Corticeira Amorim

Investor Presentation • May 8, 2019

Corticeira Amorim 102019

In brief

Helix^™ has been adopted by Bronco Wine Company's Great American Wine Company (GAWC) for its California wines.

nielsen

Latest data from Nielsen Scanning Statistics confirms rising dominance for cork-sealed brands for the Top 100 Premium Brands in the USA. Cork-sealed wines already have 64.7% market share of US Premium Wines.

In brief

ARCO VIP Room lined and decorated with cork as part of an artistic creation designed by Lázaro Rosa-Violán.

Skulpod igloo-shaped modular home

created by Nouschka Očenášek and Ryan Ashworth.

In brief

Corticeira Amorim supported a new project by Universidade de Aveiro to create a biodegradable cork-based filament for 3D printing.

Eco-friendly router made with cork, teamed up with Altice Labs. Its structure is 50% cork. Has a much lower density than alternative materials and substantially reduces the carbon footprint.

First sustainable electric quitar with an expanded cork body. Weighing only 2.9kg, 75% of its body is made of cork, a completely natural, recyclable and carbon negative material

Promote the		Circular Economy	$\gamma'$	RESPONS $\infty$
environmental features of the product and the		Product Environmental Impact	6 AGUN LIMPA $\overline{\mathbf{q}}$		13 AUTENCES
		Energy Efficiency and Climate Change			$rac{3}{2}$
"Montado"		Promotion of the "Montado", its Biodiversity and Ecosystem Services			15 VEASOBRI
	Promote people's development,	Training and Development
	safety and well- being	Health and Safety at Work
	Promote R&D and leverage	Economic Performance	DECRESCIMENTE
economic performance		Research, Development and Innovation

Consolidated Results

Key Facts & Figures

Sales rose to 202.3 M€ (+9.2%):

• Raw Materials: +28.7%;
• Cork Stoppers: +11.3%;
• Floor & Wall Coverings: -2.6%; $\bullet$
• Composite Cork: +9.2%; $\bullet$
• Insulation: +26.5%; $\bullet$

Positive impact from FX:

• total impact of 2.3 ME on sales (1Q18: -5.6 ME);
• at constant exchange rates, sales +7.9%;

EBITDA/Sales: 17.2% (1Q18: 19.9%)

• EBITDA of 34.8 M€ (1Q18: 36.8 M€);
• Increased cork prices and operational costs, partially offset by higher activity, price increases, efficiency and yield gains, and a supportive FX;

Raw Materials + Cork Stoppers:

• Sales increased by 11.4% to 148.7 M€;
• EBITDA/Sales of 22.8% (1Q18: 25.1%);
• 72% of consolidated sales (1018: 71%)

Share of profit of Associates totalled 2.9 M€, essentially reflecting the final distribution of Escrow Funds from the sale of US Floors (2.3 $M\epsilon$ );

Net Income fell to 18.6 ME, a decrease of 1.1% $(1Q18:18.8 \text{ M}\epsilon);$

Application of IFRS 16 resulted in increases of EBITDA (+0.5 M€), depreciations (+0.4M€) and net debt (+7.6 M€), as of March 31. Historical figures were not restated according to this accounting standard.

Net debt of 141.7 M€ (FY18: 139.0 M€):

• increased NWC needs (18.3 $M\epsilon$ ),
• capex (11.6 $M\epsilon$ ),
• adoption of IFRS 16 (excluding this impact, net debt would have decreased to 134.1 M€);

Dividends: the Shareholders General Meeting (April 12) approved the distribution of a gross dividend of $\epsilon$ 0.185 per share.

Net Working Capital | Net Debt

Net Working Capital

Net Debt

* Current EBITDA of the last four quarters

Values in million euros.

