Suzano S.A. (SUZ) Earnings Call Transcript & Summary

Good morning, everyone. I didn't hear anything. Good morning, everyone. It's great to have you here. Thank you for joining us. Good to see the room completely full from here. I know that's a little bit warm, but I'm sure that we're going to have a great morning here today. It's -- I want also to say that we have the whole management team from Suzano here today. So the whole team, the only one that's not here with us today, it's Pablo. Pablo Machado in Shanghai. But we have, for instance, Fabio, that's based in U.S. in charge of the Paper and Packaging business and Fabio is here today. I'm just mentioning the one that's living abroad. Carlos Anibal also based in Austria, is also here with us today. Carlos is currently the Vice President of the Board of Lanzi, and we have the rest of the team here. And the team would like to share with you during the morning our strategy, our priorities, our initiatives go through a lot of details regarding our view of the market and what we are doing and where we're going to focus our initiatives in the next 2, 3 years. We -- you will remember that our strategy in the last years were related to 5 main avenues, but the business environment has changed and do it, most of the change was related to the elements that we can see here in the slides. So that's the first thing. The other thing is that we must consider that we are finalizing a kind of a cycle of capital allocation. And we can mention here the main projects that we have delivered, and we're still delivering in the next couple of months. We can mention Cerrado, which is now finalizing the first year of operating at full capacity. Our facility of fluff in Emera, our new tissue facility in Aracruz, we also have the investments in Pine Bluff U.S., the stake at Lenzing and more recently, the swap, wood swap with Eldorado and the KC deal that we should pay next year 2026. So we must consider that a cycle of capital allocation is being finalized. So when we look for the strategy from now on, going forward, we will focus instead of 5, in 2 main avenues. Two main drivers, which is the first one, competitiveness. This has been part of our strategy for many, many years. We want to keep investing and straining our level of competitiveness, not only against ourselves, but relatively against the competition. So I would say that that's our first and main priority mainly in the next 3 years. And the second one is extracting value from those projects that I just mentioned. Again, we are finalizing a cycle of capital allocation. So now it's time to extract value from those. And the growth will come not from new projects, not from M&A will come once we deliver what we have planned with those investments that we made in the next -- in the last couple of years. So this is the priority. And we will see during the presentation, that we will cover details related to those main priorities. And we also will share with you how we're going to measure. We will see that the total operational disbursement will be presented in most of the presentation today because this is, for us, is the best way to measure how we're going to keep reducing cost and keep increasing competitiveness. And of course, the consequence of that will be deleveraging the business to reach our target of 2.5x net debt per EBITDA. So I hope you enjoy the morning today. And having said that, I would like to hand over to this tremendous professional, Leonardo Grimaldi, who will take you through the pulp market, how we see this going forward. Thank you very much.

