EMPRESAS CMPC SECOND QUARTER 2013 RESULTS
During 2Q13 CMPC raised approximately US$1 billion to finance its capex program. This was carried out through a bond issuance in the USA and a capital increase in Chile.
SECOND QUARTER 2013 RESULTS Topics 2Q13 Highlights
3
Sales and EBITDA Analysis
4-5
Sales Analysis:
6 - 11
Forestry
5
Pulp
7-8
Paper
9
Tissue
10
Paper Products
11
Income Statement Analysis
12
Balance Sheet Analysis
13
Debt Analysis
14
Capital Expenditures
15
Relevant Events
16 - 17
Capital Markets
18
Financial Information
19 - 21
Management Comment During 2Q13 CMPC continued to make progress both operationally and financially. We recorded higher quarter-on-quarter volumes in our Forestry, Pulp, Papers and Tissue businesses. We also started up operations for a new tissue machine in Chile and expanded our energy capacity with a 50MW turbo generator at the Laja pulp mill. Together, these operations helped our consolidated revenue to grow 8% QoQ and 11% YoY. We also made significant progress in enhancing our capital structure, with the issuance of a US$500 million bond in the international markets at an attractive rate, as well as raising US$450 million via a capital increase in Chile. These measures helped lower our net debt/ ebitda ratio to 2.9x, and highlighted the confidence the market has in CMPC as a high-quality credit with a track record in the financial markets. About CMPC Empresas CMPC produces forestry, pulp, paper, tissue and packaging products throughout Latin America. The company aims to deliver world-class products, from forestry to finished products, to its global customer base. Its high quality timber and production facilities are strategically located in countries including Chile, Argentina, Uruguay, Peru, Mexico, Colombia, Ecuador and Brazil, hiring more than 16 thousand direct employees, making CMPC a truly regional company with a competitive cost structure. The Company sells more than 25 different product lines to over 31,000 clients in more than 45 countries, always seeking longterm relationships.
Date: August 26th, 2013 @ 5:00 PM ET
Investor Relations Contact: • Trinidad Valdés M. / mtvaldes@gerencia.cmpc.cl / +562 2441 2713 • Colomba Henriquez B. / chenriquezb@gerencia.cmpc.cl / +562 2441 2791
US Toll Free: 1-800-860-2442 International Dial: 1-412-858-4600
Press: • Sebastián Garcés O. / sgarceso@gerencia.cmpc.cl / +562 2441 2279
Conference Call
2
2Q13 HIGHLIGHTS Total sales reached US$1,291 million, 8% and 11% higher than 1Q13 and 2Q12, respectively Pulp revenue rose 24% QoQ and 26% YoY Market pulp sales volumes of 552 th. tons, up 18% and 20% compared to 1Q13 and 2Q12, respectively Average effective net pulp export prices were CIF 681 US$/ton for softwood and CIF 680 US$/ton for hardwood Tissue sales of 143 th. tons, up 6% QoQ and 4% YoY EBITDA of US$239 million, up 13% when compared to 1Q13 and stable compared to 2Q12 EBITDA margin of 19%, 1 p.p. higher than 1Q13 and 2 p.p. lower than 2Q12 Net Income of US$31 million, 64% and 16% lower than 1Q13 and 2Q12, respectively. This was mainly a result of the depreciation of the Chilean Peso, which impacted Deferred Taxes. Excluding this non-cash effect, Net Income for the quarter would have been US$78 million CMPC raised approximately US$1 billion through a US$500 million bond issuance in the United States and a US$450 million capital increase in Chile CMPC paid over US$450 million in debt during the quarter Net Debt/EBITDA ratio of 2.9x, down from 3.4x in 1Q13, following the successful capital increase Regarding CMPC‟s projects, a new double width tissue paper machine started operating in Chile, a new turbo generator started commercial operations in the Laja pulp mill and the Puente Alto facility increased its Molded Pulp Trays capacity by 7,000 tons per year Regarding the Guaíba project, Empresas CMPC‟s Board of Directors laid the first stone in August 2013
Forward-Looking Statements
Main Figures
This earnings release may contain forward-looking statements. Such statements are subject to risks and uncertainties that could cause CMPC‟s actual results to differ materially from those set forth in the forward-looking statements. These risks include: market, financial and operational risks. All of them are described in CMPC‟s Financial Statements, Note 3 (“Gestión de Riesgos”).
US $ Million
2Q 12
1Q 13
2Q 13
Q oQ
Sales EBITDA EBITDA Margin Net Income
1.161 240 21% 37
1.194 212 18% 84
1.291 239 19% 31
8% 11% 13% 0% 4% -10% -64% -16%
160
143
226
In compliance with the applicable rules, Empresas CMPC S.A. publishes this document on 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 on its website (www.svs.cl).
