EMP EMPRESAS RESAS CM CMPC PC FIRST QUARTER 2014 RESULTS May 8 th 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 QoQ oQ increa rease in in EBI EBITDA of of the the EBIT EBITDA marg margin re reac ached ed 21 21%, 1 an and 3 pe percen entag tage poi points higher er tha that Pulp and Pa Paper busines esse ses thos ose of of 1Q13 13 and 4Q13 13, respectively 21% 21% 20% 20% +7% +7% +1% +1% 18% 18% 1Q13 4Q13 1Q14 End End of of en energy ergy contr tract acts in in Guaíba Pro roject: t: Ne Net Deb ebt / EBIT EBITDA Chile Ch le: CMPC is investing in • On schedule, on budget rati ratio of of 2.9x, x, down order to be energy self • More than 3,000 workers on site from 3.4x in 1Q13 • Structure of recovery boiler complete sufficient in Chile by mid and up from 2.8x 2015 in 4Q13 Guaíba Pro roject Financing Plan • Capital Increase (2Q13): ~US$500 million • Debt issuance (2Q13) in USA: US$500 million • Sale of BICECORP (4Q13): ~US$108 million Fir irst st Inve vestor Day: • BNDES Credit: BRL$ 2,510 million Talagante Mill and pulp, tissue presentations • ECA Financing: US$340 million • Capital increase se approve roved in in April fo for US US$250 250 million on 3
1Q FINANCIAL AND OPERATIONAL HIGHLIGHTS Revenue ue: 6% QoQ lower driven mostly by decreases 1Q13 4Q13 1Q14 QoQ YoY In US$ Milllion in volumes in all business areas and lower prices in Revenues 1,194 1,259 1,179 -6% -1% the Forestry, Pulp and Tissue divisions. Revenues COGS (820) (826) (769) -7% -6% were 1% lower compared to 1Q13. Other Operational Expenses (162) (179) (160) -11% -1% EBITDA 212 212 254 254 250 250 -2% 18% 18% EBITD TDA of US$250 million, down 2% when EBITDA margin % 18% 20% 21% 1% 3% compared to 4Q13 and up 18% compared to 4Q13. Operational Result 113 142 144 2% 28% Non Operational Result (28) (104) (98) -6% 247% Net Inco Ne ncome me of US$46 million, 24% higher Net Income 84 84 37 37 46 46 24% 24% -45% compared to 4Q13 and 45% lower compared to 1Q13. Volumes 1Q13 4Q13 1Q14 QoQ YoY Operat ational onal and Financial al Highlights Forestry + Solid Wood Prod. (1) 912 1,035 895 -14% -2% • QoQ decrease in COGS Market Pulp (2) 480 576 542 -6% 13% • QoQ decrease in SG&A Papers (2) 260 244 243 -1% -7% • US$250 million capital increase approved Tissue Papers (2) 135 144 142 -2% 5% by Shareholders 3 (1) Th. m (2) Th. tons 4
COSTS AND OTHER OPERATIONAL EXPENSES ANALYSIS COGS S (US$ Million) COGS decreased 6% and 7% when compared to 4Q13 and 1Q13, respectively. 826 820 769 -7% Decrease in volumes Lower costs in the Pulp division, specially those of -6% pulpwood Positive effect of local currencies depreciation COGS in 1Q14 were 65% of total revenues, compared with 66% in 4Q13 and 69% in 1Q13. 1Q13 4Q13 1Q14 Other er Op. Exp. (US$ Million) Other Operational Expenses decreased 1% and 11% when 179 162 compared to 4Q13 and 1Q13, respectively. 160 Decrease in revenues -1% Lower distribution costs of the Pulp and Paper divisions Lower administrative expenses in all business -11% divisions except from Forestry Other operating expenses in 4Q13 were 14% of revenues. This 1Q13 4Q13 1Q14 percentage is stable when compared QoQ and YoY. 5
FORESTRY Sales * Revenues enues: 147 ∆ -18% QoQ / ∆ -7% YoY 129 120 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 1Q13 4Q13 1Q14 containers for exports EBITDA * - ∆ -7% QoQ of plywood 38 Prices ces: 26 25 ∆ -3% QoQ mainly affected by lower wood chip sales EBITDA DA: ∆ -33% QoQ 1T13 4T13 1T14 - Lower volumes and sales * Figures in US$ million - Higher seasonal expenses 3 ) Volumes (Th. m 1Q13 4Q13 1Q14 ∆+ 4% YoY 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 6 Total 973 1,103 895
