Corticeira Amorim

Earnings Release • Feb 26, 2019

Corticeira Amorim FY2018

February 26, 2019

Corticeira Amorim is a Porto Protocol partner, a business and institutional movement aiming at tackling climate change.

Pricewaterhousecoopers study confirms that NEUTROCORK cork stopper has negative carbon footprint

Acquisition of ELFVERSON & Co AB.

Nielsen study confirms that corksealed wines dominate the French wine and bring clear added value to wines

nielsen

A large collection of Madeira wine (1796 and 1820) recently rediscovered at the Liberty Hall Museum at Kean University. The wines were uncorked, tasted, recorked and were included in a Christie's wine auction in December

Corticeira Amorim and the Auchan group promote a joint cork stopper recycling initiative (France).

Américo Amorim's Auditorium at NOVA School of Business and Economics new campus with cork wall tiles designed by Jasper Morrison.

Cork in the Mars exploration project of the European Space Agency.

Corticeira Amorim celebrates 30 years on the Portuguese Stock Exchange.

Cork meets the high acoustic performance standards at the Four Seasons Hotel in Bangkok - a cork underscreed with recycled rubber (a product that is 100% recycled and sustainable).

Claus Porto's store in New York, designed by Tacklebox. The store's walls resemble a tunnel carved in cork and it has 1,500 diamondshaped pieces, cut from Portuguese cork.

Integral Verticalization

People, Planet and Profit

Alignment with United Nations' SDG

Sustainability Strategy aligned with 11 Sustainable Development Goals

	Promote the	Circular Economy
	environmental features of the product and the	Product Environmental Impact	6 AGUN LINPA $\overline{\mathbf{v}}$		13 AUTERALE AS
		Energy Efficiency and Climate Change
	"Montado"	Promotion of the "Montado", its Biodiversity and Ecosystem Services			5 XEA SOBR
	Promote people's development,	Training and Development		Θ
	safety and well- being	Health and Safety at Work
	Promote R&D and leverage	Economic Performance	D ECRESCIMENT
	economic performance	Research, Development and Innovation

Carbon Balance with Positive Impact

Results of PwC study (September 2018) confirms our wider strategy to promote cork as one of the World's most sustainable natural products.

Research highlights that Neutrocork has a carbon balance with positive impact.

Each cork stopper is responsible for the retention of 392 grams of CO₂.

PwC previously produced studies of the carbon footprint of every BU, concluding that Amorim's activity results in an annual carbon capture which is 15 times higher than the gas emissions across its entire value chain.

Consolidated Results

Key Facts & Figures

Sales rose to 763.1 M€ (+8.8%);

• Raw Materials: +19.5%;
• Cork Stoppers: +11.9%
• Floor & Wall Coverings: -7.7%; $\bullet$
• Composite Cork: +3.4%; $\bullet$
• Insulation: +13.1%; $\bullet$

Raw Materials + Cork Stoppers:

• +13.6% Sales to 554.5 M€:
• EBITDA/Sales of 22.3% (2017: 23.3%);
• 72% of consolidated sales (2017: 69%)

EBITDA/Sales: 17.6% (2017: 19.0%)

• EBITDA of 134.0 M€ (2017: 133.6 M€);
• Higher cork prices and a weak USD, partially offset by higher activity, price increases, strict cost control, together with efficiency and yield gains;

Excluding changes in the consolidation perimeter, sales increased 3.3%;

Negative impact from FX:

• total impact of 9.4 M€ on sales (2017: - $1.8 \, \text{M} \infty$ ;
• at constant exchange rates, sales +10.1% and EBITDA +6.4%;

Net Income rose to 77.4 M€, an

increase of 6.0% (2017: 73.0 M€);

Net debt of 139.0 M€ (FY17: 92.8 M€):

• increased NWC needs $(57.4 \text{ M}\epsilon)$ , on $\bullet$ higher inventories (+45M€);
• capex (57.9 M $\epsilon$ ),
• dividend payments (35.9 ME),
• acquisitions (14.4 M $\notin$ ), in particular Elfverson and Herdade da Baliza:

Dividends: the Board of Directors will propose a dividend of €0.185/share at the Shareholders General Meeting.

Acquisitions: 2018

ELFVERSON: January

Acquisition of 70% for 5.5 M€;

Buy option on the remaining 30% of capital; seller has a put option on the same remaining capital,

Founded in 1870 and owed by Vätterledens Invest AB:

Produces high quality wooden tops for bartop cork stoppers;

Portfolio of premium products and outstanding customer base;

FY2016: turnover: 4.8 M€ | EBITDA: 1 M€;

Employees: 44;

Included in Corticeira Amorim's consolidated accounts from January 1, 2018.

