Sylvamo Corporation · NYSE:SLVM

Sylvamo — Citi 2021 Basic Materials Virtual Conference

81 slides from Sylvamo's conference presentation, Nov 30, 2021

Slide 2: Cautionary statement concerning forward-looking statements
Cautionary statement concerning forward-looking statements 2 This presentation contains information that includes or is based upon forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements that do
Slide 3: Statement relating to non-U.S. financial GAAP measures
Statement relating to non-U.S. financial GAAP measures 3 While Sylvamo reports its financial results in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"), during the course of this presentation, certain non-U.S. GAAP financial measures are presented. Managem
Slide 4: Management Team
Management Team 4 Jean-Michel Ribiéras John Sims Matt Barron Thomas A. Cleves Rodrigo Davoli Chairman and Senior Vice President and Senior Vice President and Senior Vice President, Senior Vice President Chief Executive Officer Chief Financial Officer General Counsel Corporate Affairs General Manager
Slide 6: The Sylvamo Promise
The Sylvamo Promise 6 We believe in the promise of paper to educate, communicate and entertain. Paper connects us to one another and is an enduring bond to renewable natural resources. Our purpose is to produce the paper you need in the most responsible and sustainable ways. We aim high, innovate, a
Slide 7: Vision & Mission
Vision & Mission 77 Our Vision To be the world’s paper company: the employer, supplier and investment of choice Our Mission We transform renewable resources into papers that people depend on for education, communication and entertainment © 2021 Sylvamo Corporation. All rights reserved. The World’s P
Slide 8: Our Values
Our Values 8 We always do the right things, in the right ways, for the right reasons. People Ethics We care about people’s health, safety and We hold ourselves and each other to development. We look out for each other to ensure act in accordance with our values. everyone returns home safely each day
Slide 9: Our Strategy
Our Strategy 9 Commercial Operational Financial Excellence Excellence Discipline Be the supplier of choice Operate as a responsible, Be the investment of by leveraging a deep agile and low-cost choice by delivering understanding of end-use company. consistently on our applications and compelling inv
Slide 10: Why is Sylvamo compelling?
Why is Sylvamo compelling? 10 Focused on Free Cash Flow Generation and Shareowner Value Creation Commercial Operational Financial Advantages Advantages Focus • Iconic brands with strongest • Low-cost mills in attractive • Robust, resilient cash flow brand recognition locations • Strong balance sheet
Slide 11: Uncoated freesheet is sustainable, affordable and functional
Uncoated freesheet is sustainable, affordable and functional 11 Sustainable Affordable Functional • Paper is one of the most recycled materials in the world: 74% - Europe, 67% - Latin America and 66% - North America1 • Results from 33 studies that tested students’ comprehension showed that students
Slide 12: Uncoated freesheet is the largest and most resilient paper segment globally
Uncoated freesheet is the largest and most resilient paper segment globally 12 UFS has the highest number of end-use applications across multiple industries and segments (notebooks, books, copy paper, letterheads, commercial printing, forms, file folders, etc.) 60,000 50,000 Uncoated Freesheet 000 M
Slide 13: Uncoated freesheet is used across all sectors of the economy
