Economic Performance - Summary GRI

The year 2022 was marked by a troubled macroeconomic environment. As the COVID-19 pandemic was still ongoing and its far-reaching consequences were being felt, the world was taken aback by the eruption of the conflict between Russia and Ukraine, which has caused irreparable humanitarian losses and has had a ripple effect on supply chains, significantly increasing the cost of European energy and impacting economies around the globe. Even in this challenging environment, Klabin maintained its strategy of strengthening its business on several fronts, as well as the expansion process, backed by an integrated and flexible business model with a diversified product portfolio. The Company's growth strategy is founded on the following pillars, which are linked to sustainable development, competitiveness, and value creation: a high-yield forestry asset, outstanding operational efficiency of its mills, and continuous development of technologies, solutions, and products that support the ability to generate lasting results.

Net revenue reached BRL 20.033 billion in 2022, up 22% from 2021, with growth across all business segments – pulp, paper, and packaging. This increase is due to the price adjustments made throughout the year, counterbalancing the appreciation of the Brazilian real against the US dollar during this period. The net debt/adjusted EBITDA ratio, measured in US dollars, which provides the best insight into Klabin's financial leverage profile, decreased to 2.6x by the end of 2022, down from approximately 2.9x at the end of 2021. The increase in EBITDA contributed to the reduction in the Company's leverage level, which, even during the Puma II investment cycle, reached a level near the bottom of the parameters established in its Financial Debt Policy.

Thus, 2022 was, once again, a year of excellent results, the 13th consecutive growth of adjusted EBITDA, which reached a record level of more than BRL 7.8 billion, excluding non-recurring effects. Higher adjusted EBITDA and the diligent allocation of capital, has benefited cash generation in the period and, consequently, the creation of value for shareholders, with a Return on Invested Capital (ROIC) of 19.2%. These milestones demonstrate that the expansion trajectory built over the last few years is being consistently implemented, reinforcing the confidence that Klabin will remain committed to its goal of combining growth with value creation for all stakeholders in 2023.