Unaudited condensed consolidated interim financial information
Six-month period ended June 30, 2021

(In thousands of R$, unless otherwise stated)

CONSOLIDATED BALANCE SHEET

ASSETS Note June 30,
2021
December 31,
2020
CURRENT
Cash and cash equivalents 5 8,585,570 6,835,057
Marketable securities 6 2,448,267 2,212,079
Trade accounts receivable 7 3,979,086 2,915,206
Inventories 8 4,404,865 4,009,335
Recoverable taxes 9 382,415 406,850
Derivative financial instruments 4.5 1,204,841 484,043
Advances to suppliers 10 35,821 43,162
Other assets 758,427 738,924
21,799,292 17,644,656
Assets held for sale 1.2.2 313,338
Total current assets 21,799,292 17,957,994
NON-CURRENT
Marketable securities 6 237,345 184,778
Recoverable taxes 9 1,156,151 834,575
Deferred taxes 12 6,224,616 8,677,002
Derivative financial instruments 4.5 764,156 857,377
Advances to suppliers 10 1,249,628 1,015,115
Judicial deposits 298,049 257,789
Other assets 222,695 235,341
Biological assets 13 11,720,857 11,161,210
Investments 14 497,083 359,071
Property, plant and equipment 15 38,190,785 39,156,890
Right of use 19.1 4,571,713 4,344,078
Intangible 16 16,375,218 16,759,528
Total non-current 81,508,296 83,842,754
TOTAL ASSETS 103,307,588 101,800,748

The accompanying notes are an integral part of this unaudited condensed consolidated interim financial information.

1

Suzano S.A.

Unaudited condensed consolidated interim financial information
Six-month period ended June 30, 2021

(In thousands of R$, unless otherwise stated)

CONSOLIDATED BALANCE SHEET

LIABILITIES Note

June 30,

2021

December 31,
2020
CURRENT
Trade accounts payable 17 2,575,168 2,361,098
Loans, financing and debentures 18.1 1,920,072 2,043,386
Lease liabilities 19.2 593,691 620,177
Derivative financial instruments 4.5 1,010,897 1,991,118
Taxes payable 233,277 170,482
Payroll and charges 444,938 492,728
Liabilities for assets acquisitions and associates 23 112,446 101,515
Dividends payable 11,185 6,232
Advance from customers 115,260 25,171
Other liabilities 361,197 360,916
Total current liabilities 7,378,131 8,172,823
NON-CURRENT
Loans, financing and debentures 18.1 66,556,926 70,856,496
Lease liabilities 19.2 4,773,303 4,571,583
Derivative financial instruments 4.5 5,060,920 6,126,282
Liabilities for assets acquisitions and associates 23 396,923 400,713
Provision for judicial liabilities 20.1 3,271,679 3,255,955
Employee benefit plans 21.2 792,387 785,045
Deferred taxes 12 570
Share-based compensation plans 22.3 212,500 195,135
Advance from customers 165,439
Other liabilities 111,888 98,768
Total non-current liabilities 81,341,965 86,290,547
TOTAL LIABILITIES 88,720,096 94,463,370
EQUITY 24
Share capital 9,235,546 9,235,546
Capital reserves 13,033 10,612
Treasury shares (218,265 ) (218,265 )
Other reserves 2,028,382 2,129,944
Retained earnings (accumulated deficit) 3,429,696 (3,926,015 )
Controlling shareholders´ 14,488,392 7,231,822
Non-controlling interest 99,100 105,556
Total equity 14,587,492 7,337,378
TOTAL LIABILITIES AND EQUITY 103,307,588 101,800,748

The accompanying notes are an integral part of this unaudited condensed consolidated interim financial information.

2

Suzano S.A.

Unaudited condensed consolidated interim financial information
Six-month period ended June 30, 2021

(In thousands of R$, unless otherwise stated)

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

Second quarter Semester ended
Note

April 1 to

June 30, 2021

April 1 to

June 30, 2020

June 30,

2021

June 30,

2020

NET SALES 27 9,844,439 7,995,673 18,733,605 14,976,466
Cost of sales 29 (4,777,655 ) (4,788,694 ) (9,622,689 ) (9,608,693 )
GROSS PROFIT 5,066,784 3,206,979 9,110,916 5,367,773
OPERATING INCOME (EXPENSES)
Selling 29 (496,934 ) (547,098 ) (1,078,700 ) (1,062,034 )
General and administrative 29 (353,004 ) (335,715 ) (735,558 ) (650,551 )
Income (loss) from associates and joint ventures 14 80,098 (3,663 ) 90,364 (2,952 )
Other, net 29 909,543 195,671 1,426,396 212,402
OPERATING PROFIT BEFORE NET FINANCIAL INCOME (EXPENSES) 5,206,487 2,516,174 8,813,418 3,864,638
NET FINANCIAL INCOME (EXPENSES) 26
Financial expenses (932,159 ) (1,033,126 ) (1,923,092 ) (2,119,550 )
Financial income 46,263 82,419 70,490 203,173
Derivative financial instruments 3,732,823 (1,776,322 ) 1,238,873 (10,835,114 )
Monetary and exchange variations, net 6,895,657 (2,930,209 ) 1,689,192 (15,349,795 )
NET INCOME (LOSS) BEFORE TAXES 14,949,071 (3,141,064 ) 9,888,881 (24,236,648 )
Income and social contribution taxes
Current 12 (91,514 ) (3,469 ) (155,663 ) (57,829 )
Deferred 12 (4,820,858 ) 1,092,015 (2,451,778 ) 8,822,898
NET INCOME (LOSS) FOR THE PERIOD 10,036,699 (2,052,518 ) 7,281,440 (15,471,579 )
Attributable to
Controlling shareholders' 10,035,111 (2,057,101 ) 7,277,867 (15,479,631 )
Non-controlling interest 1,588 4,583 3,573 8,052
Earnings (Loss) per share
Basic 25.1 7.43770 (1.52466 ) 5.39412 (11.47301 )
Diluted 25.2 7.43640 (1.52466 ) 5.39318 (11.47301 )

The accompanying notes are an integral part of this unaudited condensed consolidated interim financial information.

3

Suzano S.A.

Unaudited condensed consolidated interim financial information
Six-month period ended June 30, 2021

(In thousands of R$, unless otherwise stated)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Second quarter Semester ended

April 1 to

June 30, 2021

April 1 to

June 30, 2020

June 30,

2021

June 30,

2020

Income (loss) for the period 10,036,699 (2,052,518 ) 7,281,440 (15,471,579 )
Other comprehensive income (loss)
Exchange rate variation and fair value investments in equity measured at fair value through other comprehensive income (3,158) 1,456 (217 ) 2,556
Tax effect of the above items 1,074 (495 ) 74 (869 )
Items with no subsequent effect on statement of income (2,084) 961 (143 ) 1.687
Exchange rate variation on conversion of financial statements of the associates abroad (3,291) (1,451 ) (22,877 ) (4,811 )
Realization of the above items (1) (746) (746 )
Items with subsequent effect on statement of income (4,037) (1,451 ) (23,623 ) (4,811 )
10,030,578 (2,053,008 ) 7,257,674 (15,474,703 )
Attributable to
Controlling shareholders' 10,028,990 (2,057,591 ) 7,254,101 (15,482,755 )
Non-controlling interest 1,588 4,583 3,573 8,052
(1) Effect arising from the remeasurement of Spinnova's investment (Note 1.2.5)

The accompanying notes are an integral part of this unaudited condensed consolidated interim financial information.

4

Suzano S.A.

Unaudited condensed consolidated interim financial information
Six-month period ended June 30, 2021

(In thousands of R$, unless otherwise stated)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Attributable to controlling shareholders'
Share capital Capital reserves Retained
earnings
reserves
Share
capital
Share
issuance
costs
Stock
options
granted
Other Treasury
shares
Legal
Reserve
Other
reserves
Retained
earnings
(losses)
Total Non-controlling
interest
Total equity
Balances at December 31, 2019 9,269,281 (33,735 ) 5,979 6,410,885 (218,265 ) 317,144 2,221,341 17,972,630 115,339 18,087,969
Total comprehensive income
Net income (loss) for the period (15,479,631 ) (15,479,631 ) 8,052 (15,471,579 )
Other comprehensive income for the period (3,124 ) (3,124 ) (3,124 )
Transactions with shareholders
Stock options granted 1,480 1,480 1,480
Unclaimed dividends forfeited 83 83 83
Fair value attributable to non-controlling interest (3,394 ) (3,394 )
Internal changes in equity
Realization of deemed cost, net of taxes (26,513 ) 26,513
Balances at June 30, 2020 9,269,281 (33,735 ) 7,459 6,410,885 (218,265 ) 317,144 2,191,704 (15,453,035 ) 2,491,438 119,997 2,611,435
Balances at December 31, 2020 9,269,281 (33,735 ) 10,612 (218,265 ) 2,129,944 (3,926,015 ) 7,231,822 105,556 7,337,378
Total comprehensive income
Net income for the period 7,277,867 7,277,867 3,573 7,281,440
Other comprehensive income for the period (23,766 ) (23,766 ) (23,766 )
Transactions with shareholders
Stock options granted 2,421 2,421 2,421
Unclaimed dividends forfeited 48 48 48
Fair value attributable to non-controlling interest (10,029 ) (10,029 )
Internal changes in equity
Realization of deemed cost, net of taxes (77,796 ) 77,796
Balances at June 30, 2021 9,269,281 (33,735 ) 13,033 (218,265 ) 2,028,382 3,429,696 14,488,392 99,100 14,587,492

The accompanying notes are an integral part of this unaudited condensed consolidated interim financial information.

5

Suzano S.A.

Unaudited condensed consolidated interim financial information
Six-month period ended June 30, 2021

(In thousands of R$, unless otherwise stated)

CONSOLIDATED STATEMENTS OF CASH FLOWS

June 30,

2021

June 30,

2020

OPERATING ACTIVITIES
Net income (loss) for the period 7,281,440 (15,471,579 )
Adjustment to
Depreciation, depletion and amortization (Notes 26 and 29) 3,389,903 3,238,678
Depreciation of right of use (Note 19.1) 100,176 93,309
Sublease of ships (20,735 ) (11,365 )
Interest expense on lease liabilities 212,540 203,488
Result from sale and disposal of property, plant and equipment and biological assets, net (Note 29) (521,173 ) (9,343 )
Income from associates and joint ventures (90,364 ) 2,952
Exchange rate and monetary variations, net (Note 26) (1,689,192 ) 15,349,795
Interest expenses with financing, loans and debentures, net (Note 26) 1,493,570 1,736,775
Capitalized loan costs (Note 26) (1,049 ) (7,940 )
Premium expenses with early settlements (Note 26) 33,719
Accrual of interest on marketable securities (38,607 ) (74,102 )
Amortization of fundraising costs (Note 26) 56,502 41,268
Derivative losses (gains), net (Note 26) (1,238,873 ) 10,835,114
Fair value adjustment of biological assets (Note 13) (564,533 ) (173,733 )
Deferred income tax and social contribution (Note 12.3) 2,451,778 (8,822,898 )
Interest on actuarial liabilities (Note 21.2) 27,925 26,527
Provision (reversal) for judicial liabilities, net (Note 20.1) 33,525 (22,252 )
Allowance for doubtful accounts, net (Note 7.3) 4,156 10,250
Provision for inventory losses, net (Note 8.1) 10,667 32,620
Provision for loss of ICMS credits, net (Note 9.1) 23,395 48,151
Tax credits (note 20.3) (315,431 )
Other 11,002 12,798
Decrease (increase) in assets
Trade accounts receivables (1,222,390 ) 206,570
Inventories (452,852 ) 466,475
Recoverable taxes 12,185 114,501
Other assets 119,168 161,268
Increase (decrease) in liabilities
Trade accounts payables 451,708 (352,975 )
Taxes payable 132,906 24,235
Payroll and charges (47,799 ) (19,679 )
Other liabilities (83,818 ) (343,868 )
Cash provided by operations 9,559,449 7,295,040
Payment of interest with financing, loans and debentures (Note 18.2) (1,479,825 ) (1,682,413 )
Payment of premium with early settlements (Note 26) (33,719 )
Interest received from marketable securities 38,067 126,579
Payment of income taxes (70,729 ) (62,694 )
Cash provided by operating activities 8,013,243 5,676,512
INVESTING ACTIVITIES
Additions to property, plant and equipment (Note 15) (670,588 ) (559,126 )
Additions to intangible (Note 16) (18,143 ) (513 )
Additions to biological assets (Note 13) (1,611,674 ) (1,401,424 )
Proceeds from sale of property, plant and equipment 1,261,008 61,887
Capital increase (Note 14.3) (50,818 )
Marketable securities, net (288,215 ) 4,064,361
Advance for acquisition of wood from operations with development (232,157 ) 6,544
Dividends received 6,453
Acquisition of non-controlling interests (6,482 )
Cash provided (used) in investing activities (1,610,616 ) 2,171,729
FINANCING ACTIVITIES
Proceeds from loans, financing and debentures (note 18.2) 9,306,614 6,700,529
Payment of derivative transactions (note 4.5.4) (1,434,288 ) (1,834,250 )
Payment of loans, financing and debentures (note 18.2) (11,732,552 ) (6,224,940 )
Payment of leases (note 19.2) (475,483 ) (354,289 )
Payment of dividends (2,322 )
Liabilities for assets acquisitions and associates (1,520 ) (5,670 )
Cash used by financing activities (4,339,551 ) (1,718,620 )
EXCHANGE VARIATION ON CASH AND CASH EQUIVALENTS (312,563 ) 1,094,953
Increase (reduction) in cash and cash equivalents, net 1,750,513 7,224,574
At the beginning for the period 6,835,057 3,249,127
At the end for the period 8,585,570 10,473,701
Increase (reduction) in cash and cash equivalents, net 1,750,513 7,224,574

The accompanying notes are an integral part of this unaudited condensed consolidated interim financial information.

6

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

1. COMPANY´S OPERATIONS

Suzano S.A., together with its associates ('Suzano' or collectively 'Company'), is a public company with its headquarters office in Brazil, at Avenida Professor Magalhães Neto, no. 1,752 - 10th floor, rooms 1010 and 1011, Bairro Pituba, in the city of Salvador, State of Bahia, and the main business office in the city of São Paulo.

Suzano owns shares traded in B3 S.A. ('Brasil, Bolsa, Balcão - 'B3'), listed on the New Market under the ticker SUZB3 and American Depositary Receipts ('ADRs') in a ratio of 1 (one) common share, Level II, traded in the New York Stock Exchange ('NYSE') under the ticker SUZ.

The Company holds 12 industrial units, located in the cities of Cachoeiro de Itapemirim and Aracruz (Espírito Santo, State), Belém (Pará, State), Eunápolis and Mucuri (Bahia, State), Maracanaú (Ceará, State), Imperatriz (Maranhão, State), Jacareí, Limeira, Rio Verde and Suzano, being 2 units (São Paulo, State) and Três Lagoas (Mato Grosso do Sul, State).

These units produce hardwood pulp from eucalyptus, paper (coated paper, paperboard, uncoated paper and cut size paper) and packages of sanitary paper (consumer goods - tissue) to serve the domestic and foreign markets.

Pulp and paper are sold in the foreign market directly by Suzano, as well as through its wholly-owned associates in Austria, the United States of America, Switzerland and Argentina and sales offices in China.

The Company's operations also include the commercial operation of eucalyptus forest for its own use, the operation of port terminals, and the holding of interest, as partner or shareholder, in any other company or enterprise, and the generation and sale of electricity.

The Company is controlled by Suzano Holding S.A., through a voting agreement whereby it holds 45.73% of the common shares of its share capital.

These unaudited condensed consolidated interim financial information was approved by Board of Directors on August 10, 2021.

