Corporate Presentation March 2018
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 the 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 (“ Gestión de Riesgos ”) . Forward-looking statements speak only as of the date they are delivered, CMPC undertake no obligation to publicly update or revise them considering developments which differ from those anticipated.
I. CMPC at a glance
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 Market capitalization of CMPC’s Figures US$9.7 billion +1 million as of February 28 th , 2018 Sales: $5,143 mm hectáreas of land EBITDA: $1,078 mm EBITDA Margin: 21% Shareholders’ Structure Net Debt: $3,198 mm Assets: $14,951 mm 33 Chilean Pension Funds productive Figures for the LTM as of December, 2017 (US$ million) 10% mills International corporate rating Chilean and BBB (stable) - Fitch Foreign Matte Group Investors BBB- (negative) - S&P 56% 34% Baa3 (stable) - Moodys Local rating AA- (Fitch) AA (ICR) +25 product lines As of December 31 st , 2017. Source: CMPC 4
Successful growth 14,951 history over the past 5,143 decades 4,125 1,078 700 2017 686 1990 237 43 228 308 628 1,312 Tissue Pulp Revenues Capacity Capacity Plantations EBITDA Assets US$ million Th. hectares Th. tons US$ million Th. tons US$ million 5
II. CMPC’s Value Proposal 6 Source: CMPC, RISI 15-year Forecast (2016-2031) & PPPC- Dec 2016 I
CMPC’s Value Proposal 2. Low cost 4. Prudent producer with world- financial class assets management 1. Industry 5. leader and well 3. Investments Commitment diversified in high growth to sustainable P&P producer potential development businesses 7
Large-scale vertically-integrated producer of 1 multiple products % of consolidated Main Figures % of total sales Total capacity & Employees EBITDA Forests 686 Th. has. planted 67% 47% Pulp division 15.9 mm m3 harvested Sales: $2,676 mm Sales 3 rd parties: $2,406 mm Capacity EBITDA: $798 mm 1.6 million m3/y solid wood EBITDA margin: 30% 4.1 million tons/y pulp capacity Employees 5,081 employees Tissue division Capacity Sales:$1,924 mm 700 Th. tons/y Sales 3 rd parties: $1,923 mm Employees EBITDA: $215 mm 8,276 employees EBITDA margin: 11% 19% 37% Capacity 430mm tons/y boxboard Paper division Sales: $843 mm 270mm tons/y containerboard Sales 3 rd parties: $814 mm 220mm tons/y corrugated boxes 16% EBITDA: $86 mm 730mm units/y multiwall bags EBITDA margin: 10% 370mm units/y molded fiber trays Employees 10% 3,430 employees Total: $5,143 $1,078 8 Source: CMPC. Figures in US$ million for the LTM as of December, 2017 / Figures do not include Holding and Intercompany Sales.
1 Geographic & product diversity provides flexibility & cash flow stability 9 Source: CMPC. Figures in US$ million for the LTM as of Diciembre, 2017 / Figures do not include Holding and Intercompany Sales.
Pulp production in low-cost, 2 high-yield geographies Radiata Pine Eucalyptus CMPC has a high quality Average softwood growth rate Average hardwood growth rate (m 3 ssc/ha/year) (m 3 ssc/ha/year) and sustainable forestry 43 43 43 43 base with fast growth cycles which optimizes capital 23 23 19 19 20 20 invested in land, reduces 11 11 11 11 average distance to mills 5 4 2 and increases gains due to Mangium E. Nitens Chile Russia Scandinavia Canada USA Chile E. Globulus E. Globulus Eucalyptus Acacia genetic and sylvicultural Iberian Brazil Chile practices Laja ja 93 Km. m. 80 Km. m. (by train) in) 93 Km. m. Pacíf ífico ico 163 Km. (by y train) Santa ta Fe 119 Km. m. 99 Km. m. (by y train) 208 Km. Guaíb íba 260 0 Km. (by y barge rges) s) 10 Source: CMPC
Pulp production in low-cost, 2 high-yield geographies BSKP CASH COST US$/ton cif China BHKP CASH COST US$/ton cif China 700 700 600 600 500 500 400 400 300 300 CMPC’s pulp facilities 200 200 CMPC’s pulp facilities 100 100 0 0 0 5,000 10,000 15,000 20,000 25,000 30,000 0 5,000 10,000 15,000 20,000 25,000 Th. metrics Tons Th. metrics Tons 11 Source: CMPC and Hawkins Wright as of December 2017
