Arauco Santander October 2015

Transcription

1 Arauco Santander October 2015

2 Agenda Arauco Overview Pulp Business Panel and Solid Wood Business Projects and Financial Strategy 2

3 Arauco at a glance Global forestry player, producer of market pulp, panels, solid wood and energy Headquartered in Santiago, Chile One of the world s lowest cost producers In the US bond market since 1995 Part of Empresas Copec holding (in US$ million) (in US$ million) Financial Highlights LTM June 2015 Sales U.S.$ 5,375 Financial Highlights YTD June 2015 Sales U.S.$ 2,646 EBITDA U.S.$ 1,315 EBITDA U.S.$ 668 EBITDA Margin 24 % EBITDA Margin 25 % Net Income U.S.$ 192 Debt U.S.$ 4,539 Cash U.S.$ 512 Net Debt/Ebitda 3.1x Credit Ratings Capex U.S.$ 282 Debt to Equity 67% BBB (Stable) BBB- (Stable) Baa3 (Stable) Note: Panels division sales include plywood Pulp, Panels and Sawn Timber division sales include energy 3

4 Solid financial performance throughout cycles Total Revenues Adjusted EBITDA (in US$ million) LTM (in US$ million) LTM CAPEX EBITDA Margin (in US$ million) LTM LTM 4

5 Governance Structure overview Angelini Family 74.36% 60.82% Part of Empresas Copec holding (#3 in Chile in Market Cap) - Arauco represents approximately 63% of EC s EBITDA Controlled by Angelini family Not a publicly traded company SEC-registered EBITDA Empresas Copec December % 99.99% Copec 99.05% Abastible 81.93% Igemar 5

6 Operational footprint FORESTRY PULP PANELS SOLID WOOD ENERGY 1,108,735 Ha 5 mills 2,882,000 ADt 263,386 Ha 1 mill 350,000 ADt 4 mills MDF: 515,000 m3 PB: 300,000 m3 HB: 60,000 m3 Plywood:710,000 m3 2 mills MDF: 300,000 m3 PB: 260,000 m3 8 sawmills 4 remanufacturing facilities 1 sawmill 1 remanufacturing facility 10 Power Plants 606 MW 2 Power Plants 78 MW 144,390 Ha 2 mills MDF: 1,255,000 m3 PB: 310,000 m3 50% of 232,146 Ha 50% of 1,300,000 Adt 50% of 164 MW 8 mills MDF: 1,470,000 m 3 PB: 1,416,000 m 3 TOTAL 1,632,585 ha 3.9 million Adt 6.6 million m million m MW June, 2015

7 Commercial Strategy we sell to over 70 countries HOLLAND CHINA 27% CANADA 7% MEXICO USA JAPAN COLOMBIA BRAZIL 4% 32% PERU 30% CHILE ARGENTINA AUSTRALIA % of Total Sales Sales Offices 7

8 Forestry - The base for growth Largest owner of forestry land in the Southern Cone 1,6 million hectares of land Strategically located plantations Ideal conditions for forests growth fast growth rate and short harvest cycle Arauco s Plantations (in 000 hectares) Low forest operating costs Ideal Conditions for Forest Growth 8

9 Agenda Arauco Overview Pulp Business Panel and Solid Wood Business Projects and Financial Strategy 9

10 Pulp - Arauco s main industrial activity, generating 45% of the company s sales Number two in the world in terms of market pulp capacity Pulp Production (in million of tons) Strategically located mills: proximity to forests and ports Exports represent more than 90% of pulp total sales 1,5 1,5 1,6 2,0 1,9 2,2 2,6 2,9 3,0 2,3 2,8 3,0 3,1 3,3 Competitive positioning in fast growth Asian markets BSKP (Pine) UKP (Pine) BHKP (Eucalyptus) ( 1 ) Compound Annual Growth rate 10

11 Our pulp mills 645 Th. tons 1,155 Th. tons 1,505 Th. tons Arauco Mill (Arauco I ) Completed in 1972 Annual production capacity of 290,000 tons ok Bleached Pulp Constitucion Mill Started production in 1976 Annual production capacity of 355,000 tons of Unbleached Softwood Pulp Arauco Mill (Arauco II ) Started production in 1992 US$600 MM investment Annual production capacity of 510,000 tons of Softwood Bleached Pulp Alto Parana Mill Acquired in December 1996 US$290 MM investment Annual production capacity of 350,000 tons Pine Bleached Kraft Pulp and Fluff 1,655 Th. tons 2,205 Th. tons 3,232 Th. tons 3,882 Th. tons Licancel Mill Acquired in September 1999 US$127MM investment Annual production capacity of 150,000 tons of Bleached Hardwood Pulp, Bleached and Unblached Softwood Pulp Valdivia Mill Started production in 2004 US$574 MM investment Annual production capacity of 550,000 tons of Bleached Pulp 11 Nueva Aldea Mill Started production in 2006 US$850 MM investment Annual production capacity of 1,027,000 tons of Bleached Pulp Montes del Plata Mill (50%) Started production in June 2014 US$2,500 MM investment Annual production capacity of 1,300,000 tons

