.4% in 1Q18 compared to 1Q17, while imports grew 15.8%. Suzano’s paper sales amounted to 284.0 thousand tons in 1Q18, in line with production in the quarter. Compared to 4Q17, Suzano’s paper sales decreased 15.0%, reflecting the seasonality of the business.

The average net paper price in the domestic market in 1Q18 stood at R$ 3,340/ton, representing increases of R$ 150/ton (4.7%) and R$ 160/ton (5.0%) compared to 4Q17 and 1Q17, respectively. In USD, the average net pulp price in 1Q18 was US$ 945/ton, representing increases of US$ 38/ton (4.2%) and US$ 92/ton (10.8%) from 4Q17 and 1Q17, respectively. In BRL, the price of paper exports in 1Q18 was R$ 3,065/ton, representing increases of 4.1% from 4Q17 and 14.4% from 1Q17, which is explained by exchange variation in the period.

180 238 189

8497

95

265334

284

1Q17 4Q17 1Q18

Paper Sales Volume ('000 ton)


574759 630

226284

292

799

1.043923

1Q17 4Q17 1Q18

Paper Revenues (R$ million)


Others; 9%

Brazil; 68%

North America;

4%

South/ Central

America; 19%

Paper Sales Revenue (1Q18)

+7.3%

-15.0%

-11.6%

+ 15.4%

Page 7 of 26


PAPER EBITDA

Paper Business 1Q18 1Q17 Δ Y-o-Y 4Q17 Δ Q-o-Q LTM 1Q18 LTM 1Q17 Δ Y-o-Y

Adjusted EBITDA (R$ '000) 242,993 185,663 30.9% 260,720 -6.8% 979,605 1,030,352 -4.9%

Sales Volume (ton) 284,041 264,646 7.3% 334,352 -15.0% 1,199,824 1,185,952 1.2%

Adjusted EBITDA (R$/ton) 855 702 21.9% 780 9.7% 816 869 -6.0%

The performance of Adjusted EBITDA from paper in 1Q18 compared to 1Q17 is explained by the price increases successfully implemented in the domestic and international markets. Compared to 4Q17, this performance was mainly affected by higher expenses given the lower sales volume. Note that the paper business is incorporating all the results from the consumer goods business (with the exception of Facepa), which is still in the ramp-up phase.

PAPER OPERATING CASH FLOW AND ROIC

The profitability of the paper business was adversely affected by the increase in costs and expenses generated primarily by the consumer goods business (with the exception of Facepa), which is still in the ramp-up phase.

Paper Business (R$ '000) 1Q18 1Q17 Δ Y-o-Y 4Q17 Δ Q-o-Q LTM 1Q18 LTM 1Q17 Δ Y-o-Y

Adjusted EBITDA 242,993 185,663 30.9% 260,720 -6.8% 979,605 1,030,352 -4.9%

Sustaining Capex (49,818) (41,086) 21.3% (80,847) -38.4% (218,130) (193,204) 12.9%

Operating Cash Flow 193,176 144,576 33.6% 179,874 7.4% 761,475 837,148 -9.0%

Cash Taxes2 (4,202) (7,857) -46.5%



Asset 6,941,492 6,189,913 12.1%

Liabilities 680,141 482,518 41.0%

ROIC1 (%) 13.3% 14.5% -1.3 p.p.


2 Income and Social Contribution taxes.

186 261 243

1.030 980

23,2% 25,0% 26,3% 28,0% 26,1%

-50,0%

-40,0%

-30,0%

-20,0%

-10,0%

0,0%

10,0%

20,0%

30,0%

40,0%

0

200

400

600

800

1.000

1.200

1.400

1Q17 4Q17 1Q18 LTM 1Q17 LTM 1Q18

Adjusted EBITDA (R$ million) and Adjusted EBITDA Margin (%) of Paper

546 538 680 706 635

1Q17 4Q17 1Q18 LTM 1Q17 LTM 1Q18

Operational Cash Generation of Paper per ton (R$/ton)

+26.4%

-10.1%

+24.5%

Page 8 of 26


FINANCIAL PERFORMANCE NET REVENUE

Suzano’s net revenue in 1Q18 amounted to R$ 2,998.9 million. Pulp and paper shipments in the quarter amounted to 1,160.1 thousand tons, decreasing by 9.9% from 4Q17 and by 1.7% from 4Q17.

The performance of consolidated net revenue in relation to 4Q17 is explained mainly by the lower pulp and paper sales volume, which was partially offset by the higher hardwood pulp list price in USD (average FOEX in Europe in 1Q18 of US$ 1,009 vs. US$ 941 in 4Q17). Compared to 1Q17, net revenue growth was supported mainly by the higher hardwood pulp list price in USD (average FOEX in Europe in 1Q18 of US$ 693 vs. US$ 680 in 1Q17) and by the higher price of paper sold in both the export and local markets. PRODUCTION

Production ('000 tons) 1Q18 1Q17 Δ Y-o-Y 4Q17 Δ Q-o-Q

Market Pulp 918 874 5.1% 884 3.8%

Paper 295 274 7.5% 299 -1.2%

Total 1,213 1,148 5.7% 1,183 2.5%

In 1Q18, a scheduled maintenance downtime was carried out at the Limeira Unit in São Paulo, which adversely affected pulp and paper production volumes in the quarterly comparisons.

Fábrica 2017 2018 2019

1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19

Imperatriz (MA) no downtime

Mucuri - Line 1 (BA)

Mucuri - Line 2 (BA) no downtime

Suzano (SP) no downtime

Limeira (SP) no downtime

724 931 807

1.5302.211 2.192

2.254

3.142 2.999

1Q17 4Q17 1Q18

Net Revenue (R$ million)


Pulp69%

Printing & Writing

24%

Paperboard6%Other paper

1%

Net Revenue Breakdown (1Q18)

-4.6%

+33.1%

Page 9 of 26


COST OF GOODS SOLD

Average unit cost of goods sold (COGS) in 1Q18 was R$ 1,367.1/ton, increasing 3.0% from 1Q17 and in line with period inflation (2.3%). Compared to 4Q17, COGS decreased 3.2%, while net revenue decreased 4.6%, according the lower sales volumes in the period.