CAPEX Total Assets Net Debt Market Capitalization
13.621 2.586 8.834
14.073 14.147 3.039 2.628 7.993 7.307
Closing Exchange Rate (CLP/US$) Average Exchange Rate (CLP/US$)
501,84 496,64
472 507,16 472,40 484,38
58%
Y oY
41%
1% 4% -14% 2% -9% -17% 7% 3%
1% -2%
Y TD 2012
Y TD 2013
Y TD ' 13 / Y TD ' 12
2.338 464 20% 161
2.484 451 18% 115
6% -3% -2% -29%
324
370
14%
13.621 2.586 8.834
14.147 2.628 7.307
4% 2% -17%
501,84 492,75
507,16 478,71
1% -3%
3
SALES AND EBITDA ANALYSIS Sales by business area
2Q12
1Q13
2Q13
10% 10%
8% 10%
Forestry
8% 11%
29%
37%
28%
38%
Pulp Paper
37%
32%
Tissue Paper Products
14%
15%
13%
Sales by destination
1Q13
2Q12 26%
31%
2Q13 27%
31%
25%
31%
Domestic Sales Chile Export Sales Foreign Subsidiaries
42%
43%
44%
EBITDA by business area
1Q13
2Q12 4% 22%
2Q13
7% 8%
19%
3% 11% 22%
25%
41%
15%
Pulp Paper
45%
14%
Forestry
14%
Tissue
50%
Paper Products
4
SALES AND EBITDA ANALYSIS Total Revenues were US$1,291 million during the quarter, 8% higher compared to 1Q13 and 11% higher compared to 2Q12. The QoQ increase is mainly due to higher sale volumes in all business divisions except from Paper Products, which saw a seasonal decline due to the end of the summer fruit season. The delivery of late shipments following the end of the Chilean port strike at the beginning of April helped increase the export volumes of the Forestry, Pulp and Paper divisions. Also, the Tissue business benefited from additional capacity both in tissue paper and sanitary products throughout Latin America. A better pricing environment in the Forestry and Pulp divisions also contributed to increase revenues this quarter. However, tissue prices measured in local currencies were affected by the appreciation of the US Dollar. The YoY increase is mainly due to higher Y-o-Y sale volumes in our pulp business, where we grew production and also cleared a backlog of shipments from 1Q13. The Tissue business also showed higher sales, after the addition of new capacity in Latam, while an improved pricing environment in forestry offset the impact of lower volumes in that segment. Operating costs excluding depreciation, stumpage and decrease due to harvest amounted to US$871 million, 6% higher when compared to 1Q13 and 16% higher than in 2Q12. The increase was partly explained by higher sales. There were also costs associated with maintenance at the Santa Fe II facility, as well as non-recurring costs associated with the start-up of the Talagante tissue machine and the testing of equipment for the new plywood line at Mininco. At a consolidated level, operating costs in 2Q13 were 67% of total revenues, compared with 69% in 1Q13 and 65% in 2Q12. EBITDA totaled US$239 million, up 13% when compared to 1Q13 and stable from 2Q12. The QoQ increase was driven by higher EBITDA generation in the Forestry, Pulp and Paper divisions. The similar YoY result is due to higher revenues and a limited increase in other operating expenses, which offset the higher operating costs. Revenues Analysis to Third Parties ∆ Prices
EBITDA Variation by Business ∆ Volumes
+32 -3
+26 -2
+10
+62
-11
+3
+11
-18
-1
-7
-5
+19 +7
+2 1,291
239
212
1,194
Sales 1Q13
Forestry +9
Pulp +81
Papers + 6
Tissue +21
Paper Prod. Sales -20 2Q13
EBITDA 1Q13
Forestry
Pulp
Papers
Tissue
Paper Holding & EBITDA Products Others 2Q13
5
FORESTRY Sales* 130
2Q12
During 2Q13 the Forestry business registered a 7% increase in revenues when compared to 1Q13 and a 4% increment when compared to 2Q12.
134
125
1Q13
QoQ sales volumes increased by 2%, especially driven by the higher sales of sawn wood (+12%), remanufactured wood (+10%) and sawing logs (+1%). The higher volumes of sawn wood were mainly explained by the delivery of a shipment to the Middle East, which was scheduled to be dispatched during 1Q13 but was delayed by the port strike. The increase in remanufactured wood volumes was explained by the higher sales to USA and Japan, offset by lower sales to Korea. On the other hand, there were lower sales volumes of plywood (-16%) and pulpwood (-2%). The decrease in plywood sales was largely the result of the maintenance and expansion works undertaken at the Mininco mill. 2Q13â€&#x;s volumes were 7% less when compared to 2Q12, due to the lower volumes sold of plywood, pulpwood and sawn wood.
2Q13
EBITDA* 46 28 17
2Q12
1Q13
Average sale prices increased by 5% when compared to 1Q13, mainly explained by slight increases registered in all solid wood products categories.
2Q13
* Figures in US$ million
Volumes (Th. m 3 )
2 Q1 2 1 Q1 3 2 Q1 3
Pulpwood
227
202
198
Sawing Logs
393
344
347
Sawn wood
193
187
210
47
45
50
Remanufactured wood Plywood Total
52
52
44
913
831
848
EBITDA for the quarter was 63% higher compared with 1Q13, and 39% lower when compared to 2Q12. QoQ direct costs fell, thanks to improved productivity and lower transportation costs.
