Corporate

Presentation
Q1 2020
Overview
ARAUCO at a glance
As of March 2020 LTM

Shareholder Structure Credit Ratings

International Scale National Scale
Angelini Group
Fitch Ratings BBB
74.30% (Negative) Fitch Ratings AA-
(Negative)

S&P BBB-
Antar Chile (Negative)
Feller Rate AA
(Stable)
Moody’s Baa3
(Stable)

60.82%
Financial highlights
Empresas Copec In US$million

99.98% EBITDA 987 Net Income -94

EBITDA Margin 19% CAPEX 1,401
Net Debt/EBITDA 4.9x Revenues 5,068
 DIVERSIFIED SALES REVENUE BY REGION
As of December 2019
AROUND THE WORLD

Forestry Others
3% 0%

Revenues Pulp Wood

MUS$5,068 43% Products
32% 32%
54%
Asia and Oceania North America

Others
-5%
Forestry
26%
Adjusted EBITDA
Pulp 24% 8%
MUS$987 Wood 50% Central and Europe
Products South America
29%
4%
As of March 2020 LTM Others
Revenues of Pulp and Wood Products divisions include sales of energy
4
 THREE STRATEGIC BUSINESS SEGMENTS
Forestry Pulp Wood products Complementary energy
Panels Solid Wood operations
2 Mills
7 Sawmills: 2,646 th. m3 10 Power Plants
697 th. Ha (1) 5 Mills MDF: 515 th. m3 Plywood(5) : 710 th. M3 606 MW
PB: 340 th. m3 4 Rem. Facilities
2,905 th. t Surplus: 219 MW

2 Mills 2 Power Plants

1 Mill 1 Sawmill: 318 th. m3
MDF: 300 th. m3 82 MW
133 th. Ha (1)
350 th. t 1 Rem. Facility
PB: 260 th. m3 Surplus: 8 MW

4 Mills
130 th. Ha (1) MDF: 1,530 th. m3
PB: 720 th. m3

1 Power Plant
1 Mill 91 MW (2)
79 th. Ha (1) (2)
710 th. t (2) Surplus: 50 MW

10 Mills(6)
MDF: 1,470 th. m3
PB: 2,104 th. m3

2 Mills
MDF: 250 th. m3
PB: 339 th. m3

10 Mills (3)(4)
PB: 1,165 th. m3 1 Sawmill (3): 25 th. m3
MDF: 741 th. m3
OSB: 258 th. m3
Total 1.0 million ha 4.0 million t 10.0 million m3 3.7 million m3 779 MW

As of December 2019 (4) One PB mill in South Africa is currently shut down
(1) Considers hectares planted, in thousands (5)Considers 2 plywood mills.
(2) Considers 50% of Montes del Plata (6)As of the date of publication of this report, 2 MDF mills are shut down. Also, the
(3) Considers 50% of Sonae Arauco PB lines of two different mills are also shut down.
5
WE ARE A MAIN PLAYER IN
Market Pulp Capacity (thousand tonnes)
THE GLOBAL MARKET
Suzano
ARAUCO (*) 5,225
IP (exc. Ilim)
CMPC

#2
In market
APRIL
pulp capacity
Metsa Group
in the world
UPM-Kymmene
Georgia Pacific MAPA’s new capacity
Stora Enso
APP (excl. PE)

0 2,000 4,000 6,000 8,000 10,000

World Panels** Capacity (thousand m3)

Kronospan
ARAUCO (*) 9,916

#2
In Panels Egger
capacity in Norbord
the world Swiss Krono
Kastamonu
Georgia Pacific
Louisiana Pacific
Pfleiderer
Duratex

