Mercer International Inc. · NASDAQ:MERC
Mercer International — Barclays High Yield Bond and Syndicated Loan Conference 2014
33 slides from Mercer International's conference presentation, May 14, 2014
Slide 1: Barclays High Yield Bond and Syndicated Loan Conference, May 14, 2014
Exhibit 99.1 Exhibit Barclays May 14,99.1 2014 High Yield Bond and Syndicated Loan Conference
Slide 2: Forward-Looking Statements
Forward The statements and Mercer. update 2NASDAQ:MERC uncertainties Private forward-looking For Looking relating Securities morethat information Statements | to TSX:MRI.U could results Litigation statements significantly ofregarding operations |Reform www.mercerint.com basedthese affect Act onand u
Slide 3: Mercer International Inc.
Mercer International NASDAQ:MERC | TSX:MRI.U Inc. | www.mercerint.com 3
Slide 4: Corporate Debt Structure
Corporate Mercer the Stendal Celgar The Debt Restricted 100% Rosenthal 360,000 (1) NASDAQ:MERC Pursuant only Corporation Restricted is100% –80% conducts –ADMT two BC, Germany Structure -–Group Germany Germany 83% to guaranteed NBSK Canada Group the +is operations 57 |terms divided TSX:MRI.U market M
Slide 5: Strategically Located Mills with Access to Global Markets
Strategically Mercer’s -The 660,000 Stendal Rosenthal (Germany) 360,000 Europe Middle Japan Thailand America North 3% Indonesia Italy 5% Asia European NASDAQ:MERC China Germany 31% Other mills’ United –ADMT Germany 2013 three the China Other (B.C., strategic –520,000 Located the world’s Sales mills
Slide 6: Growing Chemical and Green Energy Revenues
Growing Mercer chemicals chemical Stendal’s Production 2.0 1.64 1.6 (mm) MWh 0.8 0.48 0.4 Mercer’s Chemical $110.0 Energy mm) $$88.0 Revenue -2(US $22.0 Green TTM NASDAQ:MERC 009 $66.0 1.45 0.65 4.6% 0.52 $63.5 2010 1.2 0.71 electricity 10.1% has 1.44 10.3% $44.0 Energy Electricity production Projec
Slide 7: Globally Competitive NBSK Operations
Globally nMercer’s NBSK 600 500 International Larger Nanaimo (Ilim) (ktpa) Metsä Cell 400 Capacity 300 Canfor Mill Aditya Older, Smaller 100 0Pulp Source: Average NASDAQ:MERC Low -60.0 Average Weyer- Mercer Resolute Billerud- SCA Domtar Mills Mills Södra Board Daishowa-Asia production Producer Birla
Slide 8: The NBSK Market
The NBSK Market| TSX:MRI.U | www.mercerint.com 8 NASDAQ:MERC
Slide 9: Introduction: Current Market Themes
Introduction Current The NASDAQ:MERC effect impact potential net supply themes ofofto China supply digital impact the surrounding |Major TSX:MRI.U and impact media ofother mill Themes on of the emerging closures, integrated paper NBSK | www.mercerint.com in NBSK demand market starts/restarts, econom
Slide 10: Global Pulp Market Components
(1) Global Components Other Bleached Hardwood Sulphite 1% Northern Produced nCore Characteristics: Major Tissue NBSK Spruce/ North Long, Kraft Source: Production 14% Uses Specialty aSBSK Pulp America, slender, Unbleached commands NASDAQ:MERCBleached 3% Bleached From: Pine Softwood for Market of PPPC
Slide 11: NBSK Demand Changes
n15.0 Demand Changes -The NBSK From increased CAGR Fundamentals 2003 to Papermakers’ Demand toby 2003NBSK 2012, 2012ademand - End –Use period Changes Demand Total: for very (1)(2) to for Othersuse effected NBSK NBSK in tissue +1% End by /“digital Use specialty Markets substitution” products has ofou
Slide 12: Demand Fundamentals: China's Growing Demand