6
PULP The main industry indicators pointed towards stability regarding supply-demand in the global pulp market during the second quarter. Global demand for pulp rose 2.5% in the first half of 2013 compared with the same period in 2012 (+665,000 tons), with a strong second quarter offsetting a weaker performance in the first quarter. Geographically, global demand was stronger in North America and Asia, while economic weakness in Europe and slower growth in China were drags on demand.
U S$/ton CIF
Global pulp inventories at the end of the second quarter stood at 34 days, unchanged from the end of the first quarter. It is important to mention that during the second quarter the industry is used to carry out maintenance shutdowns, reducing the supply of pulp and its occupation ratios. Regarding prices, they were also broadly stable from the first quarter, with slight increases at the beginning of 2Q13. 900 850 800 750 700 650 600 550 500
CMPC's a verage net pulp export price evolution
681 680
1Q11
2Q11
3Q11
4Q11
1Q12
Softwood
2Q12
3Q12
4Q12
1Q13
2Q13
Hardwood
7
PULP Sales* 331
2Q12
During 2Q13 the Pulp business registered a 24% increase in its sales when compared to 1Q13 and a 26% increase when compared to 2Q12.
416
335
1Q13
Market pulp sales volumes increased by 18% when compared to 1Q13 and 20% when compared to 2Q12, partly the result of the better operational performance of the pulp mills, as well as by the end of the port strike at the beginning of April. Sales volumes of softwood rose 42% QoQ and 18% YoY, while hardwood sales rose 10% QoQ and 21% YoY. It is worth noting that there was annual maintenance downtime at the Santa Fe II mill during April 2013.
2Q13
EBITDA* 122
101
96
2Q12
1Q13
Effective average sales prices (including a small tonnage of P&W papers and energy sold to the SIC grid) increased by 7%. Average effective net export price was CIF 681 US$/ton for softwood and CIF 680 US$/ton for hardwood. EBITDA during the quarter increased by 27% when compared to 1Q13 and 21% when compared to 2Q12. It is important to highlight the contribution of US$16 million from the Energy division during 2Q13, which was benefited by the commercial start-up of a new turbo generator in the Laja mill.
2Q13
* Figures in US$ million
Volumes (t h. To ns) BSKP
2Q12 1Q13 2Q13 145
121
171
BEKP
316
347
381
Total Market Pulp
461
468
552
8
PAPERS Sales* 177
2Q12
163
1Q13
169
During 2Q13 the Papers business registered a 4% increase in its sales when compared to 1Q13 and a 5% decrement when compared to 2Q12.
2Q13
QoQ sales volumes increased by 6%, with increments in all products, except for newsprint, which was affected by lower volumes sold in Chile and Argentina. Boxboard volumes were up by 5% when compared to the previous quarter, due to the recovery in exports following the end of the port strike. 2Q13â€&#x;s volumes were 5% lower when compared to 2Q12, due to a 49% decrement in newsprint sales, as the Company decided to close a production line at the Nacimento mill due to high energy spot prices.
EBITDA * 35
35
31
QoQ sales prices decreased by 2% when compared to 1Q13, mainly explained by decreases in newsprint and graphic papers. Boxboard prices were stable from than the previous quarter, while packaging paper registered a 4% increase following the upward trends in the Northern Hemisphere markets registered in April and May. 2Q12
1Q13
2Q13
* Figures in US$ million
Volumes ( th. Tons)
2 Q1 2 1 Q1 3 2 Q1 3
Boxboard
95
88
93
Newsprint
30
16
15
Corrugated Paper
26
32
32
Other Papers
37
33
39
189
169
179
Total
EBITDA for the quarter was 10% higher compared with 1Q13, and remained stable when compared to 2Q12. QoQ direct costs fell, thanks to lower costs of wood for thermo mechanical uses, as well as by decrements in electricity costs.
9
TISSUE Sales* 449
434
2Q12
1Q13
470
2Q13
EBITDA* 55
54
53
During 2Q13 the Tissue business registered a 5% increase in its sales when compared to 1Q13 and an 8% increase when compared to 2Q12. Tissue Paper sales volumes increased by 6% when compared to 1Q13, and 4% when compared to 2Q12. The QoQ and YoY increases were mainly explained by higher sale volumes in major markets including Chile, Brazil and Argentina, as well as the increased capacity in Chile. Sanitary Products sales volumes increased by 13% QoQ mainly driven by the increase in sales of the Brazilian diapers business. YoY volumes increased by 14%, also the result of the expansion of the diapers business through Latin America. Average sales prices (measured in US$) decreased by 1% for tissue paper when compared to 1Q13, while sanitary products„ average price decreased by 8% in the same period.
2Q12
1Q13
2Q13
* Figures in US$ million
Sales Volumes by Country 3% 3% 4%
12% 13%
24%
143 th. Tons 22%
19%
Chile Brazil Argentina Mexico Peru Uruguay Colombia Ecuador
EBITDA during the quarter fell 3% despite the increase in sales. This was heavily influenced by the appreciation of the US Dollar, as well as by the expenses associated with the start up of the Talagante new machine. Approximately 80% of total Tissue sales are denominated in local currencies, compared with only 40% of operating costs.
