Suzano (SUZB3) Q1 2026 earnings summary

Executive summary

• Delivered solid Q1 2026 results with higher pulp prices and volumes year-over-year, supported by operational efficiency and robust hedging, though sequential results were impacted by currency appreciation and lower sales volumes.

• Net sales for Q1 2026 were R$10.97 billion, down 5% year-over-year, with net income of R$4.31 billion, a 32% decrease from Q1 2025.

• Achieved a 10% reduction in headcount year-over-year, aligning with cost control initiatives.

• Maintained robust logistics and input self-sufficiency, mitigating supply and freight risks.

• ESG progress recognized with MSCI ESG rating upgrade to BBB.

Financial highlights

• Adjusted EBITDA for Q1 2026 was R$4.6 billion, down from R$4.9 billion in Q1 2025 and R$5.6 billion in 4Q25.

• Free cash flow yield (LTM) was 13.6%, down 4.9 p.p. year-over-year.

• Net debt increased slightly to US$13.0 billion, mainly due to dividends, CapEx, and interest payments.

• Cash and cash equivalents at quarter-end were R$22.7 billion, with gross debt at R$90.7 billion, 96% long-term.

• Cash cost of pulp production ex-downtime was R$802/t, down 7% year-over-year, up 3% sequentially.

Outlook and guidance

• Management expects the acquisition of a 51% stake in a global tissue business to close by mid-2026, pending regulatory approvals.

• Q2 2026 sales volumes and prices in Brazil and U.S. projected to improve, with price increases and cost pass-throughs.

• Annual maintenance at Suzano Packaging in May will temporarily impact production costs, but no sales impact expected.

• Company maintains focus on long-term strategy and sustainability, with operational expenditure for 2027 forecast at R$1,983/t.

• CapEx guidance for 2026 maintained, with expectations for lower CapEx in coming years.