Corticeira Amorim

Interim / Quarterly Report • Aug 2, 2017

Corticeira Amorim 1H2017

August 2, 2017

Consolidated Results

Integral Verticalization

1H2017 in brief

ASPORTUGUESAS' latest collection of flip-flops

Callie Collection, first wine brand launched in the U.S. with Helix

3D Cork Moulding

Cork flooring, Venice Biennale

1H2017 in brief

NDTech distinguished in the COTEC
National Innovation Encounter

Grõwancork, a new startup of Amorim Cork Ventures

10 Million Euros investment to increase Hydrocork production

Summer cork installation at CCB Foundation

New primary deck covering developed for the maritime industry

1H2017 in brief

Portugal's Pavilion hosts the world's biggest ever cork installation

Saks Fifth Avenue @New York

Key Facts & Figures

Sales reached 355 million euros (ME) an increase of 21 ME (+6.2%);

Consolidated sales growth slowed in 2Q17; April 2017 was negatively affected by four fewer working days (Portugal);

Sales growth in the following BUs:

• Cork Stoppers (+8.6%); $\bullet$
• Floor & Wall Coverings (+1.9%); $\bullet$
• Raw Materials (+3.8%); $\bullet$ .

Volume effect represents 50% of sales growth and price effect represents about 25%;

The exchange rate effect had a positive impact of 3.8 $M\epsilon$ on sales;

Every cork stopper segment (wine, sparkling and spirits) registered strong sales growth (above 8%);

NDtech^® recorded sales of 14 million stoppers to the end June (1Q17: 4 million);

Hydrocork® sales reached 9.7 M€;

Impairments of 2.5 M€ (1Q17: 2.3 M€) caused by:

• The reassessment of intangible assets at development projects;
• * The recoverable amount from an industrial site that will be relocated;

Key Facts & Figures

EBITDA increased by 7.2% (70.6 M€ vs. 65.9 M€);

EBITDA/Sales 1H17: 19.9% (1H16: 19.7%):

Financial operations continue to benefit from low net debt and low interest rates;

Net debt decreased by 24.8 M€ from the end of 2016, to 11.1 M€. Government grants received (8.5 M $\varepsilon$ ) had an important impact in the reduction:

Net Income of 37.8 M€ (+7.4%);

Total Assets reached 778.1 M€ (2016FY: 726.9 M€);

Dividends distributed in 2017: $\epsilon$ 0.18 per share (April);

$\bullet$ Total cash out of 23.9 ME.

Subsequent Events: on 19^th July Corticeira Amorim announced the acquisition of Bourrassé.

Subsequent events

Corticeira Amorim acquires 60% of Bourrassé for the amount of 29 ME;

The remaining 40% will be subsequently acquired, until 2022, for a price that takes as a reference the price paid for the initial 60% and that will also depend on the evolution of Bourrassé's future performance;

BOURRASSÉ has a team of about 450 employees who produce and distribute more than 700 million cork stoppers a year. These which are sold to more than 3,300 customers (direct and indirect). It operates mainly in France, Spain, Italy and Chile;

In the 2016 financial year, Bourrassé recorded a consolidated turnover of 55 ME and a EBITDA of 8.8 ME.

According the latest available information (June 2017) Bourrassé has a Net Debt of approximately 37 $M\epsilon$ ;

With this operation Corticeira Amorim:

• acquires a brand with a high level of prestige and international market recognition:
• strengths its presence in the market, mainly in France;
• maintains Bourrassé's identity and autonomy.

Sales | EBITDA

Sales^(a)

EBITDA

(a) Consolidated sales - excludes sales between Corticeira Amorim's Business Units.

Business Units

Raw Materials

Sales

EBITDA

Sales increased by 3.8% to 82.9 M€

Keeping pace with business growth at the Cork Stoppers BU, its main customer:

EBITDA reached 10.5 M $\epsilon$ , about the same as 1H16;

Slight decrease in profitability relative to the previous year. Impact of increased price of cork campaign in 2015 and 2016 offset by increased activity and improved operating efficiency;

Cork purchasing campaign went as planned in terms of quantities; increase in prices tending to 10%;

Ongoing projects to improve internal processes (Kaizen) and automation (selection, tracing) to improve quality and efficiency;

Research into shortening the first cork extraction cycle continues; the next step: expand partnerships with forest owners.