HERDADE DA BALIZA: October

Acquisition of a forest property for 5.5 $M \in$ ;

Total area: 2,866 hectares, of which only 109 are planted with cork oaks;

Additional investment to build fertigation infrastructure and plant cork oaks;

Increase density of cork oaks per hectare and use intensive production methods (reducing the time required for the first cork harvest);

Valuable contribution to establishing cork oak plantations as sustainable and profitable investments.

Acquisitions: 2017

BOURRASSÉ: July

Acquisition of 60% for the amount of 29 M $\varepsilon$ ;

The remaining 40% will be acquired by 2022; price takes as its reference the price paid for the initial 60% and will also depend on the future evolution of performance;

Wide range of products, including stoppers for still wine, sparkling wine and spirits;

700 million cork stoppers produced in 2016;

Operates mainly in France, Spain, Italy and Chile; more than 3,300 customers (direct and indirect);

FY2017: turnover: 56 M€ | EBITDA: 7.3 M€;

Employees: 470;

Included in Corticeira Amorim's consolidated accounts from July 1, 2017.

SODILIÈGE: September

Acquisition of 100% and a commitment to acquire the facilities where it operates, for a total of 3 $M \in \mathcal{E}$

Producer and distributer of bartop closures for spirits such as cognac and armagnac;

Diverse portfolio of high quality bartop closures;

Produces stoppers to customer specifications, making bartops in different materials: metal, glass, wood, porcelain, plastic;

FY2016: turnover: 3.2 M€ | EBITDA: 0.135 M€;

Employees: 12;

Included in Corticeira Amorim's consolidated accounts from September 30, 2017.

Sales & EBITDA

Consolidated sales - excludes sales between Corticeira Amorim's Business Units. Values in million euros.

Sales | EBITDA

EBITDA

* excludes 4.4 $M\epsilon$ : non-recurrent costs

** excludes 2.9 M€: non-recurrent costs

*** excludes 0.1 M€: non-recurrent gains

a) Consolidated sales - excludes sales between Corticeira Amorim's Business Units. Values in million euros.

Net Working Capital | Net Debt

Net Working Capital

NET DEBT

Net Debt

---- NET DEBT / EBITDA.

* Current EBITDA of the last four quarters

Values in million euros.

Business Units

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Raw Materials + Cork Stoppers

EBITDA

2017 figures include Bourrassé (6 months); 2018 figures include Bourrassé, Sodiliège and Elfverson. Values in million euros.

600.0 +3.8%

-7.7%

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Key
Financials

Sales by Business Unit

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

	2016	2017	2018
Raw Materials + Cork Stoppers	66.6%	68.9%	71.6%
Floor and Wall Coverings	17.7%	16.8%	14.2%
Composite Cork	14.3%	12.9%	12.8%
Insulation Cork	1.4%	1.4%	1.4%
	100%	100%	100%

Sales to more than 100 countries

Sales by geographic areas

■ EU * ■ USA ■ Rest of America ■ Australásia ■ Portugal ■ Rest of Europe ■ Africa

Sales by currency

EUR USD Others $\blacksquare$ CLP $\blacksquare$ DKK $\blacksquare$ ZAR $\blacksquare$ AUD $\blacksquare$ GBP

Sales | Gross Margin | EBITDA | EBIT

EBITDA by BU

EBITDA by BU

EBITDA by BU

EBITDA by BU (value)

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

EBITDA/Sales (%)	2016	2017	2018
Raw Materials + Cork Stoppers	21.9%	23.3%	22.3%
Floor and Wall Coverings	10.9%	6.8%	2.6%
Composite Cork	17.0%	15.2%	10.1%
Insulation Cork	18.9%	15.9%	5.4%
Consolidated	19.1%	19.0%	17.6%

Values in million euros.

Operating Figures

Operating costs

	2016	2017	2018	yoy
External supplies	103.0	116.5	124.1	6.5%
Transports	22.9	25.2	26.2	3.8%
Energy	12.2	13.4	14.8	10.9%
Staff costs	113.3	125.6	134.2	6.9%
Depreciation	26.3	29.6	31.3	5.7%
Impairments	0.7	2.3	$-0.1$	$-103.2%$
Others	$-4.7$	$-4.5$	$-5.8$	28.9%
Total Operating Costs (current)	238.7	269.5	283.8	5.3%

Staff

Values in million euros.