Uncoated freesheet is used across all sectors of the economy 13 North America Western Europe Brazil Healthcare 26% Healthcare 18% Education 32% Financial and insurance 14% Education 13% Professional and technical 16% Education 12% Public administration 12% Information and communication 14% Professio
Slide 14: Global uncoated freesheet producer
Global uncoated freesheet producer 14 LTM 9.30.21 Segment Operating Profit North #2 supply position in America Latin North America 29% America #1 supply position 45% in Latin America Europe 26% #3 supply position in Europe #1 supply position in Russia Source: Supply positions from Fisher Internation
Slide 15: Low-cost mills in the most attractive regions
Low-cost mills in the most attractive regions 15 Capacity Sylvamo with Georgetown (Million Short Tons) Mills and Riverdale North America 1.1mm1 Uncoated Freesheet 2.8 3.5 Total 3.5 4.2 Ticonderoga, New York Memphis Europe 1.1mm2 Corporate Headquarters Eastover, South Carolina Svetogorsk, Russia Lati
Slide 16: Capacity by Grade
Capacity by Grade 16 Coated Board & 000 Short Tons Uncoated Papers Market Pulp Total Other Saillat 265 130 - 395 Svetogorsk 420 170 130 720 Europe 685 300 130 1,115 Luis Antonio 385 130 - 515 Mogi Guacu 460 35 - 495 Tres Lagoas 260 - - 260 Latin America 1,105 165 0 1,270 Eastover 700 115 - 815 Ticon
Slide 18: Our Investment Thesis
Our Investment Thesis 18 The World’s • Be the employer, supplier and investment of choice Paper Company • Believe in the promise of paper to educate, communicate and entertain • Commercial Excellence, Operational Excellence and Financial Discipline Three-pronged • Create long-term value via talented
Slide 19: Demand expected to continue to grow in Eastern Europe and Latin America
Demand expected to continue to grow in Eastern Europe and Latin America 19 • Demand rebounding strongly from 2020 Key Short-term restrictions Pandemic Restrictions Demand Driver • Re-opening of businesses, offices and schools • Impact of work-from-home policies Electronic Substitution • Use of digit
Slide 20: Well-positioned in attractive regions
Well-positioned in attractive regions 20 Europe Latin America North America Bio Pappel 13% Others Others Navigator 19% 19% 24% Suzano Domtar Others PCA 35% UPM 29% 24% 8% 11% Mondi Pixelle Stora 19% 10% Enso 13% Sylvamo Sylvamo Sylvamo 34% 28% 14% 2021 – 2025 Projected Demand CAGR Eastern Europe 0.2
Slide 21: Well-maintained, low-cost mills
Well-maintained, low-cost mills 21 1250 Brazilian domestic tax incentive and other rights make Três Lagoas cost-competitive globally 1000 More than 70% of capacity in the lowest Cash Cost Per Short Ton quartiles of global and regional cost curves 750 500 250 0 10 20 30 40 50 Cumulative Million Tons
Slide 22: ESG practices embedded throughout culture and strategy
ESG practices embedded throughout culture and strategy 22 Environmental Social Governance  Healthy and productive  Employee & contractor  Code of Conduct forest ecosystems safety  8 of 9 directors  GHG reductions  Inclusive workplaces independent  Water stewardship  Diverse workforces  Tale
Slide 23: Sylvamo 2030 Goals
Sylvamo 2030 Goals 23 Sustainable Thriving People Responsible Forests and Communities Operations Goal Goal Goal Ensure healthy and productive forest Protect and improve the lives of our Improve our climate impact and our ecosystems employees, and support our communities stewardship of natural resour
Slide 24: Key competitive advantages
Key competitive advantages 24  Attractive regions  Low-cost mills  Iconic brands  Committed channel partnerships  Talented teams  Robust, resilient free cash flow © 2021 Sylvamo Corporation. All rights reserved. The World’s Paper Company
