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TRANSCRIPT
LUIS LLANOS - CFO
AUGUST, 2014
EMPRESAS CMPC – LAST UPDATES PRESENTATION PREPARED FOR LARRAÍN VIAL INVESTOR BREAKFAST
3
A DIVERSIFIED BUSINESS PORTFOLIO PROVIDES CMPC A STABLE CASH FLOW
Source: CMPC. Figures in US$ million for the LTM as of June 2014 / Figures do not include Holding and Intercompany Sales and EBITDA
Main Figures % of third parties total
sales
% of consolidated
EBITDA
Total capacity &
Employees
Fo
restr
y
Pu
lp
Pa
pe
rs
Tis
su
e
Sales:830
Sales 3rd parties: 539
EBITDA: 119
EBITDA margin: 14%
663 Th. has. planted
12.7 M m3/y harvested
2,608 employees
US$5.8 billion in assets
Sales: 1,841
Sales 3rd parties: 1,505
EBITDA: 542
EBITDA margin: 29%
2.8 M tons/y
1,984 employees
US$4.6 billion in assets
Sales: 1,072
Sales 3rd parties: 1,018
EBITDA: 166
EBITDA margin: 15%
1.3 M tons/y
3,580 employees
US$1.4 billion in assets
Sales: 1,840
Sales 3rd parties: 1,837
EBITDA: 200
EBITDA margin: 11%
617 Th. tons/y
7,853 employees
US$2.2 billion in assets
20%
11%
31%
21%
38%
12%
17%
54%
4
Plywood
CMPC HAS A PRODUCT AND GEOGRAPHIC DIVERSIFICATION THAT PROVIDES FLEXIBILITY
Source: CMPC. Figures in US$ million for the LTM as of June 2014/ Figures do not include Holding and Intercompany Sales .
6
CMPC HAS A DIVERSE PROJECT PORTFOLIO WITH MORE THAN US$2.6
BILLION IN INVESTMENT FOR THE PERIOD 2014-2015
TISSUE/ENERGY
Cogeneration plant –
Talagante Mill
21MW + 25 tons steam/hour
US$32 million
3Q15 (9% disbursed*)
PULP
Guaíba Expansion (50% disbursed*)
1.3 million ton/year | US$ 2.1 billion | 2Q15
FORESTRY
Land purchases for forestry
uses and associations with
3rd parties.
TISSUE
Increase in conversion
capacity of tissue paper and
sanitary products
PAPERS/ENERGY
Cogeneration plant –
Puente Alto Mill
50MW + 80 tons steam/hour
US$70 million
3Q15 (31% disbursed*)
TISSUE
Tissue Machine + Cogeneration –
Altamira Mill (Mexico)
50 th. tons /year
21MW + 30 tons steam/hour
US$ 161 million
3Q15 (24% disbursed*)
RECURRENT
INVESTMENTS
*As of June 30, 2014
7
Per Capita Tissue Consumption
CMPC SEEKS TO TAP LATAM UNDERPENETRATED TISSUE MARKETS
High growth potential due to low per
capita consumption relative to developed
economies.
Latam average tissue consumption:
5.7 kg/person
Expected growth in LatAm markets: 64%
for Tissue Paper and 34% for Diapers for the period 2012-2022
Tissue Paper and Baby Diapers Annual Consumption
Growth
Source: CMPC as of December 2012 Source: RISI Tissue World Report (June 2013) and Price Hanna Report (February 2013)
* CAGR: Compound Annual Growth Rate
5.0%
4.2%
6.3%
4.2%
5.7%
5.6%
3.7%
6.1%
5.2%
4.9%
3.1%
(0.1%)
2.7%
1.7%
4.4%
1.9%
1.9%
1.3%
2.3%
9.3%
Latam
Argentina
Brazil
Chile
Colombia
Ecuador
Mexico
Peru
Uruguay
Other Latam
Tissue Paper (th. tons)
Baby Diapers (th. units)
3,517 31,745
300 3,230
1,036 11,100
198 905
206 2,580
65 548
971 9,000
133 1,415
29 125
579 2,842
2012-2022 CAGR * Market Size (2012)
Honduras
India
Indonesia
GuatemalaEl Salvador
China, Ecuador,
Peru, Colombia
Brazil
Costa Rica
Venezuela
Argentina
PanamaUruguay
Mexico
Chile
Portugal
SpainItaly
Japan
France
UK
Finland
Germany
Canada
Australia
Sweden
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)
8
TISSUE DIVISION: CMPC IS UNIQUELY POSITIONED TO CAPTURE THE
DEVELOPMENT AND GROWTH OF THESE MARKETS
Chile 166 th. tons*
Argentina 99 th. tons*
Uruguay 35 th. tons*
Peru 71 th. tons*
Mexico 84 th. tons*
Colombia 27 th. tons*
Brazil 135 th. tons*
74%
8%
42%
81%
11%
6%
55%
CMPC Tissue Market Share. * The size of the circles refers to
CMPC’s installed capacity
Source: CMPC as of June 2014
Ecuador
23%
296 430
682
1,106
1,503
2,015
2001 2006 2007 2009 2012 2013
Entry to Ecuador -Colombia
Entry to
Mexico
Entry to
Brazil
CMPC Tissue Sales (US$ million)
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 has a strong
presence in all main
categories of tissue,
sanitary and away
from home products
10
GUAÍBA 2: PROJECT OVERVIEW
1.3 million tons/year Production capacity of eucalyptus
market pulp
30MW Excess Energy
US$2.1 billion Estimated Capex
2Q15 Startup
BRAZIL 180 km Average distance from forests
260 km Distance to ports by barges
100% Wood self-sufficiency
Over 120,000 Hectares planted with FSCTM
Certification
11
THE GUAÍBA 2 PROJECT WILL BE ONE OF THE MOST EFFICIENT IN THE PULP
INDUSTRY
High yield forestry base
Strategic Location
State of the art
technology
Upgrade CMPC’s existing logistics
Economies of Scale
Guaíba Terminal
Rio Grande
Terminal
12
GUAÍBA EXPANSION: ON SCHEDULE, ON BUDGET
71% Physical progress as of July 31st
2014
7,338 Workers on site
US$1,209 million Disbursements as of July 31st
2014
Financing Plan Capital Increase: US$750 million
Debt Issuance: US$500 million
BNDES Credit: BRL$ 2,510 million
ECA Financing: US$340 million
Sale of non-core assets:
Bicecorp: US$106 million
Pipe racks
Fiber Line - Boiler Dryer Machine Building
Fiber Line - Piperack - Boiler
Guaíba 2 Project - July, 2014.
