Ladies and gentlemen, thank you for holding and welcome to Suzano’s conference call to discuss the results for the first quarter of 2023. Before proceeding, please be aware that any forward-looking statements are based on the beliefs and assumptions of Suzano’s management and on information currently available to the company. They involve risks, uncertainties, and assumptions because they relate to future events and therefore, depend on circumstances that may or may not occur in the future. You should understand that general economic conditions, industry conditions, and other operating factors could also affect the future results of Suzano and could cause results to differ materially from those expressed in such forward-looking statements. Now I’ll turn the conference over to Mr. Walter Schalka. Please, you may begin your presentation.

Good morning, good afternoon, good evening to everyone that is joining us for the session of the fourth quarter results of Suzano. It’s a great pleasure to be with you. Today is a very emotional day for me. As you know, yesterday, we announced the transition of Suzano’s role as CEO, to be part of the Board of Directors, and to be on several committees. Of course, I’m very proud of the 11 years of contribution that I have made to the company and being part of the transformation of this company for the last 11 years. I’d like to start by welcoming Alberto Abreu, a person who is going to have an important contribution to the company in the coming years. I recognize that he has the right skills to continue the transformation of Suzano. I would also like to thank the 20,000 people who work every single day at Suzano, transforming the company into a better one that impacts society positively. I would like to thank the leaders and the management team who have been with me for many years and played a key role in this transformational journey that has been very positive for all stakeholders. One of our main points in our culture is to create value by sharing with all stakeholders, and they have been amazing throughout this process. I would like to thank the Board of Directors for the support I received during my tenure, and the shareholders as well, who ensured a strong governance structure throughout. I am very positive about the future of Suzano and am committed to being part of it. Capital allocation continues to be an important issue for us, and I will be on the Board to help identify alternatives that create value for everyone. Our investment policy, combined with financial discipline, will continue in the coming years. Now, I’m pleased to announce a very good year for Suzano and an outstanding fourth quarter. We achieved a strong operational performance in the fourth quarter. It is important to highlight our main strategic achievements from last year, including expanding into different verticals and increasing our addressable market with the announcement of a new swing line at the Limeira plant. Additionally, our Tissue business had significant volume growth after acquiring Kimberly Clark's tissue business in Brazil and announcing a new plant in Aracruz that will be commissioned in 2025. We have also been working on retrofitting Aracruz and Jacarei, which are extremely important projects for us. We had unprecedented growth in terms of land banking and forest base, with nearly 300,000 hectares of planted areas last year, and we anticipate the same amount for this year. Aires will share some great news about the Cerrado project today, which is transformative for our history. Our shareholder compensation program continues, and we've completed the third buyback program, with the fourth program announced weeks ago to signal to the market that we believe we are undervalued. We announced an interest of equity payment of BRL 1.5 billion in January. In terms of results, we recorded 10.2 million tons of pulp and 1.1 million tons of paper last year, with the lowest-ever inventory in the company showing the strong market demand for our products. Our adjusted EBITDA was BRL 18.3 billion, and our cash cost was BRL 816 per ton, continuously decreasing over each quarter last year. We maintain a robust balance sheet, with net debt remaining stable even amid significant CapEx investments, which demonstrates our ability to deliver new projects while keeping net debt in check. Our leverage stands at 3.1x net debt over EBITDA. This context reflects lower EBITDA due to decreased prices last year. Now, I will turn to Fabio, who will provide additional details on the paper business.

