Suzano (SUZB3) Investor Update summary

Strategic rationale and transaction structure

• Suzano will control a new joint venture with Kimberly-Clark, holding 51% ownership and appointing the majority of the board, CEO, and CFO, with a call option to acquire the remaining 49% after three years at a pre-agreed multiple.

• The JV covers 14 countries, 22 facilities, and will be headquartered in the Netherlands, operating independently from Suzano's core business.

• The partnership combines Suzano's industrial expertise with Kimberly-Clark's commercial and branding strengths, aiming to accelerate the fiber-to-fiber strategy in the global tissue market.

• The JV will have access to global and local premium brands, including a 30-year royalty-free license for Kleenex, Scott, Andrex, and 40 local brands.

• The deal is expected to close by mid-2026, pending regulatory approvals, with signing and payment expected by June 4, 2025, and integration planning underway.

Financial impact and synergies

• The transaction values the business at $3.4 billion enterprise value, with a potential $1 billion in net debt at closing, reducing Suzano's equity disbursement to $1.2 billion; acquisition value is set at USD 1.734 billion.

• Expected annual revenues are $3.3 billion, EBITDA $500 million, and free cash flow generation around $300 million.

• Estimated operational synergies of $175 million per year to be fully realized within three years, mainly from procurement, industrial efficiencies, logistics, and G&A, with no major CapEx required.

• The JV is expected to deliver an IRR above 15%, with efficiency gains modeled conservatively compared to prior Brazilian operations; expected unleveraged IRR is 15.5% in US dollar nominal terms.

• The transaction is designed to have limited impact on leverage, maintain Suzano’s investment-grade status, and reduce cash flow volatility.

Business overview and operational footprint

• The joint venture will have 1.0 million tons of tissue capacity, 22 mills in 14 countries, and sales in over 70 countries.

• The business will operate in two segments: Family Care and Professional.

• Revenue distribution is diversified across EMEA, UK, Latin America, Asia, and Oceania.

• The JV will operate with an average annual sustained CapEx of $100 million.

• No changes are expected in Suzano’s pulp inventory management as the JV will operate independently.