14
200
300
400
500
600
700
800
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)
200
300
400
500
600
700
800
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
ALLOWING THE COMPANY TO REDUCE THE IMPACT OF PRICE VOLATILITY
Source: CMPC and Hawkins Wright as of December 2013
(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)
Effective price range of CMPC’s BSKP, last 24 months Effective price range of CMPC’s BHKP, last 24 months
829
877
772
688 679662
619634
653681
668
713731
714
741 745
688
563
602
649623 624
648
680
643 633616
587
500
550
600
650
700
750
800
850
900
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14
US
$/to
n C
IF
CMPC's average net pulp export price evolution
BSKP BEKP
Pulp inventory days
MARKET PULP COMMENT
15
Global demand for pulp increased 4.5% in 2Q14 from
1Q14 and 2.4% compared to 2Q13. If we compare 2H14
with 2H13:
– Chinese demand grew 5.1% (374 Th. tons) and 18%
if we compare June 2014 with June 2013
– European demand fell 88 Th. tons; US demand fell
61 Th. tons
– Softwood demand grew 0.4% compared to 1H13
– Hardwood demand grew 1.1% compared to 1H13
BSKP and BEKP inventories at 25 and 42 days as of the
end of June 2014
Positive change in demand trend since mid May
Source: PPPC
Market Pulp demand (1H14 vs. 1H13)
-1.6%
-2.1%
-1.4%
4.0%
5.1%
-1.0%
North
America
Western
Europe
Latin
America
Japan China Other
Asia/Africa
34 34 34 33
3734
1Q13 2Q13 3Q13 4Q13 1Q14 2Q14
Source: PPPC, World Chemical Market Pulp Global 100 Report – June 2014
-0.2% -0.7%
5.1%
-7.3%
-24.0%
4.8%
Northern
Softwood
Southern
Softwood
Radiata
Softwood
Northern
Hardwood
Southern
Hardwood
Eucalyptus
16
NEW BEKP CAPACITY IN THE 4OO+ MILLION TONNES FIBER MARKET
Source: RISI 5-year Forecast (2013-2018) - December 2013
417 million tons of
total fibers
59 million tons of
market pulp
28 million tons of
BHKP
Fiber World Consumption required to
produce 403 million tons of
Paper&Board Virgin fiber used to produce Paper&Board
(million tons) Market Pulp consumed to
manufacture Paper&Board - 2013
(million tons)
Virgin Pulp
183 million
tons
(44%)
Recovered
Paper
234 million
tons
(56%)
Market Pulp
59 million
tons
(32%)
Integrated
124
million tons
(68%)
BSKP
24 BHKP
28
Sulphite
UKP
2
Mec
5
[BEKP: 16.8 million tons] [Guaíba II: 1.3 million tons]
18
DEMONSTRATED CAPACITY TO MANAGE LEVERAGE
Net Debt / EBITDA
Source: CMPC
4,5
1,5
2,3
0,9
2,8
1,5
3,3
1,8
3,4
3,1
,00
,500
1,00
1,500
2,00
2,500
3,00
3,500
4,00
4,500
5,00 Acquisition of Pacífico and Santa
Fe ISanta Fe II
Investment Period
Guaíba I
Acquisition
Guaíba II
Investment Period
20
CMPC WILL BASE ITS STRATEGY IN 4 PILLARS TO CONSOLIDATE ITS
LEADERSHIP IN THE P&P INDUSTRY
2. Focus on cost control and enhance efficiency
1. Successfully execute its investment program
3. Maintain a balanced capital structure
4. Consolidate CMPC’s culture among all business divisions and countries
CONTACT INVESTOR RELATIONS Trinidad Valdés
+(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.
Colomba Henríquez
+(562) 2 441 2791