EMPRESAS CMPC SECOND QUARTER 2015 RESULTS August 14 th, 2015
FORWARD-LOOKING STATEMENTS This presentation may contain forward-looking statements. Such statements are subject to risks and uncertainties that could cause CMPC s actual results to differ materially from those set forth in the forward-looking statements. These risks include: market, financial and operational risks. All of them are described in CMPC s Financial Statements, Note 3 ( Gestión de Riesgos ). In compliance with the applicable rules, Empresas CMPC S.A. publishes its financial results on its web site (www.cmpc.cl) 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 on its website (www.svs.cl).
1H15 HIGHLIGHTS COMPLETION OF INVESTMENT CYCLE Guaíba 2 pulp line operational after 2 years of investment Output from new line expected to be more than 500,000 tons in 2015 Other projects at or near completion Capex down QoQ for third quarter in a row Net debt to EBITDA peak in 2Q15 Positioned for improved results in 2H15 and 2016 Cogeneration plant, Puente Alto Mill July 2015 3
2Q15 FINANCIAL AND OPERATIONAL HIGHLIGHTS Operational & Other Highlights Guaíba II produced its first bale of pulp on May 7 th. Total output (as of July 31 st ) of 156,341 tons, of which 81,543 are already sold. The new Altamira Tissue Paper Machine produced its first jumbo roll on July 29 th, on-schedule and on-budget New tissue mill in Cañete, Peru was approved by CMPC s Board of Directors. Guaíba I (13 days) and Santa Fe II (12 days) maintenances undertaken during 2Q15 In US$ Milllion 2Q14 1H14 1Q15 2Q15 1H15 QoQ YoY %YTD Revenues 1,231 2,410 1,164 1,187 2,351 2% -4% -2% COGS (816) (1,585) (774) (806) -1,580 4% -1% 0% Other Operational Expenses (170) (330) (150) (165) -315 10% -3% -4% EBITDA 244 494 239 216 455-10% -12% -8% EBITDA margin % 20% 21% 21% 18% 19% -2% -2% -1% Operational Result 131 276 128 102 229-20% -23% -17% Non Operational Result (40) (138) (204) (74) (278) -64% 88% 102% Net Income 92 138-77 28 (49) -136% -70% -135% Volumes 2Q14 1H14 1Q15 2Q15 1H15 QoQ YoY %YTD Forestry + Solid Wood Prod. (1) 1,049 2,053 1,064 1,164 2,228 9% 11% 9% Market Pulp (2) 570 1,100 522 516 1,038-1% -10% -6% Papers (2) 208 436 226 193 419-14% -7% -4% Tissue Papers (2) 142 287 146 152 298 4% 7% 4% Revenue: 2% QoQ increase driven mostly by higher sales in all business divisions except from Papers EBITDA of US$216 million, 10% down from 1Q15 due to the lower contribution of the Pulp and Paper businesses Net Income of US$28 million, compared with a Net loss of US$77 million in 1Q15, largely due to impact of currency movements on Deferred Taxes. (1) Th. m 3 (2) Th. tons 4
COSTS AND OTHER OPERATIONAL EXPENSES ANALYSIS 816 COGS (US$ Million) 774 806 +4% -1% COGS increased 4% compared to 1Q15 due to: Higher consolidated sales Higher costs related to maintenance in pulp mills 2Q15 COGS decreased 1% compared to 2Q14 mainly due to lower consolidated sales and lower costs in the Forestry division. COGS in 2Q15 were 68% of total revenues, up from 67% in 1Q15 and 66% in 2Q14 Other Operational Expenses were up 10% QoQ and down 3% YoY. The quarterly variation was mainly explained by: Higher distribution in Forestry division related to the Guaíba 2 startup Higher administrative costs in Forestry and Pulp The YoY variation was mainly explained by the depreciation of the local currencies. Other operating expenses in 2Q15 were 14% of revenues, up from 13% in 1Q15 and stable compared to 2Q14. Other Op. Exp. (US$ Million) 170 150 +10% -3% 165
FORESTRY 145 Sales * 136 141 Revenues: +4% QoQ / -3% YoY EBITDA * 35 25 43 Volumes: +7% QoQ: - +11% sawn wood: higher sales in Chile and Middle East - +8% sawing logs: higher sales of logs affected by fires - +4% remanufactured wood: higher sales in Chile and US - -11% plywood: higher competition in the US, lower sales in Chile. +8% YoY: - +28% plywood: due to the advance in the learning curve of the project - +8% sawing logs: higher sales from Brazilian operations * Figures in US$ million Volumes (Th. m 3 ) Pulpwood 55 62 33 Sawing Logs 408 408 442 Sawn wood 230 179 199 Remanufactured wood 47 43 45 Plywood 60 86 76 Others 251 287 340 Total 1,049 1,064 1,135 Prices: -2% QoQ lower forestry mix price EBITDA: +73% QoQ: - Higher sales and volumes - Lower costs related to forestry protection +20% YoY: - Lower costs related to lower oil prices and depreciation of the Chilean Peso 6