10
PAPER PRODUCTS Sales* 121
101
90
2Q12
During 2Q13 the Paper Products business registered a 16% decrease in its sales when compared to 1Q13 and a 12% increase when compared to 2Q12.
1Q13
Sales volumes decreased 15% QoQ and increased 17% YoY. The QoQ decline was mainly due to a 26% decrease in the corrugated boxes business due to the end of the summer fruit season. This decline was partly offset by an 18% increase in paper bag volumes, due to higher sales in Argentina and Mexico, and a 4% increase in molded pulp tray volumes. The YoY increment was driven by a 14% increase in the corrugated boxes business, as well as by a higher demand in paper bags and molded pulp trays.
2Q13
EBITDA*
Average sale prices increased by 7% when compared to 1Q13, and declined 2% when compared to 2Q12.
15
9
2Q12
8
1Q13
EBITDA for the quarter was 49% lower compared with 1Q13, and 14% lower when compared to 2Q12. The weaker margin is partly explained by higher input costs in corrugated boxes and paper bags businesses.
2Q13
* Figures in US$ million
Volumes (t h. To ns)
2 Q1 2 1 Q1 3 2 Q1 3
Corrugated Boxes
43
65
49
Paper Bags
18
19
22
Molded Pulp Trays Total
6
7
7
67
91
78
11
INCOME STATEMENT ANALYSIS Operating costs excluding depreciation, stumpage and decrease due to harvest amounted to US$871 million, 6% higher when compared to 1Q13 and 16% higher than in 2Q12. Both increases were mainly explained by the increment in sales registered in the same period, as well as by the start-up costs of the new tissue machine in Chile, preparations to expand plywood capacity and the maintenance at the Santa Fe II pulp line. At a consolidated level, operating costs in 2Q13 were 67% of total revenues, compared with 69% in 1Q13 and 65% in 2Q12.
Other operating expenses amounted to US$181 million, 12% higher than in 1Q13 and 7% higher than in 2Q12. The QoQ change is attributed to the higher costs related to higher volumes and revenue in the quarter. At a consolidated level, other operating expenses in 2Q13 were 14% of total revenues, stable from 1Q13 and down 0.5 percentage points from 2Q12. Financial expenses increased 5% from 1Q13, mainly explained by the costs related to the bond issuance carried out in 2Q13. In addition, CMPC‟s Financial Income decreased 5% when compared with 1Q13. During this quarter there was a lower Share of profit in associated companies, which decreased to US$1 million.
Regarding Currency Exchange rate differences, the appreciation of the US Dollar resulted in a US$40 million gain. Moreover, Indexation Unit Results registered a US$1 million loss recorded during the quarter, primarily due to the appreciation of the UF, applied to the Company‟s UF denominated debt. Other gains (losses) resulted in a US$3 million gain. This category includes non-core business revenues and other items, such as insurance deductible in losses, donations, and the relative effects of changes in the fair value of financial instruments including forwards, forwards investments related to synthetic swaps, cross currency swaps and swaps, different from those under hedge accounting, among others.
Income taxes for the period implied a US$109 million loss, compared with a gain of approximately US$4 million in 1Q13. This QoQ change is the result of the depreciation of the Chilean peso and the effect of exchange rates differences on Deferred taxes, which resulted in a US$48 million loss. This is because CMPC‟s tax accounting is in Chilean Pesos and the depreciation of this currency increases the tax base of assets measured in dollars, and therefore the Deferred taxes account.
12
BALANCE SHEET ANALYSIS Cash and cash equivalents increased 61% when compared to 1Q13, and 13% when compared to 2Q12, reaching US$1,197 million. As of June 30th 2013, Current assets increased 9% when compared with those as of March 31st 2013 as a result of the increase of Cash held by the Company. Non-current assets decreased 1% when compared with those as of March 31st 2013. Current liabilities were down by 29% when compared with those as of March 31st 2013, mainly because of the maturity of a US$300 million credit note. Non-current liabilities increased by 8% when compared with those as of March 31st 2013, due to the US$500 million credit note issuance in May 2013. It is important to highlight that during 2Q13 CMPC paid down over US$450 million of debt. CMPC‟s financial debt stood at US$3,825 million as of June 30th 2013, 1% higher when compared with that as of March 31st 2013. Net financial debt amounted to US$2,628 million as of June 30th 2013, 14% lower when compared with that as of March 31st 2013 as a consequence of the capital increase. Our financial ratios showed a favorable trend during the quarter. The Net Debt/EBITDA ratio dropped from 3.4x in 1Q13 to 2.9x this quarter, in line with our track record of prudent financial management.