7

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

1.1. Equity interest

The Company holds equity interest in the following entities:

% equity interest
Entity Main activity Country Type of investment Accounting method

June 30,

2021

December 31,

2020

Celluforce Inc. Nanocrystalline pulp research and development Canada Direct Fair value through other comprehensive income 8.30 % 8.30 %
Ensyn Corporation (1) Biofuel research and development United States of America Direct Equity 26.24 % 25.30 %
F&E Technologies LLC Biofuel production, except alcohol United States of America Direct Equity 50.00 % 50.00 %
F&E Tecnologia do Brasil S.A. Biofuel production, except alcohol Brazil Direct Consolidated 100.00 % 100.00 %
Fibria Celulose (USA) Inc. Business office United States of America Direct Consolidated 100.00 % 100.00 %
Fibria Overseas Finance Ltd. Financial fundraising Cayman Island Direct Consolidated 100.00 % 100.00 %
Fibria Terminal de Celulose de Santos SPE S.A. Port operation Brazil Direct Consolidated 100.00 % 100.00 %
Ibema Companhia Brasileira de Papel Industrialization and commercialization of paperboard Brazil Direct Equity 49.90 % 49.90 %
Maxcel Empreendimentos e Participações S.A. Holding Brazil Direct Consolidated 100.00 % 100.00 %
Itacel - Terminal de Celulose de Itaqui S.A. Port operation Brazil Indirect Consolidated 100.00 % 100.00 %
Mucuri Energética S.A. Power generation and distribution Brazil Direct Consolidated 100.00 % 100.00 %
Paineiras Logística e Transportes Ltda. Road freight transport Brazil Direct Consolidated 100.00 % 100.00 %
Portocel - Terminal Espec. Barra do Riacho S.A. Port operation Brazil Direct Consolidated 51.00 % 51.00 %
Projetos Especiais e Investimentos Ltda. Commercialization of equipment and parts Brazil Direct Consolidated 100.00 % 100.00 %
Rio Verde Participações e Propriedades Rurais S.A. Forest assets Brazil Direct Consolidated 100.00 % 100.00 %
SFBC Participações Ltda. Packaging production Brazil Direct Consolidated 100.00 % 100.00 %
Spinnova Plc (2) Research and development of sustainable raw materials (wood) for the textile industry Finland Direct Equity 19.91 % 23.44 %
Stenfar S.A. Indl. Coml. Imp. Y. Exp. Commercialization of paper and computer materials Argentina Direct Consolidated 100.00 % 100.00 %
Suzano Austria GmbH. Business office Austria Direct Consolidated 100.00 % 100.00 %
Suzano Canada Inc. Lignin research and development Canada Direct Consolidated 100.00 % 100.00 %
Suzano Finland Oy (3) Industrialization, commercialization of cellulose, microfibrillated cellulose and paper. Finland Direct Consolidated 100.00 %
Suzano International Trade GmbH. Business office Austria Direct Consolidated 100.00 % 100.00 %
Suzano Operações Industriais e Florestais S.A. Industrialization, commercialization and exportation of pulp Brazil Direct Consolidated 100.00 % 100.00 %
Suzano Pulp and Paper America Inc. Business office United States of America Direct Consolidated 100.00 % 100.00 %
Suzano Pulp and Paper Europe S.A. Business office Switzerland Direct Consolidated 100.00 % 100.00 %
Suzano Shanghai Ltd. Business office China Direct Consolidated 100.00 % 100.00 %
Suzano Trading International KFT Business office Hungary Direct Consolidated 100.00 % 100.00 %
Suzano Trading Ltd. Business office Cayman Island Direct Consolidated 100.00 % 100.00 %
FuturaGene Ltd. Biotechnology research and development England Indirect Consolidated 100.00 % 100.00 %
FuturaGene AgriDev Xinjiang Company Ltd. (4) Biotechnology research and development China Indirect Consolidated 100.00 %
FuturaGene Biotechnology Shangai Company Ltd. Biotechnology research and development China Indirect Consolidated 100.00 % 100.00 %
FuturaGene Delaware Inc. Biotechnology research and development United States of America Indirect Consolidated 100.00 % 100.00 %
FuturaGene Israel Ltd. Biotechnology research and development Israel Indirect Consolidated 100.00 % 100.00 %
FuturaGene Hong Kong Ltd. Biotechnology research and development Hong Kong Indirect Consolidated 100.00 % 100.00 %
FuturaGene Inc. Biotechnology research and development United States of America Indirect Consolidated 100.00 % 100.00 %
Veracel Celulose S.A. Industrialization, commercialization and exportation of pulp Brazil Direct Proportional Consolidated 50.00 % 50.00 %
Woodspin Oy (5) Development, production, distribution and commercialization of wood-based textile fibers, yarns and filaments, produced from cellulose and microfibrillated cellulose. Finland Direct/Indirect Equity 50.00 %
1) Increase in equity interest due to the contribution made by the Company.
2) On June 24, 2021, dilution of Company's interest due to IPO and issuance of new shares by the associate (note 1.2.5).
3) On April 9, 2021, acquisition of legal entity CS Holding 99 Oy and subsequent change of corporate name to Suzano Finland Oy.
4) On March 18, 2021, company dissolution.
5) On March 23, 2021, established of joint venture controlled with Spinnova Plc, a company located in Finland.
8

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

1.2. Major events in the six-month period ended June 30, 2021
1.2.1. Effects arising from COVID 19

With the advent of the pandemic of COVID-19, popularly known as the new coronavirus, Suzano has adopted and has maintained preventive and mitigating measures, in compliance with rules and policies established by national and international health authorities, in order to minimize, the harmful effects of the pandemic, referring to the safety of people, society and their businesses.

Thus, Company's initiatives are based on three pillars:

(i) Protection for people: in order to provide security to its employees and third parties workers on site, Suzano adopted a series of measures to minimize exposure of its team and / or mitigate exposure risks.
(ii) Protection of society: one of Suzano's three cultural drivers is: 'It is only good for us, if it is good for the world'. Since the beginning of the pandemic, Suzano has adopted a series of measures to protect society, including:
· Donation of toilet paper, napkins and disposable diapers produced by the Company for needy regions.
· Acquisition of 159 respirators and 1,000,000 hospital masks for donation to the Federal and State Governments.
· Participation in joint action with Positivo Tecnologia, Klabin, Flextronics and Embraer, to support the Brazilian company Magnamed, in the production of respirators to deliver to the Federal Government. Suzano's disbursement in this action was R$9,584 in 2020.
· Construction of a field hospital in Teixeira de Freitas (BA) in conjunction with Veracel, which has already been handed over to the state government and opened in July 2020.
· Establishment a partnership with Fatec of Capão Bonito for the production of gel alcohol.
· Loan of forklifts to move donations received by the Red Cross.
· Maintenance of all direct jobs.
· Maintenance, for 90 days (until the end of June 2020) of payment of 100% of the cost of the payroll of service providers' workers who had their activities suspended due to the pandemic, aiming at the consequent preservation of jobs.
· Creation of a support program for small suppliers, a social support program for small farmers to sell their products through the home delivery system in 38 communities supported by Suzano's Rural and Territorial Development Program ('PDRT') in 5 states and social program with the objective of provide 125,000 masks in communities for donation in 5 states.
9

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

· Launch a program to support its portfolio of small and medium-sized paper customers entitled 'Tamo Junto' with the objective of ensuring that these companies have the financial and management capacity to resume activities.
· Support for the State Government of Maranhão in setting up the Imperatriz Temporary Hospital, donating R$2,798.
· Provision of 280,000 cubic meters of oxygen to the State of Amazonas.
· Construction of a new treatment center for COVID-19 in São Paulo, in partnership with Gerdau, BTG Pactual, Península Participações and through joint efforts with Hospital Israelita Albert Einstein and the Municipal Government of São Paulo.
· Donation of oxygen concentrators acquired in a joint action involving Suzano, Bradesco, BRF, B3, Embraer, Gerdau, Ultra Group, Itaú Unibanco, Magazine Luiza, Marfrig, Natura&Co and Unipar, which were delivered to the Ministry of Health, who will be responsible to carry out the logistics for the distribution of concentrators.
· Donation of 65,696 cubic meters of oxygen to Imperatriz in the State of Maranhão and 1,300 cubic meters to Aracruz in the State of Espírito Santo.

The disbursements made for carrying out the social actions implemented by Suzano, totaled R$23,696 through June 30, 2021 (Note 29).

(iii) Protection for business: to date, the Company continues with its normal operations and a crisis management committee has been implemented.

The paper and pulp sector were recognized by the World Health Organization ('WHO'), as well as by several countries, as a producer of goods essential to society. Therefore, in order to fulfill the responsibility arising from the essentiality of the business, Suzano has taken measures to ensure, to the greatest extent possible, operational normality and full service to its customers, increasing the level of wood and raw material inventories in the factories and has been advancing its inventories of finished goods product bringing them closer to their customers to mitigate possible risks of disruption in the factories' supply chain and the sale of their products.

The current situation resulting from the COVID-19 also implies a higher credit risk, especially for its customers in the paper business. Thus, the Company has also been monitoring the evolution of this risk and implementing measures to mitigate it, and so far, there has been no significant financial impact.

As previously disclosed during the year 2020, the Company temporarily stopped production for 30 days from April 27, 2020 and May 1, 2020 on the paper production lines of the Mucuri and Rio Verde industrial units, respectively, however, the activities of the factories were resumed at normal level at the beginning of July 2020 and have been maintained until now.

10

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

Finally, it is worth noting that, as a result of the current scenario, the Company has made and maintained a vast communication effort to its main stakeholders, ensuring transparency and adequate flow of information about dynamics of the social and economic conjuncture.

1.2.2. Conclusion of commitment to purchase and sale of rural properties and forests with conditions precedent ('Closing')

On January 5, 2021, through a Notice to the Market, the Company informed the conclusion of the transaction with Bracell SP Celulose Ltda.('Bracell') and Turvinho Participações Ltda. ('Turvinho'), receiving the final purchase price of R$1,056,755 in connection with the terms of the purchase and sale of rural properties and forests, with the conditions precedent agreement signed between the parties.

From the total amount received:

i) R$375,860 was recognized in other liabilities, since it is related to the sale of eucalyptus forests (mature) and biological assets in formation (immature), which will be recognized in other operating results upon delivery of the wood, scheduled for 2027; and
ii) R$680,895 was recognized in other operating results, in compliance with the obligation to delivery and transfer the possession of the rural properties. The cost of properties in the amount of R$289,867, previously classified non-current assets held for sale, was realized and recognized in other operating results, generating a net income of R$391,028.

In addition, of the amount received for the sale of rural properties, R$50,415 was classified as marketable securities of long-term as escrow account, whose amount will only be released after compliance with the documentary regularization of certain rural properties as defined in the terms of the purchase and sale. Regularization costs were estimated at R$8,000 and were recognized in the other operating results.

In the six-month period ended June 30, 2021, the Company recognized sales revenue in the amount of R$801,958 because of the transfer of control of part of the assets.

1.2.3. New facility in Cachoeiro de Itapemirim (ES)

In early 2021, the Company inaugurated a new facility located in the city of Cachoeiro de Itapemirim, in the state of Espírito Santo, which will convert tissue paper (soft and high-absorption papers) into finished products.

Mimmo and Max Pure brand toilet papers will be produced. The facility has the capacity to produce 30 thousand tons per year of toilet paper, which is equivalent to 1,000,000 rolls/day.

1.2.4. Cerrado Project Approval

On May 12, 2021, the Company communicated through material fact, that its Board of Directors approved, subject to the conditions below, the realization of investment for construction of a new pulp production mill with a nominal capacity of 2,300,000 tons of eucalyptus pulp per year, in the municipality of Ribas do Rio Pardo, in the state of Mato Grosso do Sul, known as Cerrado Project ('Cerrado Project' or 'Project').

11

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

The Project shall have an industrial capital investment estimated on R$14,700,000, the disbursement of which shall be distributed between the years of 2021 and 2024. The Company estimates that the new plant will start operating in the first quarter of 2024.

The approval and the effective execution of the Cerrado Project are subject to (i) the Company's commitment to financial discipline, maintaining compliance with the parameters established in the Suzano's Debt Management Policy; and (ii) the conclusion of the negotiation of the acquisition of the equipment and services necessary to carry out the Project, under satisfactory conditions, to be subsequently evaluated and resolved by the Board of Directors.

The Project shall be financed by the Company's cash position and cash generation from current businesses, which can be complemented by financing, provided that the conditions are attractive in terms of cost and term.

The Cerrado Project represents an important advance in the Company's long-term strategy, contributing to the expansion of its structural competitiveness, meeting the growing demand for hardwood pulp and Suzano's evolution in sustainability - especially regarding climate and waste, providing a major carbon capture increase arising from the new forest base.

In addition, the expectation is that the new plant will have an excess capacity for generating renewable energy of approximately 180 average megawatts, being also considered in the industry as free from fossil fuels, a new milestone for Suzano in eco-efficiency that demonstrates its commitment to society and the planet.

1.2.5. Investment remeasurement - Spinnova

On May 17, 2021, the Company increased its capital in associate Spinnova by EUR5,000 (equivalent to R$32,820 on the transaction date), changing the interest percentage from 23.44% to 27.15% and thus holding 9,808,530 shares, which generated a goodwill of R$22,553.

On June 24, 2021, the associate Spinnova concluded its IPO ('Initial Public Offering - IPO') on the Nasdaq First North Growth Market ('NFNGM'), with the issuance of 13,140,605 shares and raising EUR100,000 (equivalent to R$587,560 on the transaction date). The Spinnova's shares are traded under the ticker SPINN and are renamed as Spinnova Plc ('Public Company Limited') (previously called as Spinnova Oy (Oy is the equivalent of a limited company in Finland)).

The NFNGM is Nasdaq's nordic growth market, designed for small and growing companies, according to the guidelines of the capital market as implemented in the national legislation of Denmark, Finland and Sweden and operate by an exchange within the Nasdaq Group. Companies listed on NFNGM are subject do less extensive rules than companies listed on a regulated market, such as the Helsinki Stock Exchange.

As a result of the issuance of shares, the percentage of ownership held by Suzano in relation to the investment in Spinnova decreased from 27.15% to 19.91%.

12

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

The effects of Spinnova's capitalization arising from the IPO, generated the dilution of interest, and consequent gain on the remeasurement of the investment in the amount of EUR19,495 (equivalent to R$115,562 on the transaction date) excluding goodwill, arising from the difference between the investment before the IPO in the amount of EUR1,541 (equivalent to R$9,134 on the transaction date) and investment after IPO in the amount of EUR21,037 (equivalent to R$124,696 on June 30, 2021), according to the new interest percentage. The gain was recorded as a debit under investments against income from associates and joint ventures, considering that investment was already recognized by the equity method, as an associate, which remained after the effect of dilution, in view of the assessment made by the Management, in accordance with the requirements of IAS 28 - Investment in associates and joint ventures, from its significant influence on the governance and management of the associate, which has not had significant changes due to the IPO process.

As part of the transaction, the Company proportionally realized the goodwill in the amount of R$24,569, being a credit recorded in the investments against the loss from associates and joint ventures and the effect of exchange rate variation on Spinnova's investment abroad in the amount of R$746, being recorded as a debit under the heading of realization of comprehensive income, in the group of other comprehensive income, against to income from associates and joint ventures statement.

As a result of the events described above, the Company recorded a gain of R$90,992 in in the statement of income for the period.

2. BASIS OF PREPARATION AND PRESENTATION OF UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

The Company's unaudited condensed consolidated interim financial information, of the six-month period ended June 30, 2021, are prepared in compliance with the international standard IAS 34 Interim Financial Reporting issued by the International Accounting Standards Board ('IASB') and disclose all the applicable significant information related to the financial information, which is consistent with the information used by Management in the performance of its duties.

The Company's unaudited condensed consolidated interim financial information are expressed in thousands of Brazilian Reais ('R$'), as well as the amounts of other currencies, when applicable, were also expressed in thousands, unless otherwise stated.

The preparation of unaudited condensed consolidated interim financial information requires Management to make judgments, use estimates and adopt assumptions in the process of applying accounting practices, that affect the disclosed amounts of revenues, expenses, assets and liabilities, including contingent liabilities. However, the uncertainty inherent to these judgements, assumptions and estimates could result in material adjustments to the carrying amount of certain assets and liabilities in future periods.

The Company reviews its judgments, estimates and assumptions continually as disclosed in the annual financial statements for the year ended December 31, 2020 (Note 3.2.34). There were no changes in these judgments, estimates and assumptions compared to disclosed on December 31, 2020.

13

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

The unaudited condensed consolidated interim financial information was prepared on historical cost basis, except for the following material items recognized:

(i) derivative and non-derivative financial instruments measured at fair value;
(ii) share-based payments and employee benefits measured at fair value;
(iii) biological assets measured at fair value; and
(iv) deemed cost of property, plant and equipment.

The main accounting polices applied in the preparation of these unaudited condensed consolidated interim financial information are presented in Note 3.

The unaudited condensed consolidated interim financial information was prepared under the going concern assumption.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The unaudited condensed consolidated interim financial information was prepared based on the information of Suzano and its associates on the six-month period ended June 30, 2021, as well as in accordance with consistent accounting practices and policies.