Business Units

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Key
Financials

	1Q17	1Q18	1Q19
Raw Materials + Cork Stoppers	66.5%	70.9%	72.2%
Floor and Wall Coverings	18.4%	15.3%	13.8%
Composite Cork	13.6%	12.6%	12.6%
Insulation Cork	1.5%	1.3%	1.4%
	100%	100%	100%

EBITDA by BU

EBITDA by BU (value)

■ Raw Materials ■ Cork Stoppers ■ Floor and Wall Coverings ■ Composite Cork ■ Insulation Cork ■ Others

EBITDA/Sales (%)	1Q 17	1018	1Q 19
Raw Materials + Cork Stoppers	24.8%	25.1%	22.8%
Floor and Wall Coverings	7.4%	2.0%	$-3.7%$
Composite Cork	18.4%	14.7%	12.2%
Insulation Cork	18.3%	10.3%	$-1.4%$
Consolidated	19.5%	19 9%	17.2%

Values in million euros.

	1Q 17	1Q18	1Q 19	qoq	1Q19 w/o IFRS16	IFRS16
Sales	171.7	185.4	202.3	9.2%	202.3
Gross Margin	95.0	100.0	102.7	2.8%	102.7
Operating Costs (incl. depreciation)	69.5	71.2	77.1	8.3%	77.1
EBITDA	33.6	36.8	34.8	$-5.6%$	34.3	0.5
Depreciation	8.1	8.1	9.2	13.2%	8.7	0.4
EBIT	25.5	28.7	25.6	$-10.9%$	25.6
Non-recurrent costs		0.1
Net financial costs	0.2	0.4	0.7	92.5%	0.7
Share of (loss)/profit of associates	0.0	0.8	2.9	n.m.	2.9
Profit before tax	25.2	29.1	27.8	$-4.2%$	27.8
Income tax	7.1	8.6	8.0	$-7.2%$	8.0
Non-controlling interest	0.9	1.6	1.2	$-23.9%$	1.2
Net Income	17.2	18.8	18.6	$-1.1%$	18.6	0.0
	1Q 17	1Q18	1Q 19	qoq	1Q19 w/o IFRS16
Gross Margin / Production	52.6%	50.8%	48.1%	$-2.7 p.p.$	48.1%
EBITDA / Sales	19.5%	19.9%	17.2%	$-2.7 p.p.$	17.0%
Earnings per share $(\epsilon)$	0.129	0.142	0.140	$-1.1%$	0.140

	1Q17	1Q18	1Q19	qoq
External supplies	27.9	29.8	31.7	6.4%
Transports	5.5	6.4	6.8	7.0%
Energy	3.4	3.7	3.7	$-1.8%$
Staff costs	31.6	35.1	37.0	5.4%
Depreciation	8.1	8.1	9.2	13.2%
Impairments	2.3	0.1	$-0.5$	n.m.
Others	$-0.4$	$-1.9$	$-0.3$	$-86.1%$
Total Operating Costs (current)	69.5	71.2	77.1	8.3%

Financial Position

	2017	March 31, December 31, 2017	2018	March 31, December 31, 2018	March 31, 2019	March 31, 2019 w/o IFRS16	IFRS16
Net Goodwill	0.0	9.8	14.4	14.0	13.9	13.9
Net Fixed Assets / Right of use	195.1	227.9	223.3	259.6	270.4	262.8	7.6
Net Working Capital*	298.4	359.0	374.4	414.5	432.8	432.8
Other**	20.6	21.9	27.9	21.4	23.3	23.3
Invested Capital	514.1	618.7	640.0	709.4	740.4	732.8	7.6
Net Debt	11.7	92.8	85.9	139.0	141.7	134.1	7.6
Share Capital	133.0	133.0	133.0	133.0	133.0	133.0	$\overline{\phantom{a}}$
Reserves and Retained Earnings	294.5	297.5	314.9	333.4	353.2	353.2
Non Controlling Interests	16.8	29.5	31.5	31.9	33.5	33.5
Agreement to acquire non-controlling interests		19.0	19.0	20.4	20.5	20.5
Taxes and Deferred Taxes	5.0	$-17.0$	$-8.5$	$-12.6$	$-5.3$	$-5.3$
Provisions	31.0	41.2	41.9	43.4	43.2	43.2
Grants ***	22.2	22.6	22.3	21.3	20.5	20.5
Equity and other sources	502.4	525.8	554.1	570.7	598.7	598.7

* Inventories + accounts receivables - accounts payables + other operating assets/(liabilities)

the interest of the states + Interest bearing grants (reimbursable and non-reimbursable)
** Investment property + Investments in associates + Intangible assets + Other non-operating assets/(liabilities)
*** Non interest be

Values in million euros.

