Empresas CMPC S.A Company Overview Presentation prepared for Itaú Securities 5 th Annual Latin America CEO Conference

Transcription

1 Empresas CMPC S.A Company Overview Presentation prepared for Itaú Securities 5 th Annual Latin America CEO Conference

2 Agenda Overview 3 Business Divisions 7 Social Responsibility and Sustainability 13 Financial Review Concluding Remarks & CMPC s current situation in Chile

3 CMPC is an important player in the P&P industry CMPC is an integrated and well diversified producer of pulp, paper and other forest products in Latin America Controlled by the Matte Family, one of Chile s leading economic groups Market capitalization of US$ 9.4 billion as of April 30 th, 2010 CMPC s Shareholders Structure (as of 03/31/2010) Chilean Pension Funds 13.0% Local Investors 23.4% Foreign Investors 7.8% Matte Group 55.8% The Matte Family: CMPC s major shareholder and one of the most important Chilean economic groups Forestry and Manufacturing Energy Finance Telecommunications Real State & Infrastructure Empresas CMPC*, El Volcán*, Copec, Molymet, Soc. Agrícola La Rosa Sofruco Colbún* Bicecorp*, Banco Bice*, Bice Vida*, Bice Chile Consult* Entel* BICE Renta Urbana*, Puerto de Lirquén*, Portuaria Cabo Froward *Operating firms that are controlled directly or through a shareholders agreement 3

4 Paper Products Tissue Paper Pulp Forestry Balanced growth in all business segments provides CMPC a diversified revenue mix * Figures in US$ million for the LTM as of March 2010 Main Figures % of Total Sales* % of Total EBITDA* Total Capacity Sales: 546 Sales 3 rd parties: 358 EBITDA: 29 EBITDA margin: 5% 11% 4% 1,006 Th. Ha (654 Th. Plant) 8.4 MM m 3 /y Sales: 1,111 Sales 3 rd parties: 932 EBITDA: % 49% 2.5 MM tons/y EBITDA margin: 33% Sales: 761 Sales 3 rd parties: 629 EBITDA: % 19% 1.1 MM tons/y EBITDA margin: 18% Sales: 1,144 Sales 3 rd parties: 1,143 EBITDA: % 22% 420,000 tons/y EBITDA margin: 14% Sales: 319 Sales 3 rd parties: 301 EBITDA: 45 9% 6% 340,000 tons/y EBITDA margin: 14% 4

5 Product and geographic diversification provides flexibility Third party sales in US$ million for the LTM as of March

7 Forestry Division: the root of CMPC s competitive advantage Overview 100% planted and certified forests Genetic and silvicultural practices / forest management to continuously improve yields Faster growth cycle than northern hemisphere forests Young and growing forestry base. Average age of CMPC s Pine Forests: 11.8 years Average age of CMPC s Eucalyptus Forests: 9.2 years Proximity of forests to industrial facilities and ports Forestry Sawnwood Harvesting (million m 3 ) 1.82 X Remanufactured Wood Plywood Chile: 700,000 Hectares 487,000 Planted Hectares Brazil: 212,000 Hectares 102,000 Planted Hectares 23,000 Hectares of Plantable Land Argentina: 94,000 Hectares 65,000 Planted Hectares Chile - 4 Sawmills: Bucalemu, Las Cañas, Mulchén and Nacimiento Total capacity: 1.4 MM m 3 /yr Chile - 2 Remanufacturing plants: Coronel and Los Ángeles Total capacity: 216,000 m 3 /yr Chile - 1 Plywood mill: Mininco Total capacity: 250,000 m 3 /yr 7

8 (US$/Ton del N. Europe) (US$/Ton del N. Europe) Pulp Division: CMPC has one of the lowest cash costs of the pulp industry Key drivers First class assets for the production of: Softwood (pine) 760 Th. Tons annually Hardwood (eucalyptus) 1.64 MM Tons annually Strategic locations (mills near to forests and ports) World s lowest cost producer of softwood Sales diversification ISO Certified BSKP Supply Curve (US$/ton) ,000 10,000 15,000 20,000 25,000 (Thousand metric tonnes) Source: CMPC and Hawkins Wright as of April, 2010 BEKP Supply Curve (US$/ton) What s ahead Consolidation of Guaíba s assets in Brazil, which increased CMPC s hardwood capacity in 450 Th. tons per year Chile: rebuilding of Laja mill Environmental upgrades at the Pacífico and Santa Fe mills Debottlenecking of Santa Fe II mill ,000 10,000 15,000 20,000 25,000 (Thousand metric tonnes) Source: CMPC and Hawkins Wright as of April,