Slide 26: The World's Paper Company delivers
The World’s Paper Company delivers 26 Last Twelve Months 9.30.21 $3.3 Billion Sales $535 Million Adjusted EBITDA Operating Profit in 71% Europe and Latin America Gross Debt-to-Adjusted EBITDA Ratio 2.8X as of 9.30.21 Net-Debt-to-Adjusted EBITDA Ratio is 2.6X as of 9.30.21 © 2021 Sylvamo Corporation.
Slide 27: 3Q21: Building momentum for October 1st Sylvamo launch
3Q21: Building momentum for October 1st Sylvamo launch 27 Adjusted Operating Net Sales Adjusted EBITDA Earnings per Share $908 $844 $738 $177 $2.27 $124 19.5% $1.54 $104 $1.16 19.5% 14.6% 14.1% 14.1% 14.7% 3Q20 2Q21 3Q21 3Q20 2Q21 3Q21 3Q20 2Q21 3Q21 Focused on generating cash and strengthening bala
Slide 28: Strong 3Q21 Adjusted EBITDA margin - 19.5%
Strong 3Q21 Adjusted EBITDA margin - 19.5% 28 • Price & Mix offset rising input costs • UFS global demand continues to recover • Low planned maintenance outage quarter • Customer value proposition strengthened Strong commercial and operational performances © 2021 Sylvamo Corporation. All rights rese
Slide 29: 3Q21: Price & Mix outpaced input costs
3Q21: Price & Mix outpaced input costs 29 Change of Price & Mix 3Q21 vs. 2Q21 Input Costs vs. Input Costs ($ Million) Change By Region ($ Million) Europe Latin America North America (2) (3) $80 (4) +$23 (2) (1) (2) $57 ($5) (1) (5) (2) +$4 $30 ($9) (3) $26 ($12) 3Q21 vs 2Q21 3Q21 vs 3Q20 $/Ton $17 $
Slide 30: Run-full volume and improving mix
Run-full volume and improving mix 30 3Q21 YTD vs. 3Q20 YTD 3Q21 vs. 3Q20 Sylvamo UFS Shipments Sylvamo UFS Shipments +14% +11% +10% +11% North America North America +32% 5.9% +22% Latin America Latin America +3% +1% Europe Europe 3Q20 YTD 3Q21 YTD 3Q20 3Q21 Shipments in tons © 2021 Sylvamo Corporati
Slide 31: Commercial and operational performances generated strong earnings
Commercial and operational performances generated strong earnings 31 3Q21 vs. 2Q21 Adjusted EBITDA $ Million 250 $27 ($26) 200 $10 $177 $12 $30 150 $124 19.5% 100 14.7% 50 0 2Q21 Price & Mix Volume Operations Maintenance Input Costs 3Q21 Outages © 2021 Sylvamo Corporation. All rights reserved.
Slide 32: Strong commercial and operational performances during transition
Strong commercial and operational performances during transition 32 Supplier of Choice  Growing positions with key customers who want a supplier committed to UFS  Benefiting from alignment with winning channel partners and customers Commercial  Gaining new business and leveraging the strength of
Slide 33: Strong regional performances
Strong regional performances 33 3Q21 Adjusted EBITDA Region 3Q21 vs. 2Q21 Highlights $ Million Margin • Realization of prior price increases in all regions Europe $49 19% • Improving volume in Europe and continued strong volume in Latin America and North America • Good operations Latin America $59 3
Slide 34: Fourth Quarter Adjusted EBITDA Outlook: $140 - $150 Million
Fourth Quarter Adjusted EBITDA Outlook: $140 - $150 Million 34 4Q vs. 3Q Changes (Estimates in $ Million) Improving: $30 - $35 Price & Mix Continued price increase realizations in all regions Stable to Improving: $10 - $15 Volume Seasonally stronger in Latin America Increasing: ($15) Operations Seas
Slide 35: 4Q21 Outlook: Corporate Items
4Q21 Outlook: Corporate Items 35 Estimates in $ Million One-time Costs (Special Item) $9 Transition Services Agreements $8 Interest Expense $17 Effective Tax Rate 26 - 28% Fully Diluted Shares 44.2 million © 2021 Sylvamo Corporation. All rights reserved.