The unaudited condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended December 31, 2020, considering that its purpose is to provide an update on the activities, events and significant circumstances in relation to those disclosed in the consolidated financial statements. Therefore, unaudited condensed consolidated interim financial information focus on new activities, events and circumstances and do not duplicate the information previously disclosed, except when Management judges that the maintenance of the information is relevant.

The accounting policies have been consistently applied to all consolidated companies.

There were no changes on such policies and estimates calculation methodologies, except for the application of the new accounting policies as of January 1, 2021 and whose estimated impact was disclosed in the annual financial statements of December 31, 2020, as disclosed in the Note 3.1.

3.1. New accounting policies and changes in accounting policies adopted

The new standards and interpretations issued, until the issuance of the Company's unaudited condensed consolidated interim financial information, are described below. The Company intends to adopt these new standards, changes and interpretations, if applicable, when it come into force and does not expect to have a material impact on the financial statements.

3.1.1. Accounting policies adopted
14

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

3.1.1.1. Interest Rate Reform - IAS 39 / IFRS 7 and IFRS 9 - Phase 2 (Applicable on/or after January 1, 2021, early adoption permitted)

The adoption of phase 2, it is summarized as follows:

(i) changes in contractual cash flows: practical expedient that allows to replace, as a consequence of the reform, the effective interest rate of a financial asset or financial liability with a new economically equivalent rate, without derecognition of the contract;
(ii) hedge accounting requirements: end of exemptions for evaluating the effectiveness of hedge accounting relationships (Phase 1), and
(iii) disclosure: requirements about the disclosure of risks to which the Company is exposed by the reform, risk management and evolution of the IBORs transition.

The Company assessed content of this pronouncement and does not expect to have significant impacts on its debts and derivatives linked to LIBOR (note 4.4.2).

3.1.1.2. Lease - IFRS 16 - Update of the original issued on June 16, 2020 (Applicable on/or after April 1, 2021, early adoption permitted)

On March 31, 2021, this pronouncement was changed because of the benefits granted to lessee due COVID-19 under lease agreements. The Company assessed the content of this pronouncement and did not identify any impacts, for the clauses of the current lease agreements remained unchanged.

3.1.2. Accounting policies not yet adopted
3.1.2.1. Business Combination IFRS 3 - Reference to the conceptual framework (Applicable on/or after January 1, 2022. Early adoption is permitted if the entity also adopts all other updated references (published together with the updated Conceptual Framework) on the same date or earlier.

The amendments update IFRS 3 so that it refers to the 2018 Conceptual Framework instead of the 1989 Structure. It also include in IFRS 3 the requirement that, for obligations within the scope of IAS 37, the buyer applies IAS 37 to determine whether there is a present obligation on the acquisition date due to past events. For a tax within the scope of IFRIC 21 - Levies, the buyer applies IFRIC 21 to determine whether the event that resulted in the obligation to pay the tax occurred up to the date of acquisition.

The amendments add an explicit statement that the buyer does not recognize contingent assets acquired in a business combination.

4. FINANCIAL INSTRUMENTS AND RISKS MANAGEMENT
4.1. Financial risks management
4.1.1. Overview

In the six-month period ended June 30, 2021, there were no significant changes in the financial risk management policies and procedures compared to those disclosed in Note 4 to the annual financial statements for the year ended December 31, 2020.

15

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

The Company maintained its conservative approach and strong cash and marketable securities position, as well as its hedge policy, during the crisis caused by the pandemic of COVID-19 and even though there were impacts on the fair value of its financial instruments due to the effects on all global economies, the impacts were as expected, according to sensitivity analyses disclosed in previous reports, and measures were taken in relation to the risks associated to the financial instruments, in particular to the risks of liquidity, credit and exchange rate variation, as set forth below.

4.1.2. Rating

All transactions with financial instruments are recognized for accounting purposes and classified in the following categories:

Note June 30,
2021
December 31,
2020
Assets
Amortized cost
Cash and cash equivalents 5 8,585,570 6,835,057
Trade accounts receivable 7 3,979,086 2,915,206
Other assets (1) 780,449 974,265
13,345,105 10,724,528
Fair value through other comprehensive income
Other investments - Celluforce 14.1 26,121 26,338
26,121 26,338
Fair value through profit or loss
Derivative financial instruments 4.5.1 1,968,997 1,341,420
Marketable securities 6 2,685,612 2,396,857
4,654,609 3,738,277
18,025,835 14,489,143
Liabilities
Amortized cost
Trade accounts payable 17 2,575,168 2,361,098
Loans, financing and debentures 18.1 68,476,998 72,899,882
Lease liabilities 19.2 5,366,994 5,191,760
Liabilities for assets acquisitions and associates 23 509,369 502,228
Dividends payable 11,185 6,232
Other liabilities (1) 159,079 459,684
77,098,793 81,420,884
Fair value through profit or loss
Derivative financial instruments 4.5.1 6,071,817 8,117,400
6,071,817 8,117,400
83,170,610 89,538,284
65,144,775 75,049,141
1) Does not include items not classified as financial instruments.
16

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

4.1.3. Fair value of loans and financing

The estimated fair values of loans and financing are set forth below:

Yield used
to discount
June 30,
2021
December 31,
2020
Quoted in the secondary market
In foreign currency
Bonds Secondary Market 41,994,147 43,703,482
Estimated to present value
In foreign currency
Export credits ('Prepayment') LIBOR 19,097,350 20,546,778
In local currency
BNDES - TJLP DI 1 384,510 1,399,177
BNDES - TLP DI 1 564,989 647,235
BNDES - Fixed DI 1 60,143 76,732
BNDES - Selic ('Special Settlement and Custody System') DI 1 574,915 960,215
BNDES - Currency basket DI 1 24,977 27,239
CRA ('Agribusiness Receivables Certificate') DI 1/IPCA 3,284,039 3,286,792
Debentures DI 1 5,570,538 5,498,793
NCE ('Export Credit Notes') DI 1 1,330,402 1,322,813
NCR ('Rural Credit Notes') DI 1 285,282 283,702
Export credits ('Prepayment') DI 1 1,342,462 1,490,242
74,513,754 79,243,200

The Management considers that for its other financial liabilities measured at amortized cost, its book values approximate to their fair values and therefore the information on their fair values is not being presented.

4.2. Liquidity risk management

As disclosed in note 4 to annual the financial statements as of December 31, 2020, the Company's purpose is maintaining a strong cash and marketable securities position to meet its financial and operating obligations. The amount held as cash is used for payments expected in the normal course of its operations, while the cash surplus amount is invested in highly liquid financial investments according to Cash Management Policy.

The cash position is monitored by the Company's senior management, by means of management reports and participation in performance meetings with determined frequency. In the six-month period ended June 30, 2021, the impacts in cash and marketable securities were as expected and the cash generated in the operation was used for the most part to debt redemption, including in advance.

The remaining contractual maturities of financial liabilities are disclosed at the date of this financial information reporting date. The amounts as set forth below, consist in the undiscounted cash flows and include interest payments and exchange rate variation, and therefore may not be reconciled with the amounts disclosed in the balance sheet.

17

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

June 30,
2021

Book
value
Future
value
Up to 1
year
1 - 2
years
2 - 5 years More than
5 years
Liabilities
Trade accounts payables 2,575,168 2,575,168 2,575,168
Loans, financing and debentures 68,476,998 96,031,944 4,067,403 6,297,088 35,015,873 50,651,580
Lease liabilities 5,366,994 9,826,733 875,227 818,769 1,534,836 6,597,901
Liabilities for asset acquisitions and associates 509,369 569,469 115,495 134,525 228,985 90,464
Derivative financial instruments 6,071,817 8,643,168 1,052,089 933,750 5,706,969 950,360
Dividends payable 11,185 11,185 11,185
Other liabilities 473,085 473,085 361,197 111,888
83,484,616 118,130,752 9,057,764 8,296,020 42,486,663 58,290,305
December 31,
2020
Book
value
Future
value
Up to 1
year
1 - 2
years
2 - 5 years More than
5 years
Liabilities
Trade accounts payables 2,361,098 2,361,098 2,361,098
Loans, financing and debentures 72,899,882 101,540,320 4,034,595 6,619,518 36,751,023 54,135,184
Lease liabilities 5,191,760 9,552,075 620,177 806,560 2,198,419 5,926,919
Liabilities for asset acquisitions and associates 502,228 573,920 116,376 112,155 253,419 91,970
Derivative financial instruments 8,117,400 10,868,858 1,999,811 1,296,199 4,133,320 3,439,528
Dividends payable 6,232 6,232 6,232
Other liabilities 459,684 459,684 360,916 98,768
89,538,284 125,362,187 9,499,205 8,933,200 43,336,181 63,593,601
4.3. Credit risk management

In the six-month period ended June 30, 2021, there were no significant changes in the credit risk management policies compared to those disclosed in Note 4 to the annual financial statements for the year ended of December 31, 2020, except for set forth below.

4.3.1. Trade accounts receivable and advances to supplier

The Company has commercial and credit policies aimed at mitigating any risks arising from its customers' default, mainly through hiring of credit insurance policies, bank guarantees provided by first-tier banks and collaterals according to liquidity. Moreover, portfolio customers are subject to internal credit analysis aimed at assessing the risk regarding payment performance, both for exports and for domestic sales.

For customer credit assessment, the Company applies a matrix based on the analysis of qualitative and quantitative aspects to determine individual credit limits to each customer according to the identified risk. Each analyze is submitted for approval according to established hierarchy and, if applicable, to approval from the Management's meeting and the Credit Committee.

18

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

4.3.2. Banks and financial institutions

In the six-month period ended June 30, 2021, there were no significant changes in the credit risk management policies and procedures related to bank and financial institutions compared to those disclosed in note 4 to the annual financial statements for the year ended December 31, 2020.

4.4. Market risk management

In the six-month period ended June 30, 2021, there were no significant changes in the market risk management policies and procedures compared to those disclosed in note 4 to the annual financial statements for the year ended December 31, 2020.

4.4.1. Exchange rate risk management

As disclosed in note 4 of the annual financial statements for the year ended December 31, 2020, the Company hires U.S.Dollar selling transactions in the futures markets, including strategies involving options, to ensure attractive levels of operating margins for a portion of revenue. Such transactions are limited to a percentage of the net surplus foreign currency over an 18-months' time horizon and therefore, are matched to the availability of currency for sale in the short term.

The net exposure of assets and liabilities in foreign currency which is substantially in U.S. Dollars, is set forth below:

June 30,
2021

December 31,
2020

Assets
Cash and cash equivalents 8,412,710 6,370,201
Trade accounts receivables 2,883,330 1,938,614
Derivative financial instruments 1,360,976 621,385
12,657,016 8,930,200
Liabilities
Trade accounts payables (516,152 ) (492,617 )
Loans and financing (55,187,953 ) (58,145,087 )
Liabilities for asset acquisitions and associates (308,766 ) (313,022 )
Derivative financial instruments (5,282,153 ) (6,994,363 )
(61,295,024 ) (65,945,089 )
Net liability exposure (48,638,008 ) (57,014,889 )
4.4.1.1. Sensitivity analysis - foreign exchange rate exposure - except financial instruments derivatives

For market risk analysis, the Company uses scenarios to jointly evaluate assets and liabilities positions in foreign currency, and the possible effects on its results. The probable scenario represents the amounts recognized, as they reflect the translation into Brazilian Reais on the base date of the balance sheet (R$ to U.S.$ = R$5.0022).

This analysis assumes that all other variables, particularly, the interest rates, remains constant. The other scenarios considered the appreciation/depreciation of the Brazilian Real against the U.S. Dollar at the rates of 25% and 50%, before taxes.

19

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

The following table set forth the potential impacts in absolute amounts:

June 30,
2021

Effect on profit or loss and equity

Probable

(base value)

Possible

(25%)

Remote

(50%)

Cash and cash equivalents 8,412,710 2,103,178 4,206,355
Trade accounts receivable 2,883,330 720,833 1,441,665
Trade accounts payable (516,152 ) 129,038 258,076
Loans and financing (55,187,953 ) 13,796,988 27,593,977
Liabilities for asset acquisitions and associates (308,766 ) 77,192 154,383
4.4.1.2. Sensitivity analysis - foreign exchange rate exposure - financial instruments derivatives

The Company hires sales operations of U.S. Dollar in the futures markets, including strategies with options, in order to ensure attractive levels of operating margins for a portion of revenue. These operations are limited to a percentage of the net foreign exchange surplus over the 18-month horizon and, therefore, are attached to the availability of ready-to-sell foreign exchange in the short term.

Due to pandemic of COVID-19 and the effects on all global economies over the past few quarters, financial markets have experienced volatility throughout the period with a strong sense of aversion to risk, with a consequent substantial devaluation of the Real against the U.S. Dollars.

For the calculation of mark-to-market ('MtM'), the PTAX of the penultimate business day of the quarter was used, in December 2020 it was R$5.1967 and in June 2021 it was R$5.0022, with an decrease of 3.74%. These market movements caused a positive impact on the mark-to-market hedge position entered by the Company.

This analysis assumes that all other variables, particularly, the interest rates, remains constant. The other scenarios considered the appreciation/depreciation of the Brazilian Real against the U.S. Dollar at the rates of 25% and 50%, before taxes, from the base scenario of June 30, 2021.

It is important to mention that the impact caused by fluctuations in the exchange rate, whether positive or negative, will also affect the hedged asset. Therefore, even though there was a negative impact on the fair value of derivative transactions in the period, this impact was partially offset by the positive effect on the Company's cash flow and, if the exchange rate remains stable, it will be offset by the appreciation of the hedge object in the coming periods. In addition, considering that hedge contracts are limited by the policy in a maximum of 75% of the total exposure in U.S. Dollars, the exchange rate devaluation will always benefit, in a net way, the Company's cash generation in the long run.

20

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

The following table set forth the potential impacts assuming these scenarios:

June 30,

2021

Effect on profit or loss and equity

Probable

(base value)

Possible

(+25%)

Remote (+50%)

Possible

(-25%)

Remote

(-50%)

4.9450 6.1813 7.4175 3.7088 2.4725
Financial instruments derivatives
Derivative Non-Deliverable Forward ('NDF') 22,519 (99,451 ) (198,903 ) 99,451 198,903
Derivative options 837,444 (2,825,652 ) (7,098,368 ) 4,150,388 8,806,643
Derivative swaps (5,305,415 ) (4,101,386 ) (8,202,776 ) 4,101,394 8,202,784
4.4.2. Interest rate risk management

Fluctuations in interest rates may imply effects of increased or reduced costs on new loans and operations already contracted.

The Company is constantly looking for alternatives for the use of financial instruments in order to avoid negative impacts on its cash flow.

Considering the extinction of LIBOR over the next few years, the Company is evaluating its contracts with clauses that envisage the discontinuation of the interest rate. Most debt contracts linked to LIBOR have some clause to replace this rate with a reference index or equivalent interest rate and, for contracts that do not have a specific clause, a renegotiation will be carried out between the parties. Derivative contracts linked to LIBOR provide for a negotiation between the parties for the definition of a new rate or an equivalent rate will be provided by the calculation agent.

It is worth mentioning that the clauses related to replacement of the indexes in the Company's debt contracts indexed to LIBOR, establish that any replacement of the indexation rate in the contracts can only be evaluated in two circumstances (i) after the communication from an official government entity with formalization of the replacement/extinguishment of the effective rate of the contract, and this communication must define the exact date on which LIBOR will be extinguished and / or (ii) syndicated operations begin to be executed at a rate indexed to the Secured Overnight Financing Rate ('SOFR'). Considering that on March 5, 2021, the Financial Conduct Authority ('FCA') announced the date of extinction of LIBOR 3M for June 30, 2023, the Company can, from this announcement, start negotiations terms of exchange of indexes for its debt contracts and related derivatives.

The Company mapped all contracts subject to IBOR reform that have yet to transition to an alternative benchmark rate and for the six-month period ended June 30, 2021 the Company has R$18,542,667 related to loan and financing contracts and R$1,235,268 related to derivative contracts and,initiated contact with the respective counterparties of each contract, to ensure that the terms and good market practices are adopted at the time of the transition of the index until June 2023, and these terms are still under negotiation between the parties.

The Company understands that it will not be necessary to change the risk management strategy due to the change in the indexes of the financial contracts linked to LIBOR.

21

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

The Company believes it is reasonable to assume that the negotiation of the indexes in its contracts, will move towards to the replacement of LIBOR by SOFR, because the available information, so far, indicates that SOFR will be the new interest rate adopted by the capital market. Based on the information available, the Company does not expect to have significant impact on its debts and derivatives linked to LIBOR.

