SUZ — Suzano S.A.

Suzano Q3 2025 Earnings Call Summary

1. Key Financial Results and Metrics

• EBITDA: BRL 542 million, an 11% increase quarter-over-quarter but a 10% decrease year-over-year.
• Cash Costs: Decreased to BRL 801 per ton, a 4% reduction from Q2 2025 and a 7% decrease year-over-year.
• Leverage: Increased to 3.3x due to stable net debt but declining EBITDA from lower pulp prices.
• Sales Volumes: Record high for Paper and Packaging business unit, with strong export volumes from Brazil.
• Pulp Business EBITDA: BRL 4.5 billion, with a 49% margin, impacted by lower prices and unfavorable FX.

2. Strategic Updates and Business Highlights

• Pine Bluff Operations: Achieved first positive EBITDA, indicating a successful turnaround.
• Cost Efficiency Focus: Continued emphasis on reducing operational disbursements and improving productivity over the next two years.
• Suzano Packaging: Positive EBITDA achieved; plans to enhance performance and cash generation from this segment.
• Maintenance Outages: Planned outages in Q4 at Limeira and Suzano mills to improve sustainability and reduce future costs.

3. Forward Guidance and Outlook

• Q4 Expectations: Stable costs anticipated with increased sales volumes due to seasonal demand; positive EBITDA growth expected in the Packaging segment.
• CapEx Guidance: For 2025, CapEx projected at BRL 13.3 billion, with a declining trend expected in future years as major projects conclude.
• Pulp Price Outlook: Anticipated gradual increases in pulp prices, driven by rising costs for Chinese producers and potential supply-side adjustments.

4. Bad News, Challenges, or Points of Concern

• Market Conditions: Ongoing economic headwinds and uncertainties, particularly due to trade wars, impacting demand and pricing, especially in Europe.
• Pulp Price Volatility: Prices remain below breakeven for many producers, leading to unsustainable conditions that could trigger further supply-side adjustments.
• Tariff Concerns: Potential tariffs on Brazilian pulp exports to the U.S. created short-term market turbulence, although recent exemptions have eased some risks.
• Declining Demand: Notable declines in print and write paper demand, particularly in mature markets, affecting overall sales dynamics.

5. Notable Q&A Insights

• Wood Chip Market: Prices for domestic wood chips in China have increased, impacting cash costs for producers and potentially leading to higher pulp prices.
• Dissolving Pulp Shifts: Anticipated shifts in production towards dissolving pulp due to favorable pricing dynamics, with expectations for further capacity adjustments.
• Lenzing Investment: No immediate plans to increase stake; ongoing analysis of market conditions and performance of the investment.
• U.S. Market Growth: Opportunities identified in the U.S. paper market, particularly in foodservice, with a focus on improving cost efficiencies in existing operations.

Overall, Suzano's Q3 2025 results reflect a mix of operational successes and ongoing market challenges, with a strategic focus on cost efficiency and navigating a complex pricing environment.