COGS (R$ '000) 1Q18 1Q17 Δ Y-o-Y 4Q17 Δ Q-o-Q

Pulp 963,168 973.728 -1.1% 1,096,140 -12.1%

Paper 622,758 592.816 5.1% 722,466 -13.8%

Consolidated 1,585,926 1,566,544 1.2% 1,818,606 -12.8%

COGS (R$/ton) 1Q18 1Q17 Δ Y-o-Y 4Q17 Δ Q-o-Q

Pulp 1,099 1,064 3.4% 1,150 -4.4%

Paper 2,192 2,240 -2.1% 2,161 1.5%

Consolidated 1,367 1,328 3.0% 1,413 -3.2%

OPERATING EXPENSES

Expenses (R$ '000) 1Q18 1Q17 Δ Y-o-Y 4Q17 Δ Q-o-Q

Selling Expenses 121,957 100,624 21.2% 128,284 -4.9%

General and Administrative Expenses 147,353 111,597 32.0% 172,879 -14.8%

Total Expenses 269,310 212,221 26.9% 301,163 -10.6%

Total Expenses/Sales Volume (R$/ton) 232 180 29.1% 234 -0.8%

Total selling and administrative expenses amounted to R$ 232/ton in 1Q18, increasing 29.1% in comparison with 1Q17 and remaining practically stable in comparison with 4Q17. Compared to 1Q17, sales expenses increased by 21.2%, reflecting an increase of approximately R$ 9 million in the consumer goods business, in addition, the higher logistics expenditures in the domestic market and with rents. In comparison with 4Q17, despite the increase of approximately R$ 4 million in the consumer goods business, sales expenses decreased by 4.9% due to lower logistics costs due to lower sales volume. General and administrative expenses increased 32.0% from 1Q17, explained by higher expenses with labor and compensation based on net income. In comparison with 4Q17, expenses decreased 14.8%, due to lower expenses with provisioning for variable compensation and the long-term incentive programs (LTIP), as well as the lower provisioning for labor claims and consulting. ADJUSTED EBITDA

Consolidated 1Q18 1Q17 Δ Y-o-Y 4Q17 Δ Q-o-Q LTM 1Q18 LTM 1Q17 Δ Y-o-Y

Adjusted EBITDA (R$ '000) 1,528,283 847,350 80.4% 1,425,106 7.2% 5,295,833 3,483,979 52.0%

EBITDA Margin (%) 51.0% 37.6% 13.4 p.p. 45.4% 5.6 p.p. 47.0% 37.0% 10.1 p.p.

Sales Volume (ton) 1,160,078 1,180,036 -1.7% 1,287,356 -9.9% 4,775,336 4,725,572 1.1%

Adjusted EBITDA (R$/ton) 1,317 718 83.5% 1,107 19.0% 1,109 737 50.4%

Adjusted EBITDA in 1Q18 compared to 1Q17 was affected mainly by the higher pulp list price, the weaker BRL and the higher paper prices in the domestic and export market. In comparison with 4Q17, Adjusted EBITDA was affected mainly by the higher pulp list price and the higher paper prices in the domestic and international markets.

Page 10 of 26


FINANCIAL INCOME AND EXPENSES

Financial Result (R$ '000) 1Q18 1Q17 Δ Y-o-Y 4Q17 Δ Q-o-Q

Financial Expenses (234,273) (282,163) -17.0% (342,459) -31.6%

Interest on loans and financing (local currency) (59,458) (125,261) -52.5% (65,418) -9.1%

Interest on loans and financing (foreign currency)

(115,868) (121,940) -5.0% (226,947) -48.9%

Capitalized interest1 304 1,473 -79.4% 1,986 -84.7%

Other financial expenses (59,251) (36,435) 62.6% (52,080) 13.8%

Financial Income 36,726 98,675 -62.8% 57,164 -35.8%

Interest on financial investments 33,082 91,700 -63.9% 48,288 -31.5%

Other financial income 3,644 6,975 -47.8% 8,876 -58.9%

Monetary and Exchange Variations (28,406) 170,841 -116.6% (342,350) -91.7%

Foreign exchange variations (Debt) (37,911) 252,921 -115.0% (402,905) -90.6%

Other foreign exchange variations 9,505 (82,080) -111.6% 60,555 -84.3%

Derivative income (loss), net2 68,603 137,821 -50.2% (108,134) -163.4%

NDF - (56) -100.0% - n.a.