Number of employees

Net Income

Key P&L Figures

	2016	2017	2018	yoy	4Q17	4Q18	qoq
Sales	641.4	701.6	763.1	8.8%	170.1	179.4	5.4%
Gross Margin	334.7	373.5	386.5	3.5%	89.1	88.8	$-0.3%$
Operating Costs (incl. depreciation)	238.7	269.5	283.8	5.3%	68.7	70.9	3.2%
EBITDA	122.3	133.6	134.0	0.3%	28.2	25.6	$-9.5%$
Depreciation	26.3	29.6	31.3	5.7%	7.9	7.7	$-2.3%$
EBIT	96.0	104.0	102.7	$-1.2%$	20.4	17.9	$-12.2%$
Non-recurrent costs	4.4	2.9	$-0.1$		1.3	0.6	$-53.5%$
Net financial costs	$-0.9$	1.3	3.5	n.m.	0.5	1.3	n.m.
Share of (loss)/profit of associates	50.0	1.0	2.7	n.m.	0.1	0.6	n.m.
Profit before tax	142.6	100.8	102.0	1.2%	18.6	16.5	$-11.3%$
Income tax	37.9	24.3	19.4	$-20.1%$	1.3	$-2.5$	n.m.
Non-controlling interest	2.0	3.6	5.2	47.0%	0.6	0.2	$-62.7%$
Net Income	102.7	73.0	77.4	6.0%	16.7	18.8	12.8%
	2016	2017	2018	yoy	4Q17	4Q18	pop
Gross Margin / Production	53.2%	52.9%	49.2%	$-3.7 p.p.$	51.5%	49.2%	$-2.3 p.p.$
EBITDA / Sales	19.1%	19.0%	17.6%	$-1.4 p.p.$	16.6%	14.3%	$-2.3 p.p.$

0.549

0.582

$6.0%$

0.125

$0.772$

Earnings per share $(\epsilon)$

12.8%

$0.141$

Net Debt

Values in million euros.

Debt | Ratios

	2016	2017	2018
Net Debt	35.9	92.8	139.0
Net Debt / EBITDA*	0.29	0.69	1.04
EBITDA / Net Interest	108.6	135.9	108.0
Gearing	8.4%	20.2%	27.9%
Net working capital (NWC) **	286.6	361.1	0.4
NWC** / Market capitalization	25.4%	26.4%	0.0%
NWC** / Sales x 360	160.9	179.5	0.2
Free cash flow (FCF)	86.9	34.0	11.2
Capex	33.6	43.7	57.9
Return on invested capital (ROIC)	16.9%	15.0%	11.8%
Average Cost of Debt	1.80%	1.67%	1.09%

* 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 analysis of NWC variation, comparative data was reexpressed 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)

Financial Position

	2016	2017	2018
Net Goodwill	0.0	9.8	14.0
Net Fixed Assets	197.5	227.9	259.6
Net Working Capital*	286.6	359.0	414.5
Other**	22.9	21.9	21.4
Invested Capital	507.0	618.7	709.4
Net Debt	35.9	92.8	139.0
Share Capital	133.0	133.0	133.0
Reserves and Retained Earnings	278.1	297.5	333.4
Non Controlling Interests	15.9	29.5	31.9
Agreement to acquire non-controlling interests	$\overline{\phantom{a}}$	19.0	20.4
Taxes and Deferred Taxes	$-1.6$	$-17.0$	$-12.6$
Provisions	30.7	41.2	43.4
Grants ***	15.1	22.6	21.3
Equity and other sources	471.1	525.8	570.7

* Inventories + accounts receivables - accounts payables + other operating assets/(liabilities) ** Investment property + Investments in associates + Intangible assets + Other non-operating assets/(liabilities)
Non interest bearing grants (reimbursable and non-reimbursable) *** Non interest bearing grants (reimbursabl

Dividends

Attractive Dividend Payment

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

The Board of Directors will propose the approval of a gross dividend of €0.185 per share at the upcoming Shareholders General Meeting (April 12, 2019);

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	.600	2.210	3.020	5.948	8.500	10.300
Earnings per share $(N-1)$	€	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
(1-Dividend yield = dividend per share/average share price
(2%.5) Dividend yield = dividend per share/average share price
(2%.5) Dividend yield = dividend per share/average share pr

Stock Market CORA.LS

Source: Euronext

	2012	2013	2014	2015	2016	2017	2018
Qt. of shares traded	2,856,436	2,184,858	3,481,685	12,693,424	10,801,324	19,290,907	14,884,641
Share price $(\epsilon)$ :
Maximum	.650	2.400	3.650	6.290	9.899	13.300	12.000
Average	1.420	2.040	2.850	4.340	7.303	11.067	10.604
Minimum	1.270	1.560	2.200	2.990	5.200	8.180	8.370
Period-end	.600	2.210	3.020	5.948	8.500	10.300	9.000
Trading Frequency	85.2%	89.3%	96.1%	98.8%	100.0%	100.0%	100.0%
Stock market capitalisation at period-end $(\epsilon)$	212,800,000	293,930,000	401,660,000	791,084,000	1,130,500,000	1.369.900.000	1,197,000,000

Source: Euronext|Corticeira Amorim

Qt. 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