Presentation March 2018 Forward-looking Statements This - - PowerPoint PPT Presentation

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

Matte Group 56% Chilean and Foreign Investors 34% Chilean Pension Funds 10%

4

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

International corporate rating BBB (stable) - Fitch BBB- (negative) - S&P Baa3 (stable) - Moodys Local rating AA- (Fitch) AA (ICR)

CMPC’s Figures

Sales: $5,143 mm EBITDA: $1,078 mm EBITDA Margin: 21% Net Debt: $3,198 mm Assets: $14,951 mm

Shareholders’ Structure Market capitalization of

US$9.7 billion

as of February 28th, 2018

Figures for the LTM as of December, 2017 (US$ million) As of December 31st, 2017. Source: CMPC

+1 million hectáreas of land 33 productive mills +25 product lines

1,078

1990 2017

1,312 14,951 686 4,125 700 237 308 43 628

Assets

US$ million

Plantations

• Th. hectares

Pulp Capacity

• Th. tons

Tissue Capacity

• Th. tons

Revenues

US$ million

Successful growth history over the past decades

228

EBITDA

US$ million

5,143

5

Source: CMPC, RISI 15-year Forecast (2016-2031) & PPPC- Dec 2016 I

6

• II. CMPC’s

Value Proposal

CMPC’s Value Proposal

• 1. Industry

leader and well

diversified

P&P producer

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• 2. Low cost

producer with world- class assets

• 4. Prudent

financial management

5.

Commitment to sustainable development

• 3. Investments

in high growth

potential

businesses

8

Large-scale vertically-integrated producer of multiple products

Main Figures % of total sales % of consolidated EBITDA Total capacity & Employees Pulp division Sales: $2,676 mm Sales 3rd parties: $2,406 mm EBITDA: $798 mm EBITDA margin: 30% Forests 686 Th. has. planted 15.9 mm m3 harvested Capacity 1.6 million m3/y solid wood 4.1 million tons/y pulp capacity Employees 5,081 employees Paper division Sales: $843 mm Sales 3rd parties: $814 mm EBITDA: $86 mm EBITDA margin: 10% Capacity 430mm tons/y boxboard 270mm tons/y containerboard 220mm tons/y corrugated boxes 730mm units/y multiwall bags 370mm units/y molded fiber trays Employees 3,430 employees Tissue division Sales:$1,924 mm Sales 3rd parties: $1,923 mm EBITDA: $215 mm EBITDA margin: 11% Capacity 700 Th. tons/y Employees 8,276 employees $5,143 $1,078 Total:

Source: CMPC. Figures in US$ million for the LTM as of December, 2017 / Figures do not include Holding and Intercompany Sales.

1

47% 67% 37% 19% 16% 10%

9

Geographic & product diversity provides flexibility & cash flow stability

Source: CMPC. Figures in US$ million for the LTM as of Diciembre, 2017 / Figures do not include Holding and Intercompany Sales.

1

10

Pulp production in low-cost, high-yield geographies

2

Source: CMPC

Radiata Pine

Average softwood growth rate (m3ssc/ha/year)

Eucalyptus

Average hardwood growth rate (m3ssc/ha/year)

CMPC has a high quality and sustainable forestry base with fast growth cycles which optimizes capital invested in land, reduces average distance to mills and increases gains due to genetic and sylvicultural practices

163 Km. 93 Km. m. 119 Km. m. 208 Km. 80 Km. m. 93 Km. m. 99 Km. m. 260 0 Km.

(by train) in)

(by y train) (by y train) (by y barge rges) s)

Laja ja Guaíb íba Pacíf ífico ico Santa ta Fe

11 11 20 20 23 23 43 43 43 43

• E. Globulus

Iberian

• E. Globulus

Chile Acacia Mangium Eucalyptus Brazil

• E. Nitens Chile

2 4 5 11 11 19 19

Russia Scandinavia Canada USA Chile

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

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Pulp production in low-cost, high-yield geographies

