Empresas CMPC S.A Company Overview Presentation Prepared for Santander s 10 th Annual Chile Conference

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1 Empresas CMPC S.A Company Overview Presentation Prepared for Santander s 10 th Annual Chile Conference

2 Agenda Overview 3 Business Divisions 7 Social Responsibility and Sustainability 19 Financial Review 21 Concluding Remarks 28 2

CMPC is an important player in the P&P industry CMPC is an integrated and

Income: MUS$ 54 Assets: MUS$ 10,105 Net Debt: MUS$ 1,433 Highest Credit

Market capitalization of US$ 5.3 billion as of August 31 st, 2009.

P&P Companies by Market Cap (US$ Billion) 8,0 6,5 CMPC s Shareholders

3 CMPC is an important player in the P&P industry CMPC is an integrated and well diversified producer of pulp, paper and other forest products in Latin America. Figures for the LTM as of June 2009: Sales: MUS$ 2,934 EBITDA: MUS$ 611 Net Income: MUS$ 54 Assets: MUS$ 10,105 Net Debt: MUS$ 1,433 Highest Credit Rating of the industry (A-) by S&P and Fitch Ratings. Market capitalization of US$ 5.3 billion as of August 31 st, Controlled by the Matte Family, one of Chile s leading economic groups. P&P Companies by Market Cap (US$ Billion) 8,0 6,5 CMPC s Shareholders Structure Local Investors 30.26% 5,3 4,2 Chilean Pension Funds 13.56% Foreign Investors 0.35% 1,6 SCA IP CMPC STORA ENSO ARACRUZ As of August 31 st, 2009 As of June 30 th, 2009 Matte Group 55.83% 3

Paper Products Tissue Paper Pulp Forestry Balanced growth

revenue mix * Figures in US$ million for the LTM as of

EBITDA* Total Capacity Sales: 519 Sales 3 rd parties: 321

parties: 722 EBITDA: 251 EBITDA margin: 27% 792 Th.

1 MM m 3 /y 2 MM tons/y Sales: 723 Sales 3 rd parties:

Sales: 1,017 Sales 3 rd parties: 1,005 EBITDA: 119 EBITDA

4 Paper Products Tissue Paper Pulp Forestry Balanced growth in all business segments provides CMPC a diversified revenue mix * Figures in US$ million for the LTM as of June 2009 Main Figures % of Total Sales* % of Total EBITDA* Total Capacity Sales: 519 Sales 3 rd parties: 321 EBITDA: 53 EBITDA margin: 10% Sales: 917 Sales 3 rd parties: 722 EBITDA: 251 EBITDA margin: 27% 792 Th. Ha (537 Th. Plant) 9.1 MM m 3 /y 2 MM tons/y Sales: 723 Sales 3 rd parties: 614 EBITDA: 152 EBITDA margin: 21% 1,010,000 tons/y Sales: 1,017 Sales 3 rd parties: 1,005 EBITDA: 119 EBITDA margin: 12% 420,000 tons/y Sales: 288 Sales 3 rd parties: 272 EBITDA: 36 EBITDA margin: 12% 252,000 tons/y 550MM units/y 4

5 Product and geographic diversification provides flexibility Third party sales in US$ million for the LTM as of June

6 Agenda Overview 3 Business Divisions 7 Social Responsibility and Sustainability 19 Financial Review 21 Concluding Remarks 28 6

the root of CMPC s competitive advantage

Argentina: 94,000 Has. 65,000 Planted Has.

Mulchén and Nacimiento Total capacity: 1.

7 Plywood Remanuf. wood Sawnwood Forestry Forestry Division: the root of CMPC s competitive advantage Chile: 698,000 Has. 472,000 Planted Has. Argentina: 94,000 Has. 65,000 Planted Has. Chile: 4 Sawmills: Bucalemu, Las Cañas, Mulchén and Nacimiento Total capacity: 1.4 MM m 3 /y Chile: 2 Remanufacturing plants: Coronel and Los Ángeles Total capacity: 216 Th. m 3 /y Chile: 1 Plywood mill: Mininco Total capacity: 250,000 m 3 /y 7

Forestry Division: the root of CMPC s competitive advantage Key drivers 100% planted and certified forests Genetic and silvicultural practices / forest management Harvesting (million m 3 ) 2.

