Suzano (SUZB3) Investor Day 2025 summary

Strategic Priorities and Business Focus

• Shifting from five to two main strategic drivers: competitiveness and extracting value from recent investments, with growth to come from operational improvements rather than new projects or M&A in the next 2-3 years.

• Emphasis on reducing operational disbursements and achieving a net debt/EBITDA target below 2.5x, with a new net debt target of $11 billion across the cycle.

• Value extraction from previous capital allocation and acceleration of the fiber-to-fiber strategy are key levers.

• No major divestments planned, but selective asset sales and infrastructure monetization are under consideration.

• CapEx guidance revised downward, with further compression expected as major projects conclude and forestry productivity rises.

Market Outlook and Competitive Landscape

• Pulp capacity expansions in Latin America and Asia, with accelerated integrated capacity in China, are reshaping the competitive landscape and increasing pressure on non-integrated players.

• Market BHKP demand is projected to grow at a 2.1% CAGR from 2024 to 2029, mainly driven by emerging markets, especially China.

• Forecasting 3.1 million tons of hardwood pulp demand growth and 4 million tons of new capacity by 2029, resulting in a suboptimal demand/capacity ratio and unsustainable industry margins.

• Vertical integration in Asia is expected to grow, challenging competitiveness in Western markets and putting pressure on cash costs.

• Industry expects closures of high-cost, non-competitive mills, especially in Europe and North America, and potential de-verticalization to create new market opportunities.

Operational and Financial Performance

• Major operational turnaround at Pine Bluff and above-plan performance at the Cerrado Project, with Ribas do Rio Pardo exceeding design capacity in its first year, producing 2.3 MT, 16% above target, with no additional capex required.

• Over 70 cost and efficiency initiatives identified, targeting a total operational disbursement of BRL 1,983/ton by 2027, maintaining last year’s forecast despite inflation.

• Competitiveness acceleration program includes 77 initiatives across genetics, logistics, industry, and supply management, with significant cost reduction targets.

• Strong liquidity position, with $4 billion in new debt issued at competitive rates, and all 2025 debt issuances below the company’s bond curve, achieving the lowest G-Spread ever on the 2036 bond.

• Consistent hedging policy protects cash flow against FX risk, and average cost of debt continues to decline despite a volatile environment.