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 2023. We would like to inform you that all participants will be in a listen-only mode during the presentation that will be addressed by the CEO, Mr. Walter Schalka, and other executive officers. After the company's remarks are completed, there will be a question and answer section 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 Susano's 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 maturely 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 Schalka, you may proceed.

Good morning, everyone. It's a great pleasure to be with you. Welcome to the second quarter results presented by Suzanne. With me here, we have a large part number of our C-level. Please be free at the end of the session of the presentation to make the questions to everyone. I think I would like to highlight at this point of time the resiliency of the company. I think the company is very well prepared, once again, to navigate on this cycle with lower poll prices. The company has been preparing ourselves. We know there is part of the volatility process that we are facing in our industry, and we are well prepared for this month. I think it's very clear to all of us that the company has been devoting capital allocation to different initiatives. There is the preparing the company for the future. We are going to, during this session, to go a little bit further on these discussions. I think on the sales side, the company had normal volumes on this seasonality period of the time in COVID on paper. our inventory levels are below the optimal levels, continue to be below optimal levels. The performance of the company we had during this quarter, R$3.9 billion on EBITDA. Our operating cash flow was R$2.2 billion. I think this is a very important KPI for us. There is many EBITDA-less companies sustainable investment, CapEx. Our cash cost, and Iris is going to detail a little bit more on that, it's going down. We had 2% decrease during this quarter. And the company, and Marcel is going to explore a little bit more on that, is very well prepared for the cycle on our balance sheet. We have a very strong liquidity at this point of time. Our net debt is going up at a very slow pace comparing with the investment volumes that we are doing, the capex volumes that we are doing right now. And we are less than one year before we start up the Cerrado operations. Iris is going to explore a little bit. with you about Cerrado, but we are very happy with our performance of our engineering team. I think it's very important to mention and to highlight as well that on June 1st of this year, we have the closing with the deal with Kimberly Clark on the tissue assets here in Brazil. And with the combination that we have with these assets, we are facing a some synergies that would bring value to our shareholders. We are going to deliver these synergies as long as the month will come. We are very pleased from the initial movements that we had, the initial opportunities that we are facing right now. The company right now is the leader on the tissue business here in Brazil as a whole. remembering that this was a PowerPoint operation five years ago, and right now we are already leading the Brazilian market. Now I'm going to turn over to Fábio, who is going to mention a little bit about our packaging and paper business.

Thank you, Valter, and good morning, everyone. Let's turn to the next page on the presentation. As it can be seen in the chart at the bottom, the paper package in business unit has delivered stable EBITDA and margins on a year-over-year basis, despite more challenging paper market conditions. As it's shown in the top left chart, Suzano sales volume was 5% higher than the previous quarter and 10% below when compared to the same period of last year. Demands for print and writing papers in export markets have been affected by the strong destocking cycle during the first half of 2023. combined with lower consumption of printing materials in the same period. This trend is more intense in mature markets, such as North America and Western Europe, mainly for coated papers. Demands for packaging and uncoated grades have been more resilient, though. Latin America's main export region was a positive note in such a challenging international market environment, posting a demand growth in uncoated for the period. On the domestic market, according to IBA, print and write demand decreased 18% in the first two months of Q2, compared to the same period of 2022. As mentioned, most of each decrease is centered around cold papers. While for uncoated papers, we still see demand resilience at the same level of last year, pushed by sales of the editorial, school, and office segments. For Paperboard, EBAS public data on demand shows a 2% decrease on the first two months of Q2 versus the same period of last year. We considered that this decrease was due to inventory normalization throughout the chain, as demand for packaging and consumption of essential goods remained solid. Suzano paper price have been stable in the domestic market on a quarter-over-quarter basis and were 16% higher on a year-over-year basis. Our export prices, which were unusually higher than the domestic prices in the last year and a half, have decreased 20% in reais on a quarter-over-quarter, although still 3% higher on a year-over-year basis. Export prices adjustments reflect the market fundamentals imbalance and a stronger FX in the period. Our consolidated average net price during the quarter was 11% higher on a year-over-year and 6% lower on a quarter-over-quarter basis. Looking now to the EBITDA, we see a flattish performance when compared to Q2. The 11% decrease quarter over quarter was due to lower price from export and stronger FX. Looking ahead, we expect better market dynamics when compared to the first half of 2023, with demand behavior similar to pre-COVID seasonality, where second half of the year is stronger, differently from last year in which demand has been very linear throughout the year. In export markets, this stocking process is showing signs of coming to an end, and prices seem to have hit bottom in the main spot markets, while still higher than historical levels in mature markets. In the domestic market, demand should pick up due to the national government books program, a seasonally stronger second half of the year for packaging, sustaining current price levels. A stronger local occurrence poses some risk to some product trades in the domestic market due to more competitive imports. Still looking forward, costs should have a downturn trend in the end of the year, with more favorable raw materials and energy prices. Now I will turn it over to Leo, who will be presenting our poll business results.