Corporate Presentation May 2019 Forward-Looking Statements This - - PowerPoint PPT Presentation

Corporate Presentation

May 2019

Forward-Looking Statements Investor Relations Contacts

Colomba Henríquez colomba.henriquez@cmpc.cl +56 2 2441 2791 Petya Miteva petya.miteva@cmpc.cl +56 2 24412713 Agustina Mussolini agustina.mussolini@cmpc.cl +56 2 2441 2616

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 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 (“Risk Management”). Forward-looking statements speak only as of the date they are

• delivered. CMPC undertakes no obligation to publicly update or

revise them based on developments which differ from those anticipated.

2

Index

I. CMPC at a Glance II. Competitive Advantages III. Industry Drivers IV. Strategy V. Appendix

33

CMPC at a Glance

4

73% 14% 10%

Pulp Softys Packaging

Assets $15,196

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.

CMPC Figures 1

1 Source: CMPC. Figures for the LTM as of March 2019 (USD million) 2,3 Source: Hawkins Wright, RISI

4th

Global Market Producer 2

Pulp

2nd

Producer in LatAm 3

Tissue

Investment Grade Company

Fitch: BBB (stable) Moody’s: Baa3 (stable) S&P: BBB- (stable)

Cash Cost

Competitive BEKP & BSKP

5

8% 89% 5%

Softys Pulp Packaging

EBITDA $1,752

53% 15% 32%

Sales $6,229

Softys Packaging Pulp

6

Source: CMPC, as of December 2018

Vertically integrated...

tons / year

Pulp

tons / year

Recycled Paper

tons / year

Papers

HW 3,362,000 SW 798,000

688,000

Planted hectares

Pine 52% Eucalyptus 48%

1.6 million

m3 / year

Solid Wood Products

Market Pulp

580,000

Containerboard

260,000

Boxboard

520,000

Sackraft

66,000 747,000

tons / year

Tissue Paper Products Packaging

Corrugated boxes

211,000

tons / year Paper bags

732 MM

units / year Molded pulp trays

396 MM

units / year

Pul ulp Tissue ue Papers

Chile le 209 209 550 550 428 428 1, 1,18 187 19% 19% Argentina 8 300 300 15 15 324 324 5% 5% Brazil 89 89 321 321 410 410 7% 7% Peru 298 298 55 55 352 352 6% 6% Mexico 274 274 29 29 303 303 5% 5% Uruguay 81 81 81 81 1% 1% Colom lombia bia 71 71 71 71 1% 1% Ecuador dor 50 50 50 50 1% 1% La Latam 97 97 43 43 208 208 348 348 6% 6% Europe pe 727 727 67 67 794 794 13% 13% China 878 878 878 878 14% 14% Other Asia 787 787 21 21 808 808 13% 13% USA 317 317 3 52 52 371 371 6% 6% 46.501 Others 198 198 54 54 252 252 4% 4%

3,3 ,309 1,9 ,990 929 929 53% 32% 15% 6,2 ,229 Do Domestic Sales 45% 6,2 ,229 Ex Exports 55%

Source: CMPC. Figures in USD million for the LTM as of March, 2019 / Figures do not include Holding and Intercompany Sales

... and well-diversified player

7

CMPC’s Corporate Governance & Shareholders’ Structure

High corporate governance standards, in line with international best practices to continue growing and generating value to all our stakeholders in a responsible and sustainable way.

Shareholder’s Structure 1 Corporate Governance

1 Source: CMPC, as of March 31st, 2019

Chilean Pension Funds Chilean and Foreign Investors Matte Group

10% 56% 34%

Each Board of Directors Committee counts with a functioning protocol which defines its members, attributions and topics addressed.

8

Committed to Sustainable Development

Member of the

FTSE4Good Index

(4th consecutive year)

Energy Efficiency Gold Seal

granted by the Energy Ministry of Chile and the Agency for Energy Efficiency First Chilean Company to issue a

Green Bond

9

Member of the

DJSI Chile Index (4th

consecutive year) and

DJSI MILA Index (2nd

consecutive year).

Competitive Advantages

10

Forestry assets in low-cost, high-yield geographies with continuous productivity growth

Eucalyptus Radiata Pine

Average hardwood growth rate (m3ssc/ha/year) Average softwood growth rate (m3ssc/ha/year)

Eucalyptus Nitens Radiata Pine

Volume Gain (%)1 Volume Gain (%)1

Source: CMPC

11 20 23 43 43

• E. Globulus

Iberian

• E. Globulus

Chile Acacia Mangium Eucalypus Brazil

• E. Nitens

Chile

2 4 5 11 20

Russia Scandinavia Canada USA Chile

1.4 8.2 19.0 27.2

1994-1996 1997-1999 2000-2014 2015-2017

6.0 15.1 25.8 35.7

1975 1976-1994 1995-2009 2010-2015 2016-2017 11

100 200 300 400 500 600 700 5.000 10.000 15.000 20.000 25.000 30.000 35.000 100 200 300 400 500 600 700