Thank you, Walter, and good morning, everyone. Please let’s turn to the next page of the presentation. 2023 was a challenging year for paper and packaging markets globally. An excess of inventories led to a much lower level of demand in most markets. Normalized supply chains, along with excess capacity in print and writing and paperboard mainly in Asia, increased competition, which resulted in higher paper prices internationally. Despite these challenging conditions, we delivered solid results, demonstrating full operational flexibility and revenue discipline, achieving the second-best EBITDA in our history. In the domestic market, according to EBA, print and writing demand decreased 13% quarter-over-quarter. In a full-year comparison, print and writing demand fell by 11%, surpassing its secular decline caused by destocking from 2022 levels and substitution of paper, particularly in the promotional advertisement segment. Our core markets, uncoated wood-free and cut-size products, performed better than other grades and demand remained more resilient. In international markets, print and writing demand was also hindered by the destocking cycle, alongside macroeconomic uncertainties limiting economic activity and the acceleration of digitalization. Print and writing demand in mature markets such as the U.S. and Europe showed declines exceeding 20%, necessitating capacity adjustments to meet new demand levels. Regarding paperboard, we observed inventory adjustment as supply normalized, particularly in the pharmaceuticals and domestic segments, which began early in the third quarter and extended into the year-end. As a result, IVAS data indicates an 8% reduction in domestic demand quarter-over-quarter. On an annual basis, we note that paperboard demand was nearly flat compared to 2022, driven by a stronger first half of the year. Suzano’s total sales volumes in Q4 were 17% higher than in the previous quarter, driven by seasonality. Year-over-year, sales volume increased by 5%, primarily due to higher external market volumes. However, our annual sales volume compared to 2022 decreased by 6%, attributed to lower domestic sales, which represent 67% of total sales. The average net price during the quarter was 7% lower than our average price in Q3 and 50% lower than Q4 in 2022. However, when comparing 2023 to 2022, our average net price remained 3% higher. It's important to note that the lower net price in the second half of the year reflects decreasing prices in international markets, while Suzano's domestic prices proved more resilient, being only 1.4% lower year-over-year due to a seasonal product mix. Looking ahead into 2024, we expect normalized levels of demand as inventory levels appear healthier compared to 2023. Structural trends such as digitalization and permanent changes in consumption behavior will continue to influence demand, but we anticipate that purchasing trends will revert to historical patterns. Cost inflation from the previous year has eased and stabilized, and we expect flat costs for paper products in 2024, notwithstanding the stresses from global geopolitical issues that could disrupt the supply-demand balance in the future. Now, I will turn it over to Leo, who will be presenting our pulp business results.

Thanks, Fabio, and good morning, everyone. Let’s move to the next slide in our presentation to discuss the results for the pulp business unit in the fourth quarter and for the full year of 2023. I would like to start by sharing some insights on the supply side of the pulp fundamentals. Despite incoming volumes from key projects in 2023, inventories in major markets reached critically low levels during the fourth quarter, particularly at key port terminals in Europe. We have also noticed nearly 2 million tons of permanent capacity closures in chemical pulp throughout 2023, with substantial portions of this reduction already impacting the markets in the latter half of the year. As we assess the supply factors along with demand drivers, such as the recovery of paper production and pulp demand in Europe, we see that the fundamentals have instigated new rounds of price increases for pulp across all markets. As shown in the upper left graph, our fourth-quarter sales were robust, aligning with Q4 of 2022 despite reduced production availability. Our pulp inventories, as Walter mentioned, have now reached the lowest levels in our history. This demands that we push our operations to the limit to ensure excellence in our supply chain and meet our commitments to our customers. The combination of strong sales volumes, price recovery, foreign exchange benefits, and reduced cash costs resulted in a higher EBITDA margin for the quarter, reaching BRL 3.8 billion, or a 48% margin. Looking forward, I want to emphasize a few key points. The operating rates for both print and writing and specialty paper producers have been recovering in Europe at a faster pace than previously anticipated. Consequently, many of our customers have increased their demand forecasts for the upcoming months and quarters. To optimally serve our customers in Western markets, our logistics strategy differs from that of Asian markets, necessitating that we build up and maintain larger pulp inventories near or within customer facilities in Europe and North America. Currently, we are reestablishing inventories in Europe and North America, but this process will take several months, particularly as we must manage this initiative alongside ongoing shipments to Asia, Africa, and the Middle East, where we face significant backlogs. This situation has been intensified by logistical challenges stemming from the conflict in the Red Sea and other routing issues. In the coming months, we are limiting our offers to Asia, the Middle East, and Africa to effectively manage our global inventories and address the backlog resulting from delayed shipments. We have been fully booked in January and February, and we expect this scenario to continue for a few more months until the entire system stabilizes. On the demand side, January saw promising signals in China, with pulp production exceeding expectations, especially following the Chinese New Year. Initial indicators suggest that demand for pulp is recovering as market participants prepare for higher seasonality, driven by increases in commercial printing and the spring publishing season in China. These positive dynamics are bolstered by the introduction of several price increases for paper, specialty papers, and packaging grades in Asia and other major markets worldwide. Demand in Europe also continues to surpass our forecasts, with additional short-term upside created by lower paper imports from various markets, primarily due to logistical hurdles. As you know, we recently announced another round of price increases for all global markets, which we expect to implement successfully in the coming weeks. Market sources indicate that resale prices for Chinese BHKP and local hardwood prices in China are rising, showing signs of closing the gap with imported pulp shortly. With that, I would like to invite Aires to proceed with our presentation.