Thank you, Beto. Thank you. Thanks for the tremendous. Good morning, everyone, good afternoon and evening for those abroad. It's, again, a huge pleasure to be with you at Suzano Day. My presentation is structurally similar to my last year's presentation. However, it brings some important updates to several of the variables in our models. I'm again going to show the evolution and our view on the fundamentals of hardwood pulp for these upcoming years. I will update you guys on what we are seeing in terms of verticalization in China and in Asia. And as well, I'm going to give several examples of what we're doing in the fiber-to-fiber or the fiber substitution agenda. As always, to begin, we look at the organic demand for hardwood pulp for the upcoming years, and we are forecasting a solid growth of 4.5 million tons until 2029. This growth is being supported by growth in regions like China and other Asian markets. And in terms of product lines, tissue grades, paperboard and specialty papers are driving the demand for hardwood pulp at a CAGR of roughly 3% when it comes to fiber needs. This is the organic part of the demand, but as I have been pointing out several years, the fiber substitution agenda gives us an additional addressable market and increases the demand for pulp year-over-year. I am going to be talking more about fiber-to-fiber later in my presentation, but I would like to update to you what we are seeing in 2025. 2025 was again another year of growth in terms of share of hardwood over softwood, 1 percentage point, which means that just this year, an additional demand of 700,000 tons of hardwood pulp was created. 700,000 tons, meaning that rhythm, that last year, I mentioned that we were seeing almost double at what it was in the past is still maintained. So we are seeing average on average, 1, 1.2 percentage points growth in terms of the share of hardwood over softwood. Another way of looking at the same scenario is if we look at the change in demand among grades in the last 5 years, while hardwood posted 2.2% positive CAGR, softwood posted 2.3% negative CAGR in the same period of time. Last year, it was the first time that we brought a lot of focus in terms of verticalization in China and Indonesia and how that affects our market. At the time, many were skeptical, right? We were a few -- one of the fews that we're talking about this. But today, I believe that this is already understood and accepted by most and seen as a threat to the fundamentals of our business. We have a team on the ground in China, a big team. And what we do is we map all of the announcements to really see what are our confirmed projects. So in our numbers, and we are updating those. We are seeing from '25 to '29, 6 million tons of hardwood pulp projects now being deployed in China. These are confirmed projects. They do not include announcements or speculations. Again, these are all confirmed by our team. What does that mean? There's a negative aspect of that because, for example, a paper producer, who used to be a customer of Suzano or of our competitors as they are now upstream verticalizing core producing pulp, they're going to buy less market pulp. So in this way, they reduce the addressable market or the addressable demand for hardwood pulp. So that's a negative. Thank you, Beto. Thanks for the tremendous. Good morning, everyone. Good afternoon, and even for those abroad. It's again, a huge pleasure to be with you at Suzano Day. My presentation is structurally similar to my last year's presentation. However, it brings some important updates to several of the variables in our models. I'm again going to show the evolution and our view on the fundamentals of hardwood pulp for these upcoming years. I will update you guys on what we are seeing in terms of verticalization in China and in Asia. And as well, I'm going to give several examples of what we're doing in the fiber-to-fiber or the fiber substitution agenda. As always, to begin we look at the organic demand for hardwood pulp for the upcoming years, and we are forecasting a solid growth of 4.5 million tons until 2029. This growth is being supported by growth in regions like China and other Asian markets. And in terms of product lines, tissue grades, paperboard and specialty papers are driving the demand for hardwood pulp at a CAGR of roughly 3% when it comes to fiber needs. This is the organic part of the demand. But as I have been pointing out several years, the fiber substitution agenda gives us an additional addressable market and increases the demand for pulp year-over-year. I am going to be talking more about fiber-to-fiber later in my presentation, but I would like to update to you what we are seeing in 2025. 2025 was again another year of growth in terms of share of hardwood over softwood, 1 percentage point, which means that just this year, an additional demand of 700,000 tons of hard pulp was created. 700,000 tons, meaning that rhythm, last year, I mentioned that we were seeing almost double at what it was in the past is still maintained. So we are seeing average on average, 1, 1.2 percentage points growth in terms of the share of hardwood over softwood. Another way of looking at the same scenario is if we look at the change in demand among grades in the last 5 years. While hardwood posted a 2.2% positive CAGR, softwood posted a 2.3% negative CAGR in the same period of time. Last year, it was the first time that we brought a lot of focus in terms of verticalization in China and Indonesia and how that affects our market. At the time, many were skeptical, right? We were a few -- one of the fews that we're talking about this. But today, I believe that this is already understood and accepted by both and seen as a threat to the fundamentals of our business. We have a team on the ground in China, a big team. And what we do is we map all of the announcements to really see what our confirmed projects. So in our numbers, and we are updating those. We are seeing from '25 to '29, 6 million tons of hardwood pulp projects now being deployed in China. These are confirmed products. They do not include announcements or speculations. Again, these are all confirmed by our team. What does that mean? There's a negative aspect of that because, for example, a paper producer, who used to be a customer of Suzano or of our competitors as they are now upstream verticalizing producing pulp, they're going to buy less market pulp. So in this way, they reduce the addressable market or the addressable demand for hardwood pulp. So that's the negative. But there are several uncertainties in this model or in this concept as well. First, is the time to market of these projects. There are several announcements. So the actual dates that they're going to start is a bit blurry when it comes to China and it comes to our exact points in terms of their start-up dates. Then there are learning curves. How quick it is going to be, and also their operating rates. Usually, we note that the operating rates of pulp mills in China and in Asia are much lower than what they are in the western side of the world. Another different concept is how they operate these mills. Depending on what's the price of pulp and how that compares to their cash cost in several moments of the cycle, they reduce even further their operating rates, and they become marketable buyers. So this in and out, this swing in the market is very unique to the dynamics in China and in Asia. And third, which is a hot topic for most, are and what's the availability of wood chips to support these projects. It is our view that with the decline in the housing market, there is wood available in China to support these projects that are now confirmed. So we do not question if there's wood or not for those projects. What we do question in our models, and we have several scenarios for that, it's what's the cost of this wood, because as these projects are now being deployed and are coming into market, they are going to be obviously placing more and more pressure in terms of woodchip prices and that should increase in the short term or midterm. If you look at the map, it's also curious to see that with the Guangxi area, where we have 2, are out of the 8 projects for the next years, is where we see the most competitive pulp mills in China. That's where the big part of the eucalyptus base is located. So, usually, in Guangxi, we note the most competitive projects when it comes to pulp, but not all projects are in Guangxi, as you can note. Out of the 8 projects, we have 3 of them in central region in China. So overall that we understand about wood costs, they also carry an additional logistic cost to bring obviously, wood to their sites either from China or imported. And if we see 3 of the projects are in the Shandong area, Northeast of China. And these mills usually don't have access to the Chinese wood or the eucalyptus wood from Southeast China. They usually either import or they use popular trees, which is another tree used in China to produce pulp, and this tree has a 15% to 20% premium over eucalyptus wood chips. So not all mills in China carry and have the same competitiveness level. So when we add up now the organic demand that I presented, plus fiber-to-fiber, and you can note that we're still being conservative here. This is below the trend that we have been seeing for the last 3 years. And we subtract the net effect of verticalization, considering our view on operating rates in China and also some mill closures in other countries of the world, we come up to an increase in demand of 3.1 million tons until 2029. So that number that we saw previously, organic demand was adjusted considering all these factors bringing our demand forecast to 3.1 million tons. Now that can be further incentivized by additional fiber-to-fiber movements or fossil-to-fiber movement, being customers now being privileged by the agenda of having more bio-based products. When it comes to the supply side of the equation and mapping the main projects and also the main conversions, we come up to a net additional capacity of 4 million tons until 2029. So now, we have 3.1 million tons of demand growth and 4 million tons of capacity growth, and once we factor in these 2 numbers, we come to a demand to capacity ratio that is below optimum for quite a long period of time, below optimum for quite a long period of time. And this scenario is completely unsustainable. So what do we expect? When demand to capacity ratio is below optimum points, which would be roughly at 91%, 92%, prices are usually lower, and then prices are lower, a big part of the industry loses money or has inadequate margins. So what we expect? We track very closely 4 scenarios or variables, and I would like to share those with you. First is the number of permanent closures in this kind of scenario. This only shows softwood pulp mills, which are the even older pulp mills, mainly in the Northern Hemisphere. And we see that the 2025 closures are inferior to what they were in the past years. Something has to happen here. Second thing we track is the amount of commercial or market-related downtimes and unexpected downtimes. And as you will notice, and this includes softwood and hardwood in this graph, and as you all noticed, it's also below what it used to be in previous years. It is our belief that the geopolitical tensions and the tariffs war, which was kind of the top priority in the agendas of most in Q2 and Q3 2025, made a lot of decisions in this first and second variable be postponed. Now tariffs are clear. So we believe that decisions will be made. Third variable that we track is the go-to-market or when the pulp mills will actually start. So we're talking about market pulp mills and also integrated pulp mills because obviously, any change in these dates will move or change the scenario completely. And fourth, and also very important, are the integrated players in our sectors. There are almost 110 million tons of pulp to paperboard production in the world, which is integrated. A big part of this are older mills. The first generation of pulp and paper production, high cost, so we believe that 2 things could happen here. First is a closure at a bigger rhythm of this noncompetitive integrated views and that will generate demand for nonintegrated paper players, asset-light, more competitive. Second, and we are seeing this trend and it's quite important. As China verticalized and this group here gets worried, we are seeing a lot of traction in discussions where an integrated pulp to paper producer is thinking about closing his pulp production and becoming an asset-light producer. So deverticalizing in that sense and expanding the addressable market for pulp. So these are the 4 avenues that are moving around and that we see opportunity for change. We see the market today at a whole mood kind of in a freeze waiting for something to happen. And we believe this is short-lived, something has to happen in the short term. This is not sustainable. And any change in 1 of these 4, 2 of these 4, 3 or 4 of the 4 will change market dynamics quickly and pricing dynamics also very quickly. But again, to this unsustainable market that I was talking about, there's another way to look at is, which is comparing the cash cost to the market price. On the left, you see hardwood producers. This is only market pulp, right? So on the left, you see hardwood producers cash cost and where the price is today. And on the right, you see softwood producers and where the price is today. So this is an analysis of a renowned consultancy, Hawkins Wright. They just published this number days old. And as we speak, December 11, 2025, means that 14.5 million, roughly 15 million tons of pulp production in the world is bleeding and losing money, bleeding and losing money, 15 million tons. This is completely unsustainable. So what do we do under this scenario? First, as Beto has mentioned, and as you're going to see in the presentations of several of my colleagues throughout this morning is focused in being every day more competitive. Second, as a market leader, it is our role to increase and to support a bigger addressable market for hardwood pulp. We believe that it is our role to be the protagonist in this fiber-to-fiber agenda and increasing, therefore, the size of the pie or increasing even further the size of the pie for hardwood producers. I wanted to show even bigger, but they did not allow me to do so. But in anyway, this slide I showed last year, but it's just to reinforce the concept. I'm sorry, to be repetitive on that, that we see a lot of space for hardwood to grow in all product lines. In green, you see the furnish of hardwood; and in blue, softwood in all product lines. And you see that despite the numbers that I'm going to show you in 2 slides from now, there is still a very low base. So we see this as a huge opportunity. And again, if these grades increase the utilization of hardwood in 1 percentage point, 1 percentage point, and I'm going to show you what we are doing, 1 percentage point, this would give in 5-year period, an additional demand of more than 3 million tons of hardwood. So this is a huge opportunity for the sector. This idea of being protagonist on fiber-to-fiber movement didn't start last year or this year. It started actually 3 years ago. Today, we have a very strong team dedicated in this movement to support our customers in a very well-designed process as well. It starts with training. We give a lot of knowledge sharing to our customers, showing them the characteristics about Euca pulp, how they interact with the fibers that they are using and also how to better prepare their machines for such. Second, we go to our customers' mill, and this is a machine-by-machine-based project. Where we map all of their machines to understand the maximum capability of fiber substitution or if any investments are needed, to further increase the utilization of hardwood. Third, and this is, I believe, a differentiating point of Suzano, as in Brazil, we produce several kinds of paper, several kinds of tissue grades, several kinds of board with 100% eucalyptus. We invite the customers to Brazil, and we opened fully our paper production sites to our customers and their technical teams to spend how many days they wish sharing knowledge and understanding how we produce paper, tissue and board with 100% Euca pulp. Fourth, we run in our labs in Brazil in Shanghai or tech centers that we partner around the world, a lot of simulation in terms of what will be their new products or if any characteristics would change, if they change the simulation or the furnish of hardwood and softwood or other fibers eventually as well. Then we are ready to run pilot trials and then industrial runs in their mills, both pilot trials and industrial runs with full support of our technical teams who are based, part of them in our international offices and part of them in Brazil. Just this year, we have more than 70 customers, fully engaging on the fiber-to-fiber agenda, meaning that our technical team are doing projects in more than 100 industrial sites as we speak. So this is really major and to bring a little bit of data or more information on that, we track a control group of 15 tissue players through time. Just this year, with this setup in this process, we were able to increase hardwood to an average of 95% when it comes to this control group, 95%. So 12 percentage points increase in 1 year, in just 1 year, and very -- and again, it's not only on the obvious fiber substitution prices, right, moving away from softwood and coming to hardwood, the gain also comes because we come into their mills, and we share a lot of knowledge in terms of how to refine the pulp and how to prepare all of the stock to be able to feed their paper machines. So stock prep and refining is a big part of this project as well. There is an extreme case that the customer has reached 35% energy savings with the support of our team, meaning that in this tissue producer's case, the energy saving that he got after our team helped him, was even bigger than the substitution of softwood by hardwood. This is not all. We also have an innovation platform to support the fiber-to-fiber agenda. Our R&D team is creating enhancing fibers through time. When it comes to a paper producer, and this is not so obvious, they do not ask for 1 variable in terms of their control. They are tracking several variables when they are considering what fiber they're going to use. So for this example, we brought to the Tensile Index, which is usually -- we usually associate that of being much better in softwood than hardwood. We have launched this Eucastrong family of products. These are enhanced eucalyptus fiber is much stronger. We have 2 versions of it today already commercial, Version 1 and Version 3, a little bit different among themselves. And you can see that in terms of Tensile, they are approaching more and more software than actually already being over the lower grades of softwood because softwood also is not all the same. And we have new versions of the Eucastrong family, already being tested in our labs and to be commercial in the next quarters to come, but the fiber-to-fiber agenda is not only contained in the paper segments. We see the fluff segment has a huge opportunity. And again, fluff pulp is used for diapers, feminine hygiene products or hospital pads, pet pads, products like. We see a huge opportunity for that. And that's why we have announced 2 years ago, an investment in our Limeira mill, which is converting our pulp line to a flex Eucafluff line. This investment is to be ready in a few days from now. And our key focus now that our production has or will increase fourfold, and once fully deployed, it means that with Eucafluff, we are going to have 6% of market share in this total market, still small, I know that, but our focus for 2026 is homologating this process. This is a more technical product than paper-grade pulp. It demands a bit more work in terms of homologation. Our customers and our prospect customers have tested already the lab samples of the Limeira fluff, which is a bit different from our Suzano fluff. And now they're awaiting the commercial product to arrive to be able to fully homologate their mills. Regarding Eucafluff, and I know several challenged this concept of having fluff being produced with hardwood pulp as well a few years ago or 9 years ago, when we started this project, innovation from Suzano, several were questioning if it's a reality or not. So rather than staying here and talking good things about Eucafluff, we will share with you a short video, which is one of the main features of the product. This is a very standard lab test to measure how the products absorb liquid and how long do the liquid stays inside the product. In the left, you see a pad produced of softwood fluff, and on the right, you see a pad produced with Eucafluff. Eucafluff, since it's produced with eucafibers, smaller fibers, the panels are much more dense than the panels made out of pine fluff. So less void space, meaning that the course of the products are much denser than the traditional pine fluff products. So this morphology of the fiber and of the core makes a quicker and more dispersed liquid absorption. And also it keeps the liquid inside the product, and as you can see, there is less rewet, which is one of the key variables being analyzed. Our numbers are reaching almost 20% reduction in rewet when compared to 100% pine fluff product. So that means less rewet, higher retention, and obviously, extra dry skin to our consumers who are using our products. This is quite cool. Isn't it? So since I talked so much about the fiber-to-fiber agenda, and as in Brazil, we have an example, not only in the paper and packaging, but in tissue, where we produce tissue, napkins and kitchen towels, 100% with eucapulp I would now like to invite Luis to talk to us about the consumer business unit.

