Empresas CMPC S.A Company Overview 09 · Presentation Prepared for Santander’s 10th Annual Chile Conference 09.09. Empresas CMPC –Company Overview Agenda ... 4,2 1,6 SCA IP CMPC

Empresas CMPC S.A.Company OverviewPresentation Prepared for Santander’s 10th Annual Chile Conference 09.09

Empresas CMPC – Company Overview

Agenda

Overview 3

Business Divisions 7

Social Responsibility and Sustainability 19

Financial Review 21

Concluding Remarks 28

2


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.

Figures for the LTM as of June 2009:

• Sales: MUS$ 2,934• EBITDA: MUS$ 611• Net Income: MUS$ 54• Assets: MUS$ 10,105• Net Debt: MUS$ 1,433

Highest Credit Rating of the industry (A-) by S&P and Fitch Ratings.

Market capitalization of US$ 5.3 billion as of August 31st, 2009.

Controlled by the Matte Family, one of Chile’s leading economic groups.

CMPC’s Shareholders Structure

Matte Group 55.83%

Local Investors

30.26%

Chilean Pension Funds

13.56%

Foreign Investors

0.35%

8,0

6,5

5,3

4,2

1,6

SCA IP CMPC STORA ENSO ARACRUZ

P&P Companies by Market Cap (US$ Billion)

3

As of June 30th, 2009

As of August 31st, 2009


Balanced growth in all business segments provides CMPC a diversified revenue mix

Fore

stry

Pu

lpP

aper

Tiss

ue

Pap

er

Pro

du

cts

Total Capacity% of Total Sales* % of Total EBITDA*

792 Th. Ha(537 Th. Plant)9.1 MM m3/y

* Figures in US$ million for the LTM as of June 2009 Main Figures

Sales: 723

Sales 3rd parties: 614

EBITDA: 152

EBITDA margin: 21%

Sales: 1,017

Sales 3rd parties: 1,005

EBITDA: 119

EBITDA margin: 12%

Sales: 288


EBITDA: 36

EBITDA margin: 12%

2 MM tons/y

1,010,000 tons/y

420,000 tons/y

252,000 tons/y550MM units/y

Sales: 519


EBITDA: 53

EBITDA margin: 10%

Sales: 917


EBITDA: 251

EBITDA margin: 27%

4


Product and geographic diversification provides flexibility

5

Third party sales in US$ million for the LTM as of June 2009


Agenda

Overview 3



Financial Review 21


6


Forestry Division: the root of CMPC’s competitive advantage

Fore

stry

Chile: 698,000 Has. 472,000 Planted Has.

Argentina: 94,000 Has. 65,000 Planted Has.

Saw

nw

oo

d Chile:4 Sawmills:

•Bucalemu, Las Cañas, Mulchén and Nacimiento

Total capacity: 1.4 MM m3/y

Re

man

uf.

w

oo

d

Chile:2 Remanufacturing plants:

•Coronel and Los Ángeles

Total capacity: 216 Th. m3/y

Ply

wo

od

Chile:1 Plywood mill:

•Mininco

Total capacity: 250,000 m3/y

7


Forestry Division: the root of CMPC’s competitive advantage

Key drivers

• 100% planted and certified forests

• Genetic and silvicultural practices / forest

management

• Faster growth cycle than northern hemisphere forests

• Proximity of forests to industrial facilities and ports

• Growing forestry base.

What’s ahead…

• Acquisition of land, to increase the forestry

base

• Automatization process in the Nacimiento,

Bucalemu and Mulchén sawmills

• New 120,000 m3/yr sawmill in Loncoche.

2.02 X

Harvesting (million m3)

Harvesting and Plantations (Th. hectares)

1417

21 20 19

25 25

3229

33

2005 2006 2007 2008 LTM

Harvesting Plantations

8


Pulp Division: CMPC has one of the lowest cash costs of the pulp industry

Key drivers

• First class assets

• Strategic locations (mills near to forests and

ports)

• World’s lowest cost producer of softwood

• Sales diversification

• ISO Certified.

What’s ahead…

• Chile: rebuilding of Laja mill

• Environmental upgrades at the Pacífico and

Santa Fe mills

• Future debottlenecking of Santa Fe’s Line 2.

