Clearwater Paper Corporation · NYSE:CLW
Clearwater Paper — Investor Presentation (March 2013)
31 slides from Clearwater Paper's investor presentation, Mar 5, 2013
Slide 1: Clearwater Paper Corporation
Exhibit 99.1 Clearwater Paper Corporation March 2013
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains, in addition to historical information, certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our strategies to grow our business, optimize profitability and
Slide 3: Agenda
Agenda |. Overview of Clearwater Paper ll. Clearwater Paper’s Strategic Plan lll. Clearwater Paper’s Value Proposition I\V.Clearwater Paper’s Outlook 4 seen
Slide 4: Overview of Clearwater Paper
Overview of Clearwater Paper 3
Slide 5: Introduction to Clearwater Paper
Introduction to Clearwater Paper • We are a company formed in late 2008 with more than 60 years of operating history • Operate two business segments of similar size – Pulp and Paperboard: 39% of 2012 net sales – Consumer Products: 61% of 2012 net sales • Financial overview – 2012 Net Sales: $1.9 bil
Slide 6: Overview of Consumer Tissue Division
Overview of Consumer Tissue Division Clearwater Paper is one of the largest North American manufacturers of private label tissue, focused on high value tissue products across all categories, retail channels and geographies Key Products Overview of Facilities Clearwater Paper Tissue Parent Roll Clear
Slide 7: Clearwater Paper is Well Positioned to Capitalize on Favorable Tissue Market Dynamics
Clearwater Paper is Well Positioned to Capitalize on Favorable Tissue Market Dynamics Stable Growth - The tissue market has grown an average of 2% annually since 1996, consistent with population growth Source: U.S. Tissue demand per RISI, U.S. Population per U.S. Census Note: Projected U.S. Tissue D
Slide 8: Private Label Continues to Capture Market Share in Tissue
Private Label Continues to Capture Market Share in Tissue Clearwater Paper ranks as one of the largest North American private label tissue manufacturers Source: SymphonyIRI InfoScan, 52 Weeks Ending Feb 3, 2013. Based on volume of equalized cases. 7
Slide 9: Significant Opportunity Still Exists for Clearwater Paper To Expand Across the U.S. Private Label Market
Significant Opportunity Still Exists for Clearwater Paper To Expand Across the U.S. Private Label Market 2012 Multi-Outlet1 West Midwest East Total Equalized Case Volumes (mm) 84 178 230 493 % of U.S. Population 23% 34% 43% 100% % Private Label (PL) 33% 25% 25% 26% % Clearwater Paper of PL 81% 40% 2
Slide 10: North American Market Demand Expected to Absorb Projected Capacity Increases
North American Market Demand Expected to Absorb Projected Capacity Increases (in thousands of short tons) 2012 Demand to Capacity 2014E Demand to Capacity Ratio of 95% Ratio of 96% Healthy market dynamics remain intact Source: RISI and company estimates Note: Projected capacity changes represents bo
Slide 11: Overview of Pulp and Paperboard Division
Overview of Pulp and Paperboard Division Clearwater Paper ranks as one of the top five largest paperboard manufacturers in North America Key Products Overview of Facilities Clearwater Paper Pulp Pulp Production¹: 842,000 tons Clearwater Paper SBS Paperboard Production¹: 771,000 tons 2012E North Amer
Slide 12: Paperboard Demand Remains Stable and Pricing Outlook is Favorable in the U.S.
Paperboard Demand Remains Stable and Pricing Outlook is Favorable in the U.S. Bleached paperboard prices are expected to remain at attractive levels through 2016 Source: RISI, Projected GDP growth estimates represent Bloomberg median estimates as of Feb-2013 ¹ Based on tons produced. Projections bas
Slide 13: Clearwater Paper's Strategic Plan
Clearwater Paper’s Strategic Plan 12
Slide 14: Our Macro Strategy to Create Shareholder Value
Our Macro Strategy to Create Shareholder Value • Lead private label quality Grow our Tissue • Expand geographically Business • Expand retail channel penetration • Improve sales mix • Reduce costs • Continue to improve quality 13
Slide 15: Our 3 Year Strategy
Our 3 Year Strategy DEVELOP Engage and protect our people REALIZE Grow and enhance financial performance IMPROVE Promote efficient processes VALUE Deepen relationships with our customers ENSURE Sustain the future for our company, industry and communities 14 4 pee ER
Slide 16: Key Initiatives Expected to Significantly Improve Earnings Power
Key Initiatives Expected to Significantly Improve Earnings Power ($ in millions) Realization of Full Cost Shelby Cellu Tissue Savings Ramp-up Synergies Programs • Expected • Incremental • Expected benefit benefit from savings from lean full ramp-up of expected from manufacturing TAD paper Cellu Tiss
