PRESENTATION PREPARED FOR THE ITAÚ BBA 11TH ANNUAL LATAM CEO CONFERENCE - NY

Transcription

1 PRESENTATION PREPARED FOR THE ITAÚ BBA 11TH ANNUAL LATAM CEO CONFERENCE - NY MAY

2 AGENDA I. COMPANY DESCRIPTION II. CMPC S VALUE PROPOSAL 1. LEADING DIVERSIFIED LATIN AMERICAN P6P PLAYER 2. LOW COST PRODUCER WITH WORLD CLASS ASSETS 3. STRONG BALANCE SHEET AND FINANCIAL TRACK RECORD 4. COMMITTED TO SUSTAINABLE DEVELOPMENT AND CORPORATE GOVERNANCE 5. DIVERSIFIED INVESTMENT PORTFOLIO III. CHALLENGES IV. APPENDIX

3 I. COMPANY DESCRIPTION

4 CMPC AT A GLANCE CMPC is a P&P company, established in 1920, that produces solid wood products, pulp, paper, packaging products and tissue in Latin America CMPC s Figures Sales: 4,840 EBITDA: 1,122 EBITDA Margin: 23% Net Income: 134 Net Debt: 3,519 Assets: 14,859 Market capitalization of US$5.6 billion as of April 30 th, 2016 International rating BBB+ (stable) - Fitch BBB- (stable) - S&P Baa3 (stable) - Moodys Shareholders Structure* Chilean and Foreign Investors 34% Chilean Pension Funds 11% Matte Group 56% Figures for the LTM as of March, 2016 (US$ million) Local rating AA (Fitch) AA (ICR) * As of March. 31 st, Source: CMPC 4

5 II. CMPC S VALUE PROPOSAL 1. LEADING DIVERSIFIED LATIN AMERICAN P&P PLAYER

6 A DIVERSIFIED BUSINESS PORTFOLIO PROVIDES CMPC A STABLE CASH FLOW Papers Pulp-Forestry Tissue Main Figures % of third parties total sales % of consolidated EBITDA Total capacity & Employees Sales: 2,524 Sales 3 rd parties: 2,211 EBITDA: 814 EBITDA margin: 30% 46% 73% 666 Th. has. Planted 16 M m 3 /y harvested 1.7 M m 3 /y solid wood 4.1 tons/y 4,982 employees US$11.2 billion in assets Sales: 916 Sales 3 rd parties: 861 EBITDA: 127 EBITDA margin: 14% 18% 11% 1.3 M tons/y 3,616 employees US$1.4 billion in assets Sales: 1,774 Sales 3 rd parties: 1,711 EBITDA: 218 EBITDA margin: 12% 37% 19% 657 Th. tons/y 8,424 employees US$2 billion in assets Source: CMPC. Figures in US$ million for the LTM as of March 2016 / Figures do not include sales between CMPC affiliates or subsidiaries 6

7 CMPC HAS EVOLVED FROM A LOCAL COMPANY TO A GLOBAL PLAYER CMPC has expanded significantly throughout Latin America over the past two decades and has evolved from a local company to a global player in the P&P industry Operations in 8 countries in Latin America 17,562 Direct Employees 45% outside of Chile Assets of US$14,859 million Sales of US$4.840 million 41% outside of Chile 41% from operations outside of Chile Forestry Operations Pulp Operations Paper and Packaging Operations Tissue Operations 7

8 CMPC HAS A PRODUCT AND GEOGRAPHIC DIVERSIFICATION OF SALES THAT PROVIDES FLEXIBILITY Source: CMPC. Figures in US$ million for the LTM as of March 2016 / Figures do not include Holding and Intercompany Sales. 8

9 II. CMPC S VALUE PROPOSAL 2. LOW COST PRODUCER WITH WORLD CLASS ASSETS

10 CMPC BENEFITS FROM ITS PRODUCTION COST EFFICIENCIES AND WORLD CLASS ASSETS Access to low cost fiber Research and Development to enhance efficiency, productivity and customer satisfaction State of art facilities strategically located Energy investments based in biomass and natural gas cogeneration 10

