EMP EMPRESAS RESAS CM CMPC PC FIRST QUARTER 2014 RESULTS May 8 - - PowerPoint PPT Presentation

EMP EMPRESAS RESAS CM CMPC PC

FIRST QUARTER 2014 RESULTS

May 8th

th, 2014

14

FORWARD-LOOKING STATEMENTS

This presentation may contain forward-looking statements. Such statements are subject to risks and uncertainties that could cause CMPC’s actual results to differ materially from those set forth in the forward-looking statements. These risks include: market, financial and operational risks. All of them are described in CMPC’s Financial Statements, Note 3 (“Gestión de Riesgos”). In compliance with the applicable rules, Empresas CMPC S.A. publishes its financial results on its web site (www.cmpc.cl) and sends to the Superintendencia de Valores y Seguros the Financial Statements of the Company and its corresponding notes, which are available for consultation and review on its website (www.svs.cl).

HIGHLIGHTS OF 1Q14

3

EBIT EBITDA marg margin re reac ached ed 21 21%, 1 an and 3 pe percen entag tage poi points higher er tha that thos

• se of
• f 1Q13

13 and 4Q13 13, respectively QoQ

• Q increa

rease in in EBI EBITDA of

• f the

the Pulp and Pa Paper busines esse ses Fir irst st Inve vestor Day: Talagante Mill and pulp, tissue presentations

+7% +7%

Ne Net Deb ebt / EBIT EBITDA rati ratio of

• f 2.9x,

x, down from 3.4x in 1Q13 and up from 2.8x in 4Q13

Guaíba Pro roject: t:

• On schedule, on budget
• More than 3,000 workers on site
• Structure of recovery boiler complete

Guaíba Pro roject Financing Plan

• Capital Increase (2Q13): ~US$500 million 
• Debt issuance (2Q13) in USA: US$500 million 
• Sale of BICECORP (4Q13): ~US$108 million 
• BNDES Credit: BRL$ 2,510 million 
• ECA Financing: US$340 million 
• Capital increase

se approve roved in in April fo for US US$250 250 million

• n

18% 18% 20% 20% 21% 21%

1Q13 4Q13 1Q14

+1% +1%

End End of

• f en

energy ergy contr tract acts in in Ch Chile le: CMPC is investing in

• rder

to be energy self sufficient in Chile by mid 2015

1Q FINANCIAL AND OPERATIONAL HIGHLIGHTS

4

Revenue ue: 6% QoQ lower driven mostly by decreases in volumes in all business areas and lower prices in the Forestry, Pulp and Tissue divisions. Revenues were 1% lower compared to 1Q13. EBITD TDA of US$250 million, down 2% when compared to 4Q13 and up 18% compared to 4Q13. Ne Net Inco ncome me of US$46 million, 24% higher compared to 4Q13 and 45% lower compared to 1Q13. Operat ational

• nal and Financial

al Highlights

• QoQ decrease in COGS
• QoQ decrease in SG&A
• US$250 million capital increase approved

by Shareholders

In US$ Milllion

1Q13 4Q13 1Q14 QoQ YoY

Revenues 1,194 1,259 1,179

• 6%
• 1%

COGS (820) (826) (769)

• 7%
• 6%

Other Operational Expenses (162) (179) (160)

• 11%
• 1%

EBITDA 212 212 254 254 250 250

• 2%

18% 18% EBITDA margin % 18% 20% 21% 1% 3% Operational Result 113 142 144 2% 28% Non Operational Result (28) (104) (98)

• 6%

247% Net Income 84 84 37 37 46 46 24% 24%

• 45%

Volumes 1Q13 4Q13 1Q14 QoQ YoY

Forestry + Solid Wood Prod. (1) 912 1,035 895

• 14%
• 2%

Market Pulp(2) 480 576 542

• 6%

13% Papers(2) 260 244 243

• 1%
• 7%

Tissue Papers(2) 135 144 142

• 2%

5% (1) Th. m

3

(2) Th. tons

162 179 160 1Q13 4Q13 1Q14

Other er Op. Exp. (US$ Million)

820 826 769 1Q13 4Q13 1Q14

COGS S (US$ Million)

COSTS AND OTHER OPERATIONAL EXPENSES ANALYSIS

5

• 7%
• 6%

COGS decreased 6% and 7% when compared to 4Q13 and 1Q13, respectively.

