Mercer International Inc. · NASDAQ:MERC
Mercer International — Q1 2025 Earnings Presentation
22 slides from Mercer International's earnings presentation, May 2, 2025
Slide 1: Mercer International Inc. Q1 2025 Earnings Call
Mercer International Inc. Transforming biomass into bioproducts for a more sustainable world Q1 2025 Earnings Call May 2, 2025 Juan Carlos Bueno – President & CEO Richard Short – CFO, Executive VP & Secretary
Slide 2: Forward-looking Statements
Forward-looking Statements The Private Securities Litigation Reform Act of 1995 provides a For more information regarding these “safe harbor” for forward-looking statements. risks and uncertainties, review Mercer’s filings with the United States Securities and Exchange Commission. Certain informatio
Slide 3: Financial Results Overview
Financial Results Overview EBITDA Decreased Quarter-Over-Quarter Highlights Change • EBITDA decreased quarter-over-quarter EBITDA (US$ millions) Q4 2024 Q1 2025 due to: (+/-) • Planned maintenance downtime of Pulp Segment(1) $106 $50 ($56) 22 days at our Celgar mill; and • Weakening U.S. Dollar Soli
Slide 4: Pulp Prices
Pulp Segment Pulp Prices Pricing Overview Realized Prices in Q1 Remained Flat Realized Pulp Price (US$ / tonne) Region Q4 2024 Q1 2025 NBSK List Price (US$ / tonne) $1,000 Domestic $1,687 $1,753 $800 China (net) $767 $793 Europe $1,500 $1,550 $600 NBHK List Price (US$ / tonne) $400 Domestic $1,298 $
Slide 5: Pulp Segment Key Performance Indicators
Pulp Segment Key Performance Indicators Sales Volume (000s tonnes) Mill Planned Downtime (Days) 452 478 Q2 2025: • 18 days (Peace River) • 3 days (Stendal) Q4 2024 Q1 2025 Production Volume (000s tonnes) 467 467 459 489 22 - Q4 2024 Q1 2025 Q4 2024 Q1 2025 Planned Start-up Production (Actual) Produc
Slide 6: Lumber Overview
Solid Wood Segment Lumber Overview Benchmark Lumber Price Lumber Operations (mmfbm) Random Lengths WSPF 2&btr 2x4 (US$ / mfbm) $1,500 128 131 124 $1,200 115 $900 $600 $300 - 2021 2022 2023 2024 2025 Q4 2024 Q1 2025 Production Sales 6
Slide 7: Electricity and Mass Timber
Electricity and Mass Timber Electricity Mass Timber Production (000s m3) 241 235 7 6 Q4 2024 Q1 2025 Sales Volume (GWh) $109 $112 Q4 2024 Q1 2025 Mass timber production remained relatively flat in Q1 Q4 2024 Q1 2025 amidst high-interest rate environment Price ($ / MWh) 7
Slide 8: Financial Position
Financial Position Summary Highlights US$mm unless otherwise stated • Q1 net working capital excluding non-cash items Measure Q4 2024 Q1 2025 Change (+/-) increased by ~$23 million; financed by borrowing ~$22 Net Income / (Loss) $17 ($22) ($39) million from revolving credit facilities Income / (Loss
Slide 9: Evolving Market Dynamics and Strategic Focus
Evolving Market Dynamics and Strategic Focus Managing Tariff-Related Uncertainties Action Plan • Pulp and mass timber imports from Canada and • Targeting $100 million in cost savings by the end of lumber imports from Germany are currently not 2026 compared to 2024 subject to tariffs, but under a Sec
Slide 10: Performance and Outlook
Performance and Outlook Performance Drivers Headwinds into Q2 Positive • Impact of global economic uncertainty is negatively • Mills ran well in Q1 impacting buying patterns and pricing in some of our markets • Pulp pricing was strong, positive momentum expected to persist into the second quarter •
Slide 11: Pulp Markets
Pulp Markets NBSK NBHK • Softwood pricing remains strong • Hardwood pricing strengthened in China due to seasonal demand and reduced supply from South • Steady demand for softwood in mid-term, America combined with reduced supply, will create upward pressure on pricing in H1 2025 • Pricing in North