Thank you, everyone. Good morning. We are now on Slide 7, reviewing our cash cost performance in the fourth quarter compared to the prior quarter. The middle single-digit decline was primarily driven by lower wood costs, stemming from shorter transport distances from forests, improved wood consumption rates per ton of pulp, reduced chemical prices, and lower input consumption due to enhanced operational efficiency in our mills. A year-over-year comparison shows a 13% improvement, benefiting from lower input costs resulting from commodity price decreases and enhanced energy efficiency projects implemented at Sakari, along with several key performance indicator improvements, such as decreased diesel prices, better efficiency in harvesting and logistics, and reduced average distances and wood consumption per ton of pulp produced. Looking ahead, we anticipate flat cash cost performance throughout 2024 compared to Q4 of 2023. The benefits stemming from the Cerrado project are expected to materialize by year-end as we ramp up production. Moving to the next slide, we can see that the Cerrado project is progressing as planned, and we are very confident in its startup by June of this year. Now I will pass the floor over to Marcelo Bacci to continue the presentation.

Thank you, Aires. Moving to page 9, I’d like to start by giving a retrospective view of our indebtedness. As indicated on the top of the slide, we have undergone a deleveraging cycle during 2020 and 2021, following our merger with Fibra. Since the end of 2021, we have significantly increased our capital generation through operations while undergoing a robust investment cycle, with BRL 4.6 billion invested in modernization and growth. Additionally, we have returned BRL 1.4 billion to our shareholders, marking a significant return compared to prior years. Our net debt currently stands at BRL 11.5 billion, which is roughly the same level we had three years ago, and BRL 2 billion lower than in 2019. This has allowed us to maintain our leverage ratio under control, currently at 3.1x net debt to EBITDA in dollar terms. We expect this ratio to rise in the first half of this year before starting to decrease following the commencement of the Cerrado project, which will positively impact our revenues. Regarding liquidity and our amortization schedule, we have consistently improved these figures, currently standing at $6.8 billion in liquidity made up of cash-enhanced standby facilities and contracted arrangements still to be drawn. This provides us with a comfortable position that we are continuously enhancing as we seek new transaction opportunities. A significant portion of our debt is at a fixed rate, and we are gradually shifting back to floating rates to exploit expected interest rate reductions in the coming years. Moving to the last page of the presentation, I'd like to touch on the guidance for total operational expenditure we provided at the end of last year. We have reaffirmed our expectation for total operational expenditure to reach BRL 1.75 billion by the end of 2023, which means we have effectively offset inflation from last year while maintaining this guidance with slight adjustments among the three components: sustaining CapEx, SG&A, and freight and cash costs. With that, we conclude the presentation, and we can now transition to the Q&A session.

Thank you. Our first question comes from Mr. Rodolfo De Angele from JPMorgan. Mr. Angele, the floor is yours.

Okay. Thanks, everyone. Of course, I just wanted to start by saying that you’ll be missed, Walter. It’s very big shoes to fill looking forward. And it’s great to hear that you’re going to be around and the focus is on continuity. But let’s move to my questions. First of all, very impressed by your remarks. It seems quite bullish for the pulp market outlook. Leo, can you comment a little bit more on what you mentioned? How are things particularly in Asia? And you mentioned that you’ll have to limit some of the output to the region. Can you share more insights on that? The second question is regarding the business environment; it seems quite tight. We’ve been asked a lot about the 4% of capacity that was closed. Is that coming back? We’d appreciate your comments on that.

Thanks, Rodolfo. Good morning, and thanks for your questions. I will first address the situation in Asia and also how we’re managing our system to redistribute inventory worldwide, as I previously mentioned. China has exhibited a robust production month in January, which came as a surprise to many market participants. Following the Chinese New Year, there is a prevailing sense of optimism in the market. We recognize this time of year usually involves heightened demand due to commercial printing and the upcoming publishing season. Additionally, paper producers and packaging companies have successfully implemented price increases right after the Chinese New Year, with further rounds expected in March. This has prompted additional optimism in the marketplace. We have already noted resale prices on the rise since last week. Our market sources report prices in the local market today are already higher than those observed late last week. The necessity to limit volumes to Asia arises from the fact that Europe and North America are regaining traction, and our business model in these regions necessitates local inventories at outposts or even within our customers’ facilities. As we work to redirect volumes back from Asia, the market expectations continue to adjust upwards. Customers, while not anticipating a return to the extreme levels seen in 2021 and 2022, are upgrading their forecasts based on the improving outlook for 2023. We’re currently navigating the need to resell vessels to meet supply agreements and contracts effectively in both Europe and the United States. Hence, we are strategically reducing allocations to markets like China and other parts of Asia and Africa to ensure efficient, robust supply chain operations and guarantees to our customers.

Also, this is Marcelo speaking. In relation to production for this year, we will continuously assess market conditions and adjust accordingly. We are not ready to elaborate beyond that.

Great. Thank you.