• Decrease in volumes
• Lower costs in the Pulp division, specially those of

pulpwood

• Positive effect of local currencies depreciation

COGS in 1Q14 were 65% of total revenues, compared with 66% in 4Q13 and 69% in 1Q13.

• 1%
• 11%

Other Operational Expenses decreased 1% and 11% when compared to 4Q13 and 1Q13, respectively.

• Decrease in revenues
• Lower distribution costs of the Pulp and Paper

divisions

• Lower administrative expenses in all business

divisions except from Forestry Other operating expenses in 4Q13 were 14% of revenues. This percentage is stable when compared QoQ and YoY.

FORESTRY

6 Revenues enues: ∆-18% QoQ / ∆-7% YoY Volumes mes: ∆-19% QoQ:

• ∆-67% QoQ of pulpwood: lower chip sales in Chile and Argentina
• ∆-23% QoQ of sawn wood & ∆-17% remanufactured wood: reduced availability of

containers for exports

• ∆-7% QoQ of plywood

Prices ces: ∆-3% QoQ  mainly affected by lower wood chip sales EBITDA DA: ∆-33% QoQ

• Lower volumes and sales
• Higher seasonal expenses

∆+4% YoY

* Figures in US$ million

Volumes (Th. m

1Q13 4Q13 1Q14 Pulpwood 202 249 82 Sawing Logs 405 427 438 Sawn wood 187 230 177 Remanufactured wood 45 45 37 Plywood 52 54 50 Others 81 98 110 Total 973 1,103 895 129 147 120 1Q13 4Q13 1Q14

Sales*

25 38 26 1T13 4T13 1T14

EBITDA*

PULP

7 Revenues enues: ∆-10% QoQ / ∆+7% YoY Volumes mes: ∆-6% QoQ

• ∆-8% BEKP volumes  reduced availability of containers
• ∆-10% BSKP volumes  reduced availability of containers and the maintenance

undertaken at the Pacífico Mill Prices ces (including a small tonnage of P&W papers and energy sold to the SIC grid): ∆-1% QoQ Average effective net export price was CIF 731 US$/ton for softwood and CIF 616 US$/ton for hardwood. EBITDA DA: ∆+11% QoQ

• Lower wood costs
• Higher EBITDA contribution from the Energy Business

∆+61% YoY

• Better operational rates

* Figures in US$ million

331 392 355 1Q13 4Q13 1Q14

Sales*

88 128 142 1T13 4T13 1T14

EBITDA* Volumes (th. Tons) 1Q13 4Q13 1Q14 BSKP 121 171 154 BEKP 347 392 375 Other 12 13 12 Total Market Pulp 480 576 542

PAPERS

8 Revenues enues: ∆+3% QoQ / ∆-7% YoY Volumes mes: ∆+4% QoQ:

• ∆+120% of molded pulp trays & ∆+30% of corrugated boxes: due to seasonality of the

fruit season

• ∆-17% QoQ of corrugated paper: affected by lower domestic sales
• ∆-4% QoQ of paper bags: mainly due to lower local sales
• ∆-1% QoQ of boxboard

Prices ces: ∆+1% QoQ, mainly due to higher corrugated paper prices EBITDA DA: ∆+1% QoQ