4.4.2.1. Sensitivity analysis - exposure to interest rates - except financial instruments derivatives

For market risk analysis, the Company uses scenarios to evaluate the sensitivity that variations in operations impacted by the rates: Interbank Deposit Rate ('CDI'), Long Term Interest Rate ('TJLP'), Special System for Settlement and Custody ('SELIC') and the London Interbank Offered Rate ('LIBOR') which may impact the results. The probable scenario represents the amounts already booked, as they reflect the best estimate of the Management.

This analysis assumes that all other variables, particularly exchange rates, remain constant. The other scenarios considered appreciation/depreciation of 25% and 50% in the market interest rates.

The following table set forth the potential impacts in absolute amounts:

June 30,

2021

Effect on profit or loss and equity
Probable

Possible

(25%)

Remote

(50%)

CDI/SELIC
Cash and cash equivalents 17,302 180 359
Marketable securities 2,681,431 27,820 55,640
Loans and financing (9,363,931 ) 97,151 194,302
TJLP
Loans and financing (397,245 ) 4,578 9,156
LIBOR
Loans and financing (17,943,585 ) 6,538 13,076
4.4.2.2. Sensitivity analysis - exposure to interest rates - financial instruments derivatives

This analysis assumes that all other variables remain constant. The other scenarios considered appreciation/depreciation of 25% and 50% in the market interest rates.

22

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

The following table set forth the potential impacts assuming these scenarios:

June 30,

2021

Effect on profit or loss and equity
Probable Probable
(+25%)
Remote
(+50%)

Probable

(-25%)

Remote

(-50%)

CDI
Financial instruments derivatives
Liabilities
Derivative Non-Deliverable Forward ('NDF') 22,519 (2,045 ) (4,050 ) 2,087 4,218
Derivative options 837,444 (117,913 ) (230,101 ) 123,873 253,831
Derivative swaps (5,305,415 ) (27,707 ) (54,491 ) 28,618 58,092
LIBOR
Financial instruments derivatives
Liabilities
Derivative swaps (5,305,415 ) 72,227 144,448 (72,221 ) (144,448 )
4.4.2.3. Sensitivity analysis for changes in the consumer price index of the US economy

For the measurement of the probable scenario, the United States Consumer Price Index (US-CPI) was considered on December 31, 2020. The probable scenario was extrapolated considering an appreciation/depreciation of 25% and 50% in the US-CPI to define the possible and remote scenarios, respectively, in absolute amounts.

The following table set forth the potential impacts in absolute amounts:

June 30,

2021

Effect on profit or loss and equity

Probable

(base value)

Possible
(25%)
Remote
(50%)
2.5282% 3.1603% 3.7923%
Embedded derivative in forestry partnership and standing wood supply agreements 254,848 165,629 340,080
4.4.3. Commodity price risk management

The Company is exposed to commodity prices that reflect mainly on the pulp sale price in the foreign market. The dynamics of opening and closing production capacities in the global market and the macroeconomic conditions may have an impact on the Company´s operating results.

Through a specialized team, the Company monitors the hardwood pulp price and analyses future trends, adjusting the forecast that aims to assisting preventive measures to properly conduct the different scenarios. There is no liquid financial market to sufficiently mitigate the risk of a material portion of the Company's operations. Hardwood pulp price protection operations available on the market have low liquidity and low volume and large distortion in price formation. No relevant changes were observed in relation to pulp prices and future markets related to this index due to the crisis caused by the pandemic of COVID-19.

23

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

The Company is also exposed to international oil prices, which is reflected on logistical costs for selling to the export market and indirectly in the costs of other supplies. In this case, the Company evaluates the contracting of derivative financial instruments to mitigate the risk of price variation in its result.

On June 30, 2021, the Company did not a hire position to hedge its logistics costs (US$37,757 as of December 31, 2020).

4.5. Derivative financial instruments

The Company determines the fair value of derivative contracts, which differ from the amounts realized in the event of early settlement due to bank spreads and market factors at the time of quotation. The amounts presented by the Company are based on an estimate using market factors and use data provided by third parties, measured internally and compared to calculations performed by external consultants and by counterparties.

Details of derivative financial instruments and their respective calculation methodologies are disclosed in note 4 to the annual financial statements for the year ended December 31, 2020.

4.5.1. Outstanding derivatives by type of contract, including embedded derivatives

The positions of outstanding derivatives are set forth below:

Notional value in U.S.$ Fair value

June 30,

2021

December 31,
2020
June 30,
2021
December 31,
2020
Instruments hired with protection strategy
Operational Hedge
ZCC 3,777,250 3,212,250 837,500 (780,457 )
NDF (R$ x US$) 80,000 80,000 22,519 7,948
Debt hedge
Interest rate hedge
Swap LIBOR to Fixed (U.S.$) 3,600,000 3,683,333 (706,256 ) (1,059,192 )
Swap IPCA to CDI (notional in Brazilian Reais) 843,845 843,845 269,764 285,533
Swap IPCA to Fixed (U.S.$) 121,003 121,003 (85,924 ) (114,834 )
Swap CDI x Fixed (U.S.$) 2,267,057 2,267,057 (4,166,257 ) (4,977,309 )
Pre-fixed Swap to U.S.$ (U.S.$) 350,000 350,000 (529,014 ) (508,328 )
Commodity Hedge
Swap US-CPI (U.S.$) (1) 612,650 646,068 254,848 354,900
Swap VLSFO (2) 37,757 15,759
(4,102,820 ) (6,775,980 )
Current assets 1,204,841 484,043
Non-current assets 764,156 857,377
Current liabilities (1,010,897 ) (1,991,118 )
Non-current liabilities (5,060,920 ) (6,126,282 )
(4,102,820 ) (6,775,980 )
24

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

1) The embedded derivative refers to swap contracts for the sale of US-CPI variations within the term of the forest partnership and standing wood supply contracts.
2) As of December 31, 2020, includes Swap Brent, whose contracts were fully settled in the subsequent period.

The current contracts and the respective protected risks are set forth below:

(i) Swap CDI x Fixed US$: positions in conventional swaps exchanging the variation in the Interbank Deposit rate ('DI') for a fixed rate in United States Dollars ('US$'). The objective is to change the debt index in Brazilian Reais to US$, in compliance with the Company's natural exposure of receivables in US$.
(ii) Swap IPCA x CDI: positions in conventional swaps exchanging variation of the Amplified Consumer Price Index ('IPCA') for DI rate. The objective is to change the debt index in Reais, in compliance with the Company's cash position in Brazilian Reais, which is also indexed to DI.
(iii) IPCA swap x Fixed US$: positions in conventional swaps exchanging variation of the IPCA for a fixed rate in US$. The objective is to change the debt index in Brazilian Reais to US$, in compliance with the Company's natural exposure of receivables in US$.
(iv) Swap LIBOR x Fixed US$: positions in conventional swaps exchanging post-fixed rate (LIBOR) for a fixed rate in US$. The objective is to protect the cash flow from changes in the US interest rate.
(v) Pre Fixed Swap R$ x Fixed US$: positions in conventional swaps a fixed rate in Reais for a fixed rate in US$. The objective is to change the exposure of debts in Brazilian Reais to US$, in compliance with the Company's natural exposure of receivables in US$.
(vi) Zero-Cost Collar ('ZCC'): positions in an instrument that consists of the simultaneous combination of purchase of put options and sale of call options of US$, with the same principal and maturity value, with the objective of protecting the cash flow of exports. In this strategy, an interval is established where there is no deposit or receipt of financial margin upon expiration of options. The objective is to protect the cash flow of exports against decrease Real.
(vii) Non Deliverable Forward ('NDF'): positions sold in futures contracts of US$ with the objective of protecting the cash flow of exports against the decrease in the Brazilian Real.
(viii) Swap Very Low Sulphur Fuel Oil('VLSFO') (oil): oil purchase positions, with the objective of protecting logistical costs related to ocean freight contracts, against the increase in oil prices.
(ix) Swap US-CPI: The embedded derivative refers to sale swap contracts of variations of US-CPI within the terms of the forest partnership and standing wood supply contracts.

The variation in the fair value of derivatives for the six-month period ended June 30, 2021 compared to the fair value measured on December 31, 2020 is explained substantially by appreciation of the Brazilian Real against the U.S. Dollar. There were also less significant impacts caused by the variation in the Pre, Foreign Exchange Coupon and LIBOR curves in transactions.

25

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

It is important to highlight that, the outstanding agreements for the six-month period ended June 30, 2021, are over-the-counter market, without any kind of guaranteed margin or early settlement clause forced by changes from mark to market, including possible variations caused by the pandemic of COVID-19.

4.5.2. Fair value by maturity schedule

June 30,

2021

December 31,

2020

2021 74,613 (1,507,075 )
2022 (258,065 ) (918,030 )
2023 (225,705 ) (433,195 )
2024 (578,197 ) (705,859 )
2025 (1,574,105 ) (1,684,124 )
2026 onwards (1,541,361 ) (1,527,697 )
(4,102,820 ) (6,775,980 )
4.5.3. Outstanding of assets and liabilities derivatives positions

The outstanding derivatives positions are set forth below:

Notional value Fair value
Currency

June 30,

2021

December 31,
2020

June 30,

2021

December 31,
2020
Debt hedge
Assets
Swap CDI to Fixed (U.S.$) R$ 8,594,225 8,594,225 102,173 719
Swap Pre-Fixed to U.S.$ R$ 1,317,226 1,317,226 88,105 136,192
Swap LIBOR to Fixed (U.S.$) US$ 3,600,000 3,683,333 83,408 61,120
Swap IPCA to CDI IPCA 1,019,028 974,102 269,764 285,533
Swap IPCA to U.S.$ IPCA 545,000 520,973
543,450 483,564
Liabilities
Swap CDI to Fixed (U.S.$) US$ 2,267,057 2,267,057 (4,268,430 ) (4,978,028 )
Swap Pre-Fixed to U.S.$ US$ 350,000 350,000 (617,119 ) (644,520 )
Swap LIBOR to Fixed (U.S.$) US$ 3,600,000 3,683,333 (789,664 ) (1,120,312 )
Swap IPCA to CDI R$ 843,845 843,845
Swap IPCA to U.S.$ US$ 121,003 121,003 (85,924 ) (114,834 )
(5,761,137 ) (6,857,694 )
(5,217,687 ) (6,374,130 )
Operational hedge
Zero cost collar (U.S.$ x R$) US$ 3,777,250 3,212,250 837,500 (780,457 )
NDF (R$ x U.S.$) US$ 80,000 80,000 22,519 7,948
860,019 (772,509 )
Commodity hedge
Swap US-CPI (standing wood) US$ 612,650 646,068 254,848 354,900
Swap VLSFO US$ 37,757 15,759
254,848 370,659
(4,102,820 ) (6,775,980 )
26

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

4.5.4. Fair value settled amounts

The settled derivatives positions are set forth below:

June 30,

2021

December 31,

2020

Operational hedge
Zero cost collar (R$ x U.S.$) (1,161,276 ) (2,268,158 )
NDF (R$ x U.S.$) (37 ) (60,815 )
(1,161,313 ) (2,328,973 )
Commodity hedge
Swap Bunker (oil) 53,840 (85,468 )
53,840 (85,468 )
Debt hedge
Swap CDI to Fixed (U.S.$) (184,748 ) (1,888,906 )
Swap IPCA to CDI (notional in Brazilian Reais) 20,148 10,601
Swap IPCA to Fixed (U.S.$) 10,054
Swap Pre-Fixed to U.S.$ 49,562 59,351
Swap LIBOR to Fixed (U.S.$) (211,777 ) (242,299 )
(326,815 ) (2,051,199 )
(1,434,288 ) (4,465,640 )
4.6. Fair value hierarchy

For the six-month period ended June 30, 2021, there were no changes between the 3 (three) levels of hierarchy and no transfers between levels 1, 2 and 3 during the periods disclosed.

June 30,2021
Level 1 Level 2 Level 3 Total
Assets
Fair value through profit or loss
Derivative financial instruments 1,968,997 1,968,997
Marketable securities 539,382 2,146,230 2,685,612
539,382 4,115,227 4,654,609
Fair value through other comprehensive income
Other investments - CelluForce 26,121 26,121
26,121 26,121
Biological assets 11,720,857 11,720,857
11,720,857 11,720,857
539,382 4,115,227 11,746,978 16,401,587
Liabilities
Fair value through profit or loss
Derivative financial instruments 6,071,817 6,071,817
6,071,817 6,071,817
6,071,817 6,071,817
December 31,2020
Level 1 Level 2 Level 3 Total
Assets
Fair value through profit or loss
Derivative financial instruments 1,341,420 1,341,420
Marketable securities 444,712 1,952,145 2,396,857
444,712 3,293,565 3,738,277
Fair value through other comprehensive income
Other investments - CelluForce 26,338 26,338
26,338 26,338
Biological assets 11,161,210 11,161,210
11,161,210 11,161,210
444,712 3,293,565 11,187,548 14,925,825
Liabilities
Fair value through profit or loss
Derivative financial instruments 8,117,400 8,117,400
8,117,400 8,117,400
8,117,400 8,117,400
27

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

4.7. Capital management

The main objective is to strengthen the Company's capital structure, aiming to maintain an adequate financial leverage, and to mitigate risks that may affect the availability of capital in business development.

The Company monitors constantly significant indicators, such as, consolidated financial leverage, which is the ratio of total net debt to its adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization ('Adjusted EBITDA').

5. CASH AND CASH EQUIVALENTS
Average yield
p.a. %

June 30,

2021

December 31,
2020
Cash and banks 0.33 6,887,862 6,212,318
Cash equivalents
Local currency
Fixed-term deposits (1) 76.56 of CDI 17,302 115,032
Foreign currency
Fixed-term deposits (1) 0.58 1,680,406 507,707
8,585,570 6,835,057
1) Refers to Time Deposit and Sweep Account applications, maturing up to 90 days. Time Deposit is a remunerated bank deposit with a specific maturity period. Sweep Account is an interest-bearing account. At the end of the day, the balance remaining in the account is automatically applied and automatically made available the next business day in the morning.
6. MARKETABLE SECURITIES
Average yield
p.a. %

June 30,

2021

December 31,
2020
In local currency
Private funds 106.23 of CDI 16,559 175,317
Public titles measured at fair value through profit or loss 106.23 of CDI 539,382 444,712
Private Securities (CDBs/Compromised) 102.74 of CDI 1,888,145 1,585,605
Private Securities (CDBs) - Escrow Account (1) 102.78 of CDI 237,345 184,778
Other 4,181 6,445
2,685,612 2,396,857
Current 2,448,267 2,212,079
Non-Current 237,345 184,778
1) Includes escrow account, which will be released only after obtaining the applicable governmental approvals and compliance by the Company with the precedent conditions related to transactions with (i) CMPC Celulose Riograndense SA ('CMPC') as a result of the Losango Project, for sale land and forests, whose agreement was signed in December 2012 and (ii) Turvinho, for the sale of rural properties (Note 1.2.2.).
28

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

7. TRADE ACCOUNTS RECEIVABLE

7.1. Breakdown of balances

June 30,
2021
December 31,
2020
Domestic customers
Third parties 1,084,214 970,796
Related parties (Note 11) (1) 53,602 47,685
Foreign customers
Third parties 2,883,330 1,938,614
(-) Expected credit losses (42,060 ) (41,889 )
3,979,086 2,915,206
1) The balance refers to transactions with Ibema Companhia Brasileira de Papel, an entity that is not consolidated by the Company.

The Company performs factoring transactions for certain customers' receivables where, substantially all risks and rewards related to these receivables are transferred to the counterpart, so that these receivables are derecognized from accounts receivable in the balance sheet. This transaction refers to an additional cash generation opportunity and may be discontinued at any time without significant impact on the Company's operation and is therefore classified as a financial asset measured at amortized cost. The impact of these factoring transactions on the accounts receivable for the six-month period ended June 30, 2021, is R$6,049,694 (R$5,388,370 as of December 31, 2020).

