EMPRESAS CMPC THIRD QUARTER 2014 RESULTS

Transcription

1 EMPRESAS CMPC THIRD QUARTER 2014 RESULTS CMPC s pulp production will be even more competitive in 2015, with the startup of Guaíba 2. The Project is on schedule and on budget, with 79% of physical completion as of the end of September. This is a transformational project, and the Company is pleased with the progress they have made so far.

2 THIRD QUARTER 2014 RESULTS Topics 3Q14 Highlights 3 Sales and EBITDA Analysis 4-5 Sales Analysis: 6-10 Forestry 6 Pulp 7-8 Paper 9 Tissue 10 Income Statement Analysis Balance Sheet Analysis Debt Analysis 13 Capital Expenditures 14 Relevant Events 15 Capital Markets 16 Financial Information Management Comment CMPC continues to make progress in its strategy as a diversified, lowcost producer, with mid to high single digit increases in year-to-date volumes of pulp and tissue. This strong performance included a 7% increase in pulp volumes, leveraging our international base of low-cost hardwood and softwood production. We also ended the third quarter with positive momentum in our personal care business, which includes tissue and sanitary products. Our status as a regional player with unique brand strength helped us improve volumes and margins. Financially, our year-to-date consolidated EBITDA grew 5% to $746 million, with a margin of 21%, from 19% a year earlier as we continued to benefit from both scale and cost management/advantages. We continue to make progress at our landmark Guaíba pulp project, which will add 1.3 million tons of hardwood capacity while further lowering our average cost of production. Construction at the facility is 79% complete as of September and is on schedule and on budget for start-up in the second quarter of Elsewhere, smaller projects to expand our capacity in tissue and increase energy efficiency in tissue and paper are also on track for 2015 start-ups. Demand for CMPC s products remains generally strong across our global markets, and our focus on core values of efficiency, sustainability and diversity means we are well-positioned to meet that demand in 2015 and beyond. About CMPC Empresas CMPC produces forestry, pulp, paper, tissue and packaging products throughout Latin America. The company aims to deliver world-class products, from forestry to finished products, to its global customer base. Its high quality timber and production facilities are strategically located in countries including Chile, Brazil, Argentina, Mexico, Peru, Colombia, Uruguay and Ecuador, hiring more than 16 thousand direct employees, making CMPC a truly regional company with a competitive cost structure. The Company sells more than 25 different product lines to over 30,000 clients in more than 45 countries, always seeking long-term relationships. Conference Call Investor Relations Contact: Trinidad Valdés M. mtvaldes@gerencia.cmpc.cl Colomba Henríquez B. chenriquezb@gerencia.cmpc.cl Date: November 11 th, AM ET / 12:00 PM Santiago Time US Toll Free: International Dial: Press: Sebastián Garcés O. Webcast: sgarceso@gerencia.cmpc.cl /cmpc html 2

3 3Q14 HIGHLIGHTS Sales of US$1,237 million, up 1% QoQ and YoY. EBITDA of US$251 million, up 3% QoQ and down 3% YoY. Tissue sales volumes of 155,000 tons, up 6% QoQ and YoY. Tissue sales of US$486 million, up 4% QoQ and YoY. Net Loss of US$39 million, compared to net income of US$92 million in 2Q14 and US$43 million in 3Q13. Net Income for the quarter excluding the impact of currency movement on deferred taxes was US$67 million compared to US$80 million in 2Q14. One-time US$305 million impact on Shareholders Equity due to Tax Reform approved in September 2014 in Chile. Net Debt/EBITDA ratio of 3.1x, stable QoQ and up from 3.0x YoY. Liability management initiatives executed since June 2014 in order to extend the Company s average maturity. US$250 million capital increase concluded with the auction of 5.7 million shares on August, Year-to-date EBITDA of US$746 million, up 5% from 2013; EBITDA margin of 20%. Year-to-date pulp volumes up 7% from Main Figures US$ Million QoQ YoY YTD 2013 YTD 2014 YTD ' 14 / YTD ' 13 Sales 1,231 1,231 1,237 1% 1% 3,715 3,647-2% EBITDA % -3% % EBITDA Margin 21% 20% 20% 2% -3% 19% 20% 1% Net Income (Loss) ( 39) -142% -190% % CAPEX % 110% 597 1,176 97% Total Assets 14,152 14,644 15,470 6% 9% 14,152 15,470 9% Net Debt 2,793 3,101 3,090 0% 11% 2,793 3,090 11% Market Capitalization 7,223 5,196 5,895 13% -18% 7,223 5,895-18% Closing Exchange Rate (CLP/US$) % 19% % Average Exchange Rate (CLP/US$) % 14% % Forward-Looking Statements This earnings release may contain forward-looking statements. Such statements are subject to risks and uncertainties that could cause Empresas CMPC s actual results to differ materially from those set forth in the forward-looking statements. These risks include: market, financial and operational risks. All of them are described in CMPC s Financial Statements, Note 3 ( Gestión de Riesgos ). In compliance with the applicable rules, Empresas CMPC S.A. publishes this document on its web site ( and sends to the Superintendencia de Valores y Seguros the Financial Statements of the Company and its corresponding notes, which are available for consultation and review on its website ( 3