• Higher sales, which offset higher electricity costs in Chile

∆-1% YoY

* Figures in US$ million

284 256 265 1Q13 4Q13 1Q14

Sales*

46 45 45 1Q13 4Q13 1Q14

EBITDA * Volumes (th. Tons) 1Q13 4Q13 1Q14 Boxboard 88 100 98 Newsprint 16 10 - Paper Bags 19 22 21 Other Papers 33 37 33 CMPC Packaging 104 76 91 Corrugated Paper 32 30 25 Corrugated Boxes 65 42 59 Molded Pulp Trays 7 3 7 Total 260 244 243

TISSUE

9 Revenues enues: ∆-5% QoQ / ∆-2% YoY Volumes mes: Tissue Paper ∆-2% QoQ and ∆+5% YoY: Sanitary Products ∆+2% and ∆+37% YoY Prices ces (meas asured in in US US$) Stable QoQ for tissue paper and ∆-3% QoQ for sanitary products, both affected by the US Dollar appreciation EBITDA DA:

∆-14% QoQ

• Lower sales
• Higher electricity costs in Chile

∆-24% YoY

* Figures in US$ million

449 464 439 1Q13 4Q13 1Q14

Sales*

55 48 41 1Q13 4Q13 1Q14

EBITDA*

24% 21% 18% 15% 13% 3% 3% 3%

Tissue Pa Paper r Sales Volumes by Country ry

Chile Brazil Argentina Mexico Peru Uruguay Colombia Ecuador

142 142

• th. Tons

DEBT ANALYSIS

10

Cash of US$887 million in 1Q14, down 4% and 19% from 4Q13 and 1Q13, respectively. Sources of liquidity: US$135 million obtained from ECA financing + US$60 million aprox. from BNDES Uses of liquidity: US$317 million in CAPEX + US$110 million aprox. in long term amortizations Financial Ratios Net Debt/EBITDA ratio of 2.9x, up from 2.8x in 4Q13 and down from 3.4x in 1Q13 Financial Debt/Net Tangible Worth ratio of 0.46x, from 0.46x in 4Q13 and 0.48x in 1Q13 Interest Coverage ratio of 5.8x, from 5.7x in 4Q13 and 5.2x in 1Q13

83% 10% 7%

Debt by Is Issuer

Inversiones CMPC Tissue Pulp 81% 10% 9%

Debt by Curre rrency cy

US$ CLP Other 91% 9%

Debt by Intere rest Rate

Fixed Rate Floating Rate 28% 72%

Debt by Type

Banks Bonds

MARKET PULP COMMENT

11

Global demand for pulp decreased 0.8% in 1Q14 from 1Q13 (-0.1 million tons). – Chinese demand grew 2.4% (90 Th. tons) – European demand fell 140 Th. Tons; US demand fell 40 Th. tons – Softwood demand grew 0.1% compared to 1Q13 – Hardwood demand fell 1.3% compared to 1Q13 Global BSKP pulp inventories rose 4 days from the end of 2013. More aggressive commercial policy of BHKP producers resulted in lower prices. CMPC’s price differential for BSKP and BHKP reached US$115

Source: PPPC, World Chemical Market Pulp Global 100 Report – March 2014

Pulp inventory days

Source: PPPC

Market Pulp demand (1Q14 vs. 1Q13)

34 34 34 33 37

1Q13 2Q13 3Q13 4Q13 1Q14

• 0.8%
• 2.1%
• 3.9%

2.1% 3.3% 2.4%

• 2.9%

World North America Western Europe Latin America Japan China Other Asia/Africa

• 1.0%

0.7% 2.4%

• 10.0%
• 27.0%

1.4% Northern Softwood Southern Softwood Radiata Softwood Northern Hardwood Southern Hardwood Eucalyptus

2014: FOUR STRATEGIC FOCUSES

12

Suc Succes cessf sful ully execut cute our investme estment nt pro rogram am Cost contro rol and enhancing effic ficiency ency Maintain a balanc anced ed capital tal struc tructure ture Con

• nsoli
• lidat

date CMPC’s Cul Culture ture among all business divisions and countries All the above will be carried out in accordance with CMPC’s Sustai Sustainabili nability ty Principle ple

Q&A Q&A