Mercer International Inc. · NASDAQ:MERC
Mercer International — 2017 TD Forest Products Forum
17 slides from Mercer International's conference presentation, Sep 20, 2017
Slide 1: Driving Profitable Growth
Exhibit 99.1 Driving Profitable Growth 2017 TD Forest Products Forum September 20, 2017
Slide 2: Forward-Looking Statements
David K. Ure Senior Vice President, Chief Financial Officer & Secretary The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Certain information included in this presentation contains statements that are forward-looking, such as statements rel
Slide 3: Building a Platform for Growth
Building a Platform for Growth 2010—2014 TODAY Optimization of NBSK Core Strategic Focus Growth in cost / productivity adjacent businesses Balance Sheet up to 7.4x leverage (2) / Operating (1) 2.6x leverage (3) (Net Debt EBITDA ) B+ Credit Rating BB- B1 Ba3 nil Dividend Yield 4.0% (4) Wood Prod. Ene
Slide 4: Global Growth & Diversification
Global Growth & Diversification Rosenthal 360,000 tonnes NBSK Stendal 57 MW energy 660,000 tonnes NBSK $2 million bio-chemicals 148 MW energy $11 million bio-chemicals Celgar 520,000 tonnes NBSK Friesau 100 MW energy 550,000 Mfbm lumber (1) 13 MW energy Sales Mix (2) NBSK Pulp Wood Products Energy &
Slide 5: Competitive Pulp Mills
Competitive Pulp Mills Our pulp operations are some of the largest and most modern NBSK facilities in the world Low production cost Low maintenance capital requirements Strong environmental performance Net energy exporters Average Mill Capacity (000 tonnes) NBSK Producer Competitiveness (1)(2) 900 7
Slide 6: Competitive Sawmill
Competitive Sawmill Friesau – a strong entry into the global softwood lumber market Comparable size to some of the largest sawmills in North America Capable of producing green, kiln-dried, planed lumber for all global markets Top 20 Largest Softwood Sawmills (1) million fbm 800 700 North America Eur
Slide 7: Core Competencies: Innovation
Core Competencies Innovation Wood Merchandising Large buyer of wood in central Europe Buying full spectrum of pulpwood and sawlog grades and selling grades surplus to our needs Eastern Europe Reach Source all wood grades from traditionally harder to access countries in eastern Europe through our JV
Slide 8: Core Competencies: Continuous Improvement
Core Competencies Continuous Improvement Wood Costs A leading example of a cultural value that pervades our operations – we reduced wood input costs by ~$100 per tonne of pulp ($150 million annually) in the past four years Energy and Bio-Chemical Growth We have grown this business considerably over
Slide 9: Core Competencies: Execution Excellence
Core Competencies Execution Excellence 2013 Workforce reduction at Celgar – cost reduction 2014 Workforce reduction at Stendal – cost reduction Project “Blue Mill” expansion of pulp and energy production at Stendal – higher pulp and energy production Tall oil plant at Rosenthal 2015 Upgraded evapora
Slide 10: Value Creation Strategy: What we've done so far
Value Creation Strategy What we’ve done so far… (1) Improve assets Record NBSK production at Stendal and Rosenthal in 2016 Record tall oil production in 2016 Record energy sales in Q2 2017 $50 M capital spend target in 2017 (half dedicated to Celgar) (2) Diversify Operating EBITDA (1) Grown energy O
Slide 11: Value Creation Strategy: What you can watch for
Value Creation Strategy What you can watch for in the future… (1) Improve assets Driving Celgar to its full potential Continuing debottlenecking at Stendal and Rosenthal Fast payback projects at Friesau Bio-methanol at Stendal Chip screening and bleach plant upgrades at Rosenthal (2) Diversify Opera
Slide 12: Appealing Market Opportunities
Appealing Market Opportunities NBSK Lumber Supply Demand Steady growth from emerging economies, including China, across spectrum of grades Stricter enforcement of environmental policies reshaping fiber supply-demand fundamentals in China (agricultural pulps, recycled paper) Stable demand in western
Slide 13: Strong Profitable Growth Foundation
Strong Profitable Growth Foundation Attractive long-term fundamentals in key markets Management committed to growth, in spaces where we have clear competencies Consistent investor return, commitment to the dividend Strong balance sheet discipline, within solid parameters Commitment to best practices
Slide 14: Mercer
MERCER
Slide 15: Appendix: Reconciliation of Net Income to Operating EBITDA
MERCER Appendix Reconciliation of Net Income to Operating EBITDA 15
Slide 16: Reconciling Net Income to EBITDA
Reconciling Net Income to EBITDA in US$ millions 2014 2015 2016 TTM (1) PF TTM (2) Net Income Attributable to Common Shareholders 113.2 75.5 34.9 38.0 Add: Net Income Attributable to Non-Controlling Interest (3) 7.8 - - - Add: Income Tax Provision (Benefit) (16.8) 29.4 24.5 25.7 Add: Interest Expens
Slide 17: Reconciling Net Income to EBITDA
Reconciling Net Income to EBITDA Note: For other reconciliations of Net Income (Loss) to Operating EBITDA in periods not shown, please refer to that period’s respective Form 10-Q or 10-K, which can be found on our website (www.mercerint.com) Operating EBITDA is defined as operating income (loss) plu