Corporate Presentation January 2018
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.
1. CMPC at a glance
A global leader in P&P CMPC is a P&P company, established in 1920, that produces solid wood products, pulp, paper and packaging products and tissue in Latin America Shareholders’ Structure Market capitalization of CMPC’s Figures US$8.5 billion Chilean Pension Sales: $5,102 mm as of December 31 st , 2017 Funds EBITDA: $1,042 mm 10% EBITDA Margin: 20% Net Debt: $3,229 mm International corporate rating Assets: $15,421 mm Chilean and BBB (stable) - Fitch Foreign Matte Group Investors BBB- (negative) - S&P 56% 34% Baa3 (stable) - Moodys Local rating AA- (Fitch) AA (ICR) As of September 30 th , 2017. Source: CMPC Figures for the LTM as of September, 2017 (US$ million) 4
Successful growth 15,421 history over the past 5,102 decades 4,125 1,042 700 2017 671 (as of Sept.17) 1990 237 43 228 308 628 1,312 Tissue Pulp Revenues Capacity Capacity Plantations EBITDA Assets US$ million Th. hectares Th. tons US$ million Th. tons US$ million 5
2. CMPC’s Value Proposal
CMPC’s Value Proposal 2. Low cost 4. Commitment producer with to sustainable world-class development assets 1. Industry leader 3. Prudent and well financial diversified P&P management producer 7
Large-scale vertically-integrated producer of 1 multiple products % of consolidated Main Figures % of total sales Total capacity & Employees EBITDA Forests 671 Th. has. planted 67% 47% Pulp division 15.8 mm m 3 harvested Sales: $2,632 mm Sales 3 rd parties: $2,366 mm Capacity EBITDA: $729 mm 1.6 million m 3 /y solid wood EBITDA margin: 28% 4.1 million tons/y pulp capacity Employees 4,966 employees Tissue division Capacity Sales:$1,907 mm 700 Th. tons/y Sales 3 rd parties: $1,906 mm Employees EBITDA: $232 mm 8,168 employees EBITDA margin: 12% 22% 37% Capacity 430mm tons/y boxboard Paper division Sales: $859 mm 270mm tons/y containerboard Sales 3 rd parties: $830 mm 220mm tons/y corrugated boxes 16% EBITDA: $95 mm 730mm units/y multiwall bags EBITDA margin: 11% 370mm units/y molded fiber trays Employees 10% 3,356 employees Total: $5,102 $1,042 8 Source: CMPC. Figures in US$ million for the LTM as of September, 2017 / Figures do not include Holding and Intercompany Sales.
1 Geographic & product diversity provides flexibility & cash flow stability 9 Source: CMPC. Figures in US$ million for the LTM as of September, 2017 / Figures do not include Holding and Intercompany Sales.
Pulp production in low-cost, 2 high-yield geographies BHKP CASH COST 700 700 US$/ton cif China Eucalyptus 600 600 Average hardwood growth rate 500 500 (m 3 ssc/ha/year) 43 43 43 43 US$/Ton c.i.f. China 400 400 23 23 300 300 20 20 11 11 200 200 100 100 CMPC’s pulp facilities Eucalyptus E. Globulus E. Globulus Mangium E. Nitens Chile 0 Acacia Iberian Brazil Chile 0 5,000 10,000 15,000 20,000 25,000 30,000 Th. metrics Tons BSKP CASH COST 700 700 Radiata Pine US$/ton cif China Average softwood growth rate 600 600 (m 3 ssc/ha/year) 500 500 US$/Ton c.i.f. China 400 400 19 19 11 11 300 300 5 4 2 200 200 CMPC’s pulp facilities Canada USA Russia Scandinavia Chile 100 100 0 0 5,000 10,000 15,000 20,000 25,000 10 Th. metrics Tons Source: CMPC and Hawkins Wright as of October 2017
Strategically located 2 pulp facilities Di Distance Fr From Transport Mill ill Pl Plantations to to Por orts ts 80 km Laja 93 km / By Train 93 km Pacífico 163 km / By Train 99 km Santa Fe 119 km / By Train 208 km Guaíba 260 km / By Barges 11
2 CMPC’s Tissue paper mar marke ket sh shar are 9% 6% Colombia CMPC’s baby diaper 9% 4% mar marke ket sh shar are Mexico Unique region-wide tissue operation 12% 23% Ecuador More than 40 years of expertise in the LatAm 11% 3% consumer business Brazil 57% 24% Top 5 tissue and sanitary products producer in every Peru major Latin American market Range of brands & products to take advantage of economic cycles Focused on growth in key markets and 31% 70% underpenetrated sanitary product markets 70% Chile 83% Steady expanding capacity, combination of organic Uruguay & inorganic growth 44% 24% Argentina 12 Source: CMPC and Nielsen
