INVESTOR PRESENTATION December, 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 3Q19 Results
EMPRESAS COPEC AT A GLANCE Industrial group focused in natural resources and energy Business Units FUELS FORESTRY FISHING, MINING & OTHERS EBITDA: US$ 8 million EBITDA: US$ 911 million EBITDA: US$ 1,240 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, Peru and Ecuator Stake in the largest natural gas distributor • in Chile Highlights Consolidated Assets Consolidated EBITDA Market Cap* US$ 11,239 million Sales US$ 24,133 million Arauco Fuels 57,4% Total of 42,2% Fuels Total of Forestry US$ 24.546 US$ 2,159 29,3% International 63,4% BBB (Stable) million million Risk BBB (Negative) Rating Others Local Otros AA- (Stable) 7,3% 0,4% AA (Stable) Source: Empresas Copec, Bloomberg, RISI. Figures LTM as of september 2019 3 *Market Cap as of December 5 th 2019
EMPRESAS COPEC AT A GLANCE Industrial group focused in natural resources and energy 74.68% 25.32% ANGELINI GROUP OTHERS 60.82% 7,82% 31,36% 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 September 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 15.293 11.239 11.216 10.859 10.854 6.913 6.654 6.398 6.003 5.970 Americas Chile (1) Bloomberg, as of december 5 th , 2019 6
Strategic Focus
STRATEGIC FOCUS Growth concentrated in core segments, while keeping other options for value creation Total Assets Acquisitions/Investments Divestments Abcdin - Commercial Retail Planta Valdivia - Forestry AES Gener - Power Generation Guacolda - Power Generation Planta Nueva Aldea - Forestry CGE - Power Generation GNL Quintero – Infrastructure Mina Invierno - Mining CCU - Massive Consumption Selecta – Nutrition Stora Arapoti - Forestry Saesa - Power Distribution TPI Quintero - Fuels Frontel - Power Distribution Puertos y Logística - Ports Golden Omega - Fishing / Nutrition Tafisa Brasil - Forestry Terpel - Fuels Orizon - Fishing / Nutrition Montes del Plata - Forestry Latam Inversiones del Nordeste - Fuels Moncure - Forestry Moncure Masisa Brazil Flakeboard - Forestry Total Assets sep-19 Selecta - Nutrition US$ 24.5 Billion Tafisa - Forestry Mina Justa Mapco - Fuels Stora Arapoti Solgas - Fuels Duragas – Fuels Others Masisa Brazil – Forestry TPI 7,3% Forestry ExxonMobil Latam – Fuels Tafisa Quintero Brazil Mina Justa - Mining 63,4% Fuels 29,3% Nueva Planta Aldea Valdivia Total Assets 2000 US$ 7.1 Billion Others 14,0% Forestry Fuels 68,0% 18,0% 2000 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 8
FOCUS IN FUELS AND FORESTRY Diversification within core businesses Consolidated EBITDA (1) 5,4% 21,2% 8,3% Arauco Fuels 57,4% Total of 42,2% 1,6% US$ 2,159 5,5% million 0,9% 5,0% 51,9% Otros 0,4% Consolidated Revenues (2) By Channel (1) By Product (2) By Region (3) By Country (1) Others Others 1% Central & South 4% Copec - America Industrial North America USA Chile 23% 25% 21% 10% Terpel 51% 45% Total of Total of Total of Total of Panels & US$ 5,671 US$ 5,954 22.8 US$ 17,287 Pulp Other Wood million million million million m 3 48% Countries Products Copec - Europe 10% 49% Gas Stations 8% 25% Colombia Asia Forestry Mapco 40% 29% 2% 9% (1) Figures as of September 2019 (L12M) 9 (2) Figures as of June 2019 (L12M) (3) By country of destination. Includes sales of goods produced in each country plus exports to each country. Figures as of December 2018
Competitive Advantages
COMPETITIVE ADVANTAGES Short harvesting cycle (years) Low Cash Cost producer in both fibers As of August 2019 BSKP BHKP Softwood Int. West Canada 600 Coastal BC 75 Japan East Canada Japan 550 Finland US Other Europe 45 US China 500 Finland Sweden Cash Cost FOB mill Bel/France Canada 450 16 Other Asia East Europe US$/ADt Sweden Indonesia Iberia 400 Chile East Europe Other world 350 Chile Canada Finland Chile/Uruguay Brazil 300 250 200 0 5.000 10.000 15.000 20.000 25.000 30.000 35.000 40.000 38 Hardwood Annual capacity (000s ADt) Exposure by fiber BSKP 12 11 33% 9 7 EKP Capacity 45% 4.0 million Adt Brazil Uruguay Portugal Chile Finland UKP 13% Fluff 9% Source: Empresas Copec * As of June 2019 11 Considering MAPA’s capacity, EKP would represent 63%
COMPETITIVE ADVANTAGES Maximizing the value of every tree Efficient Logistics between forests → mills → ports (1) Considers only export sales volumes, as of December 2018 (2) Considers Arauco’s Line 3 new capacity and Line 1 shutdown Market pulp installed capacity World 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 As of December 2018 Source: Hawkins Wright, Public Filings, and Arauco estimates
COMPETITIVE ADVANTAGES Large scale and coverage Strong brand recognition Favorite Brand Usual Brand More than 3,200 gas stations* • Distribution of 22.8 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. Generación Empresarial 2018 award, for Distinguished by GfK Adimark in the ranking its corporate governance practices “Best place to innovate 2018” Included in Robecosam’s yearbook of Awarded the National Price Avonni good sustainability practices 2018, for initiatives in sustainable natural gas production Source: Empresas Copec * Copec Chile + Terpel + Mapco 13 ** All distribution channels for Copec Chile, Terpel and Mapco LTM
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*** 57.7% Lubricants 49.0% Natural gas crisis *** Market share as of July 2019 14
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