• •

• •

• •

• •
• •

Raw Materials + Cork Stoppers

EBITDA

** excludes 2.9 M€: Goodwill impairment

Values in million euros.

• •••••••••

• •••

Insulation Cork

Sales

Sales decreased by 13.2% to 5.6 M€

No supplies of granulated cork to the Cork Composites BU;

Excluding the effect of granulated cork sales to the Cork Composites BU, sales decreased by 30 thousand euros, -1%;

Increase in specialty sales, mainly MDFachada® and re-granulated cork for football stadiums;

EBITDA reached 1.1 M€ (-29.3%): a lower gross margin due to a higher average price for specific raw materials explains the variation.

EBITDA

Key
Financials

Cork Stoppers	■ Floor and Wall Coverings	Cork Composites	$\blacksquare$ Insulation Cork	$\blacksquare$ Raw Materials
		1H15	1H 16	1H 17
Cork Stoppers		64.5%	65.1%	66.8%
Floor and Wall Coverings		18.2%	17.8%	17.1%
Cork Composites		14.8%	14.2%	13.2%
Insulation Cork		1.4%	1.5%	1.4%
Raw Materials		1.1%	1.4%	1.4%
		100%	100%	100%

EBITDA by BU

EBITDA by BU (value)

EBITDA/Sales (%) 1H 17 1H15 1H 16 Raw Materials + Cork Stoppers 22.1% 24.8% 21.0% Floor and Wall Coverings 9.3% 11.1% $6.8%$ Cork Composite 18.8% 13.5% 16.0% Insulation Cork 23.1% 18.8% 16.6% Consolidated 17.6% 19.7% 19.9%

Values in million euros.

	1H 15	1H 16	1H 17	yoy
External supplies	51.4	52.1	56.0	7.5%
Transports	11.1	11.4	11.7	2.7%
Energy	6.3	6.6	6.6	0.8%
Staff costs	57.2	59.2	63.6	7.4%
Depreciation	14.1	13.2	15.8	20.1%
Impairments	0.8	1.0	2.5	152.3%
Others	1.4	$-1.9$	$-0.6$
Total Operating Costs (current)	124.9	123.6	137.3	11.1%

	Net Income

Key Consolidated Indicators

Sales up 6.2% to 354.8 M€;

Volume effect represents 50% of sales growth; the exchange rate accounted for 3.8 M $\varepsilon$ ;

Cork Stoppers had a major impact on growth;

EBITDA/Sales: 19.9%;

Net income up by 5.8% to 37.2 M€;

Main applications of EBITDA + government grants (8.5 M $\epsilon$ ):

14.3 M€ Capex 12.9 M€ Working Capital Needs 24.7 M€ Net Debt Reduction 23.9 M€ Dividends paid 3.0 M€ Taxes $0.3$ ME Other

The AGM held on April 7 approved a dividend of €0.18 per share, paid on April 26.

	1H 15	1H 16	1H 17	yoy
Sales	309.2	334.0	354.8	6.2%
Gross Margin	165.3	176.3	192.1	9.0%
Gross Margin / Prodution	50.2%	52.4%	53.3%	$+0.9 p.p.$
Operating Costs (incl. depreciation)	124.9	123.6	137.3	11.1%
EBITDA	54.4	65.9	70.6	7.2%
EBITDA / Sales	17.6%	19.7%	19.9%	$+0.2 p.p.$
EBIT	40.3	52.7	54.8	4.0%
Non-recurrent costs	2.9	3.7	0.0
Net Income	26.2	35.1	37.8	7.4%
Earnings per share $(\epsilon)$	0.209	0.264	0.284	7.4%

