release 3q12

7/30/2019 Release 3Q12

1/17

Earnin s Release 3

EBITDA ofup

Klabin's consolidated financial statements are presentedInstructions 457/07 and 485/10. The information related tthe equity income method.

3Q12 Highlights

Sales volume of 440 thousand t

sales volume, versus 71% in 3Q11;

Net revenue of R$ 1,086 million, u

Unit cash cost, which was already

EBITDA of R$ 375 million, with amargin was 27%;

The growth in operating cash flow

from 2,5x in June to2.3x in Septe

Sales volume (thousand tonnes) 440

% Domestic Market 72%

Net Revenue 1.086

% Domestic Market 78%

Operational Result (EBIT) 549

EBITDA 375

EBITDA Margin 34%

Net Income (loss) 331

Net Debt 3.090

Net Debt / EBITDA (LTM) 2,3x

Capex * 183

LTM - last twelve months

Notes: Due to rounding, some figures in tables and graphs mNotes: EBITDA margin is calculated over a pro-forma net rev

Notes:* Since this quarter investments will be disclosed on

R$ million 3Q12

Conference call

Friday, 10/26/12, 9:00 a.m. (EDT)

US Participants: 1-855-281-6021

BR Participants: +55 11 4688-6336

Password: Klabin

webcall.riweb.com.br/klabin/english

Contact

+55 11 3

www.kla

invest@k

12

$ 375 million in 3Q12,39% on 3Q11in accordance with International Financial Reporting Standards (IFRS),o Vale do Corisco is not consolidated in the Financial Statements. It is

nnes, with improved mix; domestic sales accou

p 10% on 3Q11;

down in September 2011, fell 1% from 3Q11;

margin of 34%, up 39% on the adjusted EBITDA

over the last twelve months reduced the net deb

ber.

3Q12/2Q12 3Q12/3Q11

430 434 2% 1% 1.290

67% 71% 5 p.p. 1 p.p. 68%

1.030 991 5% 10% 3.085

75% 81% 3 p.p. -3 p.p. 76%

116 147 374% 274% 1.297

281 277 33% 35% 967

27% 27% 7 p.p. 7 p.p. 31%

(184) (243) N/A N/A 605

3.014 2.313 3% 34% 3.090

2,5x 2,4x 2,3x

134 66 37% 178% 389

ay not result in a precise sum.nue, which includes revenues from Vale do Corisco.

cash basis.

9M122Q12 3Q11

IR

046-8401

in.com.br/ir

labin.com.br

IR Team

Antonio Sergio Alfano

Vinicius Campos

Daniel Rosolen

Lucia Reis

Mariana Arajo

KLBN4 Se

Preferredsha

Stock price

Daily trading

Marketcap

s determined by CVMnly presented through

nted for 72% of

of 3Q11, when

t/EBITDA ratio

9M12/9M11

1.306 -1%

66% 2 p.p.

2.895 7%

78% -2 p.p.

527 146%

717 35%

24% 7 p.p.

60 904%

2.313 34%

2,4x

275 42%

9M11

tember 30th, 2012

res 600.9 million

R$ 10.60

vol. 3Q R$ 22 million

R$ 9.4 billion

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2

3Q12 Results October 25t , 2012

Markets and Exchange Rate

The global economic outlook did not improve during the period. The volatility among developed economies

persisted, leading to further reductions in the indicators for 2012 and 2013, with a less pessimistic outlook foremerging economies. Despite the uncertainties, by the close of the quarter, the global aversion to risk was

noticeably lower, the Brazilian real was relatively stable against the dollar and commodity prices held steady. In

the paper market, recent plant closures have shifted supply and demand, pointing towards an improvement in

international prices.

Brazil showed modest signs of growth. However, the packaging paper market showed stronger growth, supported

by government measures to stimulate consumption, an exchange rate that was less favorable to imported

products, as well as the typical seasonality of the period (a stronger second half, due to the year-end holiday

season). In this scenario, Klabins results, which were already strong during the first half of the year, despite the

unfavorable economic environment, improved even further. Sales revenue increased 10% over 3Q11, while the

unit cash cost dropped by 1%, despite the inflation during the period. EBITDA for the quarter increased 39% over

3Q11, which already saw the beginning of cost improvements at the Monte Alegre mill.

Once again, the Company posted significant growth in its results, based on the strategy of continuous efforts to

improve operational efficiency and diversify its customers and markets. The improved management of costs,

combined with a strategy focused on preserving margins, resulted in a process of sustainable growth in the

company's operating cash flow in 2012, culminating in a record adjusted EBITDA of R$ 1,286 million over the last

twelve months.

Note: Adjusted EBITDA does not include earnings from the sale of assets in 3Q11 and 4Q11.

Domestic Market

The monetary and fiscal policies to stimulate economic activity and the stronger dollar during the past few months

had an impact on the retail sector and industrial production.

