Financial Performance - Net sales increased by 19.2% to R$47,403.3 million in 2024 from R$39,755.6 million in 2023, driven by higher cellulose prices and sales volume [358]. - Net sales from pulp rose by 22.5% to R$37,593.5 million in 2024, accounting for 79.3% of total net sales, influenced by an 8% appreciation of the USD against the BRL and a 6.3% increase in sales volume [359]. - Gross profit increased by 36.3% to R$20,001.8 million in 2024, with a gross margin of 42.2% compared to 36.9% in 2023, primarily due to increased pulp sales prices and volume [365]. - Operating profit before net financial income rose by 28.4% to R$15,691.1 million in 2024, with an operating margin of 33.1% compared to 30.7% in 2023 [369]. - Net income decreased by 149.9% to a loss of R$7,044.7 million in 2024, compared to a gain of R$14,106.4 million in 2023 [373]. Expenses and Investments - Selling expenses increased by 13.2% to R$2,938.5 million in 2024, attributed to higher sales volume and the acquisition of Kimberly Clark's tissue business in Brazil [366]. - General and administrative expenses surged by 36.2% to R$2,619.8 million in 2024, mainly due to increased personnel costs [366]. - The company plans to invest R$7,677.4 million in maintenance capital expenditures for 2024, primarily financed by cash and cash generation [381]. - Capital expenditures totaled R$17,119.8 million in 2024, down from R$18,576.6 million in 2023, with R$7,610.0 million allocated to industrial and forestry maintenance [386]. - The approved budget for capital expenditures in 2025 is R$12,380.8 million, reflecting a decrease primarily due to the Cerrado project's investment schedule [387]. Cash Flow and Indebtedness - Cash and cash equivalents as of December 31, 2024, were R$9,018.8 million, with 70% denominated in reais and 30% in U.S. dollars [378]. - Net cash provided by operating activities increased to R$20,604.4 million in 2024 from R$17,315.5 million in 2023, a rise of R$3,288.9 million due to higher pulp prices and currency appreciation [383]. - Net cash used in investing activities decreased to R$20,512.7 million in 2024 from R$26,035.3 million in 2023, with R$9,190.6 million allocated to property, plant, and equipment [384]. - Total consolidated outstanding indebtedness reached R$101,435.5 million as of December 31, 2024, with R$10,501.4 million classified as current indebtedness [388]. Research and Development - Research and development investments amounted to R$174.0 million in 2024, focusing on increasing forestry productivity and developing new products [409]. - The company produced over 320,000 seedlings and 17 new potential clones in 2024 through its Transition Nursery initiative [411]. - FuturaGene's investments in R&D ensure significant independence from external sources for intellectual property and innovation [422]. - In 2024, the company filed 11 new technology patents and protected one new eucalyptus variety, focusing on biorefining and paper products [422]. Innovations and Sustainability - The company achieved a milestone in biorefinery with the sale of 20,000 tonnes of Ecolig lignin, diversifying its portfolio of certified applications [419]. - The Paper and Packaging projects in 2024 emphasized the replacement of fossil products and introduced biodegradable solutions for hot liquids [420]. - FuturaGene's Forest Management strategy focuses on increasing productivity and reducing operational costs through technological innovation [416]. - The company launched certified grammages for food in the Greenpack® Line and introduced the Bluecup Bio® line for biodegradable solutions [420]. Financial Instruments and Compliance - The company raised R$5.9 billion in debentures in May 2024, with various interest rates and amortization schedules [394]. - The company issued panda bonds amounting to CNY1,200,000 (equivalent to US$166.0 million) on November 15, 2024, with a fixed interest rate of 2.8% [403]. - The company has no financial covenants as of December 31, 2024, and is in compliance with all other non-financial covenants [405]. Regulatory Approvals and Patents - In 2024, FuturaGene received three new commercial approvals for genetically modified eucalyptus varieties, bringing the total to eleven approvals by the end of the year [415]. - FuturaGene holds a total of 804 granted patents and patent applications, including 75 protected eucalyptus varieties and over 404 potential new varieties under evaluation [421]. Market Trends - The primary trends influencing sales and production include pulp purchase patterns, pulp prices, and global economic conditions [425].