Financial Ratio Evolution 5.54x
2.8x
5.24x
3.4x
5.39x
2.9x
(i) (ii) (iii) (iv)
In Million US$
2 Q1 2
1 Q1 3
2 Q1 3
Current Interest-bearing Liabilities Non Current Interest-bearing Liabilities Other Obligations Mark to Market of Derivatives Debt Instruments for Hedging Currencies and Interest Rates
379 3.388 (50) (74)
843 3.094 (48) (106)
444 3.516 (47) (88)
-47% 14% -1% -17%
17% 4% -5% 20%
-
-
-
-
-
1%
5%
1.197
61%
13%
3 .0 3 9 2 .6 2 8
-1 4 %
2%
-5%
-11%
(v) Net Hedging Current Liabilities related to Debt Instruments (vi) Net Hedging Non Current Liabilities related to Debt Instruments Total Debt ( (i) + (ii) + (iii) + (iv) + (v) + (vi) ) Cash*
0.47x
0.48x
0.46x
2T12
1T13
2T13
Net D ebt Average Cost of Debt
Net Financial Debt / EBITDA
3 .6 4 3 1.058 2 .5 8 6 4,4%
3 .7 8 3 3 .8 2 5 744
4,1%
3 ,9 %
Δ% QoQ Δ% YoY
*Cash and cash equivalents + Term deposits within 90 to 360 days of maturity
Financial Debt / Tangible Net Worth
Interest Coverage Ratio
13
DEBT ANALYSIS Amortization Schedule as of June 30th, 2013 EBITDA LTM: US$901 million
976
568
510
506
499
2018
2019
2020/22
337 100
163
2013
2014
Debt by Currency
11 2015
2016
Debt by Type
4%
25%
24%
72%
2017
Debt by Interest Rate 9%
2023/30
Debt by Issuer 11%
4%
75% 85%
91% US$
CLP
Other
0%
Banks
Bonds
Fixed Rate
Floating Rate
Inversiones CMPC Pulp
Tissue Paper Products
14
CAPITAL EXPENDITURES Molded pulp tray expansion – 2Q13 CAPEX
Capital expenditures in the quarter totaled US$226 million in 2Q13, representing a 58% and 47% increase when compared to 1Q13 and 2Q12, respectively. The increase relates to payments of approximately US$100 million related to the Guaíba II Project.
154
143
2Q12
1Q13
226
Regarding CMPC‟s projects, during the quarter a new double width tissue paper machine started operating in Chile, a new turbo generator started commercial operations in the Laja mill and the Molded Pulp Tray expansion started up. Also, in June 2013 CMPC‟s Board of Directors approved a Cogeneration Plant for the Puente Alto Mill. 2Q13
During 2Q13 the Guaíba Project closed its major contracts with Metso, Chemetics, Demuth, Veolia, Siemens and Weg. In August CMPC‟s Board of Directors laid the first stone of the project. Main current projects Forestry
Pulp
Desc ription
Second line - Mininco Plant
Second line - Guaíba Mill
Capac ity
260 th. m /year
1.3 million tons/year
Budget
US$106million
US$2.1 billion
Start up
3Q13
Spending Completion %
100%
3
Paper Cogeneration plant – Puente Alto Mill 50MW + 70 tons steam /hour
Tissue
Paper Produc ts
Double width tissue machine - Molded pulp tray expansion Talagante Mill Puente Alto Mill 50 th. ton/year
7 th. tons/year
US$48 million
US$80 million
US$9 million
2Q15
2Q15
2Q13
2Q13
5%
0%
100%
100%
15
RELEVANT EVENTS US$500 million international bond: On May 13th, Inversiones CMPC S.A. acting through its Cayman Island Agency, issued a US$500 million international credit note under the 144A-S regulation of the United States Securities Act. The transaction was under the guarantee of Empresas CMPC. This bullet note has a maturity of 10 years, with semiannual interest payments. The bond priced at UST +270bp and was 6.7x oversubscribed. Proceeds from the bond will go towards the financing of the Guaíba expansion project in Brazil, as well as general corporate purposes. Deutsche Bank and JPMorgan acted as joint book-running managers. Conclusion of preferential rights period of capital increase: On June 8th, Empresas CMPC concluded the preferential rights period of its capital increase, with existing shareholders subscribing 95.27% of the total shares. The Matte Group, which holds 55% of CMPC‟s shares, subscribed in proportion to their holding, as did the Chilean pension funds, which together hold 11% of CMPC‟s shares. Proceeds from the capital raise will be used to finance the expansion of the Guaíba pulp project, as well as general corporate purposes. Banchile-Citi and Bice Chileconsult acted as Financial Advisors in this process. CMPC‟s Board of Directors will decide the method and the timing for the offering of the non-subscribed portion of the shares. New tissue paper machine in the Talagante mill: This new double width tissue paper machine, which represents an investment of US$80 million, started its operations in the Talagante mill in April 2013. The machine has 50,000 tons/year of capacity and is expected to reach 90% of its learning curve by December 2013. With this project, CMPC Tissue Chile‟s capacity rose to more than 170,000 tons/ year. New turbo-generator in the Laja mill: This new turbo generator started commercial operations in the Laja Pulp mill in May 2013. This turbo generator has 50 MW of capacity, in addition to the 38 MW previously generated in the mill. The Laja mill is now energy selfsufficient, and also sells more than 20MW of energy into the to the Chilean energy grid. During 2Q13, the expansion of the molded pulp tray mill started operations: This expansion adds 7,000 tons/year capacity, representing a 40% increase of this business‟s total capacity. This US$9 million investment will sell to the Chilean egg and fruit export industries. Industry recognitions: CMPC received several recognitions in recent months. In May, CMPC‟s “Confort” toilet paper brand was recognized as the second-most-valued brand in Chile by the study “Chile 3D‟ carried out by companies including Adimark and La Tercera newspaper. Moreover, the “Confort” brand was one of three brands inducted into the Chilean Marketing Hall of Fame this year. Additionally, in July, La Segunda newspaper named Empresas CMPC as the third-most admired in Chile, with positive scores in the areas of finance, environmental responsibility and social responsibility, as well as labor relations. 16
RELEVANT EVENTS A CLP$6 cash dividend was paid in May: CMPC‟s Shareholders‟ Meeting approved a final dividend corresponding to 2012‟s liquid net income. This dividend consists of CLP$6 per outstanding share in May 3rd 2013. Laying of first stone at Guaíba II Line: On August 8th, the Board of Directors of CMPC laid the first stone of the Guaíba II Project in the state of Río Grande do Sul Brazil. Also in attendance were important figures including the Chilean ambassador to Brazil and the Governor of Rio Grande do Sul. Cogeneration energy project for Papeles Cordillera: In June, CMPC‟s Board of Directors approved a cogeneration plant for Papeles Cordillera, the main corrugated paper producer in Chile. This project consists of a plant that will generate approximately 50 MW of energy and 70 tons of steam per hour. Total investment is estimated at US$48 million and the start up date is scheduled for mid 2015.