Sep11

939

Dec11

1,028

Mar12

1,089

Jun12

1,180

Jun11

922

Sep12

1,28624%25%

26%

28%

31%29%

Margin

LTM: Last twelve months

Adjusted EBITDA LTM

(R$ million)

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3


In the packaging market, preliminary figures from the Brazilian Corrugated Boxes Association (ABPO) showed

that Brazilian corrugated cardboard shipments increased 4% in 3Q12 over the same period last year, reaching

857 thousand tonnes, compared to the 1.5% growth rate during the first half of the year.

Meanwhile, figures from the Brazilian Pulp and Paper Producers Association (Bracelpa) showed that domesticcoated board sales for the quarter (not including liquid packaging boards) increased 6% from 3Q11, reaching 144

thousand tonnes, while domestic sales during the first six months of the year grew 4% year on year.

Export Market

The Euro Zone continued to show signs of weak economic activity and high levels of uncertainty. In other regions,

there were some signs of change from the first half of the year, with a decrease in the likelihood of a collapse in

the United States or a strong deceleration in China over the short term.

Capacity closures in Europe during the period once again increased the international kraftliner prices in Euros in

3Q12. The average list price in Euros for kraftliner delivered in Europe increased 3% over 2Q12, while falling 6%

from 3Q11, reaching an average of 544/t. The average list price in Brazilian reais decreased 4% from the same

period last year.

Exchange Rate

The exchange rate, which was R$ 2.02/US$ on J une 30th, 2012, remained stable during the third quarter,

reaching R$ 2.03/US$ by the end of September. The average exchange rate for the quarter was R$ 2.03/US$, up

3% from 2Q12 and 24% from 3Q11.

Source: ABPO Source: Bracelpa

857

3Q11

828

3Q12

144

3Q11

136

3Q12

544

3Q11

1,332

577

1,383

Kraftliner( / tonne)

3Q12

Source: FOEX

Kraftliner( R$ / tonne)

Kraftliner brown 175 g/mlist price(/tonne and R$/tonne)

Brazilian Corrugated Shipmentsthousand tonnes

Brazilian Coated Boards Shipmentsthousand tonnes

3Q12/2Q12 3Q12/3Q11 9M12/9M11

Average Rate 2.03 1.96 1.64 3% 24% 1.92 1.63 18%

End Rate 2.03 2.02 1.85 0% 10% 2.03 1.85 10%

Source: Bacen

9M12 9M113Q12 2Q12 3Q11

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4


Operating and Financial Performance

Sales volume

Sales volume, excluding wood sales, came to 440 thousand tonnes in 3Q12, up 1% from 3Q11 due to increased

coated board sales.

The improved economic performance during the quarter drove paper sales in the domestic market, which

increased 3% from 3Q11. The share of domestic sales increased to 72% in 3Q12, from 71% in 3Q11.

As a result, exports decreased, totaling 120 thousand tonnes in 3Q12, down 2% from 3Q11, reflecting the

decrease in kraftliner exports.

Year-to-date sales decreased by 1% from last year, mainly due to the drop in exports during the first quarter.

However, the share of domestic sales increased from 66% to 68%. Domestic sales in 9M12 totaled 878 thousand

tonnes, up 2%.

Given that mature markets were more heavily affected by the crisis, Klabin concentrated its exports on emerging

markets, mainly in Latin America and Asia, which represented approximately 70% of the export volume.

3Q11 3Q12

29%

71%

28%

72%

434440

9M11 9M12

32%

68%

1,306 1,290

67%

33%

66%

34%

2Q12 3Q12

33%

67%

28%

72%

430

440

Export MarketDomestic Market

Sales Volume(excluding wood)

(thousand tonnes)

CoatedBoards

39%

CorrugatedBoxes

29%

Kraftliner

23%

Ind.Bags

8%

Others1%

LatinAmerica

44%

Asia

25%

Europe

22%

Africa6%

North America

3%

Sales Volume by Product 9M12 Sales Volume Export Market 9M12

does not include wood

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5


Net Revenue

Net revenue in 3Q12, including wood sales, came to R$ 1,086 million, up 10% from 3Q11, even though the

volume essentially remained stable. Revenue was impacted by the more favorable exchange rate and by the

improved sales mix, as well as the Companys ability to adapt to a global scenario characterized by low prices,persistently seek out new markets and maintain steady margins.

Net revenue in the domestic market totaled R$ 845 million, up 5% and 10% over 3Q11 and 2Q12, respectively,

representing 78% of total net revenue.

In 3Q12, exports totaled R$ 241 million (US$ 118 million), up 29% from 3Q11 due to the more favorable

exchange rate.

Pro-forma net revenue, considering Klabins proportion of revenue from Companhia Florestal Vale do Corisco,

totaled R$ 1,098 million.

