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 2024. 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. Beto Abreu, 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, select Mute Original Audio. Before proceeding, please be aware that any forward-looking statements are based on the beliefs and assumptions of Susanus Management and non-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 will turn the conference over to Mr. Beto Abreu. Please, you may begin your conference.

Thank you. Hello, everyone. Very happy to be here interacting with all of you now. Nel is part of the Susanus team. And I really would like to thank you for all of you to attending the call. So I will start here the presentation and my first slide will be highlighting to you a couple of important achievements movements related to our strategic avenues and implementation of our strategy. As you can see here, we made investment in two assets. The first one was in Lansi. In Austria, a good moment to understand and to test the market in Europe. Here we are talking about the textile market. And the other movement was impactive in U.S. on the packaging business. Also important movement to understand the market. The team here personally like the movements that we are doing. I think a few things it's important to share with you. The first one, it's important movements with no impact in our balance sheet, but huge opportunity to understand those geographies and those markets. It's like we are testing the water on those geography and markets. The other one is how able we are to implement and to use all the knowledge that we have on those kind of operation to extract value. And of course, are also markets and segments that we can scale in the future. so that's those uh things that we'd like to to share here in the in the case of lansi small acquisition which sits on the board enormous opportunity to understand the business and with a call for the future if we decide to execute in the case of active also a business with uh 420 tons of capacity in the paperboard business also a fair price to test the mark understand the environment and start planning other movements in the future. So that's the kind of movement that, again, we understand that's the right one that was in our pipeline since last year and we are bringing now. We should have the closing the last part of this year. The other highlight that I also would like to share with you is the Cerrado project. all of you are familiar with, I would say that this is a unique milestone of the company that will bring us to even a stronger position in terms of relevance in the market pool and also competitive advantage in terms of cost. And this is something that it's a kind of mantra for us that we will always keep in our agenda. It's keeping our relevance in the market open and also keep working very hard every day on the cash costs to keep our level of competitiveness against other competitors. And then we can see this in the next slide in some of the highlights related to the results. One of the things that we are very glad to show is the level of cash costs against in this third, in this quarter. This is something that we're going to keep working very hard to keep and to even use further levers to keep reducing this in the future. The other one is, of course, EBITDA. We see a number of 6.3 billion reais that shows the resilience of our business. And I think an important point to highlight here is that, as we can see, we stopped the leveraging the company even not taking all the opportunities that Cerrado will bring for us in the future. So the companies are leveraging before we have Cerrado operating and bringing the extra volume that we have. So a lot of good news here in the second quarter in our view related to those figures. We're going to go through most of those information here with the team, and also we're going to go deeper on the Cerrado projects, but let me hand over to the team now to go on the details, starting with Fabio, and then I will go back to you.

Thank you, Beto, and good morning, everyone. Please, let's turn to the next page on the presentation. On the second quarter, we had a solid performance, supported by better market conditions domestically and abroad, albeit challenged in international logistics. On the domestic markets, according to IBA, print and write demand increased 12% in the first two months of the second quarter on a year-over-year basis. Growth occurred in both unquoted and quoted paper grades. Demand benefits from the election cycle tailwind, which will take place at the end of the year. Demand for paperboard increased by a strong 14% during the first two months of the quarter compared to the same period from last year. This significant growth was primarily driven by increased packaging consumption from the food and beverage and pharmaceutical sectors. We have also seen the end of the destocking process that had impact on previous quarters. On international markets, demand in the quarter was healthy in North America, Latin America, and other markets we served. Prices were slightly up in dollar terms, supported by higher pull prices in all markets, coupled by higher container freight rates and longer logistics cycles in most international routes. Looking now to Suzano's figures, our sales volume in the quarter were 3% higher year-over-year and almost 6% above first quarter performance, pushed by higher sales volumes in the domestic market. Our export volumes in the quarters have been impacted by difficulties with vessels delays and port permissions, hampered by port conditions in most container terminals in Brazil. The average net price growth during the quarter was over first quarter was led by implementation of previously announced price increase in the external market in favorable effects. On a year-over-year comparison, the price decline was given by the abnormal price levels witnessed in the first half of 2023. Looking at EBITDA performance, the 14% increase quarter over quarter was driven by higher top line and lower costs in the period, also benefiting EBITDA per ton. When compared to the second quarter 2023, EBITDA dropped 15%, led by lower prices in both the domestic and international markets, despite higher sales volume. Looking ahead, we expect better demand for print and writing and cardboard in the domestic market when compared with the first half of the year favored by seasonality. The upcoming elections in Brazil should keep playing a role for higher demand in Q3, mainly for coated paper. Rising costs continue to push paper produced globally, and new price increases have been announced in most regions. It's also worth mentioning that a strong dollar over BRL raised prices on imported papers in the domestic market, while providing better price and local currency for our exports. As disclosed on the earnings release, in the Q3, the annual maintenance downtime will take place on the Suzano and Limeira mills. We expect our cash costs in the coming quarters, X downtimes, to remain stable when compared to the past quarter. Now, I will turn it over to Leo, who will be presenting our business results.