5.000 10.000 15.000 20.000 25.000

Strategically located pulp facilities

12

BSKP Cash Cost

USD/ton cif China

• Th. Metric Tons

BHKP Cash Cost

USD/ton cif China

Cash Cost

• Th. Metric Tons

CMPC’s pulp facilities

Source: CMPC, Hawkins Wright April 2019

Cash Cost CMPC’s pulp facilities

Colombia

TM1: 221 G2: 4.3%

9% 3%

Ecuador

TM1: 72 G2: 4.8%

22% 8%

Perú

TM1: 171 G2: 7.1%

55% 24%

Brazil

TM1: 1,243 G2: 4.4%

12% 3%

Chile

TM1: 233 G2: 5.2%

70% 31% CMPC’s Tissue paper market share CMPC’s baby diaper paper market share 41% 16%

Argentina

TM1: 327 G2: 3.5%

80% 57%

Uruguay

TM1: 38 G2: 8.4%

12% 6%

México

TM1: 1,113 G2: 2.3%

Unique Region-Wide Tissue Market Presence

13

Source: CMPC, RISI 1 TM: Total Tissue Market in th. Tons as of 2016 2 G: CAGR 2006-2016

More than 40 years of expertise in the LatAm consumer business. . Top 5 tissue and sanitary products producer in every major Latin American market. Focused on growth in key markets and underpenetrated sanitary product markets. Steady expanding capacity, combination of organic & inorganic growth.

Comprehensive Portfolio of Well-Known and Well-Regarded Brands

Away from Home Sanitary Products Tissue Paper

Source: CMPC

14

CMPC’s boxboard is a multilayer fiber- based product with multiple competitive advantages

Multilayer Boxboard

Low production cost Ratio between weight and rigidity Printing quality Transporting efficiency Conversion efficiency Product consistency Health safety

15

Local US producers cash cost curve

Source: CMPC 2018

600 400 200 800 1,000 USD / Ton

Average CMPC boxboard cash cost at US port

CMPC Maule Mill

IndustryDrivers

Global Paper Demand Evolution

Other Paper and Board Tissue Containerboard Printing and Writing Newsprint

Population Growth Urbanization Economic Growth Rising disposable income Increase in Product Quality E-Commerce Circular Economy Intelligent Packaging

17

39 37 37 37 39 38 39 38 37 32 32 31 30 28 26 24 23 22 104 99 102 105 112 113 117 119 116 105 110 110 108 107 105 102 100 98 96 96 102 105 112 117 123 128 130 128 139 142 146 149 153 157 161 166 21 22 23 23 24 25 26 27 28 28 29 30 32 33 34 35 36 38 69 68 70 72 75 76 79 82 81 77 84 85 87 89 91 91 93 95

• 50

50 10 100 15 150 20 200 25 250 30 300 35 350 40 400 45 450

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 329 322 333 343 363 369 383 394 392 371 395 399 401 405 409 410 418 414

Source: RISI

Dynamics of the Pulp Market

Source: Hawkins Wright 2017, CMPC

18

Tissue Paper Demand Dynamics

Source: RISI, World Bank and CMPC as of 2017

19

Per capita annual consumption of tissue paper (in kilograms)

(Countries in green are CMPC operation countries) Tissue Paper App. Consumption (k/capita) GDP per capita in USD'000

10 20 30 40 50 60 5 10 15 20 25

Strategy

CMPC’s Strategy

21

Efficiency & Productivity Growth Profitability

Pulp Strategy: Improving margins through operational excellence

Forest Base Expansion

Increase our forestry base in Brazil in

• rder to prepare future growth in pulp

Operational Excellence Program

Plywood

+8% 1

Laja Mill

+7% 1

Pacifico Mill 2 Santa Fe Mill

L1:+10% 1 L2:+4% 1

Guaiba Mill 2

1 Increase in production efficiency (%) between 2016 and 2018 2 Operational excellence programs are still underway and haven’t had one full cycle yet or will be launched beg. 2019

22

Softys Strategy: Leading Latin American Producer

Profitability Strategy Softys Leading markets Opportunity markets

70% 41% 55% 80% 60 th

tons

Zárate tissue machine

4Q19

USD 130

Million

60 th

tons

Cañete tissue mill

1Q17

USD 140

Million

23

12% 12%

Revenue Management Route to Market Operational Excellence Program Procurement Cost Reduction Fiber Management

Source: CMPC

Packaging Strategy: Expand business and gain efficiencies

Global packaging market expected to grow

2012 2013 2014 2015 2016 2017 2022 F 400 350 300 250 200 150 100 50

USD bn

+ 3% per year

2017-2022

Expand our business on the back of a growing packaging market given new packaging trends: Replacing the use of plastic E-commerce Corrugated products as a merchandising medium in the battle for consumers Bolster our regional footprint leveraging our quality (high quality fiber) and low cost (integrated

