Third Quarter 2018 Earnings Results

Transcription

1 Third Quarter 2018 Earnings Results

2 Second Quarter 2018 Earnings Results 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 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 to the date they are delivered; CMPC undertakes no obligation to publicly update or revise them to consider developments which differ from those anticipated. 2

3 Opening Comments Great operational execution making the best of supportive market conditions Large-scale Latin American producer of Pulp, Tissue, Wood, Paper & Packaging products, serving global and local markets Strong capital discipline continues to bring leverage down Outstanding cash generation allows the Company to be prepared for new growth cycles Disciplined and strategic approach towards market and diversification opportunities 3

4 3Q18 Highlights Operational & Financial Highlights Pulp market continues to be supportive with stable prices QoQ Hardwood CIF 761 US$/ton Softwood CIF 852 US$/ton All-time record pulp production of 1,066,000 tons, up 1% QoQ and 49% YoY EBITDA continues at an all-time high of US$508 million, stable QoQ and up 57% YoY Free cash flow reached US$324 million, up from US$103 million in 2Q18 (+213%) and US$191 million in 3Q17 (+70%) Net debt was US$2,944 million, down 9% QoQ and YoY Net debt to EBITDA ratio reached 1.8x 6 th consecutive quarterly decrease Net Income of USD151 million, increasing 59% QoQ and 70% YoY. In USD Milllion 3Q17 2Q18 3Q18 QoQ YoY Revenues 1,338 1,618 1,623 0% 21% COGS (834) (915) (923) 1% 11% Other Operational Expenses (180) (196) (193) -2% 7% EBITDA % 57% EBITDA margin % 24.2% 31.3% 31.3% 4 bps 707 bps Operational Result % 111% Non Operational Result (70) (238) (185) -22% 163% Net Income % 70% 3 rd Party Volumes 3Q17 2Q18 3Q18 QoQ YoY Forestry + Solid Wood Prod. (1) % 8% Market Pulp (2) % 23% Papers (2) % 10% Tissue Papers (2) % 0% Sanitary Products (3) 1,376 1,342 1,414 5% 3% (1) Th. m 3 (2) Th. Tons (3) M. units 4

5 COGS and Other Operating Expenses COGS (USD Million) Other Op. Exp (USD Million) % % % -2% 3Q17 2Q18 3Q18 COGS Up 1% QoQ: (+) Higher direct costs in Tissue (-) Lower pulp cash costs (-) Positive effect of depreciation of local currencies Up 11% YoY: (+) Higher sales volumes, especially Pulp (+) Higher pulp prices in the Tissue and Papers 3Q17 2Q18 3Q18 Other Operational Expenses Down 2% QoQ: (-) Lower administrative expenses in Pulp and Tissue, due to depreciation of local currencies Up 7% YoY: (+) Higher pulp sales volumes (+) Higher Pulp administrative expenses (-) Depreciation of local currencies 5

6 Pulp Business +43% Sales * % % EBITDA* % 470 Revenues: -1% QoQ, +43% YoY Forestry Sales Volumes: -10% QoQ, +1% YoY Forestry Prices: +7% QoQ, -6% YoY Pulp Production: +1% QoQ, +49% YoY No maintenance downtime 3Q17 2Q18 3Q18 Pulp Forestry 3Q17 2Q18 3Q18 Third Party Sales Volumes Third Party Sales Volumes 3Q17 2Q18 3Q18 QoQ YoY - Pulpwood % -26% - Sawing Logs % -3% - Sawn Wood % 34% - Remanufactured Wood % 15% - Plywood % 39% - Others % -4% Total ( t h. m 3 ) % 8% BSKP % -14% BEKP % 36% Total Market Pulp ( T h. T o ns) % 23% P&W Guaiba (Th. Tons) % -27% * Figures in US$ million Pulp Sales Volumes: -- QoQ (stable) -3% BSKP: Lower exports to Asia and Europe +1% BEKP: higher local sales in Brazil -- YoY (+23%) -14% BSKP: Lower exports to Europe and Asia +36% BEKP: Higher production at Guaíba II, lead to higher sales to all markets Pulp Prices: BSKP US$852/ton, BEKP US$761/ton EBITDA: -- QoQ (+6%) Lower cash costs Positive effect of BRL and CLP depreciation -- YoY (+98%) Higher pulp prices and volumes Positive effect of BRL and CLP depreciation 6

