Investor Presentaiton
32 STRATEGY AND PERFORMANCE
FINANCIAL AND
OPERATIONAL
PERFORMANCE
(G4-EC1)
ELDORADO BRASIL 2016 SUSTAINABILITY REPORT 33
INNOVATION FOR PRODUCTIVITY
With innovation and team work as key driv-
ers, in 2016 the industrial area launched its
Inovar Program, designed to encourage idea
generation among employees in the opera-
tional and maintenance areas of the Três
Lagoas plant. The goal is to develop initia-
tives that promote excellence and enhance
the work environment.
Since its introduction, the program has re-
ceived 200 submissions, 50% of which have
already been put into practice.
The forestry area is also developing its Evo-
lution program, designed to implement a se-
ries of projects to enhance competitiveness
and reduce costs in the seedling nursery and
in the forestry, harvest and maintenance
sectors. This program should be fully opera-
tional by 2019.
In 2016, Eldorado's gross revenue
was R$ 3.460 billion, down 7%
on the 2015 figure of R$ 3.721
billion. Ebitda (earnings before
interest, taxes, depreciation and
amortization) was R$ 1.585 bil-
lion, compared with R$ 1.824
billion the previous year. Ebitda
margin was 54%, still the highest
margin in the sector.
The company's financial perfor-
mance was particularly impacted
by the drop in pulp prices on the
global market, due to new produc-
tion capacity and the projected
startup of new operations, as
well as the appreciation of the
Brazilian real against the dollar.
However, operational efficiency
and commercial strategy enabled
Eldorado to partially offset these
negative effects. During the
year, the company posted a 6.6%
increase in sales volume, which
was actually higher than its an-
nual production. In contrast, there
was a 6.6% drop in the total value
for distribution, which decreased
from R$ 1,919.094 in 2015 to R$
1,791,550 in 2016 (see the full
Value Added Statement in the At-
tachments section).
In spite of the decrease in pulp
prices and the exchange rate, net
income was R$ 288 million in
2016. Cash availability at the end
of the year was R$ 1.2 billion,
while long-term indebtedness cor-
responded to 74% of total debt.
In June, the company accessed the
international capital market with
the issue of US$ 350 million in
R$ 3.5 billion
in net revenue, 7% down on 2015,
due mainly to lower pulp prices
debentures maturing in five years.
The positive reception to this is-
sue reinforced market recognition
of Eldorado's level of business
maturity.
Production and sales volume
Eldorado's operational results were
outstanding in 2016. Production
volume reached 1,638,000 metric
tons of pulp, an increase of 2.6%
over 2015 and 9% over the plant's
nominal production capacity of 1.5
million metric tons/year.
Out of 1,665,000 metric tons of pulp
commercialized in the year 90%
was exported, giving the company
a share of approximately 12% in
Brazilian pulp exports in 2016. The
main destinations were Asia (49%)
and Europe (29%). The business
segments with the highest volumes
were tissue (35%) and printing
and writing (25%). The special
papers niche was also worthy of
note, growing 4 p.p. over the
previous year.View entire presentation