Klabin Sa S/Adr

Good morning and welcome to Klabin's conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. We kindly ask that, for the benefit of time, each analyst asks a maximum of two questions. As a reminder, this conference call is being recorded and the presentation will be in Portuguese with simultaneous translation into English. All participants will be able to choose which language they wish to hear by clicking on the interpretation button and the language of the presentation by clicking on Portuguese presentation screen located above. I'd like to make a brief announcement for those participants following us in English.

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Any statements eventually made during this conference call in connection with Klabin'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 Klabin. Such expectations are highly dependent on market conditions, on Brazil's overall economic performance, and on industry and international market behavior, and are therefore subject to change. With us here today are Mr. Cristiano Teixeira, CEO, Marcos Ivo, CFO and IRO, and the other company's officers. Initially, Mr. Cristiano and Mr. Ivo will comment on the company's performance during the first quarter of 2025. After that, the offices will be available to answer any questions that you may ask. Now, I'll turn the floor over to Mr. Cristiano. Please go ahead. Thank you. Welcome to our conference call discussing the first quarter of 2025. Starting with comments about our operating performance on slide three, we see total sales of 906,000 tons, 38% in pulp, 34% in papers, and 28% in packaging. These numbers, as I was talking in the past, recently, when this becomes a routine in terms of volume, it's going to be similar to a third for each category. You're going to see on the new slides that I brought that looking at Klabin annually, it has more of these feature of one-third, one-third, one-third. And here seasonally, we have a period with a volume of packaging in the first quarter that tends to be below the average for the year when the peak is reached mostly in the second and third quarters. But going back to our performance, I'd like to point at the conversion level, the integration actually that we have with container board papers, Of 860, I always say that this number depends on the international price for papers. This is the way we found to demonstrate to you our flexibility, being able to operate both in our packaging department and industrial bags with a conversion and corrugated boxes and industrial bags. in the sense of integrating more papers depending on the cost and benefit of international markets, international prices. Another interesting point is that in the segments that we call as market paper, the coated boards and crepe liners, this trend of the volume of coated boards always with the impact of Paper Machine 28, the trend is for us to see a higher volume of coated board in the future Precisely with those contracts that as soon as they are implemented and the products are registered and approved and the machines ramp up curve, we always say that the capex has been done and now we're in a process of increasing a beta of this volume with the ramp up. And once it happens, until we reach the company's normal levels, the trend is for the volume of coded boards to increase compared to the volume of prepliner, at least in this operational slide. Now, talking about the result, a beta here, what's interesting is that paper and packaging represent 63%, pulp 37%, paper is very important. And in this slide, in this pie chart specifically, in the pulp results, I'd like to point out to the performance of fluff that is already responding to a third of our pulp results. It represents 12% in volume of pulp, but 30% in our results. Considering that we have long fiber and can access markets with high added value, and I'll talk a little bit more about this in some of the other slides that I brought you. that are new to some of you. So moving on to slide number four, here we see the breakdown and visually we bring to you, we understand that we've been provoking a change in the way we communicate with you, but always doing this very cautiously, first talking a little bit more about operating performance. The slide three, we placed that opening and we brought it in a more visual way so that it is easy for you to deal with these numbers. But when we look at slide four, an evolution of this new way of communicating with you, again, and always referring to how we do it cautiously so that we can have better and better communication. But on slide four, we remind you of the products that we operate in each segment. So bringing here our partner brands, where we're very... honored and proud to disclose. So on short fiber, we usually have our main clients, but we may also bring the focus in the product diversification, and we're going to evolve this presentation to also show you innovations. But in looking at the logos of the short fiber product, the brands that we supply, and just for curiosity, for example, on Kleenex tissues in addition to short fiber in the product, there's also the presence of coated boards that's also made by Klabin in this reference. And fluff, the main reference is the major brand, especially long fiber products. The diversity of this product is incredible considering how easy it is to operate with a product with higher added value in the fluff segment.