4 SALES AND EBITDA ANALYSIS Third Party Sales by Business Area 3Q13 11% 2Q14 12% 3Q14 13% 38% 30% 38% 30% 39% 29% 21% 20% 19% Forestry Pulp Paper Tissue Third Party Sales by Destination 3Q13 2Q14 3Q14 32% 24% 32% 22% 34% 21% 44% 46% 45% Domestic Sales Foreign Subsidiaries Domestic Sales Chile Export Sales EBITDA by Business Area 3Q13 2Q14 3Q14 22% 17% 21% 14% 23% 15% 14% 16% 12% 47% 49% 50% Forestry Pulp Paper Tissue 4

5 SALES AND EBITDA ANALYSIS Total Revenues were US$1,237 million during the quarter, 1% higher compared to 2Q14 and 3Q13. The QoQ increase was mainly due to higher sales in the Forestry and Tissue divisions. Forestry sales benefitted from higher prices and volumes, mainly of plywood, while Tissue sales increased due to higher volumes which more than offset the decrease in prices in US Dollar terms. All the above was offset by a decline in sales in the Pulp division which saw a decrease in hardwood and softwood prices, as well as lower volumes. In addition, sales in the Paper division fell mostly on lower pricing. The YoY increase is mainly due to higher prices in the Forestry and Paper divisions, as well as higher volumes in the Pulp and Tissue divisions. The above was partly offset by the lower Forestry and Paper volumes and lower hardwood prices. Operating costs, excluding depreciation, stumpage and decrease due to harvest, totaled US$813 million, unchanged from 2Q14 and up 2% from 3Q13. QoQ, higher consolidated sales were offset by lower unitary costs of Pulp, Boxboard and Tissue Paper, lower energy costs across all business areas and by the positive effect of local currencies depreciation. YoY, higher costs in the Forestry division affected operating costs. At a consolidated level, Operating costs in 3Q14 were 66% of total revenues, compared with 66% in 2Q14 and 65% in 3Q13. EBITDA totaled US$251 million, up 3% from 2Q14 and down 3% from 3Q13. The QoQ increase is the result of higher EBITDA contribution from the Forestry, Pulp and Tissue divisions partly offset by the lower EBITDA in the Paper Division. The YoY decrease is the result of lower EBITDA generation in all business areas, except for the Pulp division, where the increase in sales volumes more than offset the lower hardwood prices. Revenues Analysis to Third Parties Prices Volumes EBITDA Variation by Business ,231 1, Sales 2Q14 Forestry + 12 Pulp -14 Papers -10 Tissue +19 Sales 3Q14 EBITDA 2Q14 Forestry Pulp Papers Tissue Holding & Others EBITDA 3Q14 5

6 FORESTRY * Figures in US$ million Sales * EBITDA * Volumes (Th. m 3 ) Pulpwood Sawing Logs Sawn wood Remanufactured wood Plywood Others Total 1, In 3Q14, Forestry revenues increased 9% from 2Q14 and 12% from 3Q13. QoQ sales volumes to third parties increased 6%, driven by the higher sales of pulpwood (+82%), plywood (+19%) and sawing logs (+15%). The above was partly offset by lower sawn wood (-11%) and remanufactured wood (-2%) volumes. Pulpwood benefited from higher sales in Chile, while sawing logs recorded an increase due to the Company s trading program. The raise in plywood production due to the ramp up of the new plywood line drove a 42% in export sales during the quarter. On the other hand, the slowdown of the construction activity in Chile, resulted on a decline on solid wood products sales volumes in the domestic market. 3Q14 volumes sold to third parties were 12% lower when compared to 3Q13 due to lower volumes sold of pulpwood (-55%), due to a drop of woodchip sales, and remanufactured wood (-6%). This was partly offset by higher plywood (+37%), sawing logs (+4%) and sawn wood (+2%) volumes. Plywood sales saw a significant increase in volumes due to the additional production capacity as the expansion project advances through its learning curve. Average sale prices increased 2% compared to 2Q14, and increased 21% compared to 3Q13. The QoQ increase is mainly due to higher pulpwood and plywood prices, while the YoY increase is the result of higher solid wood products prices, especially remanufactured wood and plywood. EBITDA for the quarter increased 6% from 2Q14, and decreased 20% when compared to 3Q13. The QoQ increase in EBITDA was mainly due to the increase in plywood volumes together with lower harvesting, transportation and energy costs. 6