BSKP Supply Curve (US$/ton)

BEKP Supply Curve (US$/ton)

0

100

200

300

400

500

600

700

0 5.000 10.000 15.000 20.000 25.000

(Thousand metric tonnes)

(US

$/T

on

del N

. E

uro

pe)

0

100

200

300

400

500

600

0 5.000 10.000 15.000 20.000 25.000

(Thousand metric tonnes)

(US

$/T

on

del N

. E

uro

pe)

9


Pulp Division: CMPC has one of the lowest cash costs of the pulp industry

Har

dw

oo

d

Chile

1 mill:

• Santa Fe (Eucalyptus)

Total Capacity: 1.15 MM tons/y

Soft

wo

od

Chile

2 mills:

• Pacífico and Laja (Pine)

Total Capacity : 850 M tons/y

Santa Fe

Laja

Pacífico163 Km.

93 Km.

119 Km.

Santa Fe

Laja

Pacífico93 Km.

80 Km.

99 Km.

CMPC’s average distance from… to…

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.

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

• Integration of Melhoramentos Papeis to CMPC’s

network.

Tissue per Capita Consumption

Tissue Paper Capacity Evolution (Th. Tons)

Colombia

Perú

UruguayBrazil

Spain

MéxicoChile

Argentina

Germany

Japan

USA

0

5

10

15

20

25

0,0 10,0 20,0 30,0 40,0

GNI p/c ppp (Th US$/inhab.)

Per

Cap

ita C

on

su

mp

tio

n (

kg

/in

hab

.)

11


Tissue Division: CMPC is a leading Latin American player

Market Share:Capacity: 37,000 tons/y

5%

México

Market Share: 5%

Colombia


10%

Brazil


70%

Uruguay

Market Share: *Only Conversion Process

15%

Ecuador*


40%

Peru


70%

Chile


50%

Argentina

Tiss

ue

p

ape

rD

iap

ers

Ad

ult

D

iap

ers

Fem

inin

e H

ealt

hca

reIn

st.

12


Our Tissue products brands…

13


Paper Division: strategically focused on niche paper grades

Bo

xbo

ard Chile:

2 mills: •Maule and Valdivia

Total Capacity: 430,000 tons/y

Pac

kagi

ng Chile:

1 mill: •Puente Alto


New

spri

nt Chile:

1 mill: •Inforsa (Nacimiento)


Oth

er

Pap

ers

Chile: 1 mill:

•Laja


EDIP

AC

Chile:

Most important paper distributor, with 52% of total market share

Geographical Sales Breakdown (Th. Tons)

Paper Sales Growth (Th. Tons)

14


Paper Division: strategically focused on niche paper grades

Key drivers

• Niche products

• Well integrated with the forest and pulp

divisions

• State of art technology

• Low cost producer

• Extensive use of recycled paper

• Strong distribution network and technical

support

• Sales focused on developing countries, which

presents a more stable demand.

What’s ahead…

• Business consolidation in the higher margin

markets.

Newsprint World Demand 2008 vs. 2007

15


Paper Products Division: Local sales mainly oriented to export industries

Co

rru

gate

d

Bo

xes

Chile: 3 mills:

•Buin, Quilicura and Til Til


Pap

er

Bag

s

Chile: 1 mill: Propa (Chillán)Argentina 1 mill: FABI (Hinojo)Peru: 1 mill: FORSAC (Lima)

Total Capacity: 550 MM Units/y

Mo

lde

d P

ulp

Tr

ays

Chile: 1 mill:

•Puente Alto


Peru

ArgentinaChile

16

= Paper Bags Mill

= Corrugated Boxes Mill

= Molded Pulp Trays Mill


Paper Products Division: Local sales mainly oriented to export industries

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.

Corrugated Boxes Sales (Th. Tons)

Multiwall Bags Sales (Th. Tons)

17


Agenda

Overview 3



Financial Review 21


18


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 the Environment

CMPC and the Community

CMPC and its Business Chain

CMPC and its Workers

CMPC’sCSR

• 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

19

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Agenda

Overview 3



Financial Review 21


20


Financial Summary

Financial Summary (US$ million)

1Q08 2Q08 1Q09 2Q09 %QoQ %YoY

Sales 845 877 698 691 -1% -21%

Operating Costs (535) (514) (490) (460) -6% -10%

Other Operating Expenses (93) (108) (70) (101) 45% -6%

EBITDA 218 256 139 130 -7% -49%

Depreciation and Stumpage (77) (80) (76) (79) 4% -2%

Change in Net Value of Biological Asstes 32 19 17 4 -76% -79%

Operating Income 173 194 80 55 -31% -71%

Financial Costs (18) (21) (19) (22) 14% 2%

Other Non Operational Items (6) (32) (8) (5)

