Sustainable Economy
The best economic performance in Klabin's history
In a year marked by uncertainties, cost increases, and volatility in global markets, Klabin overcame the challenges and achieved the best operational and financial results in its 123-year history.
Adjusted EBITDA has grown for 12 consecutive years, which proves that our commercial flexibility, operational efficiency, and agility to meet the demands of the domestic and foreign markets, combined with a diversified product portfolio, constitute a privileged business model.
In 2021, the Company experienced high demand for its products, especially in the packaging paper market. In addition to being widely used in essential items, such as cleaning products or toiletries and food items, they are essential in e-commerce.
Sales volume was 3.8 million tons, representing a 6% increase over 2020, mainly reflecting the incremental volume from International Paper's corrugated board packaging plants and the first paper machine from the Puma II Project, Paper Machine 27, better known as MP27.
Although 2021 was marked by high costs, affected by rising inflation and the upswing in commodities, the company was able to adapt prices and take advantage of the positive influx of the depreciated exchange rate on revenues. Under these conditions, it was possible to not only maintain but also increase the EBITDA margin, which, excluding non-recurring effects, rose from 39% in 2020 to 42% in 2021.
BRL 16.481 billion
Net revenues (38% higher than 2020)
BRL 6.865 billion
Adjusted EBITDA excluded non-recurring effects (46% higher than 2020)
3.8 million
tons was the sales volume, up 6% compared to 2020
See GRI indicators 102-7, 201-1 and others related to the Economic performance material topic in the ESG Panel.
Results by business unit
In 2021, Klabin moved approximately 14 million tons of pine and eucalyptus logs and chips, as well as biomass for energy generation, supplying the internal demand for pulp and paper manufacturing, and providing raw material for sawmills and rolling mills. Despite the destination of wood for higher internal consumption in the operations, the sales volume in 2021 was 2.6 million tons, an increase of 73% compared to the previous year, when 1.5 million tons were sold. The net revenue was BRL 275 million.
More than 27,900 hectares of pine and eucalyptus were planted in the year, on company-owned, leased, co-owned, and partnership lands in municipalities in the areas covered by the Puma and Monte Alegre (PR), Otacilio Costa (SC), and Angatuba (SP) units.
The year 2021 began with a strong recovery movement. This resumption occurred across all markets, but with different behaviors throughout the year, allowing for consecutive price increases during the first six months of the year. As far as the operation is concerned, the Pulp Business Unit produced 1.66 million tons, 7% above the previous year's volume, and once again above the unit's nominal capacity.
In the year, the increase in pulp sales volume was 1% compared to the same period in 2020, reaching 1.55 million tons of bleached pulp, with 1.12 million tons of hardwood pulp and 431,000 tons of softwood pulp/fluff. The net revenue of the pulp segment closed 2021 at BRL 5.8 billion, an increase of 49% compared to the previous year.
Em 2021, as mudanças já em curso e aceleradas pela pandemia, como a busca de produtos In 2021, the changes already underway and accelerated by the pandemic, such as the search for more sustainable products by customers and consumers, the substitution of plastic packaging for paper packaging, and the greater representation of e-commerce in sales became more evident, reflected in the intense demand for paper and the strong recovery in prices throughout the year.
One of the highlights of the year was the start-up of the MP27 operation, with a production capacity of 450,000 tons per year. The machine is part of the Company's expansion project, known as Puma II, and initiated the production of Eukaliner®, the world's first kraftliner paper made entirely from eucalyptus fibers.
In the year, production was 99,000 tons, with a higher concentration in the last quarter. Part of this production was directed for conversion at the Company's packaging units and part was directed for sales to customers in the external market, in accordance with previously established contracts.
A paperboard machine, MP28, will also be installed in the Puma II Project. Its construction had reached 14% completion by the end of 2021. With production capacity of 460,000 tons per year, MP28 is scheduled to come online in the second quarter of 2023, continuing Klabin's expansion.
In the kraftliner market, demand remained intense and Klabin's sales volume over the course of the year came to 407,000 tons, 6% less than the volume in 2020. The reduction is explained by the higher level of internal conversion of paper into packaging with the incorporation of the International Paper (IP) packaging assets in Brazil. As such, the net revenue was BRL 1.63 billion in 2021, a growth of 36%, reflecting the better price conditions and the depreciation of the Brazilian real against the U.S. dollar.
Klabin's strategic positioning in the packaging market, especially linked to essential goods, was reinforced by its increased share of the Brazilian market after the acquisition of IP's assets in Brazil.
Thus, Klabin's converting plants operated at full capacity for most of 2021 in order to meet the intense market demand. In this context, the corrugated board sales volume reached 948,000 tons, up 31% over 2020 and 5.7% when disregarding the additional volume from IP.