Industry Overview - The Zacks Paper and Related Products industry is facing subdued demand due to lower consumer spending and a decline in graphic paper demand driven by digitalization [1][4] - However, increasing packaging requirements from e-commerce and steady demand from consumer-oriented markets like food, beverages, and healthcare are expected to support the industry [1][5] - Environmental awareness is enhancing the appeal of paper as a sustainable packaging alternative, acting as a significant growth driver [1] Major Trends - The transition to digital media has negatively impacted the graphic paper market, leading to a shift in production focus towards packaging and specialty paper [4] - Rising costs for transportation, chemicals, and fuel are pressing concerns, prompting companies to focus on pricing actions, cost reduction, and automation to enhance productivity [4] - Despite current challenges, the industry's exposure to consumer-focused markets ensures stable earnings growth, with global e-commerce revenues projected to reach $4.3 trillion by 2025 [5] M&A Activities - Increased demand for sustainable packaging is driving M&A activities in the industry, exemplified by the merger of Smurfit Kappa and WestRock to form Smurfit Westrock [6] - International Paper's acquisition of DS Smith aims to strengthen its corrugated packaging business and enhance sustainable packaging solutions [6][18] Industry Performance - The Zacks Paper and Related Products industry has outperformed the S&P 500 and the Basic Materials sector over the past year, with a gain of 14.2% compared to a 15.7% decline in the sector [10] - The industry is currently trading at a forward 12-month EV/EBITDA ratio of 8.49X, lower than the S&P 500's 12.88X and the Basic Materials sector's 7.01X [12] Company Highlights - Suzano inaugurated the world's largest single-line pulp mill, increasing its pulp production capacity by 24% to 13.5 million tons per year, leading to record sales of 12.3 million tons in 2024 [15][16] - The Zacks Consensus Estimate for Suzano's 2025 earnings has increased by 26% in the past 90 days, indicating a year-over-year growth of around 304% [16] - International Paper's acquisition of DS Smith is expected to yield $600-$700 million in pre-tax cash synergies by 2027, with projected net sales of $26-$28 billion and adjusted EBITDA of $5.5-$6 billion by 2027 [18]

Group 1 - Suzano (NYSE: SUZ) is positioned to benefit from the recent tariff draw-down, indicating a favorable market environment for the company [2] - The company has a clear deleveraging path, having achieved a 10% quarterly reduction in debt, which enhances its financial stability [2] - The Value Lab offers a portfolio with a target yield of about 4%, focusing on international mispriced equities, which may include companies like Suzano [1][2] Group 2 - The Valkyrie Trading Society consists of analysts who focus on high conviction, downside-limited investment ideas in developed markets, aiming for non-correlated and outsized returns [3] - The society operates as long-only investors, indicating a strategy that avoids short selling and focuses on capital appreciation [3]

Core Insights - Investors are evaluating the value opportunities between Suzano S.A. Sponsored ADR (SUZ) and International Paper (IP) [1] Valuation Metrics - SUZ has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while IP has a Zacks Rank of 3 (Hold) [3] - The forward P/E ratio for SUZ is 4.47, significantly lower than IP's forward P/E of 17.75 [5] - SUZ's PEG ratio is 0.08, compared to IP's PEG ratio of 0.34, suggesting SUZ is expected to grow earnings at a faster rate relative to its price [5] - SUZ has a P/B ratio of 2.09, slightly lower than IP's P/B ratio of 2.19, indicating a better valuation relative to book value [6] - Overall, SUZ has a Value grade of A, while IP has a Value grade of C, highlighting SUZ as the superior value option [6]

