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Corporate PresentationMarch 2019
Forward-Looking Statements
Investor Relations Contacts
Colomba Henríquez
+56 2 2441 2791
Petya Miteva
+56 2 24412713
Agustina Mussolini
+56 2 2441 2616
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.
2
Index
I. CMPC at a Glance
II. Competitive Advantages
III. Industry Drivers
IV. Strategy
V. Appendix
33
CMPC at a Glance
4
76%
14%
10%
Pulp
Softys
Packaging
Assets
$14,983
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 Figures 1
1 Source: CMPC. Figures for the LTM as of December 2018 (USD million)
2,3 Source: Hawkins Wright, RISI
3rd
Global Market Producer 2
Pulp
2nd
Producer in LatAm 3
Tissue
Investment Grade
CompanyFitch: BBB (stable)
Moody’s: Baa3 (stable)
S&P: BBB- (stable)
Cash Cost
Competitive
BEKP & BSKP
5
10%
85%
5%Softys
Pulp
Packaging
EBITDA
$1,816
54%
15%
31%
Sales
$6,274
Softys
Packaging
Pulp
6Source: CMPC, as of December 2018
Vertically integrated...
tons / year
Pulp
tons / year
Recycled Paper
tons / year
Papers
HW 3,362,000
SW 798,000
688,000
Planted hectares
Pine 52%
Eucalyptus 48%
1.6 millionm3 / year
Solid Wood Products
Market Pulp
580,000
Containerboard
260,000
Boxboard
530,000
Sackraft
66,000
747,000
tons / year
Tissue Paper
Products
Packaging
Corrugated boxes
211,000tons / year
Paper bags
732 MMunits / year
Packaging
Molded pulp trails
396 MMunits / year
Source: CMPC. Figures in USD million for the LTM as of December, 2018 / Figures do not include Holding and Intercompany Sales
... and well-diversified player
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
1 Source: CMPC, as of December 31st, 2018
Chilean Pension FundsChilean
and Foreign Investors
Matte Group
10%
56%
34%
Each Board of Directors Committee counts with a functioning protocol which
defines its members, attributions and topics addressed.
8
Committed to Sustainable Development
Member of the
FTSE4Good Index
(4th consecutive year)
Energy Efficiency
Gold Seal
granted by the Energy
Ministry of Chile and
the Agency for Energy
Efficiency
First Chilean
Company to issue a
Green Bond
9
Member of the
DJSI Chile Index (4th
consecutive year) and
DJSI MILA Index (2nd
consecutive year).
Competitive Advantages
10
Forestry assets in low-cost, high-yield geographies with continuous productivity growth
Eucalyptus
Radiata Pine
Average hardwood growth rate (m3ssc/ha/year)
Average softwood growth rate (m3ssc/ha/year)
Eucalyptus Nitens
Radiata Pine
Volume Gain (%)1
Volume Gain (%)1
Source: CMPC1Achieved through continuous traditional genetic and silvicultural improvements.
11
20 23
43 43
E. Globulus
Iberian
E. Globulus
Chile
Acacia
Mangium
Eucalypus
Brazil
E. Nitens
Chile
24 5
11
20
Russia Scandinavia Canada USA Chile
1.4
8.2
19.0
27.2
1994-1996 1997-1999 2000-2014 2015-2017
06.0
15.1
25.8
35.7
1975 1976-1994 1995-2009 2010-2015 2016-2017
11
0
100
200
300
400
500
600
700
0 5.000 10.000 15.000 20.000 25.000 30.000 35.0000
100
200
300
400
500
600
700
0 5.000 10.000 15.000 20.000 25.000
Strategically located pulp facilities
12
BSKP Cash Cost
USD/ton cif China
Th. Metric Tons
BHKP Cash Cost
USD/ton cif China
Ca
sh C
ost
Th. Metric Tons
CMPC’s pulp facilities
Fuente: CMPC, Hawkins Wright December 2018
Ca
sh C
ost
CMPC’s pulp facilities
ColombiaTM1: 221G2: 4.3%
9%
3%
EcuadorTM1: 72G2: 4.8%
22%
8%
PerúTM1: 171G2: 7.1%
55%
24%
BrazilTM1: 1,243G2: 4.4%
12%
3%
ChileTM1: 233G2: 5.2%
70%
31%
CMPC’s Tissue paper market share
CMPC’s baby diaperpaper market share
41%
16%
ArgentinaTM1: 327G2: 3.5%
80%
57%
UruguayTM1: 38G2: 8.4%
12%6%
MéxicoTM1: 1,113G2: 2.3%
Unique Region-Wide Tissue Market Presence
13
Source: CMPC, RISI
1 TM: Total Tissue Market in th. Tons as of 2016
2 G: CAGR 2006-2016
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
markets and underpenetrated
sanitary product markets.
