Klabin SA Q3 2024 Earnings Call Transcript

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

Question: Rafael Barcelos - Rosco BBI - Analyst : Good morning, everyone. Thank you for taking my questions. My first question to Cristiano. I'd like to discuss a little bit more about the capital allocation strategy. And also talking about fluff, the fluff market has for some years seen that the closing of capacity. And there are few additions, I understand that the company's focus today is deleveraging I that was very clear with the recent movements that the company made. But I'd like to understand a little bit more how you perceive this need from the market to have a bigger fluff capacity. And what could and could this make Klabin anticipate an investment for an additional fluff capacity? And my second question about the box or the corrugated box market as Cristiano mentioned in the beginning, October is a strong month, but I'd like to see or hear more about how you see the expectations for the fourth quarter and to close the year as well as the expectations for 2025 and still on this subject, the actual price has been improving. But I'd like to understand how much comes from the mix or on actual price increase and how this has been converting with the price of OCC here in the domestic market. Thank you.

Question: Rafael Barcelos - Rosco BBI - Analyst : Great. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 05, 2024 / 2:00PM, KLBN4.SA - Q3 2024 Klabin SA Earnings Call

Question: Kayo Hiber - Bank of America - Analyst : Good morning, everyone. Thank you for the opportunity. I have a couple of questions going back to capital allocation. Looking forward, the company continues to say that you're focused on deleveraging the company Klabin even just the maximum leverage that the company could have at moments of investment in investment cycles which shows clear discipline and the company with the ramp up of Puma to the reduction of the expansion CapEx in the coming years should be a cash cow as was shown in this quarter, excluding the effect of the purchase of KET. And my questions are number one other than the dividend policy. Do you see any room in the coming years to complement, return to shareholders with a buyback? And if you see M&A activity as an option for growth and if so if you're looking for, if you would be looking for other opportunities in other regions of Brazil and even abroad. These are my questions.

Question: Fared - Goldman Sachs - Analyst : Hello, everyone. Good morning. Thank you for the opportunity. I have two follow up questions. I think that Chris spoke about this in his presentation, he spoke about backlogs. We noticed, particularly in pulp. I know that there was a stoppage in Q3 that was a little longer and together with the operating challenge in Q3 and the backlog volumes were a bit disappointing. How should we think about this? Looking forward? I understood that Puma one is running well, but it's not clear whether the backlogs will disappear if this logistics bottleneck perhaps can take a little longer to normalize. And my second follow up question, if you could comment on the view for pulp for the coming quarters, particularly considering China and Europe, that would be great. Perhaps you could speak about long fibers slash off considering a potential strike in Canada and how this is impacting your recent conversations about all this. Thank you very much. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 05, 2024 / 2:00PM, KLBN4.SA - Q3 2024 Klabin SA Earnings Call

Question: Fared - Goldman Sachs - Analyst : Excellent . Thank you very much.

Question: Tatiana Kundi - JP Morgan - Analyst : Good morning. Thank you for taking my questions. I'd like to start trying to get more colour on the KTE project. We saw that in this quarter. We already have an integration of that cost reduction due to the synergies. So, if you can talk a little bit more about the exploration of those synergies, how you see the evolution of that? Is there any perspective for 2025 of a stronger reduction? Should we count on an acceleration of that for the fourth quarter? That's my first question. And the second question, I'd like to understand a little bit more of the logistic issues that you mentioned in container board. We understand that the demand is better, but they're still impacted by these logistics' issues. Is there an update about that? Should the fourth quarter already have it solved just to understand it better? Thank you.

Question: Lucas - - Analyst : Good morning. Thank you for this opportunity. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 05, 2024 / 2:00PM, KLBN4.SA - Q3 2024 Klabin SA Earnings Call I think it's I have a follow up on KTE but thinking more about the context of the plateau project, if you can give us an idea of the timeline for timber acquisition in the hectares of forest planted and considering that Klabin would have a land surplus after the harvest of the first cycle of Caye with the 39,000 hectares included in the agreement. What would be your idea to use this productive land after this cycle in the context of the plateau project? So I'd like to understand the dynamics of the use of land and collection of timber in this project and also to complement on the corrugated boxes issue to understand clubbings mix on the virgin and recycled fibers used in the process to manufacture corrugated boxes. And in the context that you mentioned and the pressure for OCCS and transfer the price/cost to the industry Plaine would have the strategy of pass through the price or if there's room for an increase in market share, not necessarily keeping up with the market but exceeding it. So, understanding the dynamics of virgin fiber and recycled fiber in corrugated boxes and the price in the market.

Question: Eugenia Cavallero - Morgan Stanley - Analyst : Good morning. Thank you for taking my question. I have a follow up to what Marcos said when he answered Luca's question, I would like to understand. Do you consider selling assets as an alternative to the leverage the company faster? I think it's clear that KTE and surplus is not being considered at this point for sale and monetization as we saw last week. But I'd like to know, are you thinking about shrinking any business unit at Klabin or any specific asset that you would consider selling to leverage the company faster? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 05, 2024 / 2:00PM, KLBN4.SA - Q3 2024 Klabin SA Earnings Call

Question: Eugenia Cavallero - Morgan Stanley - Analyst : Perfect. Thank you very much.

Question: Mangale - Klabin - Analyst : Good morning, everyone. Thank you for the opportunity. I have one question about project plateau. I think it became very clear that yes and the SPV's will be based on the need. But how should we think about investment for forestry for the SPV? Because the main focus is to supply some wood. Will this have an impact on clubbing cash flow? And if so, could you help us understand the level of annual investment in the SPV S in the special purpose vehicles? If this investment is included in your forecast of spending with forestry in the coming years? That's my first question. Second and dividend payout, we thought that the, the change was a responsible one on the part of the company. So, I'd like to understand how will you choose the EBITA percentage within that range in the coming quarters so that we can have the right expectations for the coming quarters? Thank you very much.

Question: Igor Cedis - - Analyst : Thank you for taking my questions. Congratulations on the earnings even considering the volume restrictions. My first question is on Kraftliner, you made some price adjustments. If I'm not mistaken, the last one in August, even if the actual price in the third quarter grew significantly, it could grow more because of the logistic bottleneck. There's an order book that was made before the last past. So, you made the deliveries at the old price point for the fourth quarter. Will this continue to grow or to increase? What's the scenario you'll see? Have you implemented all of the adjustments that make you comfortable with the pre liners operations levels even with the market conditions that you mentioned about the OCC. And the second question, I'd like to understand the homologation process with your clients for the cod boards in the ramp up of PM 28. The idea with PM 28 is to produce more coated board than craft liner with specific higher added value product. But in the short term, we'll still see the profitability conditions for craft liner. So how long do you believe it will take to be able to get this certified? And we see a bigger scale of coded boards and a higher price actual price from PM 28. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 05, 2024 / 2:00PM, KLBN4.SA - Q3 2024 Klabin SA Earnings Call

Question: Igor Cedis - - Analyst : Excellent. Thank you.