Corporate Presentation November 2019 Forward-Looking Statements - - PowerPoint PPT Presentation

Corporate Presentation

November 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 Blanca Lecaros blanca.lecaros@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

3

CMPC at a Glance

4

73% 17% 11%

Pulp Softys Biopackaging

Assets $14,796

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 September 2019 (USD million) 2,3 Source: Hawkins Wright, RISI

4th

Global Market Producer 2

Pulp

5th

Global Producer

Paper Sacks

Investment Grade Company

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

5

12% 83% 5%

Softys Pulp Biopackaging

EBITDA $1,349

50% 15% 35%

Sales $5,837

Softys Biopackaging Pulp

2nd

Producer in LatAm 3

Tissue

1st

Largest LatAm Exporter

Boxboard

6

Source: CMPC, as of December 2018

Vertically integrated...

tons / year

Pulp

tons / year

Recycled Paper

tons / year

HW 3,362,000 SW 798,000

688,000

Planted hectares

1.6 million

m3 / year

Solid Wood Products

Market Pulp

580,000 260,000 520,000 66,000 747,000

tons / year

Tissue Paper Products

211,000

tons / year

732 MM

units / year

396 MM

units / year tons / year Market Pulp tons / year Boxboard Sackraft Containerboard Paper Sacks Molded pulp trays Corrugated boxes m3 harvested

16.6 million

~90%

Source: CMPC. Figures in USD million for the LTM as of June, 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 September 30th, 2019

Chilean Pension Funds Chilean and Foreign Investors Matte Group

10% 55% 35%

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

8

Committed to Sustainable Development

Reduce by 50%(1) absolute greenhouse gas emissions(2) by 2030 Reduce by 25%(1) industrial use of water per ton produced by 2025

Zero waste to landfill by 2025

Conserve/restore 100,000 hectares by 2030

Conservation & Restoration Waste Water Climate Change Environmental Targets

CMPC owes its existence to the natural environment, which is the source of its business and whose fruits enable the Company to contribute to the future wellbeing of society.

Commitment to Sustainable Development Goals

9

(1) Using 2018 consumption as a baseline (2) Greenhouse gas emissions scope 1 and 2

CMPC subscribes to the UN Global Compact Sustainable Development Goals and develops and actively participates in projects and initiatives to contribute towards achieving them.

Partnerships & Recognitions

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

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 August 2019

Cash Cost CMPC’s pulp facilities 100 200 300 400 500 600 700

5.000 10.000 15.000 20.000 25.000

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

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 Personal Care Products Tissue Paper

Source: CMPC

14

Source: CMPC

15

Food & Beverage Consumer Goods Pharmaceutical Building materials Food & agricultural products Chemicals & minerals Industrial Produce Salmon

Cost competitiveness from fiber and vertical integration Long-term relationships with customers

Packaging: favorable competitive position

Industry Drivers

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

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

38% 9% 18% 8% 2% 10% 16% Tissue UWF Packaging CWF Mechanical Fluff Specialty

Market Pulp by Final Use

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

Strengthen the core Grow in all business divisions Focus on developing our people Innovate in bio- economy and digitalization

• Continue implementing

productivity programs in all

• ur mills to increase asset

productivity (OEEs)

• Create a forestry fund in Brazil

to prepare for future organic growth

• Evaluate growth alternatives

in Packaging while capturing synergies

• Explore organic & inorganic

alternative for main Softys markets

• Develop the skills and talents

to form a high-performance team with strong culture

• Develop new programs with a

focus on gender equality and inclusion of people with disabilities

• Strengthen CMPC’s position

as a key player in the bio- economy

• Advance in digitalization and

Industry 4.0

• Leverage the innovation eco-

system to generate value

Sustainability Prudent Financial Management

Pulp Strategy: Improving margins through operational excellence

Forest Base Expansion

Creation of a forestry fund in Brazil to prepare for future organic growth

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

Debottleneck & Modernization Initiatives

Evaluation of debottleneck and modernization initiatives in our pulp mills to increase production in our mills

SEPAC Acquisition

The conditions to the acquisition of the Brazilian tissue and personal care products company SEPAC were fulfilled. With this acquisition, Softys has consolidated itself as the largest manufacturer and distributor of this type of products in the Brazilian market, with an installed capacity of 280 th tons of tissue paper.