12 Montes del Plata - Uruguay Located in Punta Pereira, Uruguay 1.3 million ADt BHKP per year Includes port and energy plant 50% JV with Stora Enso The highest private investment in the history of Uruguay In June 2014, Montes del Plata began its start up process The first shipment was done in July Currently operating at full capacity Sept 2011 March 2012 Sept 2012 March 2013 Dec 2013 June

13 Hardwood pulp represents 39% of our pulp capacity UKP 13% 4% Fluff HARDWOOD (39%) Capacity by Grade ,882 Th. ADt 44% BSKP BHKP 39% SOFTWOOD (61%) Source: Company information and filings 13

14 Market Pulp Customer base mainly in non-developed markets America 16% At least 70% of our pulp is sold in emerging or non-developed markets Korea Rest of Asia and Others 8% 12% Sales by Market Dec-14 3,279 Th. ADt 17% 47% China High potential of growth: - Low per capita consumption of tissue and paper compared to that of developed countries China is our main market destination and where we see high potential of growth Europe Source: Company information and filings 14

15 Agenda Arauco Overview Pulp Business Panel and Solid Wood Business Projects and Financial Strategy 15

16 Panels Business: 35% of Arauco s revenues Operations in USA, Canada, Brazil, Chile and Argentina Ranked #1 in capacity in North America and #3 worldwide Low cost producer for all types of panels (MDF, HB, PBO, Plywood) Our products are used mainly in the In 000 cubic meters Panels production furniture industry (1) Compound Annual Growth rate 16

17 Panels Sales breakdown Sales by Product December 2014 Sales by Region December 2014 Plywood 8% HB 0,5% Others 1% Chile Argentina 7% Asia/ Others 6% 2% 22% Brazil PBO 34% 56% MDF 12% Rest of Latin America 50% USA and Canda Total = 5,284 Th. m 3 Total = 5,284 Th. m 3 Source: Company information and filings 17

18 Solid Wood - Arauco is one of the largest sawntimber companies Operations in Chile and Argentina Installed annual capacity of 2.9 Solid Wood Sales (in 000 cubic meters) million m 3 Improved saw log quality enhances value of product mix Economies of scale in transportation costs provide growth opportunities Main use of our sawn timber products is for the construction and packaging industry (1) Compound Annual Growth rate 18

19 Solid Wood Sales breakdown Sales by Product December 2014 Sales by Region December 2014 Remanufactured Wood Products 15% 0% 45% Kilned Sawn Timber USA and Canada Middle East and Africa 13% 11% Europe 1% 20% Rest of Latin America 15% Chile Sawn Timber 40% Asia and Oceania 41% Total = 2,791 Th.m 3 Total = 2,791 Th.m 3 Source: Company information and filings 19

20 The US market is strong on its recovery path Housing Starts Index In 000 units per year 20

21 Agenda Arauco Overview Pulp Business Panel and Solid Wood Business Projects and Financial Strategy 21

22 Valdivia mill to Produce Dissolving Pulp On July Arauco submitted an environmental impact study to produce dissolving pulp Dissolving pulp is a product used in the textile industry as an alternative of cotton Arauco would be the first company to produce this pulp in Chile It will provide flexibility to produce either dissolving or paper grade The estimated investment for this brownfield project is approximately US$ 185 million 22

23 MAPA new line at Arauco mill and cogeneration plant Construction of a third pulp line in the Arauco Mill of 1.5 million Adt of annual capacity of short fiber pulp and a 166 MW cogeneration plant The project considers the closure of Arauco s line 1 of 290,000 Adt of short fiber pulp The investment for this project will be approximately US$ 2,300 million 23

24 Last Main Events In December 2014 Celulosa Arauco subsidiary, Forestal Arauco, sold nearly 11,000 has. of plantations In March 2015 Arauco closed two committed credit facilities for US$ 320 million The plantations were located in areas farther away from the company s production facilities The total surface represents approximately 1% of the total plantations The transaction was for around US$ 90 million The first line in UF of app. US$ 120 million, was closed with a local bank The second line in USD of US$ 200 million, was closed with a club deal of foreign banks The duration of both lines is 5 years

25 Last Main Events Arauco Announced USD 325 Million Investment For New Particleboard Mill Located in Grayling, Michigan Annual Production of 750,000 m3 of MDP Ground-breaking is estimated for late 2016, with the rollout of the first panel during latter part of 2018 Investment is subject to pending permits and Arauco s board approval

26 Deleveraging and Positive Free Cash Flow Focus Financial Debt June March June US$ million Short term financial debt Long term financial debt 3, , ,018.7 TOTAL FINANCIAL DEBT 4, , ,012.8 Cash and cash equivalents , NET FINANCIAL DEBT 4, , ,372.1 Initiatives Capital expenditure discipline Working Capital Optimization Asset efficiency programs Capture EBITDA from new assets Cost reduction Financial Debt Profile as of June 30, 2015 In US$ Million Net Debt/ Adj.EBITDA Bonds Bank loans 26

27 October 2015