7.2. Breakdown of trade accounts receivable by maturity
June 30,
2021
December 31,
2020
Current 3,910,996 2,603,229
Overdue
Up to 30 days 19,190 209,210
From 31 to 60 days 7,167 51,420
From 61 to 90 days 4,502 2,062
From 91 to 120 days 5,724 6,665
From 121 to 180 days 8,278 8,618
From 181 days 23,229 34,002
3,979,086 2,915,206
29

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

7.3. Rollforward of the expected credit losses
June 30,
2021
December 31,
2020
Beginning balance (41,889 ) (41,996 )
Addition (4,429 ) (9,350 )
Reversal 273 3,328
Write-off 3,625 7,737
Exchange rate variation 360 (1,608 )
Ending balance (42,060 ) (41,889 )

The Company maintains guarantees for overdue securities in its commercial operations, through credit insurance policies, letters of credit and other guarantees. These guarantees avoid the need to recognize expected credit losses, in accordance with the Company's credit policy.

7.4. Main customers

The Company has no customer responsible for more than 10% of net sales of pulp and/or paper segment for the six-month period ended June 30, 2021 and for the year ended December 31, 2020.

8. INVENTORIES
June 30,
2021
December 31,
2020
Finished goods
Pulp
Domestic (Brazil) 659,142 553,229
Foreign 1,227,823 1,102,994
Paper
Domestic (Brazil) 369,397 225,058
Foreign 96,464 87,638
Work in process 95,674 81,465
Raw material 1,373,217 1,450,507
Spare parts and other 583,148 508,444
4,404,865 4,009,335

Inventories are disclosed net of estimated losses.

8.1. Rollforward of estimated losses
June 30,
2021
December 31,
2020
Beginning balance (79,885 ) (106,713 )
Addition (1) (16,020 ) (77,173 )
Reversal 5,353 11,498
Write-off (2) 35,563 92,503
Ending balance (54,989 ) (79,885 )
1) Refers substantially to the raw material in the amount of R$11,230 (R$56,305 as of December 31, 2020).
2) Refers mainly to the amounts of (i) finished pulp product of R$1,083 (R$32,018 as of December 31, 2020) and (ii) raw material of R$33,231 (R$49,550 as of December 31, 2020).
30

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

For the six-month period ended June 30, 2021 and for the year ended December 31, 2020, there were no inventory items pledged as collateral.

9. RECOVERABLE TAXES
June 30,
2021
December 31,
2020
IRPJ/CSLL - prepayments and withheld taxes 174,860 223,754
PIS/COFINS - on acquisition of property, plant and equipment (1) 89,239 126,990
PIS/COFINS - operations 296,755 287,206
PIS/COFINS - exclusion ICMS (2) 455,984 128,115
ICMS - on acquisition of property, plant and equipment (3) 110,822 112,672
ICMS - operations (4) 1,460,929 1,393,260
Reintegra program (5) 100,874 110,121
Other taxes and contributions 37,139 24,089
Provision for loss of ICMS credits (6) (1,188,036 ) (1,164,782 )
1,538,566 1,241,425
Current 382,415 406,850
Non-current 1,156,151 834,575
1) Social Integration Program ('PIS') and Social Security Funding Contribution ('COFINS'): Credits whose realization is in connection with depreciation year of the corresponding asset.
2) The Company and its associates filed legal actions over the years to recognize the exclusion of ICMS from the PIS and COFINS contribution tax basis, in relation to certain operations for certain periods starting from March 1992, as disclosed in Note 20.3.
3) Tax on Sales and Services ('ICMS'): Credits from the acquisition of property, plant and equipment are recovered on a linear basis over a four period, from the acquisition date, in accordance with the relevant regulation, ICMS Control on Property, Plant and Equipment ('CIAP').
4) ICMS credits accrued due to the volume of exports and credit generated in operations of entry of products: Credits are concentrated in the State of Espírito Santo, Maranhão, Mato Grosso do Sul, São Paulo and Bahia, where the Company realizes the credits through sale of credits to third parties, after approval from the State Ministry of Finance of each State. Credits are also being realized through consumption in its consumer goods (tissue) operations in the domestic market that are already operational in State of Maranhão.
5) Special Regime of Tax Refunds for Export Companies ('Reintegra'): Reintegra is a program that aims to refund the residual costs of taxes paid throughout the exportation chain to taxpayers, to make them more competitive in foreign markets.
6) Includes the provision for discount on sale to third parties of the accumulated ICMS credit in State of Maranhão and the provision for full loss of the low probability of realization of the units of States of Espírito Santo, Mato Grosso do Sul and Bahia due to the difficulty of its realization.
9.1. Rollforward of provision for loss
ICMS PIS/COFINS Total
Balance as of December 31, 2019 (1,304,329 ) (21,132 ) (1,325,461 )
Addition (64,107 ) (64,107 )
Write-off 57,254 21,132 78,386
Reversal (1) 146,400 146,400
Balance as of December 31, 2020 (1,164,782 ) (1,164,782 )
Addition (33,674 ) (33,674 )
Write-off 141 141
Reversal (1) 10,279 10,279
Balance as of June 30, 2021 (1,188,036 ) (1,188,036 )
1) Refers to the reversal of the provision for loss resulting from the recovery of ICMS credits from the State of Espírito Santo through sale to third parties.
31

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

10. ADVANCE TO SUPPLIERS
June 30,
2021
December 31,
2020
Forestry development program 1,249,628 1,015,115
Advance to suppliers 35,821 43,162
1,285,449 1,058,277
Current 35,821 43,162
Non-current 1,249,628 1,015,115

In the annual financial statements for the year ended December 31, 2020, the characteristics of the advances were disclosed, which did not change during the period of 2021.

11. RELATED PARTIES

The Company's commercial and financial operations with controlling shareholder and Companies owned by controlling shareholder Suzano Holding S.A. ('Suzano Group'). For transactions with related parties, it is determined that the specific prices and conditions for these transactions are observed, as well as the corporate governance practices adopted by the Company and those recommended and/or required by the legislation.

The transactions refers mainly to:

Assets: (i) accounts receivable from associates for the sale of pulp, paper, tissue and other products; (ii) dividends receivable; (iii) reimbursement for expenses e (iv) social services.

Liabilities: (i) loan agreements with associates;(ii) reimbursement for expenses; (iii) social services and (iv) real estate consulting.

Amounts in the statements of income: (i) sale of pulp, paper, tissue and other products; (ii) loan charges and exchange variation; (iii) social services and (viii) real estate consulting.

For the six-month period ended June 30, 2021, there were no material changes in the terms of the agreements, deal and transactions entered into, nor were there any new contracts, agreements or transactions of different natures entered into between the Company and its related parties in relation to those disclosed in the annual financial statements for the year ended December 31, 2020.

32

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

11.1. Balances recognized in assets and liabilities and amounts transacted in the period
Assets Liabilities Financial result Operating result
June 30,
2021
December 31,
2020
June 30,
2021
December 31,
2020
June 30,
2021
June 30,
2020
June 30,
2021
June 30,
2020
Transactions with controlling shareholders
Suzano Holding 4 3 (653 ) (1,303 ) (1,806 )
4 3 (653 ) (1,303 ) (1,806 )

Transactions with companies of the Suzano Group and other related parties

Management (expect compensation - note 11.2) (6 ) (5 ) (118 ) (831 )
Bexma Participações Ltda 1 1 20 7
Bizma Investimentos Ltda 1 1 4 7
Ensyn Technologies 2,829 1 0 0
Fundação Arimax 1 1
Ibema Companhia Brasileira de Papel (1) 56,040 56,013 (2,908 ) (2,834 ) (3.346 ) 46.588
Instituto Ecofuturo - Futuro para o Desenvolvimento Sustentável 1 1 (48 ) (2.242 ) (2.379 )
IPLF Holding S.A. 8 2
Mabex Representações e Participações Ltda 0 (50 )
Nemonorte Imóveis e Participações Ltda (15 ) (92 ) (99 )
56,043 58,845 (2,962 ) (2,854 ) 1 (5.765 ) 43.246
56,047 58,848 (2,962 ) (2,854 ) 1 (653 ) (7.068 ) 41.440
Assets
Trade accounts receivable 53,602 47,685
Other assets 2,445 11,163
Liabilities
Trade accounts payable (2,957 ) (2,849 )
Other liabillities (5 ) (5 )
56,047 58,848 (2,962 ) (2,854 )

1) Refers mainly to the sale of pulp.

33

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

11.2. Management compensation

Expenses related to the compensation of key management personnel, which include the Board of Directors, Fiscal Council and Board of Statutory Executive Officers, recognized in the statement of income for the period, are set for the below:

June 30,
2021

June 30,
2020

Short-term benefits
Salary or compensation 23,665 22,866
Direct and indirect benefits 407 450
Bonus 3,274 3,250
27,346 26,566
Long-term benefits
Share-based compensation plan 48,042 45,529
48,042 45,529
75,388 72,095

Short-term benefits include fixed compensation (salaries and fees, vacation, mandatory bonus and '13th salary' bonus), payroll charges (Company share of contributions to social security - INSS) and variable compensation such as profit sharing, bonus and benefits (company car, health plan, meal voucher, market voucher, life insurance and private pension plan).

Long-term benefits include the stock option plan and phantom shares for executives and key members of the Management, in accordance with the specific regulations as disclosed in Note 22.

12. INCOME AND SOCIAL CONTRIBUTION TAXES

The Company calculates income tax and social contribution taxes, current and deferred, based on the rates of 15% plus an additional 10% on taxable income in excess of R$240,000 for IRPJ and 9% for CSLL, on the net income. Balances are recognized in the Company's income on the accrual basis.

Associates located in Brazil have their taxes calculated and provisioned in accordance with current legislation and their specific tax regime, including, in some cases, presumed profit method. The associates located abroad are taxed in their respective jurisdictions, according to local regulations.

Deferred income and social contribution taxes are recognized at the net amounts in non-current assets or liabilities.

In Brazil, the Law nº. 12,973/14 revoked article 74 of Provisional Measure nº. 2,158/01 and determines that the parcel of the adjustment of the value of the investment in associate, direct and indirect, located abroad, equivalent to the profit earned by it before income tax, except for exchange rate variation, must be added in the determination of taxable income and the social contribution calculation basis of the controlling entity located in Brazil, at the each year ended.

Management's Company believes on the validity of the provisions of international treaties entered into Brazil to avoid double taxation. In order to guarantee its right to non-double taxation, the Company filed a lawsuit in April 2019, which aims at a non-double taxation, in Brazil, of profit earned by its associate located in Austria, according to Law n°. 12,973/14. Due to the preliminary injunction granted in favor of the Company in the records of the aforementioned lawsuit, the Company decided not to add the profit from Suzano International Trading GmbH, located in Austria, in determining of taxable income and social contribution basis of the net profit of the Company for the six-month period ended June 30, 2021. There is no provision for tax related to the profit of such associate in 2021.

34

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

12.1. Deferred income and social contribution taxes

June 30,
2021

December 31,
2020
Tax loss 1,136,946 1,013,008
Negative tax basis of social contribution 393,958 329,412
Assets temporary differences
Provision for judicial liabilities 249,144 233,100
Operating provisions and other losses 999,305 1,051,096
Exchange rate variation 4,959,110 6,112,906
Derivatives losses ('MtM') 1,394,959 2,303,833
Amortization of fair value adjustment on business combination 710,737 718,645
Unrealized profit on inventories 227,369 176,847
Lease 269,452 287,066
Provision of deferred taxes on results of associates abroad 33,893
Other temporary differences (1) 158,172
10,340,980 12,417,978
Liabilities temporary differences
Goodwill - Tax benefit on unamortized goodwill 608,182 469,875
Property, plant and equipment - deemed cost 1,366,017 1,385,642
Accelerated tax depreciation 984,373 1,025,136
Borrowing cost 98,934 110,036
Fair value of biological assets 382,020 237,879
Tax provision on results of associates abroad 53,744
Deferred taxes, net of fair value adjustment 453,533 469,419
Tax credits - gains in tax lawsuit (exclusion of ICMS from the PIS and COFINS contribution tax basis) 155,035 43,559
Other temporary differences 14,526
4,116,364 3,741,546
Non-current assets 6,224,616 8,677,002
Non-current liabilities 570
1) On December 29, 2020, with the final decision of Administrative Council for Economic Defense's ('CADE') approval, related to the purchase and sale agreement of rural property, Management and legal advisors understand that all conditions suspensive were implemented, with the tax recognition of capital gain being required, pursuant to art. 117 of the National Taxation Code ('CTN'). As the accounting recognition only occured at the Closing of the transaction, on January 5, 2021 (Note 1.2.2) with the fulfillment of the performance obligation and delivery of the ownership of the properties to the client, there was a need to establish the deferred tax asset on this difference temporary, in the amount of R$175,202.

Except for tax loss carryforwards, the negative basis of social contribution and accelerated depreciation, which are only achieved by the Income Tax ('IRPJ'), other tax bases were subject to both taxes.

The breakdown of accumulated tax losses and social contribution tax loss carryforwards is set forth below:

June 30,
2021

December 31,
2020
Tax loss carry forward 4,547,785 4,052,013
Negative tax basis of social contribution carryforward 4,377,311 3,660,133
35

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

The rollforward of net balance of deferred income tax is set for the below:

June 30,
2021

December 31,
2020
Beginning balance 8,676,432 1,555,165
Tax loss 123,938 412,759
Negative tax basis of social contribution 64,546 183,066
(Reversal) provision for judicial liabilities 16,044 (32,471 )
Operating provision (reversal) and other losses (19,292 ) 136,400
Exchange rate variation (1,153,796 ) 4,110,964
Derivative losses ('MtM') (908,874 ) 1,685,406
Amortization of fair value adjustment on business combination 7,978 37,917
Unrealized profit on inventories 50,522 (116,475 )
Lease (17,614 ) 265,022
Goodwill - Tax benefit on unamortized goodwill (138,307 ) (253,018 )
Property, plant and equipment - deemed cost 19,625 120,578
Accelerated tax depreciation 40,763 88,064
Borrowing cost 11,102 (5,487 )
Fair value of biological assets (176,640 ) (184,377 )
Deferred taxes on the result of associates abroad (87,637 ) 497,743
Tax credits - gains in tax lawsuit (ICMS from the PIS/COFINS calculation basis) (Note 20.3) (111,476 )
Other temporary differences (1) (172,698 ) 175,176
Ending balance 6,224,616 8,676,432
1) On December 29, 2020, with the final decision of CADE's approval related to the purchase and sale agreement of rural property (Note 1.2.2), Management and legal advisors understand that all conditions suspensive were implemented, with the tax recognition of capital gain being required, pursuant to art. 117 of the National Taxation Code ('CTN'). As the accounting recognition occurred at the Closing of the Transaction, on January 5, 2021 (Note 1.2.2) with the fulfillment of the performance obligation and delivery of the ownership of the properties to the client, there was a need to establish the deferred tax asset on this difference temporary, in the amount of R$175,202.
12.2. Reconciliation of the effects of income tax and social contribution on profit or loss

June 30,
2021

June 30,
2020

Net income (loss) before taxes 9,888,881 (24,236,648 )
Income tax and social contribution benefit (expense) at statutory nominal rate of 34% (3,362,220 ) 8,240,460
Tax effect on permanent differences
Taxation (difference) on profit of associates in Brazil and abroad (1) 1,162,607 746,640
Equity method 30,724 (1,004 )
Thin capitalization (2) (364,176 ) (252,808 )
Credit related to Reintegra Program 3,615 3,367
Tax incentives applicable to income tax (3) 3,886 3,925
Director bonus (14,096 ) (5,508 )
Write-off of tax credits, donations, fines and other (67,781 ) 29,997
(2,607,441 ) 8,765,069
Income tax
Current (148,847 ) (57,006 )
Deferred (1,806,012 ) 6,486,044
(1,954,859 ) 6,429,038
Social Contribution
Current (6,816 ) (823 )
Deferred (645,766 ) 2,336,854
(652,582 ) 2,336,031
Income and social contribution benefits (expenses) on the period (2,607,441 ) 8,765,069
Effective rate of income and social contribution tax expenses 26.37 % 36.16 %
1) The effect of the difference in taxation of associates is substantially due to the difference between the nominal rates of Brazil and associates abroad.
2) The brazilian thin capitalization rules establish that interest paid or credited by a brazilian entity to a related party abroad may only be deducted for income tax and social contribution purposes if the interest expense is viewed as necessary for the activities of the local entity and when determined limits and requirements are met. On June 30, 2021 the Company did not meet all limits and requirements.
3) Tax incentives applicable to ICMS, which is deducted from the calculation basis of Income Tax and Social Contribution.
36

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

12.3. Tax incentives

Company has a tax incentive for the partial reduction of the income tax obtained by the operations carried out in areas of the Northeast Development Superintendence ('SUDENE') in the Mucuri (BA), Eunápolis - Veracel (BA) and Imperatriz (MA) regions. The IRPJ reduction incentive is calculated based on the activity profit (exploitation profit) and considers the allocation of the operating profit by the incentive production levels for each product. The incentive of lines 1 and 2 of Mucuri (BA) facility expire, respectively, in 2024 and 2027, Imperatriz facility, expire in 2024 and Eunápolis - Veracel (BA), facility expire in 2025.

