Corporate Presentation November 2018
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 ( Risk Management ). Forward-looking statements speak only as of the date they are delivered. CMPC undertakes no obligation to publicly update or revise them based on developments which differ from those anticipated. Investor Relations Contacts Colomba Henríquez colomba.henriquez@cmpc.cl +56 2 2441 2791 Petya Miteva petya.miteva@cmpc.cl +56 2 24412713 Agustina Mussolini agustina.mussolini@cmpc.cl +56 2 2441 2616 2
Index I. CMPC at a Glance II. III. IV. Competitive Advantages Industry Drivers Strategy V. Appendix 33
4 CMPC at a Glance
A Global Leader in P&P CMPC is a P&P company, established in 1920, that produces solid wood products, pulp, paper and packaging products and tissue in Latin America. 3 rd Global Market Producer 2 Pulp CMPC Figures 1 Tissue 32% Sales $6,048 15% Packaging Pulp 53% Packaging 5% EBITDA $1,670 Tissue 14% Tissue 10% Pulp 85% Packaging 10% Assets $14,975 Pulp 76% 2 nd Producer in LatAm 3 Tissue Competitive BEKP & BSKP Cash Cost Investment Grade Company Fitch: BBB (stable) Moody s: Baa3 (stable) S&P: BBB- (stable) 1 Source: CMPC. Figures for the LTM as of September, 2018 (USD million) 2,3 Source: Hawkins Wright, RISI 5
Vertically integrated... 1.6 million 673,000 Planted hectares Pine 52% Eucalyptus 48% m3 / year Solid Wood Products HW 3,261,000 SW 864,000 tons / year Pulp Containerboard 270,000 Boxboard 430,000 Sackraft 81,000 tons / year Papers Corrugated boxes 216,000 tons / year Paper bags 688 MM units / year Packaging Market Pulp 747,000 tons / year Tissue Paper 615,000 Products tons / year Recycled Paper Source: CMPC, as of June 2018 6
... and well-diversified player Source: CMPC. Figures in USD million for the LTM as of September, 2018 / Figures do not include Holding and Intercompany Sales 7
CMPC s Corporate Governance & Shareholders Structure High corporate governance standards, in line with international best practices to continue growing and generating value to all our stakeholders in a responsible and sustainable way. Shareholder s Structure 1 Corporate Governance Chilean and Foreign Investors 35% Chilean Pension Funds 10% Each Board of Directors Committee counts with a functioning protocol which defines its members, attributions and topics addressed. 55% Matte Group 1 Source: CMPC, as of September 30th, 2018 8
Committed to Sustainable Development First Chilean Company to issue a Green Bond Member of the FTSE4Good Index, for third consecutive year Energy Efficiency Gold Seal granted by the Energy Ministry of Chile and the Agency for Energy Efficiency 9
Competitive Advantages 10
Forestry assets in low-cost, high-yield geographies with continuous productivity growth Eucalyptus Average hardwood growth rate (m3ssc/ha/year) Eucalyptus Nitens Volume Gain (%) 1 43 43 27.2 11 20 23 1.4 8.2 19.0 E. Globulus Iberian E. Globulus Chile Acacia Mangium Eucalypus Brazil E. Nitens Chile 1994-1996 1997-1999 2000-2014 2015-2017 Radiata Pine Average softwood growth rate (m 3 ssc/ha/year) Radiata Pine Volume Gain (%) 1 20 35.7 25.8 11 15.1 2 4 5 0 6.0 Russia Scandinavia Canada USA Chile 1975 1976-1994 1995-2009 2010-2015 2016-2017 Source: CMPC 1 Achieved through continuous traditional genetic and silvicultural improvements. 11
Cash Cost Cash Cost Strategically located pulp facilities BSKP Cash Cost USD/ton cif China BHKP Cash Cost USD/ton cif China 700 700 600 600 500 500 400 400 300 300 200 100 CMPC s pulp facilities 200 100 CMPC s pulp facilities 0 5,000 10,000 15,000 20,000 25,000 0 5,000 10,000 15,000 20,000 25,000 Th. Metric Tons Th. Metric Tons Source: CMPC, Hawkins Wright 12