2 BSKP CASH COST US$/ton cif China

• Th. metrics Tons

CMPC’s pulp facilities

BHKP CASH COST

US$/ton cif China

• Th. metrics Tons

CMPC’s pulp facilities Source: CMPC and Hawkins Wright as of December 2017

Unique region-wide tissue operation

• More than 40 years of expertise in the LatAm consumer

business

• Top 5 tissue and sanitary products producer in every

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

• Steady expanding capacity, combination of organic &

inorganic growth

Chile Brazil Colombia Mexico

44% 83% 9% 9% 57% 11% 23%

Peru Ecuador Argentina Uruguay

70%

CMPC’s Tissue paper mar marke ket sh shar are 12

Source: CMPC

CMPC’s baby diaper mar marke ket sh shar are

4% 24% 70% 6% 24% 3% 12% 31%

2

Renegotiation

• f electric

contracts Renegotiation

• f logistic

contracts

Operational productivity and efficiency programs in all segments of CMPC

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Productivity

• ptimization

program Sale of real-

estate land Working capital

reduction

2

Global paper demand evolution

Source: CMPC and RISI

14

Million tons

3

39 37 37 37 39 38 39 38 37 32 32 31 30 28 26 24 23 104 99 102 105 112 113 117 119 116 105 110 110 108 107 105 102 100 96 96 102 105 112 117 123 129 131 129 139 143 146 150 153 157 159 21 22 23 23 24 25 26 27 28 28 29 30 32 33 34 35 36 69 68 70 72 75 76 79 82 81 77 84 85 87 88 91 92 94

• 50

100 150 200 250 300 350 400 450

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

329 29 322 22 333 33 343 43 363 63 369 69 384 84 395 95 392 92 371 71 395 95 400 00 402 02 406 06 409 09 411 11 412 12

BHKP 32 BSKP 25 Mec 5 UKP 2

425 million tons

• f total fibers

64 million tons

• f market pulp

32 million tons

• f BHKP

FIBER WORLD CONSUMPTION required to produce 411 million tons of Paper&Board VIRGIN FIBER used to produce Paper&Board (M tons) MARKET PULP consumed to manufacture Paper&Board (M tons)

Dynamics of the pulp market

Source: CMPC, Hawkins Wright and RISI

15 Recover Paper

244 million tons (57%)

Virgin Pulp

181 million tons (43%) Integrated 117 million tons (65%) Market Pulp 64 million tons (35%) Sulphite

3

16

Tissue Paper Demand Dynamics

India Philippines Indonesia Vietnam Thailand Russia Ecuado dor Colombi bia Malaysia China Peru Venezuela Brazil Argentina Mexico Taiwan Croatia Hungary Chile Costa Rica Italy France Portugal Spain Australia Netherlands New Zealand Israel Ireland UK Finland Denmark Switzerland Germany Austria Sweden Hong Kong Canada USA 5 10 15 20 25 5 10 15 20 25 30 35 40 45 50

Source: CMPC as of December 2015

Tissue Paper App.Consumption (k/hab) GDP per capita in US$’000

Per capita annual consumption of tissue paper (in kilograms)

(Countries in green are CMPC operation countries)

DEMAND DRIVERS

• Population Growth

& Urbanization

• Economic Growth
• Increase in AfH and

non-higienic paper categories

• Product Quality
• Increase in Market

Share & Product Consumption

3

17

Packaging Paper Demand Dynamics

3

Macroeconomics & Demographic

• Population growth
• Urbanization
• Rising disposable income

E-commerce Sustainability

• Circular economy
• New packaging materials
• Packaging redesign

Digitalization

• Intelligent packaging
• Technology integration

Debt breakdown

18

Debt by currency Debt by interest rate Debt by type

Note: Figures in US$ million as of December 2017

Strong balance sheet & conservative debt profile

Amortization schedule

Total debt: $4,031mm Net debt: $3,198mm

4

Banks 7% Bonds 74% BNDES 12% ECA 7% Fixed Rate 98% Variable Rate 2% CLP 3% USD 89% BRL 4% Other 4%