Slide 12: Fiber Costs
Fiber Costs Fiber Costs Remained Flat for Pulp and Increased for Lumber Per Unit Fiber Costs Overall pulp fibre costs were steady relative to Q4. In Germany, increased demand for sawlogs inflated fibre costs. In Canada, costs were down. Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1 '24 Q2 '24 Q3 '24 Q4 '24 Q1 '25
Slide 13: Mass Timber
Mass Timber • The solid profitability we saw in 2024 underscored the earnings potential of the mass timber business when running at full capacity on a single-shift • Current ~$24 million order file suggests a weaker Q2 and Q3 for 2025; improvement anticipated to start in Q4 • Plans underway to ramp
Slide 14: Lumber Markets
Lumber Markets • U.S. prices expected to weaken slightly in Q2 due to weaker demand • In contrast, European lumber prices trending upwards, driven by increasing saw log prices • Long-term price improvement in both markets reliant on economic recovery, spurred by interest rate reductions in late 2025
Slide 15: Pallets & Pellets
Pallets & Pellets Pallet Pellet • Shipping pallet market remains weak due to • Heating pellet prices up slightly in Q1 due to overhang of European economy (especially seasonality in this market Germany) • Demand and prices to be slightly lower in Q2 as • Once signs of economic recovery show, pallet
Slide 16: Pulp Operations
Pulp Operations 2025 Planned Major Maintenance Shut • Celgar has moved to an 18-month major planned maintenance schedule • The expected maintenance schedule for 2025 as follows: Q1: Q2: Q3: Q4: ✓ Celgar (22 days) ✓ Peace River (18 days) ✓ Rosenthal (14 days) ✓ Stendal (18 days) ✓ Stendal (3 days) ✓
Slide 17: Capital Allocation
Capital Allocation Strategic and high-return capital projects at Torgau and Celgar mills are underway / recently completed Capital Expenditure Summary • Total Q1 capex of ~$20 million • Expected 2025 capex of $100 million • Project will increase lumber production capacity and volume • Continued prio
Slide 18: Bioproducts for a More Sustainable World
Bioproducts for a More Sustainable World Lignin Extraction Plant • New lignin extraction pilot plant at Rosenthal; ramp-up and expected commercialization are going as planned • Aligned with strategy to expand into green chemicals and other circular economy-compatible products • Reinforces commitment
Slide 19: 2025 Outlook
2025 Outlook Sector-wide Macroeconomy • Target to unlock $100 million • Strong softwood pulp market • Economic uncertainty stemming from improved operational • Pallet and lumber demand from potential trade wars efficiency and cost savings by under pressure due to weak • Inflation could accelerate an
Slide 20: Contact Information
Contact Mercer International Inc. Information P: +1 (604) 684 1099 info@mercerint.com Suite 1120, 700 West Pender St Vancouver, B.C. Canada www.mercerint.com V6C 1G8
Slide 21: Reconciling Net Income (Loss) to Operating EBITDA
Reconciling Net Income (Loss) to Operating EBITDA Consolidated (US$ millions) Q4 2024 Q1 2025 Net income (loss) $16.7 ($22.3) Income tax provision 3.4 0.7 Interest expense 28.3 28.2 Other expense 1.9 0.2 Operating income 50.4 6.7 Add: Depreciation and amortization 48.8 40.4 Operating EBITDA 99.2 47.
Slide 22: Reconciling Net Income (Loss) to Operating EBITDA
Reconciling Net Income (Loss) to Operating EBITDA Note: For other reconciliations of Net Income (Loss) to Operating EBITDA in periods not shown, please refer to that period’s respective Form 10-Q or 10-K, which can be found on our website (www.mercerint.com) Operating EBITDA is defined as operating