“AF&PA welcomes the signing of the trilateral trade agreement as a step in the right direction toward strengthening access for our industry’s products in the North American market. We are one the largest manufacturing sectors in the U.S. with exports to Canada and Mexico of $9.6 billion (45 percent of global exports), supporting 52,000 direct and many more indirect American jobs. We look forward to working with Congress to ensure the agreement preserves and improves the market access and investor protections such as investor state dispute settlement procedures that have long benefitted our industry and its workers.”
Suzano S.A. (B3: SUZB3 | NYSE: SUZ), one of the world’s largest integrated pulp and paper producers, announces today its consolidated results for the fourth quarter of 2019 (4Q19). Data for the comparison periods in 2018 (4Q18 and 2018) are based on the simple sum or weighted average, when applicable, of Suzano + Fibria.
• Pulp inventory drawdown of approximately 650 thousand tons.
• Pulp sales of 2,920 thousand tons, up 15% vs. 3Q19.
• Paper sales of 369 thousand tons, up 18% vs. 3Q19.
• Adjusted EBITDA1 and Operating cash generation²: R$2.5 billion and R$1.5 billion, respectively.
• Adjusted EBITDA1 /ton4 for pulp of R$741/ton (-14% vs. 3Q19).
• Adjusted EBITDA¹/ton5 for paper of R$1,150/ton (-6% vs. 3Q19).
• Average net pulp price – export market: US$471/t (-11% vs. 3Q19).
• Average net paper price5 of R$3,844/ton (-4% vs. 3Q19).
• Pulp cash cost ex-downtime of R$631/t, down 3% vs. 3Q19.
• Synergies captured in 2019 reached R$763 million, already excluding implementation costs. Considering the reduction on production the synergies captured raised R$311 million.
• Estimated operating synergies revised upwards from R$1.1bn to R$1.2bn.
The year 2019 began with a major milestone in Suzano’s history: the conclusion of the asset combination with Fibria. Over the year, we worked to build pillars to support the success of the post-merger company, which focused on capturing the projected synergies, unifying the organizational culture and integrating processes and systems. Amidst a highly challenging period for the pulp industry, we were able to end 2019 not just with a new company, but already with a single culture and a unified process represented by a single operational system.
The challenge of our post-merger journey was surmounted and successfully completed. In terms of synergies, we accelerated the capture curve, given the pulp market scenario, with the potential synergies to be captured annually in a steady state increased from between R$800 and R$900 million to between R$1.1 and R$1.2 billion. In parallel, we focused not just on integrating two distinct organizational cultures, but also on evolving towards a new culture based on the collective perceptions of our human capital. And, in this way, we implemented a comprehensive effort to reflect on who we are, what we do and how we do it, which culminated in three drivers: “people who inspire and transform,” “create and share value,” and “it’s only good for us if it’s good for the world.” By the end of the year, the new culture proved to be robust by achieving 91% adherence.
On the operational front, over the course of 2019, Suzano implemented a massive and important project to integrate its operational systems, which enabled us to end the year with our internal processes unified, with the go-live a big success that resulted in higher operating efficiency from 2020 onwards and a safer environment, paving the path towards Sarbanes-Oxley certification.
In the market environment, in 2019, we faced an adverse scenario in the pulp market due to the sudden drop in pulp prices, which was worsened by macroeconomic events such as the trade war between China and the United States and the economic slowdown in Europe. The scenario had direct impacts on our pulp business and on our financial statements. Nevertheless, we delivered important results in 2019, demonstrated by, for example, our capacity to reduce significantly our pulp inventories in the second half of the year, the decline in our cash cost despite the adverse effect from lower production volume, the Adjusted EBITDA record in the Paper Business Unit and the on our financial strength.
We ended 2019 with Suzano demonstrating strong resilience in the face of an adverse market scenario, moving forward even stronger, more competitive and confident in its determination to create and share value in the long term.
more detail at: http://ir.suzano.com.br/enu/7876/Release%20de%20Resultados_4T19_ENG_vFinal_CVM.pdf