[PPT] - Pulp and forest Presentation on Altri 2016 Altris overview PowerPoint Presentation

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Pulp and forest

Presentation on Altri

2016

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Altri’s overview Business development BHKP Market Appendix

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Forest management

82K ha rented in Portugal

– 20% self sufficiency rate – Mainly focused on eucalyptus globulus – Biological asset recorded@105M€ on BS

Strategic location

– High yield locations – 10/12 years growing age – 10 m3 per ha per year

Focus on R&D

– Over 40 years of experience – Genetic improvements obtained through traditional breeding

Forest certifications for the whole area under management

– FSC – PEFC

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2 types of pulp produced

BEKP

– Celbi and Celtejo – 924 K tonnes produced in 2015

Dissolving pulp

– Caima – 98 K tonnes produced in 2015

1022 thousand tones of pulp produced in 2015

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Altri sales: main markets

100% eucalyptus (hardwood) pulp production Main end uses

– Tissue (49%) – Printing and writing (22%) – Specialties (13%) – Dissolving pulp (9%)

94% of total production exported

– Paper pulp (BEKP): strategic focus on Europe

#1 market in demand
Lower freight cost

– Dissolving Pulp (DP): 100% exported to China

1011 thousand tonnes sold in 2015

– 923 thousand tones of BEKP – 88 thousand tones of DP

Breakdown 2015

Main markets

Paper Fabrics (rayon)

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Key financial indicators € million

Total revenues EBITDA EBIT Net profit

279 253 273 495 472 522 550 534 665 0,0 100,0 200,0 300,0 400,0 500,0 600,0 700,0 2007 2008 2009 2010 2011 2012 2013 2014 2015 58 40 13 109 61 94 89 65 168 0,0 20,0 40,0 60,0 80,0 100,0 120,0 140,0 160,0 180,0 2007 2008 2009 2010 2011 2012 2013 2014 2015 81 69 51 161 113 143 141 114 221 0,0 50,0 100,0 150,0 200,0 250,0 2007 2008 2009 2010 2011 2012 2013 2014 2015 21 5

11

62 23 52 55 37 118

20,0

0,0 20,0 40,0 60,0 80,0 100,0 120,0 140,0 2007 2008 2009 2010 2011 2012 2013 2014 2015

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Pulp production: evolution

From 115K ton in 2005 to 1 million in 2015

850 million Euros invested until 2010 Financing through financial debt

Acquisition

f Celtejo:

40 M€ Acquisition

f Celbi:

431 M€ Celbi’s expansion project: 365 M€

Thousand tones

115 255 576 511 655 787 847 910 973 991 1.022 200 400 600 800 1000 1200 2005 Caima 2006 + Celtejo 2007 + Celbi 2008 2009 2010 2011 2012 2013 2014 2015

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357 million Euros in Net Debt reduction over the last 7 years

Deleveraging trend

€ million

800,0 728,0 688,3 630,2 573,7 525,4 442,6

2009 2010 2011 2012 2013 2014 2015

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Free cash flow evolution

Avg 2010-15 free cash flow per tonne: 80 €/tonne

After investment phase, main focus on net debt reduction One of highest FCF per tonne of pulp worldwide

FCF/tonne

92 € 52€ 68€ 63€ 57€

€ million

72,0 39,7 58,1 56,5 48,3 82,8 4,1 4,1 5,1 8,6 67,7

72,0 43,8 62,2 61,6 56,9 150,5 2010 2011 2012 2013 2014 2015 Net debt reduction (M€) Dividends (M€) Free cash flow to equity (M€)

147€

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Altri’s overview Business development BHKP Market Appendix

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Altri: looking forward

Ramping up to produce1 million tons of BHKP Debottlenecking in Celbi

– 695 thousand tonnes produced in 2015 – 750 thousand tonnes by 2017/18

Celtejo

– 230 thousand tonnes produced in 2015 – Feasibility study underway to increase capacity to 250 thousand tonnes

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Dissolving wood pulp in Caima mill

– 97K tonnes of DP produced in 2015 – 105K tonnes of DP from 2016 onwards

Significant added value

– One of the lowest cost producers worldwide – Prime quality rayon grade producer – Ambition to produce higher value added products: specialty grades – Step by step approach

