Suzano S.A. (NYSE:SUZ) Q4 2025 Earnings Call Transcript

Suzano S.A. (NYSE:SUZ) Q4 2025 Earnings Call Transcript February 11, 2026

Operator: Ladies and gentlemen, thank you for holding, and welcome to Suzano’s conference call to discuss the results for the fourth quarter of 2025. [Operator Instructions] They would be addressed CEO, Mr. Beto Abreu and other executive officers. This call will be presented in English with simultaneous translation to Portuguese. [Operator Instructions] Before proceeding, please be aware that any forward-looking statements are based on the beliefs and assumptions of Suzano’s management and on information currently available to the company. They involve risks, uncertainties and assumptions because they relate to future events and therefore, depend on circumstances that may or may not occur in the future. You should understand that general economic conditions, industry conditions and other operating factors could also affect the future results of Suzano and could cause results to differ materially from those expressed in such forward-looking statements.

Now I will turn the conference over to Mr. Beto Abreu. Please, you may begin your presentation.

João Fernandez de Abreu: Thank you, and welcome, everyone, for our fourth quarter results call. I would like to cover mainly 3 highlights related to the — our results in the fourth quarter and also our results for 2025. Let me start highlighting the strong shipment in pulp during the fourth quarter. This is record volumes for Suzano, and it’s absolutely related to our supply chain team on the operational excellence side. So flawless execution in our process. So the team here is very glad of what the supply chain team was able to deliver. On the paper business unit, we also had a strong volume. But the point that I would like to highlight here is the continuous improvement of the Pine Bluff operation in U.S. We have been doing a great job over there, learning a lot and showing how our management skills and competence can add value from assets also outside Brazil.

We are learning a lot of things that for sure will be used during our K-C operation in the future. On the side of cost, cash costs came absolutely in line with the plan. On the other side, I would like to ask you to pay attention to the DTO — sorry, the TDO of Suzano, I would consider 2025 as an inflection point. So what we can expect for 2026 and for the coming years is a new trend in terms of TDO, and this is absolutely in line with our agenda of increasing and improving our level of competitiveness. We also saw a strong operational cash flow in the fourth quarter and also free cash flow, even on the lower price, I would say, cycle. And for me, the message here is the level of resilience of our business, resilience and competitiveness. So this is a business that’s going to be even stronger in the future in terms of competitiveness to face any kind of business environment.

So that’s the summary for me for the first quarter, volume, cost and the capacity of the business to generate cash in any kind of business scenario. Having said that, I’d like to hand over to Fabio that will cover the Paper and Packaging business.

Fabio Almeida Oliveira: Thanks, Beto, and good morning, everyone. Please let’s turn to the next page on the presentation. During the fourth quarter of 2025, our Paper and Packaging business unit delivered strong volumes from its operations in Brazil and also in U.S. Favorable seasonality helped to lift volumes in the quarter, while we continue to see paper prices declining in export markets. In U.S., Suzano Packaging continued to be a positive highlight with stable prices quarter-over-quarter and a solid 21% increase year-over-year. During the quarter, we also had our annual maintenance downtimes for both Suzano and Limeira. Despite the outage in Limeira — during the outage in Limeira, we finalized important upgrades at the mill, which will improve cash cost competitiveness as explained in our last Suzano Day.

Looking at our markets in Brazil, print and write demand according to IBA increased by 1% in the first 2 months of the fourth quarter compared to the same period of last year, led by uncoated paper demand due to seasonality. Demand for cut size and coated paper remained relatively stable year-over-year. International markets remained weak with declining demand and oversupply. Latin America demand has been more resilient when compared to the U.S. and Europe, but the region has seen an income of inflows of Asian papers at very low prices. Now looking at paperboard, demand in Brazil grew 2% in the first 2 months of the Q4 compared to the same period of last year, also showing the same improvement versus last quarter. In the U.S. market, according to FP&A data, SBS shipments on the fourth quarter were stable quarter-over-quarter and year-over-year, but production was up 2% with the ramp-up of new capacity.

New capacity has put pressure in operating rates, mainly in folding box and foodservice market segments, while liquid packaging board remains more insulated. Looking now at EBITDA performance, the 10% increase over Q4 was driven by the ongoing turnaround of Suzano Packaging, which delivered improved EBITDA quarter-over-quarter and year-over-year. Our EBITDA from our Brazilian operations took a hit from lower prices and FX despite higher volumes in the quarter on a year-over-year and quarter-over-quarter basis. The maintenance downtimes performed at Suzano and Limeira mills were on time and on budget, but also had an impact on our costs. Looking ahead to Suzano’s Paper and Packaging business performance, sales volumes from our Brazil and U.S. operations will be lower in Q1 compared to last quarter, following the normal seasonality of the period.

