Corporate Presentation January 2018 Forward-looking Statements - - PowerPoint PPT Presentation

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Corporate Presentation January 2018 Forward-looking Statements - - PowerPoint PPT Presentation

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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

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Corporate Presentation

January 2018

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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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  • 1. CMPC

at a glance

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Matte Group 56% Chilean and Foreign Investors 34% Chilean Pension Funds 10%

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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

International corporate rating BBB (stable) - Fitch BBB- (negative) - S&P Baa3 (stable) - Moodys Local rating AA- (Fitch) AA (ICR)

CMPC’s Figures

Sales: $5,102 mm EBITDA: $1,042 mm EBITDA Margin: 20% Net Debt: $3,229 mm Assets: $15,421 mm

Shareholders’ Structure Market capitalization of

US$8.5 billion

as of December 31st, 2017

Figures for the LTM as of September, 2017 (US$ million) As of September 30th, 2017. Source: CMPC

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1,042

1990 2017

1,312 15,421 671 4,125 700 237 308 43 628

Assets

US$ million

Plantations

  • Th. hectares

Pulp Capacity

  • Th. tons

Tissue Capacity

  • Th. tons

Revenues

US$ million

Successful growth history over the past decades

228

EBITDA

US$ million

5,102

5

(as of Sept.17)

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  • 2. CMPC’s

Value Proposal

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CMPC’s Value Proposal

  • 1. Industry leader

and well

diversified P&P

producer

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  • 2. Low cost

producer with world-class assets

  • 3. Prudent

financial management

  • 4. Commitment

to sustainable development

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Large-scale vertically-integrated producer of multiple products

Main Figures % of total sales % of consolidated EBITDA Total capacity & Employees Pulp division Sales: $2,632 mm Sales 3rd parties: $2,366 mm EBITDA: $729 mm EBITDA margin: 28% Forests 671 Th. has. planted 15.8 mm m3 harvested Capacity 1.6 million m3/y solid wood 4.1 million tons/y pulp capacity Employees 4,966 employees Paper division Sales: $859 mm Sales 3rd parties: $830 mm EBITDA: $95 mm EBITDA margin: 11% Capacity 430mm tons/y boxboard 270mm tons/y containerboard 220mm tons/y corrugated boxes 730mm units/y multiwall bags 370mm units/y molded fiber trays Employees 3,356 employees Tissue division Sales:$1,907 mm Sales 3rd parties: $1,906 mm EBITDA: $232 mm EBITDA margin: 12% Capacity 700 Th. tons/y Employees 8,168 employees $5,102 $1,042 Total:

Source: CMPC. Figures in US$ million for the LTM as of September, 2017 / Figures do not include Holding and Intercompany Sales.

47% 37% 16% 67% 22% 10%

1

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Geographic & product diversity provides flexibility & cash flow stability

Source: CMPC. Figures in US$ million for the LTM as of September, 2017 / Figures do not include Holding and Intercompany Sales.

1

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100 100 200 200 300 300 400 400 500 500 600 600 700 700 5,000 10,000 15,000 20,000 25,000 30,000

100 100 200 200 300 300 400 400 500 500 600 600 700 700 5,000 10,000 15,000 20,000 25,000

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Pulp production in low-cost, high-yield geographies

Radiata Pine

Average softwood growth rate (m3ssc/ha/year)

2 4 5 11 11 19 19

Russia Scandinavia Canada USA Chile

Eucalyptus

Average hardwood growth rate (m3ssc/ha/year)

11 11 20 20 23 23 43 43 43 43

  • E. Globulus

Iberian

  • E. Globulus

Chile Acacia Mangium Eucalyptus Brazil

  • E. Nitens Chile

BSKP CASH COST

US$/ton cif China

US$/Ton c.i.f. China

  • Th. metrics Tons

CMPC’s pulp facilities

BHKP CASH COST

US$/ton cif China

US$/Ton c.i.f. China

  • Th. metrics Tons

CMPC’s pulp facilities Source: CMPC and Hawkins Wright as of October 2017

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Strategically located pulp facilities

