SUZ — Suzano S.A.

Suzano Q4 2025 Earnings Call Summary

1. Key Financial Results and Metrics

• Record Pulp Shipments: Achieved record volumes in pulp shipments during Q4 2025, contributing to strong operational cash flow and free cash flow despite lower price cycles.
• EBITDA: Reported BRL 4.8 billion in EBITDA, an 8% increase quarter-over-quarter, driven by higher volumes and improved pricing in U.S. dollar terms.
• Cash Costs: Cash costs reached BRL 778 per tonne, the lowest since Q4 2021, reflecting operational stability and lower input costs.
• Net Debt: Reduced to $12.6 billion, with leverage declining to 3.2x.
• Free Cash Flow: Generated $400 million in Q4 2025.

2. Strategic Updates and Business Highlights

• Operational Excellence: Highlighted the strong performance of the supply chain team, particularly in the Pine Bluff operation in the U.S., which is showing continuous improvement.
• Paper and Packaging: Strong volumes in both Brazil and the U.S., with stable pricing in the U.S. market and a notable 21% year-over-year increase in Suzano Packaging.
• Closure of Rio Verde Mill: Decision to cease operations at the Rio Verde mill, expected to positively impact 2026 results by reallocating production to more competitive mills.
• K-C Joint Venture: Progressing as planned for a mid-2026 closing, with a focus on value creation and operational integration.

3. Forward Guidance and Outlook

• 2026 Expectations: Anticipated cash costs to remain around BRL 780 per tonne, with a focus on improving competitiveness and reducing total operation disbursement (TOD).
• Pulp Market Dynamics: Positive short-term outlook for pulp prices due to increased demand in China and supply constraints from Indonesia.
• Paper and Packaging Volumes: Expected lower sales volumes in Q1 2026 due to seasonality, but anticipate price improvements from announced increases.

4. Bad News, Challenges, or Points of Concern

• Market Pressures: Declining paper prices in export markets and oversupply issues in the global packaging market, particularly in Europe.
• Operational Challenges: Planned maintenance downtimes in Q1 and Q2 2026 may impact production levels and cash costs.
• Competitive Pressures: Increased competition from Asian paper imports and potential impacts from the ongoing economic environment.

5. Notable Q&A Insights

• Pulp Market Trends: Management indicated a positive shift in pulp market dynamics due to supply-side constraints and increased demand, particularly in China.
• CapEx Guidance: Acknowledged potential for lower CapEx in 2026 due to nonrecurring items but refrained from providing specific guidance.
• Buyback Program: Emphasized an opportunistic approach to share buybacks, balancing leverage and market conditions.
• Divestment Strategy: Discussed potential divestments primarily in the forestry business to enhance cash flow, but noted this would not be a major component of the deleveraging strategy.

Overall, Suzano's Q4 2025 results reflect strong operational performance and strategic initiatives, despite facing challenges in market conditions and pricing pressures. The outlook for 2026 appears cautiously optimistic, with a focus on maintaining competitiveness and managing costs.