Klabin Sa S/Adr

Welcome to Clubbing's conference call. At this time, all participants are in listen-only mode. Later, we will conduct a question and answer session when further instructions to participate will be provided. Should you require assistance during the call, in the benefit of time, please limit yourselves to two questions. As a reminder, this conference call was being recorded and being broadcast simultaneously via webcast, which can be accessed through Clubbing's investor relations website, where the presentation is also available. Forward-looking statements eventually made during this conference call in connection with Clubbing's business outlook, projections, operating and financial targets, and potential growth should be understood as merely forecasts. based on the company's management expectations in relation to the future of clubbing. Such expectations are highly dependent on market conditions, on Brazil's overall economic performance, and on industry and international market behavior, and therefore are subject to change. Present with us today are Mr. Cristiano Teixeira, CEO, Marcus Evo, CFO and IRO, as well as company officers. Initially, Mr. Cristiano Teixeira and Mr. Marcus Evo will comment on the company's performance during the first quarter of 2024. After that, the officers will be available to answer any questions that you may have. I now turn the call over to Clubbing's CEO, Mr. Teixeira. Please go ahead. Thank you. Good morning. Welcome to Clubbing's Earnings Conference Call to discuss the results of the first quarter of 2024. I'd like you to be with me on slide three. I will make some comments on the first quarter 24 performance. And then you will hear more detailed information by our business officers. Let's try this. Let's speak about long fiber. At the top on the left hand corner, I'd like to draw your attention to the fact that one third of the shipment of fibers in Q124 was one fiber with a price differential of almost $300 premium of one fiber over the other. We have been debating this thesis with you It's kind of a conceptual thesis, but it takes into account some factors, which I will mention here with a direct link with Klebing's intent to expand our long fiber product portfolio, which combines and couples our Kayete project Last year, we had about, well, the long fiber market had about 25 million tons a year. Last year, almost 3 million tons were out due to shutdown of production. basically following companies in the North Hemisphere manufacturing long fiber. And with this price differential, this was a relatively stable curve considering the price of fluff worldwide. We saw price deterioration mainly because of the North Hemisphere cash costs. So this started happening last year and there has been no announcements of investments in long fiber worldwide. So it's a sector of 25 million tons. And in this context, the clubbing stands out with a product with the same quality characteristics as the long fiber in the Northern hemisphere. And we are among the main brands that use our long fiber products. So considering the strategic design of the company and our resilience, We operate in niche markets, which are more resilient, more stable, with greater competitiveness vis-a-vis the Northern Hemisphere. So we are the only company in the Southern Hemisphere offering this kind of differential. So one of the things is, is not that there are no possibilities of replacement. of long fiber by short fiber. On the contrary, we benefited from that. We showed that in Eukaliner, as you know, and I'll be talking more about that. But in the replacement of fluff, which will benefit us as well, we like to draw your attention to the fact that in this market we've been working more and more with products with greater added value of fluff, with greater competitiveness. This is indeed a differential that we have that we always like to draw your attention to. In short, fiber, just for your reference, it's a market of about 145 million tons. We always like to point out the loss of more than 1 million tons last year due to unscheduled stoppages, which shows that We can consider this in our calculations. We believe that this will be more and more reflected in the curves of the companies that work with pulp price curves. This will be considered. This will be a reference in the price curve. In other words, there's non-recurring loss in short fiber. So we had an important quarter. And Marco Ziva will speak more about this in terms of pulp cash cost. And it shows efficiency that we have been pursuing at the company, not just in G&A and wood, but also in other areas of the company. As regards coated boards and craft liner, of course, We have to mention the moment we had in Brazil and in Latin America. This is a theme that has been debated in many segments, the overcapacity of China and its effect in many regions of the world. Brazil was not an exception in this context. We also suffered just like other industries with the offering of Chinese products in Brazil. This will be mentioned by our Coated Boards officer later, but I'd like to point out that even in this scenario, with deflation due to an overproduction in China, which has impacted many sectors around the world and also ours, in this kind of situation, still clubbing posted growth in Brazil in the shipment of Coated Boards, showing that the Chinese Coated Boards that arrived in Brazil competed with less added value products and clubbing, now focusing with the technology of PM28 with more added value products. So this reinforces what I said about top. We are going to niche products with higher added value, And of course, this also applies to coated boards, not to speak about LPB, which we know is the high-end product of every sector. Speaking a little about Kraft Liner, we're now transitioning also to packaging. I would also like to mention the level of integration and conversion at Klabin, 63%. I'd like to point out something that you should not overlook. We have been using as much as possible the paper of Paper Machine 27, which is a highly technological paper. And again, we spoke about that fiber transition, right? Using short fiber. And this used to be a lot of fiber in the past, but leaving this for products that can and need to work with a lower paper weight, and especially because of market conditions. But the box sold in area in square meter or considering units, we followed the market. in volume of 5.6%, but we produced less in tons.

So the differential between the area. in a lighter box, in fewer tons.

This differential is cost and it's competitiveness that we can include in our result. And lastly, I'd like to make a reference. We will soon be getting some information from our packaging officer. I'd like to draw your attention to Figueroa project. Well, Figueira project, I had the pleasure of visiting project Figueira just yesterday. We started production and billing. We have a first line team, another great project team at Klabin being able to deliver the project before the deadline. In the last 15 years, Klubbing is seen as an excellent company in terms of delivering projects. And I'd like to mention something about this project. I hope that soon you will have an opportunity to see it in person. But we were able to make some, one of the great leaps in productivity in packaging. Most likely the biggest leap in Klubbing's history because at this site we'll produce Double what the same high technology unit at Klabin will produce, but with half the team. So the productivity by ton shipped by person at this plant is most likely the most efficient in the world. It's most likely the highest, the greatest leap in competitiveness that Klabin ever had. You'll get more data on the project soon. So I will end my part and I will turn the floor to Marcos Ibu to speak about the quarter and then we'll come back. Thank you, Cristiano. Good morning, everyone. Thank you for joining us. On page four of the presentation, net revenue in the quarter was 4.4 billion BRLs. down 8% year-on-year. This decrease is due to drops in pulp and craft liner prices, in addition to depreciation of the Brazilian currency against the dollar, which was partially offset by the higher sales volume. Adjusted EBITDA was 1,652,000,000 BRLs in the first quarter of 2024, with a margin of 37%.