Third Quarter 2017 Earnings Results

Transcription

1 Third Quarter 2017 Earnings Results

2 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. 2

3 Opening Comments Focus on strategic plan execution, with diversification and value added revenue base Large scale Latin American producer of Pulp, Tissue, Wood & Paper products, serving global and local markets Continued improvements on market dynamics driving operational results Very strong capital discipline. Working capital and Capex programs on track Cash flow generation allows deleveraging 3

4 3Q17 Highlights Operational & Financial Highlights Positive fundamentals in pulp market drive QoQ increase in hardwood prices: Hardwood CIF up 6% to 616 US$/ton Market pulp sales volume of 753,000 tons, down 3% QoQ and 6 % YoY Volumes impacted by Guaíba II stoppage (reduction of 130,000 tons in sales volumes in 3Q17) Tissue paper sales volume of 175,000 tons, up 5% QoQ and 4% YoY Consolidated revenues up 5% QoQ, and 7% YoY to US$1,338 million EBITDA up 12% QoQ and 22% YoY to US$323 million Free Cash Flow up to US$177 million, from US$122 million in 2Q17 and US$10 million in 3Q16 Net Debt of US$3,229 million, down 4% QoQ and 11% YoY. Net Debt to EBITDA ratio reached 3.1x In US$ Milllion 3Q16 2Q17 3Q17 QoQ YoY Revenues 1,245 1,280 1,338 5% 7% COGS (814) (808) (835) 3% 3% Other Operational Expenses (167) (182) (180) -1% 8% EBITDA % 22% EBITDA margin % 21.2% 22.6% 24.1% 151 bps 291 bps Operational Result % 53% Non Operational Result (67) (123) (69) -43% 3% Net Income % 143% 3 rd Party Volumes 3Q16 2Q17 3Q16 QoQ YoY Forestry + Solid Wood Prod. (1) 1, % -32% Market Pulp (2) % -6% Papers (2) % 4% Tissue Papers (2) % 4% Sanitary Products (3) 1,372 1,307 1,366 5% 0% (1) Th. m 3 (2) Th. Tons (3) M. units 4

5 Costs & Other Operation Expense Analysis COGS (US$ Million) Other Op. Exp. (US$ Million) +3% % % % 3Q16 2Q17 3Q17 3Q16 2Q17 3Q17 COGS Up 3% QoQ and YoY, mainly reflecting: Higher softwood, tissue paper, sanitary products and paper sales volumes Higher direct costs in Pulp and Tissue 3Q17 COGS were 62% of revenues, down from 63% in 2Q17 and 65% in 3Q16 Other Operational Expenses Down 1% QoQ, reflecting: Lower distribution costs in Pulp Higher distribution costs and administrative expenses in Tissue Up 8% YoY, driven by: Higher SG&A expenses in Tissue Other Operating Expenses were 13% of revenues, up from 14% in 2Q17 and 13% in 3Q16 5

6 422 Sales * Pulp Business +11% % % Q16 2Q17 3Q17 Pulp Forestry EBITDA* % 236 3Q16 2Q17 3Q17 Third Party Sales Volumes 3Q16 2Q17 3Q17 QoQ YoY - Pulpwood % -64% - Sawing Logs % -23% - Sawn Wood % -30% - Remanufactured Wood % -22% - Plywood % -26% - Others % -45% Total (Th. m 3 ) 1, % -32% BSKP % 19% BEKP % -12% Total Market Pulp (Th. Tons) % -6% P&W Guaiba (Th. Tons) % 26% Revenues: +2% QoQ, +11% YoY Forestry Sales Volumes: +6% QoQ, -2% YoY Forestry Prices: +24% QoQ, +43% YoY Pulp Production: -27% QoQ, -23% YoY Pulp Sales Volumes: -3% QoQ, -6% YoY -- QoQ +21% BSKP: Higher exports to Europe and Asia -9% BEKP: Lower exports to all markets -- YoY +19% BSKP: Higher exports to Europe and Asia -4% BEKP: Lower exports to all markets Pulp Prices: BSKP US$630/ton, BEKP US$616/ton EBITDA: -- QoQ (+7%) Higher hardwood and solid wood product prices Higher softwood volumes -- YoY (+41%) Higher pulp prices * Figures in US$ million 6

