Corporate Presentation January 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 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: $5,102 mm EBITDA: $1,042 mm EBITDA Margin: 20% Net Debt: $3,229 mm Assets: $15,421 mm Market capitalization of US$8.5 billion as of December 31 st, 2017 International corporate rating BBB (stable) - Fitch BBB- (negative) - S&P Baa3 (stable) - Moodys Shareholders Structure Chilean and Foreign Investors 34% Chilean Pension Funds 10% Matte Group 56% Figures for the LTM as of September, 2017 (US$ million) Local rating AA- (Fitch) AA (ICR) As of September 30 th, 2017. Source: CMPC 4
Successful growth history over the past decades 4,125 5,102 15,421 1,042 671 700 2017 (as of Sept.17) 1990 237 43 228 308 628 1,312 Plantations Th. hectares Tissue Capacity Th. tons EBITDA US$ million Pulp Capacity Th. tons Revenues US$ million Assets US$ million 5
2. CMPC s Value Proposal
CMPC s Value Proposal 2. Low cost producer with world-class assets 4. Commitment to sustainable development 1. Industry leader and well diversified P&P producer 3. Prudent financial management 7
Paper division Tissue division Pulp division 1 Large-scale vertically-integrated producer of multiple products Main Figures % of total sales % of consolidated EBITDA Total capacity & Employees Sales: $2,632 mm Sales 3 rd parties: $2,366 mm EBITDA: $729 mm EBITDA margin: 28% 47% 67% Forests 671 Th. has. planted 15.8 mm m 3 harvested Capacity 1.6 million m 3 /y solid wood 4.1 million tons/y pulp capacity Employees 4,966 employees Sales:$1,907 mm Sales 3 rd parties: $1,906 mm EBITDA: $232 mm EBITDA margin: 12% 37% 22% Capacity 700 Th. tons/y Employees 8,168 employees Sales: $859 mm Sales 3 rd parties: $830 mm EBITDA: $95 mm EBITDA margin: 11% 16% 10% 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 3,356 employees Total: $5,102 $1,042 Source: CMPC. Figures in US$ million for the LTM as of September, 2017 / Figures do not include Holding and Intercompany Sales. 8
1 Geographic & product diversity provides flexibility & cash flow stability Source: CMPC. Figures in US$ million for the LTM as of September, 2017 / Figures do not include Holding and Intercompany Sales. 9
Russia Scandinavia Canada USA Chile US$/Ton c.i.f. China E. Globulus Iberian E. Globulus Chile Acacia Mangium Eucalyptus Brazil E. Nitens Chile US$/Ton c.i.f. China 2 Pulp production in low-cost, high-yield geographies Eucalyptus Average hardwood growth rate (m 3 ssc/ha/year) 43 43 700 600 500 400 BHKP CASH COST US$/ton cif China 11 20 23 300 200 100 CMPC s pulp facilities 0 0 5,000 10,000 15,000 20,000 25,000 30,000 Th. metrics Tons Radiata Pine Average softwood growth rate (m 3 ssc/ha/year) 700 600 500 BSKP CASH COST US$/ton cif China 2 4 5 11 19 400 300 200 CMPC s pulp facilities 100 0 0 5,000 10,000 15,000 20,000 25,000 Th. metrics Tons 10 Source: CMPC and Hawkins Wright as of October 2017
2 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 11
2 CMPC s Tissue paper market share Unique region-wide tissue operation 9% 4% 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 23% 12% Ecuador 57% Peru 9% Chile Colombia 24% 70% 31% 6% CMPC s baby diaper market share 11% 3% Brazil 83% 70% Uruguay Source: CMPC and Nielsen 44% 24% Argentina 12
2 Operational productivity and efficiency programs in all segments of CMPC Working capital reduction Productivity optimization program Renegotiation of electric contracts Sale of realestate land Renegotiation of logistic contracts 13