17
CAPITAL MARKETS Price Evolution
Equity 1,800
Fixed Income International Bonds
1,750 1,700
1,650 CL P$
Preferential rights period of Capital Increase from May 9th to June 8th, 2013 at a price of CLP$1,480. Average price during the quarter was CLP$1,647 compared to CLP$1,814 in 1Q13. Average daily trade volume was 1.5 million shares, representing a 26% increase QoQ. Average daily financial volume was CLP$2,387 million, 14% more when compared to 1Q13.
1,600 1,550 1,500
Preferential Rights Period CLP$1,480
1,450 1,400
Source: Bloomberg
Local bonds in Chile
Yield % Currency 2Q12 1Q13 2Q13 QoQ YoY CMPC 2018 US$ 3.7 3.4 3.7 10% 0% CMPC 2019 US$ 4.2 3.8 4.3 13% 4% CMPC 2022 US$ 4.2 5.1 22% CMPC 2023 US$ 4.9 -
Yield % BCMPC - A BCMPC - B BCMPC - D BCMPC - F
Currency 2Q12 1Q13 2Q13 UF 3.4 3.8 3.6 UF 4.0 4.1 4.1 UF 3.4 3.8 3.7 UF 3.9 3.9 3.8
Source: Bloomberg
Source: Bolsa de Comercio de Santiago
QoQ YoY -5% 5% 1% 4% -3% 7% -1% -1%
18
BALANCE SHEET 2012 Figures in Th. US$*
C urrent Assets Cash and Cash Equivalents Operative Receivables Inventories Biological Assets Tax Assets Other Current Assets
1 Q1 2
2 Q1 2
2013 3 Q1 2
4 Q1 2
1 Q1 3
2 Q1 3 2 Q1 1
QoQ
3 .3 1 2 .4 5 1 366.687 969.757 1.042.859 223.459 148.402 561.287
3 .5 0 9 .0 8 5 542.303 913.132 1.060.528 218.363 127.275 647.484
3 .4 7 8 .6 7 9 550.670 944.389 1.090.726 217.544 147.301 528.049
3 .3 5 3 .6 9 3 431.242 955.232 1.098.369 244.886 154.964 469.000
3 .3 6 6 .4 6 5 433.767 946.419 1.111.044 236.858 167.205 471.172
3 .7 7 1 .5 1 1 1.012.019 932.873 1.053.658 236.404 128.248 408.309
-
Non C urrent Assets Intangible Assets, Different from Goodwill Goodwill Property, Plant and Equipment, Net Biological Assets Deferred Tax Assets Other Non Current Assets
1 0 .2 2 3 .7 6 0 10.071 156.878 6.464.886 3.267.626 133.783 190.516
1 0 .1 1 2 .0 7 5 9.586 149.942 6.433.556 3.288.415 45.535 185.041
1 0 .3 1 3 .8 1 8 9.491 149.244 6.481.189 3.298.355 202.815 172.724
1 0 .5 2 5 .6 8 9 10.546 142.691 6.569.815 3.280.990 54.052 467.595
1 0 .7 0 6 .6 5 6 14.952 143.114 6.554.675 3.310.103 207.352 476.460
1 0 .4 7 0 .0 1 4 14.624 137.112 6.579.774 3.316.569 51.545 370.390
-
TOTAL ASSETS
-
YoY
12%
7%
133%
87%
-1%
2%
-5%
-1%
0%
8%
-23%
1%
-13%
-37%
- 2%
4%
-2%
53%
-4%
-9%
0%
2%
0%
1%
-75%
13%
-22%
100% 5%
1 3 .5 3 6 .2 1 1
1 3 .6 2 1 .1 6 0
1 3 .7 9 2 .4 9 7
1 3 .8 7 9 .3 8 2
1 4 .0 7 3 .1 2 1
1 4 .2 4 1 .5 2 5
-
1%
C urrent Liabilities Other Financial Liabilities Operative Liabilities Other Current Liabilities
1 .0 9 6 .9 9 4 241.289 653.984 201.721
1 .1 6 0 .0 6 5 416.413 588.767 154.885
1 .3 8 1 .0 3 3 563.243 643.768 174.022
1 .5 6 9 .2 3 5 705.490 707.031 156.714
1 .6 8 9 .5 5 0 890.148 647.773 151.629
1 .2 0 5 .0 6 9 551.558 573.513 79.998
-
- 29%
4%
-
-38%
32%
Non C urrent Liabilities Other Financial Liabilities Deferred Tax Liabilities Other Non Current Liabilities
4 .4 1 8 .5 3 3 3.218.130 931.633 268.770
4 .5 0 0 .1 8 0 3.387.947 861.337 250.896
4 .3 9 9 .0 0 2 3.143.351 1.094.060 161.591
4 .3 2 5 .1 1 3 3.230.886 955.449 138.778
4 .3 3 2 .4 8 9 3.097.142 1.095.247 140.100
