Klabin SA
BOVESPA:KLBN4
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Good morning, and welcome to Klabin's Conference Call. [Operator Instructions] As a reminder, this conference is being recorded and broadcast live via webcast, and it may be accessed at cast.comunique-se.com.br/Klabin/4Q18. You will also find the presentation available for download.
Before proceeding, I would like to mention that forward-looking statements that might be made during this call in connection to Klabin's business outlook, projections, operating and financial targets and potential growth are beliefs and assumptions based on the management's expectations in relation to Klabin's future. These expectations are highly dependent on market conditions, on the general economic performance of the country, of the industry, and of international market, therefore, they are subject to change.
Today with us in São Paulo, we have Mr. Cristiano Teixeira, Mr. Gustavo Sousa, and other officers of Klabin.
First, Mr. Teixeira and Mr. Sousa will be making remarks about the operating performance of the company and the fourth quarter. Later, the officers will answer questions that you might have.
Now we would like to turn the floor over to Mr. Cristiano Teixeira. Mr. Teixeira, you may begin.
Hello, and welcome to the Fourth Quarter of 2018 Conference Call of Klabin.
Just saying a few words about the expectations that we had in early 2018 when we had a very clear confidence in the Brazilian economy that should be recovering, and this was at the beginning of 2018. And we had our highest attention focused on the domestic market. As you know, according to ABPO, and the quarter was quite strong. Nevertheless, in May, we had a truckers' strike. And afterwards, there was a very big stress in Brazil because of incoming elections. And at the end of the year, growth was below what we expected.
And still, talking about ABPO. At the beginning of the year, we expected that in December 2018, for our closing, we expected 3.5%, and we closed 1.6% with ABPO. And this is quite representative of what happened in the domestic economy. In the external scenario, there were strong concerns about trade, mainly the situation between the United States and China. But ultimately, they did not have any impact on prices. We closed the year with an average price in pulp and paper, especially kraftliner, at a very good level of average prices. And with that, 2018 was marked as a year with EBITDA beyond BRL 4.0 billion, for Klabin record production by Puma and margin for 2%. So we closed the year very pleased for the fact that in spite of a very difficult year, we reached very good figures.
And now I would like to give the floor to Gustavo, and then we will come back for the questions.
Thank you, Cristiano. Good morning, everyone.
Let us start our presentation on Slide #3 where we show an adjusted EBITDA in the fourth quarter of '18 of BRL 1.133 billion. This represents a growth of 33% vis-à-vis the same period of 2017.
Our pulp production in the quarter amounted to 416,000 tonnes, a 6% increase year-on-year, which is a record production.
Our revenue from sales, BRL 2.785 billion, higher by 21% vis-à-vis the fourth quarter of '17. Our EBITDA margin was 41%. Our leverage dropped by 0.3x vis-à-vis September 2018. And we closed December of 2018 with a leverage of 3.1x. And our pulp cash cost was BRL 700 per tonne, 2.8% increase vis-à-vis the fourth quarter of '17, which is below the inflation rate of the period.
Now let's go to Slide #4. And looking at our net revenue, we delivered net revenue of BRL 2.785 billion, a 21% growth comparing with the same period in 2017, mainly due to the average dollar, which was favorable. It was higher, which is more favorable to Klabin. The average dollar for the fourth quarter of '18 was 3.81 vis-à-vis 3.25 in the fourth quarter of '17. Besides, we had better prices in the main products of Klabin and also an increase of 2% in the volume of sales. Our EBITDA closed at BRL 1.133 billion, an increase of 33% vis-à-vis the fourth quarter of '17.
Now going to Slide #5 of our presentation, we will be mentioning the highlights of our main business units, starting with pulp. We had an increase in the volume of sales of 10%. We closed the fourth quarter of '18 with a volume of sales of 399,000 tonnes. This increase drove the growth of 52%, and our net revenue from pulp amounted to BRL 1.1 billion. We also had a favorable move in prices with average list prices in Europe for short fiber hardwood, and it was $1,045 per tonne, which is an 11% increase vis-à-vis the fourth quarter of '17. And for softwood, $1,223 per tonne, 28% increase vis-à-vis the average of the fourth quarter of '17.
