The Zacks Paper and Related Products industry has been grappling with subdued demand due to lower consumer spending amid inflation and declining graphic paper demand due to the shift toward digitalization. However, increasing packaging requirements due to the rise in e-commerce activities and steady demand from consumer-oriented end markets, such as food and beverages, and healthcare, are expected to support the industry. Increasing environmental awareness is boosting the appeal of paper as a sustainable an ...

Group 1 - Suzano S.A. is the world's largest producer of eucalyptus pulp, controlling 49% of the company and producing approximately 17% of global market pulp supply through over eight mills in Brazil [2][3] - The company generated around $3 billion in operating cash flow last year, with a market capitalization of $12 billion, resulting in a price-to-operating cash flow ratio of 3.2x [3] - Suzano benefits from a structural cost advantage due to the fast maturation of eucalyptus trees, which mature in about seven years compared to nearly 20 years for pine, leading to a low unit cash cost of approximately $150 per ton [3] Group 2 - The company is expanding its footprint through a $3.4 billion joint venture with Kimberly-Clark, which will give Suzano a controlling stake in 22 tissue mills across over 70 countries [4] - Additional growth drivers include acquisitions of U.S. paperboard mills and strong shareholder returns through buybacks and dividends [5] - While Suzano is seen as a cheap, cash-rich business with long-term competitive advantages, the optimal entry point for investors depends on a recovery in pulp prices [5]

SÃO PAULO, Sept. 08, 2025 (GLOBE NEWSWIRE) -- Suzano International Finance B.V (“Suzano International Finance”) and Suzano Austria GmbH (“Suzano Austria”), both wholly owned subsidiaries of Suzano S.A. (“Suzano” or “Guarantor”), announce the expiration and final results of the offers to purchase for cash any and all of the outstanding notes of their respective series: (1) 5.750% Guaranteed Notes due 2026 (the “2026 Notes”) issued by Suzano Austria and guaranteed by Suzano (CUSIP: 05674XAA9 / A9890AAA8 / ISI ...

SÃO PAULO, Sept. 08, 2025 (GLOBE NEWSWIRE) -- Suzano International Finance B.V (“Suzano International Finance”) and Suzano Austria GmbH (“Suzano Austria”), both wholly owned subsidiaries of Suzano S.A. (“Suzano” or “Guarantor”), announce the determination of the Tender Consideration (as defined below) to purchase for cash any and all of the outstanding Notes (as defined below) validly tendered in the Offers, excluding any accrued and unpaid interest (the “Accrued Interest”), of the outstanding Notes issued ...

Group 1 - Suzano is the largest paper and pulp company in Latin America, focusing on planting and harvesting eucalyptus in Brazil due to favorable soil, climate, and productivity conditions [1] - The company maintains extremely low production costs, which enhances its competitive advantage in the market [1] Group 2 - The analysis emphasizes that the best investment opportunities are often undercovered, particularly in Brazil and Latin America [1]

Core Insights - Investors are comparing Suzano S.A. Sponsored ADR (SUZ) and Klabin SA (KLBAY) for potential value opportunities in the Paper and Related Products sector [1] Valuation Metrics - SUZ has a Zacks Rank of 1 (Strong Buy), indicating a more favorable earnings estimate revision compared to KLBAY, which has a Zacks Rank of 3 (Hold) [3] - SUZ's forward P/E ratio is 4.96, significantly lower than KLBAY's forward P/E of 11.27, suggesting SUZ may be undervalued [5] - The PEG ratio for SUZ is 0.10, while KLBAY's PEG ratio is 0.54, indicating SUZ's expected earnings growth is more favorable relative to its price [5] - SUZ's P/B ratio is 1.75, compared to KLBAY's P/B of 11.36, further highlighting SUZ's relative undervaluation [6] - SUZ has a Value grade of A, while KLBAY has a Value grade of C, reinforcing the perception that SUZ is the better investment option for value investors [6]

