Corticeira Amorim

Annual Report • Feb 18, 2016

CORTICEIRA AMORIM, S.G.P.S., S.A.

Consolidated results December, 31

1. CONSOLIDATED RESULTS Highlights Consolidated key indicators 2. HIGHLIGHTS AND KEY INDICATORS BY BUSINESS UNIT 3. APPENDICES Key Figures

1. CONSOLIDATED RESULTS Highlights Consolidated key indicators (thousand euros)

2. Consolidated sales reached 604.8 million euros (M €), an increase of 7.9% compared with the same period of 2014 (560.3 M€);

3. Favorable foreign exchange effect on sales explain about half of the growth; sales growth without currency effects: 4.0% (volume effect);
4. Except for Floor & Wall Coverings, all BU registered sales growth, especially Cork Stoppers BU (+9.9%) and Cork Composites BU (+17% to final clients);
5. Floor & Wall Coverings BU Sales affected by the decrease of around 50% of the Russian market, by negative impact of currency effects of EUR / USD and by the rising price of LVT and woods. Sales mix with lower margins also hurt revenues;
6. EBITDA increased 16.1% (100.7 M€);
7. EBITDA / Sales: 16.7% (2014 = 15.5%); 4Q15 = 14.5% (4Q14 = 15,8%) affected by the performance of Floor & Wall Coverings and tighter criteria for impairment losses on customers and inventories;

8. A 2.9M€ non-recurring operating expense was registered: write-off of the remaining goodwill;

9. Financial function benefited (1.8 M€) by lower debt and lower interest rates;

10. Net profit reached 55,012 M€ (+53.9%); (4Q15: +99,4% than 4Q14);
11. Net Debt (83.9 M€) lower 3.7 M€ than December 2014
12. EIB loan : 35 M € for the 10-year period with 4-year grace period to fund the R&D/Capex 2014-17 program;
13. September: sale of own shares increasing free float to 15%;

14. Total dividends distributed: € 0.385 per share (cash out: 50.2 M€).

15. HIGHLIGHTS AND KEY INDICATORS BY BUSINESS UNIT (thousand euros)

HIGHLIGHTS AND KEY INDICATORS 12M: RAW MATERIALS BU

Activity increase 3.1%

• Sales for the value chain increased 1.6%, with no currency effects in this BU;
• EBITDA reached 17 M € (-2.9%) a decrease due to higher prices of cork in the 2014 campaign;
• Campaign 2015 (Portugal / Spain) was held as planned;
• R&D processes and the related investments in 2014 reinforced sensory quality of manufactured products;
• Technological modernization projects (disks), automation in manufacturing and choice of disks;
• In late 2015, acquisition of a new preparation plant and storage in Ponte de Sor.

HIGHLIGHTS AND KEY INDICATORS 12M: CORK STOPPERS BU

Increased sales by 9.9%

• Sales reached 392,8 M€ (2014: 357.3 M€): volume effect + 4.6% with a total of 4.2 billion units; share gain: wine market growing by 1% per year;
• All families stoppers with sales growth;
• Highlighting the performance of Natural corks, TopSeries, Neutrocork® and Twin Top® with significant growth;
• Relevant performance in the US market, new wine markets (Argentina, Chile and South Africa); decline in eastern markets;
• High awareness of Helix stopper was not fully materialized in sales;
• Operational efficiency program has improved productivity: ratio cash costs / gross margin fell from 62.5% to 58%;
• EBITDA reached 62.8 M € (+ 34%): increased sales, better mix, favorable currency effects and industrial improvements; EBITDA / Sales increased from 13.1% to 16.0%.

HIGHLIGHTS AND KEY INDICATORS 12M: CORK STOPPERS BU

EBITDA (current) Cork Stoppers + Raw Materials

HIGHLIGHTS AND KEY INDICATORS 12M: FLOOR & WALL COVERINGS BU

Sales with a decrease of 5.6%

• Activity strongly affected by the Russian market;
• Growth seen in Scandinavia and Germany insufficient to compensate for drop in Russia;
• Sales of new products (Hydrocork) highly promising;
• Decrease in the traditional products;
• CORKTECH as a differentiating factor;
• Creation of the Collaborative Center for Innovation and Applied Research (CICIA);
• Negative impact of the exchange rate effect EUR / USD, which caused an increase in the LVT and woods price;
• Reduction of operating costs does not prevent break of 47% in EBITDA to 8.2 M €.

HIGHLIGHTS AND KEY INDICATORS 12M: CORK COMPOSITES BU

Increased sales: 18.6% (final customers: +17%)

• USD appreciation represents about 45% of the sales increase;
• US market with remarkable growth; growth in the European market and a decrease in the Russian market;
• Introducing new products and new applications;
• Good performance in the continuous agglomeration line (double-belt press);
• Completion of the transfer of the Corroios production line to Mozelos;
• Industry segment remained the most important, presenting an increase of 7%; Retail segment with 39% and construction segment with 44% growth;
• EBITDA reached 14.6 M € (+88%).

HIGHLIGHTS AND KEY INDICATORS 12M: INSULATION CORK BU

Sales increase: +0.3% (final customers: +4.9%)

• Decrease of expanded agglomerated cork volume offset by an increase of regranulate and specialties;
• Use of expanded agglomerated cork in iconic projects: Penitenzieria (Turin Cathedral), Brazil Pavilion at Expo Milan;

• EBITDA reached 1.2 M € (-25%) impacted by high impairment charges on customers. Excluding this effect EBITDA would have increased by 15%.