Now looking at our kraftliner unit, we had an 8% increase in the sales volume, and we closed the volume of sales at 93,000 tonnes. With a strong demand for packaging, the prices were historically high. The list price, average list price, was $843 per tonne in Europe, which is a 3% increase vis-à-vis the fourth quarter of '17. And increases in volume sales prices and average dollar brought about 39% increase in the net revenue from kraftliner.
Now going to Slide #6 and looking into more detail about the pulp performance. We closed the fourth quarter with a production by Puma of 416,000 tonnes, which is a quarterly record. Since the beginning of the operations of this unit in this quarter, Puma produced 8% higher than the nominal capacity.
The production cash cost in the fourth quarter of '18 was BRL 700 per tonne, which is a 2.8 increase vis-à-vis the fourth quarter 4Q '17. We had improvement in cost in personnel and services, with a high dilution of fixed price and cogeneration of energy in Puma operating, with 70% of our surplus energy sold in contracts and 30% in spot.
In the fourth quarter of '18, the average COD was BRL 166 spot price. In the fourth quarter of '17, it was BRL 405. And we had an increase in cost in fiber because we bought more third-party wood and chemicals and fuel.
On Page #7, we have a view of our net debt and leverage. We closed the month of December with a gross debt of BRL 19 billion, with available cash of BRL 7 billion and a net debt of BRL 12.4 billion. We also had a reduction in our leverage when measured in reals of 3.4x in the third quarter of '18 to 3.1x in the fourth quarter of '18. And when we look at the same metric measured in dollars, from 3x at the end of the third quarter of '18, going to 2.9x at the end of the fourth quarter of '18.
On Slide #8, we have a view of our debt schedule. In the fourth quarter, we started a strong work of liability management. In December, we had -- we raised in dollars going from BRL 1.9 billion distributed between 2019 and 2022, to 2025 and 2026 with a reduction in the financial cost. With that, our average tenure of our debt in foreign currency was 48 months in the third quarter of '18, going to 51 months in the fourth quarter of '18. And this initiative of liability management continues underway. Right now, Klabin sees good opportunities to extend the debt profile both in the domestic market and the foreign market as well.
Now going to Slide #9, where we have our free cash flow. I would like to refer to the last column to the right, which is the 2018 column. We closed this year with EBITDA higher than BRL 4 billion; a CapEx of BRL 956 million; interest paid, BRL 1 billion. It is important to highlight that in this figure of interest paid, we have those interests regarding the fixed debentures issue, mandatorily convertible debentures of BRL 1.7 billion, which had interest of 8% in dollars, and that will converted into units in January 2018 through payment of interest referring to 2018 and also in January 2018 equivalent to BRL 180 million. And this was a financial cost that something that was debt. And that as of this conversion, in 2019, we no longer have this financial cost. We had an interest income tax of BRL 160 million, very negative variation of working capital totally related to the increase of about BRL 2 billion that we had in sales. We had dividends and interest on equity paid amounted to BRL 840 million; and free cash flow, BRL 866 million. And we -- when we adjust this figure, giving back the special project such as the Puma and dividend and IOE, we reached BRL 1.9 billion in adjusted free cash flow, representing a yield of 10.7% in the period for the free cash flow yield.
Going to Slide #10, we have dividends paid to shareholders referring to 2018 fiscal year. We had payment of dividends and interest on equity of BRL 919 million. In February, we will be paying BRL 270 million in dividends and interest on equity, and BRL 145 million in dividends, BRL 125 million for payment on 22 February, and the additional 25 -- on the 25th, BRL 125 million in interest on equity to be paid on February 22.
