Rayonier Advanced Materials Inc. · NYSE:RYAM
Rayonier Advanced Materials — Investor Presentation (November 2019)
22 slides from Rayonier Advanced Materials's investor presentation, Nov 18, 2019
Slide 1: Investor Presentation November 2019
Investor Presentation November 2019
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 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
Slide 4: Who we are today… At A Glance
Who we are today… At A Glance Global Headquarters ▪ Global HQ Canadian Headquarters Jacksonville, FL Kapuskasing, ON High Purity Cellulose Plant Hearst, ON Cochrane, ON Pulp & Paper Products Facility ▪ Canadian HQ La Sarre, QC Forest Products Facility Montreal, QC Chapleau, ON Bearn, QC Fiber Facil
Slide 5: RYAM by the Numbers
RYAM by the Numbers 2018 Revenue by Geography* USA Canada China Europe Other 36% 12% 17% 17% 18% 2018 2018 Revenue by Product* Adjusted EBITDA by Segment* Forest 8% High Purity Cellulose Products Acetate 17% 23% 13% Paper High Yield Pulp $311 Pulp 8% $2.0 Newsprint billion million Forest Products 5%
Slide 6: RYAM Diverse Business Segments
RYAM Diverse Business Segments High Purity Cellulose Forest Products Paper Pulp • Dissolving Wood Pulp • Dimensional Lumber • Packaging • Mechanical o Acetate • Framing Materials • Multiply Coated Hardwood Pulp o Ethers • Wood Chips Board (Maple & o Specialties • Fuel (Chips, Sawdust, • Newsprint As
Slide 7: Commodity Price Declines with Modest Recovery Expected
Commodity Price Declines with Modest Recovery Expected Viscose Pulp Lumber $1,000 $700 $950 $900 $600 $850 $500 $800 $750 $400 $700 $300 2x4 Random Lengths Grade 2 & Better - Great Lakes** $650 Viscose Pulp Delivered to China* 2x4 8' Stud - Great Lakes** $600 $200 Newsprint $900 Bleached Eucalyptus
Slide 8: Consolidated Operating Income Bridge YTD'18 to YTD'19
Consolidated Operating Income ($ Millions) Bridge YTD’18 to YTD’19 160 140 120 100 80 (115) 60 $131 40 20 0 0 (52) (20) $(51) (40) (29) (60) 14 (80) YTD YTD Q3 2018 Sales Price Sales Volume / Mix Cost SG&A and Other Q3 2019 / Other Sales price for commodity products remain key driver for declines
Slide 9: Q3'19 Consolidated Financial Highlights
Q3’19 Consolidated Financial Highlights Revenue of $416 million with Adjusted EBITDA of $35 million Revenue* Improved Adjusted EBITDA in High Purity Cellulose from 15% prior quarter 6% — Improved productivity and reduced costs offset by lower CS $416 million volume and weaker commodity viscose a
Slide 10: Amendment
Amendment Allows the Company to manage through difficult commodity markets & emerge stronger and more resilient Provides Requires Financial flexibility & operational runway to Increased interest rate, based on grid manage through challenging markets via with ability to decrease as leverage rel
Slide 11: Strategic Update
Strategic Update • Executing on Cellulose Specialties Go-to-Market strategy with focus on improving Go-to-Market margins; Price increase announced in October Strategy • Assets realignment progressing to match market needs and sales mix • Remain on track to capture $155 million of benefits from Four
Slide 12: Go-to-Market Strategy
Go-to-Market Strategy Asset Realignment Commercial Actions Five CS lines to optimize grades and geographies to Market conditions have changed better serve customers and reduce costs • CS prices have stabilized • Align assets toward most productive use • Acetate prices at parity with other CS product
Slide 13: Disciplined Capital Allocation
Disciplined Capital Allocation Cash Flow From Operations Maintain Assets $85-90 million of annual capex term term - Adjusted Free Cash Flow Focus Near Reduce Leverage Target 2.5x Net Leverage Value Driven Approach Focused on Risk Adjusted Returns on Invested Capital Investment in the External Strate
Slide 14: Appendix
RAYONIER Advanced Materials. Appendix
Slide 15: Definitions of Non-GAAP Measures
Definitions of Non-GAAP Measures EBITDA is defined as income (loss) from continuing operations before interest, taxes, depreciation and amortization. EBITDA is a non-GAAP measure used by our Chief Operating Decision Maker, existing stockholders and potential stockholders to measure how the Company i
Slide 16: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ($ Millions) Forest High Purity Corporate Three Months Ended Products Pulp* Paper Cellulose & Other Total September 28, 2019 Income (Loss) from Continuing Operations $ (5) $ (2) $ 3 $ 8 $ (18) $ (14) Depreciation and amortization 2 1 4 33 — 40 Interest expense, ne
Slide 17: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ($ Millions) Forest High Purity Corporate Nine Months Ended Products Pulp* Paper Cellulose & Other Total September 28, 2019 Income (Loss) from Continuing Operations $ (27) $ 3 $ 8 $ 10 $ (56) $ (62) Depreciation and amortization 7 2 13 90 — 112 Interest expense, n
Slide 18: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ($ Millions) September 28, 2019 December 31, 2018 Adjusted Net Debt Reconciliation Current maturities of long-term debt $ 21 $ 15 Long-term debt & finance lease obligation 1,212 1,173 Total debt $ 1,233 $ 1,188 Original issue discount, premiums and debt issuance c
Slide 19: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ($ Millions) September 28, September 29, 2019 2018 Adjusted Free Cash Flows: Cash provided by operating activities of continuing operations 5 141 Capital expenditures (63) (58) Adjusted Free Cash Flows $ (58) $ 83 19
Slide 20: Reconciliation of Reported to Adjusted Earnings
Reconciliation of Reported to Adjusted Earnings ($ Millions, except per share amounts) Three Months Ended Nine Months Ended September 28, June 29, September 29, September 28, September 29, 2019 2019 2018 2019 2018 Adjusted Operating Income (Loss) Per Per Per Per Per and Income (Loss) from Continuing
Slide 21: Average Sales Price & Volume
Average Sales Price & Volume Three Months Ended Nine Months Ended Sep 28, Jun 29, Sep 29, Sep 28, Sep 29, 2019 2019 2018 2019 2018 High Purity Cellulose Cellulose Specialties Price ($ per metric ton) $ 1,317 $ 1,310 $ 1,333 $ 1,303 $ 1,344 Volume (000 metric tons) 137 146 163 432 466 Commodity Produ
Slide 22: Key Index Pricing
Key Index Pricing Q3’18 Q2’19 Q3’19 Average Average Average Product Index* Index Price Index Price Index Price Cellulose • None • N/A • N/A • N/A Specialties High Purity • Bleached Kraft Fluff • $1,328 • $1,260 • $1,163 Commodity • Viscose Pulp delivered to China • $930 • $845 • $745 • 2x4 Random Le
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