• 499
• 993

1,280 197 224 205 149 149 269 34

2018 2019 2020 2021 2022/2023 2024/2030 2031/2040

Bonds Banks Interests

19

Source: CMPC

Interest coverage ratio Net Debt to EBITDA

Stable credit metrics and prudent financial policies

Cash / (18M Net Financial Interest + Amortizations) Financial Debt to Equity

Covenant Financial Policy

4

3.2x 3.4x 3.7x 3.8x 3.4x 3.1x 3.0x 2.0x 2.5x 3.0x 3.5x 4.0x 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 5.66x 5.19x 4.66x 4.41x 4.63x 4.89x 5.00x 0.30x 1.30x 2.30x 3.30x 4.30x 5.30x 6.30x 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 0.54x 0.53x 0.53x 0.53x 0.59x 0.57x 0.51x 0.30x 0.40x 0.50x 0.60x 0.70x 0.80x 0.90x 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1.01x 0.53x 0.54x 0.59x 1.08x 1.23x 0.73x 0.30x 0.50x 0.70x 0.90x 1.10x 1.30x 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17

20

Source: CMPC

Positive free cash flow driving deleverage

LTM Free Cash Flow Breakdown (Dec. 2017) Free Cash Flow Evolution

4

• 48

10 62 111 122 177

18

2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1,078

• 498
• 5
• 193
• 69

+116 429 EBITDA Capex Dividends Net Financial Expenses Income Tax Working Capital Variation Free Cash Flow

Commitment to Sustainable Development

Energy Efficiency Gold Seal granted by

the Energy Ministry of Chile and the Agency for Energy Efficiency

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Member of the

FTSE4Good

Index, for third consecutive year Member of the

DJSI Chile, for

third consecutive year Member of the new

DJSI Mila

First Chilean Company to issue a Green Bond

5

22

CMPC’s Corporate Governance

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.

Board of Directors

Directors Committee Audit Committee Financial Risk Committee Corporate Affairs Committee Ethics and Compliance Committee Chief Legal Officer Compliance Division Internal Audit

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

3 Directors, 3 Directors 3 Directors 2 Directors 2 Directors 9 members, 2 independent

5

Appendix: Business divisions

24

Pulp division

Chile Planted: 471,000 has. 64% Pine, 32% Eucalyptus Brazil Planted: 157,300 has. ~100% Eucalyptus Argentina Planted: 58,300 has. ~ 100% Pine

FORESTRY ASSETS* SOLID WOOD PRODUCTS* PULP*

Sawn Wood Capacity: 960,000 m3 Remanufactured Wood Capacity: 190,000 m3 Plywood Capacity: 480,000 m3 Chile BSKP - Laja Mill Capacity: 364,000 tons BSKP - Pacifico Mill Capacity: 500,000 tons BEKP - Santa Fe Mill Capacity: 1,496,000 tons Brazil BEKP - Guaíba Mill Capacity: 1,765,000 tons

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Forestry base: 1,150,000 has.

$2,406 $10.727 LTM Dec-17 ($US Million)

SALES EBITDA

$798

ASSETS

*As of December 2017

47% 67% 73%

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Consumer tissue products Sanitary products Away from home products Chile 159,000 tons Brazil 131,000 tons Argentina 99,000 tons Mexico 123,000 tons Peru 125,000 tons Uruguay 34,000 tons Colombia 28,000 tons

TISSUE PAPER PRODUCTION CAPACITY*

MAIN CATEGORIES

SANITARY PRODUCTS PRODUCTION CAPACITY*

Diapers: 3,970 M units Feminine Care: 1,386 M units

Tissue division

$1,923 $215 $2,365

SALES EBITDA ASSETS

LTM Dec-17 ($US Million)

*As of December 2017

37% 19% 17%

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BOXBOARD PAPER BAGS OTHER PAPERS CORRUGATED PAPER CORRUGATED BOXES MOLDED PULP TRAYS

429,000 tons Chile 106,500 tons 672 MM bags Chile: ~31% Peru: ~ 34% Mexico: ~ 25% Argentina: ~ 10% 80,000 tons Chile (Sackraft) 60,000 tons Brazil (Printing & Writing) 316,000 tons Chile 240,000 tons Chile 21,200 tons 380 MM units Chile

Paper division

PRODUCTION CAPACITY* $814 $86 $1,472

SALES EBITDA ASSETS

LTM Dec-17 ($US Million)

*As of December 2017

16% 10% 10%