Now going to Slide #11, we have a summary of the potential transaction related to the royalties that Klabin pays on certain brands. On Monday, February 4, we published a material information. And on February 6, we published another material information. And on 7th of February, we published the convening of a shareholders' agreement in order to decide about this issue. And the transaction proposed is to issue 100 million [ ONs ] to the company that is the holder of the brand, and we are talking about [ BRL 144 million ] overall and the extension of the royalty contract at the present value of BRL 702 million. This represents a discount of 50%, 5-0. And for the management, one fundamental point is to show that there is value creation for my royalty shareholders. Should this operation be approved by our shareholders' meeting, the contract will no longer exist and royalties will no longer be paid, and the proposal is not to impact the leveraging of the company. And I would like to remind you that in -- during this meeting, on March 17, we will have the [ ON ] and [ PM ] holders, and there will be no participation of the shareholders that benefit from this contract.
With this, we conclude our presentation. And now, we would like to open for questions. Thank you very much.
[Operator Instructions] Our first question comes from Thiago Lofiego, Bradesco BBI.
Cristiano, can you hear me? Because I'm not in the office. I'm using a mobile phone. I have 2 questions. On corporate governance, I think this will be very beneficial, this transaction. This regard, do you believe that in the next year or couple of years, you will see more of these actions regarding corporate governance in the company considering listing in the Novo Mercado? And the second question has to do with the growth plan. Could you give us an update, please, about the company's mindset regarding making the investment that you have been talking about? And what is the time line for that, a reasonable timeline?
Thank you, Thiago. Regarding governance, I believe that the most important thing that should be taken into account is the pace. Today, we are living in a special moment of the company. Another important step, and I would even say one of the most important steps, historically, Klabin has very -- has always been a major player in terms of giving steps in corporate governance, and this is another very important step. And this step creates a lot of value to all shareholders. And we can see that this step of ongoing improvement in governance tends to continue. But we do not have any commitment on the part of the controlling shareholders or the Board of Directors any commitment in terms of migrating governance towards one single class. This is not on the table. What is on the table is the pace, the improvement and gains in terms of governance. So this is where we should focus ongoing improvement and not establishing steps, complete steps. Now talking about growth, in the Executive Committee, we have very advanced studies, and we have not submitted this yet. We have -- we are very motivated, and we were involved in very important improvements in the project with our engineering area. So we're there. In the executive committee, things are very advanced but not having submitted to the Board of Directors any proposal yet.
Renato Maruichi, Santander.
I have 2 questions. The first one has to do with third-party wood cost. I think the sector is close to beginning a new cycle of investment, and the main players do not have enough forest for new plants. So do you see the price of third-party wood going up gradually in the market already? And the second question is the following: Could you give us some more details about your negotiations with the controlling shareholders that receive royalties? And how did you get to the 50% discount? And why paying them in shares and not in cash? And what about the end of royalties and how this impacts the claim that Klabin has about that?
Renato, thank you very much. I am going to give the floor to Gustavo. He will start by talking about third-party wood, and then I will be coming back.
Thank you for the question. In relation to the cost of wood, third-party wood, and your question about any changes in the cost, the answer is no, we have not seen this. What could happen in one quarter or another is a variation of cost because of the distance, the radius, but the cost itself has no variation. I think it's important to say that Klabin has been increasing strategically the safety strategy. Think about -- security, thinking about future supply of wood. Now talking about royalties. As I emphasized during the presentation, our objective in this transaction was to show that there is value creation for everybody, for the minority shareholders. And whatever the end seeker may be, it must be very clear that it represents substantial discount, vis-à-vis the present value of the flow of payments that is the object of the contract. When we get to BRL 344 million, and that represents 50% discount vis-à-vis the metrics that I mentioned during the presentation. We should look at what is the annual flow of royalties. In 2018, it was BRL 52 million. And if we were to do the Math of this expense, by the multiple of EBITDA, we would see that there is a discount as well. So this transaction was set up this way with these parameters so that we could not only capture -- the brand for Klabin and compensating the holders of the brand; and at the same time, show that as far as Klabin and minority shareholders are involved, there are advantages. And it is important to have a transaction this way because of leverage impact. And this is why we chose to issue new shares, so that it could be neutral vis-à-vis our leverage. Regarding the deductibility or nondeductibility of the royalty, this is a controversial point between companies and the tax authorities in Brazil. We have internal reports showing the deductibility of these royalties. So we are comfortable in terms of putting these expenses as deductible according to the parameters that are in the law.
