presentation prepared for the latam day...
TRANSCRIPT
1 JUNE 2016
PRESENTATION PREPARED FOR THE LATAM DAY MACRO & CORPORATES SANTANDER CONFERENCE - LONDON
AGENDA
I. COMPANY DESCRIPTION
II. CMPC’S VALUE PROPOSAL
1. LEADING DIVERSIFIED LATIN AMERICAN P&P PLAYER
2. LOW COST PRODUCER WITH WORLD CLASS ASSETS
3. STRONG BALANCE SHEET AND FINANCIAL TRACK RECORD
4. COMMITTED TO SUSTAINABLE DEVELOPMENT AND CORPORATE GOVERNANCE
5. DIVERSIFIED INVESTMENT PORTFOLIO
III. CHALLENGES 2016-2017
IV. APPENDIX
4
Matte Group
56%
Chilean and
Foreign Investors
34%
Chilean
Pension Funds
11%
CMPC AT A GLANCE
CMPC is a P&P company, established in 1920, that produces solid wood products, pulp, paper,
packaging products and tissue in Latin America
* As of March. 31st, 2016. Source: CMPC
International rating BBB+ (stable) - Fitch
BBB- (stable) - S&P
Baa3 (stable) - Moodys
Local rating AA (Fitch)
AA (ICR)
CMPC’s Figures
Sales: 4,840
EBITDA: 1,122
EBITDA Margin: 23%
Net Income: 134
Net Debt: 3,519
Assets: 14,859
Shareholders’ Structure* Market capitalization of
US$5.2 billion as of May 31st, 2016
Figures for the LTM as of March, 2016 (US$ million)
6
A DIVERSIFIED BUSINESS PORTFOLIO PROVIDES CMPC A STABLE CASH FLOW
Source: CMPC. Figures in US$ million for the LTM as of March 2016 / Figures do not include sales between CMPC affiliates or subsidiaries
Main Figures % of third parties total
sales
% of consolidated
EBITDA
Total capacity &
Employees
Pu
lp-F
ore
str
y
Pa
pe
rs
Tis
su
e
Sales: 2,524
Sales 3rd parties: 2,207
EBITDA: 814
EBITDA margin: 32%
658 Th. has. Planted
16 M m3/y harvested
1.7 M m3/y solid wood
4.1 M tons/y pulp
4,982 employees
US$11.2 billion in assets
Sales: 916
Sales 3rd parties: 861
EBITDA: 127
EBITDA margin: 14%
1.3 M tons/y
3,616 employees
US$1.4 billion in assets
Sales: 1,774
Sales 3rd parties: 1,771
EBITDA: 218
EBITDA margin: 12%
657 Th. tons/y
8,424 employees
US$2 billion in assets
46%
18%
37%
73%
11%
19%
7
CMPC HAS EVOLVED FROM A LOCAL COMPANY TO A GLOBAL PLAYER
Assets of US$14,859 million
41% outside of Chile
Operations in 8 countries in Latin America
Forestry Operations
Pulp Operations
Paper and Packaging
Operations
Tissue Operations
Sales of US$4,840 million
41% from operations
outside of Chile
17,562 Direct Employees
45% outside of Chile
CMPC has expanded significantly
throughout Latin America over the past
two decades and has evolved from a
local company to a global player in the
P&P industry
8
CMPC HAS A PRODUCT AND GEOGRAPHIC DIVERSIFICATION OF SALES THAT PROVIDES FLEXIBILITY
Source: CMPC. Figures in US$ million for the LTM as of March 2016 / Figures do not include Holding and Intercompany Sales.
10
CMPC BENEFITS FROM ITS PRODUCTION COST EFFICIENCIES AND WORLD CLASS ASSETS
Energy investments
based in biomass and
natural gas cogeneration
Access to
low cost fiber
Research and
Development to enhance efficiency,
productivity and customer
satisfaction
State of art
facilities strategically
located
11
Eucalyptus Average hardwood growth rate
(m3ssc/ha/year)
Radiata Pine Average softwood growth rate
(m3ssc/ha/year)
11
2023
43 43
E.
Glo
bu
lus
Ibe
ria
n
E.
Glo
bu
lus
Ch
ile
Aca
cia
Ma
ng
ium
Eu
ca
lyp
tus
Bra
zil
E.
Nit
en
s C
hil
e
2 4 511
19
Ru
ssia
Sca
nd
ina
via
Ca
na
da
US
A
Ch
ile
HIGH YIELD FORESTRY ASSETS THAT PROVIDE LOW COST FIBER RESOURCES
658,100 Planted hectares
483,400 Chile
118,400 Brazil *
56,300 Argentina
CMPC
Forest Base
is FSCR
Certified
Improvement in Forestry Yields **
** Evolution of the weighted increase of volume per hectare
expected for eucalyptus and pine plantations established in
Chile in the respective year
CMPC has a high quality and sustainable forestry base with fast growth cycles which optimizes capital
invested in land, reduces average distance to mills and increases gains due to genetic and sylvicultural
practices
Source: CMPC.
