Fitch Revises Klabin's Outlook to Positive; Affirms IDR at 'BB+'

Fitch Ratings has affirmed Klabin S.A.'s Long-Term Foreign Currency and Local Currency Issuer Default Ratings (IDRs) at 'BB+', National Scale Long-Term Rating at 'AAA(bra)', and National Scale bonds ratings at 'AAA(bra)'. Fitch has also affirmed Klabin Austria GmbH's senior notes, guaranteed by Klabin, at 'BB+'. The Rating Outlook for the IDRs has been revised to Positive from Stable. The Rating Outlook for the National Scale Long-Term Rating is Stable.

The Outlook revision reflects the expectation that Klabin's net leverage will reduce to around 3.0x by 2027, supported by strong operating cash flow, lower investments and a more conservative dividend policy.

The ratings reflect Klabin's leading position in the Brazilian paper and packaging sector, large forestry assets, high vertical integration and low-cost production. Strong liquidity and low refinancing risk support the ratings. Fitch expects robust cash flow generation to continue, underpinned by the company's cost advantage and solid demand.