Corporate Presentation April 2017
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.
1. 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 CMPC s Figures Sales: $4,866 mm EBITDA: $966 mm EBITDA Margin: 20% Net Debt: $3,573 mm Assets: $14,860 mm Market capitalization of US$6.1 billion as of March 31 st, 2017 International corporate rating BBB+ (negative) - Fitch BBB- (stable) - S&P Baa3 (stable) - Moodys Shareholders Structure Chilean and Foreign Investors 34% Chilean Pension Funds 10% Matte Group 56% Figures in US$ as of December, 2016 (US$ million) Local rating AA (Fitch) AA (ICR) As of March 31 st, 2017. Source: CMPC 4
Successful growth history Diversified strategy focused on reducing markets, products & client concentration Targeting growth products like BEKP and tissue Industry-leader with world-class operations focused on improving efficiencies Commitment & track record of investment in sustainability Prudent financial management to drive stakeholder value 646 966 4,125 4,866 14,860 2016 (as of Dec.16) 665 1990 237 43 228 308 628 1,312 Plantations Th. has. Tissue Capacity Th. tons EBITDA US$ million Pulp Capacity Th. tons Revenues US$ million Assets US$ million 5
2. CMPC s Value Proposal
1 Industry leader and well diversified producer
Tissue division Paper division Pulp division Large-scale vertically-integrated producer of multiple products Main Figures % of total sales % of consolidated EBITDA Total capacity & Employees Sales: $2,500 mm Sales 3 rd parties: $2,226 mm EBITDA: $632 mm EBITDA margin: 28% 46% 65% Forests 703 Th. has. planted 16.3 mm m 3 harvested in 2016 Capacity 1.6 million m 3 /y solid wood 4.1 million tons/y pulp capacity Employees 4,898 employees Sales: $868 mm Sales 3 rd parties: $836 mm EBITDA: $110 mm EBITDA margin: 13% 17% 11% Capacity 430mm tons/y boxboard 270mm tons/y containerboard 220mm tons/y corrugated boxes 730mm units/y multiwall bags 370mm units/y molded fiber trays Employees 3,548 employees Sales:$1,806 mm Sales 3 rd parties: $1,803 mm EBITDA: $242 mm EBITDA margin: 13% 37% 25% Capacity 646 Th. tons/y Employees 8,732 employees Total: $4,866 $966 Source: CMPC. Figures in US$ million as of December. 2016 / Figures do not include Holding and Intercompany Sales. 8
Geographic & product diversity provides flexibility & cash flow stability Source: CMPC. Figures in US$ million as of December. 2016 / Figures do not include Holding and Intercompany Sales. 9
2 Strong market position in countries and markets with high growth potential
Dynamics of the pulp market FIBER WORLD CONSUMPTION required to produce 411 million tons of Paper&Board VIRGIN FIBER used to produce Paper&Board (M tons) MARKET PULP consumed to manufacture Paper&Board (M tons) Mec 5 UKP 2 Sulphite Recover Paper 244 million tons (57%) Virgin Pulp 181 million tons (43%) Integrated 117 million tons (65%) Market Pulp 64 million tons (35%) BSKP 25 BHKP 32 425 million tons of total fibers 64 million tons of market pulp 32 million tons of BHKP Source: CMPC, Hawkins Wright and RISI 11
Million tons Million tons Growing capacity to meet global demand for pulp 40 35 30 MARKET PULP DEMAND CMPC PULP CAPACITY EVOLUTION 25 20 15 450 450 450 450 450 450 1,075 1,750 10 5 0 1990 2000 2006 2008 2010 2012 2014 2016 2018 2020 BSKP BHKP BEKP 1,156 1,156 1,156 1,230 1,310 1,496 1,496 1,496 1,496 1,496 840 840 840 840 840 840 840 840 840 840 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Th. tons BSKP (Chile) BEKP (Chile) BEKP (Brazil) Source: CMPC and Hawkins Wright 12
