EX-99.1 2 a19-20763_3ex99d1.htm EX-99.1

Exhibit 99.1

Stronger sales, inventory drawdown and cash flow generation

São Paulo, October 31, 2019. Suzano S.A. (B3:SUZB5 | NYSE: SUZ), one of the world’s largest integrated pulp and paper producers, announces today its consolidated results for the third quarter of 2019 (3Q19). Data for the comparison periods of 2018 (3Q18, 9M18 and LTM(6)) are based on the simple sum or weighted average, when applicable, of Suzano + Fibria.

HIGHLIGHTS

· Pulp inventory drawdown of approximately 450 thousand tons.

· Pulp sales of 2,549 thousand tons, up 15% vs. 2Q19.

· Paper sales of 313 thousand tons, up 4% vs. 2Q19.

· Adjusted EBITDA¹ and Operating Cash Generation² of R$2.4 billion and R$1.5 billion, respectively.

· Adjusted EBITDA¹/ton(4) of pulp of R$857/ton (-34% vs. 2Q19).

· Adjusted EBITDA/ton(5) of paper of R$1,229/ton (+3% vs. 2Q19).

· Average net pulp price — exports price: US$526/t (-17% vs. 2Q19).

· Average net paper price(5) of R$4,024/ton (stable in relation to 2Q19).

· Pulp cash cost of R$717/t, or R$654/t ex-downtimes.

· Capture of synergies in line with target for 2019 (40% as of Dec. 2019).

Consolidated Financial Data (R$ million) |  | 3Q19 |  | 3Q18 |  | Δ Y-o-Y |  | 2Q19 |  | Δ Q-o-Q |  | LTM 3Q19 |
Net Revenue |  | 6,600 |  | 9,842 |  | -33 | % | 6,665 |  | -1 | % | 26,206 |
Adjusted EBITDA(1) |  | 2,396 |  | 5,387 |  | -56 | % | 3,101 |  | -22 | % | 11,809 |
Adjusted EBITDA Margin(1) |  | 36 | % | 55 | % | -18 p.p. |  | 47 | % | -10 p.p. |  | 45 | %
Adjusted EBITDA Margin ex-Klabin(4) |  | 39 | % | 59 | % | -20 p.p. |  | 48 | % | -10 p.p. |  | 47 | %
Net Financial Result |  | (6,493 | ) | (2,791 | ) | — |  | 79 |  | — |  | (6,671 | )
Net Income |  | (3,460 | ) | 1,022 |  | — |  | 700 |  | — |  | (1,002 | )
Operating Cash Generation(2) |  | 1,515 |  | 4,448 |  | -66 | % | 2,226 |  | -31 | % | 7,988 |
Net Debt/Adjusted EBITDA(1) (x) (R$) |  | 4.7 x |  | 1.5 x |  | 3.2 x |  | 3.5 x |  | 1.2 x |  | 4.7 x |
Net Debt/Adjusted EBITDA(1) (x) (US$) |  | 4.3 x |  | 1.3 x |  | 3.0 x |  | 3.6 x |  | 0.7 x |  | 4.3 x |

Operational Data (‘000 tons) |  | 3Q19 |  | 3Q18 |  | Δ Y-o-Y |  | 2Q19 |  | Δ Q-o-Q |  | LTM 3Q19 |
Sales |  | 2,862 |  | 3,227 |  | -11 | % | 2,514 |  | 14 | % | 9,815 |
Pulp |  | 2,549 |  | 2,891 |  | -12 | % | 2,214 |  | 15 | % | 8,577 |
Paper(5) |  | 313 |  | 336 |  | -7 | % | 301 |  | 4 | % | 1,238 |
Production |  | 2,406 |  | 3,084 |  | -22 | % | 2,539 |  | -5 | % | 10,329 |
Pulp |  | 2,095 |  | 2,750 |  | -24 | % | 2,221 |  | -6 | % | 9,071 |
Paper(5) |  | 311 |  | 334 |  | -7 | % | 318 |  | -2 | % | 1,258 |

(1) Excluding non-recurring items. (2) Corresponds to Adjusted EBITDA less sustaining CAPEX (cash basis). | (3) Corresponds to Adjusted EBITDA less maintenance capex (accrual basis), less working capital, less net interest, less Income Taxes | (4) Excludes Klabin volumes | (5) Includes results of the Consumer Goods Unit. | (6) Last 12 months.

The consolidated quarterly information has been prepared in accordance with the Securities and Exchange Commission (CVM) and Accounting Standards Committee (CPC) standards and is in compliance with International Accounting Standard (IFRS) issued by the International Accounting Standard Board (IASB). The data contained in this document was obtained from the financial information as made available to the CVM. The operating and financial information is presented based on consolidated numbers in Reais (R$). Summaries may diverge due to rounding. Non-financial data, such as volume, quantity, average price, average price, in Reais and Dollars, were not reviewed by independent auditors.

CONTENTS |
PULP BUSINESS PERFORMANCE | 3
PULP SALES VOLUME AND REVENUE | 3
PULP CASH COST | 4
PULP SEGMENT EBITDA | 5
PULP OPERATING CASH GENERATION | 6
PAPER BUSINESS PERFORMANCE | 6
PAPER SALES VOLUME AND REVENUE | 7
PAPER OPERATING CASH FLOW | 8
ECONOMIC AND FINANCIAL PERFORMANCE | 9
NET REVENUE | 9
PRODUCTION | 10
COST OF GOODS SOLD | 10
OPERATING EXPENSES | 12
ADJUSTED EBITDA | 14
FINANCIAL INCOME AND EXPENSES, NET | 14
DERIVATIVE TRANSACTIONS | 15
NET INCOME (LOSS) | 17
INDEBTEDNESS | 17
CAPITAL EXPENDITURE | 19
OPERATING CASH GENERATION | 20
IFRS 16 | 20
SYNERGIES | 21
EVENTS AFTER THE REPORTING PERIOD | 21
CAPITAL MARKETS | 21
FIXED INCOME | 22
RISK RATING | 22
UPCOMING EVENTS | 23
IR CONTACTS | 23
APPENDICES | 24
APPENDIX 1(2) — Operating Data | 24
APPENDIX 2(2) — Consolidated Statement of Income and Goodwill Amortization | 26
APPENDIX 3(1) — Consolidated Balance Sheet | 27
APPENDIX 4(1) — Consolidated Statement of Cash Flow | 28
APPENDIX 5(2) — EBITDA | 30
APPENDIX 6(2) — Segmented Statement of Income | 31
Forward-looking Statements | 33

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PULP BUSINESS PERFORMANCE

PULP SALES VOLUME AND REVENUE

The imbalance in market fundamentals already observed in previous quarters was boosted by seasonality in the northern hemisphere, which led to a sharp and greater correction softwood and hardwood prices compared to previous periods.

On the demand side, the growth in production of the various types of paper in China was not sufficient to offset the performance of other regions impacted mainly by macroeconomic and geopolitical issues. The tissue segment continued to show resilience and is estimated to have grown globally by 2.9% until July.

On the supply side, scheduled maintenance and unscheduled production cuts did not impact the increasing availability of both fibers. The pulp destocking movement initiated by paper producers during previous quarters, with the consequent migration to pulp producers, was still observed in the third quarter, mostly in China. At the end of this quarter, there was a typical resumption of demand in the northern hemisphere to the point that several price increase announcements were made by softwood pulp producers for the Chinese and North American markets.

In this context, Suzano recorded a quarter with sales growth and sold 2,549 thousand tons of market pulp, 15% higher than 2Q19 and 12% lower than 3Q18.

The average net pulp price in USD sold by Suzano was US$527/ton in 3Q19, a decrease of US$101/t (-16%) and US$215/ton (-29%) compared to 2Q19 and 3Q18, respectively. The average net foreign market price in 3Q19 was US$526/ton (compared to US$630/ton in 2Q19 and US$752/ton in 3Q18).

The average net price in BRL was R$2,095/ton in 3Q19, down 15% and 29% from 2Q19 and 3Q18, respectively, due to lower prices in USD.

Net revenue from pulp sales amounted to R$5,340 million in 3Q19, down 37% from 3Q18, mainly due to the lower net average price in USD (-29%) and the lower sales volume (-12%).

Compared to 2Q19, the main factor in the 2% decline in net revenue was the 16% lower net average pulp price in USD, which was partially offset by the higher pulp sales volume (+15%) and the 1% average appreciation in the USD against the BRL.

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PULP CASH COST

The consolidated cash cost of market pulp production in 3Q19, excluding the impacts from downtimes (maintenance and administrative) in the period, was R$654/ton. The cash cost including downtimes was R$717/t.

Cash cost ex-downtime in 3Q19 increased R$58/ton vs. 3Q18 (+10%), mainly due to: i) the higher wood cost, reflecting the supply mix (higher share of third-party wood and longer average supply radius); ii) the lower dilution of fixed costs given the lower production volume; and iii) the weaker result from energy sales (lower power generation and lower sales price). The positive impact on input is due to a lower consumption and lower chemical prices, partially as a result of synergy gains (mainly caustic soda prices).

Pulp cash cost ex-downtimes in 3Q19 decreased R$43/ton vs. 2Q19 (-6%), mainly due to: i) lower fixed cost, mainly explained by lower maintenance costs and by the pulp mill mix (higher relevance of Três Lagoas in the

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total production); ii) the lower consumption of inputs and iii) the higher result from energy sales given the better price.

(1) Excludes maintenance and administrative downtimes impact.

(1) Considers cash cost without downtimes and energy sales.

PULP SEGMENT EBITDA

Pulp segment |  | 3Q19 |  | 3Q18 |  | Δ Y-o-Y |  | 2Q19 |  | Δ Q-o-Q |  | LTM 3Q19 |
Adjusted EBITDA (R$ million) |  | 2,012 |  | 4,980 |  | -60 | % | 2,734 |  | -26 | % | 10,337 |
Sales Volume (k ton) — ex-Klabin |  | 2,347 |  | 2,662 |  | -12 | % | 2,095 |  | 12 | % | 8,066 |
Pulp Adjusted EBITDA Ex-Klabin (R$/ton) |  | 857 |  | 1,870 |  | -54 | % | 1,305 |  | -34 | % | 1,282 |

The variation in Adjusted EBITDA from pulp sales in 3Q19 compared to 3Q18 mainly reflects: i) the lower net pulp price in USD (-29%); ii) the 12% reduction in pulp sales volume; and iii) the higher cash COGS ex-Klabin due to the increase in cash production cost (impact from wood and lower production volumes). The lower per-ton adjusted EBITDA is explained by the lower net average pulp price and higher cash COGS ex-Klabin, by the factors mentioned above.

Compared to 2Q19, the 26% lower pulp adjusted EBITDA mainly reflects the 16% decrease in the net average price in USD, which was partially offset by the 15% higher sales volume. The decrease in per-ton pulp Adjusted EBITDA is explained by the pulp price in USD reduction.

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PULP OPERATING CASH GENERATION

Pulp segment (R$ million) |  | 3Q19 |  | 3Q18 |  | Δ Y-o-Y |  | 2Q19 |  | Δ Q-o-Q |  | LTM 3Q19 |
Adjusted EBITDA |  | 2,012 |  | 4,980 |  | -60 | % | 2,734 |  | -26 | % | 10,337 |
Maintenance Capex* |  | (811 | ) | (874 | ) | -7 | % | (797 | ) | 2 | % | (3,530 | )
Operating Cash Flow |  | 1,201 |  | 4,106 |  | -71 | % | 1,938 |  | -38 | % | 6,807 |

*Cash basis.

(1) Excludes sales volume related to the agreement with Klabin.