7 U S$/ton CIF PULP During 3Q14 global demand for Market Pulp maintained the recovery pace showed during 2Q14, increasing 1.9%, or 268,000 tons, from 2Q14. From a regional point of view, all markets, with the exception of Japan, recorded an increase in volumes YoY. During the first nine months of 2014 installed capacity increased 1.2 million tons, exceeding the 573,000 tons of demand growth during the same period. Slower growth of the Chinese economy together with the delicate situation of the European economy have contributed to a gradual decline in global paper demand over the previous years on the last two quarters. As a consequence, the increase in pulp demand reflects an increase of market pulp in the mix for paper production worldwide. It is important to mention that despite the imbalance in supply/demand, prices were stable for both fibers during the quarter. The above is the result of the delays in the entrance of new projects, their respective ramp up processes and the closure of two important hardwood mills. All of which helped change the mood of the market During 3Q14 softwood demand increased 0.2%, or 14,000 tons, compared to 2Q14, while hardwood demand increased 6.0%, or 441,000 ton, in the same period. It is important to mention that Eucalyptus demand increased 8.8%, or tons, since 2Q14. This way we are seeing that the price differential between the two fibers has pushed to substitution effect between both of them. As a consequence, some BEKP producers announced a US$20 price increase for Eucalyptus pulp effective on October Source: Pulp and Paper Products Council (PPPC) CMPC's average net pulp export price evolution Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 BSKP BEKP 7

8 PULP * Figures in US$ million Sales * EBITDA * During 3Q14, Pulp sales decreased 4% from 2Q14 and 3% from 3Q13. Market pulp volumes decreased 3% from 2Q14 and increased 5% from 3Q13. Sales volumes of softwood decreased 5% QoQ and 7% YoY, while hardwood declined 2% QoQ and rose 11% YoY. QoQ, softwood volumes were affected by lower exports to Europe, other Asian countries and Latin America, compensated by higher sales to China. On the other hand, hardwood volumes were affected by lower exports to China, Latin America and Middle East. The above was partially offset by higher exports to the US, other Asian countries and Europe. YoY, softwood sales were affected by lower volumes exported to China and Europe, while hardwood exports increased mainly in Europe, China and Latin America. It is worth noting that the Guaíba mill 6 days scheduled maintenance downtime was completed successfully during September Effective average sales prices (including a small tonnage of P&W papers and energy sold to the SIC grid) decreased 1% QoQ and 9% YoY. The average effective net export price was CIF 712 US$/ton for softwood and CIF 576 US$/ton for hardwood. During 3Q14, the spread between the two fibers was CIF 137 US$/ton, compared with CIF 127 US$/ton in 2Q14. Volumes (t h. Tons) BSKP BEKP Other Total Market Pulp EBITDA in 3Q14 rose 4% from 2Q14 and 1% from 3Q13. QoQ, lower direct costs, mainly due to lower energy and chemicals prices, as well as better operational rates compensated the decline in quarterly sales. Also, the depreciation of the Chilean peso and the Brazilian real resulted in a positive effect on costs and expenses. The Energy division contributed US$7 million of EBITDA during the quarter, compared to US$11 million in 2Q14. 8

9 PAPERS * Figures in US$ million Sales * EBITDA * Volumes (th. Tons) Boxboard Newsprint Paper Bags Other Papers CMPC Packaging Corrugated Paper Corrugated Boxes Molded Pulp Trays Total In 3Q14, Paper sales decreased 4% from 2Q14 and 7% from 3Q13. QoQ sales volumes to third parties increased 1%. The increase was led by corrugated paper sales, which increased 43% during the quarter. This was mainly caused by the seasonality of this product in preparation for the summer fruit season. This increase was partly offset by a 47% decrease in molded pulp trays sales due to the end of the apple season, a 19% decrease in corrugated boxes due to weaker industrial, wine and fruit demand from this product and a 5% decrease in paper bags. In addition, boxboard sales volumes decreased 1%. 3Q14 volumes sold to third parties, excluding newsprint volumes, decreased 2% from 3Q13 as a result of lower corrugated boxes (-13%), paper bags (-5%) and molded pulp trays (-3%) volumes. Corrugated boxes volumes were affected by the weaker fruit exports from Chile, as well as weaker domestic industrial activity. The decline was partly offset by a 5% increase in corrugated paper volumes and a 1% increase in boxboard volumes. Sale prices declined 5% from 2Q14 and rose 8% from 3Q13. The QoQ decrease is mainly explained by lower corrugated paper, corrugated boxes and paper bags prices, while the YoY increase it is attributed to higher boxboard and corrugated boxes prices. EBITDA in 3Q14 declined 18% from 2Q14 and 13% from 3Q13. Lower sales together with higher operating costs contributed to the lower EBITDA. YoY, higher energy costs, due to the end of the electric contracts at December 2013, contributed to the lower EBITDA generation. 9

