Klabin (KLBN4) Q1 2025 earnings summary

Executive summary

• Net revenue reached R$4.9 billion in Q1 2025, up 10% year-over-year, with Adjusted EBITDA of R$1.9 billion, a 13% increase, and strong free cash flow generation, despite a volatile macroeconomic environment.

• Dividend yield stood at 5.8% over the last twelve months, with R$1.477 billion paid in dividends and IOC.

• ROIC improved to 10.7% in Q1 2025, up 1.0 p.p. year-over-year, reflecting disciplined capital allocation.

• Market share remains strong in coated boards, kraft liner, industrial bags, and corrugated boxes in Brazil.

• Sustainability recognitions include inclusion in the S&P Global Sustainability Yearbook and the ISE portfolio for the 12th consecutive year.

Financial highlights

• Adjusted EBITDA margin rose to 38% in Q1 2025, up 1 p.p. year-over-year.

• Net income was R$446 million, down 3% year-over-year, impacted by higher costs and expenses.

• Net debt stood at R$30.5 billion at quarter-end, with a Net Debt/EBITDA (USD) ratio of 3.9x and Net Debt/EBITDA (R$) at 3.2x.

• Free cash flow for the quarter was R$492 million; last 12 months' adjusted free cash flow totaled R$3.6 billion (14% yield).

• Capex in Q1 2025 was R$605 million, down 35% year-over-year, reflecting the completion of major projects.

Outlook and guidance

• Production ramp-up for Puma II and cost optimization initiatives are on track, with cash cost per ton guidance for 2025 reaffirmed at R$3.1–3.2 thousand.

• Expect higher sales volumes in Q2 2025 across most segments due to seasonality and operational recovery.

• Fluff pulp expected to benefit from global trade shifts, with improved prices and volumes in coming quarters.

• Capex guidance for 2025 is R$3.3 billion, maintaining the investment level of 2024.

• Deleveraging remains a priority, with robust free cash flow expected over the next 18-24 months before considering new investments.