We also expect prices to improve with the phased implementation of the price increases we have announced in Brazil and export markets. Price for Suzano package should remain stable in dollars since the majority of our volumes are under contracts with pre-agreed prices. On the cost performance, since there are no planned downtimes in Q1, we expect an improvement in our cash cost in our Brazilian operations. For Suzano Packaging, we continue to work to reduce our cash cost, but we could see some pressure in Q1 due to the winter conditions in the region and much higher natural gas prices than expected. As a final note, I would like to share that in January, we made the decision to cease our paper operations at our Rio Verde mill. This small site was our only nonintegrated mill and was producing around 50,000 tonnes of paper annually.

This mill had the highest cash cost in our asset portfolio. And with this closure, we expect a positive impact to our 2026 results by reallocating its products to the more competitive Suzano and Limeira mills and adjusting our commercial strategy. Now I’ll hand it over to Leo, who will present our pulp business results.

Leonardo Grimaldi: Thanks, Fabio, and good morning, everyone. Let’s now turn to our pulp business unit, where I’d like to highlight the key developments from the fourth quarter of 2025. This past quarter was marked by price recovery in all markets due mainly to a higher demand of hardwood pulp in China and Asia in general as well as a more pressured cost base for wood in Asia, consequently increasing cash costs of those producers as anticipated in our Investors Day. In China, paper and board production according to SCI, posted a 17% increase in Q4 ’25 when compared to Q4 ’24, and the full year analysis presents another positive year with 3% growth in paper and board production and with highlights to Ivory Board, which posted 8% growth in tissue with a 6% growth in 2025.

This has reflected in a higher demand of pulp, having pulp imports grown 1.7 million tonnes in 2025 according to Chinese custom statistics, of which 1.4 million tonnes of hardwood pulp. Purchases of hardwood pulp have been further incentivized by softwood fiber substitution trend and also by players in the textile markets increasing their purchases of paper-grade pulp, mostly hardwood. Our order intake during the quarter was above expectations, meaning that despite a very strong quarter in terms of invoicing, we are still carrying backlogs of deliveries to markets where we invoice directly out of Brazil, like China, Southeast Asia and the Middle East. Looking at our price performance in Q4 ’25, the $538 per tonne that you see on the slide, although higher than previous quarter, is a backward-looking figure.

Market prices are already above that level, as you know, but our reported prices in Q4 was impacted by invoicing backlogs. All incoming orders during the quarter and in all regions in the world were captured at a higher price set point, fully aligned with our price increase announcements with a strong month after month order intake, a trend that is still ongoing. We sold record volumes in Q4 and above our production output during the period, meaning year-end inventories or bringing year-end inventories to very low levels and placing pressure on our logistics operations as inventories fell below optimum operational levels. Looking at the right side of the slide, the BRL 4.8 billion in EBITDA, up 8% quarter-over-quarter was supported by higher volumes and better prices in U.S. dollar terms.

Now looking forward, I would like to highlight the following points. In China, following a strong production pace of paper and board producers in Q4 ’25, January has posted upbeat figures according to SCI, even slightly above the strongest production month in 2025, which was December and 27% higher when compared to January ’25. Importantly, this increase has not led to paper inventories build up at paper producers compared to the past month’s levels. And just to connect that to pulp demand, as an example, these figures translate into an additional consumption of 250,000 tonnes of pulp compared to Jan ’25 just for Chinese tissue producers. Also in January, order intake from our customers continued quite strong with full implementation of the announced price increase.

Our announced price increase were also implemented in all Western markets. As the year began, news on the supply side of the equation have positively affected short and midterm price perspectives. First, news about the Indonesian government revoking forestry permits covering an area of over 1 million hectares, including plantations for industrial users such as pulp and paper on top of the 500,000 hectares that had that permit revoked during 2025. This brings 2 tailwinds to pulp markets as Indonesia currently produces over 4.5 million tonnes of market hardwood pulp, of which 3.5 million tonnes are exported to China. One of them is that a key pulp producer has promptly announced an immediate and unexpected curtailment of 150,000 tonnes of market pulp for February and March combined.