10 TISSUE Sales* In 3Q14, Tissue sales increased 4% from 2Q14 and 3Q13. Tissue Paper sales volumes increased 6% from 2Q14 and 3Q13. The QoQ and YoY increases are due to higher volumes in Argentina, Chile, Brazil, Peru, México and Ecuador. The increment in most markets was mainly due to an increase in volumes for home consumption tissue paper. It is important to highlight the YoY volume growth in the Mexican (+13%) and Peruvian (+8%) operations both in the institutional and home consumption segments. 58 EBITDA * Sanitary Products sales volumes increased 5% QoQ and 12% YoY. The QoQ increase was mainly driven by higher baby diapers and wet wipes volumes in Brazil, Peru, Argentina and Chile. The YoY increase is due to growing demand across markets and higher market share for CMPC s diapers in Brazil, Peru and Argentina. * Figures in US$ million 14% Tissue Paper Sales Volumes by Country 13% 3% 3% 3% 155 th. Tons 19% 24% 21% Chile Brazil Argentina Mexico Peru Uruguay Colombia Ecuador Average sales prices (measured in US$) decreased 3% for tissue paper when compared to 2Q14, while sanitary products average price increased 2% in the same period. It is important to mention that the appreciation of the US Dollar negatively affected tissue paper and sanitary products prices measured in US Dollars during the quarter. Local prices increased during the quarter offsetting most of the depreciation of the local currencies. EBITDA in 3Q14 rose 8% QoQ and decreased 1% YoY. The QoQ increase was due to the higher sales volumes and lower energy costs, which helped offset the lower tissue paper prices in dollars, measured in US Dollars. YoY, lower prices in dollars for both tissue paper and sanitary products together with higher direct costs offset the additional volumes sold during the quarter. 10

11 INCOME STATEMENT ANALYSIS Operating costs, excluding depreciation, stumpage and decrease due to harvest, totaled US$813 million, unchanged from 2Q14 and up 2% from 3Q13. QoQ, higher consolidated sales were offset by lower unitary costs of Pulp, Boxboard and Tissue Paper, lower energy costs across all business areas and the positive effect of local currencies depreciation. YoY, higher costs in the Forestry division affected operating costs. At a consolidated level, operating costs in 3Q14 were 66% of total revenues, compared with 66% in 2Q14 and 65% in 3Q13. Other operating expenses totaled to US$172 million, up 1% from 2Q14 and down 3% from 3Q13. The QoQ change was driven by higher consolidated sales, higher Distribution costs in the Pulp and Forestry divisions and higher Administrative expenses in the Pulp division, which was partly offset by lower Distribution costs and Administrative expenses in the Paper division. The YoY decrease is explained by lower Distribution costs in the Pulp, Forestry and Paper divisions and lower Administrative expenses in the Paper division. The depreciation of local currencies, mainly the Chilean Peso and the Brazilian real, resulted in a positive impact in expenses, decreasing fixed costs measured in US Dollars both QoQ and YoY. At a consolidated level, other operating expenses in 2Q14 were 14% of total revenues stable QoQ and YoY. Financial expenses increased 6% from 2Q14. In addition, CMPC s Financial Income increased US$3 million when compared with 2Q14, which is a result of the higher level of Cash held by the Company. During this quarter there was a US$27,000 loss in Share of profit in associated companies. Currency Exchange rate differences were US$44 million, a result of the appreciation of the US Dollar. Indexation Unit Results registered a US$3 million loss in the quarter, due to the depreciation of the UF, Chile s inflation-linked currency. Other gains (losses) resulted in a US$11 million loss. This category includes non-core business revenues and other items, such as insurance deductible in losses, donations, and the relative effects of changes in the fair value of financial instruments including forwards, forwards investments related to synthetic swaps, cross currency swaps and swaps, different from those under hedge accounting, among others. Income taxes represented a loss of US$164 million in 3Q14, compared with a gain of approximately US$2 million in 2Q14 and US$4 million in 3Q13. This change is the result of the depreciation of the Chilean peso and the Brazilian real, and the effect of exchange rates differences on deferred taxes. CMPC s tax accounting is in local currencies, mainly the Chilean peso and Brazilian real, and the depreciation of these currencies increases the tax base of assets measured in dollars, and therefore the Deferred taxes account. 11