9 EDIPAC Other Papers Newsprint Packaging Boxboard Paper Division: strategically focused on niche paper grades Chile: 2 mills: Maule and Valdivia Total Capacity: 430,000 tons/y Chile: 1 mill: Puente Alto Paper Sales Growth (Th. Tons) Total Capacity: 340,000 tons/y Chile: 1 mill: Inforsa (Nacimiento) Total Capacity: 200,000 tons/y Chile: 1 mill: Laja Brazil: 1 mill: Rio Grandense Total Capacity: 130,000 tons/y Chile: Newspaper Boxboard Packaging Paper Geographical Sales Breakdown (Th. Tons) Export Market Local Market 21% 15% 88% 79% 85% Most important paper distributor, with 52% of total market share 12% Newspaper Boxboard Packaging Paper 9

10 Tissue Division: CMPC is a leading Latin American player Key drivers Largest tissue company in Latin America Strong branding Broad market segmentation Extensive distribution network High growth opportunities Flexible product mix with: Children and adult diapers Tissue paper products Femenine care products Mexico (Since 2006) Market Share: 5% Capacity: 37,000 tons/yr Ecuador (Since 2009) Market Share: 15% Only Conversion Process Colombia (Since 2007) Market Share: 6% Brazil (Since 2009) Market Share: 10% Capacity: 75,000 tons/yr Away from home products What s ahead Colombia: New Tissue Paper mill (27,000 tons/y), starting in 2010 Mexico: New Tissue Paper Machine (double width, 54,000 tons/y), starting in 2010 Brazil: New Tissue Paper Machine (double width, 54,000 tons/y), starting in 2011 Peru (Since 1996) Market Share: 51% Capacity: 57,000 tons/yr Chile (Since 1980) Market Share: 75% Capacity: 118,000 tons/yr Uruguay (since 1994) Market Share: Capacity: 37,000 tons/yr 84% Argentina (Since 1991) Market Share: 50% Capacity: 96,000 tons/yr 10

11 Molded Pulp Trays Paper Bags Corrugated Boxes Paper Products Division: Local sales mainly oriented to export industries Chile: 3 mills: Buin, Quilicura and Til Til Total Capacity: 252,000 tons/y Chile: 1 mill: Chillán Argentina 1 mill: Hinojo Peru: 1 mill: Lima Mexico: 1 mill: Guadalajara Total Capacity: 70,000 tons/y Chile: 1 mill: Puente Alto Key drivers Market leader in corrugated boxes and multiwall bags markets in Chile Well diversified sales among different segments of the market in corrugated boxes Manufacturing process benefits from backward integration Although the lions share of all sales are local, CMPC is also expanding its exports What s ahead New 35,000 tons corrugating mill in the south of Chile Total Capacity: 18,000 tons/y 11

13 Social Responsibility and Sustainability Social responsibility is an integral part of the CMPC business and organizational models allowing effective linking to all stake holders. CMPC and its Business Chain CMPC and its Workers CMPC and the Community CMPC and the Environment CMPC s CSR Producing and selling quality products Strong relationships with suppliers and customers Sound and transparent financial reporting Safe working environment Strict compliance with labor regulations and union agreements Comprehensive employee benefit policy Jorge Alessandri Educational Park Good Neighborhood Plan Fundación CMPC: improve language and math education in the primary schools where CMPC has facilities Plantations Clean processes Replacement of fossil fuels with biomass Recollection and recycling of waste paper 13