Group 1 - Suzano S.A. is considered an attractive investment option due to its increasing market share in the global pulp market amidst net closures of facilities in the industry [2] - The Valkyrie Trading Society focuses on high conviction investment ideas that are expected to generate non-correlated and outsized returns in the current economic environment [2] - The company has been consistently covered over the years, indicating a long-term positive outlook from analysts [2] Group 2 - The Value Lab emphasizes long-only value investment strategies, targeting a portfolio yield of approximately 4% [1] - The team has successfully navigated international markets over the past five years, highlighting their expertise in identifying mispriced equities [1]

Financial Data and Key Metrics Changes - The company reported a strong EBITDA of R$23.8 billion for the year, with a leverage ratio of 2.9 times in dollar terms, which is a key metric guiding capital allocation decisions [9][40]. - The net debt at the end of the year was R$12.8 billion, reflecting a deleveraging process despite significant investments and share buybacks [39][40]. Business Line Data and Key Metrics Changes - The Paper and Packaging business unit saw a total sales volume increase of 15% year-over-year and 24% quarter-over-quarter, attributed to the incorporation of Suzano Packaging sales [15]. - The EBITDA for the Paper and Packaging segment decreased by 16% year-over-year, impacted by lower prices in both Brazilian and external markets [16][17]. Market Data and Key Metrics Changes - In Brazil, print and writing demand increased by 11.7% in the first two months of Q4 compared to the same period last year, with domestic sales growing by 12.5% [13]. - The U.S. market experienced a 21% recovery in SPS demand in Q4 2024 compared to the previous year, driven by strong performance in the food service sector [15]. Company Strategy and Development Direction - The company is focused on integrating new assets and employees from the acquisition of Pactiv Evergreen, with expectations of improved performance and synergies in 2025 [18]. - The management emphasized the importance of fiber substitution projects as a key part of the customer value proposition, aiming to enhance market share in the pulp sector [44]. Management Comments on Operating Environment and Future Outlook - Management expressed optimism about strong demand in the Brazilian market for uncoated and paperboard lines in 2025, while anticipating a return to structural decline in developed regions [19][20]. - The company expects challenges in logistics and supply due to low inventories and maintenance downtimes, but remains prepared for these scenarios [25][44]. Other Important Information - The company successfully renegotiated commercial contracts, securing better terms for Suzano Packaging in 2025, which is expected to positively impact results [18]. - The cash production cost in Q4 2024 was lower compared to the previous year, despite an 18% FX depreciation [33]. Q&A Session Summary Question: Does the new government change capital allocation decisions? - Management confirmed that recent government changes do not affect long-term capital allocation strategies, viewing the U.S. market as robust and attractive [51]. Question: Can you confirm the additional demand created by the Chinese mill's closure? - Management confirmed that the closure of the Chinese mill has created over 200,000 tons of additional hardwood demand per month from non-integrated players [56]. Question: What is the outlook for cash costs in 2025? - Management clarified that cash costs are expected to be flattish compared to Q4 2024, with an increase in the first quarter due to maintenance downtimes [68]. Question: How does the company view share buybacks in the context of stock derating? - Management acknowledged the stock's derating and indicated that buybacks will be considered when the right opportunity arises, balancing it with other capital allocation needs [72]. Question: What is the strategy regarding balance sheet leverage? - Management reiterated that there are no plans for transformational deals that would impact the deleveraging strategy, focusing instead on value-generating opportunities [78].

Core Viewpoint - The stock price of Suzano S.A. has been on a bearish trend, losing 6.1% in the past two weeks, but the formation of a hammer chart pattern suggests a potential trend reversal as buying interest may be emerging [1][2]. Technical Analysis - The hammer chart pattern indicates a potential bottom in a downtrend, where the stock opens lower, makes a new low, but then closes near its opening price, suggesting that bears may be losing control [3][4]. - Hammer candles can appear on various timeframes and are utilized by both short-term and long-term investors [4]. Fundamental Analysis - There has been a positive trend in earnings estimate revisions for Suzano, with a 12.5% increase in the consensus EPS estimate for the current year over the last 30 days, indicating that analysts expect better earnings than previously predicted [6][7]. - The company currently holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks, which typically outperform the market [8].