In 9M12, net revenue totaled R$ 3.1 billion, up 7% year-on-year, despite the 1% drop in sales volume, underlining

Klabins continuation of the strategy to maintain margins by seeking an optimum mix and diversified markets.

The distribution of net revenues from the export market by region felt the impact of the change in the sales mix,

with Latin America accounting for nearly half of the export revenue.

3Q11 3Q12

19%

81%

22%

78%

991

1,086

9M11 9M12

24%

76%

2,8953,085

78%

22%

2Q12 3Q12

25%

75%

22%

78%

1,0301,086

Export MarketDomestic Market

Net Revenue

(R$ million)

Coated

Boards

36%

CorrugatedBoxes

30%

Kraftliner

13%

Ind.

Bags

12%

Wood

7%

Others

2%

Latin

America

46%

Asia

27%

Europe

19%

Africa

5%

North America3%

Net Revenue by Product 9M12

includes wood

Net Reveneues Export Market 9M12

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Operating Costs and Expenses

Unlike 2Q12, which featured planned maintenance stoppages at the Monte Alegre (PR) and Otaclio Costa (SC)

mills, the Companys cash cost, including fixed and variable costs and operating expenses, experienced little

impact from non-recurring expenses. There was a single planned maintenance stoppage at the Correia Pinto(SC) mill in September.

The unit cash cost (excluding non-recurring expenses and stoppage costs) remained stable at the 2Q12 cost of

R$ 1,614/tonne, thanks to the ongoing cost reduction program, helped along by the operating performance at the

mills after the 2Q12 maintenance stoppages and by the early results, in September, from the forestry program.

Compared to 3Q11, unit cash cost decreased 1% and it should be noted that in September 2011 the cost savings

at the Monte Alegre mill had already been registered. Apart from the bigger share of high value-added products in

the production mix, the 3Q12 result was impacted by inflation on the cost components and the increased labor

costs during the period.

Unit cash cost in 9M12, excluding non-recurring items, totaled R$ 1,600/tonne, down 1% from the same period in

2011.

Cost of goods sold in 3Q12 was R$ 715 million, down 2% from 3Q11. Excluding the impacts of depletion of the

biological assets in the periods, the decrease is 3%. Thanks to the cost reduction measures, COGS decreased

despite the higher sales volume, resulting in the unit COGS 3% lower than in 3Q11.

Selling expenses amounted to R$ 82 million. As most of commercial expenses are variable, the increase came

in line with the revenues increase. In 3T12, sales expenses corresponded to 7.5% of the quarterly net revenue,

compared to 7.7% in 3Q11.

Administrat ive expenses totaled R$ 74 million, up 15% from 3Q11. The variation is primarily explained by non-

recurring items such as indemnifications and by wage raise.

Other operating revenue (expenses) totaled a revenue of R$ 1 million in 3Q12, compared with revenue ofR$ 7 million in 3Q11.

Effect of variations in the fair value of biological assets

The effect of the variation in the fair value of b iological assets in 3Q12 was impacted by the increase in wood

prices seen during the quarter. Thus, the financial result was a gain of R$ 333 million.

The effect of the depletion of the fair value of biological assets on COGS resulted in a lower variation than in

previous quarters, totaling R$ 86 million in the quarter, impacted by the greater stability in wood cutting volume

compared to the second quarter.

As a result, the non-cash effect of the variation in the fair value of biological assets on operating income (EBIT)

was a gain of R$ 247 million in 3Q12.

Operating Income

Operating income before the financial result (EBIT) was R$ 549 million in 3Q12 and R$ 1,297 million in 9M12.

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Operating cash flow (EBITDA)

During the first six months of 2012, despite a difficult market with bleak prospects, Klabin performed well, with a

35% increase in EBITDA over the first six months of 2011. With the strengthening of the domestic packaging

paper market in 3Q12, impacted by the exchange rate, which hindered the import of packaged goods, and the

typical seasonality, the Companys cash flow grew 39% from 3Q11, despite the fact that 3Q11 already included

the effects of cost reductions at the Monte Alegre mill. This comparison does not include the R$ 8 million gain

from the sale of assets during 3Q11.

Operating cash flow (EBITDA) was R$ 375 million in the quarter, with an EBITDA margin of 34%, up 7 p.p. on

3Q11. This figure includes the EBITDA of R$ 7 million related to wood sales by Florestal Vale do Corisco Ltda.

EBITDA in 9M12 totaled R$ 967 million, with a margin of 31%, maintaining the 36% growth on the same periodlast year. The adjusted EBITDA for the last twelve months (excluding the sales of assets in 3Q11 and 4Q11)

reached R$ 1,286 million, with a margin of 31%.

Indebtedness and financial investments

Gross debt on September 30th

stood at R$ 6,240 million, compared with R$ 6,326 million on J une 30th. This

decrease was due to the amortizations carried out during the quarter. Of the total debt, R$ 4,609 million

(US$ 2,270 million), or 74%, was denominated in foreign currency, primarily export pre-payment facilities.

