2017 Earnings Results Forward-looking Statements This - - PowerPoint PPT Presentation

First Quarter 2017 Earnings Results

Forward-looking Statements

This presentation may contain forward-looking statements, that should be considered as good faith estimates. Such statements are subject to risks and uncertainties outside of CMPC´s control that could cause the CMPC’s actual results to differ materially from those set forth in the forward-looking statements. These risks include in particular those described in CMPC’s Financial Statements, Note 3 (“Gestión de Riesgos”). Forward-looking statements speak only as of the date they are delivered, CMPC undertake no obligation to publicly update or revise them considering developments which differ from those anticipated.

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Opening Comments

Large scale Latin American producer of Pulp, Tissue, Wood & Paper products, serving global and local markets

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Improved market dynamics and pulp prices Results impacted by one-offs: Guaiba II stoppage and forest fires Working capital driving cash position, Underscoring commitment to deleverage and investment grade rating Successful green bond issuance underscores focus on sustainability while improving debt profile Capex program on track, start up of tissue machine in Cañete mill in January increases capacity in Peru ahead of schedule

1Q17 Highlights

Ope perational & Fin Financial Hig ighlights

• Positive fundamentals in pulp market drive

QoQ increase in prices:

• Hardwood CIF prices up 6% 507

US$/ton. Softwood prices up 5% to CIF 593 US$/ton.

• Operational one-offs impacted 1Q17 results:
• Scheduled maintenance downtime in

the Pacifico and Santa Fe II mills.

• Unplanned stoppage of Guaíba II mill.
• Forest fires in January
• Sales down 5% QoQ, but up 5% YoY to

US$1,213 million

• EBITDA of US$210 million, down 5% QoQ and

20% YoY Cap apital Exp Expenditures

• Start up of Cañete Tissue Machine on January 25th

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In US$ Milllion 1Q16 4Q16 1Q17 QoQ YoY Revenues 1,159 1,271 1,213

• 5%

5% COGS (739) (871) (841)

• 3%

14% Other Operational Expenses (160) (180) (163)

• 10%

2% EBITDA 261 220 210

• 5%
• 20%

EBITDA margin % 23% 17% 17% 0 bps -600 bps Operational Result 122 60 54

• 11%
• 56%

Non Operational Result (61) (223) (72)

• 68%

17% Net Income 60 (162) (18) 89%

• 130%

3rd Party Volumes 1Q16 4Q16 1Q17 QoQ YoY Forestry + Solid Wood Prod. (1) 1,011 1,054 947

• 10%
• 6%

Market Pulp(2) 709 887 763

• 14%

8% Papers(2) 205 202 210 4% 2% Tissue Papers(2) 151 168 162

• 4%

7% Sanitary Products(3) 1,314 1,333 1,292

• 3%
• 2%

(1) Th. m3 (2) Th. Tons (3) M. units

160 180 163

1Q16 4Q16 1Q17

Other Op. Exp. (US$ Million)

739 871 841

1Q16 4Q16 1Q17

COGS (US$ Million)

Costs & Other Operation Expense Analysis

COGS

• Down 3% QoQ, reflecting lower Pulp and Tissue sales

volumes, partly offset by higher forest protection and maintenance costs

• Up 14% YoY, driven mainly by increased sales volumes

across businesses, along with higher maintenance downtime expenses

• COGS in 1Q17 were 69% of revenues, stable QoQ but

up from 64% in 1Q16 Other Operational Exp Expenses

• Down 10% QoQ, reflecting lower distribution costs in

the Pulp business from lower volumes and lower expenses

• Up 2% YoY, driven by higher expenses in the Tissue

business, partly compensated by lower administration expenses in the Pulp business.

• Other Operating Expenses were 13% of revenues,

down from 14% in 4Q16 and stable YoY

+14% +2%

• 3%
• 10%

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1Q16 4Q16 1Q17 QoQ YoY

• Pulpwood

95 56 27

• 51%
• 71%
• Sawing Logs

386 417 420 1% 9%

• Sawn Wood

187 237 165

• 30%
• 12%
• Remanufactured Wood

45 49 47

• 5%

3%

• Plywood

85 113 103

• 8%

21%

• Others

212 183 185 1%

• 13%

Total (Th. m3) 1,011 1,054 947

• 10%
• 6%

408 454 419 119 146 123

1Q16 4Q16 1Q17

Sales*

Pulp Forestry

600 526 543 187 143 129 1Q16 4Q16 1Q17

EBITDA*

Revenues: -10% QoQ, +3% YoY For

• restry

ry Sal Sales Volum

• lumes: -10% QoQ, -6% YoY

For

• restry

ry Pric ices: -6% QoQ, +11% YoY Pulp ulp Prod

• ductio

ion: -21% QoQ, -14% YoY

• Planned maintenance downtime at Santa Fe II and Pacifico.
• Unplanned 38 days stoppage at Guaíba II.

