NET REVENUE R$1,463 million SALES VOLUME 4% growth ADJUSTED EBITDA R$512 million INVESTMENTS R$853 million PUMA PROJECT Start of operations Net revenue of R$1,463 million, up 12% over 2015, even with the deterioration of markets in Brazil. Total sales of 455 thousand tons, 4% increase in the quarter, highlighting the growth of 13% in exports and the sales stability in Brazil even in a challenging scenario, showing Klabin's agility in positioning itself in different market scenarios. In the 19 th consecutive quarter of uninterrupted growth, the Adjusted EBITDA totaled R$512 million for the quarter, up 11% over the same period in 2015, without yet including the pulp sales from the Puma Project. The EBITDA Margin was 35%. 1Q16 investments totaled R$853 million, with R$734 million directed towards the new pulp plant. The new pulp plant in Ortigueira (PR), the Puma Unit, launched operations on time and on budget, and on March 4, 2016, produced the first bleached pulp bales, marking a new phase in the Company’s existence. ADJUSTED EBITDA REACHES R$512 MILLION IN 1Q16, UP 11% OVER 1Q15, AND MARKS 19 TH CONSECUTIVE QUARTER OF GROWTH. PUMA UNIT STARTS OPERATIONS March 31, 2016 Klabin Market Cap R$23 billion KLBN11 Closing Price R$19.37 Daily traded vol. 1Q16: R$63 million Conference Call Portuguese (with simultaneous translation) Friday, 4/29/16, 11h00 (Brasília) Phone: (11) 3193-1133 - Password: Klabin http://cast.comunique-se.com.br/Klabin/1Q16 IR Antonio Sergio Alfano Tiago Rocha Brasil Daniel Rosolen Marcos Maciel Lucia Reis Natasha Utescher Albert Shih Liu www.klabin.com.br/ri [email protected]+55 11 3046-8401 1Q16 HIGHLIGHTS 1Q16 EARNINGS RELEASE APRIL 28, 2016
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NET REVENUE
R$1,463 million SALES VOLUME
4% growth ADJUSTED EBITDA
R$512 million INVESTMENTS
R$853 million PUMA PROJECT
Start of operations
Net revenue of R$1,463 million, up 12% over 2015, even with the deterioration of markets in Brazil.
Total sales of 455 thousand tons, 4% increase in the quarter, highlighting the growth of 13% in exports and the sales stability in Brazil even in a challenging scenario, showing Klabin's agility in positioning itself in different market scenarios.
In the 19th consecutive quarter of uninterrupted growth,
the Adjusted EBITDA totaled R$512 million for the quarter, up 11% over the same period in 2015, without yet including the pulp sales from the Puma Project. The EBITDA Margin was 35%.
1Q16 investments totaled R$853 million, with R$734
million directed towards the new pulp plant. The new pulp plant in Ortigueira (PR), the Puma Unit,
launched operations on time and on budget, and on March 4, 2016, produced the first bleached pulp bales, marking a new phase in the Company’s existence.
ADJUSTED EBITDA REACHES R$512 MILLION IN 1Q16, UP 11% OVER 1Q15, AND MARKS 19TH CONSECUTIVE QUARTER OF GROWTH.
PUMA UNIT STARTS OPERATIONS
March 31, 2016
Klabin Market Cap R$23 billion KLBN11 Closing Price R$19.37 Daily traded vol. 1Q16: R$63 million
competitive end products. Coupled with its vocation for manufacturing paper and packaging, the new plant enables
a new growth cycle and represents Klabin’s ability to dream and achieve.
It is important to remember that the first sales from this new unit took place during the month of April and further
details will be included in a chapter about Pulp in the Quarterly Report for the second quarter.
Klabin's consolidated financial statements are presented in accordance with International Financial Reporting Standards (IFRS), as determined by CVM Instructions 457/07 and 485/10. Vale do Corisco’s information is not consolidated, being represented in the financial statements by equity income. Adjusted EBITDA is in accordance with CVM Instruction 527/12. Notes: Due to rounding, some figures in tables and graphs may not result in a precise sum. The EBITDA margin includes the effects of Vale do Corisco. LTM - last twelve months
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3
SUMMARYThe sharp deterioration of the Brazilian economy over
the last year continued into the beginning of 2016. As
the economy awaits a solution to the political crisis
that has generated high volatility in the equity and
foreign exchange markets, continued to decline, with
rising unemployment, reduced investment and
inflation still at high levels.