The Companys cash and financial investments totaled R$ 3,150 million, which exceeds the amortizations of

loans maturing in the next 39 months.

3Q12/2Q12 3Q12/3Q11 9M12/9M11

Net Income (loss) 331 (184) (243) N/A N/A 605 60 9

(+) Income taxes and social contributi 165 (149) (134) N/A N/A 247 30 715%

(+) Net Financial Revenues 55 469 524 -88% -90% 469 436 8%

(+) Depreciation, amortization, depleti 152 164 150 -8% 1% 424 462 -8%

(-) Equity Pickup (2) (20) - -91% N/A (25) - N/A

(- ) Biologic al asset s adjustment (333) (5) (19) 6768% 1630% (773) (272) 184%

(+) Vale do Corisco 7 6 - 17% N/A 19 - N/A

Ajusted EBITDA 375 281 277 33% 35% 967 717 35%

(-) Sale of Assets - - (8) N/A N/A - (8) N/A

Ajusted EBITDA 375 281 269 33% 39% 967 709 35%

EBITDA Margin 34% 27% 27% 7 p.p. 7 p.p. 31% 24% 7 p.p.

N / A - Not applicable

Note: EBITDA margin is calculated considering the pro forma net revenue , which includes Vale do Corisco

3Q12 2Q12 3Q11R$ million 9M12 9M11

Pro forma Net Revenue 750 805 844 905 983 931 957 947 991 998 980 1040 1098

EBITDA 199 219 242 236 252 231 249 190 277 359 311 281 375

Adjusted EBITDA* 199 219 242 236 252 231 249 190 269 319 311 281 375

Adjusted EBITDA Margin 27% 27% 29% 26% 26% 25% 26% 20% 27% 32% 32% 27% 34%

*Excluding gain from the sale of assets

Pro forma Net Revenue includes Vale do Corisco

3Q12R$ million 3Q09 3Q11 4Q114Q09 2Q11 2Q121Q121Q10 2Q10 3Q10 4Q10 1Q11

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8


Net debt on September 30th, 2012 stood at R$ 3,090 million, compared with R$ 3,014 million on J une 30

th, 2012.

The 12-month increase in cash generation helped reduce the net debt /EBITDA ratio, from 2.5x at the end of

2Q12 to 2.3x at the end of 3Q12.

At the end of September 2012, net foreign exchange exposure was US$ 2,093 million, of which US$ 2,270 millioncorresponded to export pre-payment facilities with maturities up to 2022 and with an average term of 4 years, as

well as assets in foreign currency of US$ 177 million.

The average debt term stood at 41 months, with 30 months for local currency debt and 44 months for foreign

currency debt. At the end of September, short-term debt represented 20% of total debt, and the average

borrowing costs in local and foreign currency stood at 8.03% p.a. and 4.36% p.a., respectively.

Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12

2,106 2,128 2,002 1,893

2,3132,735 2,674

3,014

2.2 2.2 2.1 2.02.4 2.5

Net Debt / EBITDA (LTM)Net Debt (R$ million)

Sep-12

3,090

2.3 2.5 2.3

LTM: Last twelve months

Net Debt / EBITDA(R$ million)

Debt (R$ million)

Short term 1,226 20% 1,188 19%

Local currency 371 6% 357 6%

Foreign currency 855 14% 831 13%

Long term 5,014 80% 5,138 81%

Local currency 1,260 20% 1,223 19%

Foreign currency 3,754 60% 3,915 62%

Gross debt 6,240 100% 6,326 100%

Local currency total 1,631 26% 1,580 25%

Foreign currency total 4,609 74% 4,746 75%

(-) Cash 3,150 3,312

Net debt 3,090 3,014

Net debt / EBITDA (LTM) 2.3 x 2.5 x

LTM - last twelve months

09/30/12 06/30/12

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Financial Result

Financial expenses totaled R$ 115 million in 3Q12, versus R$ 113 million in 3Q11.

Financial revenues came to R$ 76 million in the quarter, versus R$ 89 million in 3Q11, mainly due to the cut in

the basic interest rate during the course of the year.

With little dollar fluctuation in the quarter, the effect of net foreign exchange variations wasa loss of R$ 15

million, reflecting the impact of the stronger dollar on the Companys balance sheet in the quarter. This is a purely

accounting effect and does not involve any cash disbursement.

Net Income

Net income totaled R$ 331 million in 3Q12 and R$ 605 million in 9M12, versus R$ 60 million in 9M11. In addition

to the growth in the Companys operating cash flow, the 3Q12 net income was impacted by the greater variation

in the fair value of biological assets, driven by the rising wood prices during the period.

Business Performance

Consolidated information by business unit in 9M12.