13. BIOLOGICAL ASSETS

The rollforward of biological assets is set forth below:

Balances on December 31, 2019 10,571,499
Addition 3,392,975
Depletion (3,094,742 )
Transfers (23,471 )
Gain on fair value adjustment 466,484
Disposal (93,847 )
Other write-offs (57,688 )
Balances on December 31, 2020 11,161,210
Addition 1,611,674
Depletion (1,489,460 )
Transfers 28,292
Gain on fair value adjustment 564,533
Disposal (136,044 )
Other write-offs (19,348 )
Balances on June 30, 2021 11,720,857

For the six-month period ended June 30, 2021, the Company reassessed the main assumptions used in measuring the fair value of biological assets. The fair value of forests is determined by the income method ('income approach') using the discounted cash flow model.

The calculation of fair value of the biological assets falls under Level 3 in the hierarchy set forth in IFRS 13 - Measurement of Fair Value, due to the complexity and structure of calculation.

The main assumptions such as Average annual growth ('IMA'), discount rate, and average gross selling price of eucalyptus, stand out as being the most sensitive where increases or reductions in these assumptions generate significant gains or losses in the measurement of fair value.

37

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

The assumptions used in measurement of the fair value of biological assets were:

i) Average cycle of forest formation of 6 and 7 years;
ii) Effective area of forest from the 3rd year of planting;
iii) IMA consists of the estimated volume of production of wood with bark in m3 per hectare, ascertained based on the genetic material used in each region, silvicultural practices and forest management, production potential, climate factors and ground conditions;
iv) The estimated average standard cost per hectare includes expenses on silvicultural and forest management, applied to each year of formation of the biological cycle of forests, plus costs of land lease agreements and opportunity cost of own land;
v) The average gross selling prices of eucalyptus were based on specialized research on transactions carried out by the Company with independent third parties; and
vi) The discount rate used in cash flows is measured based on capital structure and other economic assumptions in an independent market participant in the sale of standing wood (forests).

The following table discloses the measurement of the premises adopted:

June 30,
2021

December 31,
2020

Planted useful area (hectare) 954,008 1,020,176
Mature assets 102,941 111,866
Immature assets 851,067 908,310
Average annual growth (IMA) - m3/hectare/year 38.55 38.43
Average gross sale price of eucalyptus - R$/m3 72.61 70.22
Discount rate - % 8.9 % 8.9 %

The pricing model considers net cash flows, after deduction of taxes on profit at the applicable rates.

The fair value adjustment justified by variation of indicators mentioned above, which combined, resulted in a positive variation of R$564,533 recognized under other operating income (expense), net.

June 30,
2021

December 31,
2020

Physical changes 268,831 156,906
Price 295,702 309,578
564,533 466,484

The Company manages the financial risks related to agricultural activities in a preventive manner. To reducing risks from edaphoclimatic factors, the weather is monitored through meteorological stations and, in the event of pests and diseases, our Department of Forestry Research and Development, an area specialized in physiological and phytosanitary aspects, has procedures to diagnose and act rapidly against any occurrences and losses.

38

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

The Company has no biological assets pledged in the six-month period ended June 30, 2020 and year ended December 31, 2020.

14. INVESTMENTS
14.1. Investments breakdown

June 30,

2020

December 31,
2020
Investments in associates and joint ventures 236,618 96,373
Goodwill (1) 234,344 236,360
Other investments evaluated at fair value through other comprehensive income - Celluforce 26,121 26,338
497,083 359,071
1) The movement is due to the events disclosed in Note 1.2.5.

Investments are disclosed net of estimated losses.

14.2. Investments in associates and joint ventures

Information of joint ventures as of
June 30,

Company Participation
2021 Carrying amount In the income of the period
Equity Income
of the
period

Participation

equity

(%)

June 30,
2021

December 31,
2020

June 30,
2021
June 30,
2020
Associate
Ensyn Corporation 29,398 (11,482 ) 26.24 % 7,714 5,472 (3,013 ) (13,086 )
Spinnova Plc 626,299 (77,619 ) 19.91 % 124,696 15,387 (15,454 ) (2,966 )
132,410 20,859 (18,467 ) (16,052 )
Joint ventures Domestic (Brazil)
Ibema Companhia Brasileira de Papel 175,396 34,504 49.90 % 87,523 70,305 17,218 11,651
Foreign
F&E Technologies LLC 10,029 50.00 % 5,014 5,209 1,449
Woodspin 50.00 % 11,671
104,208 75,514 17,218 13,100
Other movements (1) 90,867
90,867
236,618 96,373 89,618 (2,952 )
1) Includes, substantially, the effect arising from the remeasurement of Spinnova's investment (Note 1.2.5).
39

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

15. PROPERTY, PLANT AND EQUIPMENT
Lands Buildings

Machinery,
equipment and
facilities

Work in
progress
Other (1) Total
Average rate % 4.08 5.84 16.26
Cost
Balance as of December 31, 2019 10,321,574 8,767,789 42,520,577 969,701 933,326 63,512,967
Additions 2,274 2,825 194,086 1,289,738 14,332 1,503,255
Write-offs (213,399 ) (26,564 ) (92,915 ) (18,853 ) (25,189 ) (376,920 )
Transfer and other (2) (198,144 ) 459,084 562,747 (1,357,202 ) 137,126 (396,389 )
Balance as of December 31, 2020 9,912,305 9,203,134 43,184,495 883,384 1,059,595 64,242,913
Additions 2,815 112,649 551,809 3,315 670,588
Write-offs (445,513 ) (639 ) (50,917 ) (1,499 ) (498,568 )
Transfer and other (2) 289,585 107,868 403,440 (599,685 ) 15,851 217,059
Balance as of June 30, 2021 9,759,192 9,310,363 43,649,667 835,508 1,077,262 64,631,992
Depreciation
Balance as of December 31, 2019 (2,979,916 ) (18,850,386 ) (561,720 ) (22,392,022 )
Additions (291,862 ) (2,390,583 ) (110,012 ) (2,792,457 )
Write-offs 25,992 64,397 8,067 98,456
Balance as of December 31, 2020 (3,245,786 ) (21,176,572 ) (663,665 ) (25,086,023 )
Additions (172,259 ) (1,165,276 ) (59,697 ) (1,397,232 )
Write-offs 164 41,039 318 41,521
Transfer and other (2) (113 ) 481 159 527
Balance as of June 30, 2021 (3,417,994 ) (22,300,328 ) (722,885

)

(26,441,207 )
Book value
Balance as of December 31, 2020 9,912,305 5,957,348 22,007,923 883,384 395,930 39,156,890
Balance as of June 30, 2021 9,759,192 5,892,369 21,349,339 835,508 354,377 38,190,785
1) Includes vehicles, furniture and utensils and computer equipment.
2) Includes transfers carried out between the items of property, plant and equipment, intangible, inventories and assets held for sale (Note 1.2.2).

For the six-month period ended June 30, 2021, the Company did not identify any trigger to perform the impairment test of property, plant and equipment.

15.1. Items pledged as collateral

For the six-month period ended June 30, 2021, property, plant and equipment items that are pledge as collateral for loans transactions and lawsuits, consisting substantially of the units of, Imperatriz, Limeira, Mucuri, Suzano and Três Lagoas totaled R$20,238,262 (R$20,903,151 in the same units as of December 31, 2020).

15.2. Capitalized expenses

For the six-month period ended June 30, 2021, the Company capitalized loan costs in the amount of R$1,049 (R$7,940 as of June 30, 2020). The weighted average interest rate, adjusted by the equalization of exchange rate effects, utilized to determine the capitalized amount was 10.76% p.a. (9.21% p.a. as of June 30, 2020).

40

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

16. INTANGIBLE
16.1. Goodwill and intangible assets with indefinite useful life

June 30,
2021

December 31,
2020
Facepa 119,332 119,332
Fibria 7,897,051 7,897,051
Other (1) 1,196 1,196
8,017,579 8,017,579
1) Refer to other intangible assets with indefinite useful life such as servitude and electricity.

The goodwill is based on expected future profitability supported by valuation reports, after purchase price allocation.

Goodwill are allocated to cash-generating units as presented in Note 28.4.

For the six-month period ended June 30, 2021, the Company did not identify any trigger to perform the impairment test.

16.2. Intangible assets with determined useful life

June 30,
2021

December 31,
2020
Beginning balance 8,741,949 9,649,789
Additions 18,143 2,307
Write-offs (125 )
Amortization (485,985 ) (980,385 )
Transfers and others 83,657 70,238
Ending balance 8,357,639 8,741,949
Represented by Average rate %
Non-compete agreement 46,1 and 5 5,551 5,706
Research and development agreement 5,4 62,086 66,272
Ports concession 4,3 204,584 209,506
Lease agreements 16,9 25,622 29,373
Supplier agreements 12,9 77,775 85,182
Port service contracts 4,2 624,279 639,275
Cultivars 14,3 91,764 101,960
Development and implementation of systems 11,2 1,256 1,392
Trademarks and patents 10,0 15,106 16,627
Customer portfolio 9,1 6,978,329 7,388,820
Supplier agreements 17,6 37,276 41,250
Software 20,0 120,553 123,788
Others 5,0 113,458 32,798
8,357,639 8,741,949
17. TRADE ACCOUNTS PAYABLE

June 30,

2021

December 31, 2020
In local currency
Related party (Note 11.1) (1) 2,957 2,849
Third party 2,056,059 1,865,632
In foreign currency
Third party 516,152 492,617
2,575,168 2,361,098
1) The balance refers, substantially, to transactions with Ibema Companhia Brasileira de Papel, entity that is not consolidated by the Company.
41

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

18. LOANS, FINANCING AND DEBENTURES
18.1. Breakdown by type
Current Non-current Total
Average
annual
Type Interest rate interest rate -
%
June 30,
2021
December 31, 2020 June 30,
2021
December 31, 2020 June 30,
2021
December 31, 2020
In foreign currency
BNDES UMBNDES 4.74 8,727 2,506 16,946 24,486 25,673 26,992
Bonds Fixed 5.44 787,364 779,046 35,845,562 37,232,554 36,632,926 38,011,600
Export credits ('export prepayment') LIBOR/Fixed 1.86 120,315 718,623 18,422,352 19,400,208 18,542,667 20,118,831
Others 855 2,516 855 2,516
917,261 1,502,691 54,284,860 56,657,248 55,202,121 58,159,939
In local currency
BNDES TJLP 6.90 70,955 276,441 323,252 1,254,222 394,207 1,530,663
BNDES TLP 10.29 24,379 25,535 512,934 522,367 537,313 547,902
BNDES Fixed 4.89 27,090 29,115 34,690 47,177 61,780 76,292
BNDES SELIC 5.35 35,491 98,531 775,354 1,068,959 810,845 1,167,490
CRA ('Agribusiness Receivables Certificates') CDI/IPCA 9.66 806,554 32,156 2,345,661 3,025,527 3,152,215 3,057,683
NCE ('Export credit note') CDI 7.71 19,381 15,184 1,275,687 1,275,045 1,295,068 1,290,229
NCR ('Rural producer certificate') CDI 9.18 3,637 2,738 273,715 273,578 277,352 276,316
Export credits ('export prepayment') Fixed 8.06 23,400 77,570 1,314,199 1,313,661 1,337,599 1,391,231
Debentures CDI 8.39 10,247 7,590 5,416,574 5,415,061 5,426,821 5,422,651
Others (Working capital and Industrial Development Fund ('FDI') and fair value adjustment on business combination) Fixed 0.40 (18,323 ) (24,165 ) 3,651 (18,323 ) (20,514 )
1,002,811 540,695 12,272,066 14,199,248 13,274,877 14,739,943
1,920,072 2,043,386 66,556,926 70,856,496 68,476,998 72,899,882
Interest on financing 923,461 935,010 923,461 935,010
Non-current funding 996,611 1,108,376 66,556,926 70,856,496 67,553,537 71,964,872
1,920,072 2,043,386 66,556,926 70,856,496 68,476,998 72,899,882
42

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

18.2. Rollforward in loans, financing and debentures

June 30,
2021

December 31,
2020
Beginning balance 72,899,882 63,684,326
Fundraising, net issuances 9,306,614 14,761,796
Interest accrued 1,493,570 3,286,254
Premium with repurchase of bonds 33,719 391,390
Monetary and exchange rate variation, net (2,065,925 ) 13,365,471
Settlement of principal (11,732,552 ) (19,092,810 )
Settlement of interest (1,479,825 ) (3,244,949 )
Settlement of premium with early repurchase (33,719 ) (378,381 )
Amortization of fundraising costs 52,734 87,959
Others 2,500 38,826
Ending balance 68,476,998 72,899,882
43

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

18.3. Breakdown by maturity - non current
2022 2023 2024 2025 2026 2027 onwards Total
In foreign currency
BNDES 6,355 10,591 16,946
Bonds 1,756,863 1,679,444 2,604,910 29,804,345 35,845,562
Export credits ('export prepayment') 867,773 1,489,794 4,385,577 6,720,666 4,077,429 881,113 18,422,352
874,128 1,500,385 6,142,440 8,400,110 6,682,339 30,685,458 54,284,860
In local currency
BNDES - TJLP 31,804 65,301 37,310 89,746 84,422 14,669 323,252
BNDES - TLP 9,433 18,866 18,866 17,618 21,161 426,990 512,934
BNDES - Fixed 12,083 18,611 3,996 34,690
BNDES - Selic 16,245 56,987 48,743 175,789 175,834 301,756 775,354
CRA ('Agribusiness Receivables Certificates') 757,109 1,588,552 2,345,661
NCE ('Export credit note') 640,800 634,887 1,275,687
NCR ('Rural producer certificate') 137,500 136,215 273,715
Export credits ('export prepayment') 1,314,199 1,314,199
Debentures 2,340,550 2,328,363 747,661 5,416,574
826,674 1,748,317 1,423,114 3,402,003 3,380,882 1,491,076 12,272,066
1,700,802 3,248,702 7,565,554 11,802,113 10,063,221 32,176,534 66,556,926
44

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

18.4. Breakdown by currency

June 30,
2021

December 31,
2020
Brazilian Reais 13,263,371 14,727,803
U.S. Dollar 55,187,953 58,145,087
Currency basket 25,674 26,992
68,476,998 72,899,882
18.5. Fundraising costs

The fundraising costs are amortized based on terms agreements and effective interest rate.

Balance to be amortized
June 30, December 31,
Type Cost Amortization 2021 2020
Bonds 390,104 175,219 214,885 238,568
CRA and NCE 125,222 98,232 26,990 32,374
Export credits ('export prepayment') 174,104 69,510 104,594 56,028
Debentures 24,467 9,941 14,526 16,039
BNDES ('IOF') (1) 62,658 47,900 14,758 40,611
Others 18,147 16,861 1,286 1,422
794,702 417,663 377,039 385,042
1) Tax on Financial Operations
18.6. Relevant transactions entered into the period
18.6.1. Export Prepayment Agreements ('EPP')

On February 10, 2021, the Company, through its associate Suzano Pulp and Paper Europe S.A. ('Suzano Europe'), entered into a sustainability-linked export prepayment agreement in the amount of US$1.570.000 (equivalent to R$8,481,768 on the transaction date) maturing in six years, with quarterly interest rate payment of LIBOR plus 1.15%, which may be subject to positive or negative adjustments ranging from -2bps/+2bps p.a. depending on our progress in achieving certain milestones towards satisfying key performance metrics ('KPIs') related to our industrial water withdrawals and greenhouse gas emissions, to be confirmed by an independent external verifier.

18.7. Relevant transactions settled in the period
18.7.1. Early settlement of financing with BNDES

On February 9, 2021, the Company early settled a financing contract with BNDES, in the principal amount of R$1,454,025, with original maturity in May 2026 and monthly interest rate indexed to SELIC + 3% p.a. and TJLP + 2%, transaction cost in the amount of R$24,097 and premium payment in the amount of R$32,933.

18.7.2. Export Prepayment Agreements ('EPP')

On March 8, 2021, the Company, through its associate Suzano Pulp and Paper Europe S.A., partially settled the export prepayment agreement in the principal amount of US$1,666,848 (equivalent to R$9,558,205 on the transaction date), with original maturity in December 2023 and quarterly interest payments of 1.15% p.a. plus quarterly LIBOR.