Great news on the pulp. Hi, everyone. Thank you for attending the Suzano Investor Day. Today, I'm going to share with you two points, two main points. The first one is the strategy for our consumer goods operation in Brazil. And the second one is to update you on the JV with Kimberly-Clark that we announced in June. Regarding the Brazilian operation, we currently have an imbalance between supply and demand in the country with more supply than demand. However, even in this scenario, we were able to increase prices and reach a price premiumness of 18% compared to the average of all the other brands in the market. We moved from 16% to 18% premiumness and this price premium is what allowed us to slightly increase market share in the country throughout 2025. When we look at the regions, we maintained our leadership position in the North, Northeast and Southeast regions, and we were able to further enhance our position in the south of the country, moving from the fifth position to the third position. Looking ahead, we see that with the start-up of our mill in Aracruz that we announced last quarter, we are going to be able to increase the availability of our products to serve better and faster and cheaper our clients, and we will continue to increase market share moving forward, but this strategy is based on 3 pillars. The first one, as you see, is brand. When we compare the brand power from Neve with all the other brands in the market, Neve has a 42% more power than the other brands. How do we do that? We do it throughout the years with innovation, investments, but also with the relaunch of the brand. We just relaunched the Neve brand, and you're soon going to see no supermarkets a new packaging and a new logo, much more updated than the previous one. So we are constantly investing on the brand, not only on the brand, but also on the second pillar, which is innovation. We've been innovation -- we've been innovating the market faster. And in 2025, we increased the number of product launches that reached the market. I have here some examples, the Neve Toque das Ondas is a product that is -- we just announced the start-up of this project. You're going to see the shelves on all supermarkets. I invite you to test. It's the only product in the market with the NTT technology. Just Suzano has this technology. It's a wonderful product, and I'm sure you're going to love it when you use it. And also, on the bottom of the slide, you can see that we are also investing in other categories beyond tissue, which have better prices and better margins. And the third pillar of growth is the portfolio. On the right, you have how is the Brazilian market. On the left column, you have Suzano. As you can see, we are always moving from 1 ply to 2 ply and from 2 ply to 3 ply and 4 ply. The more plies you have, the more premium is the product, the more price you can get and the more margins you can get. So the combination of these 3 pillars is what allows us to have 18% price premiumness compared to the average of the market. Now moving to the JV with KC, we announced this JV in June. And just remember, it's a $3.3 billion net sales and a $500 million EBITDA. It's a 51% Suzano, 49% Kimberly-Clark. And where we are now. Now we are working all of our teams are working to carve out the tissue and professional business from the Kimberly-Clark operation and we are expecting the antitrust to finish by the second quarter next year and that we are going to be able to close this operation by mid next year. After that, we're going to enter the second phase, which means we will have a JV, but still being managed through TSAs. And those TSAs, we are going to work to get rid of it very fast, and we expect to get rid of the TSAs, which are transient service agreements with Kimberly-Clark, and we expect to get rid of them by mid-'28. So then we reached the third phase, which is to have a completely independent and autonomous company from both Kimberly-Clark and Suzano with its own governance and also, its own Board. So by mid-'28, there will be another company, which will -- we are also creating the new name of this company that will be an independent and autonomous company compared to the parent companies, KC and Suzano. And we are using this time between signing and closing also to study and to talk to many companies around the globe, who have gone through M&As to understand, which are the learnings that we can incorporate in our planning for the start-up of this new company. As we go deep and refine the business plan, we are even more confident that we are going to be able to capture the $175 million in operational gains that we announced in June. Those gains, there is a pillar, which will enable us to get this value, which is the building of the new culture for this company. So in parallel to refining the business plan, we are also designing the culture of this new company, and also, which are the tools that will reinforce the behaviors and the construction of this new culture. So we are currently designing the organizational structure, revising the performance assessment, how it's going to be the performance management and incentive systems for this company. And in the end, we also want the regions to have a full P&L accountability. So this is what we are working on from today to the closing of this operation. And now to talk about the competitiveness and growth strategy for the paper and packaging business, I would like to invite my colleague, Fabio, on the stage. Thank you.

Hi, everyone. Good morning, good afternoon, good evening, wherever you are. It's a pleasure to be here with you today once again. And I have two objectives here with you today. One is to share with you what we are doing in the Paper and Packaging business unit to improve the competitiveness of the business, which is really important, given the structural change that we heard from Leo, that's happened in the pulp, and also, in the paper business, also geopolitical forces that are reshaping the trade in paper. And second is how we are preparing this business for future growth. So we need to capture first all the investments to have made returns and then prepare the business for growth. On this slide here, you have the footprint of our business operations. We've been sharing with you for the past years, the structure of our business here in South America. You know about how different our business model is go-to-market, reaching more than 40,000 customers in Brazil and how we capture margin throughout the chain. And you also know that we have expanded this business model from some other countries in Lat Am like Argentina and Ecuador, and it's doing well. And now we have a business in the U.S. with the acquisition of Pine Bluff, and also Waynesville in North Carolina, 2 mills that we have in the United States. What I want to share with you are the pillars of competitiveness that our business has today. First one is our cash cost reference. All our machines, paper machines, they are included in the first quartile in terms of cost. Are they going to be in the first quartile in terms of cost like in the U.S., we're moving in that direction. We have the potential to be there. The uniqueness of our business model. So you know about our print and writing business model here in Lat Am, we talked about that. But also, we have a very unique business model in the United States with long-term contracts with a liquid package board. And we have some of our products in the showroom there. You can take a look. We own about 60% to 70% of market share in liquid package board fresh in the U.S. So it's a long-term contracts with very strategic customers. So this bring uniqueness to a business model, also in the United States. We are very competitive in print and writing and we want to become even more competitive. I'm going to share with you some of the activities that we are doing today, which is a very strong cash generator for Suzano. And we want to think about ways that we can expand our portfolio in the U.S. I want to share with you now an information. I don't know if you have that about how we are working in our portfolio to mitigate the risk of print and writing. This is something that we have been doing through the years, the acquisition in the U.S. helped us a lot. Today, we have most -- half of our revenue coming from packaging. You have seen the information throughout the years, but not only here, we have the board sales in Brazil and the U.S., but we are doing lots of innovation as well. We have a new product, which is a white top liner, craft liner and our cups here in the region. This portfolio of innovation products should reach 100,000 tons of sales next year. So we are moving in that direction. That's helping us to mitigate the risk of our print and writing portfolio. Moving to the next slide. I want to share with you why we believe paperboard in the United States is the place to be in terms of packaging growth for Suzano. First of all, it's a very sizable market. We're talking about a market which is 10 million tons of demand. If you look at North America, it's about 12 million tons and it's concentrated. We have very few players compared to other regions. You can see the numbers here in this slide, and this is a market which is very concentrated, which brings discipline in terms of managing demand and supply. It's a growing market, grows between 2% to 3% per year. And we have a price premium in this market compared to other regions, which probably it's going to improve even further now with the barriers that have been announced in terms of trade. Moving to the next slide. Here, we're going to be focused on Suzano operations in the United States. I want to give you more color about what we are doing there. You have seen our third quarter results. We have shifted this company from a very big loss last year in terms of EBITDA into a positive EBITDA in the third quarter of this year. So we have been very busy since the acquisition in October. One of the main areas that we are focusing here is reducing our cash cost, industrial cash cost to try to improve it. We have so far accomplished 6% cash cost reduction. We have the number here on a 100 basis, that's the cash cost that we received from Pactiv and now we are on 94, but more important than that, we have also mapped here the future steps of potential reduction. As you can see, we have another 7% additional reduction that we can do without CapEx from Suzano. This is being in the United States. We have some optionalities that probably are not -- we don't have here in South America, but for instance, we have a partner that we're going to be investing in a new wood yard for our mills a huge project. We're talking about more than $100 million investment. That's going to help us to reduce the cost of our processing our wood, improving effectiveness at the mill. And also, we have a part -- another partner that's going to be the CTO plant that's going to help us to reduce -- to use the soap and to create a revenue stream and reduce cost on the mill. So another 7% that we can reduce without investment from Suzano. And then additionally to that, we have mapped and we have started in the last year, projects that can reduce even further, but this time, with CapEx from Suzano, another 8% of cash reduction. We're talking about here a continuous digester. This plant has batch digesters. So we can substitute this batch digest by continuous digester and a dignification investment in the mill that's going to help us, not only to increase the quality of the products that we are producing, but also reducing the cost and also bring incremental volumes that we could explore new revenue streams. So all in all, we're talking about a reduction of 21% in cash cost throughout the years. I want to just highlight that the CapEx projects that are doing by Suzano are not yet approved, and we're only going to move forward with that if they bring the adequate returns for us. And here, so we're building optionalities for organic, inorganic growth. And inorganic growth, I just want to make it clear that this is something that's not our focus at the moment, but we want to be prepared when that happens when Suzano is prepared to do the move. We are in the right place to do it. So here, it's my last slide. We're talking about our operations here in Brazil. Last year, when I came here to Suzano Day, I told you about an important project that we're doing at our Limeira mill that would increase the competitiveness of the Limeira mill. This project has been concluded. We are just concluding the final steps to move forward with a full capture of the benefits of this project in 2026. This project is going to bring us BRL 100 per ton in Limeira, which is really important for the cash cost of the paper and the unit there. And we are doing 2 things here, which are really cool and it should bring a lot of results for us. We are using digital twins in our paper machines so each one of our paper machines, we have built a digital twin that's running parallel with the machines and allowing us to make adjustments in some of the parameters. And the focus here is to reduce -- to improve the quality of the paper, to reduce breaks in the machine and also to help us to save raw materials and to reduce our cash cost. So we're doing now the hot test. We've been running this for the past few months. And next year, we're going to start running it for a full capture. And we're also using digital twins in our digesters in Suzano and Limeira to reduce the wood consumption, monitoring the CPA level of how we cook the wood, so that we don't overcook or undercook the wood, we have the right wood consumption here. So these 2 projects were very happy with the way that they're moving. And lastly, but very important, we are also using digital tools to improve our logistics costs. You know that paper logistics cost can be very costly. It's a very heavy product to transport and we're using digital tools here to make more effective the way that we hire freight into the market and especially autonomous drivers, we have created an Uber for the internal Uber for autonomous drivers here that we are using that's going to bring us good results. So all in all, we have here some savings that we have read included in our budget for next year, between BRL 80 million to BRL 115 million that we expect as a reduction and improving the competitiveness of our business moving forward already in 2026. So with that, I want to invite Douglas, my colleague Douglas, who is the Head of our Forest division. He's going to be sharing with you what we are doing to enhance competitiveness in our forestry business, which is one of the main backbone of our cost structure.