BUSINESS UNIT FORESTRY

The depreciation of the real against the dollar made wood product exports more attractive for Klabins clients. As

a result, log sales to third parties in 3Q12 were up 9% over 3Q11, totaling 747 thousand tonnes. Net revenue from

log sales in 3Q12 was R$ 78 million, up 12% from 3Q11.

In 9M12, sales volume totaled 2,198 thousand tonnes, up 5% from 9M11, while net revenue came to R$ 223

million, up 11% from 9M11.

R$ million Forestry Papers ConversionConsolidation

adjustmentsTotal

Net revenue

Domestic market 233 882 1,236 - 2,351

Exports - 641 93 - 734

Third part revenue 233 1,523 1,329 - 3,085

Segments revenue 362 660 11 (1,033) -

Total net revenue 595 2,183 1,340 (1,033) 3,085

Change in fair value - biological assets 773 - - - 773

Cost of goods sold (597) (1,448) (1,080) 1,027 (2,098)

Gross income 771 735 260 (6) 1,760

Operating expenses (14) (226) (159) (39) (438)

Operating results before financial results 757 509 101 (45) 1,322

Note: In t his table, t otal net revenue includes sales of other product s.

Nota: * Forestry cost of goods sold includes the exaustion of the fair value of biological assets of R$ 221 million in the period.

3Q12/2Q12 3Q12/3Q11 6M12/6M11

Wood 747 732 688 2% 9% 2,198 2,091 5%

R$ million

Wood 78 74 69 5% 12% 223 201 11%

thousand tonnes 3Q12 2Q12 3Q11 6M12 6M11

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10


BUSINESS UNIT PAPER

KraftlinerRecent mill closures reduced supply and producers began announcing price increases. According to FOEX,

international kraftliner prices in Euros increased by 3% over 2Q12, yet remain 6% below 3Q11 prices. Given the

appreciation of the dollar against the euro, the dollar list price remained stable.

Sales volume was 6% lower than in 3Q11, while net revenue increased 1%. Compared to 2Q12, sales volume

was 2% lower. There was a significant improvement in the mix, with 54% of sales directed to the domestic

market, versus 45% in 3Q11.

Domestic sales were strong, up 14% over 3Q11, at 51 thousand tonnes, and, as a result, exports declined to 44

thousand tonnes.

Domestic kraftliner sales totaled 124 thousand tonnes in 9M12, up 7% from the same period last year. Exportscame to 162 thousand tonnes, down 19% from the same period last year.

Coated boards

The Brazilian coated boards market recovered strongly in 3Q12, impacted by government measures to boost

consumption, such as the cuts in the interest and tax rates, as well as the reduction in finished product imports on

account of the weakening real. During the quarter, Klabins domestic coated board sales, including liquid

packaging boards, increased by 7% over 3Q11.

Domestic sales totaled 103 thousand tonnes, while exports totaled 72 thousand tonnes, up 14% from 3Q11.Thus, total coated board sales reached 175 thousand tonnes, up 10% year on year, while net revenue reached

R$ 402 million, up 23% over 3Q11.

In 9M12, the volume of coated boards sold increased 3% over last year. Net revenue grew 15%.

3Q12/2Q12 3Q12/3Q11 9M12/9M11Kraftliner DM 51 40 45 26% 14% 124 117 7%

Kraftliner EM 44 56 56 -23% -23% 162 200 -19%

Total Kraftliner 94 97 101 -2% -6% 286 316 -10%

Coated boards DM 103 86 96 19% 7% 276 264 5%

Coated boards EM 72 77 63 -6% 14% 226 222 2%

Total Coated boards 175 163 160 7% 10% 502 486 3%

Total Paper 269 260 261 4% 3% 788 802 -2%

R$ million

Kraftliner 135 126 133 7% 1% 380 403 -5%

Coated boards 402 364 327 11% 23% 1111 968 15%

Total Paper 537 490 460 10% 17% 1491 1371 9%

3Q11thousand tonnes 3Q12 2Q12 9M12 9M11

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11


BUSINESS UNIT - CONVERSION

Corrugated boxes

The corrugated boxes market started recovering slightly during the third quarter and preliminary data from ABPO

showed a 4% growth over 3Q11 in Brazilian shipments of boxes and boards. Corrugated boxes sales in 3Q12

reached 128 thousand tonnes and net revenue remained stable at R$ 318 million compared to 3Q11.

The quarter was affected by the ongoing work on capacity expansion at J undia (SP) Mill.

In 9M12, the volume sold totaled 371 thousand tonnes, while net revenue totaled R$ 912 million, both stable in

relation to the same period last year.

The new corrugator at the Jundia Distrito Industrial unit, which went operational on J uly 10th, is going through its

learning curve. The Company approved the acquisition of two new printers, which will go operational in J undia

(SP) in the first half of 2013 and will absorb part of the capacity of this new corrugator. This project is part of the

Company's growth strategy, which is focused on stronger margins and to accompany the growth of the domestic

corrugated box market.