Zero-Cost Collars 24,937 89,214 -72.0% (57,439) -143.4%

Foreign-Currency Debt Hedge 43,500 45,733 -4.9% (49,984) -187.0%

Other3 166 2,930 -94.3% (711) -123.3%

Net Financial Result (157,350) 125,174 -225.7% (735,779) -78.6%

1 Capitalized interest due to construction in progress.

2 Variation in mark-to-market adjustment plus adjustments paid and received.

3 Other includes LIBOR operations.

Financial expenses decreased by 31.6% in 1Q18 compared to 4Q17, due to the repurchase of the 2021 Bonds carried out in 4Q17 and by the financial expense of the financing lines commitment for the settlement of the operation with Fibria, which represented R$ 25.8 million. Without the impact of the commitment, the reduction of financial expenses in 1Q18 vs. 4Q17 would be 39.1%. Compared to 1Q17, the 17.0% reduction reflects the lower basic interest rate in Brazil, the prepayment of certain contracts, the increase in LIBOR. Financial income in 1Q18 compared to 4Q17 was adversely affected by the lower basic interest rate in Brazil. Monetary and exchange variation generated a negative effect of R$ 28.4 million in the quarter due to foreign exchange variation, with a negative accounting effect from the mark-to-market adjustments of the portion of debt in foreign currency, with cash effects limited to debt maturities or amortizations. At March 31st, 2018, the value of the principal of operations involving forward dollar sales through Zero Cost Collars (ZCC) was US$ 1,870 million, whose maturities are distributed from April 2018 to October 2019 and were contracted in a range from R$ 3.00 to R$ 4.57. The current volatility in the BRL/USD exchange rate makes this the most adequate strategy for protecting the Company's cash flow. If, upon maturity, the exchange rate is within the contracted range, there are no cash inflows or outflows for Suzano. The gain of R$ 25 million in 1Q18 is composed of a positive cash impact of R$10 million and a positive non-cash impact of R$ 15 million related to the pricing of operations under the Black model. Suzano calibrates its debt profile based on its proportion of dollarized cash generation in order to obtain a natural hedge. The currency hedge positions for debt obligations generated a gain of R$44 million. The Company also uses swap contracts to exchange currency and interest rates to mitigate the effects from these variations on its cash flow. The Company posted a net financial expense of R$ 157.4 million in 1Q18, compared to the net financial income of R$ 125.2 million in 1Q17 and the net financial expense of R$ 735.8 million in 4Q17.

Page 11 of 26


NET INCOME (LOSS)

The Company posted net income of R$ 813 million in 1Q18, compared to net income of R$ 358 million in 4Q17 and net income of R$ 450 million in 1Q17 INDEBTEDNESS

Debt (R$ '000) 03/31/2018 03/31/2017 Δ Y-o-Y 12/31/2017 Δ Q-o-Q

Local Currency 3,608,021 4,494,535 -19.7% 3,575,049 0.9%

Short Term 636,178 722,194 -11.9% 600,402 6.0%

Long Term 2,971,844 3,772,341 -21.2% 2,974,647 -0.1%

Foreign Currency 9,038,085 9,320,920 -3.0% 8,616,807 4.9%

Short Term 796,796 509,476 56.4% 1,514,666 -47.4%

Long Term 8,241,289 8,811,444 -6.5% 7,102,141 16.0%

Gross Debt 12,646,106 13,815,455 -8.5% 12,191,856 3.7%

(-) Cash 3,392,005 4,068,662 -16.6% 2,708,338 25.2%

Net Debt 9,254,101 9,746,793 -5.1% 9,483,518 -2.4%

Net Debt/Adjusted EBITDA1 (x) 1.7x 2.8x -1.1x 2.1x -0.3x

1 Excludes nonrecurring items.

Gross debt stood at R$ 12.6 billion on March 31st, 2018, composed of 88.7% long-term maturities and 11.3% short-term maturities, and with 71.5% denominated in foreign currency and 28.5% in local currency. The percentage of gross debt denominated in foreign currency, considering the adjustment for derivatives, was 94.2%. Net debt stood at R$ 9.3 billion (US$ 2.8 billion) on March 31st, 2018, compared to R$ 9.5 billion (US$ 2.9 billion) on December 31st, 2017. Net debt in foreign currency, considering the adjustment with derivatives, accounted for 112.5% of total net debt on March 31st, 2018. Suzano contracts debt in foreign currency as a natural hedge, since net operating cash generation is denominated in foreign currency. This structural exposure allows it to contract export financing in USD to match financing payments with receivable flows from sales. Suzano actively and expressly demonstrates its commitment to deleverage sustainably and to adopt adequate and efficient structures and costs for its market positioning and operating and managerial capacity.

12.192

2.476 160 54

( 2.313 )

77 12.646

Gross Debt onDec/17

Loans InterestAccrual

ForeignExchangeVariation

Principal andInterestPayment

Others Gross Debt onMar/18

Gross Debt Evolution (R$ million)

Page 12 of 26


The Net Debt/Adjusted EBITDA ratio was 1.7 times, compared to 2.1 times on December 31th, 2017. The decline in the ratio reflects the higher EBITDA in the period.

In March 2018, the average cost of debt in USD was 4.6% p.a. (debt in BRL adjusted by the market swap curve). The average cost of debt was 6.5% p.a. in BRL, or 101.0% of the CDI (vs. 6.9% p.a. or 99.6% of CDI in December 2017) and 5.0% p.a. in USD (vs. 5.1% p.a. in December 2017). The average term of consolidated debt ended the quarter at 85 months (vs. 84 months in December 2017).

INVESTMENTS

Investments amounted to R$ 708.6 million in 1Q18, of which R$ 263.6 million was invested in industrial and forest maintenance. Investments in Structural Competitiveness and Adjacent Businesses projects amounted to R$ 110.3 million and were mainly allocated to the Tissue (Maranhão and Bahia) and Lignin projects. Investments in the acquisition of Facepa (R$ 267.9 million), among other items, amounted to R$ 334.7 million.

1.547782 330 359

2.099

1.175

4.2661.845

552950

1.795136

62

1403.392

1.334 1.280

2.154 2.235

1.237

4.406

Cash 9M18 2019 2020 2021 2022 2023 onward

Amortization Schedule (R$ million)

Foreign Currency Local Currency

9.747 10.012 9.283 9.484 9.254

3.076 3.026 2.930 2.867 2.784

1Q17 2Q17 3Q17 4Q17 1Q18

Net Debt (R$ and US$ million)

R$ US$

2,8 2,7 2,3 2,1 1,7

2,9 2,7 2,3 2,0 1,7

1Q17 2Q17 3Q17 4Q17 1Q18

Net Debt / Adjusted EBITDA in R$ and US$ (x)

R$ US$

Export financing; 28%

Bond; 37%

Agribusiness Receivables

Certificates; 21%BNDES; 4%

Import financing; 7%

Others; 2%

Type Expousure on 03/31/2018

Libor; 33%

Fixed (US$); 37%

CDI; 23%

TJLP; 2%

Fixed (R$); 4%

Basket of Currencies; 1%

Index Exposure on 03/31/2018

Page 13 of 26


For 2018, capex is estimated at R$ 2.4 billion, of which R$ 1.2 billion corresponds to Sustaining Capex and R$1.2 billion to the Adjacent Businesses and Structural Competitiveness projects