PULP Sales * 374 357 342 EBITDA * 120 121 98 Revenues: +4% QoQ / -5% YoY Volumes: -3% QoQ - -6% BSKP: delayed shipments in LatAm - -2% BEKP: lower production in Guaíba 1 - Scheduled maintenance periods undertaken at Guaíba (13 days in 2Q15), Pacifico (3 days in 2Q15) and Santa Fe 2 (12 days) Prices (including a small tonnage of P&W papers and energy sold to the SIC grid): +3% QoQ - Average effective export price was CIF 649 US$/ton for BSKP and CIF 613 US$/ton for BEKP - Spread between the two fibers was CIF 36 US$/ton, compared with CIF 83 US$/ton in 1Q15. * Figures in US$ million Volumes (t h. Tons) BSKP 167 154 145 BEKP 404 368 362 Total Market Pulp 570 522 507 P&W Guaíba 14 13 13 EBITDA: -19% QoQ - Lower market pulp volumes - Higher costs due to maintenance downtimes - Higher energy costs -18% YoY - Lower market pulp volumes - Lower sales and Energy business contribution 7
PAPERS Sales * 245 247 223 Revenues: -10% QoQ / -9% YoY EBITDA * 43 39 29 Volumes: -9% QoQ - -35% corrugated boxes: end of fruit season in Chile, lower apple boxes and lower industrial activity in Chile - -20% corrugated papers: maintenance downtime - -14% molded pulp trays: decline in apple trays - -8% paper bags: inventory adjustments in some clients -2% YoY: - -29% molded pulp trays: decline in apple trays - -13% paper bags: inventory adjustments in some clients * Figures in US$ million Volumes (th. Tons) Boxboard 100 83 94 Paper Bags 22 21 19 Other Papers 15 17 16 CMPC Packaging 71 104 75 Corrugated Paper 25 38 31 Corrugated Boxes 39 60 39 Molded Pulp Trays 8 6 5 Total 208 226 204 Prices: -2% QoQ, mainly due to lower corrugated boxes and paper bag prices EBITDA: -33% QoQ - Lower sales volumes - Higher direct costs -26% YoY - Lower sales volumes --Lower average prices 8
TISSUE 467 Sales* 439 466 Revenues: +6% QoQ / stable YoY EBITDA * 53 54 55 Volumes: Tissue Paper +5% QoQ mainly due to higher sales in all markets except Mexico / +6% YoY mainly due to higher sales in all markets except Uruguay Sanitary Products +5% QoQ due to higher diaper volumes in Chile, Brazil, Argentina, Peru and Uruguay; higher feminine care products in Brazil, Mexico, Peru, Argentina and Ecuador / +9% YoY due to higher market share in most countries Prices (measured in US$) +3% QoQ for Tissue paper and +1% for sanitary products * Figures in US$ million EBITDA: +3% QoQ +5% YoY - Higher prices, volumes and economies of scale Volumes ( t h. Tons / M Unit s) Total Tissue Paper 145 146 153 Diapers 640 671 699 Femimine Care 274 297 312 Others 152 138 154 Total Sanitary 1,066 1,106 1,165 9
DEBT ANALYSIS Cash of US$617 million in 2Q15, down 17% and 42% from 1Q15 and 2Q14 respectively Main uses of liquidity 2Q15: US$252 million in CAPEX Financial Ratios Net Debt/EBITDA ratio of 3.8x, up from 3.6x in 1Q15 and 3.1x in 2Q14 Financial Debt/Net Tangible Worth ratio of 0.53x, stable QoQ and up from 0.5x in 2Q14 Interest Coverage ratio of 5.08x, down from 5.18x in 1Q15 and 5.74x in 2Q14 Debt by Issuer Debt by Currency Debt by Interest Rate Debt by Type 21% 7% 3% 6% 3% 14% 8% 7% 8% 71% 84% 97% 71% Inversiones CMPC Tissue Pulp USD CLP BRL Other Fixed Rate Floating Rate Banks Bonds BNDES ECA 10
MARKET PULP COMMENT 1,000 800 600 Demand Growth by Region 6 months 2015 vs. 2014 - th. Tons and % change 12.0% Global demand for pulp increased 3% in 2Q15 compared to 2Q14 Hardwood demand grew 2.9% (220 th. Tons) Softwood demand grew 3% (176 th. Tons) Chinese demand grew 12.9% (508 th. tons) 400 200 - -200 0.9% 0.4% North America Western Europe 9.9% 5.7% Eastern Europe Latin America -4.9% 3.1% Japan China Other Asia/Africa Global demand for pulp increased 4.6% (1.26 million tons) 1H15 compared to 1H14, while global capacity grew only 2.0% (0.6 million tons) in the same period Chinese demand grew 12% (911 Th. tons) Demand growth in all regions, except for Japan Eucalyptus demand grew 10.7% (1 million tons) 1,200 1,000 800 Demand Growth by Grade 6 months 2015 vs. 2014 - th. Tons and % change 10.7% Total chemical pulp producer inventories stood at 34 days at the end of June, 2015 compared to 35 days at the end of March, 2015 and 33 days at the end of June, 2014. 600 400 200 - -200 2.1% Northern Softwood 0.8% Southern Softwood 1.1% Radiata Softwood 3.3% Northern Hardwood -3.6% Southern Hardwood Eucalyptus Source: PPPC, World Chemical Market Pulp Global 100 Report June 2015 11
STRATEGIC FOCUS FOR 2H15 Ramp Guaíba II to deliver 500k tons of output for 2015. Begin Deleveraging process Implement cost control programs and projects, including energy Maintain investments in other business areas, including tissue Expand CMPC s culture among all business divisions and countries Operate according to CMPC s Sustainability Policy, strengthening the Company s relationships with its stakeholders 12
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