Pulp ulp Sale Sales Volum lumes: -14% QoQ, +8% YoY

• - QoQ
• 9% BSKP: Lower exports to China
• 15% BEKP: Lower exports to China
• - YoY
• +7% BSKP: Higher exports to Asia
• +8% BEKP: Higher exports to the U.S. and Asia

Pulp ulp Price ices: BSKP US$593/ton, BEKP US$507/ton EB EBITDA: -10% QoQ, -31% YoY

• - QoQ
• Lower hardwood volumes
• Higher costs related to forestry protection & maintenance
• - YoY
• Lower pulp prices
• Higher maintenance costs
• Negative effect of BRL appreciation

Pulp-Forestry Business

• 10%

+3%

• 31%
• 10%

Third Party Sales Volumes

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BSKP 146 172 156

• 9%

7% BEKP 563 715 607

• 15%

8% Total Market Pulp (Th. Tons) 709 887 763

• 14%

8% P&W Guaiba (Th. Tons) 7 12 11

• 11%

53%

1Q16 4Q16 1Q17 QoQ YoY Total Tissue Paper (Th. Tons) 151 168 162

• 4%

7%

• Diapers

724 753 712

• 5%
• 2%
• Feminine Care

327 342 324

• 5%
• 1%
• Others

262 238 256 8%

• 2%

Total Sanitary (M. Units) 1,314 1,333 1,292

• 3%
• 2%

46 55 53 1Q16 4Q16 1Q17

EBITDA*

414 463 453 1Q16 4Q16 1Q17

Sales*

Tissue Business

+9%

• 2%

Revenues: -2% QoQ, +9% YoY Volum

• lumes:
• - Tissue Paper
• 4% QoQ, lower volumes in most countries of operation,

except Mexico and Colombia

• +7% YoY, higher volumes across all countries, except

Ecuador

• - Sanitary Products:
• 3% QoQ, lower diaper volumes
• 2% YoY, lower diaper and feminine care products

Prices (M (Measu sured in in $USD): +2% QoQ for Tissue Paper and stable QoQ for Sanitary Products

• Higher prices in local currencies

EB EBITDA

• - QoQ (-5%)
• Lower tissue paper and diaper volumes
• Higher prices in US Dollars
• Lower SG&A
• - YoY (+15%)
• Higher tissue paper volumes
• Higher prices in US Dollars

+15%

• 5%

Third Party Sales Volumes

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1Q16 4Q16 1Q17 QoQ YoY

• Boxboard

81 82 80

• 2%

0%

• Paper Bags

19 22 21

• 1%

10%

• Other Papers

17 21 20

• 5%

20%

• Corrugated Paper

33 34 28

• 16%
• 13%
• Corrugated Boxes

50 39 53 35% 6%

• Molded Pulp Trays

6 3 7 100% 11% Total (Th. Tons) 205 202 210 4% 2%

36 21 32 1Q16 4Q16 1Q17

EBITDA *

219 209 218 1Q16 4Q16 1Q17

Sales*

Paper Business

Revenues: +4% QoQ, -1% YoY Volum

• lumes: +4% QoQ, +2% YoY
• - QoQ
• Seasonally higher volumes of corrugated boxes (+35%) and

molded pulp trays (+100%)

• Corrugated paper sales volumes (-16%) impacted by lower

production

• - YoY
• Higher volumes of paper bags in Chile and Mexico (+10%)
• Higher volumes of corrugated boxes for the fruit industry

(+6%)

• Corrugated paper sales (-13%) impacted by lower

production Pric ices: stable QoQ, down 3% YoY EB EBITDA +56% QoQ, -11% YoY

• - QoQ
• Higher sales of corrugated boxes and molded pulp trays
• Lower SG&A expenses
• - YoY
• Lower corrugated paper revenues
• Higher costs related to higher volumes
• 1%

+4%

• 11%

+56% Third Party Sales Volumes

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Global Pulp Market

Global demand for pulp increased 6.4% (+920 thousand tons) in 1Q17 compared to 1Q16, while capacity increased 3.8% (+597 thousand tons) in the same period Softwood demand up 5.4% (+336 thousand tons) Hardwood demand rose 7.5% (+573 thousand tons) Eucalyptus demand grew 7.6% (+411 thousand tons) Chinese demand increased 18.7% (+828 thousand tons) Global market pulp producer stocks ended the quarter in 37 days for hardwood and 27 days for softwood, down from the 45 days for hardwood and 28 days for softwood on March 2016.

Source: PPPC, World Chemical Market Pulp Global 100 Report – March 2017

Demand Grow

• wth

th by by Region

• n

3 mo months 2017vs. . 2016 - th. Ton

• ns and

nd % % chan hange

De Demand Gr Grow

• wth

th by by Gr Grade

3 mo months 2017vs. . 2016 2016- th.

• h. Ton
• ns and

nd % % chan hange

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+2.9%

• 3.1%

+8.5%

• 1.5%

+7.9% +18.7% +3.9%

• 200

200 400 600 800 1000 North America Western Europe Eastern Europe Latin America Japan China Other Asia +2.2% +7.5% +16.9% +3.1%

• 14.8%

7.6%

• 100
• 50

50 100 150 200 250 300 350 400 450 Northern Softwood Southern Softwood Radiata Softwood Northern Hardwood Southern Hardwood Eucalyptus

Robust Financials & Stable Debt Profile

Net Debt: US$3.5 billion

Cash position of US$677 million in 1Q17, up14% QoQ, and 7% YoY driven by lower working capital requirements CAPEX of US$112 million during 1Q17 Financial Ratios Net Debt/EBITDA ratio of 3.8x, up from 3.7x in 4Q16 and from 3.1x in 1Q16 Financial Debt/Net Tangible Worth ratio of 0.53x, stable QoQ and YoY Interest Coverage ratio of 4.41x, down from 4.66x in 4Q16 and from 5.90x in 1Q16 Issued attractively priced 10-year US$500 million 144A-S green bond on March 30th

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7% 72% 13% 8%

Debt by Type

Banks Bonds BNDES ECA 97% 3%

Debt by Interest Rate

Fixed Rate Floating Rate 88% 3% 6% 3%

Debt by Currency

USD CLP BRL Other

Strategic Outlook 2017

Large scale Latin American producer of Pulp, Tissue, Wood & Paper products, serving global and local markets

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Positioned to benefit from improving market conditions Drive operational efficiencies and focus on cost control to improve margins Committed to strengthening capital structure through effective capital management and lower leverage Maintain focus on diversification strategy Furthering investments to drive sustainability

Q&A

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