Steady expanding capacity,
combination of organic &
inorganic growth.
Comprehensive Portfolio of Well-Known and Well-Regarded Brands
Away from Home Sanitary ProductsTissue Paper
Source: CMPC
14
CMPC’s boxboard is a multilayer fiber-based product with multiple competitive advantages
Multilayer Boxboard
Low production cost
Ratio between weight and rigidity
Printing quality
Transporting efficiency
Conversion efficiency
Product consistency
Health safety
15
Local US producers cash cost curve
Source: CMPC 2018
600
400
200
0
800
1,000
USD / Ton
Average CMPC boxboard cash cost at US port
CMPC Maule Mill
IndustryDrivers
Global Paper Demand Evolution
Other Paper and Board
Tissue
Containerboard
Printing and Writing
Newsprint
Population Growth
Urbanization
Economic Growth
Rising disposable income
Increase in Product Quality
E-Commerce
Circular Economy
Intelligent Packaging
17
39 37 37 37 39 38 39 38 37 32 32 31 30 28 26 24 23 22
104 99 102 105 112 113 117 119 116 105 110 110 108 107 105 102 100 98
96 96 102 105 112 117 123 128 130
128 139 142 146 149 153 157 161 166
21 22 23 23
24 25 26 27 28
28 29 30 32 33 34 35 36 38
69 68 70
72 75 76
79 82 81
77
84 85 87 89 91 91 93 95
-
50
100
150
200
250
300
350
400
450
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
329 322333
343
363 369383
394 392
371
395 399 401 405 409 410 418414
Source: RISI
Dynamics of the Pulp Market
Source: Hawkins Wright 2017, CMPC
18
Tissue Paper Demand Dynamics
Source: RISI, World Bank and CMPC as of 2017
19
Per capita annual consumption of tissue paper (in kilograms)(Countries in green are CMPC operation countries)
Tis
sue
Pa
pe
r A
pp
. Co
nsu
mp
tio
n (
k/c
ap
ita
)
GDP per capita in USD'000
0 10 20 30 40 50 60
5
10
15
20
25
Pulp Supply Short & Medium Term Perspectives
Source: PPPC World 20 and Global 100 Statistics
20
20,0
22,0
24,0
26,0
28,0
30,0
32,0
34,0
36,0
38,0
40,0
-1,0
-0,5
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
To
tal C
pac
ity b
y g
rad
e (
mill
ion
to
ns)
An
nu
al c
han
ge in
BK
P c
apac
ity (m
illio
n t
on
s)
BHKP
BSKP
Strategy
CMPC’s Strategy
22
Efficiency &
Productivity
Growth Profitability
Pulp Strategy: Improving margins through operational excellence
Forest Base Expansion
Increase our forestry base in Brazil in
order to prepare future growth in pulp
Operational Excellence Program
Plywood
+8% 1
Laja Mill
+7% 1
Pacifico Mill 2
Santa Fe Mill
L1:+10% 1
L2:+4% 1 Guaiba Mill 2
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
Softys Strategy: Leading Latin American Producer
Profitability Strategy Softys
Leading markets
Opportunity markets
70% 41% 55% 80%
60 thtons
Zárate tissue machine
4Q19
USD 130Million
60 thtons
Cañete tissue mill
1Q17
USD 140Million
24
12% 12%
Revenue Management
Route to Market
Operational Excellence Program
Procurement Cost Reduction
Fiber Management
Source: CMPC
Packaging Strategy: Expand business and gain efficiencies
Global packaging market expected to grow
2012 2013 2014 2015 2016 2017 2022 F
400
350
300
250
200
150
100
50
0
USD bn
+ 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
Increase profitability by:
Capturing internal synergies
Improving efficiency through operational
excellence
Cost reductions by improving our
entire supply chain
25
Source: CMPC
Profitability
Source: CMPC as of December 2018