Per-ton operating cash generation in the pulp segment decreased 63% and 38% from 3Q18 and 2Q19, respectively, impacted by the lower per-ton Adjusted EBITDA, as already explained, partially offset by higher dilution of maintenance capex due to higher sales volume.

PAPER BUSINESS PERFORMANCE

Note that the paper business is incorporating the results from the consumer goods business, which is still in the ramp-up phase.

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PAPER SALES VOLUME AND REVENUE

According to the Forestry Industry Association (Ibá), domestic sales of printing & writing paper and paperboard in Brazil increased 9% vs. 2Q19 and a decrease of 10% vs. the same period of last year. The imports were stable vs 2Q19 and showed a 4% reduction vs 3Q18.

As for the first nine months of 2019, sales of printing & writing paper and paperboard in the domestic industry decreased by 6% compared to the same period of the previous year and imports also decreased by 6%. Domestic sales in printing & writing market decreased by 8% while paperboard sales decreased by 2%.

In Brazil, Suzano’s paper sales came to 211 thousand tons in 3Q19, up 13% from 2Q19, explained by the seasonality of the Brazilian market, and a drop of 14% compared to 3Q18, justified by the lower consumption in the period.

Paper sales in both domestic and foreign markets at the 3Q19 totaled 313 thousand tons, up to 4% from 2Q19, but a retraction of 6% compared to 3Q18, given the lower production in the period, due to the printing & writing paper machine conversion to Eucafluff, and the maintenance downtime at Mucuri.

The average net price in the domestic market in 3Q19 was R$4,138/ton, down R$40/ton (-1%) compared to 2Q19 and up R$253/ton (+7%) compared to 3Q18.

The average net price of paper exports in 3Q19 was US$953/ton, down US$13/ton (-1% vs. 2Q19) and US$60/ton (-6% vs. 3Q18). Due to our profitability strategy and the flexibility to operate in several markets, the deterioration of international prices in these periods was partially offset. In BRL, the export price in 3Q19 was R$3,788/ton, stable in relation to 2Q19, as a result of the BRL depreciation during the period, and down R$223/ton lower (-6%) in relation to 3Q18 driven by lower prices levels in USD.

The total average net price was R$4,024/t in 3Q19, stable in relation to 2Q19 and up 3% when compared to 3Q18.

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Net revenue from paper sales amounted to R$1,260 million in 3Q19, up 4% from 2Q19, mainly due to the higher sales volume, which was partially offset by the lower net average price.

Comparing to the same period last year, there was a 4% reduction, mainly due to lower sales volume, and partially offset by higher net average price.

PAPER EBITDA

Paper segment |  | 3Q19 |  | 3Q18 |  | Δ Y-o-Y |  | 2Q19 |  | Δ Q-o-Q |  | LTM 3Q19 |
Adjusted EBITDA (R$ million) |  | 385 |  | 407 |  | -6 | % | 366 |  | 5 | % | 1,471 |
Sales volume (k ton) |  | 313 |  | 336 |  | -7 | % | 301 |  | 4 | % | 1,238 |
Paper adjusted EBITDA (R$/ton) |  | 1,229 |  | 1,212 |  | 1 | % | 1,219 |  | 1 | % | 1,189 |

The performance of Adjusted EBITDA from paper in 3Q19 compared to 3Q18 is mainly explained by the lower sales volume and higher cash COGS, due to the downtime schedule, which were partially offset by the higher net average price and lower selling and administrative expenses.

Compared to 2Q19, the increase is due to higher sales volume (+4%) and lower cash COGS in the period, partially offset by the lower average net price.

PAPER OPERATING CASH FLOW

Operating cash flow - Paper (R$ million) |  | 3Q19 |  | 3Q18 |  | Δ Y-o-Y |  | 2Q19 |  | Δ Q-o-Q |  | LTM 3Q19 |
Adjusted EBITDA |  | 385 |  | 407 |  | -6 | % | 366 |  | 5 | % | 1,471 |
Maintenance Capex |  | (70 | ) | (65 | ) | 8 | % | (78 | ) | -10 | % | (291 | )
Operating Cash Flow |  | 314 |  | 342 |  | -8 | % | 288 |  | 9 | % | 1,181 |

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Operating cash generation per ton came to R$1,004/t in 3Q19. Compared to 3Q18, operating cash generation per ton was virtually stable (-1%). Compared to the previous quarter (+5%), in addition to the higher Adjusted EBITDA (+5%), sustaining capex decreased by 10%.

ECONOMIC AND FINANCIAL PERFORMANCE

NET REVENUE

Suzano’s net revenue in 3Q19 was R$6,600 million, 80% of which came from export sales (vs. 83% in 3Q18 and 81% in 2Q19). Pulp and paper sales in the quarter amounted to 2,862 thousand tons, up 14% from 2Q19 and down 11% from 3Q18, mainly due to the pulp sales performance in those periods.

(1) Excludes service revenue from Portocel.

Consolidated net revenue in 3Q19 decreased compared to 2Q19, explained by the 16% lower net average pulp price in USD, which was largely offset by the 14% higher sales volume (with pulp volume rising 15%) and by the 1% appreciation in the USD against the BRL.

Compared to 3Q18, the reduction in net revenue was mainly due to the lower net average price of pulp in USD (-29%) and the 12% lower sales volume.

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PRODUCTION

Production (k ton) |  | 3Q19 |  | 3Q18 |  | Δ Y-o-Y |  | 2Q19 |  | Δ Q-o-Q |  | LTM 3Q19 |
Market Pulp |  | 2,095 |  | 2,750 |  | -24 | % | 2,221 |  | -6 | % | 9,071 |
Paper |  | 311 |  | 334 |  | -7 | % | 318 |  | -2 | % | 1,258 |
Total |  | 2,406 |  | 3,084 |  | -22 | % | 2,539 |  | -5 | % | 10,329 |

In the third quarter of 2019, scheduled maintenance downtime was carried out at the Jacareí Unit and on Line 1 of the Mucuri Unit and partially on Line 2 of the Três Lagoas Unit (the latter begun in June). In addition to these effects, production volume also was affected by the Company’s decision to continue to produce below its capacity to optimize its inventories, which currently are above historical levels. The Company decided to discontinue the guidance of market pulp production volume in 2019, as per Material Fact disclosed to the market on 10/31/2019. The decision derives from the pulp market conditions, being in line with Suzano’s commercial strategy and aiming for the best interests of the Company and its shareholders.

The following calendar details Suzano’s scheduled maintenance downtimes:

(1) Veracel is a joint venture between Suzano (50%) and Stora Enso (50%) with total annual capacity of 1,120 thousand tons.

(2) Includes integrated capacities.

COST OF GOODS SOLD

COGS — Income Statement (R$ million) |  | 3Q19 |  | 3Q18 |  | Δ Y-o-Y |  | 2Q19 |  | Δ Q-o-Q |  | LTM 3Q19 |
Pulp |  | 4,166 |  | 4,085 |  | 2 | % | 4,435 |  | -6 | % | 15,601 |
Paper |  | 820 |  | 808 |  | 2 | % | 787 |  | 4 | % | 3,177 |
Consolidated |  | 4,986 |  | 4,892 |  | 2 | % | 5,222 |  | -5 | % | 18,778 |

COGS — Income Statement (R$/ton) |  | 3Q19 |  | 3Q18 |  | Δ Y-o-Y |  | 2Q19 |  | Δ Q-o-Q |  | LTM 3Q19 |
Pulp |  | 1,634 |  | 1,413 |  | 16 | % | 2,003 |  | -18 | % | 1,819 |
Paper |  | 2,620 |  | 2,403 |  | 9 | % | 2,620 |  | 0 | % | 2,566 |
Consolidated |  | 1,742 |  | 1,516 |  | 15 | % | 2,077 |  | -16 | % | 1,913 |

As a result of the business combination with Fibria, Suzano assessed the fair value of the assets acquired and liabilities assumed from Fibria and made the corresponding allocations to the balance sheet (Purchase Price Allocation - PPA). For the purposes of the operating analysis for 3Q19, the following information excludes the effects from the realization of the surplus value allocated to COGS in the period (whose impact was an

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additional expense of R$179 million) and on Selling Expenses (negative impact of R$207 million). For more details, please refer to page 27.

COGS — ex-PPA (R$ million) |  | 3Q19 |  | 3Q18 |  | Δ Y-o-Y |  | 2Q19 |  | Δ Q-o-Q |  | LTM 3Q19 |
Pulp |  | 3,987 |  | 4,085 |  | -2 | % | 3,271 |  | 22 | % | 12,899 |
Paper |  | 820 |  | 808 |  | 2 | % | 787 |  | 4 | % | 3,177 |
Consolidated |  | 4,808 |  | 4,892 |  | -2 | % | 4,058 |  | 18 | % | 16,076 |

COGS — ex-PPA (R$/ton) |  | 3Q19 |  | 3Q18 |  | Δ Y-o-Y |  | 2Q19 |  | Δ Q-o-Q |  | LTM 3Q19 |
Pulp |  | 1,564 |  | 1,413 |  | 11 | % | 1,477 |  | 6 | % | 1,504 |
Paper |  | 2,620 |  | 2,403 |  | 9 | % | 2,620 |  | 0 | % | 2,566 |
Consolidated |  | 1,680 |  | 1,516 |  | 11 | % | 1,614 |  | 4 | % | 1,638 |

Excluding the effect above from PPA, COGS in 3Q19 came to R$4,808 million, or R$1,680/ton. Compared to 3Q18, including the accounting allocation effect (R$106 million), COGS decreased 4%, reflecting the lower pulp sales volume, which was partially offset by the higher cash production cost, as explained above, and freight due to the higher per-ton freight cost — plant mix with higher share from Três Lagoas and regional mix with higher share of exports to Asia. The effect on COGS related to the alignment of criteria for accounting allocation mentioned is due to the asset combination with Fibria, which is mainly explained by logistics expenses, which in 2018 were allocated to “selling expenses” at Fibria and as of 1Q19 were reallocated to “logistics costs” under COGS. Analyzing COGS per ton excluding PPA, there was a 11% increase in view of the higher ex-Klabin cash COGS as a result of the higher cash production cost.

Compared to 2Q19 and also excluding the impact from PPA, the 18% increase was due to the higher pulp and paper sales volumes and the higher cash COGS ex-Klabin, which in turn was impacted by the higher cost with downtimes and the inventory turnover effect, given the higher impact from cash cost in prior quarters as a result of the higher sales volumes. In a per-ton basis, the same factors with the exception of the volume justify the 4% increase.

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OPERATING EXPENSES

Operating Expenses — Income Statement (R$ million) |  | 3Q19 |  | 3Q18 |  | Δ Y-o-Y |  | 2Q19 |  | Δ Q-o-Q |  | LTM 3Q19 |
Selling Expenses |  | 469 |  | 392 |  | 19 | % | 457 |  | 3 | % | 1,707 |
General and Administrative Expenses |  | 279 |  | 299 |  | -7 | % | 278 |  | 0 | % | 1,288 |
Total Expenses |  | 748 |  | 691 |  | 8 | % | 735 |  | 2 | % | 2,995 |
Total Expenses/Sales Volume (R$/ton) |  | 261 |  | 214 |  | 22 | % | 292 |  | -11 | % | 305 |

Operating Expenses — ex-PPA (R$ million) |  | 3Q19 |  | 3Q18 |  | Δ Y-o-Y |  | 2Q19 |  | Δ Q-o-Q |  | LTM 3Q19 |
Selling Expenses |  | 262 |  | 392 |  | -33 | % | 255 |  | 3 | % | 1,093 |
General and Administrative Expenses |  | 280 |  | 299 |  | -6 | % | 283 |  | -2 | % | 1,288 |
Total Expenses |  | 542 |  | 691 |  | -22 | % | 538 |  | 0 | % | 2,382 |
Total Expenses/Sales Volume (R$/ton) |  | 189 |  | 214 |  | -12 | % | 214 |  | -12 | % | 243 |

Excluding the effect from PPA of R$207 million on the result for 3Q19, Selling Expenses decreased 33% from 3Q18, which is basically explained by the impact of R$95 million from the alignment of criteria for accounting allocation due to the merger of Fibria shares (especially on selling expenses, which as of 1Q19 are recorded as COGS), and by the lower sales volume (-11%). Excluding the accounting allocation effect, selling expenses per ton remained stable.