• perations), supported by the global presence of

CMPC. Increase profitability by: Capturing internal synergies Improving efficiency through operational excellence Cost reductions by improving our entire supply chain

24

Source: CMPC

Profitability

Source: CMPC as of March 2019, figures in USD. 1 ROIC = (EBITDA – Depreciation – Stumpage) / (Accounts receivable + Inventory + Net Property, Mills and Equipment + Biological Assets (Stumpage Value) – Operating Liabilities)

25

EBITDA Margin ROIC1 Free Cash Flow LTM

428 392 374 502 702 575 100 200 300 400 500 600 700 800 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19

4.9% 6.6% 8.5% 8.6% 9.8% 9.0% 0% 2% 4% 6% 8% 10% 12% 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19

19% 27% 31% 31% 26% 23% 33% 42% 49% 53% 46% 39% 6% 10% 10% 10% 5% 12% 8% 11% 6% 6% 0% 10% 20% 30% 40% 50% 60%

4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 CMPC Pu Pulp Softys Packaging

Prudent financial management: conservative debt profile

Debt by currency Debt by interest rate Debt by type

$3,783 mm

Total debt

$2,925 mm

Net debt

Debt breakdown

USD

91% 3% 3% 2%

BRL CLP Other

99% 1%

Variable Rate Fixed Rate

81% 4% 7% 8%

BNDES ECA Banks Bonds 26

$858 mm

Cash

Source: CMPC, as of March 2019, figues in USD.

Amortization Schedule (USD Million)

5.9 Years

Average Term

4.47%

Average Rate

176 176 163 163 122 122 122 122 35 35 63 63 30 30 185 185 25 25 25 25 497 497 497 497 526 526 1056 1056 195 195 45 45 406 406 188 188 147 147 619 619 1. 1.08 080 1. 1.10 107 1. 1.08 086 195 195

2019 2020 2021 2022 2023 2024 2025/2032 2032/2041

Interests Bonds Banks

Prudent Financial Management: Stable credit metrics and prudent financial policies

27

Net debt to EBITDA Financial debt to equity Interest coverage ratio Cash1 / (18M Net Financial Interest + amortization)

Financial Policy Covenant

Source: CMPC, as of March 2019 1 Cash = cash & cash equivalents + undrawn committed lines of credit

0.51x 0.49x 0.48x 0.47x 0.47x 0.47x 0.30x 0.40x 0.50x 0.60x 0.70x 0.80x 0.90x 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 5.00x 5.87x 7.02x 7.66x 8.50x 8.35x 0.30x 1.30x 2.30x 3.30x 4.30x 5.30x 6.30x 7.30x 8.30x 9.30x 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19

3,0x 2,5x 2,2x 1,8x 1,6x 1,7x 1,50x 2,00x 2,50x 3,00x 3,50x 4,00x 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 1,10x 1,15x 0,98x 1,90x 2,17x 1,80x 0,30x 0,50x 0,70x 0,90x 1,10x 1,30x 1,50x 1,70x 1,90x 2,10x 2,30x 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19

Appendix

73% 1,866,000

Tons capacity

BHKP / Guaiba Mill

1,496,000

Tons capacity

BHKP / Santa Fe Mill

520,000

Tons capacity

BSKP / Pacifico Mill

278,000

Tons capacity

BSKP / Laja Mill

89% 53%

Pulp Division

$3,309

Sales

$1,566

EBITDA

$11,054

Assets

1,148,000 has

Forestry base

Forestry assets*

Chile

472,000

Planted has

Pine 64% Eucalyptus 32%

Brazil

158,400

Planted has

Eucalyptus 100%

Argentina

58,200

Planted has

Pine 100%

Sawn wood

960,000

m3 capacity Remanufactured wood

190,000

m3 capacity Plywood

480,000

m3 capacity

Solid wood products* Pulp*

Chile Brazil

*As of December 2018

29

LTM March 2019 (USD Million)

Feminine care

1,386 MM units

Diapers

3,970 MM units 14% 8% 32%

Softys Division

$1,990

Sales

$134

EBITDA

$2,090

Assets

Main categories

Consumer tissue products

Tissue paper production capacity* Sanitary products Production capacity*

Sanitary products Away from home products Chile Brazil Argentina Mexico Peru Uruguay Colombia

169,000 134,000 105,000 140,000 133,000 35,000 31,000

tons

30

LTM March 2019 (USD Million)

*As of December 2018

Packaging Division

5% 15% 10%

$929

Sales

$87

EBITDA

$1,512

Assets

Production capacity

LTM March 2019 (USD Million)

Boxboard

520,000

tons Chile Other papers

66,000

Chile

Sackraft

tons

64,000

Brazil

Printing and writing

Corrugated paper

260,000

tons Chile Corrugated boxes

211,000

tons Chile Molded pulp trays

396 MM units

Chile

25,300 tons

31

Paper bags

732 MM bags

Chile Peru Mexico Argentina

28% 31% 34% 7%

*As of December 2018