Suzano SA Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Marcio Farid - Goldman Sachs Group Inc - Analyst : (spoken in foreign Portugese)

Question: Marcio Farid - Goldman Sachs Group Inc - Analyst : That's great. And sorry, my question was in Portuguese. Sorry about that.

Question: Marcio Farid - Goldman Sachs Group Inc - Analyst : Just a quick follow up. Obviously, the production cut that you announced is probably not related to Mucuri, but this is the third year. Can we call it the structure now, the [3% 4%] cut, or you will continue to evaluate year by year?

Question: Rafael Barcellos - Grafico Bradesco BBI - Analyst : My first question is for Alberto. Alberto, you mentioned in the beginning of your speech that Ribas could produce more going forward without a significant investment. So firstly, I wanted to confirm the number. I understand that you mentioned between 100,000 and 150,000 tons more? And also I wanted to understand more about the timing of this addition. Other than that, in this context, since I understand, I mean, as Marcos just said, the company will rationalize production levels depending on market conditions. Could you please just e elaborate a bit more on what should be seen as a normalized production level going forward if we enter into a scenario of full prices below the $550 per ton level for a bit longer or, in the end, I mean, if this recent production cut announcement already considers this scenario? Just to understand better the assumption here. And then my second question. It is about your packaging business in the US. You mentioned that in the third queue, you mentioned that the third queue should mark the first quarter of a positive EBITDA. So could you please give more color on the main opportunities that you have already? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 07, 2025 / 12:30PM, SUZB3.SA - Q2 2025 Suzano SA Earnings Call I didn't find it in the US Packaging market. And of course, what could -- what we could consider in terms of a potential profitability and organic growth in the region? And lastly, whether are you analyzing any further significant investments in the region?

Question: Rafael Barcellos - Grafico Bradesco BBI - Analyst : Just a quick follow up on this US Packaging business. When are you expecting to capture the full benefit of all of these initiatives? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 07, 2025 / 12:30PM, SUZB3.SA - Q2 2025 Suzano SA Earnings Call

Question: Leonardo Correa - Banco BTG Pactual SA - Analyst : Yeah. So a couple questions on my side, the first one more on market-related topics. And the second one on more of a company specific issue. So starting with the market question. Moving back to the big discussion, maybe, of the day, right, on the capacity cuts. Given how the press prices had been over the past several months, which clearly seems unsustainably low, right? Suzano came out with this, let's say, with this message, right, on cutting capacity. And as always, we're waiting for others to follow, right? Just given how needed these supply cuts are, I just wanted to hear what you're seeing, right? I mean, you mentioned about Brazil switching to dissolving. We obviously saw Suzano. But what else are you seeing in the market, right? You're talking about imminent cuts. From our side, we haven't really seen that much to justify, let's say, a V-shape recovery in prices. So any additional color you can give us on how you're seeing the supply rationalization in the industry would be very helpful. The second question, Alberto, it caught my attention how strong the message was on your side, specifically on cost performance, going forward into the second semester, right? Which makes me wonder, if I'm not mistaken, the cash cost guidance for the year in Pulp is about BRL810 and BRL815 per ton. Would you see any room -- and Aires, I know this is your territory here, if you can elaborate as well. If you guys see any room for potentially reducing that level, let's say, below BRL800 per ton over the year?

Question: Rodolfo Angele - JPMorgan Chase & Co - Analyst : So my first question is on the consequence of the transaction and with Eldorado. I wanted to hear from you what to expect on the CapEx side. So I think for investors the story of Suzano, is of a company that's entering a period where it's going to basically harvest the benefits of the CapEx that was done in the past year. And it's supposed to be a successful story, which is starting to show, but of course, every time there is an additional CapEx or an eminent transaction, you dance a little bit that part of the story, even though, as you explained so far, everything made a lot of sense. So my question is for 2026, is it reasonable to expect the CapEx spending lower? And if you could elaborate a little bit on that. And my second question is a bit more, I guess, strategic. And this one is too bad. It's been a year more or less, or a little bit more, I guess, since you've been leading the company. A lot has happened, right? Both on specific things that was not good involved with, plus the market has been quite a roller coaster ride. So looking forward, what should we expect? Can we expect a little bit of a breather and sit back, relax a little bit? Or is there something else in the management's agenda looking forward? And that's all from me. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 07, 2025 / 12:30PM, SUZB3.SA - Q2 2025 Suzano SA Earnings Call

Question: Daniel Sasson - Banco Itau BBA SA - Analyst : My first question is related to the tariff uncertainty that we saw over the past few weeks with the potential of how do the imports into the US going to 50%. In the end, it was -- the final decision was to not increase to 50%, but as per my understanding, it's exports to the US are going to be subject to a 10% tariff that didn't exist before, right? So I guess my question is, have you seen any impacts in your order book, specifically in North America, because of these uncertainties? Could that harm your volumes in the third quarter? Has that already been normalized? And ultimately, who bear the -- this 10% tariff that I think didn't exist before, right? Are you engaging in one-on-one negotiations with your main clients in the US? I know that you have some very big long-term clients there. How are these negotiations going? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 07, 2025 / 12:30PM, SUZB3.SA - Q2 2025 Suzano SA Earnings Call And my second question is just if you could give us a, an update on the Kimberly-Clark acquisition. Have there or did -- have there been any new developments there in terms of the expected timeline for this deal to be closed? Or have you started working with the -- do you have already a clean team to help in the integration of those assets? Or you're going to think about that only after the deal is super close to being approved? Any new info you can give us on that front would be great.

Question: Eugenia Cavalheiro - Morgan Stanley - Analyst : Two questions on my side. The first is regarding the fiber-to-fiber transition. And if you can update us on what you have been seeing on that front, particularly, given the higher spread between the two fibers that we see. So how are your customers adopting that and how has this been evolving? The second one would be on shareholder returns. So how are you seeing potential dividend payments and share buyback in light of the leveraging process, the M&A transactions that you have announced, the slightly increasing CapEx guidance for the year? So how have you been thinking about shareholder return in that scenario? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 07, 2025 / 12:30PM, SUZB3.SA - Q2 2025 Suzano SA Earnings Call

Question: Caio Ribeiro - Bofa Merrill Lynch Asset Holdings Inc - Analyst : So my first one is on the recent announcement of higher anti-dumping duties and countervailing duties on top of Canadian lumber exports into the US, which we feel could have the potential to increase the cost of wood chips in the region, potentially, raise the cost of pulp production in the British Columbia region, which has already been under a lot of pressure on their current price levels, right? So I just wanted to see if you agree with that assessment and whether that could generate an opportunity for you in the region in the US in terms of gaining market share from the British Columbia producers? And then secondly, going back to the tissue assets that were part of the transaction with Kimberly-Clark. Since the last call, we provided a lot of details on those assets. I imagine you've had some time to analyze those assets further. I just wanted to see if you still see those synergies of close to $175 million is still feasible to achieve? And whether you have identified additional opportunities within those assets to improve profitability? And if yes, what those initiatives could be and what they could generate in terms of additional gains.

Question: Yuri Pereira - Santander Osbkinc - Analyst : Regarding this 15% of the industry below water, just to check, it considers cash flow or cash cost only? In the case you are considering only cash costs, do you have any sensitivity about how many tons are below water in terms of cash flow? And regarding the spread between dissolving pulp and hardwood, it would be very helpful if you can provide us what's this spread now versus historical levels? And also if you have any outlook about it?