Slide 17: Clearwater Paper's Value Proposition
Clearwater Paper’s Value Proposition 16
Slide 18: Clearwater Paper Leads its Peer Groups in Value Creation…
Clearwater Paper Leads its Peer Groups in Value Creation… 520% 365%+ Total Return Since Spin-off 460% 369.5% 343.5% 400% 340% 280% 220% 103.4% 91.4% 160% 81.7% 100% 40% (20)% Dec-2008 Aug-2009 May-2010 Jan-2011 Oct -2011 Jun-2012 Feb-2013 Spin Date Clearwater Paper Small Cap Tissue¹ Paperboard² Larg
Slide 19: …Through a Proven Track Record of EBITDA Growth
…Through a Proven Track Record of EBITDA Growth ($ in millions) Adjusted EBITDA1,2 • We participate in the premier segments of the paper market: Bleached Paperboard and Tissue • Strong integration across business groups creates synergistic value Source: RISI 1 See Appendix for the definition of Adju
Slide 20: …And Successful Execution on Its Previously Stated Goals
…And Successful Execution on Its Previously Stated Goals Stated Goal Timeframe Current Status Shelby TAD machine was on budget with startup in Q4 2012 with Complete New Paper Machine and expected full capacity run rate by end of 2013 Corresponding Converting Lines at 2010 – 2013 Operating 4 new conv
Slide 21: …Which Has Led to Multiple Expansion Since the Spin
…Which Has Led to Multiple Expansion Since the Spin 12x 11.1x 10x 8x 7.1x 6.5x 6x 6.1x 4x Strong upward trend in multiple over time 2x 0x Dec-2008 Jul-2009 Jan-2010 Aug-2010 Feb-2011 Sep-2011 Mar -2012 Oct-2012 Spin Date Clearwater Paper Small Cap Tissue¹ Paperboard² Large Cap Consumer Products³ Sou
Slide 22: …And Multiple Growth Rate Higher than Industry
…And Multiple Growth Rate Higher than Industry Change in 1-Year Forward EBITDA Multiple Since Clearwater Spin 109.3% 42.2% 23.9% 1.4% Clearwater Paper Small Cap Tissue¹ Paperboard² Large Cap Consumer Products ³ Source: Bloomberg, Capital IQ, market data as of 22-Feb-2013 Note: Represents current 1-y
Slide 23: The Value Proposition for Clearwater Paper Shareholders
The Value Proposition for Clearwater Paper Shareholders • Attractive, growing and stable tissue market with increasing adoption of private label products driving overall market growth • Strong competitive position in stable bleached paperboard market • Strategic capital investments, lean optimizatio
Slide 24: Clearwater Paper's Outlook
Clearwater Paper’s Outlook 23
Slide 25: First Quarter 2013 Outlook (Compared to Q4-2012)
First Quarter 2013 Outlook (Compared to Q4-2012)¹ Total Consumer Products Pulp and Paperboard Company Expecting Shelby paper Production volumes machine production of ~12k Stable tons Approximately 134,000 tons; Down ~14k tons due to up ~3,000 tons due to higher implementing consignment Shipment volu
Slide 26: 2013 Outlook (Compared to 2012)
2013 Outlook (Compared to 2012)¹ Consumer Products Pulp and Paperboard Expecting Shelby paper machine Production volumes production of ~55k tons Stable 70k ton run rate by year end Expecting shipments to be ~4.6 Shipment volumes million cases (25k tons) higher Stable due mainly to higher TAD retail
Slide 27: Appendix
Appendix 26 ny pee ER
Slide 28: Reconciliation of GAAP to Non-GAAP: Clearwater Paper EBITDA and Adjusted EBITDA
Reconciliation of GAAP to Non-GAAP: Clearwater Paper EBITDA and Adjusted EBITDA ($ in millions) 2008 2009 2010 2011 2012 Net Earnings $9.7 $182.5 $73.8 $39.7 $64.1 Income Tax Provision 5.6 93.2 2.4 31.2 47.5 Interest Expense 13.1 15.5 22.6 44.8 33.8 Earnings Before Interest and 28.5 $291.2 $98.8 $11
Slide 29: Reconciliation of GAAP to Non-GAAP: Clearwater Paper Pro Forma Adjusted EBITDA
Reconciliation of GAAP to Non-GAAP: Clearwater Paper Pro Forma Adjusted EBITDA ($ in millions) Cellu Pro Forma Tissue Cost Adjusted Shelby Synergies Optimization EBITDA Operating Income $37.0 $35.0 $16.0 $210.0 Depreciation & Amortization 13.0 - 3.0 90.0 1 EBITDA $50.0 $35.0 $19.0 $300.0 - - - - Adj
Slide 30: Definitions of Non-GAAP Measures
Definitions of Non-GAAP Measures Clearwater Paper Definitions of Non-GAAP Measures EBITDA is a non-GAAP measure that Clearwater Paper management uses to evaluate the cash generating capacity of Clearwater Paper. The most directly comparable GAAP measure is net earnings. EBITDA, as defined by Clearwa
Slide 31: North American Tissue Projected Capacity Change
North American Tissue Projected Capacity Change Capacity Company Mill/Location Conv/TAD Change Date Channel/Business/Products Announced New Capacity K.T.G. (USA)/Kruger Memphis, Tennessee TAD 70,000 2013:Q1 Retail/Brand/P.L. Florelle Tissue Brownville, New York Conv 15,000 2013:Q3* New PM from Elite
Clearwater Paper — Investor Presentation (March 2013) on 6ix