0 3,000 6,000 9,000 12,000 15,000 18,000 21,000 24,000

World market pulp and panel competitors capacity as of December 2019
*Arauco capacity includes 50% of Montes del Plata, 50% Sonae Arauco, and MAPA Project, as of December 2019
**Panels refers to Composite Panels, which corresponds to MDF, PB and OSB.
Source: Hawkins Wright, Public fillings, Arauco estimations and Company information and fillings
6
MAXIMIZING THE VALUE
OF OUR FORESTS
PULP
EKP
BSKP
UKP
Fluff
DissolvingPulp

PULP
MILLS
SURPLUS
Chips 277 MW

HEAT ENERGY National Grid

PRODUCTION &STEAM

MDF/ PB
Plywood
WOOD SawnTimber
PRODUCTS Rem. Wood Products
MILLS
WOOD
PRODUCTS

7
BUSINESS
SEGMENTS
 FORESTRY BUSINESS
Total Plantations Includes plantations in Chile, Argentina, Brazil and Uruguay
Planting and harvesting
In thousand hectares In thousand hectares
1,038 90

80 71 ha
70

60 55 ha
50

40
37 ha

30 23 ha Planted hectares
20 Harvested hectares
10
2003 2005 2007 2009 2011 2013 2015 2017 2019 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

1.8 million (*) Hectares Planted Environmental Certifications

hectares owned Pine : 70 th. Our forests plantations have international
Euca: 60 th. certification in Forestry Management and Chain
Others: 0.2 th. of Custody
1.0 million 130 th.
For detailed information about each certification, you can visit our
hectares planted Euca: 78 th. web site www.arauco.com
Pine: 0.1 th.
Pine : 503 th. Others: 0.4 th.
667 th. of Pine Euca: 192 th. 79 th.
Others: 2 th. Pine : 94 th.
349 th. of Euca Euca: 19 th.
22 th. Others 697 th.
Others: 20 th.
133 th.
(*) includes 515 th. hectares of native forest plantations.
As of December 2019
9
FORESTRY BUSINESS

Bioforest research and development

Bioforest was formed in 1990 by Arauco and one of the

achievements has been the increase in the plantation
yields by 40%

59
Highly
trained
researchers

work in order to develop and

apply the best technologies, ● Bioforest has a wide participation in local and international
organizations that are leaders in the forestry-industrial
maximizing the forestry and scientific knowledge
industrial resources.
● In addition, Bioforest aims to fulfill the environmental
objectives for the protection and conservation of
biodiversity present in our native forests

10
PULP BUSINESS Production
million tonnes

4.0 3.6 3.7 3.8 3.7 3.7

3.3 3.4
3.0

Pulp Sales 2.0

1.0

MUS
-
2014 2015 2016 2017 2018 2019 Mar 2020
EKP BSKP UKP Fluff LTM

$2,171 Does not include energy sales

As of March 2020 LTM
Sales volume: 3.7 million tonnes

Fluff
4% Europe
18%
UKP
13%
EKP(1) BSKP (2) UKP(3) FLUFF DP (4) America
11% China
EKP 52%
50% Rest of the
BSKP World
33% 13% Korea
6%

(1) Eucalyptus Kraft Pulp

(2) Bleached Softwood Kraft Pulp
(3) Unbleached Kraft Pulp
(4) Dissolving Pulp
As of March 2020 LTM
11
PULP BUSINESS
OUR MILLS
in thousand tonnes

LICANCEL
160 UKP

CONSTITUCION ALTO PARANA

355 UKP 350 BSKP & Fluff
Swing mill
MAPA PROJECT (2021)
NEW LINE 3
1,560 EKP ARAUCO MILL
LINE 1: 290 EKP
Line 1 will be shut down LINE 2: 510 BSKP
upon completion.