Compared to 2Q19, the 3% increase is explained by the higher sales volume and the 1% appreciation in the average price of the USD against the BRL. Per-ton selling expenses, however, decreased 10% due to the

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higher dilution of fixed costs and to the sales mix (increased share of sales to Asia, where the Company has lower inland logistics costs).

Excluding the minor effect from positive PPA on administrative expenses (R$1 million), due to the closing of processes, compared to 3Q18, the 6% decrease in this item is explained by lower expenses arising from the transaction with Fibria and by the capture of synergies, which were partially offset by the effect from the accounting allocation of R$30 million (related to a portion of variable compensation and contingencies that Fibria previously recorded as “other operating income and expenses”).

Compared to 2Q19, the item remained basically stable (-1%). In the analysis of administrative expenses per ton, there was a decrease of 11% due to the increase in sales volume.

Excluding the effect from PPA, “other operating income (expenses)”, net amounted to a revenue of R$116 million in 3Q19, compared to an expense of R$14 million in 3Q18 and income of R$196 million in 2Q19. The

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variation compared to 3Q18 is mainly explained: i) by the R$128 million tax credit from the exclusion of the ICMS from the PIS and COFINS calculation base (favorable decision on tax lawsuit — for further details, please refer to Note 9 in Financial Statements); and ii) by the accounting reallocation of profit sharing paid to employees of the former Fibria from this item to administrative expenses. These factors were partially offset by the agreement with Valmet in 3Q18 (non-recurring gain in that period). Compared to 2Q19, the variation is explained in that quarter by the result from the fair value of biological assets update and the sale of judicial receivables, both in the previous quarter, partially offset by the revenue from the tax credits received, as mentioned above.

ADJUSTED EBITDA

Consolidated |  | 3Q19 |  | 3Q18 |  | Δ Y-o-Y |  | 2Q19 |  | Δ Q-o-Q |  | LTM 3Q19 |
Adjusted EBITDA (R$ million) |  | 2,396 |  | 5,387 |  | -56 | % | 3,101 |  | -23 | % | 11,808 |
Adjusted EBITDA Margin - ex-Klabin |  | 39 | % | 59 | % | -20 p.p. |  | 48 | % | -10 p.p. |  | 47 | %
Sales Volume ex-Klabin (mil ton) |  | 2,661 |  | 2,998 |  | -11 | % | 2,396 |  | 11 | % | 9,304 |
Adjusted EBITDA ex-Klabin / Ton (R$/ton) |  | 901 |  | 1,797 |  | -50 | % | 1,294 |  | -30 | % | 1,269 |

Adjusted EBITDA in 3Q19 was R$2,396 million, decreasing compared to 3Q18, mainly due to: (i) the lower average net pulp price in U.S. dollar (-29%); (ii) the lower pulp sales volume (-12%); and (iii) the higher cash production cost, with these factors partially offset in large part by the lower SG&A expenses (as explained above). The 50% decrease in per-ton EBITDA also is explained by the price factor and higher cash COGS.

Compared to 2Q19, the 23% decline in Adjusted EBITDA is mostly due to the lower net pulp price in USD (-16%) and the higher cash COGS ex-Klabin (impact from downtimes and inventory turnover effect), with these factors partially offset by the higher sales volume (+14%) and the appreciation in the average price of the USD against the BRL (+1%). The 30% lower per-ton EBITDA is basically due to the lower average net price in USD and higher cash COGS ex-Klabin.

FINANCIAL INCOME AND EXPENSES, NET

Financial Result (R$ million) |  | 3Q19 |  | 3Q18 |  | Δ Y-o-Y |  | 2Q19 |  | Δ Q-o-Q |  | LTM 3Q19 |
Financial Expenses |  | (1,045 | ) | (863 | ) | 21 | % | (1,086 | ) | -4 | % | (3,984 | )
Interest on loans and financing (local currency) |  | (355 | ) | (316 | ) | 13 | % | (345 | ) | 3 | % | (1,494 | )
Interest on loans and financing (foreign currency) |  | (597 | ) | (292 | ) | 105 | % | (538 | ) | 11 | % | (1,962 | )
Capitalized interest(1) |  | 0 |  | 2 |  | -86 | % | 1 |  | -71 | % | 2 |
Other financial expenses |  | (93 | ) | (257 | ) | -64 | % | (205 | ) | -55 | % | (530 | )
Financial Income |  | 94 |  | 232 |  | -59 | % | 150 |  | -37 | % | 752 |
Interest on financial investments |  | 91 |  | 214 |  | -57 | % | 74 |  | 23 | % | 646 |
Other financial income |  | 3 |  | 17 |  | -83 | % | 76 |  | -96 | % | 107 |
Monetary and Exchange Variations |  | (3,685 | ) | (698 | ) | 428 | % | 758 |  | — |  | (2,748 | )
Foreign exchange variations (Debt) |  | (3,627 | ) | (727 | ) | 399 | % | 647 |  | — |  | (2,436 | )
Other foreign exchange variations |  | (58 | ) | 29 |  | — |  | 112 |  | — |  | (312 | )
Derivative income (loss), net(2) |  | (1,857 | ) | (1,462 | ) | 27 | % | 257 |  | — |  | (692 | )
Cash flow hedge |  | (654 | ) | (898 | ) | -27 | % | 408 |  | — |  | 969 |
Debt hedge |  | (1,246 | ) | (555 | ) | 124 | % | (177 | ) | 604 | % | (1,670 | )
Others(3) |  | 43 |  | (9 | ) | — |  | 26 |  | 65 | % | 10 |
Net Financial Result |  | (6,493 | ) | (2,792 | ) | 133 | % | 79 |  | — |  | (6,671 | )

(1) Capitalized interest due to construction in progress.

(2) Variation in mark-to-market adjustment plus adjustments paid and received (3Q19: R$(1.806) million | 2Q19: R$257 million).

(3) Includes commodity hedge and embedded derivatives.

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Financial expenses totaled R$1,045 million in 3Q19, 4% lower than 2Q19, due to the effect of the BRL depreciation on interest expenses attached to the debt in foreign currency, partially offset by the interest rates decrease in domestic and international markets (CDI and Libor) and by the reduction on “other financial expenses” as explained below. Year-on-year, the 21% increase is due to the higher level of debt as a result of the asset combination with Fibria.

Financial revenues in 3Q19 vs. 2Q19 reduced 37% mainly due to “other financial income”, explained by lower amortization of the goodwill related to the asset combination with Fibria (for further details please refer to note 24 in the Financial Statements). The 23% upturn in “interest on financial investments” is basically due to Company’s cash position increase in the period. In relation to 3Q18, the 59% reduction is explained by the decrease of the interest on financial investments, as a result of the cash position drop, considering that in that quarter there was a strong cash concentration in order to conclude the Fibria deal (R$21.8 billion).

The line “other financial expenses” showed a 55% reduction vs. 2Q19, mainly due to the anticipated settlement of the ECA Finnvera line last quarter, which caused the total write-off of its hiring costs. The settlement of this contract in 2Q19 removed the financial covenant of Company’s debt contracts. In relation to 3Q18, the 64% decrease is due to the commitment fees recorded in that quarter, related to lines of US$4.5 billion available to the asset combination with Fibria.

Inflation adjustment and exchange variation had a negative impact of R$3,685 million on the Company’s financial result in the quarter, due to the 9% appreciation in the end-of-period price of the USD against the BRL on the foreign-denominated portion of debt (73% of the total debt). The negative accounting impact from exchange variation on the foreign-denominated debt has a cash impact only on the respective maturities.

The derivatives operations results were negative in the amount of R$1,857 million in 3Q19, mainly as result of the debt hedging. The mark to market variation on derivatives can be largely explained by: (i) end-of-period USD appreciation vs. the BRL on the current contracts (negative change); and (ii) due to the Pre, Cupom and Libor negative variations. The mark-to-market of the financial derivative instruments on September 30, 2019 was negative in the amount of R$3,060 million, vs. negative mark-to-market of R$1,254 million on June 30, 2019, resulting in a negative variation of R$1,806 million.

The result from operations with derivatives was negative at R$1,857 million, impacted by the high volatility of the financial markets in the quarter, which caused a substantial variation in the mark-to-market (MtM) adjustment of derivative operations. The MtM variation is mainly explained by: 1) the variation in the Fixed-rate, Coupon and Libor curves on operations (negative variation); and 2) the effect from the appreciation in the end-of-period price of the USD against the BRL on existing agreements (negative variation). The mark-to-market adjustment of derivative instruments on September 30, 2019 was an expense of R$3,060 million, compared to the R$1,254 million expense at June 30, 2019, representing a negative variation of R$1,806 million.

Due to the aforementioned factors, the net financial expense was R$6,493 million in 3Q19, compared to net financial income of R$79 million in 2Q19 and the net financial loss of R$2,791 million in 3Q18.

DERIVATIVE TRANSACTIONS

Suzano carries out derivatives transactions exclusively for hedging purposes. The following table reflects the position of derivative hedging instruments at September 30, 2019:

Hedge |  | Notional (USD million) |  | Fair Value (R$ million) |
Debt |  | 6,543 |  | (2,881 | )
Cash flow |  | 3,765 |  | (492 | )
Others(1) |  | 693 |  | 313 |
Total |  | 11,001 |  | (3,060 | )

(1) Refer to note 4.3 of the Financial Statements for further details and fair value sensitivity analysis.

(2) Includes commodity hedge and embedded derivatives.

The Company’s currency exposure policy seeks to minimize the volatility of its cash generation and to impart greater flexibility to its cash flow management. Currently, the policy stipulates that surplus dollars may be

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partially hedged (up to 75% of exchange variation exposure over the next 18 months) using plain vanilla instruments, such as Zero Cost Collars (ZCC) and Non-deliverable Forwards (NDF).

ZCC transactions establish minimum and maximum limits for the exchange rate that minimize adverse effects in the event of significant appreciation in the BRL. If the exchange rate is within such limits, the Company neither pays nor receives any financial adjustments. Therefore, the Company is protected in scenarios of significant BRL appreciation. However, these transactions also limit potential gains in scenarios of extreme BRL depreciation. The characteristics allows for capturing greater benefits from export revenue in a potential scenario of USD appreciation within the range contracted. The current scenario of volatility in the BRL/USD exchange rate made this strategy more adequate for protecting the cash flow of the Company, which is constantly monitoring the market and analyzing the attractiveness at any given moment of any full or partial reversal in the transaction.

At September 30, 2019, the outstanding notional value of operations involving forward USD sales through ZCCs was US$3,765 million, whose maturities are distributed from October 2019 to February 2021, with an average forward rate ranging from R$ 3.85 to R$4.33. In 3Q19, results from ZCC transactions posted a loss of R$654 million. The mark-to-market adjustment (fair value) of ZCC transactions was negative R$492 million at the end of the quarter.

