Earnings Presentation 4Q18 Forward-Looking Statements This - - PowerPoint PPT Presentation

Earnings Presentation 4Q18

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 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.

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

3

Opening Comments

Record-high Full Year Pulp Production, reflecting best-in-class execution Continued Net Debt to EBITDA Ratio

• downtrend. 7th Consecutive Quarter of debt

reduction Strong cash generation positions the Company to take advantage of future opportunities Focus on diversification with long-term strategic outlook and financial discipline

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4Q18 Highlights

Op Oper erational l & & Financial l High ghli lights

• Pulp market continues to be supportive
• Hardwood CIF 726 US$/ton
• Softwood CIF 806 US$/ton
• Pulp production of 1,029,000 tons, down 3%

QoQ and up 19% YoY. 12-month 2018 production reached an all time corporate historical record of 4,115,000 tons.

• EBITDA of US$403 million, down 21% QoQ

and up 59% YoY. 2018 full year EBITDA of USD1,816 million, up 68% compared to 2017

• Free cash flow reached US$221 million, down

from US$324 million in 3Q18 (-32%) and up from US$28 million in 4Q17 (+679%)

• Net debt was US$2,853 million, down 3% QoQ

and 11% YoY

• Net debt to EBITDA ratio continued its

downtrend reaching 1.6x – 7th consecutive quarterly decrease

• Net Income of USD112 million, decreasing 26%

QoQ and increasing more than 1.000% YoY. Net Annual Income totaled USD502 million, a considerable increase from the USD103 million in 2017.

In USD Milllion 4Q17 3Q18 4Q18 QoQ YoY Revenues 1,312 1,623 1,538

• 5%

17% COGS (876) (923) (938) 2% 7% Other Operational Expenses (182) (193) (197) 2% 9% EBITDA 254 254 508 508 403 403

• 21%

59% 59% EBITDA margin % 19.3% 31.3% 26.2% -510 bps 684 bps Operational Result 95 336 226

• 33%

139% Non Operational Result (89) (185) (114)

• 38%

29% Net Income 6 151 151 112 112

• 26% 1731%

1731% 3rd

4Q17 3Q18 4Q18 QoQ YoY Forestry + Solid Wood Prod. (1) 778 748 797 7% 2% Market Pulp(2) 713 925 868

• 6%

22% Packaging(2) 183 220 204

• 7%

12% Tissue Papers(2) 167 176 172

• 2%

3% Sanitary Products(3) 1,265 1,423 1,432 1% 13%

182 193 197

4Q17 3Q18 4Q18

Other er Op. . Exp (USD D Million)

876 923 938

4Q17 3Q18 4Q18

COGS (USD D Million)

+2% +9%

5

+7% +2%

COGS and Other Operating Expenses

COG COGS Up 2% QoQ:

• (+) Higher operating costs in Pulp and

Softys Up 7% YoY:

• (+) Higher sales volumes, especially Pulp
• (+) Higher pulp prices in Softys and

Papers Ot Other er Op Oper erational l Expe Expenses Up 2% QoQ:

• (+) Higher SG&A in all business divisions

Up 9% YoY:

• (+) Higher distribution costs
• (-) Depreciation of local currencies

212 470 369 4Q17 3Q18 4Q18

EBITDA*

4Q17 3Q18 4Q18

Sales*

Pulp Forestry

639 886 807

• Rev

evenu nues: : -9% QoQ, +26% YoY

• Fore
• restr

try Sale les Vol

• lumes: +7% QoQ, +20% YoY
• Fore
• restr

try Pr Prices: stable QoQ, +10% YoY

• Pulp

Pulp Pro Produ duction: -3% QoQ, +19% YoY

• Planned maintenance downtime at Guaíba I and Laja
• Pulp

Pulp Sale les Vol

• lumes:
• QoQ (-6%)
• 11% BSKP: Lower exports to China
• 4% BEKP: Lower exports to China and Europe
• YoY (+22%)
• 16% BSKP: Lower exports to Europe and Asia
• +34% BEKP: Higher production at Guaíba II, lead to higher

sales to all markets

• Pulp

Pulp Pri Prices: BSKP US$806/ton, BEKP US$726/ton

• EB

EBITDA:

• - QoQ (-21%)
• Lower sales volumes and prices of both fibers
• Higher operating costs due to scheduled maintenance and

forest protection

• - YoY (+74%)
• Higher pulp prices and volumes
• Higher prices and sales volumes of forestry products
• 9%

6

• 21%

Pulp Business

+26% +74% Third Party Sales Volumes

4Q17 3Q18 4Q18 QoQ YoY

• Pulpwood

27 21 16

• 24%
• 42%
• Sawing Logs

367 363 350

• 3%
• 4%
• Sawn Wood

169 178 219 23% 30%

• Remanufactured Wood

35 43 45 3% 27%

• Plywood

87 112 112 0% 29%

• Others

93 31 55 76%

• 41%

Total ( t h. m3) 778 778 748 748 797 797 7% 7% 2% 2% BSKP 175 164 147

• 11%
• 16%

BEKP 538 761 721

• 5%

34% Total Market Pulp ( Th. Tons) 713 713 925 925 868 868

• 6%

22% 22% P&W Guaiba (Th. Tons) 8 10 8

• 22%
• 4%

38 29 25 4Q17 3Q18 4Q18

EBITDA* 480 500 509 4Q17 3Q18 4Q18

Sales* +2%

• Rev

evenu nues: +2% QoQ, +6% YoY

• Vol
• lumes:
• - Tissue Paper
• 2% QoQ, lower volumes in all countries, except Mexico
• +3% YoY, increases in Chile, Mexico and Peru, offset by

decrease in Argentina

• - Sanitary Products:
• +1% QoQ, supported by higher baby diaper volumes in

Brazil, Mexico and Argentina partly offset by lower feminine care products in Argentina and Brazil