Financial Data and Key Metrics Changes - The company reported that sales, operational cash generation, and EBITDA were in line with expectations for the quarter [10] - Net debt remained stable at $13 billion, with net leverage increasing to 3.1 times due to a reduction in last twelve months EBITDA to $4.2 billion [28] Business Line Data and Key Metrics Changes - The paper and packaging business in Brazil saw stronger sales volumes and lower costs compared to Q1, with EBITDA growth year-over-year [12] - U.S. operations experienced a 3% price increase quarter-over-quarter driven by product mix and better commercial location, although EBITDA was negatively impacted by lower volumes and higher costs due to maintenance [13][12] Market Data and Key Metrics Changes - In Brazil, print and write demand rose 6% year-over-year, while uncoated wood-free paper demand remained stable in North America and Latin America but declined 10% in Europe [14] - The U.S. market for boxboard demand was stable, with a 1% increase in demand for SBS boards [15] Company Strategy and Development Direction - The company is focusing on competitiveness and cost reduction, with expectations of lower cash costs in the upcoming quarters [10] - A deal with Eldorado is expected to provide an internal return of around 20%, allowing for increased production at the Ribba's mill without significant investment [7][8] Management's Comments on Operating Environment and Future Outlook - Management highlighted a positive outlook for cash cost trends and emphasized the importance of maintaining competitiveness in a challenging market environment [10][76] - The company is preparing for various scenarios in the global market and aims to improve operational efficiency [85] Other Important Information - The company is not currently planning significant new investments but is focused on executing existing projects and deleveraging [10][86] - The company has built inventories in the U.S. to mitigate the impact of 50% import duties imposed by the U.S. government [17] Q&A Session Questions and Answers Question: What are the changing dynamics in the pulp scenario? - Management noted high order intake levels in China and a supportive environment for price increases due to restocking movements and production recovery [32][34] Question: What is the internal rate of return for the deal with Eldorado? - The expected internal rate of return is around 20%, driven by optimized harvesting and reduced operational costs [40][42] Question: What is the expected CapEx trend for 2026? - The company anticipates a declining trend in CapEx, although specific numbers will be disclosed later [84] Question: How are negotiations regarding the 10% tariff going? - The company successfully negotiated that customers will bear the 10% tariff, ensuring that Suzano will not absorb this cost [95] Question: What is the status of the Kimberly Clark acquisition? - Dedicated teams have been established to plan the carve-out of the new joint venture, with the project progressing as planned [96]

Financial Data and Key Metrics Changes - The company reported that sales, operational cash generation, and EBITDA were in line with expectations for the quarter [10][11] - Net debt remained stable at $13 billion, with net leverage increasing to 3.1 times due to a reduction in last twelve month EBITDA to $4.2 billion [28][29] - Cash costs declined compared to the first quarter, driven by stronger operational performance and lower fixed costs [25][26] Business Line Data and Key Metrics Changes - Brazilian operations saw stronger sales volumes and lower costs compared to Q1, with EBITDA growth year-over-year [12][13] - U.S. operations experienced a 3% price increase quarter-over-quarter, driven by product mix and better commercial location [13] - The paper and packaging business in the U.S. is expected to deliver positive EBITDA in Q3, with lower costs and higher production volumes anticipated [16][58] Market Data and Key Metrics Changes - In Brazil, print and write demand rose 6% year-over-year, with domestic sales also increasing by 6% [14] - Uncoated wood free paper demand remained stable in North America and Latin America but declined by 10% in Europe [14] - The U.S. market for boxboard demand was stable, while demand for SBS boards increased by 1% [15] Company Strategy and Development Direction - The company is focusing on competitiveness and cost reduction, with an emphasis on executing existing deals rather than pursuing new M&A initiatives [10][11] - A deal with Eldorado is expected to provide an internal return of around 20%, allowing for increased production at the Ribba's mill without significant investment [6][42] - The company plans to maintain a focus on deleveraging and improving operational competitiveness [10][88] Management's Comments on Operating Environment and Future Outlook - Management noted that the cash cost trend is expected to continue decreasing in the upcoming quarters [10][25] - The company is monitoring market dynamics closely, particularly in light of recent price corrections and supply-demand imbalances [22][72] - Management expressed confidence in the recovery of order intake in China and the potential for price increases due to supply constraints [22][23] Other Important Information - The company has built inventories in the U.S. to mitigate the impact of 50% import duties imposed by the U.S. government [17] - The company is planning to redirect the majority of its exports from the U.S. to other regions [17] - The company maintains a healthy amortization schedule with more than six years of average maturity [28] Q&A Session Summary Question: What are the changing dynamics in the pulp scenario that allowed for the $20 price increase for Asia? - Management noted high order intake levels in China since June, indicating a supportive market environment for price increases [32][34] Question: Can you elaborate on the internal rate of return of the deal with Eldorado? - The internal rate of return is expected to be around 20%, driven by optimized harvesting and reduced operational costs [40][42] Question: What is the expected normalized production level if pulp prices remain below $550 per ton? - The company has a detailed analysis on production costs and has decided to reduce production to maintain profitability [46][47] Question: What are the main opportunities identified in the U.S. packaging market? - The company is expanding its market reach and has seen significant growth in cup stock sales, indicating strong opportunities for profitability [60] Question: How are negotiations regarding the 10% tariff on U.S. exports going? - The company successfully negotiated that customers will bear the 10% tariff, ensuring that Suzano will not absorb this cost [97] Question: What is the status of the Kimberly Clark acquisition? - Dedicated teams have been established to plan the carve-out of the new joint venture, with the project progressing as planned [98]