Net Income 149 141 53 28 -47% -80%

EBITDA Margin 26% 29% 20% 19% -1% -10%

Total Assets - - 10,108 10,105 0% -

Total Liabilities - - 3,393 3,538 4% -

Shareholder´s Equity - - 6,715 6,567 -2% -

21


CMPC follows a conservative financial policy

Debt Evolution (US$ million) * Debt / Equity *

Net Debt / EBITDA * EBITDA / Interest Expenses *

*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.

22


CMPC has the highest credit rating in the industry globally

Country:

S&P Rating: A - A - BBB+ BBB BBB BB BB

EBITDA (US$ millions): 611 596 1.932 725 3,663 498 326

Net Debt (US$ millions): 1,433 801 5,549 2,561 9,263 4,150 2,441

International

paper

Source: Public Information as of June 2009.

23


A well structured debt profile delivers value to shareholders

Debt Description as of June 30th

• Average term of debt: 6.4 years

• Average cost of debt: 4.6%

• Composition of debt:

• 53% banks / 47% Bonds

• Debt breakdown by Currencies:

• 39% UF / 53% US$ / 8% Other currencies

Last Financial Transactions

• Local Bond: in March 2009 CMPC issued a

Chilean Local Bond. This transaction included two

portions:

• 5 year bond: for US$110 MM @ BCU5 + 125 bps

• 21 year bond: for US$256 MM @ BTU20 + 135 bps



138179

131

342

110

233

158

256

2010 2011 2012 2013 2014 2015 2027 2030

86 82 86 88 83

14 18 14 12 17

2005 2006 2007 2008 LTM

24


CMPC is an important player of the Santiago Stock Exchange

• CMPC is listed at the Santiago Stock Exchange since 1922.

• CMPC has 200,000,000 of common shares.

• CMPC’s stock ranked fifth in the IPSA Index, representing 4.20% of the indicator as of December 31st 2008.

Chilean Companies by Market Cap * CMPC Average Trading Volume (MM Shares)

CMPC Average Stock Price (CLP)

25

15,5

13,0

9,08,1

5,5 5,24,4 4,0

3,1

-

5.000

10.000

15.000

20.000

25.000

1S05 2S05 1S06 2S06 1S07 2S07 1S08 2S08 1S09

-

2.000.000

4.000.000

6.000.000

8.000.000

10.000.000

12.000.000

14.000.000

16.000.000

18.000.000

20.000.000

1S05 2S05 1S06 2S06 1S07 2S07 1S08 2S08 1S09


Close relationship with the financial community

Banchile Felipe Mercado [email protected]

BCI Corredores de Bolsa Rodrigo Mujica [email protected]

Celfin Cesar Perez [email protected]

Citigroup Tereza Mello [email protected]

Compass Consorcio Andrés Heusser [email protected]

CorpResearch Cristina Acle [email protected]

Deutsche Bank Josh Milberg [email protected]

Euroamérica Corredores de Bolsa Carla Araya [email protected]

FIT Corredores de Bolsa Hernán Guerrero [email protected]

IM Trust Jorge Merino [email protected]

Inversiones Security Mauricio Ibarra [email protected]

Larraín Vial Fernanda Rodriguez [email protected]

Merrill Lynch Thiago Kiill Lofiego [email protected]

Penta Estrategia & Inversiones Rocio Castillo [email protected]

Raymond James Francisco Schumacher [email protected]

Santander GBM Juan Cristóbal Mora [email protected]

Vantrust Gavin Templeton [email protected]

Analysts

26


Agenda

Overview 3



Financial Review 21


27


Concluding remarks

World class company in the industry.

Low cost producer.

Products and geographical diversification allows strong cash generation in spite of economic and price cycles.

A – company rating by S&P and Fitch Ratings.

Committed to sustainable growth.

Strong balance sheet prepared for growth opportunities.

28


This presentation will be available at CMPC’s website:

www.cmpc.cl

Documents

Empresas CMPC S.A Company Overview 09 · Presentation Prepared for Santander’s 10th Annual Chile Conference 09.09. Empresas CMPC –Company Overview Agenda ... 4,2 1,6 SCA IP CMPC