3 Strong balance sheet & conservative debt profile Debt breakdown Total debt: $4,593mm Net debt: $3,229mm Debt by currency Debt by interest rate Debt by type BRL 5% Other 3% CLP 3% Variable Rate 4% BNDES 11% ECA 7% Banks 6% USD 89% Fixed Rate 96% Bonds 76% Amortization schedule Average term: 5.8 years CMPC18 bond redeemed on October 2017 184 Bonds Banks Interests 202 140 178 1,483 56 500 498 496 485 116-143 - 2017 2018 2019 2020 2021/2022 2023/29 2030/39 Note: Figures in US$ million as of September 2017 14
3 Stable credit metrics and prudent financial policies Net Debt to EBITDA Interest coverage ratio 4.0x 3.5x 3.0x 2.5x 3.1x 3.2x 3.4x 3.7x 3.8x 3.4x 3.1x 6.30x 5.30x 4.30x 3.30x 2.30x 1.30x 5.90x 5.66x 5.19x 4.66x 4.41x 4.63x 4.89x 2.0x 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 0.30x 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 Financial Debt to Equity Cash / (18M Net Financial Interest + Amortizations) 0.90x 0.80x 0.70x 0.60x 0.50x 0.40x 0.30x 0.53x 0.54x 0.53x 0.53x 0.53x 0.59x 0.57x 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 1.70x 1.50x 1.30x 1.10x 0.90x 0.70x 0.50x 0.30x 1.59x 1.43x 1.05x 1.01x 0.50x 0.54x 0.59x 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 Source: CMPC Covenant Financial Policy 15
3 Positive free cash flow driving deleverage Free Cash Flow Evolution LTM Free Cash Flow Breakdown (Sept. 2017) 177 107 122 64 1,042-485 -5 +190 10-173 -98 470-5 -48 EBITDA Capex Dividends Net Financial Expenses Income Tax Working Capital Variation Free Cash Flow 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 Source: CMPC 16
4 Commitment to Sustainable Development Member of the DJSI Chile, for third consecutive year Member of the new DJSI Mila Member of the FTSE4Good Index, for third consecutive year First Chilean Company to issue a Green Bond Energy Efficiency Gold Seal granted by the Energy Ministry of Chile and the Agency for Energy Efficiency 17
4 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) 18
3. Growth Drivers
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 20
Million tons Global paper demand evolution 450 400 350 300 250 329 322 69 68 21 22 333 70 23 343 72 23 363 369 75 76 24 25 384 79 26 395 392 82 81 27 28 371 77 28 395 400 402 406 409 411 412 84 85 87 88 91 92 94 29 30 32 33 34 35 36 200 96 96 102 105 112 117 123 129 131 129 139 143 146 150 153 157 159 150 100 50 104 99 102 105 112 113 117 119 116 105 110 110 108 107 105 102 100-39 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 21
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 10 5 0 Source: CMPC as of December 2015 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 22
Appendix: Business divisions..
LTM Sept-17 ($US Million) SALES EBITDA ASSETS $2,366 $729 $10.644 47% 67% 73% Pulp division FORESTRY ASSETS* Forestry base: 1,150,000 has. Chile Planted: 457,000 has. 64% Pine, 32% Eucalyptus Brazil Planted: 156,500 has. ~100% Eucalyptus Argentina Planted: 57,500 has. ~ 100% Pine SOLID WOOD PRODUCTS* Sawn Wood Capacity: 960,000 m 3 Remanufactured Wood Capacity: 190,000 m 3 Plywood Capacity: 480,000 m 3 PULP* Chile BSKP - Laja Mill Capacity: 364,000 tons BSKP - Pacifico Mill Capacity: 500,000 tons BEKP - Santa Fe Mill Capacity: 1,496,000 tons Brazil BEKP - Guaíba Mill Capacity: 1,765,000 tons *As of Sept 2017 24
LTM Sept-17 ($US Million) SALES EBITDA ASSETS $1,906 $232 $2,389 Tissue division 37% 22% 17% MAIN CATEGORIES Consumer tissue products Sanitary products Away from home products TISSUE PAPER PRODUCTION CAPACITY* Chile 159,000 tons Brazil 131,000 tons Argentina 99,000 tons Mexico 123,000 tons Peru 125,000 tons Uruguay 34,000 tons Colombia 28,000 tons SANITARY PRODUCTS PRODUCTION CAPACITY* Diapers: 3,970 M units Feminine Care: 1,386 M units *As of Sept 2017 25
LTM Sept-17 ($US Million) SALES EBITDA ASSETS $830 $95 $1,462 16% Paper division 10% 10% PRODUCTION CAPACITY* 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 Sept 2017 26