Operational productivity and efficiency 2 programs in all segments of CMPC Renegotiation Productivity Working optimization of electric capital program contracts reduction Renegotiation Sale of real- of logistic estate land contracts 13
Strong balance sheet & conservative debt profile 3 Debt breakdown Debt by currency Debt by interest rate Debt by type Variable Other ECA Banks BRL Rate CLP 3% Total debt: $4,593mm 7% BNDES 6% 5% 4% 3% 11% Net debt: $3,229mm Fixed Bonds USD Rate 76% 89% 96% Amortization schedule Average term: 5.8 years 178 CMPC18 bond Bonds Banks Interests redeemed on October 2017 1,483 202 184 140 500 498 496 485 56 143 116 - - 2017 2018 2019 2020 2021/2022 2023/29 2030/39 14 Note: Figures in US$ million as of September 2017
Stable credit metrics and prudent financial 3 policies Interest coverage ratio Net Debt to EBITDA 5.90x 4.0x 5.66x 6.30x 5.19x 4.89x 4.66x 4.63x 5.30x 4.41x 3.8x 3.5x 3.7x 4.30x 3.4x 3.4x 3.2x 3.0x 3.30x 3.1x 3.1x 2.30x 2.5x 1.30x 2.0x 0.30x 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 Cash / (18M Net Financial Interest + Amortizations) Financial Debt to Equity 1.59x 0.90x 1.70x 1.43x 0.80x 1.50x 1.30x 0.70x 1.05x 0.59x 1.01x 0.57x 1.10x 0.54x 0.60x 0.53x 0.53x 0.53x 0.53x 0.90x 0.50x 0.59x 0.70x 0.54x 0.50x 0.40x 0.50x 0.30x 0.30x 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 Covenant Financial Policy 15 Source: CMPC
Positive free cash flow driving deleverage 3 LTM Free Cash Flow Breakdown (Sept. 2017) Free Cash Flow Evolution 177 122 107 1,042 +190 -485 -5 64 -173 470 -98 10 -5 EBITDA Capex Dividends Net Income Working Free Cash Financial Tax Capital Flow -48 Expenses Variation 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 16 Source: CMPC
Commitment to Sustainable Development 4 First Chilean Member of the Company to issue Energy Efficiency DJSI Chile , for Member of the a Green Bond Gold Seal granted by third consecutive FTSE4Good the Energy Ministry of year Index, for third Chile and the Agency Member of the new consecutive year for Energy Efficiency DJSI Mila 17
Corporate governance 4 valued leadership Jorge Luis Vivianne Rafael Jorge Jorge Ramiro Pablo Bernardo Marín Felipe Blanlot Fernández Larraín Matte Matte Mendoza Turner Independent Independent Gazitúa Chairman Board of Directors increased to 9 from 7 members Directors Committee comprised by 3 board members ( 2 independent) 18
3. Growth Drivers
Dynamics of the pulp market VIRGIN FIBER MARKET PULP FIBER WORLD CONSUMPTION used to produce Paper&Board consumed to manufacture required to produce 411 million tons of (M tons) Paper&Board (M tons) Paper&Board UKP Mec Sulphite 2 5 Virgin Recover Paper Integrated Market 244 million tons Pulp 117 Pulp 181 million million tons (57%) 64 million BHKP BSKP tons (65%) 32 tons 25 (43%) (35%) 425 million tons 64 million tons 32 million tons of total fibers of market pulp of BHKP 20 Source: CMPC, Hawkins Wright and RISI
Global paper demand evolution 450 412 412 409 409 411 411 406 406 395 395 402 402 400 400 392 392 395 395 400 384 384 371 371 369 369 363 363 94 91 92 88 87 343 343 85 82 84 81 350 333 333 79 329 329 322 322 76 77 75 72 300 33 34 35 36 27 30 32 70 28 29 69 26 68 25 28 24 23 23 250 21 22 129 123 131 139 143 117 146 150 112 153 157 159 200 129 105 96 102 96 Million tons 150 100 117 119 112 113 116 104 105 99 102 110 110 105 108 107 105 102 100 50 39 37 37 39 38 39 38 37 37 32 32 31 30 28 26 24 23 - 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Newsprint Printing & Writing Containerboard Tissue Other Paper and Board 21 Source: CMPC and RISI
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