Externally, the central banks of the world's major
economies have maintained low interest rates, which
brought greater liquidity to global markets and a
consequent depreciation of the dollar, especially in
March. In this joint effort to return to the path of
economic growth, the main commodities prices
stabilized earlier this year after the significant
reduction seen throughout 2015.
The deterioration of activity levels in the Brazilian
economy continued to impact the paper and
packaging markets in the first quarter of the year. The
Brazilian Corrugated Board Association (ABPO)
indicated in its previous report from March a 5%
decline in corrugated board shipments in 1Q16,
compared to the same period in 2015.
Meanwhile in the international packaging paper
market, despite the recent decline in the kraftliner list
price in Europe, the average price of €571/t (FOEX) in
1Q16 was the same as in 1Q15. This stability in
international prices, coupled with a higher average
exchange rate compared to the same period in 2015,
ensured strong profitability from sales to export
markets.
In 1Q16, the total sales volume reached 455 thousand
tons, up 4% over 1Q15, due to increases in paper
production capacity made over 2015. Using the agility
and flexibility of the product line, Klabin allocated
most of this additional production for export, taking
advantage of the still favorable conditions in these
markets, even with the recent appreciation of the real
in March and a very challenging international
environment. In the domestic market, the total
volume in relation to the same period last year
remained stable, demonstrating the company's
competitiveness in an adverse scenario and the
resilience of the markets served by Klabin. As a result
of the increase in sales volume, the more
undervalued real versus 1Q15 and Klabin’s
competitiveness in the domestic market, net revenue
in the period totaled R$1,463 million, up 12% over
the same period last year.
Regarding the cost lines in the first quarter of 2016,
the increase in the cash cost per ton was below the
inflation recorded in the same period. The Company's
efforts to control costs, the dilution of fixed costs
through the higher sales volume and the
normalization of electricity prices more than offset
the impact of inflation that still persists on some
inputs and services contracted by Klabin.
It is worth noting that in the first quarter of 2016
Klabin was focused on the successful start of
operations at its new pulp mill, which will almost
double the Company’s production capacity. Pulp
production began in March, in full compliance with
the project's schedule and budget, with production
levels indicating a promising learning curve. Even
during the execution of this highly complex project
and the ongoing worsening of the Brazilian economic
indicators in early 2016, Klabin has once again proven
its ability to execute and the consistency of its results.
Through the versatility of its product line and
operations in resilient markets, adjusted EBITDA for
the quarter was R$512 million, up 11% over the same
period last year. In the last 12 months adjusted
EBITDA totaled R$2,026 million, marking the 19th
consecutive quarter of growth, even without the
benefit accruing from the pulp sales resulting from
the Puma Project.
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Exchange Rate
The real remained at a level close to R$4.00/US$ in the first two months of the year, still reflecting the country’s
economic and political crisis. However, after the strong appreciation of the real over the month of March, caused by
changes in the domestic political scenario and the maintenance of interest rates in the United States, the exchange
rate at the end of the quarter was R$3.56/US$ , 9% down from the close of 2015. In turn, the average exchange rate,
which reflects the impact of the high levels of the first two months of the year, was R$3.90, up 2% over 4Q15 and up
36% over 1Q15.
OPERATING AND FINANCIAL PERFORMANCE
Sales volume
Even with the extended retraction of activity in the packaging markets in Brazil throughout 2015, Klabin recorded an
increase in sales volume at the beginning of 2016. The total volume sold by the Company, excluding wood, was 455
thousand tonnes for the quarter, up 4% from the same period in 2015. It is worth noting that even with the start of
production at the Puma Unit in March, no pulp sales were incorporated into the 1Q16 results. Given the decline in
the domestic economy and the turmoil in international markets, this increase in sales once again reflected the
flexibility and global competitiveness of Klabin’s product line. This flexibility, combined with the capacity increases
implemented last year, especially new Recycled Paper Machine nº24 in Goiana (PE), enabled the Company to expand
With gross revenue of R$6.7 billion in 2015, Klabin is the largest integrated manufacturer, exporter and recycler of packaging paper in Brazil, with an annual production capacity of 2 million tons. Klabin has adopted a strategic focus on the following businesses: paper and coated boards for packaging, corrugated boxes, industrial sacks and wood logs. It is the leader in all of its market segments.
The statements in this earnings release concerning the Company's business prospects, projected operating and financial results and potential growth are merely projections and were based on Management's expectations regarding the Company's future. These expectations are highly susceptible to changes in the market, the general performance of the Brazilian economy, the industry and the international markets, and are therefore subject to change.