11 Russia Scandinavia Canada USA Chile E. Globulus Iberian E. Globulus Chile Acacia Mangium Eucalyptus Brazil E. Nitens Chile HIGH YIELD FORESTRY ASSETS THAT PROVIDE LOW COST FIBER RESOURCES 658,100 Planted hectares 483,400 Chile 118,400 Brazil * 56,300 Argentina CMPC Forest Base is FSC R Certified Over 1 million hectares of land CMPC has a high quality and sustainable forestry base with fast growth cycles which optimizes capital invested in land, reduces average distance to mills and increases gains due to genetic and sylvicultural practices Radiata Pine Average softwood growth rate (m 3 ssc/ha/year) Eucalyptus Average hardwood growth rate (m 3 ssc/ha/year) Improvement in Forestry Yields ** 23% 32% % 3% 9% 14% P ** Evolution of the weighted increase of volume per hectare expected for eucalyptus and pine plantations established in Chile in the respective year Source: CMPC. *There is an agreement to acquire from Fibria aprox. 100 Th. hectares of which 39 Th. are planted. CMPC is waiting the approval of Brazilian authorities to consolidate this land ** m 3 ssc: solid m 3 without bark 11

12 PULP DIVISION: LARGE SCALE PRODUCER WITH GLOBAL CLIENT BASE Market Pulp Capacity Ranking Fibria 5,300 Arauco 1,765 1, CMPC 700 3,055 Guaíba BEKP - Brazil 1,759Th. tons/y Santa Fe BEKP - Chile 1,500 Th. tons/y Suzano APRIL 60 3,560 3,285 UMP-Kymmene 905 1,715 Stora Enso 1,070 1, Paper Exellence 1, Georgia Pacific 2, Illim 1, ,000 4,000 6,000 Pacífico BSKP - Chile 500 Th. tons/y Laja BSKP - Chile 340 Th. tons/y BSKP BHKP Other Source: CMPC and Hawkins Wright as of April 2016 (million tons) 12

13 (US$/Ton c.i.f. N. Europe) (US$/Ton c.i.f. N. Europe) CMPC S CASH COSTS ARE AMONG THE LOWEST OF THE PULP INDUSTRY GLOBALLY CMPC s average distance from to Plantations 80 Km. Laja 93 Km. (by train) Ports 93 Km. Pacífico 163 Km. (by train) 99 Km. Santa Fe 119 Km. (by train) 208 Km. Guaíba 260 Km. (by barges) Source: CMPC BSKP 1 Supply Curve (US$/ton) CMPC s pulp facilities ,000 10,000 15,000 20,000 25,000 ( Thousand metric tonnes) BHKP 2 Supply Curve (US$/ton) CMPC s pulp facilities 0 0 5,000 10,000 15,000 20,000 25,000 30,000 (Thousand metric tonnes) Source: CMPC and Hawkins Wright as of April 2016 (1) BSKP: Bleached Softwood Kraft Pulp (2) BHKP: Bleached Hardwood Kraft Pulp 13

14 II. CMPC S VALUE PROPOSAL 3. STRONG BALANCE SHEET AND FINANCIAL TRACK RECORD

15 x 7.00x 6.00x 5.00x 4.00x 3.00x 2.00x 1.00x 0.00x 1,200 1, % 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% KEY FINANCIAL FIGURES AS OF MARCH 31 ST, 2016 Sales Evolution (US$ million) 4,759 4,974 4,900 4,841 4,840 EBITDA and EBITDA Margin Evolution (US$ million) 1,099 1, % 19% 20% 23% 23% Source: CMPC LTM Financial Debt / Equity (Covenant: <0.8x) 0.56x 0.53x 0.52x Source: CMPC LTM Interest Coverage Ratio (Covenant: >3.25x) 6.80x 5.45x 5.67x 5.94x 5.90x 5.31x 0.48x 0.48x Q Q16 Source: CMPC Source: CMPC 15

16 DEMONSTRATED CAPACITY TO MANAGE LEVERAGE Net Debt / EBITDA 5.0 Acquisition of Pacífico and Santa Fe I Santa Fe II Investment Period Guaíba I Acquisition Guaíba II Investment Period Source: CMPC 16