Net revenue, in turn, was BRL 4.66 billion, a 73% increase over the previous year, with a net increase of BRL 994 million from the new units.
The industrial bag business continues to operate at full capacity, given the growing scenario of high packaging demand for civil construction and other uses, both in the domestic market and internationally. In the annual comparison, net revenue expanded 17%, mainly due to the sales mix and price transfers intended to offset inflation and cost increases.
Klabin's e-commerce strategy
Attentive to the growth of e-commerce in recent years, Klabin has maintained, since 2019, a platform that structures its service front for this market, driven by changes in consumption behavior caused by the pandemic.
Through Klabin For You, the Company offers innovative and sustainable solutions in corrugated board and sack kraft packaging to meet a wide variety of needs, from the end consumer to large companies, in addition to small businesses and micro-businesses. For the last two, customized paper-based solutions are also available, with a simplified purchasing process and in low quantities. This sales channel offers packaging for different purposes and accessories for packaging and stationery items or even creative solutions, such as a pet house, all made from Klabin's cardboard and paper.
Klabin saw an increase of more than 100% in sales of packaging for e-commerce during the pandemic. In 2021, there was an 81% growth in the number of accesses to the platform, reaching more than 620,000 people. In the period, the company maintained its focus on diversifying its portfolio on the website to offer more solutions in paper packaging and a more comprehensive customer journey, which resulted in an 80% increase in the number of products available, totaling more than 750 items.
#eureciclo seal
In July 2021, the packages sold on Klabin ForYou began to feature a new sustainability attribute: the "eureciclo" seal, which attests to the engagement in recycling by means of reverse logistics certification of the items, adding even more value to the Company's e-commerce strategy.
In practice, the seal certifies the reverse logistics of post-consumption packaging by means of a platform that tracks the invoices issued by cooperatives and recycling operators that are partners in the initiative. The adoption of the seal also contributes to the National Solid Waste Policy, which has the goal of recycling at least 22% of the packaging sold by the companies. The seal is a guarantee that the brands that carry it allocate resources, in an environmental compensation system, for the development of the recycling chain.
Sustainable bonds
CFO Task Force: group of chief financial officers from 60 companies that are part of the UN Global Compact movement. The group committed to investing, over the next five years, more than USD 500 billion in the SDGs (Sustainable Development Goals) to promote a collective work of greater integration of these SDGs both within their own organizations and outside of them, seeking to attract new partners to the initiative.
SEE GLOSSARYPartner companies in the initiative commit to the four CFO Principles on Integrated SDG Investments and Finance, integrating corporate finance; investments and strategy for the SDGs; in addition to measuring and reporting their impact.
As part of this sustainable finance strategy, in January 2021, the company issued bonds linked to sustainability goals, called Sustainability Linked Bonds (SLBs).
The transaction, in the amount of USD 500 million, has a ten-year maturity and the lowest interest rate (3.2% per year) achieved by a Brazilian company with the same credit risk rating as Klabin.
The Company has a history of issuing green bonds since 2017, when it issued the first, maturing in ten years, and the second in 2019, both in the amount of US$500 million each. In 2020, Klabin reopened the green bonds, for an additional funding of US$ 200 million, maturing in 2049. Detailed information on these bonds is available on the Sustainable Finance page in the ESG Panel.
In addition to issuing the bonds, the Revolving Credit Facility (RCF) was recently contracted, a revolving credit line of USD 500 million, maturing in October 2026 and with costs linked to the sustainability goal. As a result, the Company committed to achieving three ESG targets by 2025:
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Water consumption equal to or below 3.68 m³ per ton of production;
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Minimum 97.5% reuse/recycling of solid waste;
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Reintroduction to the ecosystem of two species of endangered native animals, such as the guan (see the case of the guan below). Klabin was the first company to issue SLBs linked to a biodiversity goal.
Find more information on Sustainable Finances on the newly launched ESG Panel page.
Reintroduction of locally extinct endangered species
In the SLB target related to biodiversity, the work being carried out in Klabin's Ecological Park, in Paraná, on reintroducing the guan (Aburria jacutinga) into nature, after reproduction in captivity, stands out. The bird, considered extinct both in the interior of the state and in southern Bahia, Espírito Santo, and Rio de Janeiro, regions of Brazil where it was originally found, is a great disperser of seeds, contributing to forest restoration. After the renovation of the environmental enclosures in the park was completed in 2020 and all permits and licenses were obtained in 2021, the first group of birds, containing ten individuals, was released to the wild in March 2022. In parallel, two individuals born in the park were monitored as part of the breeding program for endangered species. These birds will also be reintroduced after the process of acclimatization and adaptation to the environment.
