Corticeira Amorim : Consolidated results as of 31st March 2017

INANCIAL STATEMENTS

CORTICEIRA AMORIM, SGPS, S.A. - CONSOLIDATED F 1ST QUARTER 2017

Shareholders of CORTICEIRA AMORIM,

In accordance with the law, the Directors of CORTICEIRA AMORIM S.G.P.S., S.A., a public company, present their consolidated management report.

1. INTRODUCTION

   Globally, economic activity remained robust in the first quarter of 2017. Economic sentiment improved, supported by macro data and initial expectations of expansionary measures in the United States.

   Economic growth in the United States was surprisingly low, despite signs over the quarter, with performance conditioned by temporary factors in the first three months. In EMU, political uncertainty conditions the context, but economic growth was still close to a maximum of 6 years.

   CORTICEIRA AMORIM saw a notable increase in sales of more than 9% compared to the same period of 2016, and organic growth was significant, since there were no effects of changes in the perimeter. It should also be noted the effect of the highest number of business days in the first quarter (in Portugal) compared to the same quarter of the previous year. For the remaining quarters, although organic growth is expected, it should not have a rhythm similar to this quarter.

   All Business Units (BU) presented sales growth to final customers. To highlight the Cork Stoppers (+ 10.3%), Floor & Wall Coverings (+ 9.2%) and Cork Composites (+ 5.9%). The increase in sales was mainly due to the increase in quantities sold and the foreign exchange effect on the increase in sales of 2.1 M€.

   Sales reached 171.7 M€, an increase of 15 M€ (+ 9.6%) compared to 156.7 M€ for the first three months of 2016.

   Despite an increase in operating costs due to the increase in production, the increase in gross margin allowed EBITDA to have a very positive variation, reaching 33.6 M€, an increase of 22% over the same quarter in 2016. This increase would have been higher if there were no impairments arising from the analysis of the recoverable value of some previously capitalized development projects and an industrial site that is expected to be relocated. The EBITDA ratio on sales reached 19.5%, up from 17.6% in the first quarter of the previous year. This evolution results from a more favorable sales mix and improvements in operating efficiency.

   The financial function continued to improve due to lower net debt and interest rates. Net debt at the end of the quarter was 12 M€ (1Q16: 87.1 M€). The

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   income tax estimation in terms of effective rate is higher than the previous year. This situation results from the fact that the estimation for the first quarter of 2016 was benefited from a gain related to the declaration for the 2014 financial year.

   After results attributable to non-controlling interests, net income amounted to

   17.213 M€, an increase of 23.7% compared to 13.913 M€ in the first three months of 2016.

2. ACTIVITY DURING 1Q17

   The Raw Materials BU followed the increase in the overall activity of the remaining BUs of CORTICEIRA AMORIM, showing a 9.3% increase in sales, mainly directed to the Group. The increase in production was 8.8% in line with the increase in sales.

   EBITDA amounted to 5.7 M€, a substantial increase over the same period last year (1Q16: 3.8 M€).

   During the quarter under review, the preparation of the cork campaign for 2017 was carried out as planned and the quantity targets set for this period were met.

   The BU seeks to increase efficiency ratios: several processes improvement projects (Kaizen) and automation to increase efficiency and product quality continue to be implemented.

   With regard to the micro-irrigation project, research is ongoing and its full implementation depends on the extension of partnerships with forest owners. At this level, it is important to sensitize public entities to the importance that the project has for the future of the cork industry in Portugal.

   Cork Stoppers BU recorded sales of 112.9 M€, an increase of 10.3% over the same quarter of 2016, driven by quantity (+11%) and price. Growth was balanced at the level of products and markets. All segments (wine, sparkling and spirits) recorded growth above 9%. It is worth noting the growth of the cork segment for sparkling wines.

   Good performance at the level of natural corks and Neutrocork®. The NDtech® project progressed in early 2017 with a capacity of 40 million corks per year.

   By market, the favorable evolution of the main geographic sales destinations (Spain, France, the United States and Italy) should be noted, with significant growth in the United States, Spain and Portugal. This growth reflects a phenomenon of premium market expansion and growth in large customers.

   The increase in activity combined with the sales mix resulted in a growth of around 27% in the EBITDA of this BU (22.7 M€).

   Cork Composites BU sales totaled 25.8 M€, an increase of 5.9% over the 1Q16, which is mainly due to the increase in quantities sold. By segments, growth in the Resilient & Enginnered Flooring Manufacturers, Construction, as well as the supply of inlay for Hydrocork® by Wall & Floor Coverings BU, which together account for a significant part of the increase. The Furnishing segment registered a decrease compared to 2016, due to the specific projects delimited

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   in time occurred in the previous year. Several actions are under way that will allow, hopefully, to recover the contribution of this segment. The actions include raising new partners and finding innovative solutions that allow us to present different solutions to the market, within the unique characteristics that cork has.

   At the destination markets level, the sales growth in Asia is relevant, with China with sales of 500 K€ higher. The remaining variation is dispersed by several geographies.

   EBITDA for the quarter was 4.7 M€, an increase of 8.3% over the same period of 2016. This variation is justified by an improvement in gross margin (benefited by lower prices and better yield of some of the raw materials) and industrial margin (activity growth and operating costs).

   The Floor & Wall Coverings BU has a remarkable sales growth (+ 9.2%) reaching 32.4 M€. The increase is mainly due to the sales of manufactured products. Of these, the main highlight goes to Hydrocork® with a sales increase of 1.1 M€ and for Authentica® (+1.2 M€). The sales growth was registered in multiple geographies with no country deserving special mention. Russia shows signs of stopping the fall, with sales at the same level as the previous year (1.2 M€).

   Despite the sales growth, BU EBITDA decreased to 2.4 M€ (-14.5%). Although there has been an improvement in the gross margin, the increase in commercial costs (enlargement of the commercial teams to support the current investment which will strengthen the BU's production capacity, establishment of the UK operation, marketing at Amorim Flooring North America and Others) have absorbed this improvement.

   Insulation BU sales reached 2.8 M€, a decrease of 3.4% over the previous year. However, in 2017 there was no internal supply of milled cork to the Cork Composites BU. Excluding this effect, sales of the BU increased by 12% to final customers, with MDFachada® showing sales growth of 219 K€.

   For markets there is a positive performance in France and Portugal.

   EBITDA showed a negative variation of 22.7%, reaching 0.5 M€ (1Q16: 0.7 M€). This variation is explained by the lower gross margin due to the increase in the average price of consumption of the raw materials and the respective specific consumption being higher.

3. CONSOLIDATED INCOME STATEMENT AND FINANCIAL POSITION OF CORTICEIRA AMORIM

As mentioned, the increase in sales was mainly due to the volume effect, with the exchange effect of approximately 2.1 M€. The price effect especially that verified in the Cork Stoppers BU also had some weight in this increase.

The increase in absolute value of sales was practically transposed to the gross margin. This evolution is mainly due to the evolution of Change in manufactured inventories, which is due to the significant increase in finished product (mainly in the Cork Stoppers BU). In this way, there was an

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