2004 Demand BSK 6.0 4.8 Millions 2.4 12Deliveries tonnes 2005 Month Fundamentals 1.2 3.6 2006 - Rolling ofto 2007 China(2001 2008 – (1) China’s 2009 – Present) 2010 Growing 2011Demand 2012 2013 2014 Global China’sBSK Demand Chemical PulpbyDemand Region (1) (1) 28.0 Region: P&W: China: Paper W. Tissu
Slide 13: China's Demand Fundamentals
Demand China’s 6.00 Tissue Income 5.25 4.50 Over 2.25 Rate: 1.50 -0.75 … Chinese Closure 2005—2009: 8.8 2012E: 2013E: Source: RISI (1) NASDAQ:MERC ngreater -1990 Shutting and Source: closed Avg $7.0 $6.0 $3.0 $2.0 $1.0 demand 12th Fundamentals n8.31 “China’s time, 10% 8%Demand its Growth Five-Year t
Slide 14: Global Supply Fundamentals
Note: Supply Global 28 2014E-2018E 1995-2013 26 1995 16 2012–2013 Date Q2 Canada (260) Total (1) CAGR: Source: 2012 Company 1996 Closures global August Sodra Bleached Fundamentals (115) Yueyang 1997 +0.8% CAGR: PPPC BSK softwood has 2013 March (1,750) Grade announced 1998 Softwood / (May Paper NBSK
Slide 15: Strong Demand and Improving Fundamentals
(1) Strong Demand Improving Strengthening Digital Supply -Minimal Meaningful With Tissue Printing Only Limited Source: strong one Long-Term substitution Fundamentals growth in Fundamentals for NBSK NASDAQ:MERCnew &China: economic new capacity demand NBSK writing Hawkins agent capacity potential mill
Slide 16: Financial Performance and Recent Developments
Financial Performance NASDAQ:MERC | TSX:MRI.U and Recent | www.mercerint.com Developments 16
Slide 17: Putting NBSK Prices in Perspective
Putting $1,100 Days $1,000 $900 /t) (US Price $700 NBSK #price $300 After (1) NASDAQ:MERC $500 $Sources: $800 48 32 -1996 Shortage! of undergoing History: Price surge ?Supply, 56 16Days NBSK’s Global 401998 Factset Stocks Inventory Global $400 BSK Price ?Prices: History 2000 significant | TSX:MRI.U
Slide 18: Significant Annual Consolidated EBITDA Potential
$90 Significant Annual $360 17% -10% 10% $57 -200640% 10% Consolidated Margin 2007$297 7%Earnings 2008$297 EBITDA Potential 2009 Operating mm) 13% $270 2010 12% EBITDA $233 2011 201230% (1)(2) $186 2013 $194 $173 Q1-2014 EBITDA 2010-13 (US$TTM 2010-13 $180Average 25% $138Peak$137 20% 23% $101 19% $1
Slide 19: NBSK Recent Historical Pricing Momentum
NBSK Recent Historical Period 120% 129% 150% Price 64% 45% -JCumulative an-86 43% 60% 104% Dec-93 List NBSK “Upcycle” Median Price 30% over Pricing Mar-99 24% Increases Increase 54%NBSK Momentum Sep-05 Since 90% Price May-09 Q3 Increase 2013 Sep-12 Trends to to(1) to to to to Jun-90 Oct-95 Jan-01 Au
Slide 20: Recent Developments
Mercer’s Capital Celgar Stendal NASDAQ:MERC nnSeptember Expected Amortizing Workforce Projectsn Credit Recent annual 2013 Facilities Developments loan, Completed Reduction | TSX:MRI.U tocost supported provide savings March Stendal’s greater |by of www.mercerint.com 2014 guarantees US$8 Project flexi
Slide 21: Mercer's Capital Raises and Revolvers
Mercer’s Working nCapital over NASDAQ:MERC Rosenthal Issued allotment Raises US$50 Capital Recent andwas million Celgar’s Revolvers Developments | exercised TSX:MRI.U inrevolvers “tack-on” in (Continued) full | www.mercerint.com were Senior extended Notes at to aOctober 104.5% 21 2016 premium and Ju
Slide 22: Mercer Summary
Mercer The Globally Strategically Stable NASDAQ:MERC largest and – cost Summary growing “pure-play” located competitive, | TSX:MRI.U revenue mills NBSK with modern frommarket excellent | high-margin www.mercerint.com millpulp operations access producer energy to key&22 markets bio-chemical by-produc
Slide 23: Appendix A: Additional Information on Mercer International Inc.