Industrial Bags

In 3Q12, the Company maintained its selective approach towards clients as in previous quarters with the aim of

entering new sectors in order to optimize its sales mix in both the domestic and export markets, in the pursuit of

better margins.

Industrial bag sales in Brazil and Argentina, in the domestic and export markets, totaled 35 thousand tonnes in

3Q12, while net revenue came to R$ 140 million. Compared to 3Q11, sales volume grew 4%, while net revenue

increased by 14%.

In 9M12, industrial bag sales totaled 105 thousand tonnes, up 4% from 9M11, for a 15% growth in revenue.

3Q12/2Q12 3Q12/3Q11 6M12/6M11

Corrugated boxes 128 125 130 2% -1% 371 379 -2%Industrial bags 35 36 34 -2% 4% 105 101 4%

Total conversion 163 161 163 1% 0% 476 480 -1%

R$ million

Corrugated boxes 318 307 323 3% -2% 912 919 -1%

Industrial bags 140 141 123 -1% 14% 413 359 15%

Total conversion 457 448 446 2% 3% 1324 1278 4%

3Q11thousand tonnes 3Q12 2Q12 6M12 6M11

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12


Capital Expenditure

Until 2Q12 the Company's investments

were disclosed in accordance with the

accrual basis. Starting this quarter,

investments will be disclosed on a cash

basis.

Investments in 3Q12 totaled R$ 135

million. Of this amount, R$ 47 million is

related to the capacity expansion of sack kraft paper in Correia Pinto (SC) mill. The capex estimated for the sack

kraft machinery in 2012 and 2013 is R$ 220 million. Year-to-date investments totaled R$ 389 million, of which R$

194 million went for maintenance, R$ 91 million went to forests and R$ 57 million to special projects.

Capital Markets

Stock Performance

In the third quarter of 2012, Klabins preferred shares (KLBN4) appreciated by 16%, while the Ibovespa index

rose 9%. Klabins shares were traded in all sessions of BM&FBovespa in 3Q12, registering 310 thousand trades

involving 150 million shares, for an average daily trading volume of R$ 22 million, up 78% and 7% on 3Q11 and

2Q12, respectively.

Klabin's capital stock is represented by 918 million shares, consisting of 317 million common shares and 601

million preferred shares. Klabins shares are also traded in the U.S. market as Level I ADRs listed on the over-the-counter market under the ticker KLBAY.

Dividends

On J uly 19th, the Company started payment of interim dividends amounting to R$ 120 million, approved at the

Extraordinary Board of Directors Meeting held on J une 27th, 2012. The amount paid was R$ 127.02 per lot of

thousand common shares and R$ 139.72 per lot of thousand preferred shares.

Jan-11

Apr-11

Jul-11

Oct-11

Jan-12

Apr-12

Jul-12

Oct-12

Performance KLBN4 x Brazilian Index (Ibovespa)

Klabin Ibovespa Index

85

181

100

14 1312

1716

12 1113 14

21 21

24

19

24

32

22 22

18

2119

27

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-11

Jul-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

Jan-12

Feb-12

Mar-12

Apr-12

May-12

Jun-12

Jul-12

Aug-12

Sep-12

Average Daily Volume(R$ million/day)

R$ million 1Q12 2Q12 3Q12 9M12

Forestry 22 43 27 91

Maintenance 42 78 74 194

Special Projects 9 13 36 57

Growth 47 47

Total 73 134 183 389

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Change in the Execut ive Board

This report is dedicated to the memory of the extraordinary head of the Industrial Bags unit, Antonio Andrucioli,

who passed away in last August. Mr. Andrucioli had been serving the Company since 1978 and took charge of

the unit in 2004.

Douglas Dalmasi has been chose to lead this unit. Mr. Dalmasi, who joined the Company in 1991, has a degree in

business management and an MBA in Controllership from the University of So Paulo. During his career, he has

worked as economic and accounting analyst, planning advisor, manager of planning and general manager of

supplies. As part of his professional development, he worked four months as general manager of the Industrial

Bags unit, together with Antonio Andrucioli, who led and contributed immensely to the unit during his successful

professional stint.

Conference Call

Portuguese

Friday, October 26th, 2012 at 10:00 a.m. (Braslia).

Password: KlabinDial-in: (11) 4688-6336

Replay: +55 (11) 46886312 Code: 3240032

The audio webcast of the conference call will also be available at http://webcall.riweb.com.br/klabin

English

Friday, October 26th, 2012 at 9:00 a.m. (EDT).

Password: KlabinDial-in: U.S. participants: 1-855-281-6021

International participants: 1-786-924-6977Brazilian participants: (55 11) 4688-6336Replay: +55 (11) 46886312 Code: 9153731

The conference call will also be broadcast via the Internet.