Well, my question about paying in shares and not cash because there is an upside for the controlling shareholders because of the price of your shares. But I understand the impact that this could have in terms of the company's leverage.
Yes, Renato. We at Klabin, we always think that Klabin's value is, very often, much higher than the one that is reflected in the share prices -- on the share prices. But in order to have this transaction, we had to have a parameter so that we could have, in other cases -- in other cases similar to that, you see that you have to have -- we adopted the average of the last 60 days or 39 trading sessions. But basing on similar cases, we went to this metric considering the last 60 days.
Renan Criscio, Crédit Suisse.
My question has to do with the pulp prices. We see an increase quarter-on-quarter and also year-on-year. Could you explain this increase and how should we consider this cost from now on? And specifically about the average radius, what about this quarter? And what will be the average radius be in the remainder of the year? And about pulp, have you decided about your commercial strategy when you have autonomy over these volumes, because we see some players with list prices that are slightly higher than others. And do you believe that there is a difference between your price list and the other players, including the spot price? So what will be Klabin's strategy about this? Do you intend to give presence to value and not to volume? Or do you intend to have the spot price in practice slightly lower than the list price of other Brazilian players?
Thank you. And I would like to start by Gustavo, and then Soares will be talking about contract.
Thank you for your question. And let's talk first about the cash cost of pulp. Something that we have been stating quite a few times and we gave emphasis in the last quarter is that Puma is operating in the third quarter already higher than the nominal capacity. So in the third quarter and the fourth quarter, we have already seen a good dilution of fixed cost. So in payroll and services, this was very favorable in these 2 quarters already sequentially. And what we had in terms of increases, they were related to increase in chemicals and fuels, and there is an important variation regarding exchange rate in chemicals and fiber has to do with the strategy of wood supply. As we have already mentioned, the fourth quarter, we bought more third-party wood already, considering strategically increasing our supply in order to have an adequate security for these levels in the long run. We have already adopted that, and we will be seeing this in the next years, especially during 2019. And now about the strategy for the sale of pulp. So Soares will be answering this part.
Thank you very much for the question. As we said during the APIMEC meeting last year, Klabin's strategy will be focusing on the sale of this volume. On medium-sized and small clients, our volume is not big enough to participate in the large accounts. And of course, we will be present as well in large accounts, but with a relatively small volume, low volume. And our main focus will be on small- and medium-sized clients scattered throughout many regions, focusing Europe, which is a super important market for this volume; China; and also a stronger presence in South America and Brazil. We already have the strategy practically in place. And our process of sales start to phase out of our relation with Suzano as of April, so we are already negotiating with the client in these several markets that I mentioned, and the response has been quite positive so far because our product has already been used by clients in many different markets. And for this reason, we will not have to use a lot of our time in terms of quality approval. The quality has already been approved. Clients have been using that in the last 3 years, so we just have to conclude commercial negotiations. And going back to your point about how we are going to deal with pricing, we're going to follow the market parameters, list price and levels of discount proportional to their size and how often they buy, such as the case of other players in the market. And we are going to avoid the spot deals where prices are lower. So this is the strategy, aiming at small- and medium-sized clients scattered throughout the world, and with lower discounts because our volumes will not be so big due to the size of our production. So basically, this is it.
Marcos Assumpção, Itau BBA.