Cash Flow Hedge |  | Maturity |  | Strike Range |  | Notional (US$ million) |
Zero-Cost Collars |  | 4Q19 |  | 3.72 – 4.13 |  | 1,085 |
Zero-Cost Collars |  | 1Q20 |  | 3.87 – 4.28 |  | 940 |
Zero-Cost Collars |  | 2Q20 |  | 3.86 – 4.19 |  | 695 |
Zero-Cost Collars |  | 3Q20 |  | 3.93 – 4.49 |  | 705 |
Zero-Cost Collars |  | 4Q20 |  | 4.02 – 4.42 |  | 200 |
Zero-Cost Collars |  | 1Q21 |  | 3.92 – 6.07 |  | 140 |
Total |  |  |  | 3.85 – 4.33 |  | 3,765 |

The Company also uses currency and interest rate swaps to mitigate the effects from exchange and interest rate variations on the balance of its debt and on its cash flow. Contracts swapping different interest rates and inflation indexes may be entered into as a way to mitigate the mismatch between financial assets and liabilities.

On September 30, 2019, the Company had outstanding (notional value) US$6,543 million distributed as shown in the table below. In 3Q19, debt hedge transactions posted a loss of R$1,246 million. The mark-to-market adjustment (fair value) of such operations was negative R$2,881 million at the end of the quarter.

Debt Hedge |  | Maturity |  | Currency |  | Notional (US$ million) |
Swap (PRÉ x USD) |  | 2024 |  | USD |  | 350 |
Swap (CDI x USD) |  | 2026 |  | USD |  | 3,116 |
Swap (IPCA x CDI)(1) |  | 2023 |  | BRL |  | 203 |
Swap (IPCA x USD) |  | 2023 |  | USD |  | 121 |
Swap (LIBOR x USD) |  | 2024 |  | USD |  | 2,754 |
Total |  |  |  |  |  | 6,543 |

(1) Translated at the closing exchange rate on 9/30/2019 of 4.1644

Forestry partnership agreements and standing-timber supply agreements entered into on December 30, 2013 by former Fibria Celulose S.A. are denominated in USD per cubic meter of standing timber, adjusted by U.S. inflation measured by the Consumer Price Index (CPI), which is not related to inflation in the economic environments where the forests are located, which therefore constitutes an embedded derivative. Such instrument, which is presented in the table below, consists of a swap contract with the short leg consisting of the variations in the U.S. CPI during the period of the aforementioned agreements. At September 30, 2019, the outstanding (notional) value of the operation was US$691 million. The result from the swap was a gain of R$44 million in 3Q19. The mark-to-market adjustment (fair value) of such operations was as gain of R$312 million at the end of the quarter.

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Embedded Derivative |  | Maturity |  | Index |  | Notional (US$ million) |
Embedded Derivative |  | 2035 |  | Fixed USD – USD US-CPI |  | 691 |
Total |  |  |  |  |  | 691 |

The cash effect due to the settlement of derivatives in 3Q19 was R$51 million, R$24 million related to cash flow hedge (ZCC) and R$29 of debt hedge.

NET INCOME (LOSS)

In 3Q19, the Company posted a net loss of R$3,460 million, compared to net income of R$1,022 million in 3Q18 and of R$700 million in 2Q19. The variation in relation to 3Q18 is mainly explained by the greater impact of exchange variation in financial results, from the translation of gross debt from USD (94% pegged to the USD) to BRL and the effect of exchange rate hedging instruments. The second important factor corresponds to the lower operating result, mainly explained by the decrease in net revenues (impacts of pulp price and volume sold, as explained above).

Compared to 2Q19, the variation is more concentrated in the negative financial result, largely explained by the exchange variation on debt and hedge instruments, against a positive financial result in the previous quarter.

INDEBTEDNESS

Debt (R$ million) |  | 09/30/2019 |  | 09/30/2018 |  | Δ Y-o-Y |  | 06/30//2019 |  | Δ Q-o-Q |
Local Currency |  | 17,278 |  | 17,945 |  | -4 | % | 17,221 |  | 0 | %
Short Term |  | 2,620 |  | 1,836 |  | 43 | % | 2,227 |  | 18 | %
Long Term |  | 14,658 |  | 16,109 |  | -9 | % | 14,994 |  | -2 | %
Foreign Currency |  | 46,743 |  | 27,225 |  | 72 | % | 43,259 |  | 8 | %
Short Term |  | 2,472 |  | 2,220 |  | 11 | % | 2,466 |  | 0 | %
Long Term |  | 44,271 |  | 25,005 |  | 77 | % | 40,793 |  | 9 | %
Gross Debt |  | 64,021 |  | 45,169 |  | 42 | % | 60,480 |  | 6 | %
(-) Cash and financial statements |  | 8,790 |  | 21,778 |  | -60 | % | 7,972 |  | 10 | %
Net Debt |  | 55,231 |  | 23,391 |  | 136 | % | 52,508 |  | 5 | %
Net Debt/Adjusted EBITDA(1) (x) — R$ |  | 4.7x |  | 1.5x |  | 3.2x |  | 3.5x |  | 1.2x |
Net Debt/EBITDA Ajustado¹ (x) — US$ |  | 4.3x |  | 1.3x |  | 3.0x |  | 3.6x |  | 0.7x |

(1) Excluding non-recurring items.

On September 30, 2019, gross debt stood at R$64 billion (US$15 billion) and was composed of 92% long-term maturities and 8% short-term maturities, with 73% denominated in foreign currency and 27% in local currency. The percentage of gross debt denominated in foreign currency, considering the effect from debt

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hedge, was 94%. Gross debt increased by 6% compared to 2Q19 (R$3.5 billion), reflecting the effect from exchange variation on debt, in turn due to the depreciation of the BRL against the USD (3Q19: 4.16 vs. 2Q19: 3.83). Compared to 3Q18, the increase in gross debt reflects mainly the funds raised for the asset combination with Fibria.

Suzano contracts debt in foreign currency as a natural hedge, since net operating cash generation is denominated in foreign currency. This structural exposure allows it to contract loans and financing instruments in USD to match financing payments with receivable flows from sales.

* Corresponding mainly to transaction costs (emission, fund raising, etc.) and impacts from surplus value resulting from the operation with Fibria.

At September 30, 2019, the total average cost of debt in USD was 4.8% p.a., considering the debt in BRL adjusted by the market swap curve (stable vs. 2Q19). The average term of total debt at the end of the period was 85 months (vs. 87 months in June 2019).

(1) Considers the portion of the debt with swap in foreign currency. The original debt was composed 73% of USD and 27% of BRL.

Cash and cash equivalents at September 30, 2019 was R$8,790 million, 10% higher than the previous quarter, 71% of which was invested in local currency, in government bonds and fixed income, and the remainder in short-term investments abroad.

The company maintains two stand-by credit facilities in the aggregate amount of R$3,082 million available through 2024, with one facility denominated in local currency in the amount of R$1 billion at a cost of CDI plus 2.5% p.a. when tapped (while not in use the cost in Brazilian real is 0.40% p.a.) and one facility in foreign currency in the amount of US$500 million at the cost of 3M Libor plus 1.0% p.a., potentially reaching 2.50% depending on the Company’s credit rating, when tapped (while not in use, the cost in USD is 0.30% p.a.). These funds, although untapped, help to improve the company’s liquidity conditions. As a result, the current cash position of R$8,790 million plus this line of R$3,082 million amounts to a readily available cash position of R$11,872 million (US$2,851 million). Accordingly, the ratio of cash (including these stand-by credit facilities) to short-term debt stood at 4.7 at September 30, 2019.

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Net debt stood at R$55.2 billion (US$13.3 billion) on September 30, 2019, compared to R$52.5 billion (US$13.7 billion) on June 30, 2019. The increase in net debt in BRL is mainly due to the appreciation in the USD against the BRL.

The breakdown of the gross debt between trade and non trade finance on September 30, 2019 is shown below:

|  | 2019 |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  | 2024 |  | 2025 em diante |  | Total |
Trade Finance |  | 86 | % | 8 | % | 54 | % | 62 | % | 80 | % | 54 | % | 7 | % | 33 | %
Non Trade Finance |  | 14 | % | 92 | % | 46 | % | 38 | % | 20 | % | 46 | % | 93 | % | 67 | %

The ratio of net debt to Adjusted EBITDA in BRL stood at 4.7 on September 30, 2019, compared to 3.5 at the end of 2Q19. In USD, the ratio of net debt to Adjusted EBITDA stood at 4.3 on September 30, 2019, compared to 3.6 at the end of 2Q19.

CAPITAL EXPENDITURE

In 3Q19, capital investments (cash basis) amounted to R$1,593 million, down 2% from 3Q18, mainly due to lower expenses with modernization, which was partially offset by the higher expenditures with the acquisition of forest assets from Duratex and with the investments in port operations. Compared to 2Q19, the increase was mainly due to higher expenses with land and forests (compliance with Duratex contract). The investments in Land and Forests, which amounted to R$541 million, seek to capture gains in the current operations and to create optionality for business growth.

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Investiments (R$ million) |  | 3Q19 |  | 3Q18 |  | Δ Y-o-Y |  | 2Q19 |  | Δ Q-o-Q |  | 9M19 |  | Guidance 2019 |
Sustaining |  | 881 |  | 939 |  | -6 | % | 875 |  | 1 | % | 2,736 |  | 3,813 |
Industrial Maintenance |  | 211 |  | 185 |  | 14 | % | 156 |  | 35 | % | 534 |  | 767 |
Forestry Maintenance |  | 630 |  | 749 |  | -16 | % | 695 |  | -9 | % | 2.112 |  | 2,953 |
Other |  | 40 |  | 5 |  | 705 | % | 24 |  | 70 | % | 90 |  | 93 |
Expansion and Modernization |  | 69 |  | 289 |  | -76 | % | 46 |  | 50 | % | 194 |  | 387 |
Land and Forestry |  | 541 |  | 363 |  | 49 | % | 387 |  | 40 | % | 1,205 |  | 1,349 |
Port Terminals |  | 102 |  | 33 |  | 208 | % | 70 |  | 47 | % | 263 |  | 389 |
Total |  | 1,593 |  | 1,624 |  | -2 | % | 1,377 |  | 16 | % | 4,398 |  | 5,938 |

OPERATING CASH GENERATION

(R$ million) |  | 3Q19 |  | 3Q18 |  | Δ Y-o-Y |  | 2Q19 |  | Δ Q-o-Q |  | LTM 3Q19 |
Adjusted EBITDA |  | 2,396 |  | 5,387 |  | -56 | % | 3,101 |  | -23 | % | 11,808 |
Maintenance Capex(1) |  | (881 | ) | (939 | ) | -6 | % | (875 | ) | 1 | % | (3,821 | )
Operating Cash Flow |  | 1,515 |  | 4,448 |  | -66 | % | 2,226 |  | -32 | % | 7,987 |
Operating Cash Flow (R$/ton) |  | 569 |  | 1,483 |  | -62 | % | 929 |  | -39 | % | 858 |

(1) Cash basis.

Operating cash generation, measured by Adjusted EBITDA less sustaining Capex (cash basis), amounted to R$1,515 million in 3Q19. The decrease compared to 3Q18 reflected mainly the lower net price of pulp in USD (-16%) and the lower pulp sales volume. Compared to 2Q19, the decline reflects the lower adjusted EBITDA, which in turn is explained by the lower net pulp price, partially offset by higher sales volumes. The per ton operating cash flow performance is also explained by the same factors.

