After business with Kimberly-Clark, Suzano placed the break on the M&S schedule
A. 51% of global operations Kimberly-Clark Makes Suzano Put foot on the brake M & a.
With a net debt of 3.0 times, focusing on its breakdown and its breakdown, the Brazilian paper and the pulp manufacturer already have a maximum US $ 3 billion in the results teleconference, which is used for inorganic growth movements.
Now, with the distribution of US $ 1.7 billion, it intends to pause and focus on integration for at least two years of acquisition This makes the world’s tissue (sanitary papers) the eighth largest player. “We need to focus on the operation we are doing now and not find other M&A movements in the next two or three years,” said Suzano CEO beto Abrau.
The executive presented this strategy at the morning market meeting, and in the afternoon, the board explained the operation further to the journalists.
Only the exception to the interruption of M&S Lenging Control Purchase OptionalSuzano bought 15% from the Global Special Fiber Company in Austria last year. By 2028, Brazilian is eligible to buy another 15%.
The main focus, Suzano Markos highlights the CFO of Assampo, which is a leverage reduction, which should obtain traction with the progress of the operation of the serado project. “Operation does not change our dividend payment policy,” said Assumpo.
In total, JV will have 22 factories in 14 countries, and 40 brands, including Global and Regional, will be sold to more than 70 countries. Considering the statistics of these operations by 2024, the company’s EBITDA is just over 500 million, about 300 million free cash flow.
The operation of the operation, which is fully paid in full with its cash, has the right to buy a full business in the future, without stressing on Suzano’s leverage.
Today, JV has admitted that Billion can issue a loan up to 1 billion to improve his capital structure, but Suzano and KC JV. If this happens before the conclusion, Suzano’s payment will keep JV Valuation at 4 3.4 billion.
The creation of JV is associated with the varied thesis of Suzano. For example, the company tried to take part in tissues in domestic and public -envirouses such as offices, shopping centers and airports.
JV has a series of strong industrial assets, including a transfer of premium brands such as Cleanex and Scott, 30 years of royalties, as well as local brands or vice leaders in the United Kingdom, which is used by British Royal Family and Royal Seal.
In addition to the expansion of its operations in strategic markets, Suzano is more exposed to the European market, with half the concentrated JV income in the region. The new structure opens the door to the company to enter new markets such as Israel, New Zealand and South Africa, expanding its global presence.
After the operation is closed, the company sees a significant change in its income construction. The income from the pulp (pulp) is reduced from about 80% to 60% of the total income of Suzano. This change becomes a direct reflection of the integration of tissue operation, which becomes a related part of the company’s composition.
In terms of EBITDA, the ratio of the entire pulp (cellulose) is slightly lower than 80%, but the consumer goods section (such as sanitary papers and other tissue products) represent 15%income and represent 10%of the paper unit. This new distribution allows Suzano to aim to further margin markets and growth capacity.
In addition to strengthening the variation of the strategy, the transaction also consolidates the exploration for greater competitiveness – a challenge, because some assets are considered less profitable, according to the Wall Street Journal report. However, Suzano’s management, the company said that the company manages the “active clothes -view” and that the focus on the first moment is not in the subdivises.
Suzano predicts gains to reduce the complexity of world -spreading operation in hopes of taking up to $ 175 million a year after the three -year JV operation. According to Louis Bueno, the director of Consumer Goods at Suzano, “These are more traditional expectations.”
These benefits come from the implementation of strategies already tested in Brazil, such as reducing operating costs and optimization of the supply chain. Since 2022, Suzano has assets belonging to Kimberly Clark in Latin America, including ice -t -t -t -t -t -t -t -t -t -e -e -brand. Here, the company has been able to reduce the cost of the calcixa cost of KC’s tissue operations in Brazil and increase the product size by 22%.
Directors also notice that the company will reduce the complexity of the construction transaction from 51% to 49% of the company, as well as the decision to manage the operations of Suzano and JV.
A large and elastic market
Tissue’s global market is about 44 million tonnes. The largest market is close to Asia, North America and Europe, which have similar quantities.
In Europe and North America, the tissue market showed growth 2.5% per year. “The tissue market is a elastic and necessary sector, which ensures that demand by economic fluctuations is not directly affected,” said Suzano CEO.
In the UMP Hall, which is used to calculate 15.5% internal returns (IRR) in JV, Suzano is considering an increase in the market’s rhythm or less sales quantity with the aim of maintaining its market share. “We are demonstrating traditional growth, we are linked to market behavior, and our focus is to keep our partnership,” said Buno.