8 Forestry Division: the root of CMPC s competitive advantage Key drivers 100% planted and certified forests Genetic and silvicultural practices / forest management Harvesting (million m 3 ) 2.02 X Faster growth cycle than northern hemisphere forests Proximity of forests to industrial facilities and ports Growing forestry base. What s ahead Acquisition of land, to increase the forestry base Harvesting and Plantations (Th. hectares) Automatization process in the Nacimiento, Bucalemu and Mulchén sawmills LTM New 120,000 m 3 /yr sawmill in Loncoche. Harvesting Plantations 8

9 (US$/Ton del N. Europe) (US$/Ton del N. Europe) Pulp Division: CMPC has one of the lowest cash costs of the pulp industry Key drivers First class assets Strategic locations (mills near to forests and ports) World s lowest cost producer of softwood Sales diversification ISO Certified. What s ahead Chile: rebuilding of Laja mill Environmental upgrades at the Pacífico and Santa Fe mills Future debottlenecking of Santa Fe s Line 2. BSKP Supply Curve (US$/ton) (Thousand metric tonnes) BEKP Supply Curve (US$/ton) (Thousand metric tonnes) 9

10 Softwood Hardwood Pulp Division: CMPC has one of the lowest cash costs of the pulp industry CMPC s average distance from to Chile 1 mill: Santa Fe (Eucalyptus) 80 Km. 93 Km. 99 Km. Laja Pacífico Santa Fe Total Capacity: 1.15 MM tons/y Chile 2 mills: Pacífico and Laja (Pine) 93 Km. 119 Km. 163 Km. Laja Santa Fe Pacífico Total Capacity : 850 M tons/y 10

11 Per Capita Consumption (kg/inhab.) Tissue Division: CMPC is a leading Latin American player Key drivers Largest tissue company in Latin America Strong branding Broad market segmentation Extensive distribution network High growth opportunities Flexible product mix. Tissue per Capita Consumption México Chile Spain Germany Japan 5 Brazil Argentina Uruguay Colombia 0 Perú 0,0 10,0 20,0 30,0 40,0 GNI p/c ppp (Th US$/inhab.) USA What s ahead Colombia: New Tissue Paper mill (27,000 tons/y), starting in 2010 Mexico: New Tissue Paper Machine (double width, 54,000 tons/y), starting in 2010 Integration of Melhoramentos Papeis to CMPC s network. Tissue Paper Capacity Evolution (Th. Tons) 11

Inst. Feminine Healthcare Adult Diapers Diapers Tissue paper

Colombia México Market Share: 5% Capacity: 37,000 tons/y

Share: 5% Brazil Market Share: 10% Capacity: 75,000 tons/y

Share: 70% Capacity: 37,000 tons/y Chile Market Share: 70%

12 Inst. Feminine Healthcare Adult Diapers Diapers Tissue paper Tissue Division: CMPC is a leading Latin American player Colombia México Market Share: 5% Capacity: 37,000 tons/y Ecuador* Market Share: 15% *Only Conversion Process Market Share: 5% Brazil Market Share: 10% Capacity: 75,000 tons/y Peru Market Share: 40% Capacity: 57,000 tons/y Uruguay Market Share: 70% Capacity: 37,000 tons/y Chile Market Share: 70% Capacity: 118,000 tons/y Argentina Market Share: 50% Capacity: 96,000 tons/y 12