29

Debt | Ratios

	1H 15	2015	1H 16	2016	1H 17
Net Debt	91.9	83.9	80.1	35.9	11.1
Net Assets	666.0	667.2	702.3	726.9	778.1
Equity and Minority interests	326.5	354.1	368.4	426.9	439.9
Net Debt / EBITDA*	0.94	0.83	0.71	0.29	0.09
EBITDA / Net Interest	73.4	70.5	103.4	108.6	230.3
Equity / Net Assets	49.0%	53.1%	52.5%	58.7%	56.5%
Gearing	28.1%	23.7%	21.7%	8.4%	2.5%
Net working capital (NWC) **	271.1	268.2	296.9	286.6	299.5
NWC** / Market capitalization	52.4%	33.9%	31.0%	25.4%	17.5%
$NWC^{**}$ / Sales x 360	157.8	159.6	160.0	160.9	152.0
Free cash flow (FCF)	13.2	22.1	27.8	86.9	40.3
Capex	10.6	31.4	13.9	33.6	14.3
Return on invested capital (ROIC)	14.7%	14.3%	17.7%	16.9%	17.9%
Average Cost of Debt	2.25%	2.05%	1.70%	1.80%	1.64%

* Current EBITDA of the last four quarters

** NWC calculation method was changed with impact on the other operating assets and liabilities. To allow comparability and

NWC = Inventories + Trade receivables + Other operating assets - Trade payables - Other operating liabilities FCF = EBITDA - Non-current cash expenditures - Net financing expenses - Income tax - Capex - NWC variation ROIC = Annualized NOPAT / Capital employed (average)

analysis of NWC variation, comparative data was reexpressed

Dividend

Dividend per share $(\epsilon)$ $\longrightarrow$ Payout ratio (%)

Attractive dividend payment:

2014: 23.9 M€; 9.3% of dividend yield (15.1 M€+ 8.8 M€); 2015: 50.2 M€; 13.5% of dividend yield (17.6 M€ + 32.6 M€); 2016: 31.9 M€; 5.5% of dividend yield (21.3 M€ + 10.6 M€). 1H2017: payment of a first dividend of 0.18€/share, totaling 23.94 M€

$1 - by payment year;$

2 - dividend yield considers: average share price of 2.04€, 2.85€, and 4.34€, respectively for 2013, 2014 and 2015;

$3 − 2015$ dividend includes extraordinary payment of 25.9 M€ from the gains accrued in the ABB of treasury stock (Sep. 2015)

		2012	2013	2014	2015	2016	1H 17
Issued shares	Qt.	133,000,000	133,000,000	133,000,000	133,000,000	133,000,000	133,000,000
Year-end close (N-1)	€	.350	1.600	2.210	3.020	5.948	8.500
Earnings per share (N-1)	€	0.200	0.246	0.242	0.285	0.431	0.772
Payout	%	84.20%	68.50%	83.30%	143.21%	58.02%	23.31%
Dividend per share	€	0.16	0.16	0.19	0.385	0.24	0.18
Dividend Yeld	%	14.0%	11.3%	9.3%	13.5%	5.5%	2.5%

Dividend of year N-1 is payed in year N
Dividend yield = dividend per share/average share price (N-1)
(5.62%) Dividend yield = dividend per share/average share price
(5.62%) Dividend yield = dividend per share/average sha

Stock Market COR.LS

Source: Euronext

Source: Euronext

	2012	2013	2014	2015	2016	1H 17
Qt. of shares traded	2,856,436	2,184,858	3,481,685	12,693,424	10,801,324	9,767,470
Share price $(\epsilon)$ :
Maximum	1.650	2.400	3.650	6.290	9.899	13.300
Average	1.420	2.040	2.850	4.340	7.303	10.466
Minimum	1.270	1.560	2.200	2.990	5.200	8.180
Period-end	.600	2.210	3.020	5.948	8.500	12.860
Trading Frequency	85.2%	89.3%	96.1%	98.8%	100.0%	100.0%
Sotck market capitalisation at period-end $(\epsilon)$	212,800,000	293,930,000	401,660,000	791.084.000	1,130,500,000	1,710,380,000

Source: Euronext|Corticeira Amorim

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

Cristina Rios de Amorim

CFO. IRO Tel.: +351 22 747 54 25 . Fax: +351 22 747 54 07 Email: cristina.amorim@amorim.com www.corticeiraamorim.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