Capex (R$ '000) 1Q18 1Q17 Δ Y-o-Y 4Q17 Δ Q-o-Q LTM 1Q18 LTM 1Q17 Δ Y-o-Y

Sustaining 263,619 225,482 16.9% 347,757 -24.2% 1,137,908 1,016,492 11.9%

Industrial Maintenance 54,779 56,848 -3.6% 106,897 -48.8% 271,166 243,436 11.4%

Forestry Maintenance 208,840 168,634 23.8% 240,860 -13.3% 866,741 773,055 12.1%

Structural Competitiveness and Adjacent Business

110,293 122,698 -10.1% 122,789 -10.2% 477,426 432,546 10.4%

Other 334,671 16,047 1985.6% 23,891 1300.8% 484,169 930,925 -48.0%

Total 708,582 364,228 94.5% 494,437 43.3% 2,099,502 2,379,963 -11.8%

CASH FLOW AND ROIC

(R$ '000) 1Q18 1Q17 Δ Y-o-Y 4Q17 Δ Q-o-Q LTM 1Q18 LTM 1Q17 Δ Y-o-Y

Adjusted EBITDA 1,528,283 847,349 80.4% 1,425,106 7.2% 5,295,832 3,483,979 52.0%

Sustaining Capex (263,619) (225,482) 16.9% (347,757) -24.2% (1,137,908) (1,016,492) 11.9%

Operating Cash Flow 1,264,664 621,867 103.4% 1,077,349 17.4% 4,157,925 2,467,488 68.5%

Suzano’s operating cash generation (Adjusted EBITDA less Sustaining Capex) amounted to R$ 1.3 billion in 1Q18 and R$ 4.2 billion in the last 12 months. The variation in the comparison periods is explained by the higher pulp list price and by the higher paper price in the international and domestic markets.

Consolidated ROIC equaled 17.4%. The 6.8 p.p. increase compared to LTM 1Q17 is explained by the higher profitability of the pulp segment, given the commodity’s higher price. The paper segment had a negative effect on profitability, which is explained by the higher costs associated with the tissue business.

Consolidated ROIC (R$ '000) LTM 1Q18 LTM 1Q17 Δ Y-o-Y

Operating Cash Flow 4,157,927 2,467,487 68.5%

Cash taxes² (36,677) (12,088) 203.4%



Asset 25,577,345 24,401,943 4.8%

Liabilities 1,348,387 1,318,983 2.2%

ROIC1 (%) 17.4% 10.6% 6.8 p.p.


² Income and Social Contribution taxes.

527837

1.090

522871

1Q17 4Q17 1Q18 LTM 1Q17 LTM 1Q18

Operational Cash Generation per ton (R$/ton)

+30.3% +66.8%

+106.9%

Page 14 of 26


DIVIDENDS

Suzano’s Bylaws establish that, for the purposes of the minimum mandatory dividend, the lowest of the following amounts should be considered: (i) 25% of net income for the fiscal year; or (ii) 10% of Operating Cash Generation for the fiscal year. The Annual Shareholders’ Meeting held on April 26, 2018 approved the payment of dividends in the aggregate amount of R$ 210.3 million, corresponding to R$ 0.19222841 per common share, which represents payment of the mandatory dividend, already deducting from the aggregate amount of dividends the amounts distributed in the form of interest on shareholders’ equity that were approved in the Board of Directors’ Meeting held on November 24th, 2017, which were prepaid on December 11th, 2017.

Page 15 of 26


CAPITAL MARKETS On March 31st, 2018, Suzano preferred stock (SUZB3) was quoted at R$33.36/share. The Company’s stock is listed on the Novo Mercado, the listing segment of the São Paulo Exchange (B3) with the highest corporate governance standards.

Source: Bloomberg.

Source: Bloomberg.

On March 31st, 2018, the Company’s capital stock was represented by 1,105,826,145 common shares (SUZB3) traded on the B3, of which 12,042,004 were treasury shares. Suzano’s market capitalization stood at R$ 36.7 billion on March 31st, 2018. In 1Q18, the free-float stood at 42.4% of the total capital.

Free-float Distribution on 03/31/2018

75

110

145

180

215

250

Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18

Stock Performance

Ibovespa+ 31%

IBrX-50+32%

SUZB3+152%

52 59 62 71

137

11.077 12.296 9.840 12.03415.717

-50.000

-40.000

-30.000

-20.000

-10.000

0

10.000

20.000

0

20

40

60

80

100

120

140

160

180

200

1Q17 2Q17 3Q17 4Q17 1Q18

Liquidity

Avg. Daily Volume (R$ million) Number of Trades (Daily)

Local37%

Foreign63%

Institutional Investors96%

Individual Investors4%

Page 16 of 26


Free-float Distribution on 03/31/2018

* América Latina ex-Brasil.