13 Our Tissue products brands 13

14 EDIPAC Other Papers Newsprint Packaging Boxboard Paper Division: strategically focused on niche paper grades Chile: 2 mills: Maule and Valdivia Total Capacity: 430,000 tons/y Paper Sales Growth (Th. Tons) Chile: 1 mill: Puente Alto Total Capacity: 340,000 tons/y Chile: 1 mill: Inforsa (Nacimiento) Total Capacity: 200,000 tons/y Geographical Sales Breakdown (Th. Tons) Chile: 1 mill: Laja Total Capacity: 40,000 tons/y Chile: Most important paper distributor, with 52% of total market share 14

Paper Division: strategically focused on niche paper grades Key drivers Niche products Well integrated with the forest and pulp divisions State of art technology Low cost producer Extensive use of

15 Paper Division: strategically focused on niche paper grades Key drivers Niche products Well integrated with the forest and pulp divisions State of art technology Low cost producer Extensive use of recycled paper Strong distribution network and technical support Sales focused on developing countries, which presents a more stable demand. Newsprint World Demand 2008 vs What s ahead Business consolidation in the higher margin markets. 15

Molded Pulp Trays Paper Bags Corrugated Boxes Paper Products Division: Local

and Til Til Peru Total Capacity: 252,000 tons/y Chile Argentina Chile: 1

(Lima) Total Capacity: 550 MM Units/y Chile: 1 mill: Puente Alto = Paper Bags

16 Molded Pulp Trays Paper Bags Corrugated Boxes Paper Products Division: Local sales mainly oriented to export industries Chile: 3 mills: Buin, Quilicura and Til Til Peru Total Capacity: 252,000 tons/y Chile Argentina Chile: 1 mill: Propa (Chillán) Argentina 1 mill: FABI (Hinojo) Peru: 1 mill: FORSAC (Lima) Total Capacity: 550 MM Units/y Chile: 1 mill: Puente Alto = Paper Bags Mill = Corrugated Boxes Mill Total Capacity: 18,000 tons/y = Molded Pulp Trays Mill 16

process benefits from backward integration Although the lions share of all sales are local, CMPC is also expanding its exports.

17 Paper Products Division: Local sales mainly oriented to export industries Key drivers Market leader in corrugated boxes and multiwall bags markets in Chile Well diversified sales among different segments of the market in corrugated boxes Manufacturing process benefits from backward integration Although the lions share of all sales are local, CMPC is also expanding its exports. Corrugated Boxes Sales (Th. Tons) Multiwall Bags Sales (Th. Tons) What s ahead New 35,000 tons corrugating mill in the south of Chile. 17

18 Agenda Overview 3 Business Divisions 7 Social Responsibility and Sustainability 19 Financial Review 21 Concluding Remarks 28 18

Social Responsibility and Sustainability Social

and organizational models allowing effective linking to

CMPC and its Business Chain CMPC and its Workers CMPC and

Producing and selling quality products Strong

transparent financial reporting Safe working environment

agreements Comprehensive employee benefit policy Jorge

Fundación CMPC: improve language and math education in the

19 Social Responsibility and Sustainability Social responsibility is an integral part of the CMPC business and organizational models allowing effective linking to all stake holders. CMPC and its Business Chain CMPC and its Workers CMPC and the Community CMPC and the Environment CMPC s CSR Producing and selling quality products Strong relationships with suppliers and customers Sound and transparent financial reporting Safe working environment Strict compliance with labor regulations and union agreements Comprehensive employee benefit policy Jorge Alessandri Educational Park Good Neighborhood Plan Fundación CMPC: improve language and math education in the primary schools where CMPC has facilities Plantations Clean processes Replacement of fossil fuels with biomass Recollection and recycling of waste paper 19

20 Agenda Overview 3 Business Divisions 7 Social Responsibility and Sustainability 19 Financial Review 21 Concluding Remarks 28 20