Access: http://webcall.riweb.com.br/klabin/english

With gross revenue of R$ 4.7 billion in 2011, Klabin is the largest integrated manufacturer, exporter and recycler of packagingpaper in Brazil, with annual production capacity of 1.9 million tonnes. Klabin has adopted a strategic focus on the followingbusinesses: paper and coated boards for packaging, corrugated boxes, industrial bags and wood logs. It is the leader in all itsmarket segments.

The statements made in this earnings release concerning the Company's business prospects, projected operating and financial results and

potential growth are merely projections and were based on Management's expectations regarding the Company's future. These expectations arehighly susceptible to changes in the market, the general economic performance of the Brazilian economy, industry and international markets and,hence, are subject to change.

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3Q12 Results October 25th, 2012Appendix 1Consolidated Income Statement (R$ thousands)

3Q12/2Q12 3Q12/3Q11 9M12/9M11

Gross Revenue 1,305,430 1,232,089 1,199,418 6% 9% 3,702,632 3,489,050 6%

Net Revenue 1,085,766 1,030,299 990,623 5% 10% 3,085,306 2,895,075 7%

Change in fair value - biological assets 333,122 4,850 19,255 6768% 1630% 772,578 272,146 184%

Cost of Products Sold (714,806) (755,367) (729,482) -5% -2% (2,098,211) (2,213,520) -5%

Gross Profit 704,082 279,782 280,396 152% 151% 1,759,673 953,701 85%

Selling Expenses (81,989) (96,499) (76,594) -15% 7% (258,616) (238,996) 8%

General & Administrative Expenses (74,243) (66,464) (64,311) 12% 15% (200,272) (176,367) 14%

Other Revenues (Expenses) 1,236 (1,042) 7,359 -219% -83% (4,164) (11,368) -63%

Total Operating Expenses (154,996) (164,005) (133,546) -5% 16% (463,052) (426,731) 9%

Operating Income (before Fin. Results) 549,086 115,777 146,850 374% 274% 1,296,621 526,970 146%

Equity pickup 1,755 19,988 -91% N/A 25,329 N/A

Financial Expenses (115,435) (129,005) (112,572) -11% 3% (333,592) (338,393) -1%

Financial Revenues 75,953 72,486 89,135 5% -15% 216,569 241,978 -11%

Net Foreign Exchange Losses (15,377) (412,140) (500,955) -96% -97% (352,371) (339,954) 4%

Net Financial Revenues (54,859) (468,659) (524,392) -88% -90% (469,394) (436,369) 8%

Net Income before Taxes 495,982 (332,894) (377,542) N/A N/A 852,556 90,601 841%

Income Tax and Soc. Contrib. (165,144) 148,988 134,487 N/A N/A (247,106) (30,311) 715%

Net income 330,838 (183,906) (243,055) N/A N/A 605,450 60,290 904%

Depreciation and amortization 151,759 164,348 149,811 -8% 1% 423,952 462,335 -8%

Change in fair value of biological assets (333,122) (4,850) (19,255) 6768% 1630% (772,578) (272,146) 184%

Vale do Corisco 7,033 6,001 - 17% N/A 19,403 - N/A

EBITDA 374,756 281,276 277,406 33% 35% 967,398 717,159 35%

(R$ thousand) 3Q113Q12 2Q12 9M12 9M11

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3Q12 Results October 25th, 2012

Appendix 2Consolidated Balance Sheet (R$ thousands)

Current Assets 4,811,795 4,912,350 Current Liabilities 1,891,600 1,873,217

Cash and banks 64,243 85,600 Loans and financing 1,226,327 1,187,796

Short-term investments 2,850,320 2,994,727 Suppliers 339,464 265,278

Securities 236,025 231,658 Income tax and social contribution 44,103 16,054

Receivables 959,152 851,629 Taxes payable 54,618 47,563

Inventories 481,194 494,458 Salaries and payroll charges 125,173 112,652

Recoverble taxes and contributions 151,566 174,607 Dividends to pay 119996

Other receivables 69,295 79,671 REFIS Adherence 43,765 46,426

Other accounts payable 58,150 77,452

Noncurrent Assets 9,585,352 9,150,717 Noncurrent Liabilities 7,146,064 7,163,878

Long term Loans and financing 5,014,144 5,137,966

Taxes to compensate 121,925 141,645 Deferred income tax and social contribution 1,362,021 1,253,312

Judicial Deposits 98,868 105,899 Other accounts payable - Investors SCPs 227,299 216,676

Other receivables 195,780 170,605 REFIS Adherence 388,736 388094

Other investments 461,696 459,941 Other accounts payable 153,864 167,830

Property, plant & equipment, net 5,292,068 5,118,221

Biological assets 3,407,009 3,146,229 StockholdersEquity 5,359,483 5,025,972

Intangible assets 8,006 8,177 Capital 2,271,500 2,271,500Capital reserve 1,423

Revaluation reserve 50,158 50,336

Profit r es er ve 2,098,528 1,767,512

Valuation adjustments to shareholders'equity 1,082,771 1,086,102

Treasury stock (144,897) (149,478)