• APPENDICES Consolidated indicators (thousand euros)

	2013	2014	2015
Raw Materials	1%	1%	1%
Cork Stoppers	61%	63%	64%
Floor and Wall Coverings	22%	20%	18%
Composite Cork	15%	14%	15%
Insulation Cork	1%	1%	1%

	2013	2014	2015
European Union a)	55.7%	56.5%	54.4%
Portugal	5.0%	4.4%	5.0%
Rest of Europe	6.0%	4.9%	4.0%
USA	18.3%	19.3%	21.7%
Australasia	6.6%	6.4%	5.8%
Rest of America	6.8%	7.0%	7.6%
Africa	1.6%	1.6%	1.6%

a) excludes Portugal and includes Switzerland and Norway

	2013	2014	2015
EUR	71.8%	70.3%	66.8%
USD	18.2%	19.6%	22.7%
GBP	0.8%	0.8%	0.9%
AUD	1.3%	1.2%	1.3%
ZAR	0.9%	1.0%	1.1%
DKK	1.7%	1.8%	2.0%
CLP	3.1%	3.2%	3.2%
Others	2.2%	2.2%	2.0%

	2013	2014	2015
Gross Margin	277,483	283,583	315,613
Other operating costs (current)	220,872	219,197	239,944
EBIT	56,611	64,386	75,669
EBITDA	78,127	86,722	100,720

OPERATING COSTS BREAKDOWN 12M

	2013	2014	2015
External supplies	97,266	96,429	100,537
Staff costs	100,154	103,315	111,881
Depreciation	21,516	22,336	25,051
Provisions	1,930	149	3,291
Other operating expenses and profits	-6	3,032	816
Total Operating Costs (current)	220,872	219,197	239,944
% Production	40.8%	38.5%	38.5%

VALUE AND % (SALES)

NUMBER OF EMPLOYEES

100,720

	2013	2014	2015
EBIT current	56,611	64,386	75,669
Net financial costs	7,794	5,856	2,789
Non-current costs	0	6,354	2,904
(loss)/profit of associates	692	1,280	3,091
EBT	49,509	53,456	73,066
Tax	18,551	16,776	17,496
Minority interests	620	924	558
Net Profit	30,339	35,756	55,012

Net Debt	104.447	87.558	83.896
Equity and Minority interests	301.737	315.569	354.133
EBITDA / Net Interest	20,8	30,8	70,5
Equity / Total Assets	48,1%	51,1%	53,1%
Gearing	34,6%	27,7%	23,7%
Net interest bearing debt /EBITDA	1,34	1,01	0,83

	2013	2014	2015
Non-current assets	212,744	213,265	223,689
Inventories	244,063	247,633	271,705
Customers	121,069	122,606	132,545
Other current assets	49,431	33,942	39,280
Total Assets	627,307	617,446	667,219
Capex	26,834	21,220	31,394

	2013	2014	2015
Equity	301,737	315,569	354,133
Provisions	25,085	27,951	32,227
Other non-current liabilities	51,353	44,727	58,616
Trade payables	125,203	115,303	121,184
Other current liabilities	123,929	113,896	101,059
Total Liabilities	325,570	301,877	313,086

CONSOLIDATED STATEMENT OF FINANCIAL POSITION 12M

	December 2015	December 2014
Non-current assets	223,689	213,265
Current assets
Inventories	271,705	247,633
Other current assets	171,824	156,548
Total current assets	443,530	404,181
Total Assets	667,219	617,446
Equity (M. I. included)	354,133	315,569
Non-current liabilities
Bank borrowings	41,211	26,225
Other non-current liabilities	48,985	46,453
Total non-current liabilities	90,196	72,678
Current liabilities
Bank borrowings	50,146	67,369
Other current liabilities	172,744	161,830
Total current liabilities	222,890	229,199
Total Liabilities and Equity	667,219	617,446

		2015	2014	Variation	4Q15	4Q14	Variation
Sales		604,800	560,340	7.9%	141,911	130,655	8.6%
Gross Margin – Value		315,613	283,583	11.3%	73,274	70,457	4.0%
	1)	50.7%	49.8%	+ 0.9 p.p.	50.4%	50.5%	-0.07 p.p.
Operating Costs - current		239,944	219,197	9.5%	59,046	55,468	6.4%
EBITDA - current		100,720	86,722	16.1%	20,565	20,639	-0.4%
EBITDA/Sales		16.7%	15.5%	+ 1.2 p.p.	14.5%	15.8%	-1.31 p.p.
EBIT - current		75,669	64,386	17.5%	14,229	14,990	-5.1%
Non-current costs	2)	2,904	6,354	-	-3	2,840	-
Net Income		55,012	35,756	53.9%	13,402	6,722	99.4%
Earnings per share		0.431	0.285	51.3%	0.101	0.054	88.3%
Net Bank Debt		83,896	87,558	- 3,662	-	-	-
Net Bank Debt/EBITDA (x)	4)	0.83	1.01	-0.18 x	-	-	-
EBITDA/Net Interest (x)	3)	70.5	30.8	39.71 x	74.9	38.2	36.67 x
Equity/Net Assets		53.1%	51.1%	+ 2. p.p.	-	-	-
1) Relat ed t o Product ion

2) Goodwill impairment and indust rial rest ruct uring

3) Net int erest includes int erest f rom loans deduct ed of int erest f rom deposit s (excludes st amp t ax and commissions) 4) Current EBITDA of t he last f our quart ers

CORTICEIRA AMORIM, S.G.P.S., S.A.

Rua de Meladas, nº 380 Apartado 20 4536-902 MOZELOS VFR PORTUGAL Tel.: 22 747 54 00 Fax: 22 747 54 07 Email: corticeira.amorim@amorim.com www.corticeiraamorim.com