Appendix AInformation Additional NASDAQ:MERC | TSX:MRI.U on Mercer| www.mercerint.com International Inc. 23
Slide 24: Mercer Balance Sheet
Mercer in Cash, ASSETS Property, TOTAL LIABILITIES Payables Debt Total US$ Note: $336.3 Current Long-Term Shareholders' Equity Cash millions Balance ASSETS LIABILITIES $62.8 Plant NASDAQ:MERC Equivalents $549.7 $413.7 Assets Liabilities & and Restricted$58.2 Restricted Sheet EQUITY Assets Liabilitie
Slide 25: Mercer Selected Historical Financial Data
Earnings Mercer in Pulp Total Interest Net Operating US$ Income Revenue Revenue millions, Selected Expense Per Income EBITDA (Loss) Share $1,157.2 $1,252.0 Historical except $82.1 (Loss) attributable (Basic) (2) $71.8 $232.6 $979.8 for $1,072.7 $154.7 Financial $1.39 per $69.2 $137.7 to $996.2 share
Slide 26: Mercer Corporate Overview
nMercer with generated Management NASDAQ:MERC Mercer excellent – owns International Corporate revenue believes strength three |ofTSX:MRI.U Overview Inc. large, over the properties (NASDAQ:MERC, long US$1 modern term billion | nwww.mercerint.com pulp Asupply-demand significant in mills fiscal TSX:MRI
Slide 27: History and Debt Structure
History nThe NASDAQ:MERC repurchased n2004, Supported Group Complicated Restricted Unrestricted initially ofwas Mercer’s byand created Group the the by Group cancelled | Stendal Celgar TSX:MRI.U deeply facility Debt structure in and2005 Structure interest and subordinated mill: was n In by Rosenthal
Slide 28: Appendix B: Detailed Overview of Operations
AppendixOverview Detailed NASDAQ:MERC B | of TSX:MRI.U Operations| www.mercerint.com 28
Slide 29: Rosenthal Key Facts
Rosenthal nKey NASDAQ:MERC Mercer Location: Pulp Certification: 2013 Built n Features: Close Production Green in International 1999 Mill proximity Blankenstein, Electricity –ISO modern Capacity: | TSX:MRI.U 9001, toGroup: stable Sales: and Germany 14001, 360,000 efficient nearly Restricted fiber US$
Slide 30: Celgar Key Facts
Celgar nKey NASDAQ:MERC capital Abundant Mercer Location: Pulp Certification: 2013 Modern Features: Production Mill Green funding International and Castlegar, and Electricity efficient ISO low from Capacity: | TSX:MRI.U 9001 fiber BC, government Group: Sales: and costs Canada 520,000 ISO Restricted
Slide 31: Stendal Key Facts
nStendal Key NASDAQ:MERC n2013 Mercer Location: Pulp Certification: biomass Completed Features: Production Green Mill International Stendal, power Electricity inISO 2004, Capacity: |plants TSX:MRI.U 9001 Germany Group: it’s Sales: in and one Germany 660,000 ISO (~130 Unrestricted of US$45.6 | www.me
Slide 32: Appendix C: Reconciliation of Net Income to Operating EBITDA
Appendix C of Net Reconciliation NASDAQ:MERC | TSX:MRI.U Income to Operating | www.mercerint.com EBITDA 32
Slide 33: Reconciling Net Income to Operating EBITDA
(www.mercerint.com) Reconciling in Net Instruments Add: Operating Note: USIncome Net Depreciation For Some $ operating Operating its expense of millions performance. the own Income other Income EBITDA (Loss) ($4.8) numbers Net underlying and reconciliations Income 2012 Attributable (Loss) ($19.7) an
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