ARAUCO Corporate Presentation 2Q 2019 ARAUCO OVERVIEW HISTORY - PowerPoint PPT Presentation

ARAUCO Corporate Presentation 2Q 2019

ARAUCO OVERVIEW

HISTORY OF ARAUCO: A CONTINUED EXPANSION 1996 NOW Alto Parana in Argentina, one of the first strategic steps to expand our business Today we are a world class player in the forestry products industry Europe ((1) 8Panel mills USA 1 Sawmill Canada 7 Panel mills 2 Panel mills Mexico Brazil 2 Panel mills 4 Panel mills SouthAfrica (1) Chile Argentina Uruguay (2) Chile 2 Panelmills 1 Pulp mill 2Pulp mills 1 Pulpmill 5 Pulp mills 8Sawmills Argentina 4Panel mills 7Sawmills 1 Pulp mill 2 Panelmills 1Sawmill Revenues US$5.7 billion US$641 million Revenues (3) Pulp Capacity Pulp Capacity 1.1 million t 4.0 million t Panel Capacity Panel Capacity 0 m 3 10.9 million m 3 Sawn Timber Capacity Sawn Timber Capacity 1.9 million m 3 2.1 million m 3 Number of Mills Number of Mills 47 11 Source: Arauco (1) Arauco owns 50% of European and South African mills through Sonae Arauco. (2) Arauco owns 50% of Montes del Plata mill in Uruguay. (3) June 2019 LTM As of June 2019 3

ARAUCO AT A GLANCE Financial highlights LTM National rating Shareholder Structure US$million Fitch Feller Angelini Group AA AA- 27% 74.30% 1,553 EBITDA (Stable) (Stable) EBITDA Margin Antar Chile 748 5,764 International rating Cash Debt* 60.82% Fitch S&P 2.9x 77% Empresas Copec BBB- Net debt/ Net Debt/ BBB EBITDA Equity (Stable) (Stable) 99.98% Moody’s 474 1,170 Net income Baa3 CAPEX (Stable) * Does not include swaps and forwards As of June 2019 4

DIVERSIFIED SALES AROUND THE WORLD Forestry Other1% 2% Europe N.A. Canada 8% The 25% Netherlands Revenues Spain Sales by Portugal Germany Pulp Wood USA Division ( 1) MUS$5,671 48% Products China 49% Mexico Colombia Latam Asia and United Costa Rica Arab Oceania 23% Peru Emirates 40% Brazil Other Forestry Chile South 10% -3% Uruguay Africa 4% Australia EBITDA Argentina Others Wood Products EBITDA MUS$1,553 by 21% Division Industrial operations Commercial Offices Pulp Montes del Plata, JV with Stora Enso 72% Sonae Arauco, JV with Sonae Industria World sales breakdown, as of December 2018 As of June 2019 LTM (1) Pulp and Wood products include energy sales 5

THREE STRATEGIC BUSINESS SEGMENTS Complementary energy Wood products Pulp Forestry operations 4 Mills 7 Sawmills 10 Power Plants Plywood:710 th. m 3 4 Rem. facilities 660,568 Ha (1) 5 Mills MDF: 515 th. m 3 606 MW 2,845 th. m 3 PB: 300 th. m 3 2,905 th. tons Surplus: 219 MW 1 Sawmill 2 Mills 2 Power Plants 1 Rem. facility 1 Mill MDF: 300 th. m 3 82 MW 132,067 Ha (1) 362 th. m 3 350 th. tons PB: 260 th. m 3 Surplus: 15 MW 4 Mills MDF: 1,530 th. m 3 133,370 Ha (1) PB: 720 th. m 3 1 Power Plant 1 Mill 91 MW (2) 77,182 Ha (1) (2) 708 th. tons (2) Surplus: 50 MW 9 Mills MDF: 1,470 th. m 3 PB: 2,320 th. m 3 2 Mills MDF: 250 th. m 3 PB: 339 th. m 3 10 Mills (3) PB: 1,165 th. m 3 1 Sawmill (3) MDF: 741 th. m 3 25 th. m 3 OSB: 258 th. m 3 Total 1.0 million ha 4.0 million t 3.2 million m 3 779 MW 10.9 million m 3 (1) Considers hectares planted (2) Considers 50% of Montes del Plata (3) Considers 50% of Sonae Arauco As of June 2019 6