17 CMPC S DEBT PROFILE AS OF MARCH 31 ST, 2016 Debt Profile Amortization schedule (as of today) Average term: 6.2 years Average cost in US$: 3.9% Bonds Banks 85 Total Debt: US$4,153 million Cash: US$633 million Net Debt: US$3,519 million / /39 Debt by Type Debt by Interest Rate Debt by Currency Debt by Issuer Tissue 6% Pulp 21% BRL 6% Other 3% CLP 6% Variable Rate 6% ECA 9% BNDES 12% Banks 6% Inversion es CMPC 73% USD 86% Fixed Rate 94% Bonds 73% Source: CMPC 17

18 II. CMPC S VALUE PROPOSAL 4. COMMITTED TO SUSTAINABLE DEVELOPMENT AND CORPORATE GOVERNANCE

19 CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY Throughout its history, CMPC has maintained a way of doing business and engaging with employees, customers and shareholders. With a 96-year tradition, the following five values summarize our vision of how we should work. Respect for people Fairness when competing Care of the environment Strict compliance with the legal regulation Consideration for neighbors' needs 5 Pillars of CMPC s Environmental Agenda Development of certified renewable forest plantations Replacement of fossil fuels with biomass Efficient use of energy, water and raw materials Certified industrial processes Recycling old paper 19

20 CORPORATE GOVERNANCE IN CMPC BOARD OF DIRECTORS Luis Felipe Gazitúa Chairman Vivianne Blanlot Rafael Fernández Independent Jorge Larraín Jorge Marín Independent Jorge Matte Bernardo Matte Ramiro Mendoza Pablo Turner CMPC s Board of Directors Directors Committee Current members: Vivianne Blanlot, Rafael Fernández and Jorge Marín Appoints Board Members CMPC s Management Comptroller Audit Committee Current members: Vivianne Blanlot and Ramiro Mendoza CMPC s Subsidiary s Board of Directors Financial Risk Committee Current members: Bernardo Matte and Jorge Marín CMPC s Subsidiary s Management Other initiatives: Business Ethics Guidelines, Corporate Governance Guidelines, Antitrust Guidelines, Anticorruption Policies, Whistle Blower Hotline 20

21 II- CMPC S VALUE PROPOSAL 5. DIVERSIFIED INVESTMENT PORTFOLIO

22 CMPC HAS A DIVERSIFIED INVESTMENT PORTFOLIO CMPC is finishing the largest investment cycle of its history Guaíba II Project May 2015 Tissue paper machine in Altamira, México (2Q15) Cogeneration Facilities: Puente Alto Mill, Talagante Mill and Altamira Mill. Focus in Continue to increase tissue paper and conversion capacity Cañete Mill (Peru) Capacity:50 th. tons /year Investment: US$ 129 million Start-up: 1Q17 Operational continuity projects to further increase efficiency Laja Pulp Mill Guaíba I Pulp Mill Maule Boxboard Mill Cañete Mill - Perú 22

23 TISSUE DIVISION: CMPC IS FAVOURABLY POSITIONED TO CAPTURE THE DEVELOPMENT AND GROWTH OF THESE MARKETS CMPC has a strong presence in all main categories of tissue, sanitary and away from home products Mexico 7% CMPC: 134 th. tons* CMPC successfully evolved from a local player into a leading LatAm tissue player due to its ability to enter new markets with high potential based on a pioneering spirit sustained by world-class innovations Ecuador 24% Peru Chile 76% 54% CMPC: 71 th. tons* Colombia 8% CMPC: 27 th. tons* Argentina Brazil 8% CMPC: 135 th. tons* Uruguay 83% CMPC: 35 th. tons* CMPC: 166 th. tons* 44% CMPC: 99 th. tons* CMPC Tissue Paper Market Share * CMPC s tissue paper capacity Source: CMPC as of December 31 st