12 BALANCE SHEET ANALYSIS Cash held by the Company totaled US$1,619 million as of September 30 th, 2014, up 51% from the end of 2Q14 and up 63% from the end of 3Q13. The higher cash is mainly due the issuance of an 144A-S international US$500 million bond in September 2014 (which was disbursed to prepay for a US$400 million syndicated loan in October 2014) and the US$250 million capital increase in July, As of September 30 th 2014, Current assets were up 13% from June 30 th 2014, mainly due to the higher cash held by the Company. Non-current assets increased 3% from June 30 th This is mainly the result of an increase in fixed assets due to the construction of the Guaíba 2 pulp line. Current liabilities were up by 1% from June 30 th Non-current liabilities were up 21% from June 30 th 2014 due to the issuance of a 144A-S international bond, the disbursements of the BNDES and ECA credit lines and also due to an increase of Deferred Tax Liabilities. CMPC s financial debt stood at US$4,709 million as of September 30 th 2014, 13% higher from June 30 th 2014 due to the issuance of a 144A-S US$500 million international bond used in October to prepay a US$400 million syndicated loan. Net financial debt was US$3,090 million as of September 30 th 2014, unchanged from June 30 th Financial Ratio Evolution 5.53x 5.74x 5.54x 3.0x 3.1x 3.1x 0.46x 0.50x 0.58x The Net Debt/EBITDA ratio was 3.1x, unchanged from 2Q14 and up from 3.0x in 3Q13. Net Financial Debt / EBITDA Financial Debt / Tangible Net Worth Interest Coverage Ratio Debt breakdown as of September 30 th, 2014 In Million US$ Δ% QoQ Δ% YoY (i) Current Interest-bearing Liabilities % 85% (ii) Non Current Interest-bearing Liabilities 3,552 3,675 4,237 15% 19% (iii) Other Obligations (47) (38) (37) -1% -20% (iv) Mark to Market of Derivatives Debt Instruments for Hedging Currencies and Interest Rates (11) (55) (40) -27% 276% (v) Net Hedging Current Liabilities related to Debt Instruments (vi) Net Hedging Non Current Liabilities related to Debt Instruments Total Debt ( (i) + (ii) + (iii) + (iv) + (v) + (vi) ) 3,786 4,171 4,709 13% 24% Cash* 993 1,070 1,619 51% 63% Net Debt 2,793 3,101 3,090 0% 11% Average Cost of Debt 4.1% 4.2% 4.3% 2% 5% *Cash and cash equivalents + Term deposits within 90 to 360 days of maturity 12

13 DEBT ANALYSIS Amortization Schedule as of September 30 th, 2014 EBITDA LTM: US$1,000 million 1, * * / / /39 * Includes US$400 million (US$200 million on 2015 and 2016) syndicated loan prepaid on October, % Debt by Issuer 15% Debt by Currency 5% 11% 6% 78% 78% Inversiones CMPC Tissue Pulp US$ CLP R$ Other Debt by Interest Rate Debt by Type 4% 10% 6% 15% 96% 69% Fixed Rate Floating Rate Banks Bonds BNDES ECA 13

14 CAPITAL EXPENDITURES Guaíba Expansion September 2014 Capital expenditures during the quarter totaled US$479 million, up from US$379 million in 2Q14 and US$228 million in 3Q13. The QoQ increase was mainly due to the expenditures related to the Guaíba 2 Project. The Guaíba 2 Project continues on schedule and on budget with approximately US$1,322 million disbursed as of September 30 th 2014 and 79% of the construction completed. As of the end of September 2014, approximately 8,242 people were working at the construction site. It is important to emphasize that in November the Company will reach its peak of investment for Guaíba, so its monthly disbursements should fall from this point on * Figures in US$ million CAPEX* Main current projects as of September 30 th, 2014 Pulp Paper Tissue Tissue Tissue Description Second line - Guaíba Mill Cogeneration plant - Puente Alto Mill Cogeneration plant - Talagante Mill Tissue machine - Altamira Mill (Mexico) Cogeneration plant - Altamira Mill (Mexico) Capacity 1.3 million tons/year 44MW + 80 tons steam /hour 20MW + 25 tons steam /hour 50 th. tons/year 21MW + 30 tons steam /hour Budget US$2.1 billion US$70 million US$34 million US$96 million US$34 million Start up 2Q15 2Q15 2Q15 3Q15 3Q15 Spending Completion % 63% 34% 26% 40% 12% 14