*There is an agreement to acquire from Fibria aprox. 100 Th. hectares of which 39 Th. are planted. CMPC is waiting the approval of Brazilian authorities to consolidate this land
** m3ssc: solid m3 without bark
Over 1 million hectares of land
0%3%
9%
14%
23%
32%
1975 1980 1990 2000 2010 2020P
12
PULP DIVISION: LARGE SCALE PRODUCER WITH GLOBAL CLIENT BASE
Market Pulp Capacity Ranking
Laja BSKP - Chile 340 Th. tons/y
Pacífico BSKP - Chile 500 Th. tons/y
Santa Fe BEKP - Chile
1,500 Th. tons/y
Guaíba BEKP - Brazil
1,759Th. tons/y
Source: CMPC and Hawkins Wright as of April 2016 (million tons)
1,440
2,210
1,610
1,070
905
60
700
1,765
340
100
170
1,335
1,715
3,285
3,560
3,055
1,585
5,300
215
635
60
485
- 2,000 4,000 6,000
Illim
Georgia Pacific
Paper Exellence
Stora Enso
UMP-Kymmene
APRIL
Suzano
CMPC
Arauco
Fibria
BSKP BHKP Other
13
0
100
200
300
400
500
600
700
0 5,000 10,000 15,000 20,000 25,000 30,000
(US
$/To
n c
.i.f
. N
. E
uro
pe)
(Thousand metric tonnes)
0
100
200
300
400
500
600
700
0 5,000 10,000 15,000 20,000 25,000
(US
$/To
n c
.i.f
. N
. Eu
rop
e)
( Thousand metric tonnes)
BSKP1 Supply Curve (US$/ton)
CMPC’S CASH COSTS ARE AMONG THE LOWEST OF THE PULP INDUSTRY GLOBALLY
Source: CMPC and Hawkins Wright as of April 2016
(1) BSKP: Bleached Softwood Kraft Pulp
(2) BHKP: Bleached Hardwood Kraft Pulp
CMPC’s pulp facilities
CMPC’s pulp facilities
BHKP2 Supply Curve (US$/ton)
CMPC’s average distance from… to…
Source: CMPC
163 Km.
93 Km.
119 Km.
208 Km.
80 Km.
93 Km.
99 Km.
260 Km.
(by train)
(by train)
(by train)
(by barges)
Laja
Guaíba
Pacífico
Santa Fe
Plantations Ports
15
Interest Coverage Ratio (Covenant: >3.25x) Financial Debt / Equity (Covenant: <0.8x)
Sales Evolution (US$ million) EBITDA and EBITDA Margin Evolution (US$
million)
KEY FINANCIAL FIGURES AS OF MARCH 31ST, 2016
Source: CMPC
Source: CMPC
Source: CMPC
Source: CMPC
4,759 4,974 4,900 4,841 4,840
2012 2013 2014 2015 LTM
914964 985
1,099 1,122
19% 19% 20%23% 23%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
0
200
400
600
800
1,000
1,200
2012 2013 2014 2015 LTM
0.48x 0.48x
0.56x
0.52x0.53x
0.44
0.46
0.48
0.50
0.52
0.54
0.56
0.58
2012 2013 2014 2015 1Q16
6.80x
5.45x 5.67x5.31x
5.94x 5.90x
0.00x
1.00x
2.00x
3.00x
4.00x
5.00x
6.00x
7.00x
8.00x
2011 2012 2013 2014 2015 1Q16
16
4.5
1.5
2.3
0.9
2.8
1.5
3.3
1.8
3.4
3.8
3.1
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0 Acquisition of Pacífico and Santa
Fe I
Santa Fe II
Investment Period
Guaíba I
Acquisition
Guaíba II
Investment Period
DEMONSTRATED CAPACITY TO MANAGE LEVERAGE
Net Debt / EBITDA
Source: CMPC
17
CMPC’S DEBT PROFILE AS OF MARCH 31ST, 2016
Amortization schedule (as of today)
Source: CMPC
Debt Profile
Average term: 6.2 years
Average cost in US$: 3.9%
Total Debt: US$4,153
million
Cash: US$633 million
Net Debt: US$3,519 million
Banks
6%
Bonds
73%
BNDES
12%
ECA
9%
CLP
6%
USD
86%
BRL
6%
Other
3%
Fixed
Rate
94%
Variable
Rate
6%
Debt by Type Debt by Interest Rate Debt by Currency Debt by Issuer
Inversion
es CMPC
73%
Tissue
6%
Pulp
21%
- -
498 497
- -
494
990
478
179 196
125 124
120 116
114
85
2016 2017 2018 2019 2020 2021 2022 2023/29 2030/39
Bonds Banks
19
CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY
Throughout its history, CMPC has maintained a way of doing business and engaging with employees,
customers and shareholders. With a 96-year tradition, the following five values summarize our vision of how we
should work.