1 ROIC = (EBITDA – Depreciation – Stumpage) / (Operative receivables + Inventories + Property, Plant and Equipment Net + Biological Assets (Stumpage Value) – Operative Liabilities) 26
EBITDA Margin
ROIC1
Free Cash Flow LTM
702
0
100
200
300
400
500
600
700
800
3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
26%
46%
5%5%
0%
10%
20%
30%
40%
50%
60%
3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
CMPC Pulp Softys Packaging
9,8%
0%
2%
4%
6%
8%
10%
12%
3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
Prudent financial management: conservative debt profile
Debt by currency Debt by interest rate Debt by type
$3,814 mm
Total debt
$2,847 mm
Net debt
Debt breakdown
USD
90%
3%
4% 3%
BRL
CLP
Other
99%
1%
Variable Rate
Fixed Rate 79%
5%
7%
9%BNDES
ECA
Banks
Bonds
27
$968 mm
Cash
Source: CMPC, as of December 2018
Amortization Schedule (USD Million)
6.02 YearsAverage Term
4.47%
Average Rate185 25 25
497
1022 1053
195
173
195 145
145
57 54
7
42
400
220 170
642
1.080 1.107
202
2019 2020 2021 2022 2023/2024 2025/2031 2032/2041
Interests
Bonds
Banks
Prudent Financial Management: Stable credit metrics and prudent financial policies
28
Net debt to EBITDA
Financial debt to equity
Interest coverage ratio
Cash1 / (18M Net Financial Interest + amortization)
Financial Policy CovenantSource: CMPC, as of December 20181 Cash = cash & cash equivalents + undrawn committed lines of credit
1,59x
1,10x 1,15x0,98x
1,90x
2,17x
0,30x
0,50x
0,70x
0,90x
1,10x
1,30x
1,50x
1,70x
1,90x
2,10x
2,30x
3T17 4T17 1T18 2T18 3T18 4T18
0,57x
0,51x 0,49x 0,48x 0,47x 0,47x
0,30x
0,40x
0,50x
0,60x
0,70x
0,80x
0,90x
3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
3,1x3,0x
2,5x
2,2x
1,6x
1,50x
2,00x
2,50x
3,00x
3,50x
4,00x
3Q17 4Q17 1Q18 2Q18 4Q18
4,89x5,00x
5,87x
7,02x7,66x
8,50x
0,30x
1,30x
2,30x
3,30x
4,30x
5,30x
6,30x
7,30x
8,30x
9,30x
3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
Appendix
76%
1,866,000Tons capacity
BHKP / Guaiba Mill
1,496,000Tons capacity
BHKP / Santa Fe Mill
520,000Tons capacity
BSKP / Pacifico Mill
278,000Tons capacity
BSKP / Laja Mill
88%54%
Pulp Division
$3,377Sales $1,616EBITDA $11,054Assets
1,148,000 hasForestry baseForestry assets*
Chile
472,000Planted has
Pine 64% Eucalyptus 32%
Brazil158,400
Planted has
Eucalyptus 100%
Argentina58,200
Planted has
Pine 100%
Sawn wood
960,000m3 capacity
Remanufactured wood190,000
m3 capacity
Plywood480,000
m3 capacity
Solid wood products* Pulp*
Chile
Brazil
*As of December 2018
30
LT
M D
ece
mb
er
20
18
(USD
Mill
ion
)
Feminine care 1,386 MM units
Diapers 3,970 MM units
14%8%31%
Softys Division
$1,974Sales $153EBITDA $2,090Assets
Main categories
Consumer tissue products
Tissue paper production capacity*
Sanitary productsProduction capacity*
*As of December 2018
Sanitary products
Away from home products
Chile
Brazil
Argentina
Mexico
Peru
Uruguay
Colombia
169,000
134,000
105,000
140,000
133,000
35,000
31,000
tons
31
LT
M D
ece
mb
er
20
18
(USD
Mill
ion
)
Packaging Division
4%15% 10%
$924Sales $81EBITDA $1,512Assets
Production capacity
*As of December 2018
LT
M D
ece
mb
er
20
18
(USD
Mill
ion
)
Boxboard
530,000tons
Chile
Other papers
66,000
Chile
Sackraft
tons
64,000
Brazil
Printing and writing
Corrugated paper
260,000tons
Chile
Corrugated boxes
211,000tons
Chile
Molded pulp trays 396 MM units
Chile
25,300 tons
32
Paper bags 732 MM bags
Chile
Peru
Mexico
Argentina
28%
31%
34%
7%