NUEVA ALDEA MONTES DEL PLATA

520 EKP 1,414 EKP
520 BSKP Arauco owns 50%

VALDIVIA
550 EKP

As of March 2020

12
 PULP BUSINESS
COMPETITIVE ADVANTAGES
1. Logistic Efficiency 2. Cost Advantages

620
East Canada
Coastal BC
Int. West Canada
570 Japan
Japan
US Finland
Other Europe US
520 Sweden

China

Cash Cost, CIF China

Bel/France
470 East Europe
Iberia

US$/ADt
Indonesia Canada
Finland
420 Sweden
Average distances from Average distances from Other Asia
East Europe
Forests to Mills Mills to Ports 370
Km Chile
320 Other World Chile/Uruguay
Chile 85 Licancel 420
Brazil
Constitucion 316 270
Argentina 80
Nueva Aldea 63
220
Uruguay 282
Arauco 35 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000
Annual capacity (000s ADt)
Valdivia 301
Arauco
Alto Paraná 1,200
BSKP BHKP
Montes del plata 0
Weighted Avg. 205 (1) 161(2) Source: Hawkins Wright, as of December 2019
Other world includes Argentina, China and Oceania.
with MAPA
Source: ARAUCO, as of December 2019
(1) Calculated using sales volume for 2019
(2) Calculated including sales volume from ARAUCO´s Line 3 expected capacity and assuming Line 1’s shutdown

13
 PULP BUSINESS
COMPETITIVE ADVANTAGES
3. Product Diversification

BCP world industry demand by End-use, 2018(2)

(48%) FLUFF
SOFTWOOD 9%
UKP
13%

Current Capacity
(52%)
4.0 million HARDWOOD
tonnes

EKP
BSKP 52%
26%
DP (1)
9%
FLUFF (63%)
7%
HARDWOOD
UKP
10% Projected
Capacity
(37%) 5.2 million EKP
Including MAPA’s SOFTWOOD tonnes 54%
capacity and DP (1)
BSKP
20%

Source: ARAUCO, as of March 2020 (2) Source: Hawkins Wright, as of December 2019
(1)Dissolving Pulp BCP: Bleached Chemical Pulp, which includes all bleached kraft pulp (and not unbleached)
The Valdivia mill will keep the ability to switch from producing dissolving pulp to paper grade (EKP). and sulphite pulp

14
WOOD PRODUCTS BUSINESS Sales evolution
US$ billion

3.0 2.8 2.6 2.6 2.7 2.7 2.7

2.5

2.0

Revenues 1.0

MUS -
2014 2015 2016

Panels
2017 2018

Solid wood
2019 Mar 2020
LTM

$2,702 Does not include energy sales

Subdivisions

As of March 2020 LTM

PANELS

SOLID WOOD

15
WOOD PRODUCTS BUSINESS: PANELS Production
million m3
8.0

Millares
7.0
6.0 6.1
6.0 5.6
4.8 4.8 4.9
5.0
4.0

Panels Sales 3.0

2.0

MUS
1.0
0.0
2015 2016 2017 2018 2019 Mar 2020
MDF PB Others LTM

$1,858 Does not include energy sales

Sales volume: 6.0 million m3

Others*
3%
Chile Others**
Argentina 4%
3%
As of March 2020 LTM
5%

Mexico
11%

PBO
45% MDF
USA and
52% Brazil Canada
25% 52%
As of March 2020 LTM
Does not include Sonae Arauco volumes
*OSB, HB, Retail and Composite panels
** EMEA, Asia, Oceania and Rest of Latam
16
PANELS
OUR MILLS 2 mills
470 m3 MDF 4 mills *
in thousands 974 m3 PB
886 m3 MDF
516 m3 OSB
2 mills*
140 m3 MDF
428 m3 PB

2 mills*
372 MDF
456 PB

8 mills (**)
1,000 m3 MDF
2,104 m3 PB

2 mills
339 m3 PB
250 m3 MDF

4 mills
1,530 m3 MDF
720 m3 PB 2 mills*
472 m3 PB***
84 m3 MDF

3 mills
515 m3 MDF
340 m3 PB
Legend 2 mills
MDF: Medium Density Fiberboard 300 m3 MDF
PB: Particle Board 260 m3 PB
OSB: Oriented Strand Board