Strict compliance
with the legal
regulation
Consideration for
neighbors' needs
Respect for
people
Fairness when
competing Care of the
environment
Development of
certified
renewable forest plantations
Replacement of
fossil fuels with biomass
Efficient use of energy, water
and raw
materials
Certified industrial
processes
Recycling old paper
5 Pillars of CMPC’s Environmental Agenda
20
BOARD OF DIRECTORS
CORPORATE GOVERNANCE IN CMPC
Luis Felipe
Gazitúa
Chairman
Vivianne
Blanlot
Jorge
Marín
Independent
Jorge
Larraín Jorge
Matte
Ramiro
Mendoza
Bernardo
Matte Rafael
Fernández
Independent
Pablo
Turner
Current members: Vivianne Blanlot,
Rafael Fernández and Jorge Marín CMPC’s Board of
Directors
CMPC’s
Management
CMPC’s
Subsidiary’s Board
of Directors
CMPC’s
Subsidiary’s
Management
Appoints
Board
Members
Directors
Committee
Financial Risk
Committee
Audit
Committee Comptroller
Current members: Vivianne Blanlot
and Ramiro Mendoza
Current members: Bernardo Matte
and Jorge Marín
Other initiatives: Business Ethics Guidelines, Corporate Governance Guidelines, Antitrust Guidelines, Anticorruption Policies,
Whistle Blower Hotline
22
CMPC HAS A DIVERSIFIED INVESTMENT PORTFOLIO
CMPC is finishing the largest investment cycle of its
history
Guaíba II Project – May 2015
Tissue paper machine in Altamira, México
(2Q15)
Cogeneration Facilities: Puente Alto Mill,
Talagante Mill and Altamira Mill.
Focus in 2016-2017
Continue to increase tissue paper and
conversion capacity
Cañete Mill (Peru)
• Capacity:50 th. tons/year
• Investment: US$ 129 million
• Start-up: 1Q17
Operational continuity projects to further
increase efficiency
Laja Pulp Mill
Guaíba I Pulp Mill
Maule Boxboard Mill
Cañete Mill - Perú
23
TISSUE DIVISION: CMPC IS FAVOURABLY POSITIONED TO CAPTURE THE DEVELOPMENT AND GROWTH OF THESE MARKETS
Chile
Argentina
Uruguay
Peru
Mexico
Colombia
Brazil
76%
8%
44%
83%
8%
7%
54%
CMPC Tissue Paper Market Share
Source: CMPC as of December 31st 2015
Ecuador
24%
CMPC has a
strong presence in
all main
categories of
tissue, sanitary
and away from
home products
CMPC: 134 th. tons*
CMPC: 71 th. tons*
CMPC: 166 th. tons*
CMPC: 27 th. tons*
CMPC: 135 th. tons*
CMPC: 35 th. tons*
CMPC: 99 th. tons*
CMPC successfully
evolved from a local
player into a leading
LatAm tissue player due to its
ability to enter new markets
with high potential based on
a pioneering spirit sustained
by world-class innovations
* CMPC’s tissue paper capacity
24
CMPC SEEKS TO TAP LATAM UNDERPENETRATED TISSUE MARKETS
High growth potential in Tissue Paper and Sanitary Products in Latin America based on the following fundamentals,
Per Capita Tissue Consumption
Source: CMPC as of December 2013
Honduras
India
GuatemalaEl Salvador
Indonesia
Ecuador, Peru,
China, Colombia, South Africa
Costa Rica
Brazil
Mexico
Venezuela
PanamaUruguay
Chile HungaryPoland
Greece
Portugal
Czech Republic
MaltaIsrael
SpainNew Zealand
Italy
JapanFrance
UKFinland
BelgiumIceland
Canada
Australia
Germany
Sweden
Austria
USA
0
5
10
15
20
25
0 10 20 30 40 50 60
Tís
su
e P
ap
er
Ap
p. C
on
su
mp
tio
n (
k/h
ab
.)
