INVESTOR PRESENTATION June, 2019
CONTENTS 3 Empresas Copec at a glance 7 Strategic Focus 10 Competitive Advantages 16 Internationalization 20 Latest and Potential Expansions 30 Financial Strength 33 Commitment to ESG initiatives 35 1Q19 Results
EMPRESAS COPEC AT A GLANCE Industrial group focused in natural resources and energy Business Units FUELS FORESTRY FISHING, MINING & OTHERS EBITDA: US$ 5 million EBITDA: US$ 929 million EBITDA: US$ 1,749 million Main distributor of liquid fuels in Chile and One of the most important fishing Second largest market pulp and panel • • • Colombia companies in Chile and the world producer of the world Participates in coal and metal mining Largest distributor of liquefied petroleum • Largest sawn timber producer in Latam • • gas in Chile, Colombia and Peru Stake in the largest natural gas distributor • in Chile Highlights Consolidated Assets Consolidated EBITDA Market Cap* US$ 13,470 million Combustibles Sales US$ 24,145 million Arauco 34,6% 65,2% Total of Fuels Total of Forestry US$ 24.409 US$ 2,684 30,2% Stable 62,6% million million International BBB Otros Risk Stable Local 0,2% AA / AA- Others Rating 7,2% Source: Empresas Copec, Bloomberg, RISI 3 Figures LTM as of March 2019 *Market Cap as of May 30 th 2019
EMPRESAS COPEC AT A GLANCE Industrial group focused in natural resources and energy 74.68% 25.32% ANGELINI GROUP OTHERS 60.82% 8,02% 31,16% PENSION FUNDS OTHERS FUELS FISHING FORESTRY OTHER INVESTMENTS 81.93% 99.98% 100.00% 50.00% 100.00% 39.83% 39.83% 99.20% 83.50% 39.79% 40.00% 100.00% 58.51% 40.80% 12.00% 46.79% 46.79% 100.00% 100.00% 51.00% Figures as of March 2019 4
EMPRESAS COPEC AT A GLANCE 83 years of history 2010-2018 Internationalization 1986-2000 Investments and 2003 Expansion of liquid fuels and LPG • growth business to Colombia Corporate Montes del Plata pulp mill in • 1934 restructuring Alto Paraná Uruguay starts operations (1) • Arauco II Incorporation • Consolidation of the panel • Creation of Empresas • Licancel • Copec business Metrogas • Terpel completes its restructuring • 1970-1980 process Empresas Copec sells its stake in Diversification • Guacolda for US$ 364 million Arauco acquires a 50% stake in Tafisa (2) • 1986 2000-2005 Entry of Angelini Consolidation and Abastible acquires Solgas in Peru and • group strategic focus Duragas in Ecuador (3) 2005-2010 Financial 1950- Angelini assumes control • • A world scale Copec completes the acquisition of restructuring of the Company • 1960 player Mapco in the United States Strategic • Divestiture of shares in • Development Plan non-core businesses Expansion in Arauco becomes • Focus in fuels, forestry • fuels Arauco acquires Masisa’s assets in Brazil • the second largest and fishing and Mexico market pulp Abastible • producer in the Sonacol • Copec acquires ExxonMobil’s lubricants world and the • and liquid fuels assets in Colombia, third main panel Ecuador and Peru producer Alxar acquires 40% stake of Mina Justa • project in Peru (4) Source: Empresas Copec (1) Arauco participates in a joint venture with Stora Enso (50% participation each) (2) Tafisa is the subsidiary of the Portuguese group Sonae Industria, dedicated to the panel business, which has plants in Spain, Portugal, Germany and South Africa 5 (3) Abastible acquired Repsol’s LPG operations i n Peru and Ecuador (4) Mina Justa is a copper mining Project, located in Ica, Peru. The remaining 60% stake is owned by Minsur, which is controlled by the Breca group
EMPRESAS COPEC AT A GLANCE One of the most relevant companies in Chile Market capitalization of Chilean companies (1) US$ million 15.139 14.403 13.470 13.243 9.155 8.729 7.932 6.630 6.254 Americas Chile Source: Bloomberg As of May 30 th 2019 (1) 6
Strategic Focus
STRATEGIC FOCUS Growth has concentrated in core segments, while keeping other options for value creation Total Assets Acquisitions/Investments Divestments Planta Valdivia - Forestry AES Gener - Power Generation Planta Nueva Aldea - Forestry CGE - Power Generation Mina Invierno - Mining CCU - Massive Consumption Stora Arapoti - Forestry Saesa - Power Distribution TPI Quintero - Fuels Frontel - Power Distribution Golden Omega - Fishing / Nutrition Abcdin - Commercial Retail Tafisa Brasil - Forestry Guacolda - Power Generation Terpel - Fuels GNL Quintero – Infrastructure Orizon - Fishing / Nutrition Selecta - Nutrition Latam Montes del Plata - Forestry Moncure Inversiones del Nordeste - Fuels Masisa Brazil Moncure - Forestry Flakeboard - Forestry Mina Justa Selecta - Nutrition Stora Tafisa - Forestry Arapoti Mapco - Fuels TPI Solgas - Fuels Quintero Tafisa Duragas – Fuels Brazil Total Assets 2018 Masisa Brazil – Forestry ExxonMobil Latam – Fuels US$ 23.5 Billion Mina Justa - Mining Nueva Planta Aldea Valdivia Total Assets 2000 Fuels Forestry US$ 7.1 Billion 34,6% 65,2% Fishing & Fuels Forestry 18,0% Others 68,0% 0,2% Fishing & Others 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 14,0% 8