As of December 2019
*Arauco owns 50% of Sonae Arauco
**As of the date of publication of this report, 2 MDF mills are shut down. Also, the PB lines of two
different mills are also shut down.
***One PB mill in South Africa is currently shut down 17
WOOD PRODUCTS BUSINESS: SOLID WOOD Production
million m3
5.0

4.0
3.2 3.2 3.1 3.2 3.1
2.9 3.0
3.0

2.0

Solid Wood Sales 1.0

MUS 0.0
2014

Sawn Timber
2015 2016

Kiln-dried lumber
2017

Plywood
2018 2019 Mar 2020

Reman. Wood products

LTM

$844Does not include energy sales

As of March 2020 LTM
Sales volume: 2.7 million m3

Rem. Wood
products
Others*
2%
Rest of Latam

Chile
7%
Asia and
17% Oceania
Kiln- 13%
dried 36%
lumber EMEA
Plywood 35% 10%
19%

Sawn Timber North America

27% 33%

As of March 2020 LTM

Does not include Sonae Arauco volumes
* Pallets
18
SOLID WOOD
OUR MILLS
in thousands

1 sawmill*
50 th. m3 ST

7 Sawmills
2,646 m3 ST
408 m3 Rem
Legend
2 Plywood Mills 1 sawmill
ST: Sawn Timber 318 m3 ST
710 m3
Rem: Remanufactured Wood Products
67 m3 Rem

As of December 2019
*Arauco owns 50% of Sonae Arauco

19
ENERGY BUSINESS Highlights As of September 2018

Arauco generates renewable energy from forestry biomass and uses it in

the production processes.

In Chile, Argentina and Uruguay, we are self-sufficient in net electricity

consumption and we sell the surplus to the local grid.

Revenues 5 cogeneration plants in Chile and 1 plant in Uruguay are registered under
the Kyoto Protocol Clean Development Mechanism (CDM).
We expect MAPA will generate an additional surplus of 142MW available
MUS for the national grid.

$78 277 MW
As of March 2020 LTM
779MW Sold to National Grid in Chile,
Installed capacity Argentina and Uruguay

606 MW
82 MW 900,000 homes
can be powered by the surplus
injected to the grid

91 MW
20
FINANCIAL
HIGHLIGHTS
MAIN FIGURES
Adjusted EBITDA Net Debt
US$ million US$ million
2,000 35%
31% 4.9x
1,800
30% 6,000 5.0
26% 3.6x 3.9x
1,600
24% 25% 4.0
25% 3.2x 2.9x 2.7x
22% 22% 5,000 3.0
1,400 1.9x
19% 2.0
1,200 20% 4,000
1.0
1,000 1,851 15% 3,000 -

800 4,490 4,817 -1.0

1,280 1,290 1,353 10% 2,000 4,107 3,805 3,889 3,684 -2.0
1,147 3,434
600 1,067 987 -3.0
1,000
5% -4.0
400
- -5.0
200 0% 2014 2015 2016 2017 2018 2019 Mar 2020
2014 2015 2016 2017 2018 2019 Mar 2020 LTM
LTM Net Debt Net Debt/ EBITDA
Adjusted EBITDA Adjusted EBITDA Mg
CAPEX Debt Breakdown
US$ million
by Instrument by Currency
Leasing Other Currencies
4% Banks 4%
UF (*)
17% swapped to
1,350 1,401
U.S. Dollar
921 20%
614 665 654
469

2014 2015 2016 2017 2018 2019 Mar 2020

LTM Bonds
U.S.Dollar
79%
76%

As of March 2020
(*) UF or “Unidad de Fomento” is a Chilean inflation-indexed currency
22
FUTURE
INVESTMENTS
MAPA NEW PULP LINE AT Modernization and Expansion of the Arauco Mill (MAPA)
ARAUCO MILL & COGENERATION consists in the construction of a third pulp line of 1.56 million
PLANT tonnes of short fiber production capacity.