• +13% YoY, driven by higher diaper volumes in Brazil, Peru,

Argentina and Colombia

• Pri

Prices (in USD):

• +2% QoQ for Tissue Paper
• +7% QoQ for Sanitary Products
• EB

EBITDA:

• - QoQ (-14%)
• Higher operating costs in Mexico
• Higher SG&A expenses in Chile and Brazil
• - YoY (-34%)
• Negative effect of hyperinflation in Argentina
• Negative effect of currency depreciation
• Higher direct costs of fiber
• 14%

Third Party Sales Volumes

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Softys Business

+6%

• 35%

Third Party Sales Volumes

4Q17 3Q18 4Q18 QoQ YoY

• Chile

38 40 40 0% 7%

• Brazil

35 35 34

• 1%
• 2%
• Mexico

32 35 35 1% 9%

• Argentina

24 24 23

• 6%
• 7%
• Peru

22 25 25

• 2%

9%

• Uruguay

5 5 5

• 5%
• 4%
• Colombia

6 7 7

• 7%

2%

• Ecuador

4 4 4

• 13%

0% Total Tissue Paper ( Th. Tons) 167 167 176 176 172 172

• 2%

3% 3%

• Diapers

769 839 862 3% 12%

• Feminine Care

320 318 322 1% 1%

• Others

176 266 248

• 7%

41% Total Sanitary ( M . Unit s) 1,265 1,423 1,432 1% 1% 13% 13%

12 23 11 4Q17 3Q18 4Q18

EBITDA * 193 237 222 4Q17 3Q18 4Q18 Sales*

• Rev

evenu nues: -6% QoQ, +15% YoY

• Vol
• lumes:
• - QoQ (-3% )
• Lower volumes of all products except seasonally higher

volumes in corrugated boxes

• - YoY (+12% )
• Higher volumes of boxboard
• Pri

Prices: stable QoQ, +3% YoY

• EB

EBITDA :

• - QoQ (-54% )
• Lower revenues from boxboard sales
• Higher corrugated boxes due seasonal sales
• - YoY (-11% )
• Higher fiber costs

+15%

• 11%
• 54%

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Third Party Sales Volumes

• 6%

Packaging Business

Third Party Sales Volumes

4Q17 3Q18 4Q18 QoQ YoY

• Boxboard

61 109 96

• 12%

58%

• Paper Bags

22 24 22

• 7%
• 1%
• Other Papers

24 24 22

• 9%
• 11%
• Corrugated Paper

33 27 23

• 15%
• 30%
• Corrugated Boxes

39 32 38 21%

• 3%
• Molded Pulp Trays

3 5 3

• 31%
• 6%

Total ( Th. Tons) 183 183 220 220 204 204

• 7%

12% 12%

• Bleached Kraft pulp demand declined 0.9% (-569,000 tons), year on year, the first full-year decline reported since the 2008

Great Recession:

• Softwood demand decreased by 3.2% (-833,000 tons)
• Hardwood demand increased by 0.4% (+124,000 tons)
• Eucalyptus demand rose by 2.7% (+636,000 tons)
• Chinese demand fell 2.7% (-530,000 tons), while North America decreased 4.6% (-366,000 tons). Western Europe increased

by 1.4% (+210,000 tons) and Eastern Europe rose 6.9% (+172,000 tons).

• Global market pulp producer stocks ended December 2018 at 38 days for softwood and 56 days for hardwood, compared to

28 days and 41 days, respectively, at the end of December 2017

BKP Demand Growth by Region 12 months 2018 vs 2017- th. Tons and % change

BKP Demand Growth by Grade 12 months 2018 vs 2017- th.Tons and % change

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Global Pulp Market

• 4.6%

• 2.5%
• 0.7%
• 600
• 500
• 400
• 300
• 200
• 100

• 1.9%
• 4.7%
• 5.7%

• 14.0%

• 400
• 200

• Free Cash Flo

low of US$219 million, down from US$324 million in 3Q18 (-32%) and up from US$28 million in 4Q17 (+670%)

• Cash position of US$968 million at the

end of 4Q18, up 5% QoQ and 16% YoY

• CAPEX of US$83 million during 4Q18,

mainly related to maintenance and the Zarate mill

• Net Debt

bt/EBI BITDA ratio in 4Q18 was 1.6x, down from 1.8x in 3Q18 and 3.0x in 4Q17, trending lower every quarter since 2Q17.

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Robust Financial Execution & Cash Generation

USD Million 4Q17 3Q18 4Q18 QoQ YoY EBITDA 254 254 508 508 403 403

• 21%

59% 59% (-) Capex (153) (99) (83)

• 16%
• 46%

(-) Dividends (0) (52) (0)

• 100%

30% (-) Net Financial Expenses (65) (37) (48) 30%

• 26%

(-) Income tax (14) (53) (79) 48% 452% (+/-) Working Capital Variation 7 58 26

• 55%

253% Free Cash Flow 28 28 324 324 219 219

• 32%

670% 670% 3,4x 3,1x 3,0x 2,5x 2,2x 1,8x 1,6x 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18

Net Debt/EBITDA

Internal Policy

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Large-scale Latin American producer of Pulp, Tissue, Wood & Paper products, serving global and local markets Efficient operations to leverage competitive advantages Softys remains a key driver for the next growth cycles Well positioned for value creation: lean capital structure to quickly adapt to future market opportunities Capital discipline and diversification, focusing on strategic execution

2019 Strategic Outlook

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

Q&A