Klabin (KLBN4) Q3 2025 earnings summary

Executive summary

• Net revenue reached BRL 5.4 billion in 3Q25, up 9% year-over-year, with Adjusted EBITDA of BRL 2.1 billion, a 17% increase, and EBITDA margin at 39–40%.

• Sales volumes increased: pulp up 25%, paper up 10%, packaging up 7–14% year-over-year, driven by higher production and Puma II ramp-up.

• Packaging and paper segments outperformed, offsetting declines in pulp prices, with corrugated boxes and industrial bags showing strong volume and price gains.

• The company is transitioning from a heavy investment phase to a focus on free cash flow generation and deleveraging.

• Free cash flow for the last twelve months was BRL 3.1 billion, with a yield of 12.6%.

Financial highlights

• Free cash flow for the quarter was BRL 699 million, with an adjusted FCF yield of 12.6% over the last twelve months.

• Net debt reduced to BRL 26.1 billion, down BRL 1.8 billion from Q2 2025, with leverage at 3.6x net debt/EBITDA (USD).

• Liquidity stood at BRL 12.4 billion, with BRL 9.7 billion in cash and the rest in undrawn credit lines.

• Total cash cost per ton was BRL 3,104, a 2% decrease both sequentially and year-over-year.

• Dividend yield over the last twelve months: 5.5–6.2%, with BRL 1.3 billion distributed and BRL 318 million to be paid in November.

Outlook and guidance

• Management expects continued free cash flow generation and further deleveraging, with no major transformational investments ahead.

• CapEx is expected to remain stable, with only marginal carryover into 2026; operational continuity and cost discipline are priorities.

• Cost benefits from recent investments, such as the Monte Alegre boiler and CAITE Project, are expected to materialize in 2026.

• Guidance for production volumes in 2026 will depend on market conditions and the use of recycled versus virgin fibers.

• Ongoing land monetization through the Caetê Project, with R$95 million in land sales in 3Q25 and ~20,000 hectares available for future sales.