Total 14,397,147 14,063,067 Total 14,397,147 14,063,067

Assets Sep-12 Jun-12 Liabili ties and Stockholders' Equity Sep-12 Jun-12

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3Q12 Results October 25th, 2012Appendix 3Loan Maturity Schedule September 30th, 2012

2020

Forward

BNDES 97 82 103 86 94 368 402 121 66 63 36 26 1,544

Others 1 0 0 0 2 5 15 9 13 20 10 10 86

Local Currency 99 83 103 86 96 373 418 130 79 83 47 36 1,630

Trade Finance 308 122 191 125 111 378 376 205 452 333 432 344 3,377

Fixed Assets 11 3 3 3 2 9 36 100 269 144 81 20 682

Others 18 38 13 20 10 76 76 147 - - 51 102 550

Foreign Currency 337 164 207 148 123 463 488 452 721 477 564 466 4,610

Gross Debt 436 247 310 234 219 836 905 582 800 559 610 502 6,240

Total20182015 2016 2017 2019R$ million 4Q12 1Q13 3Q13 20142Q13 4Q13

337

99

164

83 103

207

140

488

418

452

130

451

83 47 36

477 564 466

436

247

905

582559

610

502

4Q12 1Q13 2Q13 3Q13 2014 2015 2016 2017 2018 2019 2020Forward

310

ForeignCurrency4,609

LocalCurrency

1,631

Gross Debt6,240

4Q13

477

R$ million

234

148

86

219

123

96

463

373

836

721

79

800Local Currency 8.0 % p.y. 30 months

Foreign Currency 4.4 % p.y. 44 months

Gross Debt 41 months

Average Cost Average Tenor

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October 25 th, 20123Q12 ResultsAppendix 4Consolidated Cash Flow Statement (R$ thousands)

Cash flow from operating activities 236,848 241,786 629,211 543,852

Operating activities 260,218 235,937 750,763 511,111

. Net income 330,838 (243,055) 605,450 60,290

. Depreciation and amortization 55,200 59,567 164,643 175,887

. Depletion in biological assets 96,559 90,244 259,309 286,448

. Change in fair value - biolgical assets (333,122) (19,255) (772,578) (272,146)

. Equity results 191 (11,115) 363 (11,116)

. Results on Equity Pickup (1,755) - (25,329)

. Deferred income taxes and social contribution 94,653 (183,514) 201,925 (105,193)

.Income taxes and social contribution (1,974) (2,230) (118,349) (84,780)

. Interest and exchange variation on loans and financing 95,514 606,717 624,492 562,529

. Interest Payment (84,291) (64,745) (218,472) (192,455)

. REFIS Reserve 9,714 12,758 36,885 86,806

. Others (1,309) (9,435) (7,576) 4,841

Variations in Assets and Liabilities (23,370) 5,849 (121,552) 32,741

. Receivables (107,975) (20,332) (150,160) (29,378)

. Inventories 13,268 (489) 27,591 (2,907)

. Recoverable taxes 44,735 (14,047) 82,229 91,904

. Marketable Securities (4,367) (6,306) (14,765) (17,264)

. Prepaid expenses 6,542 7,191 10,784 13,191

. Other receivables (14,310) (2,133) (26,174) (35,022)

. Suppliers 4,278 (39,336) (101,842) (65,408)

. Taxes and payable 35,104 47,106 1,443 49,576

. Salaries, vacation and payroll charges 12,521 13,271 22,052 7,782

. Other payables (13,166) 20,924 27,290 20,267

Net Cash Investing Activities (183,249) (16,430) (381,006) (223,051)

. Purchase of property, plant and equipment (159,163) (38,369) (300,967) (186,430)

. Cust biological assets planting (ex taxes) (24,213) (27,644) (88,483) (88,403)

. Income of assets sale127 49,583 9,291 51,782

. Sale of property, plant and equipment - - (847)

Net Cash Financing Activities (219,363) 107,291 325,294 (37,209)

. New loans and financing 131,323 363,055 1,237,237 577,453

. Loan amortization (227,837) (160,422) (700,122) (461,033)

. Minority shareholders entrance - 350 13,002

. Minority shareholders exit (6,566) (571) (7,531) (1,508)

. Dividends payed (119,996) (81,998) (200,001) (152,000)

. Stocks repurchase - (13,123) (8,002) -13123

. Stocks disposal 3,713 3,713

Increase (Decrease) in cash and cash equivalents (165,764) 332,647 573,499 283,592

Cash and cash equivalents at beginning of period 3,080,327 2,482,050 2,341,064 2,531,105

Cash and cash equivalents at end of period 2,914,563 2,814,697 2,914,563 2,814,697

3Q12 3Q11 9M12 9M11

release 3q12

Documents