Another is that according to our market intelligence analysis, Indonesians are likely intensifying their wood chip purchases mostly from Vietnam, placing upward pressure on wood chip prices. This would affect not only Indonesian costs, but also Chinese and Japanese pulp producers who are major offtakers of Vietnamese wood chips. Even before the developments in Indonesia, we had been observing rising imported wood chip prices into China, which, as I have shared in our last Investor Day, represents roughly 50% of the wood furnace for Chinese pulp and paper industry. Separately from that and very important, APP has announced the delay of the OQ 2 project start-up from early Q2 to mid-Q4 2026. As this was the only market pulp capacity addition considered for 2026, now no incremental market pulp capacity is expected to reach markets this year.

The addition of positive paper production figures in China with their gradual price increases in Tissue and Ivory board grades added to unforeseen news on the supply side of the equation, results in a positive short-term dynamic for hardwood pulp, way better than we had expected for the beginning of the year. We don’t believe that this trend is short-lived, and we expect that it should continue post February. For Suzano, Q1 and Q2 ’26 concentrate most of our planned maintenance downtime program for the year, as you saw on our previous earnings release. Therefore, we now need to ensure the proper inventory buildup in Q1 after the record Q4 ’25 invoicing performance, focused on recovering our global inventories to optimum operational levels, which will reflect in improved logistics efficiency and also service levels to our customers.

We also need to especially prepare our inventories for Q2 when our planned maintenance downtimes will peak, resulting in almost 300,000 tonnes of lower output compared to Q2 ’25 according to our production plan. This requires ensuring that our inventories are strategically positioned to serve contracted customers in line with their agreed inventory policies. As a consequence, we have lower pulp availability to be sold to customers who purchase directly out of Brazilian ports, such as China, Asia markets, Middle East and Africa, meaning that our volumes will remain constrained in the coming months and with 0 allocation to spot markets and customers. To finish my presentation, I would also like to call your attention to the fact that despite price increase implementations during recent months and taking the latest China PIX indexes as a reference, just yesterday night, updates from Hawkins Wright presents that an equivalent to approximately 7 million tonnes of bleached chemical pulp are currently loss-making, and this is still clearly unsustainable.

With that said, I would now like to invite Aires to address our cash cost performance during the past quarter.

Aires Galhardo: Thank you, Leo. Good morning, everyone, and move to the cash cost slide. We closed the fourth quarter confirming the cost path we had anticipated at the beginning of last year, reaching the lowest level of 2025 with a cash cost of BRL 778 per tonne. Compared with the third quarter ’25, the 3% reduction was mainly driven by lower input costs, supported by stronger operational stability across our mills and by lower prices for key energy and chemical items such as natural gas and caustic soda. Fixed costs also declined driven by lower labor costs, while wood costs benefited from a shorter average radius and better wood quality, which in turn reduced the specific consumption in the pulp production. In addition, higher energy export volumes and more appreciated FX contributed positively to cash cost performance in the period.

Fourth quarter ’25 marks our best cash cost performance since 2021 with the lowest nominal level since fourth quarter ’21 and even better performance in real terms as it represents the lowest level since first quarter ’21. For 2026, we expect the average cash production cost of pulp to be broadly in line with the fourth quarter ’25. The partner should mirror 2025, meaning a more pressure first quarter versus fourth quarter ’25 due to planned maintenance and nonrecurring events such as 2 turbines overhaul, followed by a gradual decline in cash cost over the course of the year. Moving on to the next slide. As I recently shared with you at our latest Investor Day, Suzano is implementing a comprehensive multiyear program to improve its competitiveness with a clear focus on reducing what we call total operation disbursement or TOD.

As you can see on the slide, the 2025 TOD reached BRL 2,060 per tonne, improving on year-over-year base and reinforcing the downward trend toward our 2025 guidance also shared with the market at our Investor last December — Investor Day last December. Now I turn the floor over to Marcos, who will continue the presentation.

Marcos Assumpcao: Thank you, Aires, and good morning, everyone. Moving to the next slide, I will start commenting about the positive free cash flow generation of $400 million in 4Q 2025. even in a scenario of pressured pulp prices. This cash flow generation contributed to reduce our net debt to $12.6 billion by the end of 2025. And as a result, our leverage in dollar terms declined to 3.2x. On liability management, I would like to emphasize that last week, we renewed our revolving credit facility with 20 banks. And the result of that was that we upsized the line from $1.3 billion to $1.8 billion, and we were also able to reduce the cost of this new line. Moving to the next slide. I would like to highlight our financial discipline by 3 key metrics.

