Suzano S.A.

Ladies and gentlemen, thank you for holding and welcome to Suzano's conference call to discuss the results for the second quarter of 2022. We would like to inform that all participants will be in a listen-only mode during the presentation that will be addressed by the CEO, Mr. Walter Schalke, and the other executive officers. After the company's remarks are completed, there will be a question and answer session when further instructions will be given. Should any participant need assistance during this call, please press star zero to reach the operator. Before proceeding, please be aware that any forward-looking statements are based on the beliefs and assumptions of Susanus Management. and on information currently available to the company. They involve risks, uncertainties and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur in the future. You should understand that general economic conditions, industry conditions, and other operating factors could also affect the future results of Suzano and could cause results to differ materially from those expressed in such forward-looking statements. Now, I would like to turn the floor over to the company's CEO. Please, Mr. Walter Schalke, you may proceed.

Good morning, good afternoon, good evening to our colleagues all over the world. Welcome to the second part of the results discussions of Suzano. I'm pleased to have with us here all the C-level of the organization in the T&A session. Feel free to ask us about everything on the company. I learned in the past that happiness is equal to results, less expectations. I would like to, despite of the reviews of the sell side analysts that we are in line with the results, we are very pleased to announce an outstanding results of the company. I'm very pleased to announce that to everyone. We had, and I'm going to highlight several KPIs of the organization of the last quarter. First, in terms of the pulp volumes, we had almost 2.7 million tons of sales on pulp. Leo is going to address this issue with you in his part of the presentation. On the paper side, we have extremely good volumes, around 290,000 tons on paper, and Fabio will share with you. We'd like to tell you that we reached 6.3 billion We have operating cash flow of $5.1 billion. Aires is going to share with you as well our efforts to, despite of the inflation that we are facing, we have keep the cash cost in line with the previous quarter. Our liquidity position is $5.2 billion at this point of time for a very robust balance sheet. and our net debt, despite of the fact that we had dividends, we had cash returns on buyback program, we had parque, there is 1.7 billion reais, we had Cerrado, we were able to keep, to cap the net debt at the same level of the previous quarter with 10.5 billion dollars. Our leverage right now is 2.3 times. And We are not going to share any further detail on the Cerrado project today, but the good news is that we are on time, on budget with the project, with the physical progress on 21% in line with the expectations in defense. That we have right now, we are developing on a very good pace at this point of time, keeping the same previous projection that we forecast that we are going to have our commissioning period on the second half of 2024. Now I'm going to pass to Fabio that is going to share our view on paper and packaging business.

Thanks, Walter. Good morning, everyone. Let's turn to the next stage on the presentation. Today, I'm glad to share with you that the paper and packaging business unit, through a combination of operational excellence and assertive pricing management, has had its best quarter ever. As we have seen in previous quarters, demand for print and writing papers and carton board has continued to be solid in the domestic and international markets served by Suzano. Paper supply has been limited by logistics bottlenecks, which has continuously imposed operational challenges in shipping, terminal operations, and inland logistics. In most markets, demand recovery has been capped by limited supply for certain paper grades. Moving forward, we continue to see inflationary pressures over paper producers' cash costs. Figures for the whole Q2 from IBA related to print and write in domestic demand are yet not published. Considering the first two months of the second quarter when compared to the same period of 2021, the available data shows a 4.6% decline, mainly due to an impact of 29% drop of imported paper, as well as a reduction of sales of paper directed to the container board market. When looking only into print and write applications, we estimate that local sales have increased 11% year over year. EBA's public data on paper board demand shows a 3% shrunk in the first two months up to the second quarter of 2022, given the strong comparison period in 2021. Focusing on Susano sales volumes, the Q2 performance was 9% higher than the same period of last year. and as seen in the graphic, a record volume for the second quarter. Domestic sales reached 68% of our total sales in the quarter, totaling 198,000 tons, also a 90% increase on a year-over-year basis. Inflation has continued to cause negative impact on paper costs during the quarter. Still, we are able to manage our prices effectively to more than offset inflation impact during the period. Our margins have expanded 2% points on a year-over-year and a quarter-over-quarter basis. Our average net price during the quarter was 11% higher than our average price in Q1 and 34% higher than this quarter last year. As a result of strong volumes in prices, revenue management, and operational stability, our EBITDA has reached R633 million, a 52% increase on a year-over-year basis and a 20% increase compared to last quarter. Our Q2 EBITDA and EBITDA Porton are new all-time highs for the paper and packaging business unit. Due to strong sales in the first half of 2022, our paper inventories have been reduced and we are running below our optimal level and should continue to do so for the remainder of this year. Looking ahead, our major short-term challenge still resides in minimizing the exogenous pressure of inflation while overcoming the continuous logistics disruptions in maritime shipments and ports. On the demand side, the second half of the year is the strongest season for paper demand in Brazil, and we continue to see supportive demand for our products in the export markets. Last but not least, sales of products from our innovation pipeline have progressed well in the first half of 2022, and we are on track to deliver on our goals for this year. Now, I will turn over to Leo, who will be presenting our pop-up business results.