PULP Sales * Revenues enues: ∆ -10% QoQ / ∆+ 7% YoY 392 355 331 Volumes mes: ∆ -6% QoQ - ∆ -8% BEKP volumes reduced availability of containers - ∆ -10% BSKP volumes reduced availability of containers and the maintenance 1Q13 4Q13 1Q14 undertaken at the Pacífico Mill EBITDA * Prices ces (including a small tonnage of P&W papers and energy sold to the SIC grid): 142 128 ∆ -1% QoQ 88 Average effective net export price was CIF 731 US$/ton for softwood and CIF 616 US$/ton for hardwood. EBITDA DA: 1T13 4T13 1T14 ∆+ 11% QoQ * Figures in US$ million - Lower wood costs - Higher EBITDA contribution from the Energy Business Volumes (th. Tons) 1Q13 4Q13 1Q14 ∆+ 61% YoY BSKP 121 171 154 - Better operational rates BEKP 347 392 375 Other 12 13 12 Total Market Pulp 480 576 542 7
PAPERS Sales * Revenues enues: 284 265 256 ∆+ 3% QoQ / ∆ -7% YoY Volumes mes: ∆+ 4% QoQ: - ∆+ 120% of molded pulp trays & ∆+ 30% of corrugated boxes: due to seasonality of the 1Q13 4Q13 1Q14 fruit season EBITDA * - ∆ -17% QoQ of corrugated paper: affected by lower domestic sales 46 45 45 - ∆ -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 1Q13 4Q13 1Q14 * Figures in US$ million EBITDA DA: Volumes (th. Tons) 1Q13 4Q13 1Q14 ∆+ 1% QoQ Boxboard 88 100 98 - Higher sales, which offset higher electricity costs in Chile Newsprint 16 10 - ∆ -1% YoY 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 8 Total 260 244 243
TISSUE Sales * Revenues enues: 464 449 439 ∆ -5% QoQ / ∆ -2% YoY Volumes mes: Tissue Paper ∆ -2% QoQ and ∆+ 5% YoY: Sanitary Products ∆+ 2% and ∆+ 37% YoY 1Q13 4Q13 1Q14 EBITDA * Prices ces (meas asured in in US US$) 55 Stable QoQ for tissue paper and ∆ -3% QoQ for sanitary products, both affected by the US 48 41 Dollar appreciation EBITDA DA: ∆ -14% QoQ 1Q13 4Q13 1Q14 - Lower sales * Figures in US$ million - Higher electricity costs in Chile Tissue Pa Paper r Sales Volumes by ∆ -24% YoY Country ry 3% 3% 3% Chile 24% Brazil 13% Argentina Mexico 142 142 Peru 15% th. Tons Uruguay Colombia Ecuador 21% 18% 9
DEBT ANALYSIS 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$110 million aprox. in long term amortizations Financial Ratios Net Debt/EBITDA ratio of 2.9x, up from 2.8x in 4Q13 and down from 3.4x in 1Q13 Financial Debt/Net Tangible Worth ratio of 0.46x, from 0.46x in 4Q13 and 0.48x in 1Q13 Interest Coverage ratio of 5.8x, from 5.7x in 4Q13 and 5.2x in 1Q13 Debt by Is Issuer Debt by Curre rrency cy Debt by Intere rest Rate Debt by Type 7% 9% 9% 10% 28% 10% 72% 81% 83% 91% Banks Bonds Inversiones CMPC Tissue Pulp US$ CLP Other Fixed Rate Floating Rate 10
MARKET PULP COMMENT Global demand for pulp decreased 0.8% in 1Q14 from 1Q13 Market Pulp demand (1Q14 vs. 1Q13) (-0.1 million tons). 3.3% – Chinese demand grew 2.4% (90 Th. tons) 2.4% 2.1% – 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 -0.8% Global BSKP pulp inventories rose 4 days from the end of -2.1% -2.9% 2013. -3.9% More aggressive commercial policy of BHKP producers resulted in lower prices. CMPC’s price differential for BSKP World North Western Latin Japan China Other America Europe America Asia/Africa and BHKP reached US$115 0.7% 2.4% 1.4% Pulp inventory days -1.0% 37 34 34 34 33 -10.0% -27.0% Northern Southern Radiata Northern Southern Eucalyptus Softwood Softwood Softwood Hardwood Hardwood 1Q13 2Q13 3Q13 4Q13 1Q14 Source: PPPC Source: PPPC, World Chemical Market Pulp Global 100 Report – March 2014 11
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