First, we delivered our 2025 CapEx in line with our guidance. Second, we are reducing our 2026 CapEx guidance by nearly 20% year-on-year. And third, we are maintaining a very healthy portfolio of FX hedges. By December 2025, we had a $6.2 billion portfolio with an interval of BRL 5.83 to BRL 6.73 per dollar. So as reported in this big orange box, the expected cash adjustments for our zero-cost collars portfolio, if the FX remains at BRL 5.50, which was the level at the closing of 2025, we would receive positive cash adjustments of BRL 2.7 billion. If BRL remains at BRL 5.20, for example, which was close to the level of yesterday’s closing, our adjustment would surpass BRL 4 billion in the upcoming 24 months. Now moving to the last slide. I’d like to update you with our shareholder remuneration program.

Last week, we paid BRL 1.4 billion in dividends, which equates to more than 2% of dividend yield. We also concluded our fifth buyback program on February 9, in which we acquired 15 million shares. And we announced yesterday a new buyback program to acquire up to 40 million shares in the upcoming 18 months. Now I would like to turn it over to Beto for his final remarks.

João Fernandez de Abreu: Thank you, Marcos. As we just hear, I think a couple of things to clarify when we look ahead. From Leo’s presentation, what we saw is a more constrictive business environment for 2026, and this was related to clear and concrete events that somehow has changed the supply and demand balance. On the cash, Aires also had a chance to share the level of ambition that he has for the cash cost during 2026. We also expect the same level of trend when we look for the TOD. We still see opportunities on the sustaining CapEx and also on this logistic infrastructure and cost. And this will also allow us to keep reducing our net debt in line with our deleverage objective for the business. And I also would like to highlight that our JV with K-C is progressing absolutely as planned for closing in mid-2026.

The level of liquidity that we have today is also considering the payment in the third quarter for our JV. So having said that, I will hand over to the group to hear all the questions for the Q&A. Thank you very much.

Q&A Session

Operator: [Operator Instructions] Our first question is from Mr. Rodolfo Angele from JPMorgan.

Rodolfo De Angele: I have 2 questions for you. First, I think the main discussions with investors have been on what Leo has discussed in his remarks. So I just wanted to dig a little bit deeper on that front. Aside from all the topics that you mentioned, Leo, can you talk a little bit more about what do you see in China? You mentioned that paper demand is strong, but I would like to hear a bit more what do you see on the pulp side? Any updates, any change in the trend that we were seeing of increased production out of China? Any risks to the numbers that you presented on the Investor Day of close to 6 million tonnes of distance. So that’s my first question. And my second question is to Marcos. I think the message from Beto was very clear on the trends on the cost side.

But I wanted to hear from you a little bit on CapEx, especially if we look ahead, not for this year, but the trends, especially into ’27. We believe there is a case for lowering CapEx through time. We don’t need a hard number, but if you could comment on at least the trend, that would be great.

Leonardo Grimaldi: Rodolfo, thank you for your question. This is Leo here answering regarding pulp. And just to review, right, in our Investors Day, we give a 5-year road map of what we’re seeing in terms of further verticalization or upstream verticalization in China despite not disclosing the year-over-year numbers. But I will do that here for 2025 and 2026, just to make my answer clear. In 2025, all our very detailed mapping of upstream verticalization in China pointed out to roughly 2 million tonnes of new pulp capacity coming to market. And that 2 million tonnes were almost all, if not all, compensated by lower operating rates of the mills at the beginning, plus the Chenming effect, negative effect when you compare their shutdown in ’25 compared to ’24 and also to the fact that several integrated pulp-to-paper players and buyers have swapped hardwood pulp volumes especially in Q3 when pulp prices reached the minimum.

So we saw a net zero effect of verticalization in 2025. And that explains why we see a very positive imports of hardwood and growth of over 1.7 million tonnes or 1.4 million tonnes, sorry, into China, as I mentioned in my opening speech. For 2026, we have mapped closely a new addition of upstream verticalization. The number is a bit even bigger than in 2025. It’s roughly 2.8 million to 3 million tonnes of capacity. But different than last year, all of these projects with an exception of one are starting or supposed to start in Q4 2026 and one starts in Q3 2026. So we should see no effect of that in the beginning of the year, maybe in the end of — very most end of 2026, if nothing is delayed. So that’s very much concentrated in the latest part of the year.