Our next question comes from Mr. Jon Brandt from HSBC. Mr. Brandt, the floor is yours.

Hi, good morning, Walter. I just wanted to congratulate you on an excellent 11 years. You’re leaving Suzano in a much better position than when you started. So congratulations and best of luck in your new role. I have two questions. One is related to one of your customers. I understand that Vinda in China is in the process of being acquired by one of your competitors. Presumably, they may want to shift to their internal pulp once that acquisition is complete. What does that mean for you? Is that another variable we need to manage regarding moving volumes away from Vinda to smaller customers? My second question involves logistics issues you're discussing, particularly regarding Panama Canal and the Red Sea. Can you elaborate on the issues you are experiencing? Are shipping costs affected? Is it taking longer? How significant are these logistical issues?

Thanks, Jon. This is Leo. I will address both of your inquiries. Regarding our pivotal customer Vinda in China, we are following the recent developments very closely. Our collaboration with them has been significant, and our principal goal is to facilitate a smooth transition for all involved. The market is interconnected; if the new management opts to move towards vertical integration, it could open up new opportunities for other customers, allowing the system to realign. We do not foresee any challenges from this transition. Regarding logistics, given Suzano’s established long-term agreements and contracted vessels, costs are not a major issue at this stage. The primary concern centers on delays in shipments and specific routes. We have numerous shipments planned that involve transit through the Red Sea, which has increased lead times by 10 to 15 days. Additionally, an unusual rainy season in Brazil late last year and into January impacted operations at southern Brazil ports, adding some delays to vessel rotations. Thus, it’s largely a matter of lead times rather than costs.

Perfect. Great. Thank you.

Our next question comes from Mr. Leonardo Correa from BTG Pactual. Mr. Correa, the floor is yours.

Hello. Good morning, everyone. Can you hear me?

Yes.

Okay, sorry about that. I want to start by congratulating Walter on an amazing career as CEO. I hope you have a lot of success in your new role on the Board. Moving to a couple of questions, the first is on the new potential investment cycle, which is highly pertinent to the investment case. Management has discussed this new cycle, even as we finalize the Cerrado project. I want to hear about your evolving mindset on international expansion. Would joint ventures make sense? Should we plan for expansion in Mato Grosso? I’d appreciate any insights to pass along to the incoming CEO. My second question pertains to costs. The inflationary environment for pulp costs seems to be fading as we see a drop from BRL 900 per ton to roughly BRL 800. Can we expect similar single-digit drops or is a stability scenario more realistic? I look forward to your thoughts.

Thank you for your kind words and for your question, Leonardo. I appreciate that. It’s essential for us to maximize returns to our shareholders. This discipline in capital allocation is key to our value creation process. We’re agnostic about geographies—opportunities could arise in Brazil or elsewhere. What’s critical is to identify products and projects that differentiate us without getting caught in the mid-pack. Projects of scale that enhance cash flow after the Cerrado project’s commissioning are a focus. The Cerrado project promises excellent cash costs, and we’d assess value creation opportunities for shareholders based on our project pipeline. Increased volumes in the short fiber market, a hypothetical fiber-to-fiber program expands our market reach. We’re looking at opportunities in textiles, packaging, and tissue, which the incoming CEO should take into consideration. Lastly, financial discipline remains crucial, and I will ensure that’s maintained on the Board of Directors. Now I’ll pass it to Aires.

Thanks for your questions. There are two main avenues for reducing cash costs in our facilities. First, is increasing efficiency and productivity, which we’ve been enhancing with our projects in Jacarei, Aracruz, and the Cerrado initiative. The second focus involves reducing transport distances between forests and mills, achieved through significant plantation expansions and land banking. The impact of the Cerrado project will materialize at year-end as ramp-up progresses. Moving to the next slide, we can see that the Cerrado project is advancing as planned, and we are highly confident for its launch by June this year. Now I will hand this over to Marcelo Bacci to continue the presentation.

Hi, good morning. First of all, Walter, congratulations on your tenure at Suzano. It was a pleasure collaborating with you, and I look forward to hearing from you on the Board. I have two questions. First, Leo, regarding the market; China was exceptionally strong, escalating to levels 4-5 times the norm. Europe, conversely, has shown weakness, with a 20% decline. As we consider your commercial strategy for Cerrado volumes entering the market in the second half of the year, what are key trends we should anticipate? Second, Fabio, could you please provide an update on the packaging and graphics paper markets, particularly in Europe, alongside competition from imports? Thank you.