Di Distance Fr From Pl Plantations Mill ill Transport to to Por

  • rts

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

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2

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Unique region-wide tissue operation

  • More than 40 years of expertise in the LatAm

consumer business

  • Top 5 tissue and sanitary products producer in every

major Latin American market

  • Range of brands & products to take advantage of

economic cycles

  • Focused on growth in key markets and

underpenetrated sanitary product markets

  • Steady expanding capacity, combination of organic

& inorganic growth

Chile Brazil Colombia Mexico

44% 83% 9% 9% 57% 11% 23%

Peru Ecuador Argentina Uruguay

70%

CMPC’s Tissue paper mar marke ket sh shar are 12

Source: CMPC and Nielsen

CMPC’s baby diaper mar marke ket sh shar are

4% 24% 70% 6% 24% 3% 12% 31%

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Renegotiation

  • f electric

contracts Renegotiation

  • f logistic

contracts

Operational productivity and efficiency programs in all segments of CMPC

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Productivity

  • ptimization

program Sale of real-

estate land Working capital

reduction

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  • 500

498

  • 496

1,483 485 116 184 202 143 140 178 56 2017 2018 2019 2020 2021/2022 2023/29 2030/39

Bonds Banks Interests CLP 3% USD 89% BRL 5% Other 3% Fixed Rate 96% Variable Rate 4%

Debt breakdown

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Debt by currency Debt by interest rate Debt by type

Note: Figures in US$ million as of September 2017

Strong balance sheet & conservative debt profile

Average term: 5.8 years

Amortization schedule

Total debt: $4,593mm Net debt: $3,229mm

Banks 6% Bonds 76% BNDES 11% ECA 7%

CMPC18 bond redeemed on October 2017

3

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Source: CMPC

Interest coverage ratio Net Debt to EBITDA

Stable credit metrics and prudent financial policies

3.1x 3.2x 3.4x 3.7x 3.8x 3.4x 3.1x 2.0x 2.5x 3.0x 3.5x 4.0x 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 5.90x 5.66x 5.19x 4.66x 4.41x 4.63x 4.89x 0.30x 1.30x 2.30x 3.30x 4.30x 5.30x 6.30x 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17

Cash / (18M Net Financial Interest + Amortizations) Financial Debt to Equity

0.53x 0.54x 0.53x 0.53x 0.53x 0.59x 0.57x 0.30x 0.40x 0.50x 0.60x 0.70x 0.80x 0.90x 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 1.05x 1.01x 0.50x 0.54x 0.59x 1.43x 1.59x 0.30x 0.50x 0.70x 0.90x 1.10x 1.30x 1.50x 1.70x 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17

Covenant Financial Policy

3

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Source: CMPC

Positive free cash flow driving deleverage

1,042

  • 485
  • 5
  • 173
  • 98

+190 470 EBITDA Capex Dividends Net Financial Expenses Income Tax Working Capital Variation Free Cash Flow

  • 5
  • 48

10 64 107 122

177

1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17

LTM Free Cash Flow Breakdown (Sept. 2017) Free Cash Flow Evolution

3

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Commitment to Sustainable Development

Energy Efficiency Gold Seal granted by

the Energy Ministry of Chile and the Agency for Energy Efficiency

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Member of the

FTSE4Good

Index, for third consecutive year Member of the

DJSI Chile, for

third consecutive year Member of the new

DJSI Mila

First Chilean Company to issue a Green Bond

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Corporate governance valued leadership

  • Board of Directors increased to 9 from 7 members
  • Directors Committee comprised by 3 board members (2 independent)

Ramiro Mendoza Bernardo Matte Pablo Turner Luis Felipe Gazitúa Chairman Vivianne Blanlot Jorge Marín Independent Jorge Larraín Jorge Matte Rafael Fernández Independent

4

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  • 3. Growth

Drivers

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BHKP 32 BSKP 25 Mec 5 UKP 2

425 million tons

  • f total fibers

64 million tons

  • f market pulp

32 million tons

  • f BHKP

FIBER WORLD CONSUMPTION required to produce 411 million tons of Paper&Board VIRGIN FIBER used to produce Paper&Board (M tons) MARKET PULP consumed to manufacture Paper&Board (M tons)