That’s why we see even stronger fundamentals for the short-term dynamics in hardwood.

Marcos Assumpcao: Rodolfo, thank you for your question regarding CapEx. Yes, there are a lot of moving parts on CapEx, including inflation for sure. But we see a couple of nonrecurring items that we will have to pay on our CapEx in 2026. To give you a couple of examples, first, we are — we have our SAP upgrading version. We also have the Pangea Deal that we did, which was the wood swap with Eldorado, which had a payment in the first quarter of 2026. We even had an additional investment at Cerrado regarding the bonus for the productivity that we had over the initial 12 months of the project. And we also had a spillover payments from a couple of industrial projects that we concluded in the second half of 2025. So considering all of those nonrecurring items, let’s say, there is room for us to see a lower number on CapEx, but I would not like to give you that as a guidance, okay?

Operator: Our next question is from Mr. Caio Ribeiro from Bank of America.

Caio Ribeiro: So my first question is on buyback execution, right? I’m just wondering if you could talk a little bit about the mentality and the process that goes behind deciding whether to execute the buyback or not, particularly as you look at the previous program execution versus the new one that was announced. Looking at the past program, I’m wondering if the M&A transactions that were announced by the company impacted the magnitude or pace of execution of the buyback program. And going forward, as the company focuses on absorbing those assets acquired and assuming that no more M&A is carried out, does it make sense to execute a higher portion of the new buyback program or fully executed? And then my second question is on potential divestments, I just wanted to see if you could share a little bit more color on how this divestment lever could be used to accelerate the deleveraging progress of the company?

What assets you could consider as potential divestments and what the timing would be? And if there is a targeted leverage level for the company?

Marcos Assumpcao: Okay. Caio, remember that at our Suzano Day, we mentioned that we have an ambition to reduce our net debt to $11 billion, okay? That’s the most important priority here for the company. So connecting your question on the buybacks, the focus of the company remains on deleveraging its balance sheet. But we try to be very opportunistic on our buyback program. There are a lot of variables that we look when we are doing the buybacks or when we are more active on the buybacks, including leverage, but also our view for the share price, our views for pulp price outlook in the short term, our view for the currency outlook as well. So there are a lot of variables that we consider, and we try to be as opportunistic as possible in order to create value for shareholders.

Regarding divestments, as we mentioned also in the Suzano Day, this is a very small portion of the free cash flow expectations for 2026. This is just like a changing mentality for the company, looking for opportunities that are not core business for the company and eventually divesting. The most — the opportunities that we see are mainly on the forestry business in which we could do the high best use of the land. Sometimes we’re using a land for our forestry plantations, but that land is probably more valued for other crops or for other businesses, and we could eventually transform that into cash by converting that land into other businesses. So I would say that this is the most likely event that we will see in terms of divestments. And this, as I mentioned, is not a relevant portion of our free cash flow generation expectations for 2026.

João Fernandez de Abreu: Caio, I just want to complement what Marcos just said. The deleverage plan for the company, it’s not related to any divestment. The deleverage will come from the operational side. That’s our plan here. If there’s any specific opportunity in terms of generating value for the shareholder with a specific assets, this is something that we will consider.

Operator: Our next question is from Mr. Marcio Farid from Goldman Sachs.

Marcio Farid Filho: Two questions on my side. Maybe the first one to Leo. Leo, very clear message on the pulp markets. Maybe the missing link there is paper prices in China, which have either been under historical lows or have not performed as good as pulp. So maybe the question is, does it matter at all, right? Obviously, the upstream and downstream markets have their own supply-demand dynamics. They tend to correlate to each other. But does it matter that paper prices are not moving? Are you confident that they are going to be moving? Does it matter at all for the pulp price direction from here? And how do you see the relationship between hardwood and softwood at this point because the gap has narrowed quite significantly with hardwood performing a lot better, right?

Just trying to understand those 2 topics also important to try and build the pulp mill as well. And secondly, to Fabio. Fabio, obviously, great momentum on the U.S. Packaging side. And obviously, internally, it seems that you are progressing quite well in terms of operational efficiency and also renegotiating some of the contracts with suppliers and clients as well. We look at your global peers and especially the major — the largest ones in Europe and the U.S. And after earnings quarter, they pointed to quite negative outlook on — especially on demand side as well in the case of Europe with competition with imports. So just trying to understand how do we make that up? I mean, can you perform well in this current market environment? If you have any comment in terms of what you’re seeing for your specific products in the U.S., obviously, a more protected region as well.