Thank you, Fabio. Thank you very much. Hello, everyone. It's a big pleasure to be here. I'm Douglas Lazaretti, Executive Vice President of Forestry at Suzano. Over the last 10 years, I've had the opportunity to live, learn and lead across every region where Suzano operates. And that experience gives me a holistic and grounded understanding of our forestry platform, one of Suzano's main strength. Today, I want to show you how our long-term forest strategy contributes to the Suzano's competitiveness based in 3 main pillars, but before that, let's turn to one of the most pressing challenges we face, the climate change. This is not a distance threat. This is a reality that is already impacting our operations. Our regions have a record 180 millimeters less rainfall per year over the last 6 years. Without action, this could mean a reduction of 7 cubic meter of eucawood per hectare year. But what sets Suzano apart, it's how we respond. And for that, let's move to our first pillar, our forestry unique capability. Despite the impact of climate change, our productivity is increasing, and this is possible by the investments that we have been done in silviculture and logistic and genetics, the 2 most powerful tools to overcome this challenge. In Mato Grosso do Sul, for example, we are increasing the share of our own clones that outperformed the market bringing more resilience, eucawood and stability, even under climate stress. It's important to highlight that each 1 cubic meter more of eucawood per hectare year or 3% gain adds BRL 1 billion at NPV to Suzano. The billion forests, as Carlos Anibal mentioned last year, let me repeat, BRL 1 billion at NPV to Suzano, the billion forest. So now let's move to our second pillar, our discipline of execution. We are consistently delivering an optimized cost, and this is possible by increasing the one self-sufficiency and also reducing the distance between firms and mills. In 2027, we will reach 150 kilometers, which means a reduction of more than BRL 170 million in logistics. This is possible by expanding our forest base and creating strategic opportunities. And talking about opportunities, I wish to address the swap transaction with Eldorado. It's a great and unique example of our third pillar. Suzano is still harvesting, it's now harvesting, 18 million cubic meter of eucawood from Eldorado. The same volume will be harvested by Eldorado, but is starting only in 2028. This time-based swap by preserving our stand-in forests will increase our wood stock by 18% net gain, and we add 1 more year on the forest average age in Mato Grosso do Sul. This combination allow us to increase the pulp production in Ribas and to optimize our operations in Mato Grosso do Sul. This deal has an expected return of 20% and will contribute to the reduction of the TOD. So in short, resilience, discipline and value creation. This is how we manage forests, as a strategic and high-performance asset. And with that, I will hand it over to my colleague, Aires. Thank you very much.

Hi. Good morning, everyone. It's a pleasure to be here with all of you today. It's a good day, especially after last night games, at least for pulp deals. I'd like to start by sharing some excellent news. We are closing the year of 2025, which also marks the first full year of operation at our unit, Ribas do Rio Pardo. And what we have achieved in this first year is quite remarkable. We will exceed the nominal design capacity of Suzano project and produce in 2025, 2.57 million tons. And in the first 12 months of the operation, we outperformed the learning curve for more than 60%, which is an exceptional result for a plant of this scale in the first year. And these numbers reflect a very highly experienced team, months of training supported by modern simulators, and our flawless project as a cushion. And all of this give us confidence to keep pushing forward. And remain this positive trend, we believe that we closed Pactiv with no CapEx, no new investments in this plant. We could achieve close to 2.7 million tons starting in 2027. And then we expected to maintain this positive trajectory in 2026, which will be essential to strengthening Suzano's competitiveness. And that brings us to the second point, competitiveness. This has become the central topic across all discussions at Suzano. How do we have discussed, how do we lower CapEx per ton, what we can do differently and better? And then over the past months, we conducted a deep diagnostic review of the company and revisiting our cost and expense structure. And this exercise is always the same, challenge of what we do, why we do it and how can we do it differently. And we organized is working to value journeys that at the end, electrified more than 70 initiatives with a potential of significantly enhance our competitiveness in the short, medium and long term. These initiatives expand our value chain. Since the client selection, nursery management planting through harvesting and construction roads, optimizing our production models, product allocation, customer services and aftersales. And each initiative has a clear value capture target, defined time lines and one Suzano leader responsible for its implementation. And whenever possible, we aim it on reducing carbo emissions and reducing water consumption. In summary, we are fully focused on maintaining and expanding our competitiveness in the coming years. And the impact of this effort will be flagged, as Beto mentioned, in the total operation disbursement in 2027. Considering our consolidated 2025 results and even accounting for inflation inputs and services, we project a total operational disbursement of BRL 1,983 per ton in 2027, considering 2026 currency. And that's exactly the same value that we present last year as just only for cost inflation. That demonstrates our discipline, our consistent and our confidence in the execution and reinforce our compromise of delivering what we promised. This being said, I would like to invite Malu, my colleague to continue this presentation.

Well, firstly, I want to say that it's great to be back here at Suzano Day. Suzano's long-term success relies also on a resilient ecosystem and territory. That is the business case behind our sustainability strategy that has all to do with protecting and generating value for the business, for the people and for the environment. And we do that through 3 interconnected pillars. Let's start by nature. Well, we depend on nature and in its ability to regenerate cycle after cycle, as well on our capabilities to promote conservation and restoration. Moving to climate. Mentioned already here today, climate change is not a risk. It's a reality for us. And because of our business model and our capabilities, we can create meaningful impact on both sides of the equation. On the reducing emission side as well as on the removal of carbon from the atmosphere. Going to the third pillar, people. Today, we have data that's shown that our operations can run much more efficiently when our neighboring communities also thrive, not only Suzano, but Suzano and the community thrive. Well, we have big challenging across all these 3 pillars, too big to be addressed alone. So that's why it's very crucial. It's essential that we engage our value chain to amplify the positive impact Suzano can cause. I think it's also important to call the attention to the fact that the sustainability strategy does not belong to the sustainability team. You saw here today, Fabio, Douglas and Aires embedding the sustainability lens into their strategies and performance. We have that in mind, we selected 4 teams where we need -- we want to focus. Why this for? They are the ones that we believe that Suzano can create positive impact, but most importantly, scalable impact. And they are water, climate, biodiversity and social. This includes, for instance, tracking the availability of water in our critical water sheds. There is no other company doing that. It also includes to connect 0.5 million hectares of fragmented habitats, creating biodiversity corridors. There is no company. It's hard to find a company to work on such a scale, 0.5 million hectares. And we are also contributing to the improvement of life -- of the life of at least 200,000 people that live in the territories where we operate. And as I'm going to call, I will pass the word to our CFO, Marcos, I think that's worth to mention that today, 40% of Suzano's debt is linked to sustainability targets. Thank you. The floor is yours, Marcos.

Thank you very much, Malu. Hello, everyone. I'll start my presentation connecting with what was said before regarding a less certain pulp price outlook in the short term. I'd like to spend some time explaining the rationale for production discipline at Suzano. For every mill that we have, we are comparing always 2 variables. First, the highest cost of wood that we have in our system, which is usually linked to third-party wood at long distances and also comparing with the lowest export home port that we have, which depends a lot on the logistic costs to serve our customers. We combine these 2 variables also with the outlook for pulp price and FX volatility for the upcoming 6 months. And by doing that, we have a very clear view of what should be the optimal production at every mill of Suzano. Our goal is to guarantee that every tonnage that is produced at Suzano generates an adequate return for the company. And a very clear example of that strategy was in August when we announced a capacity shutdown of 450,000 tons, which had a very minor impact in Suzano's cash flow. Moving to the next slide. We want to reinforce Suzano's commitment and priority to deleverage the balance sheet of the company. We have now a new target of net debt at $11 billion throughout the cycle, and we outlined a very clear and detailed plan to reach that level. That plan includes: first, total operational disbursement reduction. That theme was very explored today by Aires, Douglas, Leo and Fabio. This is embedded in the company's journey of competitiveness inside the culture of the company. Second thing, we're cutting discretionary CapEx. This is 100% aligned with what we announced this week for 2026 CapEx guidance. We're also optimizing our working capital. We're looking for opportunities to sell noncore assets. We're sticking to our minimum dividend policy that we just announced last night, BRL 1.4 billion of dividends. And we continue to maintain a conservative approach towards buyback. We believe that by doing that, reducing our leverage and our net debt, we will be able to capture opportunities that could arise in the market if profitability remains well below historical average for our industry. Here in this next slide, I want to show that we continue to see our cost of debt as a source of competitiveness for Suzano. In 2025, we were able to issue $4 billion of new debt and we have 2 main highlights. First, we came back to the U.S. bond market with meaningful transaction, $1 billion 10-year bond at the lowest corporate spread ever for Suzano. And second, we also did 6 different transactions totaling almost up to $3 billion, and all of them were priced in below our bond cost curve. We believe that this reflects Suzano's discipline and when to time the market to capture opportunities. And by doing all of these transactions, we brought forward all of our liquidity needs for 2026. We already have cash in hand to pay down for the Kimberly-Clark transaction, which we expect to close by mid-2026. Now I would like to show the progress we made in all of our metrics regarding our debt guidelines. First, we expanded our maturities to 80 months. Second, we reduced the percentage of debt that is maturing in the upcoming 36 months or 3 years to only 17%, and we now have cash in hand to cover for 40 months of our upcoming obligations. That's way above our target of 24 months. Most importantly, we did all of that, maintaining our cost of debt at 5%, which is very competitive, that was all despite higher interest rates in the U.S. and all the volatility in the U.S. market. Going to my last slide, I want to show Suzano's consistency in its FX hedging strategy. Here, we have a very long history of 7 years of the results of our policy. We were able, in the past 7 years, not only to protect our U.S. dollar exposure, but also to generate close to BRL 1 billion of positive financial results, which was converted into cash. Now considering our current portfolio of close to $6 billion of FX hedges, if we were to stay -- if the currency was to stay at 5.32, which was the level of the closing of the third quarter, we would generate a positive result on the financial side of BRL 2.6 billion in 2026 and 2027. So protecting our profitability from a potential BRL appreciation. So in summary, we continue to focus on production discipline in order to maximize the company's results. We are very committed to deleveraging the balance sheet of the company, and we will continue to look for opportunities to enhance our capital structure and reduce our cost of debt. Now I would like to hand it over to Beto for his final remarks. Thank you.