FIXED INCOME

Unit Mar/17 Dec/17 Mar/18

Suzano 2021 - Price USD/k 106.7 108.1 105.3

Suzano 2021 - Yield % 3.9 3.1 3.9


Suzano 2026 - Yield % 5.5 4.5 5.0


Suzano 2047 - Yield % 7.1 5.9 6.0

Treasury 10 years % 2.4 2.4 2.7

RATING

Agency National Scale Global Scale Outlook

Fitch Ratings AAA BBB- Stable

Standard & Poor’s brAAA BBB- Stable

Moody’s Aaa.br Ba1 Negative

Page 17 of 26


EVENTS EVENTS IN THE PERIOD

Acquisition of land and forests in the state of São Paulo On February 5th, 2018, the Company informed its shareholders and the general market that it had entered into an Agreement for the Purchase of Forestry Assets, Purchase of Rural Properties, Purchase Option and Other Covenants, with Conditions Precedent, with Duratex S.A. (“Duratex”), through itself or its affiliated companies, under which it: (i) acquired approximately nine thousand and five hundred (9,500) hectares of rural land and one million and two hundred thousand cubic meters (1,200,000 m³) of forests, which reflects the production potential of the forests existing and already implemented in the areas acquired, which are located in the central region of the state of São Paulo, for R$ 308.1 million; and (ii) acquired an option to purchase approximately twenty thousand (20,000) hectares of rural properties in the same region and five million and six hundred thousand (5,600,000) cubic meters of forests, which reflects the production potential of the forests existing and already implemented in the areas that are subject to the option, for the price of R$ 749.4 million, with the option being exercisable, at the sole discretion of Suzano, through July 2nd, 2018. The Material Fact notice is available on the CVM website and on the Company’s IR website (www.suzano.com.br/ir). Syndicated pre-export financing transaction On February 8th, 2018, the Company announced to its shareholders and the general market that, as part of its ongoing liability management program, Suzano Pulp and Paper Europe S.A., a wholly-owned subsidiary of Suzano, entered into, on said date, a syndicated pre-export financing transaction in the amount of seven hundred fifty million U.S. dollars (US$ 750,000,000.00), with a term of five (5) years and grace period of three (3) years, with the Company and Suzano Trading Ltd., also a subsidiary of Suzano, as guarantors of the transaction. The Notice to the Market is available on the website of the CVM and on the Company’s IR website (www.suzano.com.br/ir). Media news report On February 19th, 2018, the Company informed its shareholders and the general market that it constantly evaluates opportunities with the potential to create value for its shareholders and its business and, in this context, had recently begun preliminary conversations with representatives of the controlling shareholders of Fibria Celulose S.A. about a possible deal involving the companies, with no defined format or structure. The Notice to the Market is available on the website of the CVM and on the Company’s IR website (www.suzano.com.br/ir). Acquisition of PCH Mucuri On February 19th, 2018, the Company announced to its shareholders and the general market that, after fulfillment of all conditions precedent and after approval was obtained from the applicable government authorities, the transaction with Queiroz Galvão Energia S.A. for the acquisition of all shares issued by Mucuri Energética S.A. was completed. Mucuri Energética S.A. owns a small hydroelectric plant located in the cities of Carlos Chagas and Pavão. The Notice to the Market is available on the website of the CVM and on the Company’s IR website (www.suzano.com.br/ir). Media news report On February 22nd, 2018, the Company announced to its shareholders and the general market that it ratified the Notice to the Market dated February 19, 2018, in response to Official Letter 210/2018-SAE, affirming that the recent conversations with representatives of the controlling shareholders of Fibria Celulose S.A. on a potential deal involving the companies did not have a defined format or structure. In the announcement, the Company noted that it consulted its controlling shareholders, who also confirmed that there was no fact or event to be disclosed at that time. The Notice to the Market is available on the website of the CVM and on the Company’s IR website (www.suzano.com.br/ir). Completion of acquisition of tissue producer FACEPA On March 1st, 2018, the Company announced to its shareholders and the general market that, after fulfillment of all conditions precedent and after approval was obtained from the applicable government authorities, on said date, the direct and indirect acquisition of approximately 92.84% of the total capital and 99.99% of the voting capital of FACEPA - Fábrica de Papel da Amazônia S.A. (“FACEPA”) was completed. The Notice to the Market is available on the website of the CVM and on the Company’s IR website (www.suzano.com.br/ir).

http://www.suzano.com.br/ir


http://ri.suzano.com.br/services/_pub/siteri-1/redirect.asp?grupo=6738&idioma=ptb&arquivo=597112.pdf&tipo=ipe&protocolo_atual=597112


http://ri.suzano.com.br/services/_pub/siteri-1/redirect.asp?grupo=6740&idioma=ptb&arquivo=597196.02.19_Comunicado20ao20Mercado_PCH20Mucuri_PT.pdf&tipo=ipe&protocolo_atual=597196




http://ri.suzano.com.br/services/_pub/siteri-1/redirect.asp?grupo=6752&idioma=ptb&arquivo=598580.03.01_Comunicado20ao20Mercado_Facepa20AprovaE7E3o_PT.pdf&tipo=ipe&protocolo_atual=598580


Page 18 of 26


Clarifications of CVM/B3 queries on media news report On March 9th, 2018, the Company announced to its shareholders and the general market that it reiterated to its shareholders and the general market, complementing the Notices to the Market dated February 19 and 22, 2018, that negotiations were ongoing between the Company and the controlling shareholders of Fibria Celulose S.A. (“Fibria”) involving a potential transaction between the Company and Fibria. However, there were still pending issues involving the deal and its conditions, including financial and structural issues, for which reason it was not possible to validate the veracity of the information disclosed by the newspaper Valor Econômico and by the internet portal InfoMoney. The Material Fact notice is available on the CVM website and on the Company’s IR website (www.suzano.com.br/ir). Transaction with Fibria On March 16th, 2018, the Company informed the market that on March 15th, 2018, Suzano Holding S.A., jointly with the other controlling shareholders of the Company (collectively, the “Controlling Shareholders of the Company”), entered into, with the controlling shareholders of Fibria Celulose S.A. (“Fibria” and, jointly with Suzano, the “Companies”), Votorantim S.A. and BNDES Participações S.A. – BNDESPAR (“BNDESPAR”) (collectively the “Controlling Shareholders of Fibria”) and with Suzano as intervening consenting party, a Voting Commitment and Assumption of Obligations, whereby the Controlling Shareholders of the Company and the Controlling Shareholders of Fibria agreed to exercise their voting rights to combine the operations and shareholder bases of the Company and of Fibria (“Voting Commitment”), through a corporate restructuring (“Transaction”). The Material Fact notice is available on the CVM website and on the Company’s IR website (www.suzano.com.br/ir). Clarifications on CVM/B3 queries on media news report On March 19th, 2018, the Company reiterated to its shareholders and the general market that, in compliance with Official Letter 432/2018-SAE (“Official Letter”), it respectfully provided clarifications on the information contained in the news report published by the agency Broadcast, on March 16, 2018, entitled “Sinergias entre Suzano e Fibria serão muito expressivas” [Synergies between Suzano and Fibria are very high], stating that the synergies between these two companies would be “very high,” in an amount between R$8 billion and R$10 billion. The Notice to the Market is available on the website of the CVM and on the Company’s IR website (www.suzano.com.br/ir).