So if you can comment a little bit on the broader market view as well and the progress around U.S. packaging business, that would be great.

Leonardo Grimaldi: Marcio, thank you for your question on the pulp side and how that correlates to paper prices in China as well as softwood. First part of the question, we see — obviously, the main line that drives our business is tissue, and we see quite on average margins as we speak. We saw the beginning of a price recovery for those grades, but we track that with the current fiber mix that they’re using. And obviously, as they are also focusing on this fiber transitioning agenda, moving a bigger part of their purchases to hardwood that also helps offset their cost structure. And in most cases and in several times of the cycle or in most times of the cycles, we see pulp prices pushing paper prices and not the other way around.

So Obviously, the margins and the prices of paper in China are one of the factors that we use in our decision-making process, but not the only one that we use to decide what we’re going to do. And also just in line with that we have been supportive in a way. Our last price moves were at a lower range, let’s say, closer to $20 a month price increases with time, and that has obviously also the objective to give time to our paper customers to adjust their prices in market. But again, that’s not the only variable that we take into consideration. Your question on the hardwood-softwood gap. Obviously, everyone noticed that we were trending at above $200 in China. Now this number is closer to $100 in other regions in the world is over $100, but I use the $100 as a reference.

As we have more and more customers engaging with the fiber-to-fiber agenda and understanding how to better blend and use hardwood pulp, I think that what we see today is paper producers everywhere in the world having a lot of pressure in their margins, and everyone will try to capture margin despite the gap is $170, $150 or $200. The agenda is of a much bigger knowledge in terms of how to utilize hardwood. And I believe that this trend is not stopping despite if the gap is lower or higher.

Fabio Almeida Oliveira: Marcio, this is Fabio. Thank you for your question. I will address your question about packaging market. You’re right. Global packaging market is undergoing a major challenge with lots of oversupply in most of the grades of packaging papers and also some weak demand, especially in Europe. In the U.S., I don’t think demand is the main issue here. What’s happening, the market is kind of insulated with the tariffs. What’s happened is that we have a new capacity that come to market this year and also last year. And this is causing some imbalance in the supply and demand curve and the operating rates for SBS has gone down. So when you look at the major results for the players that have announced their results, there’s some concerns about this imbalance and impact on prices.

But this has happened mainly on the open market for SBS, which is Folding Box Board and also food service market. We are kind of insulated from that. You know that our production here at Suzano Packaging, 80%, 85% of that goes into liquid packaging in a market which we have a very large market share. And we are — we have a 2- to 3-year contract with our major customers. In that 80% to 85% of our exposure, we are protected. Demand is quite stable. Our prices are covered and protected under our contract. And on the 15%, 20% that we sell to the market, that’s the type of pressure that we feel momentaneously from the market. But we’re confident that there’s still some costs that we can take out of our operation here and the resilience of the liquid packaging market in 80% of our business is going to help us to survive well during these tough market conditions here.

The U.S. markets have adjusted themselves in terms of supply and demand imbalances, and we have started to see some capacity closures as well. So I expect operating rates to come back to normal in the near future.

Operator: Our next question is from Mr. Daniel Sasson from Itau BBA.

Daniel Sasson: Congrats on the results. My first question is related to the cost front. Aires, you mentioned that you do want to have a better performance on average in 2026 versus 2025, but you’re already running at 5% below the average of 2025 in the 4Q. I know it’s not a straight line, but if you could compare your current performance at the margin with your total disbursement operation guidance or maybe let us quantify a little bit the sort of improvement that you expect in 2026, if the 4Q ’25 is a good proxy. I think that would help us think about the evolution from now until your guidance in 2027. And my second question, Leo, it was great to hear you say that the order intakes that you’ve received so far this year have had prices above the average of the 4Q for all regions.

But can you please comment a little bit if you’re seeing any changes at the margin over the past few weeks, maybe? My question is more related to the decline in resale prices that we’ve seen or the fact that you guys are trying to increase prices by $10 per tonne this time around and not by $20 per tonne as you had been doing since the end of last year. I mean, are you seeing any weakness or signs at all? And if you could comment a little bit about the current wood price or wood cost for Chinese producers in China, the domestic wood and the import wood chips mainly from Vietnam, which have also shown a slight decline in prices or in that case, cost for Chinese producers, that would be great.