GNI p/c (thousand US$ at ppp)
4.4 Kg. 1.2 kg 0.4 kg 0.1 kg
LatAm Average Tissue Consumption 6.1 kg/person
Baby Diapers Feminine
Protection Incontinence
LatAm Sanitary Products Penetration*
73% 72%
TISSUE PAPER
Population growth and urbanization
Economic growth
Increase in per capita consumption
Higher quality products
SANITARY PRODUCTS
Child population growth
Economic growth
Higher penetration levels
14%
Source: Price Hanna
26
CMPC WILL BASE ITS STRATEGY IN 4 PILLARS TO CONSOLIDATE ITS LEADERSHIP IN THE P&P INDUSTRY
1. Continue running at full capacity across all business units
2. Expand tissue capacity with new facility in Peru
3. Focus in cost control and enhance efficiency
4. Reduce leverage, lower Net Debt / EBITDA
among all business divisions and countries
28
APPENDIX I: ANNUAL CAPACITY BY PRODUCT/COUNTRY
Business Area Product / Country Capacity
Forestry
Sawn wood 1.0 M m3
Remanufactured
wood 190 th. m3
Plywood 500 th. m3
Pulp
BSKP (Laja) 340 th. tons
BSKP (Pacífico) 500 th. tons
BEKP (Guaíba) 1.750 th. tons
BEKP (Santa Fe) 1.496 th. tons
Papers
Boxboard 431 th. tons
Paper Bags 93 th. tons
660 M bags
Corrugated Paper 330 th. tons
Corrugated boxes 285 th. tons
Molded Pulp trays 18 th. tons
296 M units
Other Papers 140 th. tons
Tissue
Chile 166 th. tons
Brazil 135 th. tons
Argentina 99 th. tons
Mexico 134 th. tons
Peru 71 th. tons
Uruguay 35 th. tons
Colombia 27 th. tons 28
29
APPENDIX II: NEW BEKP CAPACITY IN THE 4OO+ MILLION TONNES FIBER MARKET
Source: RISI 5-year Forecast (2016-2018) – March 2016
419 million tons of total
fibers
64 million tons
of market pulp
32 million tons
of BHKP
Fiber World Consumption required
to produce 406 million tons of
Paper&Board Virgin fiber used to produce
Paper&Board
(million tons) Market Pulp consumed to
manufacture Paper&Board
(million tons)
Virgin Pulp 183 million
tons (43%)
Recovered Paper
234 million tons
(57%)
Market Pulp
59 million tons
(35%)
Integrated 124
million tons
(65%)
BSKP 25
BHKP 32
Sulphite
UKP 2
Mec 5
30
APPENDIX II: EUCALYPTUS PULP GROWTH HAS OUTPACED OTHER HARDWOOD FIBERS BECAUSE OF ITS COST AND QUALITY ADVANTAGES
Source: CMPC, Hawkins Wright
Higher pulp production yield than other species
Fast growing trees: shorter rotation, less land required and better performance
Superior structural properties for several paper & paperboard applications
Paper manufacturers looking for BEKP to premium tissue products
BEKP replacing other fibers
0
5
10
15
20
25
30
35
40
1990 1995 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2019
Millio
n t
on
s
Market pulp demand
BSKP BHKP BEKP
31
APPENDIX II: THE PAPER INDUSTRY HAS GROWN, SPECIALLY IN THE PACKAGING SEGMENT
Since 1992 paper production has grown 61%, mainly explained by:
106 million additional tons of packaging paper
33 million additional tons of P&W papers
18 million additional tons of tissue papers
Since 2007, Packaging and Tissue have continued to grow, while P&W has declined
Source: RISI
Mill
ion
To
ns
32 33 34 35 35 36 36 38 39 38 37 37 39 38 38 38 37 32 32 31 30 28 26
74 76 83 85 85 93 94 98 104 99 102 105 112 113 117 119 116 106 111 110 108 106 105
114 115 123 127 131
138 138 144
148 148 156 161 171 177
186 194 196 191
206 210 214 220 226 15 16
16 17 18 19 19
20 21 22
23 23
24 25 26
27 28
28
29 30 31 32 33
15 14 15
15 16 16 15
16 15 15
14 15
15 14
15 15 15
14
16 17 16 16 16
-
50
100
150
200
250
300
350
400
450
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Mil
lio
n t
on
s
Newsprint P&W Packaging Tissue Other P&B
32
CONTACT INVESTOR RELATIONS Colomba Henríquez
+(562) 2 441 2791
Isidora Farías
isidora.farí[email protected]
+(562) 2 441 2713
Disclaimer:
This document provides information about Empresas CMPC SA. In any case this constitutes a comprehensive analysis of the financial, production and
sales situation of the company, so to evaluate whether to purchase or sell securities of the company, the investor must conduct its own independent
analysis.
In compliance with the applicable rules, Empresas CMPC SA. publishes this document in 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.