IFRS 16

The Company first adopted CPC 06 (R2) / IFRS 16 as of January 1, 2019. As a result, it recognized on January 1, 2019 the amounts corresponding to the right-of-use of current contracts, in amounts equivalent to the present value of obligations assumed with its counterparties. These balances will be amortized over the terms of the leases. Upon adoption of the standard, the Company recognized lease liabilities for contracts that meet the definition of lease, in the amount of R$4,019 million. The updated balance of liabilities on September 30, 2019 was R$4,534 million, while the updated balance on the same date of “Rights of use over lease contracts” under assets was R$4,360 million. For more details, see Note 18 to the 3Q19 Quarterly Financial Statements (ITR).

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SYNERGIES

On March 26, 2019, the Company announced its projected synergy gains from the business combination with Fibria Celulose S.A. Suzano expects to gradually capture from 2019 to 2021 operating synergies estimated at R$800 to R$900 million per year (before taxes), and on a recurring basis as from 2021, with a reduction in costs, expenses and capital expenditures from the areas of procurement, forest, industrial, logistics, sales, administrative and personnel, and expects to capture tax synergies that result in tax deductions of around R$2.0 billion per year, from the merger of Fibria into Suzano.

The estimated amount of operating synergies mentioned above does not include the costs for implementing the initiatives linked to these synergies, which are estimated by the Company at approximately R$200 million by 2021, 50% of which is planned for 2019. The synergies continue to be captured in line with the planning.

EVENTS AFTER THE REPORTING PERIOD

On October 17, 2019, the Company announced to the market the settlement of the issuance of debentures not convertible into shares, unsecured, in the total amount of R$750 million, with issuance date of September 15, 2019, term of 9 years and remuneration of 100% CDI + spread of 1.20 a.a.

CAPITAL MARKETS

On September 30, 2019, Suzano’s stock was quoted at R$33.65/share (SUZB3) and US$8.07 (SUZ). The Company’s stock is listed on the Novo Mercado, the trading segment of the São Paulo Exchange (B3 — Brasil, Bolsa e Balcão) with the highest corporate governance standards, and also is traded on the New York Stock Exchange (NYSE) - Level II.

Source: Bloomberg.

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On September 30, 2019, the Company’s share capital was represented by 1,361,263,584 common shares, of which 12,042,004 were held in Treasury. Suzano’s market capitalization stood at R$45.8 billion on September 30, 2019. In 3Q19, the free-float corresponded to 53.3% of the total capital.

FIXED INCOME

|  | Unit |  | Sep/18 |  | Jun/19 |  | Sep/19 |  | Δ Y-o-Y |  | Δ Q-o-Q |
Suzano 2021 — Price |  | USD/k |  | 103.6 |  | 104.5 |  | 103.8 |  | 0,2 | % | -0,8 | %
Suzano 2021 — Yield |  | % |  | 4.2 |  | 2.9 |  | 2.9 |  | -1,3 |  | 0,1 |
Fibria 2024 — Price |  | USD/k |  | 100.6 |  | 106.4 |  | 106.9 |  | 6,2 | % | 0,5 | %
Fibria 2024 — Yield |  | % |  | 5.1 |  | 3.8 |  | 3.6 |  | -1,5 |  | -0,2 |
Fibria 2025 — Price |  | USD/k |  | 92.7 |  | 100.8 |  | 102.1 |  | 10,1 | % | 1,3 | %
Fibria 2025 — Yield |  | % |  | 5.4 |  | 3.8 |  | 3.6 |  | -1,8 |  | -0,3 |
Suzano 2026 — Price |  | USD/k |  | 100.5 |  | 109.1 |  | 110.6 |  | 10,1 | % | 1,4 | %
Suzano 2026 — Yield |  | % |  | 5.7 |  | 4.2 |  | 3.9 |  | -1,7 |  | -0,3 |
Fibria 2027 — Price |  | USD/k |  | 99.2 |  | 107.4 |  | 107.7 |  | 8,5 | % | 0,2 | %
Fibria 2027 — Yield |  | % |  | 5.6 |  | 4.3 |  | 4.3 |  | -1,3 |  | -0,1 |
Suzano 2029 — Price |  | USD/k |  | 100.0 |  | 109.1 |  | 108.8 |  | 8,8 | % | -0,2 | %
Suzano 2029 — Yield |  | % |  | 6.0 |  | 4.8 |  | 4.8 |  | -1,2 |  | 0,0 |
Suzano 2030 — Price |  | USD/k |  | 0.0 |  | 101.1 |  | 102.5 |  | — |  | 1,4 | %
Suzano 2030 — Yield |  | % |  | 0.0 |  | 4.9 |  | 4.7 |  | 4,7 |  | -0,2 |
Suzano 2047 — Price |  | USD/k |  | 103.9 |  | 113.6 |  | 114.7 |  | 10,3 | % | 0,9 | %
Suzano 2047 — Yield |  | % |  | 6.7 |  | 6.0 |  | 5.9 |  | -0,8 |  | -0,1 |
Treasury 10 years |  | % |  | 3.1 |  | 2.0 |  | 1.7 |  | -1,4 |  | -0,3 |

Note: Senior Notes issued with face value of 100 USD/k

RISK RATING

Agency |  | National Scale |  | Global Scale |  | Outlook |
Fitch Ratings |  | AAA |  | BBB- |  | Negative |
Standard & Poor’s |  | brAAA |  | BBB- |  | Stable |
Moody’s |  | Aaa.br |  | Ba1 |  | Stable |

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UPCOMING EVENTS

Earnings Conference Call (3Q19)

Date: November 1, 2019 (Friday)

Portuguese (simultaneous translation) | English
10:00 a.m. (Brasília time) | 10 a.m. (Brasília time)
9:00 a.m. (New York time) | 9 a.m. (New York time)
2 p.m. (London time) | 2 p.m. (London time)
Tel: +55 (11) 4003-4860 | Tel: +1 866 890 2584 (access code: Suzano)

Please connect 10 minutes before the conference call is scheduled to begin.

The conference call will be held in English, feature a slide presentation and be transmitted simultaneously via webcast. The access links will be available on the Company’s Investor Relations website (www.suzano.com.br/ir).

If you are unable to participate, the webcast link will be available for future consultation on the Investor Relations website of Suzano S.A.

IR CONTACTS

Marcelo Bacci

Camila Nogueira

Roberto Costa

Luiz Otavio Souza Fonseca

Tel: +55 (11) 3503-9330

ri@suzano.com.br

www.suzano.com.br/ir

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APPENDICES

APPENDIX 1(2) — Operating Data

Revenue breakdown (R$ ‘000) |  | 3Q19 |  | 3Q18 |  | Δ Y-o-Y |  | 2Q19 |  | Δ Q-o-Q |  | 9M19 |  | 9M18 |  | Δ Y-o-Y |
Exports |  | 5,277,946 |  | 8,178,625 |  | -35 | % | 5,402,279 |  | -2 | % | 15,066,030 |  | 20,315,087 |  | -26 | %
Pulp |  | 4,892,173 |  | 7,817,554 |  | -37 | % | 4,975,200 |  | -2 | % | 13,963,834 |  | 19,350,626 |  | -28 | %
Paper |  | 385,774 |  | 361,071 |  | 7 | % | 427,079 |  | -10 | % | 1,102,196 |  | 964,461 |  | 14 | %
Domestic Market |  | 1,321,963 |  | 1,637,131 |  | -19 | % | 1,262,800 |  | 5 | % | 3,897,960 |  | 4,070,350 |  | -4 | %
Pulp |  | 448,042 |  | 681,549 |  | -34 | % | 478,569 |  | -6 | % | 1,432,137 |  | 1,747,011 |  | -18 | %
Paper |  | 873,921 |  | 955,582 |  | -9 | % | 784,231 |  | 11 | % | 2,465,823 |  | 2,323,339 |  | 6 | %
Total Net Revenue |  | 6,599,909 |  | 9,815,756 |  | -33 | % | 6,665,082 |  | -1 | % | 18,963,990 |  | 24,385,437 |  | -22 | %
Pulp |  | 5,340,215 |  | 8,499,103 |  | -37 | % | 5,453,769 |  | -2 | % | 15,395,971 |  | 21,097,637 |  | -27 | %
Paper |  | 1,259,695 |  | 1,316,653 |  | -4 | % | 1,211,310 |  | 4 | % | 3,568,019 |  | 3,287,800 |  | 9 | %

Sales Volume (tons) |  | 3Q19 |  | 3Q18 |  | Δ Y-o-Y |  | 2Q19 |  | Δ Q-o-Q |  | 9M19 |  | 9M18 |  | Δ Y-o-Y |
Exports |  | 2,442,076 |  | 2,715,039 |  | -10 | % | 2,126,088 |  | 15 | % | 6,172,893 |  | 7,439,425 |  | -17 | %
Pulp |  | 2,340,238 |  | 2,625,025 |  | -11 | % | 2,013,287 |  | 16 | % | 5,881,145 |  | 7,166,843 |  | -18 | %
Paper |  | 101,838 |  | 90,014 |  | 13 | % | 112,801 |  | -10 | % | 291,749 |  | 272,583 |  | 7 | %
Paperboard |  | 17,673 |  | 13,594 |  | 30 | % | 15,691 |  | 13 | % | 44,304 |  | 40,205 |  | 10 | %
Printing & Writing |  | 84,166 |  | 76,420 |  | 10 | % | 97,110 |  | -13 | % | 247,445 |  | 232,377 |  | 6 | %
Domestic Market |  | 420,143 |  | 510,314 |  | -18 | % | 388,334 |  | 8 | % | 1,207,051 |  | 1,388,714 |  | -13 | %
Pulp |  | 208,929 |  | 266,079 |  | -21 | % | 200,598 |  | 4 | % | 610,989 |  | 760,724 |  | -20 | %
Paper |  | 211,214 |  | 244,235 |  | -14 | % | 187,736 |  | 13 | % | 596,062 |  | 627,990 |  | -5 | %
Paperboard |  | 32,173 |  | 36,555 |  | -12 | % | 32,866 |  | -2 | % | 95,214 |  | 96,715 |  | -2 | %
Printing & Writing |  | 150,248 |  | 177,645 |  | -15 | % | 133,459 |  | 13 | % | 429,028 |  | 469,467 |  | -9 | %
Other paper(1) |  | 28,793 |  | 30,034 |  | -4 | % | 21,410 |  | 34 | % | 71,820 |  | 61,809 |  | 16 | %
Total Sales Volume |  | 2,862,219 |  | 3,227,128 |  | -11 | % | 2,514,422 |  | 14 | % | 7,379,945 |  | 8,831,241 |  | -16 | %
Pulp |  | 2,549,167 |  | 2,891,104 |  | -12 | % | 2,213,885 |  | 15 | % | 6,492,134 |  | 7,927,566 |  | -18 | %
Paper |  | 313,052 |  | 336,024 |  | -7 | % | 300,537 |  | 4 | % | 887,811 |  | 903,674 |  | -2 | %
Paperboard |  | 49,846 |  | 50,149 |  | -1 | % | 48,557 |  | 3 | % | 139,518 |  | 136,920 |  | 2 | %
Printing & Writing |  | 234,413 |  | 254,066 |  | -8 | % | 229,814 |  | 2 | % | 676,473 |  | 701,844 |  | -4 | %
Other paper(1) |  | 28,793 |  | 31,809 |  | -9 | % | 22,166 |  | 30 | % | 71,820 |  | 64,910 |  | 11 | %

