Suzano S.A.(SUZ)2025-02-13 16:23Financial Data and Key Metrics Changes - The company reported a strong EBITDA of R12.8 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].