WE ARE A MAIN PLAYER IN THE GLOBAL MARKET Market Pulp Capacity (thousand tons) Arauco* 5,225 #2 In market pulp capacity in the world MAPA’s new capacity World Panels Capacity (thousand m 3 ) Arauco* 10,878 #2 In Panels capacity in the world World market pulp and panel competitors capacity as of December 2018. *Arauco capacity includes 50% of Montes del Plata, 50% Sonae Arauco, and MAPA Project, as of June 2019 Source: Hawkins Wright, Public fillings, Arauco estimations and Company information and fillings 7

MAXIMIZING THE VALUE OF EVERY TREE PULP BSKP/UKP BHKP Licquor Black PULP MILLS Chips HEAT ENERGY PRODUCTION &STEAM MDF/PB WOOD Plywood PRODUCTS SawnTimber Remanufactured WoodProducts MILLS WOODPRODUCTS 8

BUSINESS SEGMENTS

FORESTRY BUSINESS 10

FORESTRY BUSINESS Total Plantations Planting and harvesting Includes plantations in Chile, Argentina, Brazil and Uruguay In thousand hectares In thousand hectares 1,003 2003 2005 2007 2009 2011 2013 2015 2017 Jun 2019 LTM 1.8 million Pine : 70 th. Environmental Certifications Euca: 63 th. hectares owned Others: 0.2 th. Our forests plantations have international certification in 1.0 million Forestry Management and Chain Euca: 76 th. of Custody Pine : 481 th. Pine: 0.2 th. hectares planted Others: 0.4 th. Euca: 177 th. For detailed information about each Others: 3 th. certification, you can visit our web site 645 th . of Pine Pine : 94 th. www.arauco.com Euca: 19 th. 335 th . of Euca As of June 2019 Others: 20 th. 11

FORESTRY BUSINESS Bioforest research and development Bioforest was formed in 1990 by Arauco and one of the achievements has been the increase in the plantations production by 40% 51 Researchers ● Bioforest has a wide participation in local and highly international organizations that are leaders in the trained forestry-industrial scientific knowledge ● In addition, Bioforest aims to fulfill the environmental work in order to develop and objectives for the protection and conservation of apply the best technologies, biodiversity present in our native forests maximizing the forestry and industrial resources. 12

PULP BUSINESS

PULP BUSINESS Production million tons Pulp Sales MUS $2,680 Sales volume: 3.6 million tons Does not include energy sales As of June 2019 LTM FLUFF DP (4) EKP (1) BSKP (2) UKP (3) (1) Eucalyptus Kraft Pulp (2) Bleached Softwood Kraft Pulp (3) Unbleached Kraft Pulp As of June 2019 LTM (4) Dissolving Pulp * China (84%); Korea (8%); Rest of Asia (8%) 14

PULP BUSINESS OUR MILLS LICANCEL 160 th. tons UKP CONSTITUCION ALTO PARANA 350 th. tons BSKP & 355 th. tons UKP Fluff Swing mill ARAUCO MILL LINE 1 & LINE 2 290 th. tons EKP 510 th. tons BSKP NUEVA ALDEA MONTES DEL PLATA 520 th. tons EKP 1,414 th. tons EKP 520 th tons BSKP Arauco owns 50% VALDIVIA 550 th. tons Bleached pulp Swing mill As of June 2019 15