This presentation contains what are considered "forward-looking statements," as defined in Section 27A of the 1933 Securities Act and Section 21E of the 1934 Securities Exchange Act, as amended. Some of these forward-looking statements are identified with words such as "believe," "may," "could," "would," "possible," "will," "should," "expect," "intend," "plan," "anticipate," "estimate," "potential," "outlook" or "continue," as well as the negative forms of these The forward-looking statements include, witho ...

Financial Performance - Net sales for the year ended December 31, 2024, were R$47,403,282, an increase of 18% compared to R$39,755,575 in 2023[9] - Gross profit for 2024 was R$20,001,755, up from R$14,678,900 in 2023, reflecting a significant improvement in profitability[9] - The company reported a net loss of R$7,044,706 for 2024, compared to a net income of R$14,106,381 in 2023, highlighting challenges faced during the year[9] - Earnings per share for 2024 were reported at R$-5.59313, a decline from R$10.85794 in 2023, indicating a significant drop in shareholder value[9] - Net income for the year was a loss of $7,044,706, a significant decrease from a profit of $14,106,381 in 2023[16] - Cash generated from operations increased to $23,751,750, compared to $20,510,846 in 2023, reflecting a growth of approximately 10.9%[16] Assets and Liabilities - Total assets increased to R$165,936,105 in 2024, compared to R$143,593,025 in 2023, representing a growth of approximately 15.5%[5] - Total liabilities increased to R$133,520,530 in 2024, up from R$98,782,725 in 2023, marking a rise of approximately 35%[7] - Trade accounts receivable rose to R$9,132,860 in 2024, a 33% increase from R$6,848,454 in 2023, indicating stronger sales performance[5] - Cash and cash equivalents at year-end were R$9,018,818, an increase from R$8,345,871 in 2023, indicating improved liquidity[5] Equity and Dividends - Share capital remained unchanged at R$ 9,269,281 thousand as of December 31, 2023[13] - The company reported a total equity of R$ 44,810,300 thousand at the end of 2023, reflecting an increase from the previous year[13] - The company proposed additional dividends totaling R$ 93,633 thousand for 2023[13] - The Board of Directors approved the distribution of interest on equity totaling R$2,500,000, at a rate of BRL 2.017362506 per share[47] Investments and Acquisitions - The Cerrado Project commenced operations on July 21, 2024, with a nominal capacity of 2,550,000 tons of eucalyptus pulp production per year and a total investment of R$22,200,000[32] - On August 30, 2024, the Company acquired 15% of Lenzing Aktiengesellschaft for EUR 229,971 (equivalent to R$1,436,814), at a price of EUR 39.70 per share[37] - The Timber Transaction was completed on July 31, 2024, with a cash consideration of R$2,143,821 for the purchase of 100% of Timber VII SPE S.A. and Timber XX SPE S.A.[41] - The Pactiv Transaction involved the acquisition of assets from Pactiv Evergreen Inc. on October 1, 2024, for US$82.932 (equivalent to R$452,153)[44] Operational Efficiency and Future Plans - The company plans to focus on expanding its market presence and enhancing operational efficiencies to recover from the financial challenges faced in 2024[9] - The company operates 16 industrial units, including 14 in Brazil and 2 in the United States, along with 7 technology centers globally[18] Tax and Regulatory Changes - The Tax Reform enacted on December 20, 2023, introduces a dual VAT system, replacing existing taxes such as PIS, COFINS, ICMS, and ISS[50] - A transition period for the new tax system will occur from 2026 to 2032, with no immediate impact on financial statements as of December 31, 2024[53] Accounting Policies and Financial Reporting - The consolidated financial statements are prepared in compliance with IFRS and expressed in thousands of Brazilian Reais (R$)[54][55] - The Company has adopted new accounting policies effective January 1, 2024, with no significant changes identified in the assessment of supplier financing agreements[64][68] - The Company has identified two reportable segments for financial reporting purposes[100] Risk Management - The Company has not identified any short-term or long-term risks to its supply chain due to the ongoing geopolitical conflicts[30] - The Company has maintained its commercial transactions as planned, with only minor suspensions of sales to customers in Russia[30] - The Company has taken steps to monitor the situation in Israel, where it has local employees and facilities, to ensure operational continuity[31]