15 RELEVANT EVENTS Tax Reform approved in Chile: In September 2014, a Tax Reform was approved in Chile. As a consequence, Empresas CMPC will be taxed based on the Partially Integrated System, starting in fiscal year The increase in the First Category corporate tax rate will result in a one-time charge of US$305 million due to adjustments in Deferred Taxes to reflect the new corporate tax rate, which will be charged directly to the Other Reserves account in the Company s Shareholders Equity. Consequently, this adjustment will not affect the financial results for the year nor distributable earnings for dividend purposes. For more details please review Note N 21 of Empresas CMPC s Financial Statements as of September US$500 million 144A-S International bond issuance: On September 10 th, Inversiones CMPC S.A. issued a US$500 million 144A-S international bond. The transaction was carried out under the guarantee of Empresas CMPC. This bullet note has a maturity of 10 years, with semiannual interest payments. The bond priced at a spread of 225bps over U.S. Treasuries, with a 4.75% coupon. Proceeds from the bond will go towards general corporate purposes, including liability management. JPMorgan, MUFG and Santander acted as joint book-runners. Conclusion of the capital increase process: On August 20 th Empresas CMPC concluded its capital increase process with the auction of 5.7 million shares at a price of CLP$$1,432, for a total of CLP$8,184 million (approximately US$ 14 million). Previously, Empresas CMPC sold 119 million shares via the offering of preferential rights to existing shareholders. The Matte Group, which holds 56% of CMPC s shares, subscribed in proportion to their holding, as did the Chilean pension funds, which together hold 11% of CMPC s shares. Liability Management Initiatives: Since June 2014 CMPC has implemented liability management initiatives that will extend the average maturity of the Company s debt. In June, Inversiones CMPC issued the CMPC-G bond (UF + 3.5%, maturing in 2039), to prepay the CMPC-B bond issued in April 2006 (UF + 4.2%, maturing on 2027). Also in June and July, Inversiones CMPC refinanced an existing bank credit for its Colombian operations for US$100 million (six-months Libor plus 156 bps, due in 2015) with a Colombian bank credit for US$100 million (Libor plus 100 bps, due in 2017). As mentioned earlier, in September Inversiones CMPC issued a US$500 million 144A-S International bond. The funds raised were disbursed for the prepayment of a US$400 million syndicated loan on October Provisory CLP$5 cash dividend: A dividend of CLP$5 per outstanding share was approved by Empresas CMPC s Board of Directors. This dividend was paid on September 4 th, Industry recognitions & Certifications: Adimark and La Segunda newspaper recognized Empresas CMPC as the sixth most respected company in Chile, highlighting scores in categories including: Contribution to Education, Integrity and Transparency and Reliability and Solvency. Also, Forestal Mininco and CMPC Tissue obtained the 12 th and 18 th position, respectively, in Prohumana s ranking of the most sustainable companies in Chile. Finally, CMPC Celulosa received the ISO certification, which recognizes a systematic approach in achieving continual improvement of energy performance, including energy efficiency, energy use and consumption. 15

16 CL P$ CAPITAL MARKETS Equity Preferential rights period of Capital Increase from June 25th to July 25th, 2014 at a price of CLP$1,100. Average price during the quarter was CLP$1,382 compared to CLP$1,232 in 2Q14. Average daily volume traded was 2 million shares, compared to 1.2 million shares in 2Q14. Average daily financial volume was CLP$2,718 million. 1,600 Price Evolution 1,500 1,400 1,300 1,200 1,100 1,000 Preferential Rights Period CLP$1,100 Source: Bloomberg Fixed Income International Bonds Yield % (1) Currency QoQ YoY CMPC 2018 US$ % -23% CMPC 2019 US$ % -22% CMPC 2022 US$ % -14% CMPC 2023 US$ % -14% CMPC 2024 US$ Source: Bloomberg Local bonds in Chile Yield % (1) Currency QoQ YoY BCMPC - A UF % - 32% BCMPC - B UF % - 4% BCMPC - F UF % -13% BCMPC - G UF % - Source: Bolsa de Comercio de Santiago (1) Average Mid Yield to Maturity 16