Aires Galhardo: Daniel, thanks for your question. As I mentioned, we intend to work on average of 2026 roughly in the level that we operate in the fourth quarter 2025 when we closed BRL 778 per tonne. If you consider our average in the year 2025 of BRL 817 per tonne, it’s close to what you said 5% in reduction. But of course, we have a challenge in the first 2 quarters, especially because our stoppage that we have scheduled. In the first quarter, we have Imperatriz, [indiscernible], Veracel, and Aracruz Linha A that put a lot of pressure in our cost, especially because of Ribas performance that will bring our cost below. And in the second quarter, we have Tres Lagoas, 2 lines that put pressure in the same way. Then our trend is a proxy of we have last year when we start the first quarter with a higher probably cash cost when we compare with the fourth quarter, but a trend to reduce in the coming quarters, close the effort in the same level that we achieved in the fourth quarter of 2025.

Leonardo Grimaldi: Okay. Good. Daniel, this is Leo here. I’m going to answer the several questions on pulp together. First, just to rephrase, I mentioned that our order intake in Q4, all months of Q4 had prices higher than our Q4 delivered and invoiced prices. And obviously, January follows the same trend. So even what we were able to capture month-over-month in Q4 had price at points higher than the $538 price that you saw in our release. In terms of how we are seeing the margin or the market going forward, already talking a bit about February. As I mentioned, January is quite strong. We see no changes at all. We — despite this calendar of the Chinese New Year, where our customers will be leaving for holidays on this weekend and probably returning closer to Feb 23, 24.

Prior to leaving all of our customers have confirmed purchasing intentions or numbers. We are just finalizing the details and most will be finalized indeed after the Chinese New Year. We didn’t see absolutely no customer in China and in Asia skipping their purchases or what they expect to purchase in February, meaning that we see no changes in this habit or pattern that we have been observing for the last several months. Our decision of not pushing a higher price increase in February was much more related to the calendar of the month because as most of negotiations will be concluded in a very short time period due to the return of the holidays, we didn’t want to be opening any spread of negotiation with customers. So our increase of February is unnegotiable.

We will implement it at all costs. Resale, your question on resale, we believe that this should react post Chinese New Year. Today is trending roughly $10 to $15 below the imported PIX prices references. And our certainty comes to the fact that we also, as I have mentioned in previous calls, we also are always tracking and selling in our customer portfolio in China, integrated pulp and paper producers and also traders who are big markers of price in the resale market. And I can confirm to you today that already all major traders in China have purchased volumes at higher set points than the resale prices that you see on screen. So we have an expectation that you should — that we should see some reaction on this index post Chinese New Year. Now on wood costs.

Wood costs, we saw on the end of last year, an increase on the wood cost base for China, increasing their cash costs, as we have commented and talked about during Suzano’s Investors Day. On the end of the year and early ’26, we saw different movements. We saw imported wood chip prices increasing at a range of 12% to 15%, while Chinese wood falling at a range of 10% to 12%. And if you consider that the Chinese industry uses half-half imported and local, I would say that today, our view is that these wood costs are quite stable to what we had on the end of last year, the higher cost basis that we saw at the end of last year, imported wood compensating the — a bit lower cost of Chinese wood. This precedes all the news on the floods and revocations of licenses in Indonesia.

Just to make it clear, Vietnam, which is a major supplier of wood chips to the region, 70% of that wood chip goes to China. roughly 25%, 23% goes to Japan and currently 7% goes to Indonesia. And our market intelligence analysis show that with this latest revocation of lands and we correlate that to the pulp and paper industry, we believe that Indonesia will push for a higher demand that their needs could reach almost 20% of the available wood chips from Vietnam. So you can imagine the pressure that will put on the markets, on the wood chip markets going forward. So our expectation is that especially this imported base will have a higher cost point looking forward.

Operator: Our next question is from Mr. Rafael Barcellos from Bradesco BBI.

Rafael Barcellos: Congratulations for the results. The first question is just like a follow-up and a wrap-up on these discussions on the pulp market. So Leonardo, sorry, one more question. But just to wrap up everything you have just said during the call, I mean, there was a clear positive tone, particularly when we compare with our last interactions, right? So I just wanted to understand what was the key development that has made you change the tone. I mean if you just — if you can just like wrap up and just comment, I mean, what was the key development that has made you change the tone? And secondly, Beto, I mean, when we look at the Paper division, there were like 3 important developments in 2025, right? I mean there was the acquisition of K-C, the first positive EBITDA in your paperboard assets in the U.S. and the new Tissue mill in Brazil. So that said, I mean, what do you believe should be the highlights for the division in 2026?

