Rayonier Advanced Materials Inc. · NYSE:RYAM
Rayonier Advanced Materials — Investor Presentation (November 2018)
28 slides from Rayonier Advanced Materials's investor presentation, Nov 13, 2018
Slide 1: Investor Presentation November 2018
Investor PresentationNovember 2018
Slide 2: Safe Harbor
Safe Harbor Certain statements in this document regarding anticipated financial, business, legal or other outcomes including business and market conditions, outlook and other similar statements relating to Rayonier Advanced Materials’ future events, developments, or financial or operational performa
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures These presentation materials contain certain non-GAAP financial measures, including EBITDA, adjusted free cash flows, adjusted operating income, adjusted net income and adjusted net debt. These non-GAAP measures are reconciled to each of their respective most directly com
Slide 4: Granite Overview: A Global Leader of Cellulose-Based Technologies
Granite Considerations---Granite Overview A Global Leader of Cellulose-Based Technologies Acquisition of Tembec completed on November 17, 2017 creates:Stronger, more balanced business with greater scale to drive growthProduct and geographic diversification creates a more balanced CS portfolioStrateg
Slide 5: Rayonier Advanced Materials at a Glance
* Based on 9 months ended September 2017 and excludes eliminations** Based on full year 2017 and excludes Corporate results Granite Considerations---Granite Overview Rayonier Advanced Materials at a Glance Global leader in high purity Cellulose Specialties; #1 or #2 in all product segments2017 Pro F
Slide 6: Global Footprint
Global Footprint Rayonier Advanced Materials Global Headquarters Facilities Capacity Forest Products* Bearn, QC 110,000 MBF Chapleau, ON 135,000 MBF Cochrane, ON 160,000 MBF Hearst, ON 110,000 MBF Huntsville, ON 15,000 MBF Kapuskasing, ON 105,000 MBF La Sarre, QC 135,000 MBF Facilities Capacity Hi
Slide 7: High Purity Cellulose – Segment Overview
High Purity Cellulose – Segment Overview Core Products End Markets Acetate Pulp Tow, High Impact Plastics, Optical Screens Ethers Pulp Construction Material, Food Thickeners, Pharma Other Cellulose Specialties Pulp Filtration, Tirecord, Sausage Casings, Nitrocellulose Viscose Textiles Absorbent Mate
Slide 8: Forest Products – Segment Overview
2017 Sales by Geography* Forest Products – Segment Overview Core Products End Markets Studs Random Length Lumber Specialty Hardwood Residual Chips for Pulp Seven facilities with Total capacity of 770,000 MBFProduces a range of commodity forest products used primarily for residential and commercial c
Slide 9: Pulp & Paper – Segment Overviews
Pulp & Paper – Segment Overviews Core Products End Markets Paperboard Lightweight board, Packaging and Cardstock High-Yield Pulp Writing Materials, Packaging Newsprint Newspapers Footprint comprised of four facilities located in CanadaTotal capacity is 180,000 MT of paperboard, 570,000 MT of high-yi
Slide 10: Third Quarter & YTD Financial Highlights
Granite Considerations---Granite Overview 10 Third Quarter & YTD Financial Highlights Q3 Revenue: $544 millionQ3 Operating Income: $56 million; Q3 Adjusted EBITDA: $99 million $31 million decline in revenue with $3 million decrease in Adjusted EBITDA from prior year* as cost reduction efforts helped
Slide 11: Financial Highlights
Quarter Ended Quarter Ended Combined* Pro Forma2 3Q 2018 1Q 2018 3Q 2017 1Q 2017 3Q 2017 1Q 2017 Sales $ 544 $ 210 $ 575 Operating Income 56 19 Adjusted Operating Income* 60 24 67 Net Income 38 16 Adjusted Net Income* 35 10 EBITDA* 101 53 Adjusted EBITDA* 99 44 102 Diluted Earnings per Share $ 0.60
Slide 12: Stable and Balanced Capital Structure
Stable and Balanced Capital Structure As of Q3’18 Outstanding Leverage Interest Rate Maturity Cash 106 Debt Term Loan A-1 160 LIBOR +2.00% November 2022 Term Loan A-2 439 LIBOR +1.75%* November 2024 Other Secured Debt 104 Avg. 5.8% 2018-2028 Total Secured Debt 703 1.8x Senior Notes 506 5.50% June 20
Slide 13: Capital Resources & Allocation
Capital Resources & Allocation 13 ($ Millions) Nine Months Ended Three Months Ended September 29, 2018 March 31, 2018 September 23, 2017 March 25, 2017 Cash Provided by Operating Activities $ 160 $ 118 Cash Used for Investing Activities (76 ) (44 ) Cash Used for Financing Activities (73 ) (21 ) Chan
Slide 14: Market Conditions and Management Perspective