Slide 36: 4Q21 Outlook: Timing Update on Selected Metrics Guidance
4Q21 Outlook: Timing Update on Selected Metrics Guidance 36 $ Million 2020 2021F 2022E 2023E 2024E Direct Maintenance Outage Costs $46 $70 $62 Maintenance, Regulatory & Reforestation $74 $90 $145 Other Capital $1 - - Capital Spending Svetogorsk Recovery Boiler - - $15 $75 $100 Total $75 $90 $160 Dep
Slide 37: 3Q21: Focused on generating free cash flow to drive shareowner value
3Q21: Focused on generating free cash flow to drive shareowner value 37 Free Cash Flow Generating strong free cash flow • Fund debt reduction $325 • Fund one-time costs and transition service agreements Expect to generate sufficient cash in 2022 to: • Fund $145 million of maintenance, regulatory and
Slide 38: Focus on strengthening our balance sheet
Focus on strengthening our balance sheet 38 Debt Maturity Profile Current Debt Structure $ Million Interest Rate $500 Revolving Credit Facility $70 LIBOR + 1.75% (as of 11.10.21) $400 6-year Secured Farm Credit Term Loan F $520 LIBOR + 1.90% (Eligible for an annual rebate) $300 7-year Secured Term L
Slide 39: Key covenants of credit agreement
Key covenants of credit agreement 39 Annual Cash Restrictions until Resolution of the Brazilian Tax Dispute Restricted Equity Restricted Debt Restricted Leverage Ratio Payments Payments Investments1 2.5X or Higher $25 million < 2.5X $50 million < 2.0X $75 million There are no restrictions on the rep
Slide 40: Contingent tax liability
Contingent tax liability 40 Brazilian tax authorities have disputed the deductibility of goodwill from IP’s 2007 acquisition of the Luis Antonio mill • No liability has been recorded as no loss is deemed probable at this time • If a settlement or judgement occurs, Sylvamo would pay a maximum of $120
Slide 41: Financial discipline
Financial discipline 41 • Strong balance sheet across economic cycles Cash Culture • Focus on cash generation • High-return, short-payback investments • Target initial Gross Debt-to-Adjusted EBITDA ratio of < 2.5X Leverage and Liquidity • Minimum cash balance of $100 million • Achieve initial levera
Slide 42: Creating value for shareowners
Creating value for shareowners 42 $ Generate significant free cash flow Deliver strong Adjusted EBITDA margins Reduce debt, strengthening balance sheet and increasing flexibility Increase equity per share © 2021 Sylvamo Corporation. All rights reserved.
Slide 44: Strong positions in attractive regions
Strong positions in attractive regions 44 Latin North Europe America America #3 #1 #2 Sylvamo Supply Position #1 in Russia 61% 76% 72% First-quartile Cost Capacity Tres Lagoas low-cost Svetogorsk is Eastover the lowest-cost given contract first-quartile North American mill and tax benefits Source: S
Slide 45: Iconic brands
Iconic brands 45 Russia Europe Latin America North America Global SvetoCopy has the highest The conscious-choice Chamex has strongest Hammermill Paper is the Exclusive global supplier of frequency of repeat brand for European brand recognition in Latin brand most purchased by one of the most-recogni
Slide 46: Long-term, committed partnerships
Long-term, committed partnerships 46 Customer (Years of partnership) Europe Finsib 10+ 10+ 10+ 20+ 25+ Latin America 10+ 20+ 15+ 10+ 20+ North America 5+ 100+ 20+ 30+ 100+ • Top 10 customers represent ~1/3 of net sales with average partnership tenure of ~50 years • No one customer makes up more than
Slide 47: Sylvamo: 3Q21 vs. 3Q20 Adjusted EBITDA
Sylvamo: 3Q21 vs. 3Q20 Adjusted EBITDA 47 300 $ Million $32 $0 ($57) 250 $18 $80 $177 200 150 $104 100 19.5% 14.1% 50 0 3Q20 Price & Mix Volume Operations Maintenance Input Costs 3Q21 Outages © 2021 Sylvamo Corporation. All rights reserved.