9% 4% 11% 6% Colombia TM 1 : 221 G 2 : 4.3% Unique Region-Wide Tissue Market Presence México TM 1 : 1,113 G 2 : 2.3% 22% 15% More than 40 years of expertise in the LatAm consumer business. Top 5 tissue and sanitary products producer in every major Latin American market. Focused on growth in key 54%. markets and underpenetrated 38% Ecuador TM 1 : 72 G 2 : 4.8% sanitary product markets. Steady expanding capacity, combination of organic & inorganic growth. 8% 3% Perú TM 1 : 171 G 2 : 7.1% 67% 81% Brazil TM 1 : 1,243 G 2 : 4.4% 58% 29% CMPC s Tissue paper market share 41% 15% CMPC s baby diaper paper market share Source: CMPC, RISI 1 TM: Total Tissue Market in th. Tons as of 2016 2 G: CAGR 2006-2016 Chile TM 1 : 233 G 2 : 5.2% Argentina TM 1 : 327 G 2 : 3.5% Uruguay TM 1 : 38 G 2 : 8.4% 13
Comprehensive Portfolio of Well-Known and Well-Regarded Brands Tissue Paper Away from Home Sanitary Products Source: CMPC 14
CMPC s boxboard is a multilayer fiberbased product with multiple competitive advantages Multilayer Boxboard Low production cost Ratio between weight and rigidity Printing quality Local US producers cash cost curve Transporting efficiency Conversion efficiency Product consistency Health safety USD / Ton 1,000 800 Average CMPC boxboard cash cost at US port 600 400 200 0 Source: CMPC 2018 CMPC Maule Mill 15
IndustryDrivers
Global Paper Demand Evolution Population Growth Urbanization Economic Growth Rising disposable income Increase in Product Quality E-Commerce Circular Economy Intelligent Packaging 450 400 350 300 250 329 322 69 68 21 22 333 70 23 343 72 23 363 369 75 76 24 25 383 79 26 394 392 82 81 27 28 371 77 28 395 399 401 405 409 410 414 418 84 85 87 89 91 91 93 95 29 30 32 33 34 35 36 38 Other Paper and Board 200 96 96 102 105 112 117 123 128 130 128 139 142 146 149 153 157 161 166 Tissue 150 Containerboard 100 104 99 102 105 112 113 117 119 116 105 110 110 108 107 105 102 100 98 Printing and Writing Newsprint 50-39 37 37 37 39 38 39 38 37 32 32 31 30 28 26 24 23 22 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: RISI 17
Dynamics of the Pulp Market Source: Hawkins Wright 2017, CMPC 18
Tissue Paper App. Consumption (k/capita) Tissue Paper Demand Dynamics Per capita annual consumption of tissue paper (in kilograms) (Countries in green are CMPC operation countries) 25 20 15 10 5 0 10 20 30 40 50 60 GDP per capita in USD'000 Source: RISI, World Bank and CMPC as of 2017 19
Annual change in BKP capacity (million tons) Total Cpacity by grade (million tons) Pulp Supply Short & Medium Term Perspectives 4.0 3.5 BHKP 40.0 38.0 3.0 36.0 2.5 34.0 2.0 32.0 1.5 1.0 BSKP 30.0 28.0 0.5 26.0 0.0-0.5 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 24.0 22.0-1.0 20.0 Source: PPPC World 20 and Global 100 Statistics 20
Strategy
CMPC s Strategy Efficiency & Productivity Growth Profitability 22
Pulp Strategy: Improving margins through operational excellence Forest Base Expansion Operational Excellence Program Increase our forestry base in Brazil in order to prepare future growth in pulp Plywood Laja Mill Pacifico Mill 2 +8% 1 +11% 1 L1:+9% 1 L2:+4% 1 Guaiba Mill 2 Santa Fe Mill 1 Increase in production efficiency (%) between 2016 and 2018 2 Operational excellence programs are still underway and haven t had one full cycle yet or will be launched beg. 2019 23
Tissue Strategy: Leading Latin American Producer Profitability Strategy Tissue Revenue Management Leading markets Route to Market Operational Excellence Program Procurement Cost Reduction 67% 41% 54% 81% Fiber Management 54 th USD 130 54 th USD 140 tons Million tons Million Zárate tissue machine 4Q19 Cañete tissue mill 1Q17 Opportunity markets 8% 11% Source: CMPC 24
Packaging Strategy: Expand business and gain efficiencies Global packaging market expected to grow USD bn 400 350 300 250 200 150 100 + 3% per year 2017-2022 Expand our business on the back of a growing packaging market given new packaging trends: Replacing the use of plastic E-commerce Corrugated products as a merchandising medium in the battle for consumers Bolster our regional footprint leveraging our quality (high quality fiber) and low cost (integrated operations), supported by the global presence of the CMPC group 50 0 2012 2013 2014 2015 2016 2017 2022 F Increase profitability by: Capturing internal synergies Improving efficiency through operational excellence Cost reductions by improving our entire supply chain Source: CMPC 25