PULP BUSINESS COMPETITIVE ADVANTAGES 1. Product mix 2. Cost advantage SOFTWOOD 620 East Canada Coastal BC (55%) Int. West Canada Japan 570 Japan BSKP Finland 33% US Other Europe US 520 Sweden EKP Capacity China Cash Cost, CIF China Bel/France 45% 470 4.0 millionADt East Europe US$/ADt (45%) Iberia Indonesia Canada Finland 420 Other Asia Sweden HARDWOOD Chile SOFTWOOD East Europe 370 UKP Other world (37%) Chile/Uruguay 13% Fluff 320 Brazil 9% 270 220 0 5.000 10.000 15.000 20.000 25.000 30.000 35.000 40.000 Annual capacity (000s ADt) Considering Capacity BHKP BSKP MAPA’s new 5.2 millionADt Source: Hawkins Wright, August 2019 capacity and DP* (63%) HARDWOOD As of June 2019 *Dissolving Pulp 16

PULP BUSINESS COMPETITIVE ADVANTAGES 3. Logistic efficiency Average Distances Average Distances Mills to Ports Forests to Mills Km Km 420 Licancel Km 316 Constitución Chile 85 Nueva Aldea 63 MAPA Argentina 80 Project Arauco 35 location 282 Uruguay Valdivia 301 1,200 Alto Paraná 0 0 Montes del Plata (2) (1) (2) Weighted Avg. 158 123 (1) Considers only export sales volumes, as of December 2018 (2) Considers Arauco’s Line 3 new capacity and Line 1 shutdown 17

WOOD PRODUCTS BUSINESS

WOOD PRODUCTS BUSINESS Sales evolution US$ million Revenues MUS $2,716 Subdivisions Does not include energy sales PANELS As of June 2019 LTM SOLID WOOD 19

WOOD PRODUCTS BUSINESS: PANELS Production (1) million m 3 Panels Sales MUS $1,756 Sales volume (1) : 5.6 million m 3 Others** Others* 4% Chile 5% 3% Does not include energy sales Argentina As of June 2019 LTM 6% Mexico 7% PBO 42% Brazil US and CA MDF 27% 51% 55% As of June 2019 LTM Does not include Sonae Arauco volumes *OSB, HB, Retail and Composite panels ** EMEA, Asia, Oceania and Rest of Latam 20

PANELS OUR MILLS 4 mills * 2 mills 974 th. m 3 PB 470 th. m 3 MDF 886 th. m 3 MDF 216 th. m 3 PB 2 mills* 516 th. m 3 OSB 140 th. m 3 MDF 228 th. m 3 PB 2 mills* 372MDF 456 PB 7 mills 1,000 th. m 3 MDF 2,104 th. m 3 PB 2 mills 339 th. m 3 PB 250 th. m 3 MDF 2 mills* 4 mills 472 th. m 3 PB** 1,530 th. m 3 MDF 84th. m 3 MDF 720 th. m 3 PB 4 mills 710 th.m 3 Plywood 515 th. m 3 MDF 300 th. m 3 PB 2 mills 60 th. m 3 HB** Legend 300 th. m 3 MDF MDF: Medium Density Fiberboard 260 th. m 3 PB PB: Particle Board HB: Hardboard OSB: Oriented Strand Board As of June 2019 *Arauco owns 50% of Sonae Arauco **One PB mill in South Africa and HB mill in Chile are currently shut down 21

WOOD PRODUCTS BUSINESS: SOLID WOOD Production In thousand cubic meters Solid Wood Sales MUS $960 Sales volume: 2.8 million m 3 Does not include energy sales As of June 2019 LTM As of June 2019 LTM Does not include Sonae Arauco volumes * Pallets 22

SOLID WOOD OUR MILLS 1 sawmill * 50 th.m 3 ST 7 sawmills 2,441 th.m 3 ST 1 sawmill 405 th.m 3 Rem 317 th.m 3 ST 45 th.m 3 Rem Legend ST: Sawm Timber Rem: Remanufactured Wood Products As of June 2019 *Arauco owns 50% of Sonae Arauco 23

ENERGY BUSINESS