Average net price (R$/ton) |  | 3Q19 |  | 3Q18 |  | Δ Y-o-Y |  | 2Q19 |  | Δ Q-o-Q |  | 9M19 |  | 9M18 |  | Δ Y-o-Y |
Exports |  | 2,161 |  | 3,012 |  | -28 | % | 2,541 |  | -15 | % | 2,441 |  | 2,731 |  | -11 | %
Pulp |  | 2,090 |  | 2,978 |  | -30 | % | 2,471 |  | -15 | % | 2,374 |  | 2,700 |  | -12 | %
Paper |  | 3,788 |  | 4,011 |  | -6 | % | 3,786 |  | 0 | % | 3,778 |  | 3,538 |  | 7 | %
Domestic Market |  | 3,146 |  | 3,208 |  | -2 | % | 3,252 |  | -3 | % | 3,229 |  | 2,931 |  | 10 | %
Pulp |  | 2,144 |  | 2,561 |  | -16 | % | 2,386 |  | -10 | % | 2,344 |  | 2,297 |  | 2 | %
Paper |  | 4,138 |  | 3,913 |  | 6 | % | 4,177 |  | -1 | % | 4,137 |  | 3,700 |  | 12 | %
Total |  | 2,306 |  | 3,042 |  | -24 | % | 2,651 |  | -13 | % | 2,570 |  | 2,761 |  | -7 | %
Pulp |  | 2,095 |  | 2,940 |  | -29 | % | 2,463 |  | -15 | % | 2,371 |  | 2,661 |  | -11 | %
Paper |  | 4,024 |  | 3,918 |  | 3 | % | 4,030 |  | 0 | % | 4,019 |  | 3,638 |  | 10 | %

24

Average net price (US$/ton) |  | 3Q19 |  | 3Q18 |  | Δ Y-o-Y |  | 2Q19 |  | Δ Q-o-Q |  | 9M19 |  | 9M18 |  | Δ Y-o-Y |
Exports |  | 544 |  | 761 |  | -29 | % | 648 |  | -16 | % | 628 |  | 758 |  | -17 | %
Pulp |  | 526 |  | 752 |  | -30 | % | 631 |  | -17 | % | 611 |  | 749 |  | -19 | %
Paper |  | 953 |  | 1,013 |  | -6 | % | 966 |  | -1 | % | 972 |  | 982 |  | -1 | %
Domestic Market |  | 792 |  | 810 |  | -2 | % | 830 |  | -5 | % | 831 |  | 814 |  | 2 | %
Pulp |  | 540 |  | 647 |  | -17 | % | 609 |  | -11 | % | 603 |  | 637 |  | -5 | %
Paper |  | 1,041 |  | 988 |  | 5 | % | 1,066 |  | -2 | % | 1,064 |  | 1,027 |  | 4 | %
Total |  | 580 |  | 768 |  | -24 | % | 676 |  | -14 | % | 661 |  | 766 |  | -14 | %
Pulp |  | 527 |  | 743 |  | -29 | % | 629 |  | -16 | % | 610 |  | 739 |  | -17 | %
Paper |  | 1,013 |  | 990 |  | 2 | % | 1,028 |  | -2 | % | 1,034 |  | 1,010 |  | 2 | %

(1) Paper from other manufacturers sold by the distributor and tissue paper,

(2) Data for the comparison periods of 2018 (3Q18, 9M18 and LTM) are based on the simple sum or weighted average of Suzano + Fibria,

FX Rate R$/US$ |  | 3Q19 |  | 3Q18 |  | Δ Y-o-Y |  | 2Q19 |  | Δ Q-o-Q |
Closing |  | 4.16 |  | 4.00 |  | 4 | % | 3.83 |  | 9 | %
Average |  | 3.97 |  | 3.96 |  | 0 | % | 3.92 |  | 1 | %

25

APPENDIX 2(2) — Consolidated Statement of Income and Goodwill Amortization

Income Statement (R$ ‘000) |  | 3Q19 |  | 3Q18 |  | Δ Y-o-Y |  | 2Q19 |  | Δ Q-o-Q |  | 9M19 |  | 9M18 |  | Δ Y-o-Y |
Net Revenue |  | 6,599,909 |  | 9,841,611 |  | -33 | % | 6,665,082 |  | -1 | % | 18,963,990 |  | 24,459,920 |  | -22 | %
Cost of Goods Sold |  | (4,986,414 | ) | (4,892,335 | ) | 2 | % | (5,222,119 | ) | -5 | % | (14,933,426 | ) | (12,977,782 | ) | 15 | %
Gross Profit |  | 1,613,495 |  | 4,949,276 |  | -67 | % | 1,442,963 |  | 12 | % | 4,030,564 |  | 11,482,138 |  | -65 | %
Gross Margin |  | 24.4 | % | 50.3 | % | -26 p.p. |  | 21.6 | % | 3 p.p. |  | 21.3 | % | 46.9 | % | -26 p.p. |
Operating Expense/Income |  | (616,180 | ) | (700,767 | ) | -12 | % | (559,902 | ) | 10 | % | (1,965,376 | ) | (1,946,967 | ) | 1 | %
Selling Expenses |  | (469,014 | ) | (392,486 | ) | 19 | % | (456,981 | ) | 3 | % | (1,367,298 | ) | (1,071,438 | ) | 28 | %
General and Administrative Expenses |  | (278,976 | ) | (298,543 | ) | -7 | % | (278,031 | ) | 0 | % | (887,772 | ) | (817,388 | ) | 9 | %
Other Operating Income (Expenses) |  | 116,132 |  | (13,876 | ) | -937 | % | 171,199 |  | -32 | % | 268,447 |  | (62,692 | ) | -528 | %
Equity Equivalence |  | 15,678 |  | 4,138 |  | 279 | % | 3,911 |  | 301 | % | 21,247 |  | 4,551 |  | 367 | %
EBIT |  | 997,315 |  | 4,248,509 |  | -77 | % | 883,061 |  | 13 | % | 2,065,188 |  | 9,535,187 |  | -78 | %
Depreciation, Amortization & Depletion |  | 1,514,089 |  | 1,163,264 |  | 30 | % | 2,327,703 |  | -35 | % | 6,313,082 |  | 3,254,448 |  | 94 | %
EBITDA |  | 2,511,404 |  | 5,411,773 |  | -54 | % | 3,210,764 |  | -22 | % | 8,378,270 |  | 12,789,635 |  | -34 | %
EBITDA Margin (%) |  | 38.1 | % | 55.0 | % | -17 p.p. |  | 48.2 | % | -10 p.p. |  | 44.2 | % | 52.3 | % | -8 p.p. |
Adjusted EBITDA(1) |  | 2,396,426 |  | 5,387,027 |  | -56 | % | 3,100,521 |  | -23 | % | 8,258,189 |  | 12,811,064 |  | -36 | %
Adjusted EBITDA Margin(1) |  | 36.3 | % | 54.7 | % | -18 p.p. |  | 46.5 | % | -10 p.p. |  | 43.5 | % | 52.4 | % | -9 p.p. |
Net Financial Result |  | (6,493,278 | ) | (2,791,151 | ) | 133 | % | 79,065 |  | -8313 | % | (8,350,355 | ) | (9,427,613 | ) | -11 | %
Financial Expenses |  | 108,143 |  | 231,722 |  | -53 | % | 149,607 |  | -28 | % | 393,374 |  | 465,797 |  | -16 | %
Financial Revenues |  | (1,058,484 | ) | (862,378 | ) | 23 | % | (1,086,192 | ) | -3 | % | (3,123,771 | ) | (2,080,375 | ) | 50 | %
Exchange Rate Variation |  | (3,685,540 | ) | (698,257 | ) | 428 | % | 758,223 |  | -586 | % | (3,383,054 | ) | (3,445,887 | ) | -2 | %
Net Proceeds Generated by Derivatives |  | (1,857,397 | ) | (1,462,075 | ) | 27 | % | 257,427 |  | -822 | % | (2,236,904 | ) | (4,366,985 | ) | -49 | %
Earnings Before Taxes |  | (5,495,963 | ) | 1,457,373 |  | -486 | % | 962,126 |  | -685 | % | (6,285,167 | ) | 107,573 |  | -6062 | %
Income and Social Contribution Taxes |  | 2,035,728 |  | (435,433 | ) | -568 | % | (262,278 | ) | -876 | % | 2,295,649 |  | 283,579 |  | 710 | %
Net Income (Loss) |  | (3,460,235 | ) | 1,021,925 |  | -439 | % | 699,848 |  | -594 | % | (3,989,518 | ) | 391,153 |  | -1120 | %
Net Margin |  | -52.4 | % | 10.4 | % | -63 p.p. |  | 10.5 | % | -63 p.p. |  | -21.0 | % | 1.6 | % | -23 p.p. |

(1) Excluding non-recurring items,

(2) Data for the comparison periods of 2018 (3Q18, 9M18 and LTM) are based on the simple sum or weighted average of Suzano + Fibria,

Goodwill amortization - PPA (R$ thousand) |  | 3Q19 |  | 3Q18 |  | Δ Y-o-Y |  | 2Q19 |  | Δ Q-o-Q |
COGS |  | (180,036 | ) | — |  | — |  | (1,165,069 | ) | -85 | %
Selling Expenses |  | (206,700 | ) | — |  | — |  | (202,085 | ) | 2 | %
General and administrative expenses |  | 794 |  | — |  | — |  | 5,404 |  | -85 | %
Other operational revenues (expenses) |  | (6,820 | ) | — |  | — |  | (1,596 | ) | 327 | %
Financial results |  | (31,143 | ) | — |  | — |  | 102,707 |  | -130 | %

26

APPENDIX 3(1) — Consolidated Balance Sheet

Assets (R$ ´000) |  | 09/30/2019 |  | 06/30/2019 |  | 09/30/2018 |
Current Assets |  |  |  |  |  |  |
Cash and cash equivalents |  | 3,714,646 |  | 4,104,641 |  | 6,651,586 |
Financial investments |  | 4,897,585 |  | 3,692,806 |  | 14,956,430 |
Trade accounts receivable |  | 2,058,731 |  | 2,895,714 |  | 4,907,940 |
Inventories |  | 6,258,364 |  | 7,365,938 |  | 4,493,721 |
Recoverable taxes |  | 1,235,668 |  | 1,303,898 |  | 2,016,922 |
Derivative financial instruments |  | 239,161 |  | 569,297 |  | 79,310 |
Other assets |  | 417,223 |  | 472,652 |  | 1,037,390 |
Total Current Assets |  | 18,821,378 |  | 20,404,946 |  | 34,143,299 |
Non-Current Assets |  |  |  |  |  |  |
Recoverable taxes |  | 557,373 |  | 478,232 |  | 693,879 |
Financial investments |  | 177,453 |  | 174,699 |  | 170,220 |
Derivative financial instruments |  | 677,305 |  | 823,476 |  | 336,446 |
Biological assets |  | 10,280,967 |  | 10,094,235 |  | 9,475,035 |
Investments |  | 279,263 |  | 228,381 |  | 199,038 |
Property, plant and equipment |  | 41,500,872 |  | 41,744,825 |  | 32,515,678 |
Right of use |  | 4,359,907 |  | 4,245,797 |  | — |
Intangible |  | 17,968,738 |  | 18,212,469 |  | 4,901,731 |
Other assets |  | 4,723,820 |  | 2,604,885 |  | 1,829,231 |
Total Non-Current Assets |  | 80,525,698 |  | 78,606,999 |  | 50,121,258 |
Total Assets |  | 99,347,076 |  | 99,011,945 |  | 84,264,557 |