45

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

18.8. Guarantees

Some loan and financing agreements have guarantees clauses, in which the financed equipment or other property, plant and equipment are offered by the Company, as disclosed in Note 15.1.

The Company does not have contracts with restrictive financial clauses (financial covenants) to be complied with.

19. LEASE
19.1. Right of use

The rollforward is set forth below:

Lands and
farms
Machines and
equipment's
Buildings Ships and
boats
Vehicles Total
Balance as of December 31, 2019 1,769,645 130,051 45,999 1,904,455 87 3,850,237
Additions/updates 858,085 45,624 90,616 95,768 2,675 1,092,768
Depreciation (265,091 ) (18,078 ) (43,903 ) (122,904 ) (313 ) (450,289 )
Write-offs (74,578 ) (72,332 ) (1,728 ) (148,638 )
Balance as of December 31, 2020 2,288,061 85,265 90,984 1,877,319 2,449 4,344,078
Additions/updates 443,211 450 32,436 (836 ) 4,412 479,673
Depreciation (1) (145,589 ) (7,202 ) (27,166 ) (62,843 ) (3,256 ) (246,056 )
Write-offs (5,982 ) (5,982 )
Balance as of June 30, 2021 2,585,683 78,513 96,254 1,807,658 3,605 4,571,713
1) On June 30, 2021, the amount of R$145,558 related to land was reclassified to biological assets to compose the formation cost (R$118,286 as of June 30, 2020).

For the six-month period ended June 30, 2021, the Company is not committed to lease agreements not yet in force.

19.2. Lease liabilities

The balance of lease payables for the six-month period ended June 30, 2021, measured at present value and discounted by the respective discount rates are set forth below:

Nature of agreement Average rate - % p.a. (1) Maturity (2) Present value of
liabilities
Lands and farms 11.89 April/2049 2,692,888
Machines and equipment's 11.05 April/2035 168,348
Buildings 9.70 March/2031 84,663
Ships and boats 11.39 February/2039 2,417,826
Vehicles 10.04 October/2023 3,269
5,366,994
1) To determine the discount rates, quotes were obtained from financial institutions for agreements with characteristics and average terms like the lease agreements.
2) Refers to the original maturities of the agreements and, therefore, do not consider eventual renewal clause.

The Company have renewed the subleasing transaction of 2 (two) ships, under the same conditions as before, for another period of 10 months and the amount of US$7,500 (equivalent to R$40,253 on the transaction date), only replacing the ships, due to the need for planned operational maintenance. The transaction has been effective since February 08, 2021 and May 11, 2021, for each of the ships.

46

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

The rollforward is set forth below:

Balance as of December 31, 2019 3,984,070
Additions 1,092,768
Write-offs (148,638 )
Payments (824,245 )
Accrual of financial charges (1) 486,286
Exchange rate variation 601,519
Balance as of December 31, 2020 5,191,760
Additions 479,673
Write-offs (5,982 )
Payments (475,483 )
Accrual of financial charges (1) 273,800
Exchange rate variation (96,774 )
Balance as of June 30, 2021 5,366,994
Current 593,691
Non-current 4,773,303
1) On June 30, 2021, the amount of R$61,260 related to interest expenses on leased lands was capitalized to biological assets to compose the formation cost (R$37,040 as of June 30, 2020).

The maturity schedule of future payment not discounted to present value related to lease liabilities is disclosed in Note 4.2.

19.2.1. Amounts recognized in the statement of income for the period

The amounts recognized are set for the below:

June 30, 2021 June 30, 2020
Expenses relating to short-term assets 4,329 2,531
Expenses relating to low-value assets 2,950 6,428
7,279 8,959
20. PROVISION FOR JUDICIAL LIABILITIES

The Company is involved in certain legal proceedings arising from the normal course of business, which include tax, social security, labor, civil and environment risks.

The Company classifies the risk of unfavorable decisions in the legal proceedings, based on legal advice, which reflect the estimated probable losses.

47

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

The Company's Management believes that, based on the elements existing at the base date of these unaudited condensed consolidated interim financial information, its provision for tax, social security, civil, environment and labor risks, accounted for according to IAS 37 is enough to cover estimated losses related to its legal proceedings, as set forth below:

20.1. Rollforward of provisions for probable losses, net of judicial deposits

June 30,

2021

Nature of provisions Judicial deposits Provision Provision, net
Taxes and social security (134,968 ) 2,976,588 2,841,620
Labor (38,558 ) 229,727 191,169
Civil and environment (1,871 ) 240,761 238,890
(175,397 ) 3,447,076 3,271,679

December 31,

2020

Nature of provisions Judicial deposits Provision Provision, net
Taxes and social security (135,641 ) 2,984,230 2,848,589
Labor (57,780 ) 217,180 159,400
Civil and environment (3,495 ) 251,461 247,966
(196,916 ) 3,452,871 3,255,955
20.1.1. Changes in the provision according to the nature of the proceedings for probable losses

June 30,

2021

Tax and social security Labor Civil and environment Contingent liabilities (1) (2) Total
Beginning balance 476,070 217,180 50,368 2,709,253 3,452,871
Payments (4,647 ) (14,515 ) (34,459 ) (53,621 )
Write-off (127 ) (31,784 ) (11,334 ) (8,272 ) (51,517 )
Additions 1,407 50,255 25,108 76,770
Monetary adjustment 3,972 8,591 10,010 22,573
Ending balance 476,675 229,727 39,693 2,700,981 3,447,076
1) Amounts arising from lawsuits with probability of loss possible and remote, of tax nature in the amount of R$2,499,916 and civil in the amount of R$201,065, measured and recorded at the estimated fair value resulting from the business combination with Fibria, in accordance with paragraph 23 of IFRS 3 - Business Combination.
2) Reversal due to a change in prognosis and/or settlement.

December 31,

2020

Tax and social security Labor Civil and environment Contingent liabilities (1) (2) Total
Beginning balance 492,413 227,139 64,897 2,902,352 3,686,801
Payments (23,162 ) (43,783 ) (14,618 ) (81,563 )
Write-off (23,106 ) (52,333 ) (25,223 ) (193,099 ) (293,761 )
Additions 20,560 64,053 17,337 101,950
Monetary adjustment 9,365 22,104 7,975 39,444
Ending balance 476,070 217,180 50,368 2,709,253 3,452,871
1) Amounts arising from lawsuits with probability of loss possible and remote, of tax nature in the amount of R$2,508,162 and civil in the amount of R$201,091, measured and recorded at the estimated fair value resulting from the business combination with Fibria, in accordance with paragraph 23 of IFRS 3 - Business Combination.
2) Reversal due to a change in prognosis and/or settlement.
48

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

20.1.2. Tax and social security

For the six-month period ended June 30, 2021, the Company was a defendant in 50 (fifty) (51 (fifty-one) as of December 31, 2020) administrative proceedings as well as tax lawsuits in which the disputed matters related, Income Tax ('IRPJ'), Social Contribution ('CSLL'), Social Integration Program ('PIS'), Social Security Funding Contribution ('COFINS'), Social Security Contribution, Tax on Sales and Services ('ICMS'), among others whose amounts are provisioned for when the likelihood of loss is deemed probable by the Company's external legal counsel and the Management.

20.1.3. Labor

For the six-month period ended June 30, 2021, the Company was a defendant in 1,038 (one thousand thirty-eight) (1,010 (one thousand and ten) as of December 31,2020) labor lawsuits.

In general, labor lawsuits are related primarily to matters frequently contested by employees in agribusiness companies, such as certain wages and/or severance payments, in addition to suits filed by outsourced employees of the Company.

20.1.4. Civil and environment

For the six-month period ended June 30, 2021, the Company is a defendant in approximately in 59 (fifty nine) (58 (fifty eight) as of December 31, 2020) civil and environmental lawsuits.

Civil proceedings are related primarily to payment of damages, such as those resulting from contractual obligations, traffic-related injuries, possessory actions, environmental restoration obligations, claims and others.

20.2. Provisions for possible losses

The Company is involved in tax, civil and labor lawsuits, for which losses have been assessed as possible by Management with the support from legal counsel and therefore no provision was recorded:

June 30,

2021

December 31,

2020

Taxes and social security (1) 7,288,728 7,145,147
Labor 266,424 263,971
Civil and environment (1) 3,703,974 3,068,884
11,259,126 10,478,002
1) The amounts above do not include the fair value adjustment allocated to probable contingencies of R$2,602,107 (R$2,677,970 as of December 31, 2020), which were recorded at fair value resulting from business combinations with Fibria, in accordance with paragraph 23 of IFRS 3 - Business Combination, as presented in note 20.1.1. above.

In the six-month period ended June 30, 2021, there were no significant changes in the main nature of these contingencies compared to those disclosed in Note 20 to the annual financial statements for the year ended December 31, 2020.

49

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

20.3. Assets arising from the exclusion of VAT (ICMS) from PIS and COFINS tax basis

In the six-month period ended June 30, 2021, there were no significant changes in the main nature of these contingencies compared to those disclosed in Note 20 to the annual financial statements for the year ended December 31, 2020, except as disclosed set forth below.

In judgment held on May 13, 2021, the Federal Supreme Court ('STF') examined the amendment of judgment filed by the Federal Government, set out the understanding regarding the exclusion of VAT (ICMS) from PIS and COFINS tax basis in the Extraordinary Appeal proceeding No. 574,706, stating that:

(i) The effects of exclusion of VAT (ICMS) from PIS and COFINS tax basis must take place after March 15, 2017, except for lawsuits and administrative requirements filled by March 15, 2017, and
(ii) The VAT (ICMS) to be excluded from tax basis from PIS and COFINS is what is highlighted in the invoices.

With the edition of Opinion Nº. 7698/2021, the National Treasury Attorney's Office ('PGFN'), confirming the understanding of the STF, established that:

(i) Regarding to income earned from March 16, 2017, VAT (ICMS) value highlighted in the corresponding sales invoices must not be included on tax basis of PIS and COFINS, regardless of whether legal entity has filed a lawsuit or not; and
(ii) Regarding to income earned up to March 15, 2017, VAT (ICMS) value highlighted in the corresponding sales invoices must not be included on tax basis of PIS and COFINS, only if the legal entity has filed a lawsuit by March 15, 2017.

Over the years, the Company and its associates have filled lawsuits to recognize their rights to exclude ICMS (VAT) from the PIS and COFINS tax basis, including periods since March 1992. The lawsuits filed by the Company and its associates are in different procedural phases, with some final decision and other pending final position by the Courts. Notwithstanding, the fact that the lawsuits are in different procedural phases, the Company believes, supported by its legal counsel, that due to the final decision by the STF on the matter, the economic benefits arising from the lawsuits are practically certain and, therefore, they are no longer contingent assets, and the credits must be recorded.

Thus, in the six month period ended June 20, 2021, the total PIS and COFINS tax credits to be recovered recognized by the Company, following exactly the terms decided by the STF regarding the exclusion of ICMS (VAT) from the PIS and COFINS tax basis, is R$455,984, of which were registered, R$128,115 in September 2019 and R$327,869 in June 2021. Recognition is based on the best estimate and tax documents currently available, and this amount may be subject to adjustments arising from obtaining tax documents for older periods and/or other adjustments, to the estimate that may arise in the final confirmation of the effective values of the credit.

50

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

21. EMPLOYEE BENEFIT PLANS

The Company offers supplementary pension plan and defined benefit plan, such as medical assistance and life insurance. The characteristics of such benefits were disclosed in the annual financial statements for the year ended December 31, 2020 and have not been changed during the period of 2021.

21.1. Pension plan

Contributions made by the Company, for Suzano Prev pension plan managed by BrasilPrev, for the six-month period ended June 30, 2021 amounted R$6,706 (R$3,505 as of June 30, 2020) recognized in under cost of sales, selling and general and administrative expenses.

21.2. Defined benefits plan

The Company offers medical assistance and life insurance in addition to the pension plans, which are measured by actuarial calculation and recognized in the unaudited condensed consolidated interim financial information.

The rollforward of actuarial liability prepared based on actuarial report, is set forth below:

Balance on December 31, 2019 736,179
Interest on actuarial liabilities 53,092
Actuarial loss 33,843
Employee contribution (88 )
Exchange rate variation 487
Benefits paid (38,468 )
Balance on December 31, 2020 785,045
Interest on actuarial liabilities 27,925
Exchange rate variation (78 )
Benefits paid (20,505 )
Balance on June 30, 2021 792,387
22. SHARE-BASED COMPENSATION PLAN

For the six-month period ended June 30, 2021, the Company had 3 (three) share-based, long-term compensation plans, (i) Phantom stock option plan ('PS') and (ii) Share Appreciation Rights ('SAR'), both settled in local currency and (iii) common stock options, settled in shares.

The characteristics and measurement method of such each plan were disclosed in the annual financial statements for the year ended December 31, 2020 and have not been changed during the period of 2021.

51

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

22.1. Long term compensation plans ('PS and SAR')

The rollforward is set forth below:

June 30,

2021

December 31, 2020
Number of outstanding options
Beginning balance 5,772,356 5,996,437
Granted during of the period 1,871,944 1,770,384
Exercised (1) (1,057,087 ) (1,789,413 )
Exercised due to resignation (1) (47,328 ) (21,253 )
Abandoned / prescribed due to resignation (260,886 ) (183,799 )
Ending balance 6,278,999 5,772,356
1) The average price for share options exercised and exercised due to termination of employment, for the six-month period ended June 30, 2021 was R$60,30 (sixty Brazilian Reais and thirty cents) (R$43.14 (forty-three Brazilian Reais and fourteen cents) as of December 31, 2020).
22.2 Common stock option plan

The position is set forth below:

Program Date of grant Deadline for the options to become exercisable Price on grant date Shares Granted Restricted year for transfer of shares
Program 4 01/02/2018 01/02/2019 R$39.10 130,435 01/02/2022
Program 2020 01/02/2020 01/02/2021 R$51.70 106,601 01/02/2024
22.3 Balances and result

The amounts corresponding to the services received and recognized are set forth below:

Liabilities and Equity Statement of income and Equity

June 30,

2021

December 31, 2020

June 30,

2021

June 30,

2020

Non-current liabilities
Provision for phantom stock plan 212,500 195,135 (77,253 ) (49,143 )
Equity
Stock option granted 13,033 10,612 (2,421 ) (1,480 )
Total general and administrative expenses from share-based transactions (79,674 ) (50,623 )
23. LIABILITIES FOR ASSETS ACQUISITIONS AND ASSOCIATES

June 30,

2021

December 31, 2020
Lands and forests acquisition
Real estate receivables certificates (1) 39,767 37,104
39,767 37,104
Business combination
Facepa (2) 42,093 41,721
Vale Florestar Fundo de Investimento em Participações ('VFFIP') (3) 427,509 423,403
469,602 465,124
509,369 502,228
Current 112,446 101,515
Non-current 396,923 400,713
1) Refers to obligations with the acquisition of land, farms, reforestation and houses built in Maranhão, updated by IPCA.
2) Acquired in March 2018, for the amount of R$307,876, upon payment of R$267,876 and the remaining updated at IPCA, adjusted by possible losses incurred up to the payment date, with maturities in March 2023 and March 2028.
3) On August 2014, the Company acquired the Vale Florestar S.A. through VFFIP, for the total amount of R$528,941 with a upon payment of R$44,998 and remaining with maturity to August 2029. The monthly settlements are subject to interest and updated by the variation of the U.S. Dollar exchange rate and partially updated by the IPCA.
52

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

24. SHAREHOLDERS' EQUITY
24.1 Share capital

For the six-month period ended June 30, 2021, the Suzano's share capital is R$9,269,281 divided into 1,361,263,584 common shares, all nominative, book-entry shares without par value. The share capital is net of the public offering expenses of R$33,735. The breakdown of the share capital is set forth below:

Ordinary
Quantity (%)
Controlling Shareholders
Suzano Holding S.A. 367,612,329 27.01
Controller 194,809,797 14.31
Managements 33,856,734 2.49
Alden Fundo de Investimento em Ações 26,154,744 1.92
622,433,604 45.73
Treasury 12,042,004 0.88
Other shareholders 726,787,976 53.39
1,361,263,584 100.00

By resolution of the Board of Directors, the share capital may be increased, irrespective of any amendment to the Bylaws, up to the limit of 780,119,712 common shares, all exclusively book-entry shares.

