KPresentation2005 Ing

8/6/2019 KPresentation2005 Ing

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Strategy Coated Carton Board Expansion Project

Contents

Klabins Briefing Competitive Advantages

Highlights

Shares Performance at Bovespa

Company's strategy

Market Position

Coated Carton Boards Structure

Total Capacity

New Machines Layout

Corporate Profile

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Klabins Briefing

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Largest packaging paper and coated carton board producer

Paper, coated carton board and recycled paper installed production capacity1.6 million t/year

Net Revenue: US$ 1.1 billion in the last twelve months

Market Capitalization: US$ 1.9 billion (30/09/2005)

There are 17 plants in Brazil and 1 in Argentina

Klabin is a forestry based company focused on wood, coatedcarton boards, packaging paper and packaging products

(corrugated boxes and industrial bags)

Forestry Papers and Boards Corrugated Boxes Industrial Bags


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4

Shareholder Structure 30/09/2005

4

Total Shares (Common + Preferred)

Local Price Share (KLBN4) 30/09/05

Book Value

Free Float

Daily Trade Volume 3Q05

917,683,296

R$ 4.60

R$ 2.49

79%

R$ 5,456 k

Common Preferred

Klabin Irmos

64%

Monteiro Aranha

20%

Foreign

Investors

3%Brazilian

Investors

13%

Brazilian

Investors

43%

Foreign

Investors

26%

BNDESPAR

31%

316,827,563 600,855,733


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Considerations

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Competitive Advantages Opportunities

Global player: quality and cost

competitiveness

Leadership in all segments in thedomestic market

Largest Brazilian paper exporter

(packaging paper and coated carton

board)

Long-term sales partnerships

Global producers/suppliers areintegrated

Western Europe: an emerging market

with great consumption potential

Coated carton board: low technologycompetitiveness in North America

China and India: potential demand

market growth


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Comprehensive Geographic Coverage

RS

SC

PR

SP

RJ

MG

BA

PE

Boards and kraftliner

Angatuba SP Correia Pinto SC

Monte Alegre PR Otaclio Costa - SC

Industrial Bags

Lages - SC (2) Pilar (Argentina)

Corrugated Boxes

Betim - MG Del Castilho RJ Feira de Santana - BA

Goiana - PE Itaja SC Jundia SP (2) Piracicaba SP So Leopoldo - RS

Recycled Paper

Goiana PE Guapimirim - RJ

Piracicaba SP Ponte Nova MG

Forestry

Paran PR Santa Catarina SC So Paulo SP

Brazil17 units

Argent ina1 unit


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Corrugated

Boxes

540,000 ton

FinishedProducts

(*)

Pineand

Eucalyptus

Total

353,000 ha

Forests

Planted186,000 ha

Wood - 2.5 million ton

100%

Integrated

Kraftliner750,000

ton

Sack Kraft155,000

ton

CoatedBoards350,000

ton

OCC 380,000 ton

1.6 million ton

RecycledPaper

300,000ton

100%

Integrated

Industrial Bags

155,000 ton

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Liquid Packaging BoardCarrier Board

Folding Box Board350,000 ton

Exports450,000 ton

40%Integrated

100%Integrated

(*) All figures refer toInstalled production capacity

Domestic

andExport

Sales

NBSK andBEKP

1.3 millionton

Pulp

Klabin Largest Integrated Producer of Coated Boards,Packaging Paper and Packaging ProductsInstalled Capacity 30/09/2005


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Corporate Governance and

the Sustainable Development

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Corporate Governance Sustainability Policy

Klabins preferred shares are memberof IBOVESPA, IBX-50 and MSCI

Level I of Corporate Governance in the

So Paulo Stock Exchange

Granted tag along rights to preferred

shareholders

Seek competitive advantage and qualityin all products, in order to contribute to

the companys results

Promote the personal and professional

growth of all employees

Social responsibility practices

Reduce the environment impacts and

improve the recycling activities

Assure the sustainable developmentprinciples, in an economically viable,

socially beneficial and environmentally

appropriate way

Repurchase up to 10% of preferred

outstanding shares


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Certifications and Awards

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Forest Stewardship Council Quality and Environment

Native Forestry

Commercial Plantation

Aromatic and Medical Plants

Custody Chain

ISO 14001 - Environment

OHSAS 18001 Occupational Health

and Security

ISO 9001 / 9002 - Quality

HACCP Environment Security -

Hazard Analysis of Critical Control Points

ISEGA - institute certification (Germany)

assuring that packaging papers

(paperboard and kraftliner) may be used

in direct contact with food.

GMP People and Equipments

cleanness - Good Manufacturing

Practices

Awards

Rainforest Alliance Award May/2004 -

As recognition for preserving the

environment and to correctly use

natural resources

Eco 2005 Prize - Business

Management for Sustainability -

sponsored by the American Chamber

of Commerce (Amcham)


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Highlights

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Sales Volume

Net Revenue

3Q05

334

650

2Q05

360

720

1Q05

317

673

1,000 t

R$ million

EBITDA R$ million

EBITDA Margin

Net Profit R$ million

Capex

EBITDA / Net Debt

R$ million

155239246

24%33%37%

6590128

1397293

0.40.40.4

2004

1,343

2,730

990

36%

456

300

0.5

Net Revenue by Market 9M05

Domestic Market: 73%

Exports: 27%

Exports DestinationNet Revenue - 9M05

Europe: 43%

Argentina: 19%

Latin America: 18%

Asia: 9%

Africa: 7%North America: 4%

Export Net Revenue 9M05: US$ 222 million

9M05

1,011

2,043

640

31%

283

296

0.4


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IndebtednessGross Debt X Cash, cash equivalents and investments