Thank you, Marcos. I would like to wrap up what we just saw in the presentation right now. And I -- when you come for a group like that to present our plans and what we are expecting to deliver, I really like the concept of reasons to believe, reasons to believe that we will deliver what we are presenting here today. And let's go back to the presentation of Aires regarding what we are delivering at the Cerrados project above what we announced above what we planned. Let's go back to Fabio's presentation, what we are delivering at Pine Bluff, the huge turnaround that Fabio and the team is doing in Pine Bluff, delivering above what we expected, Fabio. And also, with the business, we are expecting to start generating cash very briefly. And this is all about what we are talking about competitiveness. I also have a personal reason to believe, which is the group of talent that we have of Suzano. It's our group of people, proud of its journey that we built in the last many years, proud of the platform that we were able to build, proud of the competitive position that we were able to build and motivate about what we still have to do in the next couple of years. You know that in Suzano, we have 40,000 people working at Suzano and 92% would recommend Suzano for a relative or for a friend to work at this company. So this is the level of motivation of a team with a track record of delivering and also with this flawless execution competence that's embedded in our future. And we also saw a lot of examples of how can we capture value from the assets and from the cycle of investment that we already made. So we saw the presentation from Douglas in the forest side, what the benefit that we still have to gain in the next couple of years, not only on the operational side, but also on the deal with Eldorado. We also saw in Luis' presentation that we are expecting to capture a lot of value in the KC, by the way, do not underestimate what is moving abroad. We must keep rumble and understand that there's a lot of challenge, but we are very confident of what we can deliver? So the summary of this and going back also to Leo's presentation, when we saw the leadership of the company in increasing the size of the pie of the pulp market, leading many initiatives on the fiber-to-fiber and into the fluff business, bring us to the beginning of my presentation, when I said that we're going to focus on increasing our competitiveness and also extracting value from the investment that we have implemented in the last couple of years. We believe that doing that, we will be prepared for any scenarios. We can discuss here 2 or 3 scenarios, what's going to really happen in this market that's somehow reshaping, but we want to be prepared for any one of those scenarios and take the opportunities that might appear in front of us and be prepared to start a new cycle for the company in the right moment. Having said that, I want to say thank you. I know they're a little bit warm for the attention, and now we're going to go through the Q&A. And for that, I would like to ask the whole management team to come to the stage. Thank you very much.

So first of all, thank you, Suzano, for the entire team. Thank you so much for the presentation. I think, very enlightening. I have 2 questions. My name is Leonardo Correa from BTG Pactual. Two questions. First one for Leo. Leo, thanks for the presentation. I think the tone is quite clear, right, on the outlook. At least on my side, I think what has been surprising us over the past years in the pulp market has been all of what's happening in China. We saw -- if we take the consultants cash cost curve for China specifically, right, we saw big deflation over the past 2, 3 years, right? At one point, Chinese cash cost numbers were at $600 per ton. They've now deflated to about $480, right, which is quite a big reduction. So I wanted to hear from you if you think that we're now at a floor, you talked about wood chip costs increasing in China and now my question to you is whether you think we were turning around those numbers, and we're going to start seeing some inflation back in China, which I think for the market would be a positive. So that's my first question. Second one to Marcos and maybe to Beto, if he wants to chip in. Marcos, something that caught my attention in your presentation was at least I haven't -- I don't remember a big message on noncore divestments, right, from Suzano. You didn't quantify anything or you didn't give us any details on exactly what would be, let's say, available for sale? Is there any business line at this point for Suzano that's less attractive and that you would be willing to sell. If you -- can you give us any color, that would be very helpful.

Sorry, let me, Leo, if you don't mind, and then I turn it over to Marcos, if you want to jump in. It's regarding the selling assets, we're still looking for very selective in the small elements. So there's no huge element of divesting of -- at this time, okay? So it's really opportunity, high alternative value lands. So -- but it's a big company. So if you look the whole thing, you will find assets and elements that you can divest and generate more cash. So that's the kind of situation that we are considering at this time, okay? There's no big element in the plan regarding divestment. That's the first thing. I will hand over to Marcos, please let me know if you want to complement. But before handing over to Leo, I just -- regarding the inflation, I just would like to mention that if we go back to the wood chip cost and Leo know all the numbers, let's say, 6 months ago, the cost of wood in the pulp production in China, 6 months ago was roughly speaking, $295, $300 per ton, and now it's $360, so it's 20% more, and again, the cost of food in the pulp production. So I just want to share the numbers to complement exactly what's Leo said during the presentation. Is there wood available? Yes, there's wood available. The question is, at which cost? How the cost looks like in the future if you have more demand for that? And I'm talking about the inflation of wood cost only in the last 6 months from, let's say, April, June to the current situation. Leo, thank you.

Thank you, Beto.

Leo, just to complement on the second question and the first one, Grimaldi will answer. We have -- as you're right, that's the first time we're talking about a noncore asset divestment. As Beto mentioned, we're not considering anything big at this moment, but there are 2 main areas where we could focus at this point. One, of course, is land and considering the high best use of the land, and we have land across like many different states, many different cities in which we could even sell land that became closer to larger cities to real estate, and this is something that has a lot of value. And the second thing, which people don't are pricing much at Suzano is we have a lot of infrastructure assets that we could sell part of it. And that could be meaningful in the future. Remember that we have 3 port terminals. Remember that we have also -- we also have our rail terminals that connects to rails as well. So this kind of infrastructure assets that we have. And today, we believe that they're not well priced in, in our share and historically, they trade at a much higher multiple than our industry, it could be a source of additional cash flow in the future.

Well, thanks for your question. Beto already tackled a quicker answer to it. So I'm going to go to a deeper level in terms of how we see the China wood dynamics to support his answer in my answer. So in China, we see and we map roughly in the 2 core species that produce hardwood, which is eucalyptus and popular for euca, roughly 6 million hectares of land of planted euca and in terms of popular around 8 million hectares of planted trees. And that derives in the wood basket of roughly 138 million, 140 million cubic meters of wood. That's the wood basket of hardwood in China. As we all know, a big part of that was used before in the housing market and for other users as pulp usually pay less, right? So usually a smaller part of this wood basket would come to the pulp industry. 2024, we already saw a year of a lot of investments in new pulp mills in China. And this -- the dynamics are the pulp mills in China being hardwood and also BCTMP pulp mills, which also use hardwood wood chips. If we add how they're performing and where they're buying with today, roughly half comes from China, half comes from imports. So imports are roughly back to what they used to be 2, 3 years ago in terms of volume, but this new volume that they're consuming roughly is 25% of the wood basket in China, so 25%. Upon the deployment of that projects that I mentioned, which totaled 6 million tons of new hardwood capacity confirmed projects and also adding to that 2 million tons roughly of BCTMP pulp mills, which are also confirmed and being built or to be built. If they use all Chinese wood to feed or to the necessities of these new mills, then they're going to reach -- the pulp industry will reach 47%, 48% of this wood basket. So obviously, as each of these new projects come live, it should put more pressure on wood prices. Now even more interestingly, I didn't talk about the unconfirmed projects, but several consultants do, right, and map those projects as well. If we get all the unconfirmed projects, which are already announced, but unconfirmed. And if they were being fed by Chinese wood, this wood basket, the pulp industry would consume 84% of it, which is unrealistic or prices will have to be much, much higher than what they are today. So wood costs, we expect that should be inflating through time, as Beto mentioned, and it would put further pressure on Chinese mills. And when you mentioned this cash cost, I believe they are correct or it's kind of in the level that we see today. But again, these are the Guangxi mills, the most competitive mills, all of those mills that are being deployed, the 6 of them are being deployed on other regions carry an additional cost of $20, $30 or $40 on top of that. So it's not all -- all mills have the same competitiveness price point that you mentioned.

Rafael Barcellos from Bradesco BBI. Thanks for the opportunity. Congratulations for the event. Beto, Suzano has now many growth avenues, right? I mean the packaging business in the U.S., Lenzing, the international tissue business through KC and even your traditional pulp business with a project like Limeira, right? And I imagine that many of these initiatives have very good rates of return and can even like match most of your criteria for investment decision, right? So I just would like to -- if you could elaborate a bit more on your framework on choosing the next step, right? I mean what should you prioritize going forward? And as a second question, I remember, Beto, the first time we spoke -- you mentioned the opportunity that you are seeing on the cost side, on the pulp business, right? Initiatives like mechanization of the -- on the forestry side and so on. So I just wanted to -- if you could add more, whether you see like upside risks to your guidance for 2027 would be very interesting.

Yes. Thank you, Rafael, for the question. On the first question regarding everything that you mentioned that's in the pipeline that's on the table, I would say that the next step, it's -- as I said here, is really generating value and deliver what we promise with those investments. So we're still in the journey on the Pine Bluff. So it's not only a journey of turning around that specific business, but it's a journey of understanding as much as we can in the market. So Fabio now is a member of the association in U.S. He saw the idea of having a team and we have a group of 6 employees from Suzano that's now based in Arkansas on different areas, on finance, commercial, also on the operational side. It's really about understanding the whole thing. If we go to Lenzing and Carlos is here, Carlos sits in the Board, together with Leo, our priority here, it's keep understanding the business. So as you know, we have a call that just -- that we aspire by end of 2028. So we have a bench of time to keep understanding the business, keep understanding the textile industry and take the time to analyze and understand what we're going to do with that. It's -- we have -- it's an optionality that in any way that we have, so with a great contract. So let's take the advantage of the contract that we have. And we have a huge challenge, Rafael, that's also on the table. And again, that we must focus on, which is delivering the KC efficiencies that we understand that together with the KC we're going to be able to deliver. KC brings to the table a lot of competence on the marketing side, on the product development side, on managing very strong brands, global brands that they have. And we understand that we can add a lot of value on the operational side, on the management side and really operating those assets at a lower cost on the most efficient way. So that's the combination that we are expecting from complementary competence and understanding where we are spending a lot of time understanding the case of failures. We have a lot of case of failures in Brazil of companies going abroad. And how can we understand more the failures than the success to make sure that we're going to be prepared in the process. And we are taking the time between the signing and the closing, to understand better the market, the people, the levers that have in the business. So this is our priority. Again, there's a lot to do already. We don't want to put other initiatives on this table. What we saw during the presentations to you was a lot of focus. And if we go, for instance, for innovation technology, just to complement your question, you saw a lot of initiatives that in the past was a very potential initiatives that used to make a lot of sense for us. But today, we have decided to stop and to focus on the innovation and the technology side on 2 main areas, again, a lot of focus on the fiber-to-fiber. So this is where we're going to put reserves, people, investment, is make sure that we're going to have further and more and more application for our Eucastrong for our hardwood. And the other one, it's in the Forest side. So making sure that we're going to have clones that will be more and more productivity in the future with more productivity in the future. So that's the 2 areas that we're going to vest on innovation. So that's the first question. Sorry, Rafael, the second one is.