Financial Performance - Sales volume reached 3.3 million tons in 2Q25, compared to 2.7 million tons in 1Q25 and 2.5 million tons in 2Q24[6] - Adjusted EBITDA was R$6.1 billion in 2Q25, versus R$4.9 billion in 1Q25 and R$6.3 billion in 2Q24[6] - Operating cash generation amounted to R$4.1 billion in 2Q25, up from R$2.6 billion in 1Q25 but down from R$4.5 billion in 2Q24[6] - Cash cost ex-downtimes was R$832/ton in 2Q25, compared to R$859/ton in 1Q25 and R$828/ton in 2Q24[6] - Net debt stood at US$13.0 billion in 2Q25, slightly higher than US$12.9 billion in 1Q25 and US$12.0 billion in 2Q24[7] - Leverage was 3.1x in US$ in 2Q25, compared to 3.0x in 1Q25 and 3.2x in 2Q24[7] Pulp and Paper Business - Paper sales were 348 thousand tons in 2Q25, compared to 329 thousand tons in 1Q25 and 270 thousand tons in 2Q24[6] - Pulp sales volume increased to 3,269 thousand tons in 2Q25 from 2,651 thousand tons in 1Q25 and 2,545 thousand tons in 2Q24[12] - Pulp business adjusted EBITDA margin was 52% in 2Q25[12] Financial Management - Notional value of the current portfolio was US$6.8 billion as of June 2025[22]