15 Financial Summary Financial Summary (US$ million) 1Q Q09 4Q Q10 QoQ% YoY% Sales 3, , % 34% Operating Costs (2,074) (490) (579) (2,066) (604) 4% 23% Other Operating Expenses (380) (70) (126) (414) (101) -20% 45% EBITDA % 67% Depreciation & Stumpage (311) (76) (91) (327) (96) 5% 27% Change in Net Value if Biological Assets % 93% Operating Income % 110% Financial Costs (76) (18) (34) (104) (33) -2% 80% Other Non Operational Items (245) (9) 10 3 (55) -676% 551% Net Income % 50% EBITDA Margin 25% 20% 23% 21% 25% 5% 5% Total Assets 9,662 10,044 12,296 12,296 12,207 22% 22% Total Liabilities 3,161 3,480 5,038 5,038 4,896 41% 41% Shareholder's Equity 6,501 6,564 7,258 7,258 7,312 11% 11% 15

16 CMPC follows a conservative financial policy Debt Evolution (US$ million) * Debt / Equity * Net Debt Cash ,397 1,362 1,349 2,130 2, LTM Net Debt / EBITDA * LTM EBITDA / Interest Expenses * LTM LTM *Figures as of 2003, 2004, 2005, 2006, 2007 and 2008 are under Chilean GAAPs. Figures for the LTM as of June 2009 are under the IFRS accounting standard. 16

17 A well structured debt profile delivers value to shareholders Debt Description as of March 31 st Average term of debt: 6.5 years Average cost of debt: 4.6% Amortization Schedule New Credit Note Amortizations Composition of debt: 45% banks / 55% Bonds 500 Debt breakdown by Currencies: 27% UF / 65% US$ / 8% Other currencies Last Financial Transactions Debt Description as of March 31 st (%) International Benchmark Bond: on November 2009, CMPC issued an International Benchmark Bond under the 144A-S regulation. The transaction conditions were: Floating Rate Fix Rate 18% 14% 12% 26% 15% - 10 year bullet bond: for CT bps 82% 86% 88% 74% 85% LTM 17

18 The Guaíba acquisition: the biggest project in the history of CMPC What is CMPC buying? What is CMPC getting? On October 8th 2009, Empresas CMPC S.A. and Aracruz Celulose S.A. signed a sale contract for the transfer of ownership of a group of assets known as the Guaíba Unit for a total price of US$1,432 million The Guaíba Unit includes: A pulp mill with annual production capacity of approx. 450,000 tons A paper mill with annual production capacity of approx. 60,000 tons Approximately 212,000 hectares of land of which 125,000 are plantable Licenses and authorizations to execute an expansion project for the pulp mill, to increase its annual capacity to around 1.75 million tons Sizable entry to Brazil Strategic location, complementary to existing facilities, to serve customers worldwide Ability to reconfigure sales, delivery and increase customers Ability to easily increase production to 1.75 million tons of pulp in the near future Potential to replicate CMPC Chile in one of the largest and most dynamic economies in the world Substantial forestry base and sylvicultural know-how Opportunity to further improve CMPC s low cost producer status 18

20 CMPC adds value through several competitive advantages CMPC has an irreplicable forestry base with sustainable competitive advantages in both fibers. This is due to: High growth yield in both fibers Secured land and fiber to produce over 3.75 million tons of pulp annually (1.5x of current production) Forestry base at an average distance of less than 100 kms. away of the mill mill Higher Forestry Yield Higher Pulping Growth Yield shorter distance to the mills Average harvest distance 20

21 CMPC adds value through several competitive advantages Countries with more than a 90% coverage : Chile Uruguay Argentina Colombia Peru Countries with more than a 70% and less than a 90% coverage: CMPC s tissue products have presence in : 10,592 sores 146 wholesalers 34 Drugstore Chains In store service (over 2,800 people) Mexico Ecuador Brazil High brand recognition Strong and efficient distribution network Elevated market share and a recognized leadership in the tissue industry 21

22 CMPC s current situation in Chile Tissue Paper Products Forestry Paper Pulp 2 mills: Talagante Puente Alto Corrugated Boxes: Buin Quilicura Til Til Paper Bags: Chillan Molded Pulp Trays: Puente Alto Sawmills: Bucalemu Mulchén Nacimiento Las Cañas Remanufacturing Plants: Los Ángeles Coronel Plywood mill: Nacimiento Boxboard: Maule Valdivia Packaging Paper: Puente Alto Newsprint: Nacimiento Printing & Writing: Laja 4 mills: Pacífico Laja Santa Fe I Santa Fe II *Mills operating as May 14 th,

23 Q&A 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 ( 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. This presentation will be available at CMPC s Web Site