And the second is about whether you see upside to your cost guidance going forward given the mechanization of the forestry side. I mean any kind of those initiatives, whether they are included in this guidance.

Yes. I think when -- once we decide, firstly, when -- once we have finished a lot of investment initiatives, we have to adapt the structure and the organization for the new reality. So we used to have a structure for many projects that was being developed and implemented. Now they are done. So that is about execution. So let's be -- we are expecting, I would say, a more lean structure already in 2026 in the next couple of years. The second one is optimization using technology and process review. I would expect, as we saw here, a lot of benefits in the logistics side. So we are looking the end-to-end logistics and apply new technology, reviewing the process. We see this as important leverage in terms of reducing our TOD. Second one, it's, as you said, it's on the planting system. So as you know, this is an industry that's still planting 100% of the trees manually. So we expect and we started already the mechanization process. So we expect to in Mato Grosso do Sul in 2 years' time, have 70% of the whole planting being mechanized. So the machines are there, was tested. Now, it's about rolling out this and of course, learnings will come. So that's the second element. And we are also bringing technology for many of our process, review process. Fabio mentioned one of the initiatives on bringing AI to some of our process and the kind of benefits that you can generate with a very, very low CapEx. You will not see Suzano do know launching a big digitalization strategy. Now we're going to put digital process and use AI and everything. We are doing a different way. What we are doing is, where are the main pains in our process that we can use the right technology to reduce costs and be more efficient. So this, I would say, is the third initiative that we can expect reducing our costs in the next couple of years.

Caio Greiner from UBS. Marcos, maybe my first question to you. On the CapEx side, we talked a lot about cost today, but also on the CapEx number. It was great to see the guidance being revised slightly downward from previous estimates, maybe even below market expectations down slightly below BRL 11 billion. And I think the question and the debate we usually have with investors on that is that -- the fact that a lot of people perpetuate those levels, but not necessarily include the benefit for the extra CapEx above the maintenance CapEx for your investment. So the question is, what can we expect in terms of total CapEx for the coming years? And how can -- how do you think that investors can better start appreciating those investments and maybe start factoring that into our models and to EBITDA generation in the future. And Leo, my second question to you, it was interesting to see in the presentation, the utilization rates below 90%. And then you even talk about the possibility of what could drive the market to become tighter and you mentioned deverticalization, which is interesting. I think it's one of the first times that we discussed that in a little bit more detail. So it would be interesting to hear those conversations that you briefly mentioned that you're having with some of these players. What are they telling you? What would be the timing for this? And do you think this actually has the potential to drive market to rebalance and utilization rates to move back, if this could eventually offset the Chinese integration? And again, what's the timing for this?

So answering your first question, Caio, regarding CapEx. You're right. There is room for us to continue reducing our CapEx. Of course, there is a lot of the CapEx that is built in, in the forestry business, but there are still some projects that we have done in the past that we're finalizing at this moment. There is still some CapEx for Cerrado, for example, which is totally compressible for the upcoming years. Important to mention, as Douglas said in his presentation that as we evolve in the 1 billion forest evolution and increase in the productivity of our forestry, we should require less land and also less CapEx for silviculture, for example. But that -- we need to deliver that. And in the short term, we're still building up the full forestry area that we need. So that's why probably we still have a CapEx that's still a little bit above our sustaining CapEx level, which is, as you saw in the past few years between BRL 7.5 million and BRL 8 billion. So there is room for sure, to continue compressing will depend a lot on what we're doing at the forestry side. Remember, there is also some inflation in the industry, which is not low at all, inflation at the -- so we're doing more and more to compensate the inflation that we're seeing in the area. A lot about the mechanization that we just discussed also will help on the cost side but also could help on the CapEx side as well in the future.

Just to complement what Marcos just said regarding CapEx, let me give you other public examples of initiatives that will compress the CapEx in the next coming years. Besides Cerrado, which is BRL 200 million, we also have the rest of the wood swap that we will pay in 2026, BRL 139 million, which is not that we will not have in the coming years. And you know that we are also upgrading the SAP system, the SAP HANA, which we will finalize in 2026. We are talking about extra BRL 200 million that's not going to be next year. Just a couple of examples that our CapEx that will be compressed for the next coming years. So I think this is a trend. If you look at what we just released in terms of CapEx, I think really is a trend.

Okay. Caio, thanks for the second question, again, about fiber-to-fiber. So as I mentioned in my presentation, we started more proactively this journey about 3 years ago. After the end of the second year, with the help of a consultancy, we mapped all of the assets in each kind of paper production where we could have better benefits. So today, we have screening of all global markets, actually, all paper producers in the world, their machines and capability of their machines so that our team can actually go quite focused on that. But the fiber-to-fiber strategy is actually has 2 branches to it. One, which is more obvious, is substituting other grades like -- or other kinds of even hardwood and targeting softwood grades to increase the addressable market, as I mentioned. We have a team dedicated for this journey, right? And part of them under the commercial team, part of them under the R&D team of Suzano, but with joint similar targets and same compensation targets in terms of what we have to do and focus with our customers. We have a second team also under the same leadership, which is based on this mapping that we did at the end of the second year, what are the integrated pulp producers in the world? What are their cash costs? And what are the most probable to make decisions of deverticalization, and it's not only a cost position base, but also how old are their mills and when they have to make critical decisions in terms of investing in these mills in a new boiler or a new part of that mill, will demand a lot of CapEX and believing in that equipment for the next 30, 40, 50 years as well. So we have 2 teams, one focusing on fiber replacement and other assessing these sites, these mills to enable this discussion of the verticalization. This is not the sales team to procurement team conversation. This is a conversation that the leadership has. I'm involved, Beto is involved. We are talking to CEOs of these companies. We have a lot of interest in that sense. We have 2 main focuses today being studied in one in North America, one in Europe. And obviously, there are more complex projects, right, because you can imagine that this company, for example, will be shutting down a part of their production sites and what they are today. So it's a more complex project, which takes longer, but I really believe that this is a true example of a new business model that will be created with this verticalization that's ongoing on China. That's the only way if you think about it, that higher cost, European assets or North American assets can compete against Chinese because obviously, they're going to export many of these paper products or tissue or paperboard to these markets as well. So I believe Beto -- and Beto is most of the time with me in these discussions that we see full leadership engagement from these companies to really believe and create a different concept and model of business, which will make European producers and North American paper producers, again, competitive vis-a-vis Asian producers.

Daniel Sasson from Itau BBA. My first question, maybe to Beto, you opened your presentation talking about competitiveness efficiency. So if you could detail a little bit more what do you see as opportunities in terms of reducing your SG&A? Is it something that bothers you? Or where do you want to be? Maybe even going beyond 2027, right, we have the guidance for the total operating disbursement, what can you do? What are the initiatives? Where do you want to be? And maybe my second question to Marcos. It seems that there is a huge mismanagement between the EV per ton that Suzano is currently trading at and the investment that some of your competitors are willing to do in Brazil. So maybe building up on Leo's question on the divestment of noncore assets, would you consider to do some sort of recycling plan for your producing assets? Would you be willing to divest from your producing plants at the right value, of course. Are there other opportunities to convert plants such as what you did in Limeira, how do you see your operating footprint and the opportunities that you see to generate value there?

Daniel, maybe regarding the cost, I think I mentioned to Rafael, a couple of initiatives that we're going to be able to implement to reduce. Let me go through exactly your point of SG&A. I think we have the chance to talk about that in the beginning of the year that we were not happy with the level of SG&A of our organization, and this was because many, many projects was going on. Now as I said, we are finalizing most of them. We are delivering, for instance fluff, the tissue machine in Aracruz. So many of those projects now, Cerrado started, let's say, with a buffer. Now we are adjusting the organization for a steady state operation. So many initiatives that now we can really adapt the structure and the overhead of the organization for the new reality. So I think that's the -- how did we do that? We really decide, I would say, Carol, a couple of months ago, Carol and Aires, they were leading this initiative was really doing a kind of benchmark exercise on the specific SG&A in the whole industry, not only in Brazil but also abroad. The idea, if you want to be the leader in cost, you must be the lever in each line of the cost. So that's what we did. And the SG&A is reducing as we speak right now in 2025. And in 2026, we will see the same.

Daniel, to your second question, I would say that any M&A transaction that we look at on the buy side or on the sell side, we need to add value, right? So we have that as our mantra. We are flexible. And you can see that we are flexible when we did the JV with KC, right? It was a transaction, initially thought to be a 100% acquisition. We built together with KC a transaction that was a completely different one, 51%, 49% JV, so on and so forth. So we are flexible. We could be considering selling small parts of our assets in order to recycle capital as well. But of course, it needs to add value to the company. It needs to be at the right valuation level. So we're open for discussions like that. As you mentioned, regarding new potential conversions, we have the benefit of having a full system of mills. We operate in 9 different mills, and some of them have different lines. So we have opportunities to consider on that front as well.