Slide 48: Sylvamo: 3Q21 Shipments
Sylvamo: 3Q21 Shipments 48 Latin North 000 Short Tons Europe Sylvamo America America Uncoated Papers 206 275 379 860 Market Pulp 76 30 15 121 Coated Board & Other 33 - - 33 Total 1,014 © 2021 Sylvamo Corporation. All rights reserved.
Slide 50: #3 supply position in Europe; #1 position in Russia
#3 supply position in Europe; #1 position in Russia 50 Others 19% Navigator 24% UPM $982 Million 11% LTM 9.30.21 Sales Mondi 19% Stora Enso 13% Sylvamo 14% Source: Supply positions from Fisher International as of December 2020 © 2021 Sylvamo Corporation. All rights reserved. The World’s Paper Compan
Slide 51: Key strategic advantages in Europe
Key strategic advantages in Europe 51 23-year successful track record of operating in Russia Strong and steady cash flow generation over time SvetoCopy - Strong supply position and brand loyalty First branded office paper produced in Russia Svetogorsk - 1st-quartile mill that serves Russia and expor
Slide 52: Favorable European industry supply and demand dynamics
Favorable European industry supply and demand dynamics 52 Eastern Europe Capacity Demand Western Europe Capacity Demand 2014 - 2019 0.7% (0.6%) 2014 - 2019 (2.4%) (2.8%) 2021 – 2025 (2.6%) 0.2% 2021 – 2025 (5.7%) (2.7%) 10,000 W. Europe Capacity W. Europe Demand E. Europe Capacity E. Europe Demand 8
Slide 53: Commercial advantages in Europe
Commercial advantages in Europe 53 Iconic Mill Brand & Exclusive HP Brand Antalis, Europapier, Finsib, Inapa, Winning Customers Komus, Lyreco, Tetra Pak and others Attractive Segments Digital Printing, Premium Grades e-commerce and Retail for Work-from-Home, New Approaches / Channels Paper as a Serv
Slide 54: European mills
European mills 54 Capacity (Million Short Tons) UFS 0.4 • Copy Paper Svetogorsk • Coated Paperboard Total 0.7 • Market Pulp • Copy Paper UFS 0.3 • Premium Laser Saillat • Premium Inkjet Total 0.4 • Colors • Market Pulp © 2021 Sylvamo Corporation. All rights reserved. The World’s Paper Company
Slide 55: Europe: 3Q21 vs. 2Q21 Adjusted EBITDA
Europe: 3Q21 vs. 2Q21 Adjusted EBITDA 55 $ Million 60 $15 ($5) $49 50 $10 ($2) 40 $4 $27 30 19% 20 11% 10 0 2Q21 Price & Mix Volume Operations Maintenance Input Costs 3Q21 Outages © 2021 Sylvamo Corporation. All rights reserved.
Slide 56: Europe: 3Q21 vs. 3Q20 Adjusted EBITDA
Europe: 3Q21 vs. 3Q20 Adjusted EBITDA 56 $ Million 70 $5 $0 ($7) 60 $4 $49 $20 50 40 $27 30 19% 20 12% 10 0 3Q20 Price & Mix Volume Operations Maintenance Input Costs 3Q21 Outages © 2021 Sylvamo Corporation. All rights reserved.
Slide 57: #1 supply position in Latin America
#1 supply position in Latin America 57 Bio Pappel 13% Suzano 29% Others 24% $754 Million LTM 9.30.21 Sales Sylvamo 34% Source: Supply positions from Fisher International as of December 2020 © 2021 Sylvamo Corporation. All rights reserved. The World’s Paper Company
Slide 58: Key strategic advantages in Latin America
Key strategic advantages in Latin America 58 Chamex - Leading brand in Latin America 25% supply position Exports to a majority of Latin American countries U.S. Dollar revenues provide a natural currency hedge Three global low-cost mills with ability to ship globally High margins generate substantial
Slide 59: Favorable Latin American industry supply and demand dynamics
Favorable Latin American industry supply and demand dynamics 59 Latin America Capacity Demand 2014 - 2019 (0.3%) (3.1%) 2021 – 2025 (1.6%) 2.2% Capacity Demand 6,000 Global low-cost position allows all Sylvamo 000 Metric Tons Brazilian mills to run at full capacity 4,000 3,225 2,818 2,000 2014 2015
