Financial Data and Key Metrics Changes - The company reported strong operational cash flow and free cash flow in Q4 2025, demonstrating resilience despite lower price cycles [4][5] - EBITDA for Q4 2025 reached $4.8 billion, an 8% increase quarter-over-quarter, supported by higher volumes and better prices in US dollar terms [14][25] - Net debt was reduced to $12.6 billion by the end of 2025, with leverage declining to 3.2 times [25] Business Line Data and Key Metrics Changes - The pulp business unit achieved record shipment volumes in Q4 2025, with a price recovery noted across all markets [3][12] - The paper and packaging business unit also delivered strong volumes, particularly in the U.S., with a 21% year-over-year increase in packaging prices [6][10] - The company ceased operations at its Rio Verde Mill, which had the highest cash cost in its portfolio, expecting a positive impact on 2026 results [11] Market Data and Key Metrics Changes - In Brazil, print and write demand increased by 1% in the first two months of Q4 2025, while paperboard demand grew by 2% [7][8] - The U.S. market saw stable shipments in Q4, but production increased by 2% due to new capacity, impacting operating rates [9] - International markets remained weak, with declining demand and oversupply, particularly in Europe [7] Company Strategy and Development Direction - The company aims to improve competitiveness through a multi-year program focused on reducing total operational disbursement (TOD) [23] - The management highlighted the importance of maintaining liquidity and reducing net debt as part of their strategic objectives [28] - The joint venture with KC is progressing as planned, with expectations for closing in mid-2026 [28] Management's Comments on Operating Environment and Future Outlook - Management noted a more constrictive business environment for 2026 due to changes in supply and demand dynamics, particularly in the pulp market [28] - The company expects to maintain cash costs in line with Q4 2025 levels, despite challenges in the first half of 2026 [21][25] - Positive developments in the pulp market were attributed to supply-side changes, including the revocation of forestry licenses in Indonesia [70] Other Important Information - The company announced a new buyback program to acquire up to 40 million shares over the next 18 months [27] - A comprehensive review of CAPEX for 2026 indicated a nearly 20% reduction year-on-year [25] Q&A Session Summary Question: Insights on pulp market dynamics in China - Management indicated that new pulp capacity in China is expected to be offset by lower operating rates, resulting in a net zero effect on verticalization for 2025 [34][35] Question: CAPEX trends for 2027 - Management acknowledged non-recurring items impacting CAPEX in 2026 but suggested potential for lower numbers in the future [33][37] Question: Buyback execution strategy - The company emphasized a focus on reducing net debt while being opportunistic with buybacks based on various market factors [40][42] Question: Potential divestments and their impact - Management clarified that divestments are not a primary strategy for deleveraging, focusing instead on operational improvements [41][44] Question: Paper prices in China and their impact on pulp - Management noted that while paper prices are a factor, pulp prices generally drive paper prices, and they expect a recovery in paper margins [47][50] Question: U.S. packaging market performance - The company highlighted its strong position in the U.S. packaging market, insulated from broader market pressures due to long-term contracts [52][53] Question: Cost reduction levers in the pulp business - Management indicated that cash costs are expected to remain stable, with efforts focused on operational efficiency [78]