21 Financial Summary Financial Summary (US$ million) 1Q08 2Q08 1Q09 2Q09 %QoQ %YoY Sales % -21% Operating Costs (535) (514) (490) (460) -6% -10% Other Operating Expenses (93) (108) (70) (101) 45% -6% EBITDA % -49% Depreciation and Stumpage (77) (80) (76) (79) 4% -2% Change in Net Value of Biological Asstes % -79% Operating Income % -71% Financial Costs (18) (21) (19) (22) 14% 2% Other Non Operational Items (6) (32) (8) (5) Net Income % -80% EBITDA Margin 26% 29% 20% 19% -1% -10% Total Assets ,108 10,105 0% - Total Liabilities - - 3,393 3,538 4% - Shareholder s Equity - - 6,715 6,567-2% - 21

*Figures as of 2003, 2004, 2005, 2006, 2007 and 2008 are under Chilean

22 CMPC follows a conservative financial policy Debt Evolution (US$ million) * Debt / Equity * Net Debt / EBITDA * EBITDA / Interest Expenses * *Figures as of 2003, 2004, 2005, 2006, 2007 and 2008 are under Chilean GAAPs. Figures for the LTM as of June 2009 are under the IFRS accounting standard. 22

23 CMPC has the highest credit rating in the industry globally International paper Country: S&P Rating: A - A - BBB+ BBB BBB BB BB EBITDA (US$ millions): , Net Debt (US$ millions): 1, ,549 2,561 9,263 4,150 2,441 Source: Public Information as of June

24 A well structured debt profile delivers value to shareholders Debt Description as of June 30 th Average term of debt: 6.4 years Average cost of debt: 4.6% Composition of debt: 53% banks / 47% Bonds Debt breakdown by Currencies: 39% UF / 53% US$ / 8% Other currencies Last Financial Transactions Local Bond: in March 2009 CMPC issued a Chilean Local Bond. This transaction included two portions: 5 year bond: for US$110 BCU bps 21 year bond: for US$256 BTU bps Debt Description as of June 30 th Debt Description as of June 30 th LTM 24

25 CMPC is an important player of the Santiago Stock Exchange CMPC is listed at the Santiago Stock Exchange since CMPC has 200,000,000 of common shares. CMPC s stock ranked fifth in the IPSA Index, representing 4.20% of the indicator as of December 31 st CMPC Average Stock Price (CLP) S05 2S05 1S06 2S06 1S07 2S07 1S08 2S08 1S09 Chilean Companies by Market Cap * 15,5 13,0 9,0 8,1 5,5 5,2 4,4 4,0 3,1 CMPC Average Trading Volume (MM Shares) S05 2S05 1S06 2S06 1S07 2S07 1S08 2S08 1S09 25

26 Close relationship with the financial community Analysts Banchile Felipe Mercado BCI Corredores de Bolsa Rodrigo Mujica Celfin Cesar Perez Citigroup Tereza Mello Compass Consorcio Andrés Heusser CorpResearch Cristina Acle Deutsche Bank Josh Milberg Euroamérica Corredores de Bolsa Carla Araya FIT Corredores de Bolsa Hernán Guerrero IM Trust Jorge Merino Inversiones Security Mauricio Ibarra Larraín Vial Fernanda Rodriguez Merrill Lynch Thiago Kiill Lofiego Penta Estrategia & Inversiones Rocio Castillo Raymond James Francisco Schumacher Santander GBM Juan Cristóbal Mora Vantrust Gavin Templeton 26

27 Agenda Overview 3 Business Divisions 7 Social Responsibility and Sustainability 19 Financial Review 21 Concluding Remarks 28 27

28 Concluding remarks World class company in the industry. Low cost producer. Products and geographical diversification allows strong cash generation in spite of economic and price cycles. A company rating by S&P and Fitch Ratings. Committed to sustainable growth. Strong balance sheet prepared for growth opportunities. 28

29 This presentation will be available at CMPC s website:

EMPRESAS CMPC COMPANY OVERVIEW

EMPRESAS CMPC COMPANY OVERVIEW Presentation prepared for the BCI Investor Meeting Luis Llanos CFO April 2013 AGENDA I. Company description II. Our Value proposal 1. Leading diversified Latin American P&P