4 .6 9 7 .4 1 6 3.548.429 1.022.257 126.730
-
15%
5%
-7%
19%
-10%
-49%
Non C ontrolling Participations Equity Attributable to the Owners of the C ontroller TOTAL LIABILITIES & SHAREHOLD ERS' EQUITY
-11%
-3%
-47%
-48%
8%
4%
9 .5 0 8
4 .7 1 3
4 .7 2 3
4 .7 2 2
4 .8 0 1
4 .3 5 7
-
- 9%
- 8%
8 .0 1 1 .1 7 6
7 .9 5 6 .2 0 2
8 .0 0 7 .7 3 9
7 .9 8 0 .3 1 2
8 .0 4 6 .2 8 1
8 .3 3 4 .6 8 3
-
4%
5%
1 3 .5 3 6 .2 1 1
1 3 .6 2 1 .1 6 0
1 3 .7 9 2 .4 9 7
1 3 .8 7 9 .3 8 2
1 4 .0 7 3 .1 2 1
1 4 .2 4 1 .5 2 5
-
1%
5%
* Balance Sheet numbers are based on CMPC's quarterly financial data, which is presented to the"Superintendencia de Valores y Seguros" (SVS).
19
INCOME STATEMENT 2012 Figures in Th. US$
1 Q1 2
2 Q1 2
2013 3 Q1 2
4 Q1 2
1 Q1 3
2 Q1 3 2 Q1 3
QoQ
YoY
Sales
1.176.975
1.160.717
1.209.488
1.212.140
1.193.670
1.290.776
8%
11%
Operating Costs(1)
(799.287)
(752.084)
(794.926)
(817.131)
(819.774)
(870.932)
6%
16%
Operating Marg in
3 7 7 .6 8 8
4 0 8 .6 3 3
4 1 4 .5 6 2
3 9 5 .0 0 9
3 7 3 .8 9 6
4 1 9 .8 4 4
12%
3%
Other Operating Expenses(2)
(153.331)
(168.958)
(171.724)
(187.795)
(161.715)
(180.781)
12%
7%
EBITD A ( 3) EBITDA Margin (%)
2 2 4 .3 5 7 19%
2 3 9 .6 7 5 21%
2 4 2 .8 3 8 20%
2 0 7 .2 1 4 17%
2 1 2 .1 8 1 18%
2 3 9 .0 6 3 19%
13% 4%
0% -10%
Depreciation, Amortizations and Stumpage Increase in Biological Assets due to Forests Growth and Price Effects Decrease in Biological Assets due to Harvest
(106.085) 58.222 (44.104)
(102.156) 58.221 (52.743)
(100.691) 61.915 (53.596)
(115.842) 60.026 (51.155)
(105.380) 51.903 (46.134)
(106.200) 51.904 (51.812)
1% 0% 12%
4% -11% -2%
Operating Income
1 3 2 .3 9 0
1 4 2 .9 9 7
1 5 0 .4 6 6
1 1 2 .5 7 0
1 3 2 .9 5 5
18%
-7%
(41.310) 8.926 3.435 (14.971) (8.214) (5.182) 49.280
(45.809) 8.892 2.160 (1.345) (2.937) (12.594) (54.832)
(45.391) 10.694 3.093 (31.654) (765) 12.210 (95.140)
1 0 0 .2 4 3 (42.721) 8.763 4.122 10.484 (6.213) (9.535) (27.132)
(41.638) 6.202 2.631 (13.419) (1.016) 14.653 4.332
(43.918) 5.868 1.032 39.574 701 2.904 (108.550)
5% -5% -61% -395% -169% -80% -2606%
-4% -34% -52% -3042% -124% -123% 98%
1 2 4 .3 5 4
3 6 .5 3 2
3 .5 1 3
3 8 .0 1 1
8 4 .3 1 5
3 0 .5 6 6
-64%
-16%
Financial Expenses Financial Income Share Results in Associated Companies Foreign Exchange Difference Indexation Unit Results Other Gains (Losses) Income Taxes Net Income
(1) Operating Costs are calculated as: Costs of Sales minus Stumpage minus Decrease in Biological Assets due to Havest minus Depreciation (2) Other Operating Expenses are calculated as: Distribution Costs plus Administration Expenses plus Other Functional Expenses (3) EBITDA is calculated as: Sales minus Operating Costs minus Other Operating Expenses
20
CASH FLOW STATEMENT 2012 F ig ures in Th. U S C ash F low from Operating Activities
1 Q1 2
2013 2 Q1 2
1 Q1 3
2 Q1 3 2 Q1 3
QoQ
YoY
1 7 9 .0 1 7
1 5 9 .1 8 0
1 6 2 .9 6 5
2 1 8 .2 9 9
34%
-2 7 %
1.280.431 84.793
1.375.528 66.581
1.363.551 69.422
1.420.809 59.293
4% -15%
-3% 12%
(1.042.197) (80.894) (97) (40.559) 2 0 1 .4 7 7 (22.460) 0
