Suzano S.A.

Ladies and gentlemen, thank you for holding and welcome to Suzano's conference call to discuss the results for the fourth quarter of 2023. We would like to inform that all participants will be in listen-only mode during the presentation that will be addressed by the CEO Mr. Rival Teixalca and other executive officers. This call will be presented in English with simultaneous translation to Portuguese. To change the audio, you can press the globe icon on the lower right side of your Zoom screen and then choose to enter the Portuguese room. After that, you can select Mute Original Audio. 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 SUSANO and could cause results to differ materially from those expressed in such forelooking statements. Now, I'll turn the conference over to Mr. Valter Schalka. Please, you may begin your presentation.

Good morning, good afternoon, good evening to everyone that is joining us for the session of the results of SUSDANO. It's a great pleasure to be with you. Guys, today is a very emotional day for me. As you know, yesterday we announced the transition of Suzano Rowe as a CEO to be part of the board of directors and to be on several committees. Of course, I'm very proud from the 11 years contribution that I have been delivering to the company and being part of the transformation of this company for the last 11 years. I'd like to start some issues. First, to welcome Beto Abreu. I think it's a person that is going to have important contribution to the company in the next coming years. I think and I recognize that he has the right skills to continue, and the word is like that, is continuing the transformation of Suzano. I'd like as well to thank you, the 20,000 people that is working every single day on Suzano, to be transforming Suzano on a better company that is impacting the society. Of course, I would like to thank you, the leaders in the management team, our C-level that have been with me for the last many years. and being part of this transformational journey that have been very positive to all stakeholders. As you may know, one of our main points on our culture is to create value and sharing with all the stakeholders, and they have been amazing on this process. I'd like to thank you, the board of directors for the support that I got from all period that we have been here and the reference shareholder as well, that we implement a very good governance where was the roles of everyone was very clear during the process. I'm very positive about our future, about Suzano. I'm going to be part of that. And it's very clear that capital allocation is quite important issue for us. And I'm going to be on the board of directors to help to continue to look for alternative that would create value for everyone. Our policy of looking for new investments in one side, but we have a very financial discipline in one side and very discipline on capital allocation will continue on the next coming years. This is not related with me, it's related with all the governance system of the company. Now I'm going to turn to the results of the fourth quarter and 2023 results. I'm very pleased to announce a very good year for Suzano and a very good fourth quarter. I think we had an extremely good operational performance on the fourth quarter, but it's very important to bring to your attention the main strategic achievements that we had last year. First, related with expanding our role in different verticals. We increased the addressable market on the fiber-to-fiber, on the fluff market, announcing an expansion with a swing line in the Lemera plant. On the other hand, it's very important to mention that our tissue business last year had the major additional volumes with the acquisition of the tissue business of Kimberly-Clark in Brazil, and we announced a new plant in Aracruz that is going to be commissioned on 2025. Regarding growth and modernization, and competitiveness. We have been working to retrofit Aracruz and Jacareí, extremely important projects for us. We never had in our history so much expansion in terms of land banking and forest base. We were close to 300,000 additional, sorry, 300,000 hectares of planted areas last year, and we are going to have the same amount for this year. Heidi is going to share with us today good news about the Cerrado project. And I think this is a transformational project for our history. We are going to increase volumes on a very competitive base for the future. And we continue to have shareholder compensation. We concluded the third buyback program and we had now the fourth program that we announced a few weeks ago. that is going to show to the market that we believe that we are undervalued and the best capital allocation for us would be to buy back shares and show to the market that we can keep creating value to our shareholders. And we announced last year, we pay in January the interest of equity payment of one and a half billion reais. In terms of results on the page number four, we had last year 10.2 million tons of pulp, 1.1 million tons of paper. We had the lowest ever inventory in the company, showing that the market is demanding volumes for us. Leo is going to explain in detail what is the market conditions for us right now. We had one adjusted EBITDA of 18.3 billion reais. The cash cost for the last quarter of last year was 816 reais per ton. We have been decreasing every single quarter our cash cost on the last year. And now a very robust balance position. Marcelo is going to go in more details about that. but we have a very good liquidity. Our net debt is not growing even at a very high pace, even considering the largest capex on our history, showing that we are able to deliver new projects without expanding our net debt on a very high level. And our leverage was 3.1 times that of EBITDA. Of course, this is regarding a lower EBITDA due to the lower prices that we had last year. Now I'm going to turn to Fabio, who is going to explain a little bit more about the paper business. Fabio, the floor is yours.

Thank you, Walter. Good morning, everyone. Please, let's turn to the next page on the presentation. 2023 was a challenging year for paper and packaging markets globally. Excess of inventories led to a much lower level of demand in most markets. Normalized supply chains coupled with excess capacity on print and writing and paper board mailing in Asia increased competition, which turned into higher pressure over paper price in international markets. Despite these challenging conditions, we were able to deliver solid results, full operational flexibility and revenue discipline, achieving the second best EBITDA in our history. On the domestic market, according to IBA, print and write demand decreased 13% on a quarter-over-quarter basis. In a full year comparison, we see 11% decrease in print and write demand, quite above its secular trend caused by destocking from 2022 levels and paper substitution, mainly in promotional advertisement segments. Our core markets, unquote wood-free and cut-sized products, performed better than our paper grades and demand was more resilient. On international markets, print and write demand was also hampered by the destocking cycle, but also by macroeconomic uncertainties that limit economic activity and a faster advancement of digitalization. Print and write demand has shrunk above 20% in the mature markets, such as US and Europe, forcing adjustments in capacity to match new demand levels. Regarding paper board, we have seen inventory adjustments as supply normalized, mainly in the pharmaceuticals and domestic segments, which start early in the third quarter and continue through the end of the year. As a result of that, eBus public data shows an 8% reduction in domestic demand on quarter over quarter. When you look at the full year, we see that paper board demand almost flat compared to 2022, on a stronger first half of the year. Susano's total sales volumes in Q4 were 17% higher than last quarter due to seasonality. Compared year-over-year, sales volume increased 5%, driven by higher volumes for the external market. Our annual sales volume compared to 2022 decreased 6% due to lower sales in the domestic market, which represents 67% of total sales. The average net price during the quarter was 7% lower than our average price in Q3 and 50% lower than Q4 on 2022. But when looking at 2023 versus 2022, our average net price remained 3% higher. It is important to mention that lower net price in the second half of the year reflect lower price in international markets. Susano domestic prices were more resilient and were only 1.4% lower year over year due to seasonal product mix. Looking at now at EBITDA, the 11% decrease quarter over quarter and 29% year over year were both driven by lower price despite higher sales volumes. The same factors led to lower EBITDA per ton. Our full year EBITDA was 2.6 billion, a 90% decrease versus 2022, but still much higher versus pre-pandemic levels, as it can be seen in this slide. Looking ahead for 2024, we expect to see normalized levels of demand, as inventory levels seem healthier compared to 2023. The structural trend of digitalization, permanent shifts in consumption behavior will continue to impact demand, but we expect purchase trends to go back to its historical pattern. Cost inflation over the past year have eased and settled, and we should expect flat cost for paper products in 2024, albeit stressed global geopolitics, which could impact supply and demand balance in the future. Now I will turn over to Leo, who will be presenting our business results.