Liabilities and Equity (R$ ´000) |  | 09/30/2019 |  | 06/30/2019 |  | 09/30/2018 |
Current Liabilities |  |  |  |  |  |  |
Trade accounts payable |  | 3,325,724 |  | 3,986,488 |  | 3,992,346 |
Loans, financing and debentures |  | 5,091,236 |  | 4,693,057 |  | 4,055,703 |
Lease liabilities |  | 587,910 |  | 536,891 |  | — |
Derivative financial instruments |  | 1,111,477 |  | 615,183 |  | 417,600 |
Taxes payable |  | 212,378 |  | 245,000 |  | 317,073 |
Payroll and charges |  | 439,615 |  | 370,853 |  | 452,471 |
Liabilities for assets acquisitions and subsidiaries |  | 92,098 |  | 499,984 |  | 3,097,068 |
Dividends payable |  | 9,904 |  | 9,907 |  | — |
Other liabilities |  | 310,540 |  | 463,369 |  | — |
Total Current Liabilities |  | 11,180,882 |  | 11,420,732 |  | 12,332,261 |
Non-Current Liabilities |  |  |  |  |  |  |
Loans, financing and debentures |  | 58,929,307 |  | 55,786,677 |  | 41,113,729 |
Lease liabilities |  | 3,946,474 |  | 3,822,300 |  | — |
Liabilities for assets acquisitions and subsidiaries |  | 463,835 |  | 513,792 |  | — |
Provision for judicial liabilities |  | 3,495,447 |  | 3,541,857 |  | — |
Derivative financial instruments |  | 2,865,034 |  | 2,031,612 |  | 1,454,897 |
Other liabilities |  | 1,429,838 |  | 1,465,495 |  | 2,504,632 |
Total Non-Current Liabilities |  | 71,129,935 |  | 67,161,733 |  | 45,073,258 |
Shareholders’ Equity |  |  |  |  |  |  |
Share capital |  | 9,235,546 |  | 9,235,546 |  | 15,970,759 |
Capital reserves |  | 6,419,941 |  | 6,418,623 |  | 400,862 |
Treasury shares |  | (218,265 | ) | (218,265 | ) | (237,681 | )
Retained earnings |  | 3,081,740 |  | 3,080,618 |  | 6,146,799 |
Other reserves |  | 2,348,132 |  | 2,295,169 |  | 5,577,311 |
Accumulated losses |  | (3,947,403 | ) | (498,557 | ) | (1,088,650 | )
Total Equity |  | 16,919,691 |  | 20,313,134 |  | 26,769,400 |
Non-controlling shareholders interests |  | 116,568 |  | 116,346 |  | 89,638 |
Total Liabilities and Equity |  | 99,347,076 |  | 99,011,945 |  | 84,264,926 |

(1) Data for the comparison periods of 2018 (3Q18, 9M18 and LTM) are based on the simple sum or weighted average of Suzano + Fibria,

27

APPENDIX 4(1) — Consolidated Statement of Cash Flow

Fluxo de Caixa (R$ ‘000) |  | 3Q19 |  | 3Q18 |  | 9M19 |  | 9M18 |
Cash flow from operating activities |  |  |  |  |  |  |  |  |
Net income/(loss) for the period |  | (3,460,235 | ) | 1,021,925 |  | (3,989,518 | ) | 391,153 |
Depreciation, depletion and amortization |  | 1,080,976 |  | 1,163,264 |  | 2,879,183 |  | 3,254,447 |
Amortization of fair value adjustment - Fibria/Facepa/Ibema |  | 493,624 |  | — |  | 3,326,974 |  | — |
Amortization of fair value adjustment - Fibria recorded in financial result |  | (69,397 | ) | — |  | (69,397 | ) | — |
Amortization of right of use |  | 43,036 |  | — |  | 106,925 |  | — |
Interest expense on lease liabilities |  | 56,068 |  | — |  | 153,061 |  | — |
Results from sale and disposals of PP&E and biological assets, net |  | 22,777 |  | 4,501 |  | 26,281 |  | 34,924 |
Equity equivalence |  | (15,679 | ) | (4,136 | ) | (21,247 | ) | (4,564 | )
Provision for loss and write-off of fixed assets and biological assets |  | — |  | 3,204 |  | — |  | 15,503 |
Exchange rate and monetary variations, net |  | 3,685,550 |  | 780,771 |  | 3,383,054 |  | 3,679,963 |
Interest expenses with financing and loans, debentures and debentures, net |  | 853,692 |  | 420,135 |  | 2,528,301 |  | 1,195,896 |
Accrual of interest on financial investments |  | (43,250 | ) | — |  | (290,303 | ) | — |
Amortization of fundraising costs |  | 12,947 |  | — |  | 172,803 |  | — |
Deferred income tax and social contribution expenses |  | (2,066,142 | ) | 338,158 |  | (2,517,641 | ) | (703,709 | )
Tax credits — gains in tax lawsuits (ICMS from PIS/COFINS calculation basis) |  | (128,115 | ) | — |  | (128,115 | ) | — |
Fair value adjustment of biological assets |  | — |  | — |  | (83,453 | ) | (95,661 | )
Interest on employee benefits |  | 11,920 |  | 8,617 |  | 38,762 |  | 25,851 |
Provision/ (Reversal) for judicial liabilities |  | (24,333 | ) | (18,970 | ) | (21,858 | ) | 8,990 |
Provision for stock-based compensation plan |  | — |  | 41,123 |  | — |  | 117,780 |
Derivative (gains) losses, net |  | 1,857,397 |  | 1,462,399 |  | 2,236,904 |  | 4,367,309 |
Expected credit losses, net |  | (4,436 | ) | 1,510 |  | (14,364 | ) | 6,433 |
Reversal for rebates |  | — |  | 17,692 |  | — |  | 28,978 |
Estimated loss in inventories |  | 42,818 |  | (41,513 | ) | 30,790 |  | (23,140 | )
Provision for loss of ICMS credits, net |  | 18,305 |  | (348 | ) | 87,496 |  | 74,628 |
Other |  | (73,601 | ) | 184,056 |  | (6,861 | ) | 192,665 |
Decrease (increase) in assets |  | 2,077,625 |  | (1,287,511 | ) | 1,962,550 |  | (2,435,730 | )
Related parties |  | 2,178 |  | — |  | — |  | — |
Trade accounts receivable |  | 947,628 |  | (1,044,294 | ) | 2,015,294 |  | (1,102,298 | )
Inventories |  | 864,625 |  | (197,235 | ) | (343,929 | ) | (983,895 | )
Recoverable taxes |  | 155,818 |  | (25,329 | ) | 137,786 |  | (165,628 | )
Other assets |  | 107,376 |  | (20,653 | ) | 153,399 |  | (183,909 | )
Increase (decrease) in liabilities |  | (424,145 | ) | 308,976 |  | (1,093,513 | ) | 689,903 |
Related parties |  | (57,322 | ) | — |  | — |  | — |
Payroll and charges |  | 66,863 |  | — |  | (196,046 | ) | — |
Trade accounts payables |  | (360,409 | ) | 273,794 |  | (726,528 | ) | (43,397 | )
Other taxes and contributions paid |  | — |  | — |  | — |  | — |
Taxes payable |  | 10,905 |  | 405,434 |  | 263,662 |  | 726,941 |
Other liabilities |  | (84,182 | ) | (370,252 | ) | (434,601 | ) | 6,359 |
Cash provided by operations |  | (762,259 | ) | (1,011,166 | ) | (2,344,275 | ) | (2,083,464 | )
Payment of interest with financing and loans and debentures |  | (899,650 | ) | (678,587 | ) | (2,362,331 | ) | (1,507,956 | )
Interest received from financial investments |  | 68,614 |  | 42,641 |  | 354,536 |  | 121,456 |
Payment of other taxes |  | — |  | (150,815 | ) | — |  | (389,467 | )
Payment of income taxes |  | 68,777 |  | (224,405 | ) | (336,480 | ) | (307,497 | )
Net cash from operating activities |  | 3,185,143 |  | 3,392,687 |  | 6,352,539 |  | 8,738,155 |
Cash flow from investing activities |  |  |  |  |  |  |  |  |
Financial investments |  | (1,405,165 | ) | (6,346,723 | ) | 20,428,121 |  | (10,526,014 | )
Cash provided by the merger of subsidiary |  | — |  | (5 | ) | — |  | 21,431 |
Settlement of derivative operations |  | — |  | (235,135 | ) | — |  | (206,226 | )
Acquisition of subsidiaries |  | — |  | — |  | — |  | (315,904 | )
Increase of capital in subsidiaries and associates |  | (34,640 | ) | — |  | (45,856 | ) | — |
Advance for acquisition of wood from operations with development |  | (82,012 | ) | — |  | (294,162 | ) | — |
Acquisition of subsidiaries, net cash |  | (1 | ) | — |  | (26,002,540 | ) | — |
Additions to property, plant and equipment |  | (1,088,201 | ) | (1,435,169 | ) | (3,744,151 | ) | (4,507,893 | )
Proceeds from sale of assets |  | 70,044 |  | 20,428 |  | 153,739 |  | 54,423 |
Other investments |  | 5 |  | — |  | (264 | ) | — |
Net cash (used in) / provided by investment activities |  | (2,539,970 | ) | (7,996,604 | ) | (9,505,113 | ) | (15,480,183 | )

28

Financing activities |  |  |  |  |  |  |  |  |
Proceeds from loans, financing and debentures |  | 90,839 |  | 1,197,761 |  | 16,315,910 |  | 9,683,781 |
Debentures |  | — |  | 4,681,100 |  | — |  | 4,681,100 |
Payment of derivative transactions |  | (51,335 | ) | (1,093,688 | ) | (55,997 | ) | (1,263,050 | )
Payment of loans, financing, debentures |  | (546,010 | ) | (480,294 | ) | (12,249,522 | ) | (4,890,122 | )
Payment of leases |  | (154,711 | ) | — |  | (425,297 | ) | — |
Payment of dividends |  | (4 | ) | (1 | ) | (601,735 | ) | (470,209 | )
Others financing |  | 2,193 |  | 1,349 |  | 4,575 |  | 5,736 |
Proceeds from own shares |  | — |  | — |  | — |  | 8,514 |
Acquisition of own shares |  | — |  | — |  | — |  | 1,730 |
Liabilities for assets acquisitions and subsidiaries |  | (466,971 | ) | (67,595 | ) | (470,396 | ) | (70,666 | )
Cash provided by financing activities |  | (1,125,999 | ) | 4,238,632 |  | 2,517,538 |  | 7,686,814 |
Exchange variation on cash and cash equivalents |  | 90,831 |  | 109,201 |  | (37,771 | ) | 578,266 |
Increase (reduction) in cash and cash equivalents |  | (389,995 | ) | (256,084 | ) | (672,807 | ) | 1,523,036 |
Cash and cash equivalents at the beginning for the period |  | 4,104,641 |  | 6,907,670 |  | 4,387,453 |  | 5,128,550 |
Cash and cash equivalents at the end for the period |  | 3,714,646 |  | 6,651,586 |  | 3,714,646 |  | 6,651,586 |
Statement of increase (reduction) in cash and cash equivalents |  | (389,995 | ) | (256,084 | ) | (672,807 | ) | 1,523,036 |

(1) Data for the comparison periods of 2018 (3Q18, 9M18 and LTM) are based on the simple sum or weighted average of Suzano + Fibria,