Page 19 of 26


UPCOMING EVENTS

Earnings Conference Call (1Q18)

Date: April 27, 2018 (Friday)

Portuguese (with simultaneous translation) 11 a.m. (Brasilia time) 10 a.m. (New York time) 3 p.m. (London time) Tel: +55 (11) 3193-1001 or (11) 2820-4001

English 11 a.m. (Brasilia time) 10 a.m. (New York time) 3 p.m. (London time) Tel: +1 (646) 828-8246 (access code: Suzano)

Please connect 10 minutes before the conference call is scheduled to begin.

The conference call will be held in English, feature a slide presentation and be transmitted simultaneously via webcast. The access links will be available on the Company’s Investor Relations website (www.suzano.com.br/ir).

If you are unable to participate, the webcast link will be available for future consultation on the Company’s Investor Relations website. IR CONTACTS Marcelo Bacci Rafael Mastrocola Danielle Cheade Fernanda Brienza Matheus Chiderolli Tel: +55 (11) 3503-9061 [email protected] www.suzano.com.br/ir


mailto:[email protected]

http://www.suzano.com.br/ri

Page 20 of 26

EARNINGS RELEASE 1Q18

APPENDICES APPENDIX 1 – Operating Data

Revenue breakdown (R$ '000) 1Q18 1Q17 Δ Y-o-Y 4Q17 Δ Q-o-Q

Exports 2,192,050 1,529,908 43.3% 2,211,404 -0.9%

Pulp 1,899,779 1,304,143 45.7% 1,927,175 -1.4%

Paper 292,271 225,765 29.5% 284,229 2.8%

Domestic Market 806,809 723,999 11.4% 930,916 -13.3%

Pulp 176,547 150,296 17.5% 172,089 2.6%

Paper 630,262 573,703 9.9% 758,827 -16.9%

Total Net Revenue 2,998,859 2,253,907 33.1% 3,142,320 -4.6%

Pulp 2,076,326 1,454,439 42.8% 2,099,264 -1.1%

Paper 922,533 799,468 15.4% 1,043,056 -11.6%

1Q18 1Q17 Δ Y-o-Y 4Q17 Δ Q-o-Q

Sales volume (tons) 1Q18 1Q17 Δ Y-o-Y 4Q17 Δ Q-o-Q

Exports 890,383 892,369 -0.2% 959,895 -7.2%

Pulp 795,030 808,136 -1.6% 863,391 -7.9%

Paper 95,353 84,233 13.2% 96,504 -1.2%

Paperboard 14,332 13,257 8.1% 19,054 -24.8%

Printing & Writing 81,021 70,976 14.2% 77,451 4.6%

Domestic Market 269,694 287,667 -6.2% 327,461 -17.6%

Pulp 81,007 107,254 -24.5% 89,613 -9.6%

Paper 188,688 180,413 4.6% 237,848 -20.7%

Paperboard 30,021 30,142 -0.4% 31,090 -3.4%

Printing & Writing 148,364 144,060 3.0% 187,593 -20.9%

Other paper1 10,303 6,211 65.9% 19,165 -46.2%

Total sales volume 1,160,078 1,180,036 -1.7% 1,287,356 -9.9%

Pulp 876,037 915,390 -4.3% 953,004 -8.1%

Paper 284,041 264,646 7.3% 334,352 -15.0%

Paperboard 44,353 43,398 2.2% 50,144 -11.5%

Printing & Writing 229,385 215,036 6.7% 265,044 -13.5%

Other paper1 10,303 6,211 65.9% 19,165 -46.2%

Average net price (R$/ton) 1Q18 1Q17 Δ Y-o-Y 4Q17 Δ Q-o-Q

Exports 2,462 1,714 43.6% 2,304 6.9%

Pulp 2,390 1,614 48.1% 2,232 7.1%

Paper 3,065 2,680 14.4% 2,945 4.1%

Domestic Market 2,992 2,517 18.9% 2,843 5.2%

Pulp 2,179 1,401 55.5% 1,920 13.5%

Paper 3,340 3,180 5.0% 3,190 4.7%

Total 2,585 1,910 35.3% 2,441 5.9%

Pulp 2,370 1,589 49.2% 2,203 7.6%

Paper 3,248 3,021 7.5% 3,120 4.1%

1 Paper from other manufacturers sold by the distributor and tissue paper.

Page 21 of 26


APPENDIX 2 – Consolidated Statement of Income

Financial Statement (R$ '000) 1Q18 1Q17 Δ Y-o-Y 4Q17 Δ Q-o-Q

1Q18 1Q17 Δ Y-o-Y 4Q17 Δ Q-o-Q

Net Revenue 2,998,859 2,253,908 33.1% 3,142,320 -4.6%

Cost of Goods Sold (1,585,926) (1,566,544) 1.2% (1,818,606) -12.8%

Gross Profit 1,412,933 687,364 105.6% 1,323,714 6.7%

Gross Margin 47.1% 30.5% 16.6 p.p. 42.1% 5.0 p.p.

Operating Expense/Income (279,230) (218,677) 27.7% (152,123) 83.6%

Selling Expenses (121,957) (100,624) 21.2% (128,284) -4.9%

General and Administrative Expenses (147,353) (111,597) 32.0% (172,879) -14.8%

Other Operating Income (Expenses) (9,867) (7,274) 35.6% 147,982 -106.7%

Equity Equivalence (53) 818 -106.5% 1,058 -105.0%

EBIT 1,133,703 468,687 141.9% 1,171,591 -3.2%

Depreciation, Amortization & Depletion 384,938 365,728 5.3% 355,608 8.2%

EBITDA 1,518,641 834,415 82.0% 1,527,199 -0.6%

EBITDA Margin (%) 50,6% 37,0% 13.6 p.p. 48,6% 2.0 p.p.

