Clearwater Paper Corporation · NYSE:CLW
Clearwater Paper — Q4 2024 Earnings Presentation
16 slides from Clearwater Paper's earnings presentation, Feb 13, 2025
Slide 1: Fourth Quarter and Full Year Earnings Release Materials
Fourth Quarter and Full Year Earnings Release Materials February 13, 2025 ARSEN KITCH President, Chief Executive Officer and Director SHERRI BAKER Senior Vice President and Chief Financial Officer
Slide 2: Forward Looking Statements
2 Forward Looking Statements Cautionary Statement Regarding Forward Looking Statements This presentation of supplemental information contains, in addition to historical information, certain “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Slide 3: 2024 Was a Transformational Year For Clearwater Paper
3 Utilized ~$850 million of net proceeds from sale to pay down debt Completed sale of tissue business for $1.06 billion on November 1 Completed acquisition of Augusta paperboard mill for $700M on May 1 LIGHTWEIGHT PRODUCTS Increased total SBS capacity to ~1.4M tons Balanced network to deliver lower
Slide 4: Clearwater is Well Positioned to Deliver Strong Returns Across the Cycle
4 Clearwater is Well Positioned to Deliver Strong Returns Across the Cycle >16% Cycle peak (>95% utilization, 50-60% FCF conversion) Average across cycle (90-95% utilization, 40-50% FCF conversion) ~13 to 14% Downcycle (<85% utilization, 0-20% FCF conversion) <10% TARGETING STRONG CASH FLOW GENERATI
Slide 5: Optimized Capital Allocation Approach Supports Value Creation
5 Optimized Capital Allocation Approach Supports Value Creation $70-80M EXPECTED ANNUAL MAINTENANCE CAPEX, EXCLUDING LARGE REPLACEMENT PROJECTS 1-2x TARGET LEVERAGE RATIO Investing to maintain the long-term performance of our assets Evaluating capital investments to diversify product portfolio Oppor
Slide 6: Industry Trends
6 INDUSTRY TRENDS 1. Based on data from AF&PA. 2. Based on data reported by RISI Fastmarkets and other industry sources. SBS PAPERBOARD SHIPMENTS IMPROVED IN 2024, PROJECTED TO GROW IN 2025 Industry shipments1 up 4% FY 2024 vs. FY 2023 Shipments projected to grow by 3 to 5%2 in 2025 Domestic demand
Slide 7: FY 2024 Financial Summary
7 +44% FY increase in shipments Primarily due to Augusta acquisition -12% FY decrease in paperboard pricing Consistent with industry trends FY 2024 Financial Summary NET SALES FROM TOTAL1 OPERATIONS $2.2B FY NET SALES FROM CONTINUING OPERATIONS $1.4B FY OFFSET BY MARKET DRIVEN PRICING DECREASE NET I
Slide 8: FY'24 vs FY'23 Adjusted EBITDA Results from Total Operations
8 FY’24 VS FY’23 Adjusted EBITDA Results from Total Operations ($ in millions) $281.0 -$13.6 -$28.0 $1.3 $181.5 -$90.3 $31.1 FY'23 Adj. EBITDA Tissue Price/Mix Volume Costs/Other SG&A FY'24 Adj. EBITDA Lower market pricing as reported by RISI Higher sales and production, primarily from Augusta acqui
Slide 9: Q4 2024 Financial Summary
9 +63% in Q4 Primarily due to Augusta acquisition -9% in Q4 decrease in paperboard pricing Consistent with industry trends Q4 2024 Financial Summary NET SALES FROM TOTAL OPERATIONS $483M Q4 NET SALES FROM CONTINUING OPERATIONS $387M Q4 OFFSET BY MARKET DRIVEN PRICING DECREASE NET INCOME FROM TOTAL O
Slide 10: Q4'24 vs Q4'23 Adjusted EBITDA Results from Total Operations
10 Q4’24 VS Q4’23 Adjusted EBITDA Results from Total Operations ($ in millions) $63.3 -$36.3 -$8.4 $3.2 $21.2 -$11.5 $10.9 Q4'23 Adj. EBITDA Tissue Price/Mix Volume Costs/Other SG&A Q4'24 Adj. EBITDA Lower market pricing as reported by RISI Sale completed Nov 1 ‘24 Higher maintenance outage costs, i
Slide 11: Outlook and Assumptions for Q1 and Full Year 2025
11 Outlook and Assumptions for Q1 and Full Year 2025 Q1 2025: $20 to $30M of Adjusted EBITDA1 No major maintenance outages planned Higher seasonal energy usage and costs Balancing supply to meet demand Action taken to reduce fixed costs, including a 10% reduction in all positions across company FY 2
Slide 12: Optimistic About Long-Term Value Creation
12 Optimistic About Long-Term Value Creation • Meaningfully de-levered balance sheet with proceeds from sale • Focus on growing our position as a premier independent paperboard packaging supplier to North American converters Sale of our tissue business enables sharpened focus on improving and growin
Slide 13: Appendix
Appendix My segeoe
Slide 14: Financial Performance
14 FINANCIAL PERFORMANCE ($ IN MILLIONS, EXCEPT PER SHARE INFORMATION) (In millions) As reported Discontinued operations Adjustments Total Operations As reported Discontinued operations Adjustments Total Operations Net sales $ 387.1 $ 102.1 $ (6.4) $ 482.8 $ 1,383.6 $ 870.3 $ (44.6) $ 2,209.4 Costs
Slide 15: Reconciliation of Adjusted EBITDA
15 Reconciliation of Adjusted EBITDA ($ IN MILLIONS) (In millions) 2024 2023 2024 2023 Net income (loss) $ 199.1 $ 17.6 $ 196.3 $ 107.7 Add (deduct): Less: Income from discontinued operations, net of tax 218.8 20.2 270.3 59.0 Income from continuing operations (19.7) (2.5) (74.0) 48.7 Income tax prov
Slide 16: Q3'24 vs Q4'24 Adjusted EBITDA Results from Total Operations
16 Q3’24 VS Q4’24 Adjusted EBITDA Results from Total Operations ($ in millions) $63.5 -$31.6 -$17.7 $5.4 $21.2 -$2.9 $4.5 Q3'24 Adj. EBITDA Tissue Price/Mix Volume Costs/Other SGA Q4'24 Adj. EBITDA Higher production volume Higher planned major maintenanceLess favorable sales mix Sale completed Nov 1