Marcio Farid Filho from Goldman Sachs. Thanks a lot for the time today. It's been very enlightening. I think pushing on what Leo just said, right? I mean, trying to have U.S. and Europe competing more with China. I think the -- I will elaborate, but I think the question is can U.S. and Europe really compete with China, right? Clearly, Suzano has a much better cost position. And I think Suzano is going to be a winner in a sector where maybe the profit pool is becoming smaller, right? But I mean, we look at paperboard in China, FOB price is $500 a ton. And everybody else is $1,000 a ton, right? It seems like the gap is so huge. China build a pulp mill 30% faster, 20% cheaper or even more than that, right? So I think the question is outside of maybe government protectionism. And I think maybe FOB is in the best place because U.S. is probably the best place to be with all the import tariffs as well. And maybe it would be great to hear from Carlos, right, what's happening in Europe? I mean, SAP UPM just got together on the paper business, Stora Enso trying to spin off their forest business. Everybody is trying to compete against China, to your point, right, in different ways, but I mean, how do you see, and it's probably not -- that's unnecessary searching every day, but how do you see the sector in 5, 10 years from now and outside of China and especially this Chinese momentum continue or not. And we can debate here whether chips prices are going to be 30-plus percent higher or not. But it seems like China is here for the long term. They are not optimistic anymore, right? And Suzano is clearly here for the long term as well and have its own position. But again, how does everybody else compete in this world? And where do you see the sector in 10 years' time?

I will start. Maybe this is a 2-hour answer question, and maybe we're not going to get the answer completely right. But under first of all, the pulp perspective and nonintegrated customers. So just to focusing on these 2 main regions. Main customers for hardwood pulp in the U.S. are tissue players. And the tissue dynamic in North America is very unique. We have very strong brands, different technology of products, which are not made in China. So the concept of the how the market dynamic is in place, protects our customers, which are positioned usually on the higher part of the pyramid against lower cost, eventually, imports of jumbo rolls from China. So we see the market a bit more protected. When it comes to Europe, there is a bigger concern because now we're talking about nonintegrated customers in several niches, right, printing writing, paperboard and also tissue. Again, tissue a bit more protected, but other customers are extremely concerned. And again, trying to find out how can they be protected against this Chinese threat by having closer relationships with customers, but also in the cost side. And then it opens a lot of opportunities and discussions with us. And again, this opens opportunities on the fiber-to-fiber agenda because if they continue doing paper like they do, which is much more conservative when compared to how Chinese do. It even brings their cost position to a much harder place to compete against Chinese. So we believe that this threat is there. They understand, and it opens in the short term, a lot of opportunity for us to tackle even more opportunities in fiber-to-fiber and even in different pricing models, we have been saying that for quite some time that we are very open and quite creative in terms of how we design our contracts with these customers to enable them each one with their particularity to compete against Chinese. Now the other part are the integrated pulp and paper capacity producers like those that I showed that add up to 110 million tons per year. If they don't do anything, it's my belief that we are going to see a bigger amount of closures in that sense as it was 2, 3, 4 years ago. We saw a little bit less in the last 2 years, but we see a lot of potential for those to recover. But that's opening this new perspective and maybe a completely new model for the future where integrated mills, and I truly believe this is a model of the future. We'll be closing up their high-cost pulp sites and seeing ways to virtually connect to lower-cost producers like Suzano. We call this a virtual integrated model when we're talking to them so that we can together bring their cost structure much lower and down so that they are able to compete against Chinese as well. And obviously, regulations and policies will always be a way that they can also seek for momentarily protection in both markets.

Marcio, let me just complement from a paper perspective now. And I think on a cost per cost basis, on the paper side, it's going to be very hard to compete with China. Maybe for Europeans and Americans, maybe impossible because you have some structural change that would make it very hard for the industry to reinvent itself. But I see 2 ways of the markets that could reshape. I look at -- I think in the American markets, North American markets bring us some perspective on that. You're going to see companies moving more towards the final customer. You see downstream integration, as you see in the U.S. most of the companies are integrated through converting and some of them are operating inside the brand owners, so makes it much difficult for imported products to come. And even at a lower cost to replace. You can do that by integrating downstream or you can do that by integrating it virtually with your supply chain. So I think the U.S. model shows us some of that different business models can lead to differentiation and protection for the industry. And the other thing that may happen, and we're probably going to see more of this trade protections, either from tariffs or either from technical specs because as Leo pointed out during his presentation on the way it is right now, it's completely unsustainable. So I think you're going to see lots of that happening, companies changing business model in order to adapt and try to find differentiation to try to protect themselves through the business model or looking for protection from government.

And just to add, the sustainability standards in Europe and North America are much higher than the sustainability standards in China and in Asia. So that is a key protection point as well because the customers of our customers demand certification standards, compromises that today, Asians still cannot comply with. So that as well is a blocker to several producers coming into these markets.

Marcio, I think it's -- just to complement because I fully agree with your statement regarding Europe and maybe summarizing what we just said. And we spent myself, Leo and Carlos a lot of time with the players in Europe last month on the pulp week. And there's not a silver bullet as we know but there's overcapacity. So things like what we saw in start and UPM must still -- they start to have -- must start happening more often. And secondly, shut down capacity with a very low, let's say, competitiveness. The second one in the pulp side, it's what Leo said, this is despite of China. This is nothing related to China. It's they don't have the level of competitiveness for a long time ago. So it's just a new trigger after the war and after everything, it's getting worse. So it's about maybe the deintegration. It's the other way around process that we are seeing in China. This is the second thing. And the other thing, as you know, that in Europe, they take more time, and we usually see Europe as a single country, which is not. There's a lot of different situations, different countries, and they usually take much more time to react than U.S. and then Latin America for a more tougher scenarios. So I think there's a couple of things that must happen in the next coming years that we have changed the situation in Europe in the market.

I know that you'd never forget me. Thanks for question. I'm going to address your point in the Paper and Package producers perspective. And I can say to you that I've been following Europe over the last 20 years more or less closely, but always looking at that. And what we see today, I had never seen before. As Beto has said, overcapacity increasing costs, wood cost today is much higher than what it was to be 5 years ago. It has decreased a little bit over the last few months, but it's still very high. Overcapacity, we have even some producers adding more capacity, very low pricing power. They are losing share. They are losing space in U.S. They are losing space in the neighborhoods. Middle East used to be region dominated by the Europeans. Today, that market is dominated by the Chinese. And I think the European producers, they are not taking the actions at the right pace. In my view, in 3 years' time, we're going to see European industry on the Paper and Package side, completely different of what we have today, a completely different setup, and that can be a great opportunity for us even on a fiber-to-fiber. We're going to see producers rationalizing production, taking out high-cost facilities, high-cost machines. We're going to see asset combinations, and again, I do believe that all that will create a new space that Luis' team will fulfill that will mean additional demand for hardwood in Europe. So Europe is going to be different in 2, 3 years' time. And what we have today is not sustainable. The enaction there is enough. They're going to need to do something different.

Hello, everyone. This is Alfonso Salazar from Scotiabank. I have a couple of questions. The first one, we haven't discussed the recycled fiber market and the implications of what is happening in China with all this integration that is now taking place. Also, there is a good number of projects that can be developed in Brazil over the coming years, that will increase demand or supply of virgin fiber. So I just want to understand what it means for the usage of recycled fiber? That would be the first question. The second one is regarding the printing and writing market. I don't think that was in your presentation, anything related to that? Maybe I missed it. But any comment on what do you think is going to happen over the coming years, we have seen a contraction, but at what point or at what point in time you think and at what level do you think is going to stop and bottom finally? Those are the 2 questions that I have.

Alfonso, this is Leo. I'm going to answer the first question. When it comes to fiber-to-fiber, the obvious first step is focusing on fibers that costs more than our pulp so that we can replace them easier or in the case of the innovation platform that I mentioned to you that Suzano is developing, we obviously charge an additional price for those as these products are getting closer and closer to softwood. And usually recycled grades were priced below virgin pulp grades. What we're seeing now, and that maybe connects to your second question is that with the decline of printing and writing grades. There is less formation of sorted office products, or SOP recycled grades. And that's the top of the pyramid in terms of quality when it comes to recycled grades. And that is a very particular grade and very important grade to tissue producers because still a big part of the tissue industry, 30%, 35% of the furnish for tissue producers globally are recycled fibers. And as we see a declining demand for printing and writing grades and a smaller availability of sorted office papers, this price is increasing. We are mapping quite closely. We have also in the fiber-to-fiber team, a project with one of the key users of this recycled grades in the tissue in the European tissue industry. And we are always mapping the points or the set points in terms of what needs to be the higher price of this premium recycled grade that will make financial sense for us to substitute with hardwood pulp or with virgin fiber. So this is an active discussion in our agenda. I think every year, it intensifies more and more, especially for again, tissue producers, which uses high premium recycled grade. And I think that every year, this gap gets closer and closer. We are in the kind of in the proximity of the threshold being crossed.

Alfonso, I'll answer the second one here about the print and writing segment. As you know, the speed of decline in the market has increased the pace. Now we're seeing in developed markets with a pace of decline at 6% to 8% per year. That's what we are seeing in North America and in Europe for the past few years, which is huge. And we are seeing even the developed markets, under developing markets like Brazil and Asia, that had growth in the past. Now is kind of stable and also declining, but capacity is, believe it or not, still the net capacity still going up, mainly in Asia. So it's not a good future for the whole overall market. That's what's driving movement like the UPM SAP that you have seen recently. We're going to see more of that as we discussed in the year. And we are preparing ourselves. We have a good cost structure, even lower our cost structure to be as a last man standing practice here on the print and writing. I don't have an answer for your question, about when it's going to plateau I think it is very difficult because we were competing with digital tools. We don't know what technology is going to change and bring in the cost of technology into the future, but we are preparing ourselves here for the worst scenario. And I think that nobody has an answer for that.