Adjusted EBITDA1 1,528,283 847,349 80.4% 1,425,106 7.2%

Adjusted EBITDA Margin1 51.0% 37.6% 13.4 p.p. 45.4% 5.6 p.p.

Net Financial Result (157,350) 125,174 -225.7% (735,777) -78.6%

Financial Expenses 36,726 98,675 -62.8% 57,165 -35.8%

Financial Revenues (234,273) (282,163) -17.0% (342,460) -31.6%

Exchange Rate Variation (28,406) 170,841 -116.6% (342,348) -91.7%

Net Proceeds Generated by Derivatives 68,603 137,821 -50.2% (108,134) -163.4%

Earnings Before Taxes 976,353 593,861 64.4% 435,814 124.0%

Income and Social Contribution Taxes (163,226) (143,714) 13.6% (77,948) 109.4%

Net Income (Loss) 813,127 450,147 80.6% 357,866 127.2%

Net Margin 27.1% 20.0% 7.1 p.p. 11.4% 15.7 p.p.

1 Excluding non-recurring items.

Page 22 of 26


APPENDIX 3 – Consolidated Balance Sheet

Assets (R$ '000) 03/31/2018 12/31/2017 09/30/2017 06/30/2017 03/31/2017

Current Assets

Cash and Cash Equivalent 2,000,336 1,076,833 1,439,776 1,001,883 1,005,344

Financial Investments 1,391,669 1,631,505 2,410,173 2,628,886 3,063,318

Accounts Receivable 2,389,398 2,303,810 1,862,202 1,891,698 1,628,501

Inventories 1,321,436 1,207,961 1,408,791 1,336,768 1,253,428

Recoverable Taxes 320,038 306,140 423,523 415,056 405,869

Prepaid Expenses 182,593 37,016 52,317 51,823 27,697

Other Current Assets 278,188 233,610 398,580 339,164 722,617

Total Current Assets 7,883,658 6,796,875 7,995,362 7,665,278 8,106,774

Non-Current Assets

Other Accounts Receivable 816,295 770,792 793,692 784,042 818,499

Biological Assets 4,579,097 4,548,897 4,248,989 4,228,301 4,141,518

Investments 6,712 6,764 5,706 5,716 1,713

Property, Plant and Equipment 16,415,548 16,211,228 16,195,420 16,172,254 16,153,481

Intangible Assets 375,027 188,426 204,202 208,777 209,528

Total Non-Current Assets 22,192,679 21,726,107 21,448,009 21,399,090 21,324,739

Total Assets 30,076,337 28,522,982 29,443,371 29,064,368 29,431,513

Liabilities and Equity (R$ '000) 03/31/2018 12/31/2017 09/30/2017 06/30/2017 03/31/2017

Current Liabilities

Accounts Payable 600,564 610,476 641,537 614,587 531,997

Loans and Financing 1,432,974 2,115,067 1,785,368 1,995,621 1,231,670

Tax Liabilities 185,541 125,847 199,090 147,489 92,015

Salaries and Payroll Taxes 154,829 196,467 194,926 177,470 130,052

Other Payable 696,906 660,506 593,297 673,846 1,207,158

Total Current Liabilities 3,070,814 3,708,363 3,414,218 3,609,013 3,192,892

Non-Current Liabilities

Loans and Financing 11,213,131 10,076,789 11,347,543 11,646,806 12,583,785

Deferred Taxes 1,857,237 1,789,960 1,775,084 1,548,263 1,673,221

Provision 726,336 706,652 675,062 649,041 628,836

Other Liabilities 742,506 619,664 625,390 783,753 751,410

Total Non-Current Liabilities 14,539,210 13,193,065 14,423,079 14,627,863 15,637,252

Shareholders’ Equity

Share Capital 6,241,753 6,241,753 6,241,753 6,241,753 6,241,753

Capital Reserve 380,564 394,801 197,837 197,475 197,118

Treasury shares (218,265) (241,088) (241,006) (241,006) (258,113)

Profit Reserve 2,927,760 2,927,760 1,657,125 1,657,125 1,657,125

Equity Valuation Adjustment 2,295,927 2,298,328 2,273,885 2,308,364 2,296,749

Retained Earnings/Accumulated Losses 16,675 - 26,913 15,090 16,590

Retained Earnings/Losses of the period 813,127 - 1,449,567 648,691 450,147

Total Equity 12,457,541 11,621,554 11,606,074 10,827,492 10,601,369

Non-controlling shareholders interests 8,772 - - - -

Total Liabilities and Equity 30,076,337 28,522,982 29,443,371 29,064,368 29,431,513

Page 23 of 26


APPENDIX 4 – Consolidated Statement of Cash Flow

Cash Flow Statement (R$ '000) 1Q18 1Q17

Cash flow from operating activities

Net income/(loss) for the period 813,127 450,147

Depreciation, depletion and amortization 384,938 365,728

Income from sale of fixed and biological assets 506 (3,388)

Equity pick-up in subsidiaries and affiliates 53 (818)

Exchange and monetary variations, net 16,653 (260,152)

Interest expenses, net 160,689 180,520

Derivative (gains)/losses, net (68,603) (137,821)

Expenses (income) from deferred income and social contribution taxes 65,450 114,125

Interest on actuarial liabilities 8,617 9,506

Provision/ (reversal) for contingencies 233 8,224

Provision/ (reversal) for share-based payments 19,262 6,601

Addition to allowance for doubtful accounts, net 6,292 3,504

Provision/ (reversal) for discounts - loyalty program (16,617) (36,565)

Provision/ (reversal) for inventory losses and write-offs (3,045) 573

Provision for losses and write-off with fixed and biological assets 8,982 3,154

Other provisions /(reversals) (7,383) 22,278

Increase / (decrease) in accounts receivable (14,239) (9,660)

Decrease/ (increase) in inventories (88,286) 57,482

Decrease/ (increase) in recoverable taxes 1,241 (3,741)