My first question has to do with pulp, Soares, please. Thank you very much for the explanation regarding your commercial strategy. Now could you say a few words about the outlook for pulp prices, the net pulp prices looking ahead in this first quarter? And there is a small price lag there, and we saw that prices were still very good in the fourth quarter. So could you talk about the net price in each one of the regions so that we may see if there is a big difference still between the net prices between China and Europe? And where do you believe that prices will stabilize after the Chinese New Year? Because we saw a very big dispute in the market with Brazilian producers holding on to their volumes because they didn't want to sell with lower prices, and the Chinese buyers offering very much lower prices with the spot prices at lower levels. So could you talk about the market? And the second question about the investment that you made with the timber fund, if we should see more similar deals in the next few quarters, because it seems to be a very interesting strategy, increasing your forestry base without a big need for investment in the short run.
Thank you, Marcos. Soares and then Gustavo will be talking.
As you said yourself, the market went through this big dispute between mainly Chinese buyers and Brazilian suppliers. We are not yet a major player. We are more or less observing this moment. But the impression that we have is that the market is going through a moment of reversal of this curve, this downward curve. And it seems to me that the inventories of paper producers in China, they are low because they didn't buy anything in November, in December, in January, very small purchases. And the trading companies were holding on to their volumes in the last 2, 3 months, buying just a little. So it seems to me that inventories, we do not have exact data. But the impression that we have is that inventory levels in the trading companies and Chinese paper producers is coming down. And sometime, new purchases will have to be made. As you know, exports from Brazil were very much reduced during this period than competitors from other regions of the world that produce pulp. They are not able to absorb the whole demand that comes from China even if the demand is lower than average. So it seems to me that as of next week, when the Chinese New Year comes to an end, it seems to me that we will be -- see the real situation of inventories in the chain in the Chinese trading companies and paper producers as well. So we will see some changes in prices there. What seems clear today is that we are already leaving this bottom. And your question about Europe, of course, the prices in Europe are slightly higher than prices in China. European clients have been insisting in these movements, downward movements, in order to bring the prices close to Chinese prices. I do not -- I cannot tell you the level of negotiations for the end of February. You know that the ForEx is around $1,000, so dropping by $50 from the end of last year to today. And we have the impression that spot deals are lower than $1,000, something like $975, $980 in spot deals. And the prices are in line with the prices announced for China for February. So the net prices are very similar. Of course, still with a tug-of-war happening between the different regions of the world. So this month will be decisive. And our impression is that the market is starting to find an equilibrium as of the second half of February.
Soares, just to confirm, thank you again for the explanation. It was quite clear. And the market should stabilize in your opinion? Well, where do you think it would stabilize? Closer to the Chinese buyers? Or closer to the Brazilian suppliers?
Well, I believe it will be halfway. I believe that this level of $720, $730, which is what we have seen in February, this is where it seems to me that it makes sense, at least for the second quarter of this year, as of the third quarter, we will be seeing a supply already, better balance with demand. And this is when we will see a recovery of prices. But it seems to me that between the second and the third quarter, it would be closer to $730, $720 than lower than $700 as we have been seeing some suppliers practicing.
We still have the second question by Marcos Assumpção.
Marcos, thank you for the question, this is Gustavo. For the benefit of participants on the call, I'm going to recap the terms of the announcement that we made, Marcos. So on December 13, 2018, we have announced a partnership, which is Guaricana Reflorestadora, where Klabin and with the management organization put together this partnership to acquire land with forest in Santa Catarina. We are talking about 11.5 thousand hectares of land. And the characteristics of this partnership was that Klabin had 4,500 hectares of forest, and our partner had BRL 192 million that entered this partnership. Klabin will have 69.48 of the voting stock and 35 of total capital of this company. These are the main characteristics of the transaction. And this type of partnership where Klabin has supply guaranteed for wood by the means of a partnership, where Klabin has the majority of the voting stock but a minority of the total capital stock of the company tends to be the preferred mechanism for Klabin in order to have access to more forestry areas. So it's possible that we will see other transactions like this one in the future.