Caio Ribeiro from Bank of America. Thank you very much for the opportunity, and thank you for the presentation. Super insightful, as always. So my first question is on your pulp business, right, and especially how you see the structure of that business in light of this world where we continue to see your Lat Am competitors contemplating or moving towards additional expansions. So how do you respond to that? Do you grow the business further to keep your market share intact? Do you pursue further integration? Do you see the size right now as adequate for your business model? Or do you pursue a shift perhaps into other products like the solving wood pulp? So that's my first question. And then moving on to tissue, right, and particularly discussing the JV with Kimberly-Clark. The narrative in Europe, as far as we perceive it, has been one where the private labels over the last few years, have gained share versus the branded products, right? And so I'm curious to hear, I mean, what differentials that you can bring into this JV to perhaps trigger a reversal of that cycle and start gaining share similar to what you've done in Brazil?

Caio, let me start with the first one. And very straight to the point. There is no way to have a return on new pulp project with the level of price that we have been seeing. So if we have to think and something at least of $600 per ton from that level to above to stop thinking about a minimum level of return in a project like that. And I also would say that Suzano is very well positioned if in the future, we just start to thinking in increasing our pulp production, it's not in the -- it's not in our priority today as I -- as we talk today. But any extra capacity for Suzano will be a brownfield, not a greenfield, which is completely different CapEx per ton. So we wouldn't consider a brownfield even on the level of such $600 to have the right level of return. So this is how it would be in the greenfield. As you know, we have a portfolio that allowed us to have this kind of flexibility to increase capacity on completely different levels. I'm talking about brownfield in Ribas, which is 100% prepared for that or Imperatriz, which is also 100% prepared with that, with different level of capacity, different level of production to face the kind of situation, this kind of flexibility we do have, but now with this level of price. So greenfield is even worst.

I am going to complement Beto being a little bit less polite than he was a PowerPoint accept everything, anything. Obviously, as we saw a few days ago, if we are forecasting that 20% to 30% of the hardwood industry will shut down in a few years, obviously, it makes sense in having a new pulp mill. But we are very truthful to our beliefs and to our role in terms of how we -- as Aires mentioned and throughout the presentation in terms of what we deliver and the messages that we are very clearly delivering to you guys as well. And we clearly do not see the scenario. We are seeing a scenario that unless something dramatically changes, we're going to see very low or below optimum demand-to-capacity ratio, which obviously will derive these prices that Beto mentioned, and we will not make any new project, greenfield project makes sense.

And just complementing on that as well. Like when you're looking at returns in a high interest rate and more volatile environment, we already spoke about that. You should require a higher return for your investment above the cost of capital of the company. We see at current levels of prices, for sure. We wouldn't reach anything close to a little bit above normalized levels of spread over a rock for new projects.

Going for the second question, thank you for the question. When we look at Latin America, Europe and Asia, the 3 regions are very different in terms of market consolidation and also private label. So Europe, you're correct, is the region with the highest level of private label penetration among all the regions that we have. This number has kind of stabilized right now, but on very high -- on a very high level. Going for our operation in future operations in Europe, we see 2 points here. The first 1 is that we have the best brands and the strongest brands in the country so when -- in the region. So when we look at the branded business, I think we are very well positioned in terms of the brands that we carry. We still have opportunities to innovate and to bring new products or to enter new categories with those that are strong and already known in the market. That's number one. The second one is, we are going to implement a series of cost reductions as we have mentioned in the presentation and some of my colleagues have mentioned here, that will make us more competitive in this market and will allow us also to compete in other areas as well, for example, in private label because we do have idle capacity already on the mills that we have installed in the country. So the combination of cost reduction will allow us to be more competitive and enter new businesses as well in the region, therefore, filling up the mills, diluting fixed costs and then getting a higher margin.

Just complementing and what Luis said, but the main opportunities in this business in the first 2, 3 years, its cost in all lines of the P&L. So we have all those opportunities, as Luis said, but the new management team has to focus to do at least half of what we have done here in Brazil. So this is the priority as soon as we start managing together the business.

Ricardo Monegaglia with Safra. I have 2 questions. First, connecting Aires with Douglas, so forestry and also Cerrado. Aires, you mentioned about the plans to raise capacity to 2.7 million tons and connecting with Douglas, everything he said about wood productivity, less rains. So I wonder if you will be able to keep this 2.7 million tons per year with our current asset base and also current rain conditions in Mato Grosso do Sul or you plan or Suzano plans to do similar deals as the one with Eldorado, the wood swap, would that be necessary? So this is my first question. And my second question to Marcos. You mentioned opportunistic buyback. So I just wonder if you could guide us through what are the ideal variables that would make you decide for a buyback?

So thank you for the question. The first one, we are ready to increase the pulp capacity in Ribas. Our forest base is already established. So we are completely ready to support this 2.7 million ton per year in Mato Grosso do Sul.

And of course, that's -- we are more comfortable after the deal with Eldorado, the financial AI product that brings our addition of consumption in these coming years, especially because the average of -- have of wood pulp contained inside the wood because the average of the forest is higher than we have predicted several years ago. And then it will give us confidence to announce this volume of pulp and of course, we are talking here remain the same pace in [indiscernible]. We will deliver here more production at Cerrado and try to increase and operate on a higher level -- interest level issue.

Ricardo, regarding your second question on the buybacks, we look at many variables, right? So of course, the price of the stock is probably one of the most important ones, but we also look at other metrics on the industry. We compare also the outlook for the currency makes a difference for us when we are considering buybacks as well. And we look at our disbursements that we have for the future. We look at our leverage as well to see how we're projecting our leverage for the upcoming quarters. So we take all of that into consideration. And considering what I mentioned in my presentation that we have a very strong focus on deleveraging the balance sheet of the company. We will probably be more selective on buybacks at this point in time. We are already being more selective on buybacks at this point in time. By any chance, we have an improvement in the cycle that we have or we're able to generate additional cash through an asset sale that was not forecasted and we are now starting to consider. Then we open room for the buyback. So we're taking a very conservative approach towards that, but we look on a daily basis on all of those variables to see if it makes sense for us to engage in the program or not. We have an open program for the buyback. It's still open. We have room to do buybacks if we need and if we decide to do.

Thanks, guys, for the presentation. Yuri Pereira from Santander. Still on forest productivity. I'd like to understand if you have in your plans some approvals about GMO regulations and how is that important for Suzano in the long term. And if you could also recap to us about the benefits and the differences that these regulations could bring to the sector.

Carlos, would you like to mention about.

I can start. Today, we have 11 events approved by the Brazilian Biotech agency. And those events are related to herbicide tolerance, insect resistance and productivity. And once we can get the approval of others that we have been working on. Once we can find a solution with the certification body, we're going to be in a unique position to have those GMOs contributing, even more to take us to a much higher productivity level. Right now, we have ongoing discussions with some NGOs with some certification bodies, but we don't have a conclusion yet. This is one of the fronts that I lead there in Europe, and this is one of my priorities. We got to find a way to make it happen once we have a lot of value in having those GMOs planted or brought to our plantations.

Just to share a thought on that area. Carlos is leading this initiative, which is very important for us in Europe since he is based there. If you buy a box of corn flakes at home, the corn inside the box has GMO, but the box, we are not allowed to use it. So that's the rules today. So -- and we want to challenge this very strongly to make sure that we have the same right that other futures like soybean and corn that are using GMO for more than 20 years already. So it's in our agenda.

We have room for another last question. The team always deliver.

Thank you, Marcos. Congratulations to the team. So I'm going to make a heads last one to Malu and Douglas. I think we're having some real climate change. The world has lost the majority of our coral reefs. And we're moving towards losing the Permafrost and that will release a lot of CO2 in the air. So it seems that the ship has sailed, and the oil productions are every year higher. And I would like to know if you have any perspective for the next 5, 10 years or for the next decades of how big these challenges will be and how to face them.

Well, thank you for the question. I think in the coming years, it will be higher, the challenge because the technologies, the investments are not there yet. I think everybody is moving faster, but not on the speed that's still necessary. In our case, to be very concrete, and then, Douglas, you can complement. We have been investing a lot on research and development, okay? So to have a more resilient seed, to have a more resilient plant is already necessary for us. We are not waiting for this climate change. We have been dealing with that in the last few years. And we have been able to be managing it because we started earlier, right, with all the research that we have with all the efforts that we have on the environmental side and the social yet. When you look at global level, we still need the development of the carbon credit markets okay? It's still not on the right pace. We have just finalized COP. There is no evolution on this side, but you can see that it's not -- it's something that it will be happening, not now, but maybe in a couple of years, and we will make a difference. Companies will move faster when the market will become much more mature, but companies are also moving because they are being impacted already, not only -- it's not news, it's not about information. Because of a lot of things happening. People are saying that companies are not investing on climate -- fighting climate change and more or any other sustainability agenda. And for me, you are the first ones that show to us that it's not really changing because you're still demanding from us, data, performance, risk analysis on every environmental and social, let's say, risks that we -- each different business faces so I think what we have today, it's not on top of the agenda, maybe not on the front page of the news, but companies realize it's important. So we are moving and working together with public sector. If we don't work together with them, we advocate, it's very important for us. We have to be part of the definition of those rules, not only here in Brazil, but also abroad, because they are impacting our business. So we are organized. We are organizing Intermodal ourselves to the part of those debates of those developments.

It's quite hard to think about this future to simulate that, but what I can say is that we are obsessed by resilience. A couple of years ago, our focus was productivity. Now, it's not just productivity. It's productivity and resilience. And as I saw today, we are completely focused on that. Suzano has one of the largest bank clonal in the world for eucalyptus. And even considering the climate change, we are delivering on productivity and resilience. Resilience not just for water, but for pests and diseases as well. This is how we are working to overcome this challenge.

Just a final statement on that, so then we can finish. We see sustainability as an opportunity, not as a cost. This is the way that we believe this is the way that we manage we truly -- we fully believe the whole team at Suzano that we can keep growing the business and at the same time, generating positive social impact and protecting the environment. Those 3 things must come together. That's how we manage the business, and we see a business case under any sustainability initiative. So having said that, we really would like to thank you in this warm day to spend the morning here with us. We really appreciate the questions. We really appreciate the discussion. So thank you very much for that, and we see you next time. Thank you.