Dynamics of the pulp market

Source: CMPC, Hawkins Wright and RISI

20 Recover Paper

244 million tons (57%)

Virgin Pulp

181 million tons (43%) Integrated 117 million tons (65%) Market Pulp 64 million tons (35%) Sulphite

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Global paper demand evolution

Source: CMPC and RISI

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Million tons

39 37 37 37 39 38 39 38 37 32 32 31 30 28 26 24 23 104 99 102 105 112 113 117 119 116 105 110 110 108 107 105 102 100 96 96 102 105 112 117 123 129 131 129 139 143 146 150 153 157 159 21 22 23 23 24 25 26 27 28 28 29 30 32 33 34 35 36 69 68 70 72 75 76 79 82 81 77 84 85 87 88 91 92 94

  • 50

100 150 200 250 300 350 400 450

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

329 329 322 322 333 333 343 343 363 363 369 369 384 384 395 395 392 392 371 371 395 395 400 400 402 402 406 406 409 409 411 411 412 412

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Leading player in underpenetrated tissue markets

India Philippines Indonesia Vietnam Thailand Russia Ecuado dor Colombi bia Malaysia China Peru Venezuela Brazil Argentina Mexico Taiwan Croatia Hungary Chile Costa Rica Italy France Portugal Spain Australia Netherlands New Zealand Israel Ireland UK Finland Denmark Switzerland Germany Austria Sweden Hong Kong Canada USA 5 10 15 20 25 5 10 15 20 25 30 35 40 45 50

Source: CMPC as of December 2015

Tissue Paper App.Consumption (k/hab) GDP per capita in US$’000

Per capita annual consumption of tissue paper (in kilograms)

(Countries in green are CMPC operation countries)

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……..

Appendix: Business divisions

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Pulp division

Chile Planted: 457,000 has. 64% Pine, 32% Eucalyptus Brazil Planted: 156,500 has. ~100% Eucalyptus Argentina Planted: 57,500 has. ~ 100% Pine

FORESTRY ASSETS* SOLID WOOD PRODUCTS* PULP*

Sawn Wood Capacity: 960,000 m3 Remanufactured Wood Capacity: 190,000 m3 Plywood Capacity: 480,000 m3 Chile BSKP - Laja Mill Capacity: 364,000 tons BSKP - Pacifico Mill Capacity: 500,000 tons BEKP - Santa Fe Mill Capacity: 1,496,000 tons Brazil BEKP - Guaíba Mill Capacity: 1,765,000 tons

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Forestry base: 1,150,000 has.

$2,366 $10.644 LTM Sept-17 ($US Million)

SALES EBITDA

$729

ASSETS

*As of Sept 2017

47% 67% 73%

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Consumer tissue products Sanitary products Away from home products Chile 159,000 tons Brazil 131,000 tons Argentina 99,000 tons Mexico 123,000 tons Peru 125,000 tons Uruguay 34,000 tons Colombia 28,000 tons

TISSUE PAPER PRODUCTION CAPACITY*

MAIN CATEGORIES

SANITARY PRODUCTS PRODUCTION CAPACITY*

Diapers: 3,970 M units Feminine Care: 1,386 M units

Tissue division

$1,906 $232 $2,389

SALES EBITDA ASSETS

*As of Sept 2017

LTM Sept-17 ($US Million)

37% 22% 17%

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*As of Sept 2017

BOXBOARD PAPER BAGS OTHER PAPERS CORRUGATED PAPER CORRUGATED BOXES MOLDED PULP TRAYS

429,000 tons Chile 106,500 tons 672 MM bags Chile: ~31% Peru: ~ 34% Mexico: ~ 25% Argentina: ~ 10% 80,000 tons Chile (Sackraft) 60,000 tons Brazil (Printing & Writing) 316,000 tons Chile 240,000 tons Chile 21,200 tons 380 MM units Chile

Paper division

PRODUCTION CAPACITY* $830 $95 $1,462

SALES EBITDA ASSETS

LTM Sept-17 ($US Million)

16% 10% 10%