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 2025. 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 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 will turn the conference over to Mr. Beto Abreu. Please, you may begin your presentation.

Thank you, everyone, for attending our second quarter results. from Susano. I would like to start sharing a couple of highlights of our results in the second quarter, but also I'd like to cover and give you more details about the relevant information that we share last night with all of you and with the market. Regarding the results, all the numbers was quite in line with what we planned, with what we expected, mainly regarding sales, operational cash. But I want to reinforce that the trend that we saw regarding the cash cost is something that we will see in the next quarter. So we are really expecting even lower cost in the third quarter. regarding the second quarter and even lower in the last quarter. Iris will be able to cover that specific topic with more details. I also would like to share with you more details regarding the swap and the deal that was announced with Eldorado. Just to give you a summary about the concept here, what's gonna happen is that we're gonna be able, once we sign it already, the deal is to start harvesting their wood immediately in 2025, but also in 2026 and 2027. And we will have to give it back the same amount of volume And they will start harvesting 20, 28, 29, 30 and 31. So that will allow our forests to grow during this period of time. And then much more volume in terms of cool meter will be available in our operation. That of course means cost avoidance, capex avoidance, to be very honest, in terms of less planning and also less wood to be acquired in the market. And we will also be able to reduce, on a very important way, the ratio, the average ratio for our operations, mainly in Ribas and Tres Lagoas. So this is the kind of deal that we want to pursue considering the amount of value that is generating for the business. We are expecting an internal return of the deal, which will be around 20%. That's what we are expecting with this deal with El Dorado. So I want also to mention that the deal will bring us an optionality to in the future, increase production at Dahiba's mill. Since we have been learning that the capacity of that mill is even higher than the one that is in the plan. So that mill might be able to produce something between 100 and 150,000 tons per year more than was originally planned. That's what we have been learning in the last couple of months. So the deal that we are doing now we also create the optionality for the company to increase in the future production this meal without any investment if we decide to do it. And if the market brings the right environment to justify any kind of increase in terms of production. So that's the rationale behind the deal. And we can also comment more detail if you want during the call. The other thing that I would like to mention is that the communication regarding the 3.5% of reduction in our production in the next 12 months, it's completely aligned with our production objectives to produce with the right level of return. That's not only about, of course, producing with generating cash, but it's producing with the right level of return that we expect from our operation. So we are being absolutely consistent with what we have been doing the last couple of years. Just also to give more detail regarding the process, we should reduce on the linear way in the next 12 months, the reduction in our operation. So Leo can also comment regarding the business environment. And this is a decision that we use to accept from the finance team that is controlling all the time, the profitability and the level of return of any ton of poop that we produce in our meals. I will finish mentioning that our focus, as I have been mentioning the other calls, will be on competitiveness. This is why I'm highlighting the trend regarding the cash costs in the next quarter, and also in executing the deal that we signed with Casey. Firstly, making sure that the cavout will be done on time. and on budget, but also making sure that we do not bring any new distraction in terms of new initiatives on the M&A arena for the table. We want to concentrate to execute well what we have on the table right now. So again, in the next two years, that will be our focus on executing our process, on deleveraging, and also making sure that our level of competitiveness will keep increasing in our operational side. So that's the main highlights that I would like to share with you. Again, saying that sales Operational cash generation and EBITDA was absolutely in line with what the team here has planned for the quarter. Having said that, I would like to hand over to Fabio, who will cover the paper and packaging business.

Thank you, Beto, and good morning, everyone. Let's turn to the next page of the presentation. Our second quarter results were marked by stronger sales volumes and lower costs versus Q1, with EBITDA growth from our Brazilian operations on a quarter over quarter and a year over year basis. Although Brazilian operations didn't have any planning maintenance in the quarter, as I have mentioned to you on our last call, we conducted in April our annual maintenance at the Pine Bluff Mill, which was executed on time and slightly below budget, but negatively impact US operations EBITDA due to the lower volumes and higher costs. Regarding price performance in Q2, versus Q1, starting with our Brazilian operations, the 1% price hike in the domestic market was more than offset by lower export prices as a result of product mix, regional location strategy, and BRL appreciation. Regarding price performance on our US operations, the 3% hike quarter over quarter was driven by product mix and better commercial location. Now talking about demand dynamic in Q2, looking to the Brazilian market and according to IBA, print and write demand, including imports, rose 6% in the first two months of Q2 year over year. Domestic sales grew 6% and imports grew 9%, driven mainly from higher demand for uncoated paper linked to the Brazilian government textbook program. Cut size demand remained stable, while coated paper demand in Brazil shrunk in the same period. Outside Brazil, and according to PPPC, uncoated wood-free paper demand, our main exported product, remains stable in North America and Latin America, but declined 10% in Europe. International markets continue to show weak demand for print and write paper grades during the quarter due to unfavorable supply-demand balance and ongoing trade war uncertainties. Turning to pay board demand, in Brazil we saw a 3% demand increase in the first two months versus last year, with domestic sales up 5% and imports down 3% in the period. In the US market, a Fox region for Suzano packaging operations, according to Numera, box board demand was stable in the first six months of 2025. However, demand for SBS boards, which Suzano Pact produces, has increased 1% over the same period, albeit coming 1% reduction versus Q1. Looking ahead to Suzano's paper and packaging business in Q3, we expect the costs in our Brazilian operations to remain stable versus Q2 as no maintenance down times are scheduled. At Suzano package in the US, we anticipated lower costs along with higher production and sales volumes. We are confident in delivering positive EBITDA from this operation going forward. Sales volumes in Brazil are expected to increase versus Q2. Given market seasonality, higher prices should remain stable. Before diving into our paper export performance, it's important to highlight that our paper exports were not exempt from the 50% import duties imposed by the US government started in August. To mitigate the impact, Suzano has built inventories in the US that are sufficient to cover most of our sales throughout the year end. and we are now planning to redirect the majority of our exports in the U.S. to other regions. Currently, the U.S. accounts for around 20% of our total exports, and we are running different actions to mitigate the impact of the tariffs moving forward. Now, I'll hand over to Leo, who will be presenting our pool business results.