29

APPENDIX 5(2) — EBITDA

(R$ ‘000, except where otherwise indicated) |  | 3Q19 |  | 3Q18 |  | 9M19 |  | 9M18 |
Net Income |  | (3,544,791 | ) | 1,021,925 |  | (4,074,073 | ) | 391,153 |
Net Financial Result |  | 6,493,278 |  | 2,791,151 |  | 8,350,355 |  | 9,427,613 |
Income and Social Contribution Taxes |  | (2,079,287 | ) | 435,433 |  | (2,339,208 | ) | (283,579 | )
EBIT |  | 869,200 |  | 4,248,509 |  | 1,937,074 |  | 9,535,187 |
Depreciation, Amortization and Depletion |  | 1,514,089 |  | 1,163,264 |  | 6,313,079 |  | 3,254,448 |
EBITDA(1) |  | 2,383,289 |  | 5,411,773 |  | 8,250,153 |  | 12,789,635 |
EBITDA Margin |  | 36.1 | % | 55.0 | % | 43.4 | % | 52.3 | %
Valmet agreement |  | — |  | (52,780 | ) | — |  | (52,780 | )
Accruals for losses on ICMS credits |  | 17,357 |  | (348 | ) | 84,056 |  | 74,628 |
PPA effect (Asset disposal) |  | 505 |  | — |  | 24,868 |  | — |
Expenses with Fibria’s transaction |  | 1,355 |  | 19,959 |  | 75,946 |  | 37,746 |
PIS/COFINS revision |  | — |  | 3,729 |  | — |  | 3,729 |
Fiscal credits (PIS/COFINS calculation base) |  | (128,115 | ) | — |  | (128,115 | ) | — |
Indemnity — FACEPA |  | — |  | — |  | 3,283 |  | — |
Sale of judicial credits |  | — |  | — |  | (87,000 | ) | — |
Adjustment of the fair value of biological assets |  | — |  | — |  | (83,453 | ) | (95,661 | )
Equity equivalence |  | (15,678 | ) | (4,138 | ) | (21,247 | ) | (4,567 | )
Sprout cancellation |  | — |  | — |  | — |  | 7,366 |
Property, Plant and Equipment disposal |  | — |  | 7,645 |  | 1,858 |  | 32,979 |
Write downs of inventories |  | — |  | — |  | — |  | 17,092 |
Others |  | 9,598 |  | 1,188 |  | 9,723 |  | 897 |
Adjusted EBITDA |  | 2,396,426 |  | 5,387,028 |  | 8,258,189 |  | 12,811,064 |
Adjusted EBITDA Margin |  | 36.3 | % | 55.2 | % | 43.5 | % | 52.6 | %

(1) The Company’s EBITDA is calculated in accordance with CVM Instruction 527 of October 4, 2012,

(2) Data for the comparison periods of 2018 (3Q18, 9M18 and LTM) are based on the simple sum or weighted average of Suzano + Fibria,

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APPENDIX 6(2) — Segmented Statement of Income

|  | 3Q19 |  |  | 3Q18 |
Segmented Financial Statement (R$ ‘000) |  | Pulp |  | Paper |  | Non Segmented |  | Total Consolidated |  |  | Pulp |  | Paper |  | Non Segmented |  | Total Consolidated |
Net Revenue |  | 5,340,215 |  | 1,259,694 |  | — |  | 6,599,909 |  |  | 8,524,956 |  | 1,316,653 |  | — |  | 9,841,609 |
Cost of Goods Sold |  | (4,166,295 | ) | (820,119 | ) | — |  | (4,986,414 | ) |  | (4,084,729 | ) | (807,606 | ) | — |  | (4,892,335 | )
Gross Profit |  | 1,173,920 |  | 439,575 |  | — |  | 1,613,495 |  |  | 4,440,228 |  | 509,047 |  | — |  | 4,949,274 |
Gross Margin |  | 22.0 | % | 34.9 | % |  |  | 24.4 | % |  | 52.1 | % | 38.7 | % |  |  | 50.3 | %
Operating Expense/Income |  | (559,831 | ) | (184,464 | ) | 128,115 |  | (616,180 | ) |  | (466,230 | ) | (234,536 | ) | — |  | (700,766 | )
Selling Expenses |  | (372,735 | ) | (96,280 | ) | — |  | (469,014 | ) |  | (286,664 | ) | (105,822 | ) | — |  | (392,486 | )
General and Administrative Expenses |  | (187,439 | ) | (91,537 | ) | — |  | (278,976 | ) |  | (164,882 | ) | (133,661 | ) | — |  | (298,543 | )
Other Operating Income (Expenses) |  | (6,064 | ) | (5,918 | ) | 128,115 |  | 116,132 |  |  | (14,833 | ) | 957 |  | — |  | (13,875 | )
Equity Equivalence |  | 6,407 |  | 9,271 |  | — |  | 15,678 |  |  | 148 |  | 3,990 |  | — |  | 4,138 |
EBIT |  | 614,089 |  | 255,111 |  | 128,115 |  | 997,315 |  |  | 3,973,997 |  | 274,511 |  | — |  | 4,248,508 |
Depreciation, Amortization & Depletion |  | 1,377,539 |  | 136,550 |  | — |  | 1,514,089 |  |  | 1,040,704 |  | 122,561 |  | — |  | 1,163,264 |
EBITDA |  | 1,991,628 |  | 391,661 |  | 128,115 |  | 2,511,404 |  |  | 5,014,701 |  | 397,072 |  | — |  | 5,407,782 |
EBITDA Margin (%) |  | 37.3 | % | 31.1 | % | — |  | 38.1 | % |  | 58.8 | % | 30.2 | % |  |  | 54.9 | %
Adjusted EBITDA(1) |  | 2,011,755 |  | 384,670 |  | — |  | 2,396,426 |  |  | 4,980,084 |  | 407,194 |  | — |  | 5,387,278 |
Adjusted EBITDA Margin(1) |  | 37.7 | % | 30.5 | % |  |  | 36.3 | % |  | 58.4 | % | 30.9 | % |  |  | 54.7 | %
Net Financial Result |  | — |  | — |  | (6,493,278 | ) | (6,493,278 | ) |  | (828,163 | ) | — |  | (1,962,988 | ) | (2,791,151 | )
Earnings Before Taxes |  | 614,088 |  | 255,112 |  | (6,365,163 | ) | (5,495,963 | ) |  | 1,459,497 |  | 274,511 |  | (1,962,988 | ) | (228,980 | )
Income and Social Contribution Taxes |  | — |  | — |  | 2,035,728 |  | 2,035,728 |  |  | (556,804 | ) | — |  | 121,371 |  | (435,433 | )
Net Income (Loss) |  | 614,088 |  | 255,112 |  | (4,329,435 | ) | (3,460,235 | ) |  | 2,589,030 |  | 274,511 |  | (1,841,617 | ) | 1,021,924 |
Net Margin |  | 11.5 | % | 20.3 | % |  |  | -52.4 | % |  | 30.4 | % | 20.8 | % |  |  | 10.4 | %

(1) Excluding non-recurring items,

(2) Data for the comparison periods of 2018 (3Q18, 9M18 and LTM) are based on the simple sum or weighted average of Suzano + Fibria,

(3) Excludes equity income (loss)

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|  | 9M19 |  |  | 9M18 |
Segmented Financial Statement (R$ ‘000) |  | Pulp |  | Paper |  | Non Segmented |  | Total Consolidated |  |  | Pulp |  | Paper |  | Non Segmented |  | Total Consolidated |
Net Revenue |  | 15,395,971 |  | 3,568,019 |  | — |  | 18,963,990 |  |  | 21,172,118 |  | 3,287,801 |  | — |  | 24,459,919 |
Cost of Goods Sold |  | (12,581,007 | ) | (2,352,419 | ) | — |  | (14,933,426 | ) |  | (10,849,819 | ) | (2,127,962 | ) | — |  | (12,977,781 | )
Gross Profit |  | 2,814,964 |  | 1,215,600 |  | — |  | 4,030,564 |  |  | 10,322,299 |  | 1,159,839 |  | — |  | 11,482,138 |
Gross Margin |  | 18.3 | % | 34.1 | % |  |  | 21.3 | % |  | 48.8 | % | 35.3 | % |  |  | 46.9 | %
Operating Expense/Income |  | (1,532,136 | ) | (561,355 | ) | 128,115 |  | (1,965,376 | ) |  | (1,310,475 | ) | (636,492 | ) | — |  | (1,946,967 | )
Selling Expenses |  | (1,084,740 | ) | (282,558 | ) | — |  | (1,367,298 | ) |  | (796,441 | ) | (274,997 | ) | — |  | (1,071,438 | )
General and Administrative Expenses |  | (606,419 | ) | (281,353 | ) | — |  | (887,772 | ) |  | (450,898 | ) | (366,491 | ) | — |  | (817,389 | )
Other Operating Income (Expenses) |  | 153,222 |  | (12,890 | ) | 128,115 |  | 268,447 |  |  | (63,819 | ) | 1,127 |  | — |  | (62,692 | )
Equity Equivalence |  | 5,801 |  | 15,446 |  | — |  | 21,247 |  |  | 682 |  | 3,869 |  | — |  | 4,551 |
EBIT |  | 1,282,828 |  | 654,245 |  | 128,115 |  | 2,065,188 |  |  | 9,011,824 |  | 523,347 |  | — |  | 9,535,170 |
Depreciation, Amortization & Depletion |  | 5,936,578 |  | 376,504 |  | — |  | 6,313,082 |  |  | 2,909,717 |  | 345,094 |  | — |  | 3,254,812 |
EBITDA |  | 7,219,406 |  | 1,030,749 |  | 128,115 |  | 8,378,270 |  |  | 11,921,541 |  | 868,441 |  | — |  | 12,786,113 |
EBITDA Margin (%) |  | 46.9 | % | 28.9 | % | — |  | 44.2 | % |  | 56.3 | % | 26.4 | % |  |  | 52.3 | %
Adjusted EBITDA(1) |  | 7,217,238 |  | 1,040,949 |  | — |  | 8,258,189 |  |  | 11,907,049 |  | 903,119 |  | — |  | 12,810,419 |
Adjusted EBITDA Margin(1) |  | 46.9 | % | 29.2 | % | — |  | 43.5 | % |  | 56.2 | % | 27.5 | % |  |  | 52.4 | %
Net Financial Result |  | — |  | — |  | (8,350,355 | ) | (8,350,355 | ) |  | (3,337,480 | ) | — |  | (6,089,970 | ) | (9,427,450 | )
Earnings Before Taxes |  | 1,282,829 |  | 654,244 |  | (8,222,240 | ) | (6,285,167 | ) |  | 3,514,873 |  | 523,347 |  | (6,089,970 | ) | (2,051,751 | )
Income and Social Contribution Taxes |  | — |  | — |  | 2,295,649 |  | 2,295,649 |  |  | (623,915 | ) | — |  | 908,298 |  | 284,383 |
Net Income (Loss) |  | 1,282,829 |  | 654,244 |  | (5,926,591 | ) | (3,989,518 | ) |  | 5,050,281 |  | 523,347 |  | (5,181,672 | ) | 391,955 |
Net Margin |  | 8.3 | % | 18.3 | % |  |  | -21.0 | % |  | 23.9 | % | 15.9 | % |  |  | 1.6 | %

(1) Excluding non-recurring items,

(2) Data for the comparison periods of 2018 (3Q18, 9M18 and LTM) are based on the simple sum or weighted average of Suzano + Fibria,

(3) Excludes equity income (loss)

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Forward-looking Statements

This release may contain forward-looking statements, Such statements are subject to known and unknown risks and uncertainties that could cause the expectations expressed not to materialize or to differ substantially from the expected results, “These risks include changes in future demand for the Company’s products, changes in factors affecting domestic and international product prices, changes in the cost structure, changes in the seasonal patterns of markets, changes in prices charged by competitors, foreign exchange variations, changes in the political or economic situation of Brazil, and changes in emerging and international markets,” The forward-looking statements were not reviewed by our independent auditors,

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