Slide 60: Commercial advantages in Latin America
Commercial advantages in Latin America 60 Iconic Mill Brands & Exclusive HP Brand Acco Brands, CMPC, Kalunga, Nagem, Winning Customers Oji Papers, Perez Trading, and others Attractive Segments Specialized Retail, Digital Printing, Industrial Conversion New Approaches / Channels Innovative Products,
Slide 61: Global low-cost Latin American mills
Global low-cost Latin American mills 61 Capacity (Million Short Tons) UFS 0.4 • Copy Paper Luis Antonio • Offset Total 0.5 • Market Pulp UFS 0.5 • Copy Paper Mogi Guacu • Offset Total 0.5 • Market Pulp UFS 0.3 • Copy Paper Tres Lagoas • Offset Total 0.3 © 2021 Sylvamo Corporation. All rights reserve
Slide 62: Our eucalyptus plantations are a key advantage
Our eucalyptus plantations are a key advantage 62 Own 100,000 hectares of forestland • 75,000 hectares of eucalyptus trees • 25,000 hectares of protected forests Plant 14 million seedlings per year 80% fiber self-sufficient 80 kilometer (50 miles) average haul distance © 2021 Sylvamo Corporation. Al
Slide 63: Latin America: 3Q21 vs. 2Q21 Adjusted EBITDA
Latin America: 3Q21 vs. 2Q21 Adjusted EBITDA 63 $ Million 90 $3 ($7) 80 $11 $2 ($9) 70 $59 $59 60 50 40 31% 30% 30 20 10 0 2Q21 Price & Mix Volume Operations Maintenance Input Costs 3Q21 Outages © 2021 Sylvamo Corporation. All rights reserved.
Slide 64: Latin America: 3Q21 vs. 3Q20 Adjusted EBITDA
Latin America: 3Q21 vs. 3Q20 Adjusted EBITDA 64 $ Million 100 90 $12 ($6) ($18) 80 $7 70 $33 $59 60 50 40 $31 30% 30 20 21% 10 0 3Q20 Price & Mix Volume Operations Maintenance Input Costs 3Q21 Outages © 2021 Sylvamo Corporation. All rights reserved.
Slide 65: #2 supply position in North America
#2 supply position in North America 65 Others 19% PCA 8% Domtar 35% $1,631 Million LTM 9.30.21 Sales Pixelle 10% Sylvamo 28% Source: Supply positions from Fisher International as of December 2020 © 2021 Sylvamo Corporation. All rights reserved. The World’s Paper Company
Slide 66: Key strategic advantages in North America
Key strategic advantages in North America 66 Strong supply position in all major UFS segments Coverage across multiple end-use applications through various channels Strong portfolio of iconic brands and private label products Hammermill brand associated with quality and willingness to pay Attractive
Slide 67: Favorable North American industry supply and demand dynamics
Favorable North American industry supply and demand dynamics 67 North America Capacity Demand 2014 - 2019 (3.1%) (3.5%) 2021 – 2025 (1.7%) (2.6%) Capacity Demand 10,000 8,000 000 Metric Tons 6,000 5,657 5,298 4,000 2,000 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Pre-Pandemic Pandem
Slide 68: Commercial advantages in North America
Commercial advantages in North America 68 Iconic Mill Brand & Exclusive HP Brand Amazon, Central National Gottesman, Winning Customers Staples, and others Attractive Segments Books on Demand, Digital Printing New Approaches / Channels e-commerce, Paper as a Service, End-User Selling Innovation Produ
Slide 69: Growing position in North American e-commerce channel
Growing position in North American e-commerce channel 69 Projected e-commerce CAGR1 2017 – 2023 • Sylvamo sales growth outperforming the category Outpaced • Sylvamo e-commerce sales ~10% of North American 46% Growth 8% sales, up ~85% since 2016 Sylvamo Office Supplies Sales Sales Strong • Hammermill
Slide 70: North American mills