Market Condition Management Perspective Chinese Tariffs5% tariff currently imposed by China on High Purity Cellulose products from U.S.~$160 million of Cellulose Specialties~$60 million of Commodity Products 5% tariff on Cellulose Specialties sales impacts Full Year EBITDA by ~$2 million per quarter
Slide 15: Strategic Pillars Tracking
Strategic Pillars Tracking 15 * Cost improvements before inflation and changes in commodity prices ~$155 million EBITDA* opportunity by end of 2020$40 million captured through 9 months of 3 year plan $25 Legacy $75 Synergy Investments/ Acquisitions
Slide 16: Significant Synergy Opportunity
Granite Considerations---Granite Overview Significant Synergy Opportunity SG&A/Public Company CostsGeneral corporate cost reductionsConsolidation of duplicate systems and spending Supply Chain & ProcurementLeverage combined spendingReduce transportation costs Operational/ManufacturingApply continuou
Slide 17: Market Optimization
Market Optimization Position production to maximize value within our markets Ability to Capture Value Market Attractiveness Cellulose Specialty End MarketsAcetate FilmPlasticsAcetate TowYarnCasingsCMCFiltrationMCCNitro.Tire CordEthers CommodityEnd MarketsFluffViscoseFilament Drive towards higher val
Slide 18: New Products Pipeline
New Products Pipeline 18 Stage 1Idea development Stage 2Proof of concept Stage 3Lab Stage 4Pilot/Mill Trials Stage 5Industrial Stage 6Commercial 1 2 3 4 5 Priority 1 Priority 2 Priority 3-4 OptiSilk Sapphire Stage OIdeas Biofloc XV20 18
Slide 19: Disciplined & Balanced Capital Allocation
Disciplined & Balanced Capital Allocation Maintain Assets $100-110 million of annual capex Adjusted Free Cash Flow Return of Capital to Shareholders Stock buybacks and dividends to maximize long-term shareholder returns External Strategic Investments Acquisitions and other investments to complement
Slide 20: Strategic Pillars of Growth
Granite Considerations---Granite Overview Strategic Pillars of Growth Well Positioned to Drive EBITDA Growth 20 Strategic Pillars provide a framework to achieve an incremental ~$155 million of EBITDA opportunities by 2020 before cost inflation and changes in commodity sales pricesCost Transformation
Slide 21: Appendix
RAYONIER Advanced Materials. Appendix
Slide 22: Non-GAAP Definitions
EBITDA is defined as earnings before interest, taxes, depreciation and amortization. EBITDA is a non-GAAP measure used by our Chief Operating Decision Maker, existing stockholders and potential stockholders to measure how the Company is performing relative to the assets under management. Adjusted EB
Slide 23: Combined Results Basis of Presentation
Combined net sales and operating income (loss) represents the combination of Tembec’s net sales and operating earnings for the related periods, adjusted to reflect the estimated conversion from International Financial Reporting Standards to U.S. Generally Accepted Accounting Principles for certain m
Slide 24: Reconciliation of Non-GAAP Measures (Three Months)
Reconciliation of Non-GAAP Measures($ Millions) 24 Three Months Ended: Forest Products Forest Products Pulp Pulp Paper Paper High Purity Cellulose High Purity Cellulose Corporate & Other Corporate & Other Total Total September 29, 2018 Net Income $ 8 $ 26 $ 16 $ 40 $ (52 ) $ 38 Depreciation and amor
Slide 25: Reconciliation of Non-GAAP Measures (Nine Months)
Reconciliation of Non-GAAP Measures($ Millions) 25 Nine Months Ended: Forest Products Forest Products Pulp Pulp Paper Paper High Purity Cellulose High Purity Cellulose Corporate & Other Corporate & Other Total Total September 29, 2018 Net Income $ 35 $ 76 $ 30 $ 97 $ (122 ) $ 116 Depreciation and am
Slide 26: Adjusted Net Debt Reconciliation
Reconciliation of Non-GAAP Measures($ Millions) September 29, 2018 September 29, 2018 September 23, 2017 September 23, 2017 Adjusted Net Debt Reconciliation Current maturities of long-term debt $ 12 $ 267 Long-term debt & capital lease obligation 1,192 513 Total debt $ 1,204 $ 780 Original issue dis
Slide 27: Reconciliation of Reported to Adjusted Earnings
Reconciliation of Reported to Adjusted Earnings($ Millions, except per share amounts) 27 Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 29, 2018 September 29, 2018 June 30, 2018 June 30, 2018 September 23, 2017 September 23, 2017 September 29, 2018 September 29,
Slide 28: Key Production & Pricing
28 Key Production & Pricing * Indices provide directional relationship between products and pricing; contractual arrangements and mix will determine actual pricing** Alterative Index includes Bleached Chemi-Thermo Mechanical Pulp (BCTMP), which more closely reflects production capabilities*** Index
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