The next question is in English from Mr. George Staphos from Bank of America Merrill Lynch.
I have 2 questions. One on cash flow and then one on the board market overall. Gentlemen, if we go to Slide 9, obviously, it was a very good year for adjusted EBITDA progressions for Klabin. However, free cash flow didn't move quite as much as EBITDA in the year. A lot of that was on working capital in terms of the swing in cash flow. What implementation, what programs are you looking at for 2019 to achieve a better free cash yield from the EBITDA that you generate? That is question number one. Question number two, can you comment on the progress that you're making with pricing, both in domestic coated board and kraftliner market, and how some of the softening that we're seeing in global container board markets -- it's not significant, but nonetheless, it's visible -- how that might or might not be impacting your commercial efforts in paperboard?
Well, let's start by Gustavo, and I will return to talk about the paperboard.
George, thank you very much for your question. I please ask you to go back to Slide #9 on the presentation so that I can address George's question. When we look at this figure of free cash flow of BRL 866 million, I will start to break down some important topics here. First, when we talk about interests, where we had a payment of BRL 1 billion, if I were to normalize that math to a recurring figure, I would have to make 2 adjustments. One of them I mentioned in the presentation is that we had BRL 180 million on interest related to convertible debentures of Klabin. And these debentures, when they were converted in January, they have interest -- January of 2018, they were related to interest of the whole year of 2018. These debentures have been converted. These financial expenses will no longer be present in 2019. And that represents BRL 180 million. We also had around BRL 100 million related to big funding fees with movements of early payments of debt within the liability management strategy of the company, which we decide in 2018. And part of these costs are related to early payments made in the first quarter of 2018, and the other 50% early payment in the fourth quarter of 2018. It's important to stress that even with these break-funding fees already posted to the liability management accounts, the final cost becomes more competitive than what we had before. But if we were to adjust by this BRL 180 million of the interest of the banks, we do not have any more. In the extraordinary funding fees, we would have an interest line very different that would allow us to have a higher free cash flow and probably closer to what George is saying. It would be closer to our EBITDA expansion. Regarding working capital, we had a negative variation of BRL 191 million. In our models, we always consider as an initial assumption, when we have an increase in sales, we have a consumption of working capital of 25% of that increase in sales. And from one year to another, we had an increase in sales in BRL 22 billion. About initiatives for 2019, yes, we have a plan for more efficiency in the working capital, but I cannot comment on that right now. First, we have to turn this plan into a reality. And probably, in the next calls, I might be able to provide you some efficiency regarding these figures. Now I'll turn the floor over to Cristiano, who will address the questions on coated boards.