Softys Strategy: Leading Latin American Producer

Profitability Strategy Softys Leading markets Strengthen our leading position Opportunity markets Focus on Brazil and Mexico to gain go-to- market capabilities and market share

70% 41% 55% 80% 60 th

tons

Zárate tissue machine

1Q20

USD 130

Million

60 th

tons

Cañete tissue mill

1Q17

USD 140

Million

23

Revenue Management Procurement Operational Excellence Program Fixed Cost Reduction Brand Innovation Approach

Source: CMPC

135 th tons

Tissue Paper Capacity

BRL1,303

Million Transaction Price

175 M Units

Baby Diapers Capacity

Biopackaging Strategy: Expand business and gain efficiencies

24

Source: CMPC

Corrugated Integrated all CMPC corrugated related businesses to capture synergies and improve operational efficiencies Increase productivity via a continuous improvement program (BEST) Regain sales volumes and market share, optimizing prices Increase productivity via a continuous improvement program (BEST) Continue growing through the existing commercial platform Increase our sack paper capacity - New conversion line in Peru (60 million sacks/year) New market development as a result of the plastic bag ban in Chile - 3 new conversion lines in Chile (115 million bags/year)

Boxboard Paper Sacks Corrugated

Prudent financial management: conservative debt profile

Debt by currency Debt by interest rate Debt by type

$3,838 mm

Total debt

$2,969mm

Net debt

Debt breakdown

USD

92% 3% 2% 3%

BRL CLP Other

99% 1%

Variable Rate Fixed Rate

81% 6% 7% 6%

BNDES ECA Banks Bonds 25

$869 mm

Cash

Source: CMPC, as of September 2019, figures in USD.

Amortization Schedule (USD Million)

5.8 Years

Average Term

4.1%

Average Rate

40 40 197 197 137 137 123 123 43 43 138 138 42 42 185 185 25 25 25 25 498 498 512 512 512 512 1, 1,158 195 195

• 11

11 214 214 222 222 163 163 621 621 555 555 600 600 1, 1,200 195 195

2019 2020 2021 2022 2023 2024 2025/2031 2032/2041

Interests Bonds Banks

Prudent Financial Management: Stable credit metrics and prudent financial policies

26

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

Financial Policy Covenant

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

2,5x 2,2x 1,8x 1,6x 1,7x 2,0x 2,2x 1,50x 2,00x 2,50x 3,00x 3,50x 4,00x 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 0,49x 0,48x 0,47x 0,47x 0,47x 0,45x 0,48x 0,30x 0,40x 0,50x 0,60x 0,70x 0,80x 0,90x 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 5,87x 7,02x 7,66x 8,50x 8,35x 7,52x 6,82x 0,30x 1,30x 2,30x 3,30x 4,30x 5,30x 6,30x 7,30x 8,30x 9,30x 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 1,15x 0,98x 1,90x 2,17x 1,80x 1,29x 1,86x 0,30x 0,50x 0,70x 0,90x 1,10x 1,30x 1,50x 1,70x 1,90x 2,10x 2,30x 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19

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

83%

Pulp Division

$3,244

Sales

$1,150

EBITDA

$10,997

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

28

LTM September 2019 (USD Million)

50%

Feminine care

1,386

Diapers

3,970 17% 12% 35%

Softys Division

$2,045

Sales

$162

EBITDA

$2,425

Assets

Main categories

Consumer tissue products

Tissue paper production capacity* Personal Care products Production capacity*

Personal Care 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

29

LTM September 2019 (USD Million)

*As of December 2018

million units million units

Biopackaging Division

5% 15% 10%

$919

Sales

$68

EBITDA

$1,578

Assets

Production capacity

LTM September 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 million units

Chile

25,300 tons

30

Paper sacks 732 million sacks Chile Peru Mexico Argentina

28% 31% 34% 7%

*As of December 2018