Rayonier Advanced Materials Inc. · NYSE:RYAM
Rayonier Advanced Materials — Q3 2023 Earnings Presentation
27 slides from Rayonier Advanced Materials's earnings presentation, Nov 22, 2023
Slide 1: Third Quarter 2023 Financial Presentation Materials
Third Quarter 2023 Financial Presentation Materials November 8, 2023
Slide 2: Forward-Looking Statements Safe Harbor
Forward-Looking Statements 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 RYAM’s future events, developments, or financial or operational per
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures This earnings presentation and the accompanying schedules contain certain non-GAAP financial measures, including EBITDA, adjusted EBITDA, adjusted free cash flows, adjusted income from continuing operations and adjusted net debt. The Company believes these non-GAAP financ
Slide 4: Q3'23 Financial Highlights
Q3’23 Financial Highlights Revenue by Segment/Product ◼ Revenue of $369 million; -$97 million or -21% from Q3’22 ◼ Operating loss of $14 million, -$43 million for Q3’22 ◼ Adjusted Free Cash Flow of -$25 million ◼ Adjusted EBITDA of $24 million; -$44 million or -65% from Q3’22 Paperboard 15% — High P
Slide 5: Strategic Vision
Strategic Vision ◼ Plan to address balance sheet: ◼ Target debt reduction of $70 million in the next year through Free Cash Flow generation and passive asset sales ◼ Potential to sell Paperboard and High-Yield Pulp assets to further reduce debt ◼ Refinance 2026 maturities in 2024 ◼ Reduce commodity
Slide 6: High Purity Cellulose
High Purity Cellulose Operating Income Bridge $ Millions Quarter Ended Key Financials Sept 30, Jul 1, Sept 24, 2023 2023 2022 ($ millions) Net Sales $292 $300 $369 Operating Income (6) - 22 Adjusted EBITDA 27 28 53 High Purity Cellulose - Volume and Price ◼ 13% decrease in sales price compared to th
Slide 7: Paperboard
Paperboard Quarter Ended $ Millions Operating Income Bridge Key Financials Sept 30, Jul 1, Sept 24, 2023 2023 2022 ($ millions) Net Sales $57 $48 $66 Operating Income 13 6 12 Adjusted EBITDA 17 10 15 Paperboard - Volume and Price Volume (000 MT) Price ($ / MT) 1,587 1,568 ◼ 8% decrease in sales pric
Slide 8: High-Yield Pulp
High-Yield Pulp Operating Income Bridge Quarter Ended $ Millions Key Financials Sept 30, Jul 1, Sept 24, 2023 2023 2022 ($ millions) Net Sales $25 $44 $40 Operating Income (6) 1 6 Adjusted EBITDA (5) 1 6 High-Yield Pulp - Volume and Price* Volume (000 MT) Price ($ / MT) 200 900 ◼ 31% decrease in sal
Slide 9: Consolidated Operating Income
Consolidated Operating Income ($ Millions) Bridge Q3’22 to Q3’23 ◼ Operating loss of $14 million; down $43 million from the prior year period ◼ Higher sales prices in Cellulose Specialties compared to the prior year period more than offset by pricing declines in all other segments ◼ Increased sales
Slide 10: Capital Structure & Liquidity
Capital Structure & Liquidity ◼ Adjusted Net Debt of $743 million; Total Liquidity $5 million decrease from Q3’22 ◼ $147 million of liquidity, including $27 $27 million of cash as of Q3’23 ◼ Capital Allocation focused on: $8 $147 — Debt repayment million ◼ Target $70 million within next year $112 ◼
Slide 11: Adjusted EBITDA Guidance: Q3 to Q4
Adjusted EBITDA Guidance: Q3 to Q4 11
Slide 12: Actions to Manage Debt Covenant
Actions to Manage Debt Covenant ◼ Current net secured leverage 4.4x vs 4.5x covenant — Q3 LTM Covenant EBITDA of $170M — Secured net debt of $743M ◼ Sequentially Higher EBITDA for Q4 supports positive free cash flow — Q4 LTM Covenant EBITDA of $160M based on updated guidance — Target secured net deb
Slide 13: Update on 2023 Initiatives
Update on 2023 Initiatives ◼ Raising 2023 Adjusted Free Cash Flow guidance; reducing 2023 Adjusted EBITDA guidance — Raising guidance to generate $65-75 million of Adjusted Free Cash Flow — Updating guidance to achieve approximately $150 million of Adjusted EBITDA ◼ Capital investments focused on ma
Slide 14: 2023 Free Cash Flow Guidance
2023 Free Cash Flow Guidance Raising Adjusted Free Cash Flow guidance to $65-75 million ($ Millions) ~$150 $50M YTD Capital Allocation decision to repay debt or invest in high return Strategic 85-95 Capital projects $102M YTD $14M YTD 51* 14 $18M YTD $65-75 $71M YTD $55M YTD 20 0 $27M YTD ~85 0 0 (1
Slide 15: Net Debt/Adjusted EBITDA
Reducing Net Leverage via EBITDA Growth 12.5x & Debt Reduction 16.0% 16% 14% 14.0% 10.0x 10.0x 12.0% Net Debt/Adjusted EBITDA 10.3% 10.0% EBITDA Margin 7.5x 9.0% 9.1% ~9.0% 7.4% 8.0% 5.4x 5.0x 4.7x ~ 4.7x 6.0% 4.0x $1,095 4.4x 4.4x $937 4.0% $859 < 2.5x 2.5x $770 ~$770 $700 2.0% 0.0x 0.0% 2020 Actua
Slide 16: Appendix
Section Appendix
Slide 17: Definitions of Non-GAAP Measures
Definitions of Non-GAAP Measures EBITDA is defined as net income (loss) before interest, taxes, depreciation and amortization. EBITDA is a non- GAAP measure used by our Management, existing stockholders and potential stockholders to measure how the Company is performing relative to the assets under
Slide 18: Net Sales and Operating Income by Segment
Net Sales and Operating Income by Segment ($ Millions) 18
Slide 19: Consolidated Statements of Operations
Consolidated Statements of Operations ($ Millions) 19
Slide 20: Consolidated Balance Sheets
Consolidated Balance Sheets ($ Millions) 20
Slide 21: Reconciliation of EBITDA by Segment
Reconciliation of EBITDA by Segment ($ Millions) 21
Slide 22: Reconciliation of EBITDA Guidance
Reconciliation of EBITDA Guidance ($ Millions) 22
Slide 23: Reconciliation of Adjusted Free Cash Flow
Reconciliation of Adjusted Free Cash Flow ($ Millions) 23
Slide 24: Reconciliation of Adjusted Free Cash Flow Guidance
Reconciliation of Adjusted Free Cash Flow Guidance ($ Millions) 24
Slide 25: Reconciliation of Adjusted Net Debt
Reconciliation of Adjusted Net Debt ($ Millions) 25
Slide 26: Reconciliation of Adjusted Income from Continuing Operations
Reconciliation of Adjusted Income from Continuing Operations ($ Millions) 26
Slide 27: Commodity Prices Mixed
Commodity Prices Mixed Price ($ / MT) Viscose Price ($ / MT) Fluff 1,400 Delivered to China Delivered to North America 2,400 2,230 2,208 1,170 2,138 1,130 2,200 2,070 1,200 1,977 970 2,000 1,770 940 935 1,747 1,000 905 900 1,800 1,640 850 1,600 800 1,400 1,200 600 1,000 400 800 Q4 Q1 Q2 Q3 Q4 Q1 Q2
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