FOCUS IN FUELS AND FORESTRY Diversification within core businesses Consolidated EBITDA (1) Arauco 6,2% 65,2% 28,7% 14,5% Combustibles Total of 34,6% US$ 2,684 1,6% million 3,1% 1,2% 37,5% 7,1% Otros 0,2% Consolidated Revenues (2) By Channel (1) By Country (1) By Product (2) By Region (2) Industrial Others Others 20% 4% 1% Central & South Chile America USA North America 49% 25% 11% 28% Gas Stations Panels & Total of Total of Total of Total of 25% Wood US$ 5,955 Other US$ 5,955 US$ 16,819 22.3 Pulp million Products million million million m 3 Countries 51% 46% 9% Europe 7% Terpel 46% Mapco Colombia Asia Forestry 9% 36% 31% 2% (1) Figures as of March 2019 (L12M) (2) By country of destination. Includes sales of goods produced in each country plus exports to each country. Figures as of December 2018 (L12M) 9
Competitive Advantages
COMPETITIVE ADVANTAGES Short harvesting cycle (years) Low Cash Cost producer in both fibers BSKP BHKP Coastal BC Japan Japan Softwood 500 East Canada 75 Int. West Canada Finland China US Sweden 450 US Other Europe Bel/France 400 Cash Cost FOB mill 45 Indonesia Finland Other Asia Sweden Other World US$/ADt Iberia 350 Chile Canada East Europe 300 16 East Europe Chile/Uruguay 250 200 Chile Canada Finlandia Brazil 150 0 5.000 10.000 15.000 20.000 25.000 30.000 35.000 40.000 38 Annual capacity (000s ADt) Hardwood Higher exposure to Softwood Fluff 9% UKP 13% BHKP 37% 12 11 Capacity by 9 grade* 7 3,887 th. Adt BSKP 41% Brasil Uruguay Portugal Chile Finlandia Source: Empresas Copec *Figures as of December 2018 11
COMPETITIVE ADVANTAGES Maximizing the value of every tree Efficient Logistics between forests → mills → ports Pulp installed capacity Panel installed capacity Million m 3 Million tons Suzano Kronospan Arauco 5,2 Arauco 10,9 3,95 + 1,27 9,55 + 1,36 (MAPA) (Grayling and Mexico) International Paper Norbord CMPC Egger APP Georgia Pacific 2 nd 2 nd Metsä Kastamonu UPM Swiss Krono APRIL Louisiana Pacific Stora Enso Duratex Georgia Pacific Pfleiderer 12 Source: Empresas Copec, as of December 2018
COMPETITIVE ADVANTAGES Large scale and coverage Strong brand recognition Favorite Brand Usual Brand More than 3,200 gas stations* • Distribution of 21.9 million m³ • Other Other of liquid fuels** 16% 12% Import facilities • 84% 88% Storage plants • Industrial clients • Strategic locations 1 st place in “Service Stations” of the Loyalty Distinguished among the best companies in Corporate Reputation, Merco 2018 Award 2018 by Effie. 1 st place in “Canned Gas" of the National Distinguished by GfK Adimark in the ranking Customer Satisfaction Award, ProCalidad “Best place to innovate 2018” 2017 Recognized among the companies with the Awarded the National Price Avonni best corporate reputation, according to Merco 2018, for initiatives in sustainable Empresas and Lideres Colombia 2017 ranking natural gas production Source: Empresas Copec 13
COMPETITIVE ADVANTAGES Synergies among business lines Logistic efficiency 9,0 Thousand m 3 sold / gas station Gas Stations 7,5 6,0 4,5 Other players in Chile 3,0 Convenience Stores 1,5 0,0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 MARKET SHARE EVOLUTION COPEC LIQUID FUELS Industrial Channel % Market Share*** 58.2% Lubricants 49.0% Gas crisis * Copec Chile + Terpel + Mapco 14 ** All distribution channels for Copec Chile, Terpel and Mapco LTM *** Market share as of February 2019
COMPETITIVE ADVANTAGES Leadership in all businesses in which it participates Fuels distribution in Lubricants distribution Fuels distribution in Chile in Chile Colombia* 44,0% 41,8% 46,7% 1 st 1 st 1 st 53,3% 58,2% 56,0% LPG distribution in LPG distribution in LPG distribution in LPG distribution in Peru Chile Colombia Ecuador 19,5% 32,6% 38,2% 38,6% 1 st 1 st 1 st 1 st 61,8% 61,4% 67,4% 80,5% Market share as of february 2019. * Terpel’s market share as of Dicember 2018. 15
Internationalization
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