[Consolidated Balance Sheet](index=4&type=section&id=CONSOLIDATED%20BALANCE%20SHEET) As of June 30, 2025, Suzano S.A.'s total assets decreased by **3.93%** to **R$159.42 billion** from R$165.94 billion, while total liabilities decreased by **13.01%** to **R$116.15 billion** and shareholders' equity increased by **33.49%** to **R$43.27 billion** [Assets Overview](index=4&type=section&id=Assets) As of June 30, 2025, Suzano S.A.'s total assets decreased by **3.93%** to **R$159.42 billion** from R$165.94 billion at December 31, 2024. This decline was primarily driven by a decrease in current assets, particularly marketable securities and trade accounts receivable, partially offset by an increase in cash and cash equivalents and biological assets | Metric | 06/30/2025 (R$ thousands) | 12/31/2024 (R$ thousands) | Change (R$ thousands) | % Change | | :-------------------------- | :------------------------ | :------------------------ | :-------------------- | :------- | | **Total Assets** | 159,422,893 | 165,936,105 | (6,513,212) | -3.93% | | Current Assets | 39,909,114 | 42,182,960 | (2,273,846) | -5.39% | | Non-Current Assets | 119,513,779 | 123,753,145 | (4,239,366) | -3.43% | | Cash and cash equivalents | 12,283,589 | 9,018,818 | 3,264,771 | 36.20% | | Marketable securities | 8,087,850 | 12,971,547 | (4,883,697) | -37.65% | | Trade accounts receivable | 7,287,028 | 9,132,860 | (1,845,832) | -20.21% | | Biological assets | 23,221,979 | 22,283,001 | 938,978 | 4.21% | [Liabilities and Shareholders' Equity Overview](index=5&type=section&id=Liabilities%20and%20Shareholders'%20Equity) Total liabilities decreased by **13.01%** to **R$116.15 billion** as of June 30, 2025, primarily due to a significant reduction in current loans, financing, and debentures, and derivative financial instruments. Shareholders' equity increased by **33.49%** to **R$43.27 billion**, mainly driven by a substantial increase in retained earnings and controlling shareholders' equity | Metric | 06/30/2025 (R$ thousands) | 12/31/2024 (R$ thousands) | Change (R$ thousands) | % Change | | :---------------------------------- | :------------------------ | :------------------------ | :-------------------- | :------- | | **Total Liabilities** | 116,151,588 | 133,520,530 | (17,368,942) | -13.01% | | Current Liabilities | 12,616,956 | 24,477,938 | (11,860,982) | -48.46% | | Non-Current Liabilities | 103,534,632 | 109,042,592 | (5,507,960) | -5.05% | | Loans, financing and debentures (Current) | 2,881,840 | 10,501,387 | (7,619,547) | -72.56% | | Derivative financial instruments (Current) | 1,044,493 | 2,760,273 | (1,715,780) | -62.16% | | Dividends and interest on own capital payable | 1,997 | 2,200,917 | (2,198,920) | -99.91% | | **Total Equity** | 43,271,305 | 32,415,575 | 10,855,730 | 33.49% | | Controlling shareholders' | 43,137,811 | 32,284,269 | 10,853,542 | 33.62% | | Retained earnings | 11,431,251 | 0 | 11,431,251 | N/A | [Consolidated Statements of Income (Loss)](index=6&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20INCOME%20(LOSS)) For the six-month period ended June 30, 2025, Suzano S.A. moved from a net loss of **R$3.55 billion** in the prior year to a net income of **R$11.36 billion**, primarily driven by a substantial positive net financial result [Income Statement Highlights](index=6&type=section&id=Income%20Statement%20Highlights) For the six-month period ended June 30, 2025, Suzano S.A. reported a significant turnaround, moving from a net loss of **R$3.55 billion** in the prior year to a net income of **R$11.36 billion**. This was primarily driven by a substantial positive net financial result, largely due to favorable monetary and exchange variations and derivative financial instruments | Metric | Six months YTD 06/30/2025 (R$ thousands) | Six months YTD 06/30/2024 (R$ thousands) | Change (R$ thousands) | % Change | | :------------------------------------ | :--------------------------------------- | :--------------------------------------- | :-------------------- | :------- | | Net Sales | 24,848,816 | 20,952,738 | 3,896,078 | 18.59% | | Gross Profit | 8,511,525 | 9,159,629 | (648,104) | -7.08% | | Operating Profit Before Net Financial Income (Expenses) | 5,134,179 | 7,165,872 | (2,031,693) | -28.35% | | Net Financial Income (Expenses) | 12,121,178 | (14,113,723) | 26,234,901 | N/A | | Net Income (Loss) Before Taxes | 17,255,357 | (6,947,851) | 24,203,208 | N/A | | Net Income (Loss) For The Period | 11,360,131 | (3,545,485) | 14,905,616 | N/A | | Basic Earnings Per Share (R$) | 9.16799 | (2.76777) | 11.93576 | N/A | - Net financial result swung from a **R$14.11 billion** expense in H1 2024 to a **R$12.12 billion** income in H1 2025, primarily due to **positive** monetary and exchange variations (**R$8.19 billion** income vs. **R$8.19 billion** expense) and derivative financial instruments (**R$6.35 billion** income vs. **R$4.52 billion** expense)[9](index=9&type=chunk)[229](index=229&type=chunk) [Consolidated Statements of Comprehensive Income (Loss)](index=7&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME%20(LOSS)) For the six-month period ended June 30, 2025, total comprehensive income significantly improved to **R$11.04 billion**, a substantial increase from a **R$3.52 billion** loss in the prior year, mainly driven by the strong net income for the period [Comprehensive Income Highlights](index=7&type=section&id=Comprehensive%20Income%20Highlights) For the six-month period ended June 30, 2025, total comprehensive income significantly improved to **R$11.04 billion**, a substantial increase from a **R$3.52 billion** loss in the prior year. This positive shift was mainly driven by the strong net income for the period, despite some negative impacts from fair value investments and exchange rate variations on foreign subsidiaries' financial information | Metric | Six months YTD 06/30/2025 (R$ thousands) | Six months YTD 06/30/2024 (R$ thousands) | Change (R$ thousands) | % Change | | :------------------------------------ | :--------------------------------------- | :--------------------------------------- | :-------------------- | :------- | | Net income (loss) for the period | 11,360,131 | (3,545,485) | 14,905,616 | N/A | | Other comprehensive income (loss) | (317,925) | 24,020 | (341,945) | N/A | | Total comprehensive income (loss) | 11,042,206 | (3,521,465) | 14,563,671 | N/A | | Attributable to Controlling shareholders' | 11,027,530 | (3,530,786) | 14,558,316 | N/A | - Other comprehensive income (loss) shifted from a **positive R$24