Leonardo Grimaldi: Okay. Good. So Rafael, let me share with you what made us change the tone from our last interactions. First is the intensification of the revoking of forestry licenses in Indonesia. now affecting directly the pulp and paper industry. At the end of last year, when we had summed up almost 500,000 tonnes of hectares with license revoked, we didn’t correlate any of that directly to the pulp and paper industry. Now that’s not more the case. So that is one major factor happening and already affecting directly one of the key producers and an immediately — an immediate curtailment of 150,000 tonnes in 2 months only of market pulp and how that can affect all the wood dynamics, as I mentioned in my last answer to Daniel.

Second and major change is the delay of OKI from April to the fourth quarter last — this year. meaning that in terms of pulp coming into market, we should see no new volumes in 2026. This is a major change. It’s also important. It’s not only that OKI also started or APP also started a board machine — is expected to start this board machine over 1 million tonnes in Indonesia now in March, meaning that the plan was, as we understand, to be integrated with OKI 2. But now as OKI 2 was delayed, you have a double effect of less market pulp in the market or no additional supply of market pulp in 2026. At the same time, they’re going to need to feed up this new machine and our expectation is that they’re going to need roughly 350,000 tonnes of pulp in 2026, meaning that their system should be even tighter to run 2026.

So I would say that the major changes have been really on the supply side of the equation. And just to sum up and wrap up, this has changed market dynamics completely and on a very fast-moving pace, as I mentioned in my opening speech.

João Fernandez de Abreu: Thank you, Leo. Regarding the questions for 2026, what do we expect from K-C paper business in U.S. and also the tissue after the investment that we made in Aracruz, as you mentioned, on the tissue side, we are expecting to increase the level of return of the business. Firstly, we were able to deliver another project on time and on budget. That was the case of [indiscernible]. She is in Aracruz. And we expect to now in 2026, extract the right level of value that we expect from this investment. So in the end of the day, we expect to have a better ROIC in this business with a lower cash cost and higher volume. On the Pine Bluff business in the U.S., I want to highlight again the great turnaround that the local team were able to implement.

We have now a positive EBITDA differently from the asset that we have received it, but we are looking to generate cash with the business. So we still a journey in this process of not only generating positive EBITDA, but of course, generating cash with the business. So that’s what we expect for 2026 is to keep moving forward on this direction of having assets that can generate value for the shareholders. On the K-C JV, I think there are 2 main elements that we must consider for 2026. One, of course, is the carve-out is finalized, the carve-out in all countries on time. So that’s not a simple process. It’s complex, consider the amount of countries that we have. We are on track, but still a lot to do. So finalizing this process on time is absolutely key.

So keep working very close the 2 clean teams to make sure that we will deliver this on time. On the other side, we also have the value creation stream. So making sure that we have all the details regarding, let’s say, the levers that we must consider in the beginning of this operation to start generating value as soon as we can is also the second priority. So by the way, we are glad on how the both teams are working together in this process. And — but for 2026, we would like to see value being created in the JV in the beginning and the carve-out being finalized on time. So again, I think the bottom line of everything is what I have been saying this, which is 2026, we must extract value from the investment that we have made in the past.

Operator: Our next question is from Ms. Eugenia Cavalheiro from Morgan Stanley.

Eugenia Cavalheiro: If possible, I would like to understand better where do you expect the cost reductions in the pulp business to come from? So I mean, you already disclosed a bit the level that you expect for the year, but just to understand what are the levers for that cost reduction?

Aires Galhardo: We gave some drive for this year. We are not hoping for coming years, just in TDO (sic) [ TOD ] that we presented in our last Investor Day. And for this year, our intention is to work in the same level that we closed the fourth quarter 2025, roughly BRL 780 per tonne. That’s the idea for the average of 2026.

Operator: The Q&A session is over. We would like to hand the floor back to Mr. Beto Abreu for his final remarks.

João Fernandez de Abreu: Thank you very much for everyone. Thank you for the questions. If still any doubt, as you know, our IR team is always available. So thank you very much, and see you in the next quarter call. Bye.

Operator: The Suzano S.A. Fourth Quarter of 2025 Conference Call is concluded. The Investor Relations department is available to answer further questions you may have. Thank you, and have a good day.