Altri: looking forward

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Altri: looking forward

Source: Hawkins Wright

Dissolving pulp project in Caima mill

Value added strategic objective

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Altri’s overview Business development BHKP Market Appendix

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Global BHKP pulp market

Global hardwood demand grew 4.6% (CAGR) between 1990 – 2015 European hardwood demand grew 2.6% (CAGR) between 1990 – 2015

– From 4,8 M tonnes in 1990 to 9,2 M tonnes in 2015 (+4,3 M tonnes) – Mkt share decreased from 50% in 1990 to 31% in 2015

Chinese demand grew 16.0% (CAGR) between 2000 – 2015

– From 1,1 M tonnes in 2000 to 9,2 M tonnes in 2015 (+8,0 M tonnes) – Mkt share grew from 7% in 2000 to 31% em 2015

Organic growth in Europe Strong exogenous growth driven by Chinese demand

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Global BHKP pulp market

Global BHKP incremental demand

1990-2015 (thousand tonnes)

Incremental yearly BHKP demand

1990-2015 (thousand tonnes)

“Linear” growth pattern
Strong adherence for a period
f over 25 years
All years recorded positive

growth rates

Between 1990 and 2015, on

absolute terms demand grew,

n average, 812 thousand

tonnes per year

Source: PPPC, Hawkins Wright and Altri

y = 820,01x + 8117,4 R² = 0,9916

5.000

10.000 15.000 20.000 25.000 30.000 35.000 40.000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

TOTAL Linear (TOTAL)

500

1.000 1.500 2.000 2.500 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

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Global BHKP pulp market

Global BHKP supply

2005-2015 (thousand tonnes)

Total supply LHS Incremental supply RHS

BHKP supply and demand

2005-2015 (incremental thousand tonnes)

From 2005-2015

– Supply increased, on average, around 1 million tonnes/year – Demand grew, on average, around 930 thousand tonnes/year

Source: PPPC, Hawkins Wright and Altri

1.500
1.000
500
500

1.000 1.500 2.000 2.500 3.000

5.000

10.000 15.000 20.000 25.000 30.000 35.000 20052006200720082009201020112012201320142015

1.500
1.000
500
500

1.000 1.500 2.000 2.500 3.000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Supply demand

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Incremental demand and supply vs average yearly price in Euros

Global BHKP pulp market

BHKP year avg Price (€) Supply/Demand (incremental yearly tonnes) Euro

Source: PPPC, FOEX, Hawkins Wright and Altri

100 200 300 400 500 600 700 800 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

PIX (EUR)

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Pulp price weekly evolution: 2003 to date USD & EUR

Global BHKP pulp market

Source: FOEX,

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Global BHKP pulp market

Additional tissue production: projects 2014-17E

Source: Hawkins Wright

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Altri’s overview Business development BHKP Market Appendix

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Business structure and shareholders

* Joint venture with EDP

Celbi Pulp mill EDP Bioeléctrica Biomass

50%* 100%

Celtejo Pulp mill Caima Pulp mill

Major shareholders

205.132 million shares Free float 34% Management 66%

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Biomass power production

50% joint venture with EDP

– 62 MW in operation – #1 biomass player in Portugal – Equity accounting

Tariff

– 106€/MWh updated yearly on recorded inflation – Feed in tariff granted for 25 years

Financial highlights 2015

– Turnover: 49,3 M€ – EBITDA: 17,2 M€ – EBITDA margin of 35% – Net profit of 5,7€ – Net debt: 63,4 M€

Celbi 27.9 MW

In operation

Caima 12.8 MW

In operation

Celtejo 12.8 MW

In operation

Mortágua 1 8.6 MW

In operation

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2015 P&L

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2015 BS

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2Q 2016 P&L

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2Q 2016 BS

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Disclaimer

All data contained in this presentation may contain confidential information, and it is exclusively intended for its addressees. Unauthorized copy, reproduction or distribution is strictly prohibited. This presentation is provided “as is” without any express or implied warranty. The information here in is provided for general purposes only and do not constitute professional advice. This presentation may contain forward-looking information and statements that can, ultimately, prove inaccurate, due to unexpected risks and uncertainties. All data referred in this document must be reported to the document’s date. Altri makes no guarantees of any kind regarding the accuracy of the information included in this presentation. The company will not be responsible for updating or correcting any of the information hereby contained in the future.