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1,5

1,41,4

1,1

0,90,91,0

1,8

1,6

1,8 1,8

1,4

1,5

1,4

0,4

0,5

0,6

0,5 0,5

0,4 0,4

0,0

0,2

0,4

0,6

0,8

1,0

1,2

1,4

1,6

1,8

2,0

1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05

0,0

0,1

0,2

0,3

0,4

0,5

0,6

0,7

Cash, cash equivalents and investments Gross Debt Net Debt / EBITDA (*)

R$ billion

* Annualized


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Dividends

2005

100(2)

2004

165

2003

Dividends

Preferred Shares R$ 0.113R$ 0.187

266(1)

R$ 0.272

Buyback Program

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Common Shares

Year

R$ million

R$ 0.103R$ 0.169

R$ 0.299

Up to 10% of preferred outstanding shares or 47.7 million shares

Deadline: 26/10/06, at the price of the stock on the trade date

(1) Payment over fixed assets sold

R$ / share

R$ / share

(2) Related to anticipated payment

Dividends Distribution

Payments done twice a year

2003: equivalent to 28% of adjusted net profit

2004: equivalent to 38% of adjusted net profit


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Strategy

Coated Carton Board Expansion Project


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Increase packaging paper and coated carton board installedcapacity from 1.6 million to 2.0 million t/year

Main expansion focus Coated carton board

More value added products, with less volatile prices

Growing Market

Entrance Barriers

Financial Capacity

Technology: use of long and short sized fibers and coating

Tradition: more than 25 years supplying Tetra Pak

Company Strategy


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Market PositionBrazilian Board Shipment Last 10 years (excluding LPB)

25% 14%

410 kt

1995

Ripasa

21%

Itapag

10%

Others

16%Suzano

32%

Ibema8%

Papirus

13%

513 kt

2000

Itapag

9%

Ripasa

15%

Others

19%

Suzano34%

Klabin

3%Ibema

7%Papirus

13%

585 kt

2004

Klabin

15%Ibema

8%

Papirus

13%

Itapag

6%

Ripasa

13%

Suzano

32%

Others

13%

Source: BRACELPA17


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Boards International Market - 2004

SBS FBB WLC SUS

North America8 million

Western Europe5 million

Asia10 million

Source: Jaakko Pyry

Global market board consumption: 26 million tons

The brown backed duplex is equal to 10% of the market

Latin America represents 5% of total volume or approximately 1 million ton

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International Market TrendPulp and paper consumption growth rate (between 2000 and 2015)

Paper and board demand are moving from the traditional marketsto the emerging markets, such as China, Brazil, India and Russia

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International Market Trend

In 2020, China will be a larger pulp and paper market than theUnited States. India will be as large as German market, while

Brazilian market will be equivalent to England.

Million tons Million tons

World Largest Pulp and Paper Markets

Source: Jaakko Pyry20


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Current board market

Brazil: potential coated carton boardsupplier with recognized high qualityproduct

0

50

100

150

200

250

300

350

400

051015202530

- Technical age, years -

Weighted average technicalage 21 years

Weighted averagecapacity 187,000 t/a

WEAK

STRONG

Weighted average BM capacity - 1,000 t/a

SUS

SBS

FBB

WLC

North America Market Trend

Trend

Globalization: higher-expectedquality demand

Quality

Capacity


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Coated Carton Board Structure

Softwood Stiffness

Printability Hardwood + 3 coating

Runability

State of art equipment

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Unbleached Pulp softwood fibers

Unbleached Pulp mixed hard/soft + CTMP

Bleached Pulp mixed hard/soft fibers

Triple clay coating

Starch

Attributes


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1,000 t

25 25

35

325

60

325

325

325

Angatuba Monte Alegre

MonteAlegre

Angatuba

Net growth

360

710

385

350

June/2005 October/2005 2008

Coated Carton Board Expansion ProjectTotal Capacity

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Current

Conclusion Angatuba Project October/05

t/year

350,000

385,000

Conclusion Monte Alegre Project January/08 710,000

Coated carton board total production

Current Estimated after Project

Coated Carton Board Expansion ProjectVolume Participation

Coated

carton board

23%

Kraftliner

33%

Others

4%Industrial bags

9%

Corrugated

boxes

31%

Coated

carton board

36%

Kraftliner

28%

Others

6%Industrial bags

7%

Corrugated

boxes

23%


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Overview PlantNew Machine Layout

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Successful Partnerships

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Partners

Baltika - Russia

Heineken Holland / Germany / Poland / Belgium

Grolsch Eastern Europe

Labatt - Canada

Cott - Canada

Barilla - Italy

Main Shipments

Europe

United States

Western Europe

United States and Canada

United States and Canada

Europe


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Coated Carton Boards Expansion ProjectChallenge

Development and Growth

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Investor Relations

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[email protected]

www.klabin.com.br

Phone: +55 11 3225 4045Luiz Marciano: [email protected]

Fax.: +55 11 3225 4241

Phone: +55 11 3225 4059Gustavo Schroden: [email protected]

Phone: +55 11 3225 4046Yolanda Nunes: [email protected]

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