2 CMPC’s Tissue paper mar marke ket sh shar are 9% 6% Colombia CMPC’s baby diaper 9% 4% mar marke ket sh shar are Mexico Unique region-wide tissue operation 12% 23% Ecuador More than 40 years of expertise in the LatAm consumer 11% 3% business Brazil 57% 24% Top 5 tissue and sanitary products producer in every Peru major Latin American market Range of brands & products to take advantage of economic cycles Focused on growth in key markets and underpenetrated sanitary product markets 31% 70% Steady expanding capacity, combination of organic & 70% Chile 83% inorganic growth Uruguay 44% 24% Argentina 12 Source: CMPC
Operational productivity and efficiency 2 programs in all segments of CMPC Renegotiation Productivity Working optimization of electric capital program contracts reduction Renegotiation Sale of real- of logistic estate land contracts 13
Global paper demand 3 evolution 450 409 09 411 11 412 12 406 06 395 95 402 02 400 00 392 92 395 95 400 384 84 371 71 369 69 363 63 94 91 92 88 87 85 343 43 82 81 84 350 79 333 33 329 29 77 322 22 76 75 72 300 33 34 35 36 27 30 32 70 28 29 69 26 68 25 28 24 23 250 23 21 22 129 123 131 139 143 146 117 150 112 153 157 159 200 129 105 96 102 96 Million tons 150 100 117 119 112 113 116 104 105 99 102 110 110 105 108 107 105 102 100 50 39 37 37 39 38 39 38 37 37 32 32 31 30 28 26 24 23 - 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Newsprint Printing & Writing Containerboard Tissue Other Paper and Board 14 Source: CMPC and RISI
Dynamics of the 3 pulp market VIRGIN FIBER MARKET PULP FIBER WORLD CONSUMPTION used to produce Paper&Board consumed to manufacture required to produce 411 million tons of (M tons) Paper&Board (M tons) Paper&Board UKP Mec Sulphite 2 5 Virgin Recover Paper Integrated Market Pulp 244 million tons 117 Pulp 181 million million tons (57%) 64 million BHKP BSKP tons (65%) 32 tons 25 (43%) (35%) 425 million tons 64 million tons 32 million tons of total fibers of market pulp of BHKP 15 Source: CMPC, Hawkins Wright and RISI
Tissue Paper Demand Dynamics 3 Per capita annual consumption of tissue paper (in kilograms) DEMAND DRIVERS (Countries in green are CMPC operation countries) 25 USA Population Growth & Urbanization Canada Hong Kong Economic Growth 20 Sweden Austria Tissue Paper App.Consumption (k/hab) Increase in AfH and Germany Switzerland Denmark Finland non-higienic paper UK Ireland Israel New Zealand categories Netherlands 15 Australia Spain Product Quality Portugal Italy France Chile Costa Rica Hungary Increase in Market Croatia Share & Product 10 Taiwan Consumption Mexico Argentina Peru China Brazil Malaysia 5 Venezuela Ecuado dor Russia Colombi bia Thailand Vietnam Indonesia Philippines India 0 0 5 10 15 20 25 30 35 40 45 50 GDP per capita in US$’000 16 Source: CMPC as of December 2015
Packaging Paper 3 Demand Dynamics Macroeconomics & Demographic - Population growth - Urbanization - Rising disposable income E-commerce Sustainability - Circular economy - New packaging materials - Packaging redesign Digitalization - Intelligent packaging - Technology integration 17
Strong balance sheet & conservative debt profile 4 Debt breakdown Debt by currency Debt by interest rate Debt by type Variable Other ECA Rate Banks BRL CLP 4% Total debt: $4,031mm 7% 2% 7% 4% 3% BNDES Net debt: $3,198mm 12% Fixed Bonds USD Rate 74% 89% 98% Amortization schedule Bonds Banks Interests 34 269 1,280 205 993 499 224 149 197 149 - - - 2018 2019 2020 2021 2022/2023 2024/2030 2031/2040 18 Note: Figures in US$ million as of December 2017
Stable credit metrics and prudent financial 4 policies Interest coverage ratio Net Debt to EBITDA 5.66x 4.0x 6.30x 5.19x 5.00x 4.41x 4.89x 4.66x 5.30x 4.63x 3.5x 4.30x 3.7x 3.8x 3.4x 3.0x 3.30x 3.2x 3.4x 3.1x 3.0x 2.30x 2.5x 1.30x 2.0x 0.30x 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Cash / (18M Net Financial Interest + Amortizations) Financial Debt to Equity 1.23x 0.90x 1.30x 1.08x 0.80x 1.01x 1.10x 0.70x 0.59x 0.90x 0.57x 0.73x 0.54x 0.60x 0.53x 0.53x 0.53x 0.51x 0.70x 0.59x 0.50x 0.54x 0.53x 0.40x 0.50x 0.30x 0.30x 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Covenant Financial Policy 19 Source: CMPC
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