Increase / (decrease) in other current and non-current assets (231,073) 97,771

Decrease / (increase) in trade accounts payable (10,903) (31,894)

Increase/(decrease) in other current and non-current liabilities 220,729 68,742

Payment of interest (194,402) (246,468)

Payment of other taxes and contributions (154,481) (139,019)

Payment of income and social contribution taxes (11,045) (18,186)

Net cash from operating activities 906,695 500,643

Cash flow from investing activities

Financial investments 265,000 (912,363)

Cash from the acquisition of subsidiaries 21,436 -

Acquisition of subsidiaries (309,872) -

Additions to fixed assets, intangible assets and biological assets (349,003) (353,359)

Proceeds from asset divestment 15,043 8,509

Net cash used in investment activities (357,396) (1,257,213)

Cash flow from financing activities

Funding 2,476,082 1,009,369

Settlement of derivative operations 13,036 96,954

Payment of loans (2,134,630) (942,693)

Dividends (acquisition) of own shares 8,514 8,514

Net cash provided by (used in) financing activities 363,002 172,144

Exchange variation on cash and cash equivalents 11,202 (24,927)

Increase (reduction) in cash and cash equivalents 923,503 (609,353)

Cash and cash equivalents at the beginning of the period 1,076,833 1,614,697

Cash and cash equivalents at the end of the period 2,000,336 1,005,344

Statement of the increase (reduction) in cash 923,503 (609,353)

Page 24 of 26


APPENDIX 5 – EBITDA

(R$ '000, except where otherwise indicated) 1Q18 1Q17

Net Income 813,127 450,147

Net Financial Result 157,350 (125,174)

Income and Social Contribution Taxes 163,226 143,714

EBIT 1,133,703 468,687

Depreciation, Amortization and Depletion 384,938 365,728

EBITDA1 1,518,641 834,415

EBITDA Margin 50.6% 37.0%

Provision (Reversion) for losses with fixed assets, write-offs, taxes 7,366 1,157

Expenses with Fibria's Transaction 1,539 -

Land conflict agreement 11,779

Equity Equivalence 53 (818)

Others 684 817

Adjusted EBITDA 1,528,283 847,349

Adjusted EBITDA Margin 51.0% 37.6%

1 The Company's EBITDA is calculated in accordance with CVM Instruction 527 of October 4, 2012.

Page 25 of 26


APPENDIX 6 – Segmented Statement of Income

Financial Statement (R$ '000) 1Q18 1Q17

Pulp Paper Non

Segmented Total

Consolidated Pulp Paper

Non Segmented

Total Consolidated

Net Revenue 2,076,326 922,533 - 2,998,859 1,454,439 799,469 - 2,253,908

Cost of Goods Sold (963,168) (622,758) - (1,585,926) (973,728) (592,817) - (1,566,545)

Gross Profit 1,113,159 299,775 - 1,412,933 480,711 206,653 - 687,363

Gross Margin 53.6% 32.5% 47.1% 33.1% 25.8% 30.5%

Operating Expense/Income (109,329) (169,901) - (279,230) (93,892) (124,784) - (218,677)

Selling Expenses (47,831) (74,127) - (121,957) (40,400) (60,224) - (100,624)

General and Administrative Expenses (50,697) (96,656) - (147,353) (39,059) (72,538) - (111,597)

Other Operating Income (Expenses) (10,801) 934 - (9,867) (14,433) 7,159 - (7,274)

Equity Equivalence - (53) - (53) - 818 - 818

EBIT 1,003,830 129,873 - 1,133,703 386,818 81,868 - 468,686

Depreciation, Amortization & Depletion 274,192 110,746 - 384,938 263,183 102,548 - 365,730

EBITDA 1,278,022 240,619 - 1,518,641 650,000 184,416 - 834,416

EBITDA Margin (%) 61.6% 26.1% 50.6% 44.7% 23.1% 37.0%

Adjusted EBITDA1 1,285,290 242,993 - 1,528,283 661,688 185,663 - 847,350

Adjusted EBITDA Margin1 61.9% 26.3% 51.0% 45.5% 23.2% 37.6%

Net Financial Result - - (157,350) (157,350) - - 125,174 125,174

Earnings Before Taxes 1,003,830 129,873 (157,350) 976,353 386,818 81,868 125,174 593,860

Income and Social Contribution Taxes - - (163,226) (163,226) - - (143,714) (143,714)

Net Income (Loss) 1,003,830 129,873 (320,576) 813,127 386,818 81,868 (18,540) 450,146

Net Margin 48.3% 14.1% 27.1% 26.6% 10.2% 20.0%

1 Excluding non-recurring items.

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Corporate Information Suzano Pulp and Paper, which reported net revenue of R$10.5 billion in 2017, is one of the largest vertically integrated producers of paper and eucalyptus pulp in Latin America, with annual production capacity of 3.6 million tons of market pulp and 1.2 million tons of paper. Suzano Pulp and Paper offers a broad range of pulp and paper products for the domestic and export markets: (i) eucalyptus pulp; (ii) hardwood fluff pulp; (iii) uncoated printing and writing paper; (iv) coated printing and writing paper; (v) paperboard; and (vi) tissue paper. Forward-looking Statements This release may contain forward-looking statements. Such statements are subject to known and unknown risks and uncertainties that could cause the expectations expressed not to materialize or to differ substantially from the expected results. These risks include changes in future demand for the Company’s products, changes in factors affecting domestic and international product prices, changes in the cost structure, changes in the seasonal patterns of markets, changes in prices charged by competitors, foreign exchange variations, changes in the political or economic situation of Brazil, and changes in emerging and international markets. The forward-looking statements were not reviewed by our independent auditors.

Documents

1Q18 Results - ir.suzano.com.brir.suzano.com.br/ptb/6834/613652.pdf · • Lower cash costs in LTM: R$573/ton, down 5.3% from LTM 1Q17 • Implementation of price increase and recovery