Industry Overview - The Zacks Paper and Related Products industry is benefiting from increased packaging demand driven by rising e-commerce activities and sustained demand from consumer-oriented sectors like food, beverages, and healthcare [1] - The industry is highly diversified, producing graphic paper, packaging paper, absorbent hygiene products, and more, catering to sectors such as food and beverage, healthcare, retail, and e-commerce [3][4] - The industry is positioned to capitalize on the growing consumer preference for environmentally friendly packaging solutions [1] Key Trends - E-commerce accounted for over 19% of global retail sales in 2023, projected to reach 25% by 2027, with global e-commerce revenues expected to hit $4,791 billion in 2025, presenting a major growth opportunity for the industry [5][6] - Increased merger and acquisition activities are transforming the industry, with notable examples like the formation of Smurfit Westrock and International Paper's acquisition of DS Smith to strengthen its corrugated packaging business in Europe [7][8] - Sustainability is a key driver, with the industry incorporating recycled content into production methods and investing in breakthrough technologies to meet demand for eco-friendly packaging [9] - Rising costs of transportation, chemicals, and fuel are being offset through pricing actions, cost reduction, and automation in manufacturing [10] Industry Performance - The Paper and Related Products industry has outperformed the Basic Materials sector and the S&P 500, with stocks gaining 42.5% over the past year compared to the sector's decline of 1.8% and the S&P 500's growth of 26.8% [13] - The industry is currently trading at a forward 12-month EV/EBITDA ratio of 9.24X, compared to the S&P 500's 13.96X and the Basic Materials sector's 6.64X [14] Key Companies - **Suzano**: Inaugurated the world's largest single-line pulp mill, increasing its installed pulp production capacity by 24% to 13.5 million tons per year Acquired industrial assets in Arkansas and North Carolina, positioning itself as a major supplier of paper for liquid packaging boards in North America Also acquired a 15% stake in Lenzing, aligning with its strategy to grow in new markets [15][16][17] - **Sylvamo**: Implemented a cost-reduction program, Project Horizon, achieving savings exceeding $110 million in 2024, with $80 million from operational improvements and the rest from reduced selling and administrative expenses The company has a pipeline of over $200 million in high-return capital projects to boost earnings and cash flow [18][19] - **International Paper**: Optimizing cost structure and investing in capacity expansion to meet demand for corrugated and containerboard packaging Its pending acquisition of DS Smith is expected to strengthen its European corrugated packaging business and generate $514 million in pre-tax cash synergies annually by the fourth year post-closure [21][22] - **Klabin**: Witnessed a 6% year-over-year increase in total sales volumes in the first nine months of 2024, driven by the ramp-up of Paper Machines 27 and 28, which have a combined annual production capacity of 910,000 tons of paper The company also expanded its corrugated cardboard conversion capacity to 1.2 million tons annually [24][25] Earnings and Valuation - Suzano's 2025 earnings estimate surged 39% in the past 60 days, indicating year-over-year growth of 364% [17] - Sylvamo's 2024 earnings estimates increased by 10.5% over the past 60 days, with year-over-year growth of 17.5% [20] - International Paper's 2025 earnings estimate moved up 3.4% over the past 60 days, indicating year-over-year growth of 156% [23] - Klabin's 2025 earnings estimate increased by 15% over the past 60 days, showing significant improvement from 2024's expected earnings [27]