North American mills 70 Capacity (Million Short Tons) • Copy Paper UFS 0.7 • Envelope Eastover • Forms • Offset Total 0.8 • Market Pulp UFS 0.3 • Premium Color Copy • Premium Laser Copy Ticonderoga • Opaques Total 0.3 • Colors UFS 0.1 • Bristols • Colors IP Georgetown • Envelope Total 0.3 • Specialt
Slide 71: Offtake early termination rights
Offtake early termination rights 71 Termination Rights IP SLVM with 180-day Notice Georgetown JAN 1, 2023 JAN 1, 2025 Riverdale JAN 1, 2024 JAN 1, 2026 © 2021 Sylvamo Corporation. All rights reserved. The World’s Paper Company
Slide 72: North America: 3Q21 vs. 2Q21 Adjusted EBITDA
North America: 3Q21 vs. 2Q21 Adjusted EBITDA 72 $ Million 90 $19 ($12) 80 $69 70 $9 60 $15 ($0) 50 $38 40 15% 30 20 9% 10 0 2Q21 Price & Mix Volume Operations Maintenance Input Costs 3Q21 Outages © 2021 Sylvamo Corporation. All rights reserved.
Slide 73: North America: 3Q21 vs. 3Q20 Adjusted EBITDA
North America: 3Q21 vs. 3Q20 Adjusted EBITDA 73 120 $ Million $6 ($32) $15 100 $7 $27 80 $69 60 $46 40 15% 12% 20 0 3Q20 Price & Mix Volume Operations Maintenance Input Costs 3Q21 Outages © 2021 Sylvamo Corporation. All rights reserved.
Slide 74: Sylvamo: 3Q21 YTD Delivered Cost of Goods Sold
Sylvamo: 3Q21 YTD Delivered Cost of Goods Sold 74 Distribution 16% Fiber 22% Depreciation 6% $1.6 Woo Labor Billion d 13% Chemicals 14% Energy Fixed 8% 15% Packaging 6% Fixed costs include insurance, mill supplies, repair and operating materials, contracted repairs, miscellaneous inspections and ser
Slide 75: 2021 Direct Maintenance Outage Costs
2021 Direct Maintenance Outage Costs 75 $ Million 1Q21 2Q21 3Q21 4Q21F 2021F Europe $1 $7 $1 $16 $25 Latin America - - $5 - $6 North America - $21 $1 $17 $39 Total $1 $28 $7 $33 $70 Direct maintenance outage costs include only the direct labor & material costs. Total maintenance outage expenses incl
Slide 76: Business Segment Operating Results
Business Segment Operating Results 76 Sales D&A Adjusted EBITDA $ Million 3Q20 2Q21 3Q21 3Q21 3Q20 2Q21 3Q21 Europe $220 $243 $262 $9 $27 $27 $49 Latin America $150 $189 $200 $15 $31 $59 $59 North America $375 $426 $447 $13 $46 $38 $69 Segment Total $745 $858 $908 $37 $104 $124 $177 Sum of Business
Slide 77: Adjusted EBITDA and Margin Reconciliation
Adjusted EBITDA and Margin Reconciliation 77 $ Million LTM 9.30.21 3Q20 2Q21 3Q21 4Q21F Net Income $427 $51 $115 $92 $47 – $55 Depreciation, Amortization, Cost of Timber Harvested 145 38 35 37 37 Interest (Income) Expense, Net (20) (2) (29) 10 17 Income Tax Provision (Benefit) - 12 41 28 18 - 20 Adj
Slide 78: Adjusted EBITDA and Margin Reconciliation
Adjusted EBITDA and Margin Reconciliation 78 $ Million 3Q20 2Q21 3Q21 Adjusted EBITDA $104 $124 $177 Europe 27 27 49 Latin America 31 59 59 North America 46 38 69 Total Business Segment Adjusted EBITDA $104 $124 $177 Net Sales (excluding Corporate and Inter-segment Sales) $745 $858 $908 Europe 220 2
Slide 79: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation 79 3Q20 3Q21 $ Million 2Q21 3Q21 YTD YTD Cash Provided by Operations $140 $157 $225 $379 Cash Invested in Capital Projects ($15) ($22) ($59) ($54) Free Cash Flow $125 $135 $166 $325 Free cash flow is a non-GAAP measure and the most directly comparable GAAP measure is ca
Slide 80: Adjusted Operating Earnings per Share Reconciliation
Adjusted Operating Earnings per Share Reconciliation 80 $ Million 3Q20 2Q21 3Q21 Net Income $51 $115 $92 Special Items Expense (Income) - (47) 8 Adjusted Operating Earnings 51 68 100 Adjusted Operating Earnings per Share $1.16 $1.54 $2.27 At the date of distribution of Sylvamo common shares by Inter