(1.027.199) (169.038) 0 (54.019) 1 9 1 .8 5 3 (32.673) 0
(1.082.802) (1.044.892) (115.162) (158.368) (1.062) (64) (49.901) (43.420) 1 8 4 .0 4 6 2 3 3 .3 5 8 (21.081) (15.059) 0 0
-4% 38% -94% -13% 27% -29% -
-2% 7% -100% 24% -1 8 % 117% -
(1 5 8 .5 3 9 )
(2 2 7 .2 5 8 )
(1 3 6 .0 7 6 )
(8 6 .6 8 2 )
-3 6 %
162%
Cash flows used for acquiring subsidiaries Amounts obtained from the sale of property, plant and equipment Purchases of property, plant and equipment Cash obtained from the sale of intangible assets Purchases of other long-term assets Payments of future contracts, forwards, options and swaps Collections of future contracts, forwards, options and swaps Dividends received Interest received Other cash inflows (outflows)
0 9.561 (158.039) 0 (15.646) (6.700) 0 0 8.698 3.587
(792) 101 (136.396) 5.480 (22.727) 2.830 0 3.379 8.804 (87.937)
0 0 (130.544) 1.241 (13.948) (5.923) 1.930 0 6.217 4.951
0 892 (210.270) 0 (16.328) (21.690) 28.366 3.585 5.053 123.710
61% -100% 17% 266% 1370% -19% 2399%
-89% -35% 39% -113% -100% -6% 74% -171%
C ash collection from operating activities Collections from sales of goods and services delivered Other cash collections from operating activities Payments for operating activities Payments to suppliers for goods and services Payments to and on behalf of employees Payments for premiums, benefits, annuities, and other obligations derived from suscribed policies Other payments from operating activities Net cash flows from (used in) operating activities Income taxes paid (reimbursed) Other cash inflows (outflows) C ash F low from Investment Activities
C ash F low from F inancing Activities
(9 5 .5 9 8 )
2 7 0 .9 4 0
(2 8 .3 8 1 )
4 6 1 .7 5 1
-1 7 2 7 %
-4 1 %
Proceeds raised through short-term loans Proceeds raised through long-term loans Proceeds raised throug h loans Proceeds from equity issuances Loans reimbursements Payments of financing lease liabilities Dividends paid Interest received Interest paid Dividends received Other cash inflows (outflows)
0 105.411 1 0 5 .4 1 1 0 (156.526) 0 (149) 0 (44.334) 0 0
47.704 521.457 5 6 9 .1 6 1 0 (210.295) 0 (53.902) 0 (34.024) 0 0
156.957 0 1 5 6 .9 5 7 0 (146.143) 0 (79) 0 (39.116) 0 0
338.027 235.109 5 7 3 .1 3 6 437.414 (478.233) 0 (27.665) 0 (42.858) 0 (43)
115% 265% 227% 34919% 10% -
-86% 122% -1 % -100% -56% 95% -21% -100%
Net increase (decrease) in cash and cash equivalents before effect of exchang es rate chang e
(7 5 .1 2 0 )
2 0 2 .8 6 2
(1 .4 9 2 )
5 9 3 .3 6 8
-3 9 8 7 0 %
-6 6 %
4.017
(15.116)
-476%
80%
Effects of variation in the exchange rate on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period C ash and cash equivalents at end of period Term deposits within 90 to 360 days of maturity Total C ash at the end of the period
37.450
(27.246)
(3 7 .6 7 0 )
1 7 5 .6 1 6
2 .5 2 5
5 7 8 .2 5 2
22801%
-7 0 %
404.357
366.687
431.242
433.767
1%
-15%
3 6 6 .6 8 7
5 4 2 .3 0 3
4 3 3 .7 6 7
1 .0 1 2 .0 1 9
133%
-4 6 %
416.152
515.307
310.475
185.161
-40%
178%
7 8 2 .8 3 9
1 .0 5 7 .6 1 0
7 4 4 .2 4 2
1 .1 9 7 .1 8 0
61%
-1 2 %
21