Thank you, George, for your question. I am sure that our interpreter did have a huge challenge, probably one of the main challenges of her career interpreting Gustavo. And if you have not understood his explanation, you can always call us back. About the kraft market, and you mentioned kraft and coated boards in domestic and international markets, I will start on kraft to say that there is a moderate optimism in the domestic market. With the Brazilian political environment a little more clearer than what we had last year, we do see some signs of more jobs in civil construction and other signs that start to consolidate what we are calling this moderate optimism. And that is happening in retail just the same. Just remember, what is important here for our industry, and this is something we always repeat to ourselves, we are waiting for that political stability, confidence, investment, job, income. And Brazil has had several moments like this one in its history, and we expect that as soon as we have all these important facts happening in the country, Brazil will have -- what -- from everything that we hear from the federal administration, we believe that we will have a long period of stable growth in this country. So we were dedicated in the past years specifically talking about kraft for the international market. But in the short term, at the end of last year, we started analyzing domestic market, serving our clients because we expect 2019 to be a good year for kraft in the domestic market in terms of volume and price. That does not change our historic and strategic trajectory of increasing share of kraft in the global market. And based on that, the investments that we talked so much about are based on this product. But we see in the short term an opportunity for kraft in the domestic market. About the foreign market for kraft, we are following that up closely. We always follow also the American market, which is, in fact, the main driver to define price. Once the shipment of boxes in the U.S. and machine occupation, the containerboard machine occupation in the U.S., will determine the volume of sales for the international market. And so that's where we meet the Americans in this market. And based on that, we see 2019 for kraftline very similar in terms of organic growth and also good levels of price still in 2019 and feel significant announcements in kraftliner now in the market. We see a lot of movement in the recycled, but for virgin fiber, very little. And on virgin fiber, and now, we'll be talking about what we are seeing in the mid and the last 2 years, and very much in the last year, and we still see there the major brands looking for sustainable products, sustainable packages with the replacement of the single-use plastics, especially for food packages, which we call foodservice. And that brings a non-measured upside. It's difficult to measure what this market will be, a little bit for kraftliner virgin fiber, and now so coated board, and up to where this migration will happen and what will be the upside of that for the paper market. But in my understanding so far, we have been very conservative regarding any projections in terms of consumption of packaging paper, virgin fiber paper. And my expectation is that these figures will actually be higher than what we have seen. About coated boards, an important comment, and I would like all of you to pay attention to that. If you go back to long periods with all the curves of the products based on pulp, but considering here softwood, hardwood pulps, the kraftliner and coated boards, and the coated boards here, I'm talking about [ S1K ], not considering LPBs, this is the main product of our line in coated boards. If you analyze a longer period of history, and obviously, pulp has its traditional [indiscernible], its own curve with the higher levels. But after a period of increase in pulp, right after that, we don't have a delay, but coated boards started to reflect that increase of pulp, and we believe that a lot of that is because of the nonintegrated coated boarders -- boards manufacturers. So after the price increase of pulp, after that, the nonintegrated started to add that to their cost. The margins go back up, and also the prices of the coated boards. Americans have announced the price increases that are significant in $50 in the case of [ C1K ], so we do have a positive expectation for this paper in 2019. I'm sorry, this is a very long answer. I hope I was clear enough.
Next question is from Gabriela Cortez from Banco do Brazil.
I have a question about cardboard boxes and performance for 2018 compared to the figure from ABPO. And still talking about coated boards, can we understand that you expect 2019 to have a recovery in the sold volumes because they went down in 2018, right? Can you tell us more about that, please?
Thank you, Gabriela. Okay, let's start with Douglas, our packaging director, and I'll go back to talk about coated boards.
Gabriela, thank you for your question. In the fourth quarter, our box market was in line with ABPO's figure, close to 1%. And in the year, a little bit lower than ABPO's figure. ABPO had a figure of 1.6%, and our growth was 1%. Throughout the year, we talked about our strategy to focus in results for Klabin's chain. And really, we prioritized the margin throughout the year, also export of kraftliner, domestic market for kraftliner, and also the improvement of our business in the whole market, in the whole domestic market. Now moving on about the coated boards market, yes, we do have an expectation here when -- I'll repeat something that I already said. We are with that expectation of a moderate optimism. The domestic market is kind of numb in the last 3 years. And especially in the foodservice line, we are extremely motivated with that market. Thank you very much.
If there are no further questions, I would like to turn the floor to Mr. Cristiano Teixeira for his final remarks.
Thank you, all, very much for your questions, and I will -- just closing this call. I would like to say that we do have an excitement about generating value for Klabin in the future. And this trajectory has been very clear in terms of a high-capacity view, leveraging a continuous improvement in the operating efficiency in the constant search for innovation in a market that is really avid for sustainable solutions, especially for the global brands, in the continuous improvement of the company's governance, acknowledging also minority shareholders, and especially in the ability to grow and to create value to all shareholders. Thank you all very much, and talk to you next time in the next call.
Klabin's Conference Call has ended and thank you very much for your participation.