MESSAGE FROM THE BOARD
- After some uncertainties early in the year, still in the midst of the Covid-19 pandemic, when expectations related to the mass vaccination against and the global economic recovery were on a horizon of uncertainty, we remained on an upward trajectory. The fact is that we reached the end of 2021 certain that we are an even more solid company, a global benchmark in sustainability, wich continues in full and continuous growth.
- We recorded strong demand for our products in the domestic and foreign markets and the best operational and financial results in our history. Adjusted EBITDA, excluding non-recurring effects, which measures operating cash generation, totaled BRL 6,865 billion in 2021, 46% higher than that recorded in the same period in 2020, wich represents the Company's 12th consecutive year of growth. Results like these are the result of an integrated, diversified and flexible business model, combined with operational efficiency.
- The global logistics challenges, the energy crisis in China, rising inflation in several countries, and the concern with the national water crisis are examples of adversities faced by Klabin last year and resilience, once again, was a preponderant factor for the realization of our projects. We had the successful start-up of Paper Machine 27, in August, in the first stage of the Puma II Project. We have also moved forward in offering innovative solutions, with diversified, recyclable, and biodegradable products from renewable sources and in tune with the consumption demands of our customers and of society, for which we have a genuine vocation. The start of Eukaliner® production on MP27, the world's first kraftliner made exclusively from eucalyptus fiber, illustrates Klabin’s ability to reinvent itself, reinforcing its portfolio of sustainable products. The novelty is the result of studies conducted by our teams at the Technology Center, which is also responsible for the development of barriers that add even more functionality to our paper and paper packaging.
- 2021 was also a year of future-oriented decisions. The production of paper board by MP28, the second paper machine of the Puma II Project, with start-up scheduled for the second quarter of 2023, will serve a growing market worldwide and for wich there is no forecast of supply expansion in the short term. In line with our expansion projects, we started operating a container rail terminal in Paraná, which represented an important gain in the logistics area. We have doubled our container flow capacity from the Puma and Monte Alegre units to the Port of Paranaguá.
- A clear result of a history of commitment to sustainable development and its pioneering role in practices and initiatives that benefit the planet, KIabin was invited to participate in COP26 as representative of the leadership of private companies in Latin America. In partnership with the UN Global Compact Brazil Network, to which the Company has been a signatory since 2003, we launched the ImPacto NetZero campaign, born out of the urgency of collective mobilization to climate change mitigation.
- We registered another important milestone in the period, which was Klabin's inclusion in CDP's Triple A List with the Water Management, Forestry and Climate Change programs. This Initiative, wich analyzes and recognizes the efforts of companies worldwide to manage the environmental impacts of their activities, showed that we are moving in the right direction. This achievement place us among the companies recognized as leaders in the transition process into a new sustainable economy. Klabin has been included in the Dow Jones Sustainability Index for the second year in a row, in the World – the most robust and important of all – and Emerging Markets categories. Even with a record number of companies competing in this edition, we made up the group of 10% of companies with the best scores in the Global category. We also stood out for the best score in the industry (Containers & Packaging category), and we progressed in the environmental, social, and corporate governance indicators.
- It was a celebrated outcome in a year that began with the fundraising, in January, of USD 500 million in Sustainability Linked Bonds (SLB) issued in the international market, with a ten-year term and the lowest interest rate – 3.2% per year – ever achieved by a Brazilian risk rating company identical to ours. The SLB is tied to the achievement of sustainability goals wich, in Klabin's case, are planned to be achieved by 2025 and are related to the reduction of water consumption, the reuse of waste, and the reintroduction of endangered native animal species. For this operation, Klabin won the Bonds & Loans Latin America & Caribbean award in the "ESG Deal of the Year" category, which highlights innovative and sustainable operations.
- Our governance model was strengthened in the period, with the performance of the three advisory committees to the Board of Directors created in December 2020: the Sustainability Committee and the People Committee, the Audit and Related Parties Committee. We launched the ESG Panel in the first half of 2021, a platform that brings together our indicators in a single place, allowing us to monitor the evolution of our performance and compliance with the Klabin 2030 agenda (the KSDGs), inspired by the UN Sustainable Development Goals. In March 2022, we added the Sustainable Finance page to the platform, with the reporting of financial instruments linked to sustainability – green Bond, sustainability Linked Bond and revolving credit facility. More than just accountability, we present an overview of our ESG integration into the Company's long-term strategy. In 2021, Klabin's investor base exceeded 200,000 individuals. Motivated by this growth, we have further increased our efforts to provide increasingly clear content on financial results, in a practical and accessible way. Weekly, we supply information to the Klabin Invest platform, through videos and podcasts, and we provide a completely revamped Investor Relations website (https://ri.klabin.com.br/en/).
- Reinforcing our commitment to citizenship in the communities with a focus on local development, in 2021, we highlighted the support to 15 municipalities in Paraná and Santa Catarina in the construction of the Multi-Year Plan and the launch of the Social Progress Index (SPI) for 12 municipalities in Paraná. The SPI has been used worldwide to measure and compare social progress, helping to direct investments, both in the public and private sectors. By the end of 2022, 12 municipalities in Santa Catarina will also be included in the index.
- Among the concerns of a company focused on a sustainable future is the well-being of the people who build it day after day. An internal consultation showed that our employees really perceive the Company's evolution in initiatives aimed at diversity and, especially, gender equity. The same survey revealed that work safety is perceived as a priority value at Klabin. This is a significant recognition, as safety is one of the pillars of the growth we want. For this reason and in order to continue with our cultural evolution plan, we have reinforced our security measures and this year implemented a Corporate Life Protection Policy.
- In this sense, I could not fail to mention that we were dismayed, in March 2022, in the period between the closing of 2021 and the production of this report, with the bus accident that victimized employees of a third-party company on the way to the General Maintenance Shutdown at the Monte Alegre plant, in Paraná. In it, 11 people lost their lives and 20 were injured. We continue to work tirelessly so that processes and activities are increasingly safer at Klabin.
- I would like to thank the Board of Directors and our shareholders for believing in our capacity to overcome; and also the customers, who challenge us to innovate and work even better. I thank our employees, who are responsible for our results, the communities, that welcome us and with whom we develop relationships of partnership and encouragement, and, finally, all those who make up our business environment. The trust you place in us is what allows us to invest, grow, and create value for society.
I could not close this Message without paying tribute to Dr. Armando Klabin, who died on September 22, 2021, then Chairman of the Company's Board of Directors. Dr. Armando dedicated himself untiringly to the quest to transform Klabin into a world renowned company. His dedication will remain in our daily lives, and we will honor his legacy through our work in building a renewable future that can also inspire future generations.
Cristiano Teixeira
Klabin’s Chief Executive Officer