Sylvamo — Citi 2021 Basic Materials Virtual Conference on 6ix

Sylvamo — Citi 2021 Basic Materials Virtual Conference

Slide 1: Investor Update

Slide 2: Cautionary statement concerning forward-looking statements

Slide 3: Statement relating to non-U.S. financial GAAP measures

Slide 4: Management Team

Slide 5: Company Overview

Slide 6: The Sylvamo Promise

Slide 7: Vision & Mission

Slide 8: Our Values

Slide 9: Our Strategy

Slide 10: Why is Sylvamo compelling?

Slide 11: Uncoated freesheet is sustainable, affordable and functional

Slide 12: Uncoated freesheet is the largest and most resilient paper segment globally

Slide 13: Uncoated freesheet is used across all sectors of the economy

Slide 14: Global uncoated freesheet producer

Slide 15: Low-cost mills in the most attractive regions

Slide 16: Capacity by Grade

Slide 17: Investment Thesis

Slide 18: Our Investment Thesis

Slide 19: Demand expected to continue to grow in Eastern Europe and Latin America

Slide 20: Well-positioned in attractive regions

Slide 21: Well-maintained, low-cost mills

Slide 22: ESG practices embedded throughout culture and strategy

Slide 23: Sylvamo 2030 Goals

Slide 24: Key competitive advantages

Slide 25: Financial Highlights

Slide 26: The World's Paper Company delivers

Slide 27: 3Q21: Building momentum for October 1st Sylvamo launch

Slide 28: Strong 3Q21 Adjusted EBITDA margin - 19.5%

Slide 29: 3Q21: Price & Mix outpaced input costs

Slide 30: Run-full volume and improving mix

Slide 31: Commercial and operational performances generated strong earnings

Slide 32: Strong commercial and operational performances during transition

Slide 33: Strong regional performances

Slide 34: Fourth Quarter Adjusted EBITDA Outlook: $140 - $150 Million

Slide 35: 4Q21 Outlook: Corporate Items

Slide 36: 4Q21 Outlook: Timing Update on Selected Metrics Guidance

Slide 37: 3Q21: Focused on generating free cash flow to drive shareowner value

Slide 38: Focus on strengthening our balance sheet

Slide 39: Key covenants of credit agreement

Slide 40: Contingent tax liability

Slide 41: Financial discipline

Slide 42: Creating value for shareowners

Slide 43: Appendix

Slide 44: Strong positions in attractive regions

Slide 45: Iconic brands

Slide 46: Long-term, committed partnerships

Slide 47: Sylvamo: 3Q21 vs. 3Q20 Adjusted EBITDA

Slide 48: Sylvamo: 3Q21 Shipments

Slide 49: Regional Overviews

Slide 50: #3 supply position in Europe; #1 position in Russia

Slide 51: Key strategic advantages in Europe

Slide 52: Favorable European industry supply and demand dynamics

Slide 53: Commercial advantages in Europe

Slide 54: European mills

Slide 55: Europe: 3Q21 vs. 2Q21 Adjusted EBITDA

Slide 56: Europe: 3Q21 vs. 3Q20 Adjusted EBITDA

Slide 57: #1 supply position in Latin America

Slide 58: Key strategic advantages in Latin America

Slide 59: Favorable Latin American industry supply and demand dynamics

Slide 60: Commercial advantages in Latin America

Slide 61: Global low-cost Latin American mills

Slide 62: Our eucalyptus plantations are a key advantage

Slide 63: Latin America: 3Q21 vs. 2Q21 Adjusted EBITDA

Slide 64: Latin America: 3Q21 vs. 3Q20 Adjusted EBITDA

Slide 65: #2 supply position in North America

Slide 66: Key strategic advantages in North America

Slide 67: Favorable North American industry supply and demand dynamics

Slide 68: Commercial advantages in North America

Slide 69: Growing position in North American e-commerce channel

Slide 70: North American mills

Slide 71: Offtake early termination rights

Slide 72: North America: 3Q21 vs. 2Q21 Adjusted EBITDA

Slide 73: North America: 3Q21 vs. 3Q20 Adjusted EBITDA

Slide 74: Sylvamo: 3Q21 YTD Delivered Cost of Goods Sold

Slide 75: 2021 Direct Maintenance Outage Costs

Slide 76: Business Segment Operating Results

Slide 77: Adjusted EBITDA and Margin Reconciliation

Slide 78: Adjusted EBITDA and Margin Reconciliation

Slide 79: Free Cash Flow Reconciliation