7 Tissue Business Sales* 513-3% % EBITDA* 49 +3% -40% 29 3Q17 2Q18 3Q18 3Q17 2Q18 3Q18 Third Party Sales Volumes 3Q17 2Q18 3Q18 QoQ YoY - Chile % 4% - Brazil % 1% - MexicoThird Party Sales Volumes % 0% - Argentina % -13% - Peru % 7% - Uruguay % -9% - Colombia % 3% - Ecuador % -6% Total Tissue Paper ( T h. T o ns) % 0% - Diapers % 3% - Feminine Care % -8% - Others % 18% Total Sanitary ( M. U nit s) % 3% * Figures in US$ million Revenues: +3% QoQ, -3% YoY Volumes: -- Tissue Paper +3% QoQ, higher volumes in all countries, except Argentina Stable YoY, increases in Chile, Brazil and Peru, offset by decrease in Argentina -- Sanitary Products: +5% QoQ, supported by higher baby diaper volumes in all countries (except for Mexico) and higher wet wipe volumes in all countries (except Brazil). +3% YoY, driven by higher diaper volumes in Brazil and Peru and wet wiped in Peru and Chile Prices (in USD): -1% QoQ for Tissue Paper -2% QoQ for Sanitary Products EBITDA: -- QoQ (-40%) Negative effect of hyperinflation in Argentina Higher SG&A expenses Negative effect of local currency depreciation -- YoY (-57%) Negative effect of hyperinflation in Argentina Negative effect of currency depreciation Higher direct costs of fiber 7

8 Paper Business Sales* +15% % 3Q17 2Q18 3Q18 EBITDA * 24-5% % 3Q17 2Q18 3Q18 Revenues: +2% QoQ, +15% YoY Volumes: -- QoQ (+5% ) Higher volumes of all products. Except seasonally lower volumes of corrugated boxes and molded pulp trays -- YoY (+10% ) Higher volumes of all products except paper bags Prices: -4% QoQ, +4% YoY Third Party Sales Volumes Third Party Sales Volumes 3Q17 2Q18 3Q18 QoQ YoY - Boxboard % 17% - Paper Bags % -5% - Other Papers % 19% - Corrugated Paper % -6% - Corrugated Boxes % 11% - Molded Pulp Trays % 3% Total ( T h. T o ns) % 10% EBITDA : -- QoQ (-2% ) Lower seasonal corrugated boxes and molded pulp trays Higher production in Maule -- YoY (-5% ) Higher fiber costs Higher SG&A * Figures in US$ million 8

9 Global Pulp Market Global demand for Bleached Kraft pulp increased by 2.2% ( tons) in the first 9 months of 2018, compared to the same period in Growth entirely concentrated in hardwood and unbleached kraft (+5% each): Softwood demand decreased by 1.5% (-294,000 tons) Hardwood demand increased by 4.9% (+1,215,000 tons) Eucalyptus demand rose by 8.0% (+1,408,000 tons) Chinese demand grew 5.6% (+854,000 tons), Western Europe increased by 3.4% (+384,000 tons) and Eastern Europe rose 9.5% (+174,000 tons), while North America decreased 5.1% (-302,000 tons). Global market pulp producer stocks ended September 2018 at 32 days for softwood and 39 days for hardwood, compared to 28 days and 42 days, respectively, at the end of September BKP Demand Growth by Region 9 months 2018 vs th. Tons and % change % North America +3.4% Western Europe +9.5% Eastern Europe +0.1% Latin America Source: PPPC, World Chemical Market Pulp Global 100 Report September % +5.6% -1.3% Japan China Other Asia/Africa 1,600 1,400 1,200 1, BKP Demand Growth by Grade 9 months 2018 vs th.tons and % change +0.1% Northern Softwood -2.4% Southern Softwood -6.8% Radiata Softwood -2.2% -12.7% Northern Hardwood Southern Hardwood +8.0% Eucalyptus 9

10 Robust Financial Execution & Cash Generation Free Cash Flow of US$324 million, up from US$103 million in 2Q18 (+213%) and from US$191 million in 3Q17 (+70%) Cash position of US$919 million at the end of 3Q18, up 44% QoQ and down 33% YoY CAPEX of US$99 million during 3Q18, mainly related to maintenance and the Zarate mill Net Debt/EBITDA ratio in 3Q18 was 1.8x, down from 2.2x in 2Q18 and 3.1x in 3Q17, trending lower every quarter since 2Q17. USD Million 3Q17 2Q18 3Q18 QoQ YoY EBITDA % 57% (-) Capex (126) (99) (99) 0% -21% (-) Dividends - (66) (52) -21% N/A (-) Net Financial Expenses (34) (60) (37) -38% 9% (-) Income tax (18) (74) (53) -29% 197% (+/-) Working Capital Variation 44 (103) 58 N/A 31% Free Cash Flow % 70% 3.8x 3.4x 3.1x Net Debt/EBITDA 3.0x 2.5x 2.2x 1.8x 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 Internal Policy 10

11 Strategic Outlook 2018 Operational efficiencies and focus on cost control to maintain competitiveness Continue executing growth strategy, with focus in the Tissue business Large-scale Latin American producer of Pulp, Tissue, Wood & Paper products, serving global and local markets Solid capital structure to pursue valuecreating investment opportunities Maintain focus on strategic execution: diversification and capital discipline 11

12 Third Quarter 2018 Earnings Results Q&A 12