Tissue Paper App.Consumption (k/hab) Leading player in underpenetrated tissue markets 25 Per capita annual consumption of tissue paper (in kilograms) (Countries in green are CMPC operation countries) USA 20 15 Finland UK Israel New Zealand Spain Costa Rica Chile Portugal Italy France Hungary Croatia Canada Austria Sweden Germany Denmark Ireland Netherlands Australia Hong Kong Switzerland Source: CMPC as of December 2015 10 5 0 Mexico Peru China Brazil Venezuela Ecuador Colombia Argentina Malaysia Russia Taiwan Thailand Vietnam Indonesia Philippines India 0 5 10 15 20 25 30 35 40 45 50 GDP per capita in US$ 000 13
CMPC s Tissue paper market share Unique region-wide tissue operation 7% 5% Mexico More than 40 years of expertise in the LatAm consumer business Top 5 tissue and sanitary products producer in every major Latin American market Range of brands & products to take advantage of economic cycles Focused on growth in key markets and underpenetrated sanitary product markets Steady expanding capacity, combination of organic & inorganic growth 24% 11% Ecuador 54% Peru 8% Chile Colombia 23% 76% 27% 4% CMPC s baby diaper market share 8% Brazil 2% 83% 56% Uruguay Source: CMPC and Nielsen 44% 11% Argentina 14
Million tons Repositioning paper business to focus on growth area of packaging GLOBAL PAPER DEMAND EVOLUTION 450 395 400 392 395 400 402 406 409 411 412 384 363 369 371 82 79 81 84 85 87 88 91 92 94 350 343 329 333 322 75 76 77 300 72 69 70 26 27 28 29 30 32 33 34 35 36 68 24 25 28 250 21 22 23 23 112 117 123 129 131 139 143 146 96 96 102 105 129 150 200 153 157 159 150 100 104 99 102 105 112 113 117 119 116 105 110 110 108 107 105 102 100 50 Aiming to expand in folding boxboard to capture growth trends Extensive use of recycled paper, major paper recycler in Chile Closed newsprint operations in 2013-39 37 37 37 39 38 39 38 37 32 32 31 30 28 26 24 23 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Newsprint Printing & Writing Containerboard Tissue Other Paper and Board Source: CMPC and RISI 15
3 Strategically located low cash-cost operations
E. Globulus Iberian E. Globulus Chile Acacia Mangium Eucalyptus Brazil E. Nitens Chile Russia Scandinavia Canada USA Chile US$/Ton c.i.f. China US$/Ton c.i.f. China Pulp production in low-cost, high-yield geographies 700 600 500 BHKP CASH COST US$/ton cif China 700 600 500 BSKP CASH COST US$/ton cif China 400 400 300 300 200 100 CMPC s pulp facilities 200 100 CMPC s pulp facilities 0 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 Th. metrics Tons Eucalyptus Average hardwood growth rate (m 3 ssc/ha/year) 43 43 0 0 5,000 10,000 15,000 20,000 25,000 Th. metrics Tons Radiata Pine Average softwood growth rate (m 3 ssc/ha/year) 11 20 23 2 4 5 11 19 Source: CMPC and Hawkins Wright as of December 2016 17
Strategically located pulp facilities Distance From Plantations Mill Transport to Ports 80 km Laja 93 km / By Train 93 km Pacífico 163 km / By Train 99 km Santa Fe 119 km / By Train 208 km Guaíba 260 km / By Barges 18
Efficiency as a core value Focused on reducing working capital & leverage Optimizing asset base Additional efficiencies at the mills derived from purchasing, transportation & maintenance costs Efficient energy production and utilization 19
4 Prudent and conservative financial management and adequate debt profile
Strong balance sheet & conservative debt profile Debt breakdown Debt by currency Debt by interest rate Debt by type Debt by issuer/division BRL 6% $326 $279 CLP 3% $47 Other 3% USD 88% Amortization schedule Average term: 5.7 years Average cost in US$: 4.2% Note: Figures in US$ million as of December 2016 Floating 4% $646 $683 $147 $185 Fixed 96% Bonds Banks Interests $771 $276 $499 $498 $140 $495 $140 $1,121 $130 2017 2018 2019 2020 2021/22 2023/29 2030/39 BNDES 14% Banks ECA 6% Total debt: $4,169mm Bonds 72% $991 Tissue 6% Pulp 22% Inversiones CMPC 72% $482 $482 21