Thank you, Marcio. This is Leo. You are accurate; last year saw China leading pulp consumption, surpassing all expectations with increased production rates across all paper products. Looking forward, European and North American markets are in recovery, with historically low inventories falling over 40% compared to last year. There’s a double challenge ahead as we attempt to restore these patterns while minimizing overselling to the Asian markets. Regarding Cerrado volumes, we expect a significant majority of the estimated 700,000 tons to be operational towards year-end as we finalize our strategies for this volume. Our approach has been comprehensive, targeting both spur organic demand and fiber-to-fiber initiatives.

Marcio, good morning, Fabio here. Thank you for your question. Reflecting on international paper markets, we faced a large correction in excess demand and inventory levels due to earlier surges. We noted an overall weak scenario in mature markets, especially in Europe and North America, which recorded significant drops in demand last year. Conversely, things began to change toward the end of the year as pulp price increases positively influenced the competitiveness of paper prices in China. We are witnessing some price recovery in both China and the international market, and stable pricing trends are emerging in the domestic markets. We have implemented price increases for uncoated wood-free and cut-size papers beginning early January, indicating our optimistic outlook for this segment throughout 2024.

Thank you, Walter and Fabio. Great details.

Our next question comes from Mr. Batalha Vasconcelos from Bradesco BBI. Mr. Vasconcelos, the floor is yours. Our next question comes from Mr. Guilherme Rosito from Bank of America. Mr. Rosito, the floor is yours.

Hi. Good morning, everyone. Can you hear me?

Yes.

Perfect. First, I’d like to congratulate Walter on his achievements and the long journey at Suzano. Two questions: First, regarding the Cerrado project, could you clarify what the breakeven volume is? When should we begin to see fixed costs diluted to recognize the full benefits of Cerrado? Second, given the recent movements in land acquisition, what are the current incentive prices you’re noticing for pulp? Any details would be appreciated.

Hi, Guilherme, this is Marcelo. As you know, the Cerrado project operates as a low-cost asset. Based on the guidance provided for production evolution this year, we anticipate reaching the breakeven level swiftly. Although we cannot disclose the exact breakeven quantity, we expect to exceed it this year. Regarding the incentive price, it's evident that it has escalated due to rising capex, land costs, and wood costs, making new projects increasingly costly and complicated, so while we’re unable to specify a number at this time, we recognize that it has indeed risen.

Thanks a lot.

Our next question comes from Mr. Jens Spiess from Morgan Stanley. Mr. Spiess, the floor is yours.

Yes. Thank you. I would also like to congratulate Walter for your successful tenure as CEO and commend you for staying with the company that you helped shape over the past decade. Most of my questions were previously asked; however, I would like clarification on the cost progression how we should assume that in the context of the Cerrado project. Should we anticipate an initial spike in costs before breakeven, perhaps as early as the fourth quarter? What sort of capacity utilization do you anticipate aiming to achieve by year-end?

As previously stated, our guidance suggests that once we ramp up, we expect our cash costs to settle around BRL 500 per ton, with the potential to drop to BRL 400 per ton, driven by optimal product distances from forests to mills at 66 kilometers. The guidance indicates that our aim is 2 million tons in production over the first year. We're confident in the learning curve and ramp-up efficiency. After a planned short shutdown around six months in, we believe that our operations will fully benefit from the cash cost improvements by the end of the year. Importantly, this initial ramp-up will not adversely affect Suzano’s overall cash cost performance, which we've monitored consistently.

Jens, this is Leo. I just wanted to clarify—the 700,000 tons we discussed refers to our sales plan for Cerrado's 2024 production, which is distinct from production targets. The ramp-up and sales processes will be aligned across our entire market strategy from Mato Grosso to other operational points. Our sales for the Cerrado project are intentionally designed to establish inventory stability within our logistics, predicting that a significant proportion of this volume will be released towards the year's end.

Understood. Thank you.

The Q&A session is now concluded. I would like to hand the floor back to Mr. Walter Schalka for his final remarks.

I would like to thank all of you for joining us today. I want to emphasize that we are dedicated to securing a brighter future for Suzano. Recently, we celebrated our 100th anniversary, and it was an honor to be part of this milestone. We are focused on the legacy we can build for society in the coming years, and I appreciate the support we have received in making a positive impact. As we reach 2 billion people monthly with our products, we believe there are even greater opportunities to enhance societal impact. Thank you for your support over the past 11 years, and I hope for a successful journey forward. It's worth noting that I hope April will present a more favorable opportunity to address the valuation of Suzano, as I have yet to achieve it over my tenure. Thank you again, everyone. Best wishes, and stay in touch.

The Suzano S.A. fourth quarter of 2023 conference call is concluded. The Investor Relations department is available to answer any further questions you may have. Thank you, and have a good afternoon.