Profitability EBITDA Margin Free Cash Flow LTM 60% 53% 50% 600 500 400 300 200 502 40% 30% 20% 10% 0% 31% 10% 6% 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 100 CMPC Pulp Tissue Packaging 0 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 ROIC 1 Drivers 12% 10.9% Higher pulp volumes and prices Efficiency and productivity initiatives Lower SG&A expenses in Tissue 10% 8% 6% 4% 2% 0% 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 Source: CMPC as of September 2018 1 ROIC = (EBITDA Depreciation Stumpage) / (Operative receivables + Inventories + Property, Plant and Equipment Net + Biological Assets (Stumpage Value) Operative Liabilities) 26
Prudent financial management: conservative debt profile Debt by currency Debt by interest rate Debt by type Debt breakdown CLP 3% Other BRL 4% 3% Variable Rate 1% ECA 8% BNDES 9% $3,863 mm Banks 5% Total debt $2,944 mm Net debt 90% USD 99% Fixed Rate 78% Bonds $919 mm Cash Amortization Schedule 6.2 Years Average Term 4.4% Average Rate 1,664 1,170 63 176 1,601 408 103 223 184 137 994 185 196 2018 2019 2020 2021 2022/2023 2024/2030 2031/2040 Banks Bonds Source: CMPC, as of September 2018 27
Prudent Financial Management: Stable credit metrics and prudent financial policies Net debt to EBITDA Interest coverage ratio 4.00x 3.50x 3.00x 2.50x 2.00x 1.50x 3.8x 3.4x 3.0x 3.1x 2.5x 2.2x 1.8x 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 8.30x 7.30x 6.30x 5.30x 4.30x 3.30x 2.30x 1.30x 0.30x 7.66x 7.02x 5.87x 4.41x 4.63x 4.89x 5.00x 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 Financial debt to equity Cash 1 / (18M Net Financial Interest + amortization) 0.90x 0.80x 0.70x 0.60x 0.50x 0.40x 0.30x 0.59x 0.57x 0.53x 0.51x 0.49x 0.48x 0.47x 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 2.10x 1.90x 1.70x 1.50x 1.30x 1.10x 0.90x 0.70x 0.50x 0.30x 1.90x 1.59x 1.43x 1.10x 1.15x 0.94x 0.98x 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 Source: CMPC, as of September 2018 1 Cash = cash & cash equivalents + undrawn committed lines of credit Financial Policy Covenant 28
Appendix
LTM September 2018 (USD Million) Pulp Division Sales $3,210 EBITDA $1,458 Assets $11,006 53% 87% 76% Forestry assets* 1,150,000 has Forestry base Solid wood products* Pulp* Chile 471,000 Planted has Sawn wood 960,000 m3 capacity 364,000 Tons capacity Pine 64% Eucalyptus 32% BSKP / Laja Mill Brazil 157,300 Planted has Eucalyptus 100% Remanufactured wood 190,000 m3 capacity Chile 1,496,000 Tons capacity BSKP / Santa Fe Mill 500,000 Tons capacity BSKP / Pacifico Mill Argentina 58,300 Planted has Plywood 480,000 m3 capacity Brazil 1,765,000 Tons capacity Pine 100% *As of June 2018 30
LTM September 2018 (USD Million) Tissue Division Sales $1,944 EBITDA $166 Assets $2,000 32% 10% 14% Main categories Tissue paper production capacity* Sanitary products Production capacity* Chile 169,000 Consumer tissue products Sanitary products Away from home products Brazil Argentina Mexico 134,000 105,000 140,000 tons Diapers Feminine care 3,970 MM units 1,386 MM units Peru 133,000 Uruguay 35,000 Colombia 31,000 *As of June 2018 31
LTM September 2018 (USD Million) Packaging Division Sales $894 EBITDA $83 Assets $1,495 5% 15% 10% Production capacity Boxboard 430,000 tons Other papers tons 81,000 60,000 Chile Sackraft Brazil Printing and writing Paper bags 688 MM bags Chile Chile 31% Peru 34% Corrugated boxes 216,000 tons Chile Corrugated paper 270,000 tons Chile Molded pulp trails 21,200 tons 370 MM units Chile Mexico Argentina 25% 10% *As of June 2018 32