24 Tíssue Paper App. Consumption ( k/hab.) CMPC SEEKS TO TAP LATAM UNDERPENETRATED TISSUE MARKETS High growth potential in Tissue Paper and Sanitary Products in Latin America based on the following fundamentals, TISSUE PAPER Population growth and urbanization Economic growth Increase in per capita consumption Higher quality products SANITARY PRODUCTS Child population growth Economic growth Higher penetration levels LatAm Average Tissue Consumption 6.1 kg/person Per Capita Tissue Consumption 25 USA 4.4 Kg. 1.2 kg 0.4 kg 0.1 kg LatAm Sanitary Products Penetration* Baby Diapers Source: Price Hanna 73% 14% 72% Incontinence Feminine Protection Source: CMPC as of December 2013 Canada Sweden UK Finland Austria Belgium Germany Israel New Zealand Iceland Greece Malta Spain Japan Australia Costa Rica Portugal France Chile Hungary Italy Panama Poland Czech Republic Uruguay Mexico El Salvador Brazil Venezuela 5 Guatemala Honduras Ecuador, Peru, China, Colombia, South Africa Indonesia 0 India GNI p/c (thousand US$ at ppp) 24

25 III. CHALLENGES

26 CMPC WILL BASE ITS STRATEGY IN 4 PILLARS TO CONSOLIDATE ITS LEADERSHIP IN THE P&P INDUSTRY 1. Continue running at full capacity across all business units 2. Expand tissue capacity with new facility in Peru 3. Focus in cost control and enhance efficiency 4. Reduce leverage, lower Net Debt / EBITDA among all business divisions and countries 26

27 IV. APPENDIX

28 APPENDIX I: ANNUAL CAPACITY BY PRODUCT/COUNTRY Business Area Product / Country Capacity Sawn wood 1.0 M m 3 Forestry Remanufactured wood 190 th. m 3 Plywood 500 th. m 3 Pulp Papers BSKP (Laja) BSKP (Pacífico) BEKP (Guaíba) BEKP (Santa Fe) Boxboard Paper Bags Corrugated Paper Corrugated boxes 340 th. tons 500 th. tons th. tons th. tons 431 th. tons 93 th. tons 660 M bags 330 th. tons 285 th. tons Tissue Molded Pulp trays Other Papers Chile Brazil Argentina Mexico Peru Uruguay 18 th. tons 296 M units 140 th. tons 166 th. tons 135 th. tons 99 th. tons 134 th. tons 71 th. tons 35 th. tons Colombia 27 th. tons 28

29 APPENDIX II: NEW BEKP CAPACITY IN THE 4OO+ MILLION TONNES FIBER MARKET Fiber World Consumption required to produce 406 million tons of Paper&Board Virgin fiber used to produce Paper&Board (million tons) Market Pulp consumed to manufacture Paper&Board (million tons) Recovered Paper 234 million tons (57%) Virgin Pulp 183 million tons (43%) Integrated 124 million tons (65%) Market Pulp 59 million tons (35%) BSKP 25 BHKP 32 Mec 5 UKP 2 Sulphite 419 million tons of total fibers 64 million tons of market pulp 32 million tons of BHKP Source: RISI 5-year Forecast ( ) March

30 APPENDIX II: EUCALYPTUS PULP GROWTH HAS OUTPACED OTHER HARDWOOD FIBERS BECAUSE OF ITS COST AND QUALITY ADVANTAGES Million tons Higher pulp production yield than other species Fast growing trees: shorter rotation, less land required and better performance Superior structural properties for several paper & paperboard applications Paper manufacturers looking for BEKP to premium tissue products BEKP replacing other fibers Market pulp demand BSKP BHKP BEKP Source: CMPC, Hawkins Wright 30

31 Million tons Million Tons APPENDIX II: THE PAPER INDUSTRY HAS GROWN, SPECIALLY IN THE PACKAGING SEGMENT Since 1992 paper production has grown 61%, mainly explained by: 106 million additional tons of packaging paper 33 million additional tons of P&W papers 18 million additional tons of tissue papers 450 Newsprint P&W Packaging Tissue Other P&B Source: RISI Since 2007, Packaging and Tissue have continued to grow, while P&W has declined 31

32 Disclaimer: This document provides information about Empresas CMPC SA. In any case this constitutes a comprehensive analysis of the financial, production and sales situation of the company, so to evaluate whether to purchase or sell securities of the company, the investor must conduct its own independent analysis. In compliance with the applicable rules, Empresas CMPC SA. publishes this document in 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. CONTACT INVESTOR RELATIONS Colomba Henríquez colomba.henriquez@cmpc.cl +(562) Isidora Farías isidora.farías@cmpc.cl +(562)