7 Tissue Business Revenues: +7% QoQ, +6% YoY Volumes: -- Tissue Paper +5% QoQ, with higher volumes across all countries +4% YoY, driven by higher volumes across most countries, except Uruguay, Argentina and Chile -- Sanitary Products: Sales* % +7% EBITDA* -15% % 67 +5% QoQ, supported by higher diaper and feminine care products Stable YoY, higher volumes in Brazil and Argentina were mainly offset by lower wet wipes volumes and lower diaper volumes in Mexico. 3Q16 2Q17 3Q17 3Q16 2Q17 3Q17 Prices (Measured in $USD): +3% QoQ for Tissue Paper and Sanitary Products Higher prices in local currencies Third Party Sales Volumes 3Q16 2Q17 3Q17 QoQ YoY Total Tissue Paper (Th. Tons) % 4% - Diapers % 3% - Feminine Care % 6% - Others % -20% Total Sanitary (M. Units) 1,372 1,307 1,366 5% 0% EBITDA: -- QoQ (+16%) Higher tissue paper and sanitary products volumes Higher average prices -- YoY (-15%) Higher fiber costs Higher SG&A expenses * Figures in US$ million 7

8 Sales* Paper Business +2% % 23 EBITDA * +5% % 24 Revenues: +5% QoQ, +2% YoY Volumes: +6% QoQ, +4% YoY -- QoQ Higher volumes of boxboard (+14%) and corrugated paper (+38%) -- YoY Higher volumes of boxboard (+9%) Lower volumes of corrugated boxes (-5%) and corrugated paper (-3%) 3Q16 2Q17 3Q17 3Q16 2Q17 3Q17 Third Party Sales Volumes Third Party Sales Volumes 3Q16 2Q17 3Q17 QoQ YoY - Boxboard % 9% - Paper Bags % 3% - Other Papers % 14% - Corrugated Paper % -3% - Corrugated Boxes % -5% - Molded Pulp Trays % 1% Total (Th. Tons) % 4% Prices: -1% QoQ, -2% YoY EBITDA : -- QoQ (+34%) Higher boxboard and paper bags revenues -- YoY (+5%) Higher boxboard revenues Lower administrative expenses * Figures in US$ million 8

9 Global Pulp Market Bleached Kraft Pulp Global demand increased 3.5% (+1.47 million tons) in the first nine months of 2017 Softwood demand up 2.4% (+441 thousand tons) Hardwood demand rose 4.3% (+1,027 thousand tons) Eucalyptus demand grew 2.9% (+489 thousand tons) Chinese demand increased 6.9% (+945 thousand tons) Global market pulp producer stocks ended the quarter in 28 days for softwood and 40 for hardwood, compared to 29 days for softwood and 43 days for hardwood in September BKP Demand Growth by Region BKP Demand Growth by Grade 9 months 2017vs th. Tons and % change 9 months 2017vs th. Tons and % change % % % 4.4% +6.9% +5.0% % +2.6% +8.0% +5.3% North America -1.2% Western Europe Eastern Europe -0.7% Latin America Japan China Other Asia/Africa Northern Softwood Southern Softwood Radiata Softwood Northern Hardwood -0.8% Southern Hardwood Eucalyptus Source: PPPC, World Chemical Market Pulp Global 100 Report September

10 Robust Financial Execution & Cash Generation Free Cash Flow of US$177 million, up from US$122 million in 2Q17 and US$10 million in 3Q16 Cash position of US$1,364 million in 3Q17, up 8% QoQ, and 129% YoY driven positive free cash flow generation CAPEX of US$126 million during 2Q17 Net Debt/EBITDA ratio in 3Q17 was 3.1x, down from 3.4x in 2Q17 and in 3Q16 Debt ratio complies with internal policy US$ Million 3Q16 2Q17 3Q17 QoQ YoY EBITDA % 22% (-) Capex (141) (108) (126) 16% -11% (-) Dividends (0) (5) (0) -100% -83% (-) Net Financial Expenses (40) (46) (34) -27% -15% (-) Income tax (35) (6) (18) 205% -48% (+/-) Working Capital Variation (39) (2) % 183% Free Cash Flow % 1690% (1) This figure includes VAT 4.0x 3.5x 3.0x 2.5x 2.0x Net Debt/EBITDA 3.7x 3.8x 3.4x 3.4x 3.1x 3T16 4T16 1T17 2T17 3T17 Internal Policy 10

11 Strategic Outlook 2017 Maintain focus on diversification strategy Drive operational efficiencies and focus on cost control to improve margins Large scale Latin American producer of Pulp, Tissue, Wood & Paper products, serving global and local markets Benign market conditions expected to continue supporting execution Committed to strengthening capital structure through effective capital management and lower leverage 11

12 Q&A..