Stable credit metrics and prudent financial policies Sales Evolution (US$mm) EBITDA and EBITDA Margin Evolution (US$mm) 4,837 4,841 4,866 2014 2015 2016 1200 1000 800 600 400 200 0 $986 $1,099 $966 20.4% 22.7% 19.9% 2014 2015 2016 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Debt and Net Debt to EBITDA Interest coverage ratio ¹ 4.6x 3.4x Debt/EBITDA 3.7x Net Debt/EBITDA 4.3x 3.7x 3.2x 5.3x 5.9x 4.7x 2014 2015 2016 Source: Public company filings 1. Interest coverage ratio is calculated as EBITDA (as adjusted) plus Finance income divided by Finance costs 2014 2015 2016 22
Multiple avenues for growth to drive financial results Growing tissue business Capitalizing on turnaround in pulp prices Targeting growth in boxboard and plywood business Optimizing efficiencies across business 23
5 Commitment and proven track record of sustainability
Strong commitment to sustainable development of forests and environment FSC Certifications Examples of efforts in community relations Paper recycling capabilities, highlighting tissue. Large LatAm Land Owner (+1 million hectares & US$3.5 billion biological assets) Member of the DJSI Chile, for second consecutive year First Chilean company to issue a Green Bond CMPC purchases diminished land Plants new seed and manages growth Produces large forest of CO 2 consuming trees Utilizes green energy through biomass from plantations Recycles paper, then uses it to produce other papers 25
Corporate governance valued leadership Luis Felipe Gazitúa Chairman Vivianne Blanlot Rafael Fernández Independent Jorge Larraín Jorge Marín Independent Jorge Matte Bernardo Matte Ramiro Mendoza Pablo Turner Board of Directors increased to 9 from 7 members Directors Committee comprised by 3 board members (2 independent) 26
Appendix: Business divisions..
Dec. 2016 ($US Million)* SALES EBITDA ASSETS 2,226 $632 $11,100 46% 66% 76% Pulp division FORESTRY ASSETS* Forestry base: 1,086,000 has. Chile Planted: 488,000 has. 66% Pine, 31% Eucalyptus Brazil Planted: 157,200 has. ~100% Eucalyptus Argentina Planted: 58,200 has. ~ 100% Pine SOLID WOOD PRODUCTS* Sawn Wood Capacity: 960,000 m3 Remanufactured Wood Capacity: 190,000 m3 Plywood Capacity: 480,000 m3 PULP* Chile BSKP - Laja Mill Capacity: 364,000 tons BSKP - Pacifico Mill Capacity: 500,000 tons BEKP - Santa Fe Mill Capacity: 1,496,000 tons Brazil BEKP - Guaíba Mill Capacity: 1,765,000 tons *As of December 2016 28
Dec. 2016 ($US Million)* SALES EBITDA ASSETS $1,803 $242 $2,050 Tissue division 37% 25% 14% MAIN CATEGORIES Consumer tissue products Sanitary products Away from home products TISSUE PAPER PRODUCTION CAPACITY* Chile 159,000 tons Brazil 131,000 tons Argentina 99,000 tons Mexico 123,000 tons Peru 71,000 tons Uruguay 34,000 tons Colombia 28,000 tons SANITARY PRODUCTS PRODUCTION CAPACITY* Diapers: 3,463 M units Feminine Care: 1,210 M units *As of December 2016 29
Dec. 2016 ($US Million)* SALES EBITDA ASSETS $836 $110 $1,430 17% Paper division PRODUCTION CAPACITY* 11% 10% BOXBOARD 429,000 tons Chile PAPER BAGS 106,500 tons 672 MM bags Chile: ~31% Peru: ~ 34% Mexico: ~ 25% Argentina: ~ 10% OTHER PAPERS 80,000 tons Chile (Sackraft) 60,000 tons Brazil (Printing & Writing) MOLDED PULP TRAYS 21,200 tons 380 MM units Chile CORRUGATED PAPER 316,000 tons Chile CORRUGATED BOXES 240,000 tons Chile *As of December 2016 30