West Fraser Timber Co. Ltd. · TSX:WFG

West Fraser Timber — Investor Presentation (February 2015)

17 slides from West Fraser Timber's investor presentation, Feb 26, 2015

  1. Slide 1: Investor Presentation

    INVESTOR PRESENTATION New York City February 26, 2015

  2. Slide 2: Forward-Looking Statements

    Forward-Looking Statements This presentation and comments associated with it contain forward-looking statements including statements relating to U.S. housing recovery, the potential for constrained lumber supply, energy-related opportunities, earnings sensitivity and estimated annual capital expendi

  3. Slide 3: Our Products

    Our Products LUMBER PANELS PULP & PAPER 27 mills 7 mills 5 mills SPF 3.9 Bfbm Plywood: 830 MMsf3/8” NBSK: 570 Mtonnes SYP 2.3 Bfbm MDF: 300 MMsf3/4” BCTMP: 650 Mtonnes Total 6.2 Bfbm LVL: 3.2 MMcf Newsprint: 135 Mtonnes • North America’s largest lumber producer • Largest plywood producer in Canada •

  4. Slide 4: Trend Sales Mix

    Trend Sales Mix ($) Pulp & Paper 23% Panels Lumber 11% 66% 4

  5. Slide 5: Operations diversified by geography

    Operations diversified by geography Geographic diversification Lumber Capacity U.S. B.C. 37% 40% Alberta 23% 5

  6. Slide 6: Earnings Growth Drivers - Lumber

    Earnings Growth Drivers - Lumber Demand - North American housing - Chinese construction and industrial applications - Japanese housing Supply - Fibre limitations - Residual offtake - Mill closures - People Efficiency - Capital investment - Business model 6

  7. Slide 7: Returns on Lumber

    -10% 0% 5% -5% 10% 15% 20% 25% 30% 35% 40% 1991 1992 1993 1994 1995 1996 1997 1998 1999 Returns on Lumber 2000 2001 2002 2003 2004 2005 2006 EBITDA Margin (%) - Lumber 2007 2008 2009 2010 Average: 16% 2011 2012 2013 2014 7

  8. Slide 8: Canadian Shipments to China

    Canadian Shipments to China 3,500 3,000 Equivalent to 300,000 housing starts * 2,500 2,000 1,500 MMfbm 1,000 500 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 Proj. * Based on consumption of 11.5 Mfbm per U.S. housing start (average mix of single and multi family) 8 Source: Council of Forest Indust

  9. Slide 9: Canadian Fibre Supply

    Million (M3) 0 10 20 40 50 60 70 30 80 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Quebec 2001 2002 2003 2004 2005 Annual Allowable Cut Ontario Canadian Fibre Supply 2006 2007 2008 2009 2010 BC Interior 2011 2012 2013 2014 2015 2016 Forecast 2017 2018 2019 Source: FEA, Q4 2014 2020 9

  10. Slide 10: U.S. South Positive Timber Inventory

    U.S. South Positive Timber Inventory Bfbm Int’l ¼” 30 25 Projected Excess Growth 20 15 10 5 Growth Drain 0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 10 Source: FEA, Q4 2014

  11. Slide 11: Capital Strategy

    Capital Strategy • Reinvest profits to lower costs, improve efficiency through technology and improved processes • Estimate normalized annual capital spending between $150 and $225 million • Capital spending in 2014 of $410 million; projecting approximately $300 million for 2015 • Growth through opp

  12. Slide 12: West Fraser Capital Spending

    West Fraser Capital Capital Spending $ Million 450 410 400 358 350 300 250 200 159 150 100 50 0 2012 2013 2014 Maintenance Timber Profit Improvement Energy 12

  13. Slide 13: Why Invest in West Fraser?

    Why Invest in West Fraser? • Proven ability to generate strong cash flow even in worst markets • Consistent, straightforward business plan • Loyal, long-term employee and management base • Conservative financial management coupled with proven ability to grow strategically • Strong historical shareho

  14. Slide 14: Strong Cash Generation

    Strong Cash Generation ($millions) Total 2014 2013 2012 2011 2010 Cash from Operations 1,595 475 419 195 85 421 Capital Expenditures 1,229 410 358 159 213 89 Acquisitions 238 208 - 30 - - 14

  15. Slide 15: Annualized Shareholder Return (Cdn$)

    Annualized Shareholder Return (Cdn$) June 2006* – December 31, 2014 17.3% 18% 16% 13.7% 13.6% 14% 12% 10% 7.6% 8% 6.5% 6.1% 6% 4% 2.5% 2% 0.1% 0% West Fraser DAX Dow S&P/TSX FTSE Competitor A Competitor B Competitor C * June 2006 marked the beginning of the steep decline in U.S. housing starts 15 So

  16. Slide 16: Share Value Traded

    Share Value Traded Cdn$ Million 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2014 2013 2012 WFT CFP IFP 16

  17. Slide 17: "WFT" – Toronto Stock Exchange

    “WFT” – Toronto Stock Exchange www.WestFraser.com These materials have been prepared by Management of the Company. No regulatory authority has approved or disapproved of the contents of these materials. These materials do not constitute an offer to sell or the solicitation of an offer to buy any sec

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