17 BALANCE SHEET Q14 Figures in Th. US$* 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 QoQ YoY Current Assets 3,366,465 3,680,515 3,454,358 3,488,780 3,314,118 3,512,321 3,958,459 13% 15% Cash and Cash Equivalents 433,767 1,012, , , ,948 1,069,747 1,590,344 49% 91% Operative Receivables 946, , , , , , ,381-7% -8% Inventories 1,111,044 1,053,658 1,086,941 1,057,951 1,060,244 1,043,435 1,025,722-2% -6% Biological Assets 236, , , , , , ,688-1% 10% Tax Assets 167, , , , , ,537 97,036-7% -9% Other Current Assets 471, , , ,147 90, , ,288 15% -51% Non Current Assets 10,706,656 10,561,010 10,697,200 10,699,074 10,856,805 11,131,414 11,511,391 3% 8% Intangible Assets, Different from Goodwill 14,952 14,624 14,383 14,904 14,464 14,206 16,311 15% 13% Goodwill 143, , , , , , ,975-4% -6% Property, Plant and Equipment, Net 6,554,675 6,579,774 6,650,920 6,810,573 6,959,615 7,219,147 7,592,838 5% 14% Biological Assets 3,310,103 3,316,569 3,311,019 3,306,717 3,309,836 3,299,857 3,290,478 0% -1% Deferred Tax Assets 207,352 51,545 56,404 46,072 44,933 46,907 43,884-6% -22% Other Non Current Assets 476, , , , , , ,905 5% -17% TOTAL ASSETS 14,073,121 14,241,525 14,151,558 14,187,854 14,170,923 14,643,735 15,469,850 6% 9% Current Liabilities 1,689,550 1,205,069 1,084,798 1,138,200 1,231,898 1,334,970 1,343,035 1% 24% Other Financial Liabilities 890, , , , , , ,521-7% 47% Operative Liabilities 647, , , , , , ,214 5% 7% Other Current Liabilities 151,629 79, , , , , ,300 15% 39% Non Current Liabilities 4,332,489 4,697,416 4,676,341 4,729,885 4,557,654 4,805,253 5,799,018 21% 24% Other Financial Liabilities 3,097,142 3,548,429 3,568,630 3,582,714 3,410,827 3,679,995 4,261,510 16% 19% Deferred Tax Liabilities 1,095,247 1,022, ,097 1,024,778 1,025,825 1,004,236 1,421,018 42% 43% Other Non Current Liabilities 140, , , , , , ,490-4% 5% Non Controlling Participations 4,801 4,357 4,383 4,245 4,143 3,708 3,518-5% -20% Equity Attributable to the Owners of the Controller 8,046,281 8,334,683 8,386,036 8,315,524 8,377,228 8,499,804 8,324,279-2% -1% TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 14,073,121 14,241,525 14,151,558 14,187,854 14,170,923 14,643,735 15,469,850 6% 9% * Balance Sheet numbers are based on CMPC's quarterly financial data, which is presented to the "Superintendencia de Valores y Seguros" (SVS). 17

18 INCOME STATEMENT Q14 Figures in Th. US$ 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 QoQ YoY Sales 1,193,670 1,290,776 1,230,528 1,259,485 1,179,044 1,230,734 1,237,321 1% 1% Operating Costs (1) (819,774) (870,932) (794,907) (826,165) (769,141) (816,330) (813,490) 0% 2% Operating Margin 373, , , , , , ,831 2% -3% Other Operating Expenses (2) (161,715) (180,781) (177,196) (179,129) (159,788) (170,032) (172,362) 1% -3% EBITDA ( 3) 212, , , , , , ,469 3% -3% EBITDA Margin (%) 18% 19% 21% 20% 21% 20% 20% 2% -3% Depreciation, Amortizations and Stumpage (105,380) (106,200) (105,773) (107,770) (103,667) (107,959) (109,553) 1% 4% Increase in Biological Assets due to Forests Growth and Price Effects 51,903 51,904 51,114 53,019 47,325 47,325 45,603-4% -11% Decrease in Biological Assets due to Harvest (46,134) (51,812) (56,155) (57,909) (49,288) (52,370) (51,009) -3% -9% Operating Income 112, , , , , , ,510 4% -8% Financial Expenses (41,638) (43,918) (43,217) (45,525) (43,615) (46,119) (49,087) 6% 14% Financial Income 6,202 5,868 4,069 5,232 4,604 3,916 6,918 77% 70% Share Results in Associated Companies 2,631 1,032 3,131 2,085 (35) (39) (27) -31% -101% Foreign Exchange Difference (13,419) 39,574 (10,339) 21,204 20,193 11,410 44, % -531% Indexation Unit Results (1,016) 701 (8,708) (8,926) (10,259) (13,761) (3,307) -76% -62% Other Gains (Losses) 14,653 2,904 (53,202) (150) (20,616) 3,333 (10,531) -416% -80% Income Taxes 4,332 (108,550) 3,947 (77,991) (48,338) 1,718 (163,761) -9632% -4249% Net Income (Loss) 84,315 30,566 43,292 37,460 46,419 91,826 (38,769) -142% -190% (1) Operating Costs are calculated as: Costs of Sales minus Stumpage minus Decrease in Biological Assets due to Havest minus Depreciation (2) Other Operating Expenses are calculated as: Distribution Costs plus Administration Expenses plus Other Functional Expenses (3) EBITDA is calculated as: Sales minus Operating Costs minus Other Operating Expenses 18