For the six-month period ended June 30, 2021, SUZB3 common shares ended the period quoted at R$59.81 (fifty-nine Brazilian Reais and eighty-one cents) (R$58.54 (fifty-eight Brazilian Reais and fifty-four cents) on December 31, 2020).

24.2 Treasury shares

For the six-month period ended June 30, 2021, the Company has 12,042,004 common shares of own issuance held in treasury, with an average cost of R$18.13 (eighteen Brazilian Reais and thirteen cents) per share, with historical value of R$218,265 and market value corresponding to R$720,232. For the six-month period ended June 30, 2021 and 2020, there was no movement of purchase or sale.

25. EARNINGS (LOSS) PER SHARE
25.1 Basic

The basic earnings (loss) per share is measured by dividing the profit attributable to the Company's shareholders by the weighted average common shares issued during the period, excluding the common shares acquired by the Company and held as treasury shares.

June 30,
2021
June 30,
2020
Resulted of the period attributable for controlling shareholders' 7,277,867 (15,479,631 )
Weighted average number of shares in the period - in thousands 1,361,264 1,361,264
Weighted average treasury shares - in thousands (12,042 ) (12,042 )
Weighted average number of outstanding shares - in thousands 1,349,222 1,349,222
Basic loss per common share - R$ 5.39412 (11.47301 )
53

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

25.2 Diluted

The diluted earnings (loss) per share is measured by adjusting the weighted average of outstanding common shares, assuming the conversion of all common shares that would cause dilution.

June 30,
2021
June 30,
2020
Resulted of the period attributed to controlling shareholders' 7,277,867 (15,479,631 )
Weighted average number of shares in the period (except treasury shares) - in thousands 1,349,222 1,349,222
Adjustment by stock options - in thousands 237
Weighted average number of shares (diluted) - in thousands 1,349,459 1,349,222
Diluted loss per common share - R$ 5.39318 (11.47301 )

On June 30, 2020, due to the loss in the period, the Company does not consider the dilution effect in the measurement.

26. NET FINANCIAL RESULT
June 30,
2021
June 30,
2020
Financial expenses
Interest on loans, financing and debentures (1) (1,492,521 ) (1,728,835 )
Premium expenses on early settlements (33,719 )
Amortization of fundraising costs (2) (56,502 ) (41,268 )
Amortization of fair value adjustment on business combination (6,108 ) (10,660 )
Interest expense on lease liabilities (273,800 ) (240,528 )
Other financial expenses (60,442 ) (98,259 )
(1,923,092 ) (2,119,550 )
Financial income
Cash and cash equivalents and marketable securities 49,328 108,427
Amortization of fair value adjustment on business combination 47,619
Other financial income 21,162 47,127
70,490 203,173
Income from derivative financial instruments
Income 4,603,059 990,989
Expenses (3,364,186 ) (11,826,103 )
1,238,873 (10,835,114 )
Monetary and exchange rate variation, net
Exchange rate variation on loans, financing and debentures 2,065,925 (16,364,585 )
Lease 96,774 (742,501 )
Other assets and liabilities (3) (473,507 ) 1,757,291
1,689,192 (15,349,795 )
Net financial result 1,075,463 (28,101,286 )
1) Does not include R$1,049 arising from capitalized loan costs for the six-month period ended June 30, 2021 (does not include R$7,940 as of June 30, 2020).
2) Includes an expense of R$3,767 arising from transaction costs with loans and financing that were recognized directly to the statement of income (R$2,213 as of June 30, 2020).
3) Includes effects of exchange rate variations of trade accounts receivable, trade account payable, cash and cash equivalents, marketable securities and other.
54

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

27. NET SALES
June 30,
2021
June 30,
2020
Gross sales 21,899,618 17,477,563
Sales deductions
Returns and cancelations (29,346 ) (40,981 )
Discounts and rebates (2,387,828 ) (1,901,193 )
19,482,444 15,535,389
Taxes on sales (748,839 ) (558,923 )
Net sales 18,733,605 14,976,466
28. SEGMENT INFORMATION
28.1 Criteria for identifying operating segments

The Company evaluates the performance of its business segments through the operating result. The information disclosed under 'Not Segmented' is related to statement of income and balance sheet items not directly attributed to the pulp and paper segments, such as, net financial result and income and social contribution taxes expenses, in addition to the balance sheet classification items of assets and liabilities.

The operating segments defined by Management are set forth below:

i) Pulp: comprises production and sale of hardwood eucalyptus pulp and fluff pulp mainly to supply the foreign market, with any surplus sold in the domestic market.
ii) Paper: comprises production and sale of paper to meet the demands of both domestic and foreign markets. Consumer goods (tissue) sales are classified under this segment due to its immateriality.

Information related to total assets by reportable segment is not disclosed, as it is not included in the set of information made available to the Company's administration, which makes investment decisions and determine allocation of resources on a consolidated basis.

In addition, with respect to geographical information related to non-current assets, the Company does not disclose such information, as all our property, plant and equipment, biological and intangible assets are in Brazil.

55

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

28.2 Information of operating segments

June 30,

2021

Pulp Paper Not
segmented
Total
Net sales 16,038,957 2,694,648 18,733,605
Domestic market (Brazil) 1,014,148 1,886,041 2,900,189
Foreign market 15,024,809 808,607 15,833,416
Cost of sales (7,905,782 ) (1,716,907 ) (9,622,689 )
Gross profit 8,133,175 977,741 9,110,916
Gross margin (%) 50.71 % 36.28 % 48.63 %
Operating income (expenses) (240,841 ) (56,657 ) (297,498 )
Selling (855,781 ) (222,919 ) (1,078,700 )
General and administrative (532,454 ) (203,104 ) (735,558 )
Other operating, net 1,071,126 355,270 1,426,396
Income(loss) from associates and joint ventures 76,268 14,096 90,364
Operating profit before net financial income ('EBIT') (1) 7,892,334 921,084 8,813,418
Operating margin (%) 49.21 % 34.18 % 47.05 %
Financial result, net 1,075,463 1,075,463
Net income (loss) before taxes 7,892,335 921,083 1,075,463 9,888,881
Income taxes (2,607,441 ) (2,607,441 )
Net income (loss) for the period 7,892,335 921,083 (1,531,978 ) 7,281,440
Profit (loss) margin for the period (%) 49.21 % 34.18 % 38.87 %
Attributable to
Controlling shareholders' 7,892,335 921,083 (1,535,551 ) 7,277,867
Non-controlling interest 3,573 3,573
Depreciation, depletion and amortization 3,179,633 283,603 3,463,236
1) EBIT ('Earnings before interest and tax').

June 30,

2020

Pulp Paper Not segmented Total
Net sales 12,862,936 2,113,530 14,976,466
Domestic market (Brazil) 741,568 1,372,423 2,113,991
Foreign market 12,121,368 741,107 12,862,475
Cost of sales (8,246,527 ) (1,362,166 ) (9,608,693 )
Gross profit 4,616,409 751,364 5,367,773
Gross margin (%) 35.89 % 35.55 % 35.84 %
Operating income (expenses) (1,179,960 ) (323,175 ) (1,503,135 )
Selling (875,343 ) (186,691 ) (1,062,034 )
General and administrative (460,226 ) (190,325 ) (650,551 )
Other operating, net 170,212 42,190 212,402
Income (loss) from associates and joint ventures (14,603 ) 11,651 (2,952 )
Operating profit before net financial income ('EBIT') (1) 3,436,449 428,189 3,864,638
Operating margin (%) 26.72 % 20.26 % 25.80 %
Financial result, net (28,101,286 ) (28,101,286 )
Net income (loss) before taxes 3,436,449 428,189 (28,101,286 ) (24,236,648 )
Income taxes 8,765,069 8,765,069
Net income (loss) for the period 3,436,449 428,189 (19,336,217 ) (15,471,579 )
Profit (loss) margin for the period (%) 26.72 % 20.26 % (103.31 )%
Attributable to
Controlling shareholders' 3,436,449 428,189 (19,344,269 ) (15,479,631 )
Non-controlling interest 8,052 8,052
Depreciation, depletion and amortization 3,126,528 231,053 3,357,581
1) EBIT ('Earnings before interest and tax').
56

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

28.3 Net sales by product

The following table set forth the breakdown of net sales by product:

Products

June 30,

2021

June 30,

2020

Market pulp (1) 16,038,957 12,862,936
Printing and writing paper (2) 2,149,273 1,661,611
Paperboard 524,146 430,292
Other 21,229 21,627
18,733,605 14,976,466
1) Net sale from fluff pulp represents approximately 0.7% of total net sales and, therefore, was included in market pulp net sales.
2) Tissue is a recently launched product and its revenues represent approximately 2.2% of total net sales and, therefore, was included in printing and writing paper net sales.
28.4 Goodwill based on expected future profitability

The goodwill based on expected future profitability arising from the business combination were allocated to the disclosable segments, which correspond to the Company's cash-generating units ('CGU'), considering the economic benefits generated by such intangible assets. The allocation of intangibles is set forth below:

June 30,

2021

December 31,

2020

Pulp 7,897,051 7,897,051
Consumer goods 119,332 119,332
8,016,383 8,016,383
29. RESULTS BY NATURE

June 30,

2021

June 30,

2020

Cost of sales (1)
Personnel expenses (545,621 ) (505,895 )
Costs with raw materials, materials and services (3,838,933 ) (4,059,893 )
Logistics cost (2,030,390 ) (2,025,824 )
Depreciation, depletion and amortization (2,937,939 ) (2,843,700 )
Operating expenses Covid-19 (6) (15,500 )
Other (2) (269,806 ) (157,881 )
(9,622,689 ) (9,608,693 )
Selling expenses
Personnel expenses (106,097 ) (93,913 )
Services (52,021 ) (53,938 )
Logistics cost (421,838 ) (410,230 )
Depreciation and amortization (470,940 ) (460,597 )
Other (3) (27,804 ) (43,356 )
(1,078,700 ) (1,062,034 )
General and Administrative expenses
Personnel expenses (461,212 ) (351,108 )
Services (140,886 ) (134,501 )
Depreciation and amortization (51,773 ) (43,814 )
Social actions COVID-19 (23,696 ) (48,024 )
Operating expenses Covid-19 (6) (3,971 ) (10,729 )
Other (4) (54,020 ) (62,375 )
(735,558 ) (650,551 )
Other operating (expenses) income net
Rents and leases 1,706 2,365
Result from sale of other products, net 18,783 24,886
Result from sale and disposal of property, plant and equipment and biological assets, net (2) (5) 521,617 9,343
Result on fair value adjustment of biological assets 564,533 173,733
Result on disposal of investments (9,404 )
Insurance reimbursement 1,783 4,129
Depreciation and amortization (2,584 ) (9,470 )
Tax credits - gains in tax lawsuit (ICMS from the PIS/COFINS calculation basis) (7) 315,431
Other operating income, net 5,127 16,820
1,426,396 212,402
57

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

1) Includes R$54,467 related to maintenance downtime costs (R$149,087 related to idle capacity and maintenance downtime as of June 30, 2020).
2) Includes R$444 related to the formation cost of the biological asset applied directly in the statement of income (there was no formation cost applied directly in statement of income on June 30, 2020).
3) Includes expected credit losses, insurance, materials of use and consumption, travel, accommodation, trade fairs and events.
4) Includes corporate expenses, insurance, materials of use and consumption, social programs and donations, travel and accommodation.
5) Includes, substantially, the net gain on the sale of rural properties and forests to Turvinho and Bracell (Note 1.2.2.).
6) Includes, mainly, expenses in the manufacturing units for the refurbishment of cafeterias and workplaces, expansion of the frequency of conservation, cleaning, hygiene and maintenance of common areas, public transport with greater space between passengers, distribution of masks and realization rapid tests on employees working in factories. As of 2021, these expenses were incorporated into the normal course of the Company's operations
7) Refers to the recognition of (i) R$327,869, related to the tax credit, as described in Note 20.3 and (ii) R$12,438 related to the provision for legal fees.
30. SUBSEQUENT EVENTS
30.1 Issuance of Sustainability-linked Notes 2032 ('Notes 2032')

On July 1, 2021, the Company, through its associate Suzano Austria GmbH ('Suzano Austria'), issued Senior Notes totaling US$1,000,000 (equivalent to R$5,005,500 on the transaction date) with yield of 3.280% p.a., with a coupon of 3.125% p.a., to be paid semi-annually, on the 15th of January and July of each year, starting on January 15, 2022, and maturing on January 15, 2032 ('Notes').

The Notes have environmental performance indicators ('Key Performance Indicator - KPI') associated with a goal of (i) reducing the industrial water withdrawal intensity and (ii) achieve 30% in the representative of women in leadership positions in the Company by the end of 2025, evidencing Suzano's commitment to a more efficient usage of natural resources in its operations and with diversity&inclusion and in convergence with the implementation of its Long Term Goal published in 2020.

Under the terms of the Senior Notes 2032, from July 16, 2027 until the due date, the interest rate payable will increase by 12.5 basis points unless the Company provides confirmation to the Trustee together with a related confirmation by the External Verifier at least 30 days prior to July 16, 2027, of compliance with the target of reducing industrial water abstraction to a volume less than or equal to 26.1m³ per ton produced, calculated using the average of realized values in 2025 and 2026. In parallel, from July 16, 2026 until the due date, the interest rate payable will increase by 12.5 basis points unless the Company provides confirmation to the thereof trustee, together with a confirmation issued by the external expert at least 30 days prior to July 16, 2026, that the target of 30% or more women in leadership positions has been met by December 31, 2025. Additionally, pursuant to the Sustainability-Linked Securities Framework, the Company has committed to publish annually a Sustainability Report, together with a verification assurance report issued by the External Verifier. Thus, the new debt securities are characterized as sustainability-linked bonds, according to the principles promulgated by the Capital Markets Association. Additional information on the scope of sustainability associated with the new securities and measurement of performance indicators can be found in the Sustainability-Linked Securities Framework document available on the Company's Investor Relations website.

58

Suzano S.A.

Notes to the unaudited condensed consolidated interim financial information

Six-month period ended June 30, 2021

The Notes are senior obligations and are fully guaranteed by the Company. The proceeds obtained will be used to repay existing debt, including payments with respect to (i) maturing obligations under certain export pre-payment agreements; and (ii) the optional redemption of the 5.25% Senior Notes due May 2024 issued by Fibria Overseas Finance Ltd., upon terms to be subsequently determined; and otherwise for general corporate purposes.

30.2 Total Repurchase of 2024 Notes

On July 26, 2021 the Company, through its associate Fibria Overseas Finance Ltd. ('Fibria Overseas') exercised its right to redeem all of the outstanding aggregate principal amount of its 5.250% Notes due 2024 ('2024 Notes') currently outstanding, in the total aggregate principal amount of US$352,793 (equivalent to R$1,829,690 on the transaction date).

Fibria Overseas redeemed the 2024 Notes, with funds obtained from the issuance of the 2032 Notes (Note 30.1), at a repurchase price equal to the greater of (a) 100.0% of the principal amount thereof, and (b) the sum of the present values of each remaining scheduled payment of principal and interest thereon discounted to the repurchase date on a semi-annual basis using a discount rate equal to the treasury rate plus 0.40%, plus in the case of item (a) only, accrued and unpaid interest on the principal amount of the 2024 Notes to the repurchase date (the 'Make-Whole Amount'), plus in each case any accrued and unpaid interest and additional amounts, if any, on such securities to the repurchase date, as calculated by the Independent Investment Banker.

In the execution of the total repurchase, premium payments were made in the amounts of US$43,781 (equivalent to R$227,063 on the transaction date), to the bondholders of Notes 2024 recognized in the financial result and payment of interest of US$3,807 (equivalent to R$19,745 on the transaction date).

The 2024 Notes are no longer listed on the NYSE and the related guarantee by the guarantor was cancelled and any obligation thereunder extinguished.

30.3 Early Settlement of the Export Prepayment Agreement

On July 27, 2021 the Company, through its associate Suzano Pulp and Paper Europe S.A., concluded the early settlement of the export prepayment agreement, entered into on December 4, 2018, as part of the funding structure for payment of the cash installment related to the business combination with Fibria Celulose S.A., with the Company as guarantor of the transaction ('Prepayment Agreement'). On this date, the updated balance of the Prepayment Agreement was US$333,152 (equivalent to R$1,721,364 on the transaction date), at the cost of Libor + 1.15% p.a., with an average term of 24 months and final maturity in December 4, 2023.

59

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Suzano SA published this content on 11 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 August 2021 21:08:16 UTC.