Ratios

	1Q17	2017	1Q18	2018	1Q19
Net Debt / EBITDA*	0.09	0.69	0.63	1.04	1.07
EBITDA / Net Interest	238.0	135.9	128.2	108.0	92.3
Gearing	2.6%	20.2%	17.9%	27.9%	27.3%
NWC / Market capitalization	23.0%	26.4%	27.2%	34.6%	30.6%
NWC / Sales x 360	160.1	179.5	182.0	195.5	192.5
Free cash flow (FCF)	17.2	34.0	9.7	11.2	4.0
Capex	5.7	43.7	8.7	57.9	11.6
Return on invested capital (ROIC) pre-tax	22.6%	20.5%	20.2%	16.4%	15.6%
Return on invested capital (ROIC)	16.5%	15.0%	14.7%	11.8%	11.1%
Average Cost of Debt	1.44%	1.67%	1.49%	1.09%	1.23%

Current EBITDA of the last four quarters
FCF = EBITDA – Non-current cash expenditures – Net financing expenses – Income tax – Capex – NWC variation
ROIC = Annualized NOPAT / Capital employed (average)

Dividends

Attractive Dividend Payment

11% Compound Annual Growth Rate in the last 5 years;

The Shareholders General Meeting (April 12, 2019) approved the distribution of a gross dividend of $\epsilon$ 0.185 per share;

In 2018, a total of 35.9 M€ was paid out in dividends, an increase of 4% on 2017.

		2012	2013	2014	2015	2016	2017	2018
Issued shares	Qt.	133,000,000	133,000,000	133,000,000	133,000,000	133,000,000	133,000,000	133,000,000
Year-end close (N-1)	€	1.350	1.600	2.210	3.020	5.948	8.500	10.300
Earnings per share (N-1)	$\in$	0.200	0.246	0.242	0.285	0.431	0.772	0.549
Payout	%	84.2%	68.5%	83.3%	143.2%	58.0%	33.7%	49.2%
Dividend per share	€	0.160	0.160	0.190	0.385	0.240	0.260	0.270
Total dividend	M€	20.2	20.1	23.9	50.2	31.9	34.6	35.9
Dividend Yield	%	14.0%	11.3%	9.3%	13.5%	5.5%	3.6%	2.4%

Dividend of year N-1 is payed in year N

Dividend yield = dividend per share/average share price (N-1)

2015: dividend of 0.385€ per share includes an additional dividend of 0.195€ per share (Nov. 2015) as an application of gains accrued in the ABB of treasury stock (5.62%)

Stock Market CORA.LS

Source: Euronext

	2013	2014	2015	2016	2017	2018	1Q19
Qt. of shares traded	2,184,858	3,481,685	12,693,424	10,801,324	19,290,907	14,884,641	2,155,744
Share price $(\epsilon)$ :
Maximum	2.400	3.650	6.290	9.899	13.300	12.000	11.020
Average	2.040	2.850	4.340	7.303	11.067	10.604	9.932
Minimum	1.560	2.200	2.990	5.200	8.180	8.370	8.710
Period-end	2.210	3.020	5.948	8.500	10.300	9.000	10.640
Trading Frequency	89.3%	96.1%	98.8%	100.0%	100.0%	100.0%	100.0%
Stock market capitalisation at period-end $(\epsilon)$	293,930,000	401,660,000	791,084,000	1,130,500,000	1,369,900,000	1,197,000,000	1,415,120,000

Source: Euronext|Corticeira Amorim

Ot. of shares traded in 2015 includes the ABB of 7,399,262 shares (17-09-2015)

Cristina Amorim

CFO tel.: +351 227 475 425 cristina.amorim@amorim.com

Ana Negrais de Matos, CFA

IRO tel.: +351 227 475 423 ana.matos@corticeira.amorim.com

Corticeira Amorim, SGPS, S.A. Rua de Meladas, nº 380. PO BOX 20. 4536-902 MOZELOS PORTUGAL

tel.: +351 22 747 54 00. Fax: +351 22 747 54 07 email: corticeira.amorim@amorim.com www.corticeiraamorim.com