The investment for this project is approximately US$ 2,350million. It is expected that the new line will start its operations during the
second quarter of 2021, increasing ARAUCO’s total pulp production
The Project also considers the shut down of Arauco´s line 1 of 290 th. tonnes capacity to more than 5 million tonnes.
of short fiber pulp once the new line (line 3) is operating, and the
construction of a cogeneration plant that we expect will generate a surplus of
142 MW to be made available for the national grid.

24
 MAPA PROJECT TIMELINE

July 2018 February 2019 May 2019 End of May 2020: 52% advance
The Board ofDirectors Contracts awarded for Most of the critical equipment is on-site and
approved the MAPA Earth-moving worksstart. construction companies, totaling construction continues.
Project. approximately US$ 680 million.

April 2011 October 2018 April 2019 2021

Arauco’s first Arauco signed main equipment On April 1st, 2019, Arauco signed an The new Line 3 is
environmental studies contracts with Andritz and ECA* agreement for a total of Eur 555 expected to start
for MAPA Project. Valmet million. This financing is mainly operating on Q2 2021,
associated with the suppliers while Line 1 is
contracts signed on October 2018. shutdown.

(*) Export Credit Agency

25
DISSOLVING PULP PROJECT

• Dissolving Pulp Project is a brownfield project, located in the Valdivia mill and approved by
ARAUCO’s Board of Directors on September 2017.

• This US$ 200 million investment consisted in the mill’s adaptation to produce dissolving
pulp, with the option to switch back to paper pulp production. This project allows Arauco
to continue diversifying its product portfolio and reaching new costumers

• Dissolving pulp is used to produce viscose, an alternative material for cotton. It is used to
soften, shine, and purify fibers.

• At the beginning of June, the first dissolving pulp bales started coming out of our
Valdivia mill, thus marking the completion of the Dissolving Pulp Project. Our dissolving
pulp will be marketed under the brand name ARAUCO Create.

• This constitutes a highlight in the history of our Company, having brought together
innovation in sustainable fibers and diversification of our product portfolio.

26
SUSTAINABILITY
SUSTAINABILITY STRATEGY

Combining science, Developing high standard, Responsibly managing Being a virtuous actor in
innovation and quality-oriented products our operations using the areas where we
technology that always aim to be the best-in-class maintain operations to
with the goal of superior choice for our environmental practices become an active agent
unlocking the full customers. and promoting the safety for their social and
potential of our of ARAUCO’s workers. economic development.
plantations.

With products that come from responsible

management of natural and renewable
Towards a Bioeconomy resources
 SUSTAINABILITY STRATEGY

Global Change
Our commitment to sustainable development is a
CARBON
response to the challenges posed by climate change
and population growth. NEUTRAL
COMMITMENT RENEWABLE RESOURCE
2020
Capture more Solutions to fulfill the
greenhouse gas
emissions than it
+ world´s demand, while
keeping our planet in
ARAUCO anticipates it will
be the first company in
emits globally balance
our industry to certify
achieving this important
goal

ARAUCO also announced its intention to align with the

“Science Based Targets”

29
 SUSTAINABILITY STRATEGY Around We maintain and protect,

Engagement with US$56 63 128

220
million Areas of High Biological
Conservation Value
Areas of High Social,
Cultural or Religious
Invested during 2019 Conservation Value
in environmental projects

communes
over In alignment with the UN

more than
70,000
programs with direct beneficiaries
communities
Source: ARAUCO Sustainability Report

30
FOR FURTHER INFORMATION,
PLEASE CONTACT:
Marcelo Bennett, Treasurer
marcelo.bennett@arauco.com
Phone: (562) 2461 7309

Gonzalo Jofré, Investor Relations

gonzalo.jofre@arauco.com
Phone: (562) 2461 7494
investor_relations@arauco.com

For further information, please visit www.arauco.com