Suzano (SUZB3) Q1 2025 earnings summary

Executive summary

• Q1 2025 results aligned with management's plan, with inventory rebuilt to normalized levels despite concentrated maintenance downtimes and operational readiness remaining strong.

• Focus remains on strengthening competitive position and deleveraging amid escalating global uncertainty and cost competitiveness, with US packaging operations nearing breakeven.

• Free cash flow generation is resilient across pulp price scenarios, with ongoing efforts to reduce cash and SG&A costs.

• Consolidated adjusted EBITDA was R$4.9 billion, down 25% from 4Q24 and up 7% year-over-year; operating cash generation reached R$2.6 billion, down 46% sequentially but up 5% year-over-year.

• Net income was R$6.3 billion, a significant turnaround from a R$6.7 billion loss in 4Q24 and up from R$220 million in 1Q24, mainly due to positive financial results from BRL appreciation.

Financial highlights

• Net revenue was R$11.6 billion, down 19% from 4Q24 but up 22% year-over-year, with 81% from exports.

• Adjusted EBITDA margin was 42%, down from 46% in 4Q24 and 48% in 1Q24.

• Net debt stood at US$12.9 billion (R$74.2 billion), with leverage at 3.0x in USD and 3.1x in BRL.

• Free cash flow yield (LTM) reached 18.5%, up 3.2 p.p. year-over-year.

• Gross margin was 33%, down from 40% in 1Q24.

Outlook and guidance

• Cash production costs expected to decline in coming quarters, with Q4 2024 as a reference for 2025.

• Free cash flow generation anticipated under any pulp scenario; US packaging operations expected to reach breakeven soon.

• Total operational expenditure for 2027 is forecast at R$1,900/t, progressing as planned.

• Cerrado project capex is 97% complete, with R$0.6 billion remaining for 2025.