19 CASH FLOW STATEMENT Figures in Th. US 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 QoQ YoY Cash Flow from Operating Activities 162, , , , , , ,083 1% 13% Cash collection from operating activities Collections from sales of goods and services delivered 1,363,551 1,420,809 1,396,521 1,412,810 1,300,527 1,385,934 1,401,399 1% 0% Other cash collections from operating activities 69,422 59,293 57,723 55,993 56,454 82,388 56,979-31% -1% Payments for operating activities Payments to suppliers for goods and services (1,082,802) (1,044,892) (1,051,700) (1,138,430) (999,610) (1,035,776) (956,649) -8% -9% Payments to and on behalf of employees (115,162) (158,368) (139,983) (24,246) (106,504) (99,276) (176,926) 78% 26% Payments for premiums, benefits, annuities, and other obligations derived from suscribed policies (1,062) (64) (415) (25,051) (114) (107) (164) 53% -60% Other payments from operating activities (49,901) (43,420) (41,795) (46,711) (51,529) (47,210) (50,652) 7% 21% Net cash flows from (used in) operating activities 184, , , , , , ,987-4% 24% Income taxes paid (reimbursed) (21,081) (15,059) 6,481 (13,294) (13,871) (32,622) (16,904) -48% -361% Other cash inflows (outflows) Cash Flow from Investment Activities (136,076) (86,682) (201,951) (118,324) (232,273) (387,628) (491,224) 27% 143% Cash flows from losing control of subsidiaries or other businesses , Cash flows used for acquiring subsidiaries 0 0 (278) (55) Amounts obtained from the sale of property, plant and equipment , % -99% Purchases of property, plant and equipment (130,544) (210,270) (205,827) (252,822) (307,766) (364,467) (460,095) 26% 124% Cash obtained from the sale of intangible assets 1, , % - Purchases of other long-term assets (13,948) (16,328) (23,157) (15,011) (11,649) (16,042) (19,143) 19% -17% Payments of future contracts, forwards, options and swaps (5,923) (21,690) (20,299) (38,213) (35,532) (10,527) (10,747) 2% -47% Collections of future contracts, forwards, options and swaps 1,930 28,366 16,721 17,573 22,739 (158) 20, % 21% Dividends received 0 3, % Interest received 6,217 5,053 3,918 5,521 4,336 3,382 7, % 94% Other cash inflows (outflows) 4, ,710 26,178 56,092 93,601 (940) (29,139) 3000% -211% 0 Cash Flow from Financing Activities (28,381) 461,751 (199,041) 2,366 16, , , % -510% Proceeds raised through short-term loans 0 235, ,787 (107,183) 40,085 76, , % 480% Proceeds raised through long-term loans 156, , , , , ,032-54% - Proceeds raised through loans 156, , , , , , , % 609% Proceeds from equity issuances 0 437, , , % - Loans reimbursements (146,143) (478,233) (272,619) (64,958) (185,857) (73,945) (329,910) 346% 21% Dividends paid (79) (27,665) (22,869) (22,086) (37) (20,630) (20,660) 0% -10% Interest paid (39,116) (42,858) (38,340) (48,412) (37,132) (45,981) (34,746) -24% -9% Other cash inflows (outflows) 0 (43) Net increase (decrease) in cash and cash equivalents before effect of exchanges rate change (1,492) 593,368 (174,160) 105,113 0 (30,773) 177, , % -434% Effects of variation in the exchange rate on cash and cash equivalents 4,017 (15,116) (3,892) (11,831) (9,528) 5,105 (61,465) -1304% 1479% Net increase (decrease) in cash and cash equivalents 2, ,252 (178,052) 93,282 0 (40,301) 182, , % -392% Cash and cash equivalents at beginning of period 431, ,767 1,012, , , ,948 1,069,747 21% 6% Cash and cash equivalents at end of period 433,767 1,012, , , ,948 1,069,747 1,590,344 49% 91% Term deposits within 90 to 360 days of maturity 310, , ,789 95, , % Total Cash at the end of the period 744,242 1,197, ,756 1,023, ,948 1,069,747 1,618,805 51% 63% 3Q14 19