Rayonier Advanced Materials Inc. · NYSE:RYAM
Rayonier Advanced Materials — Investor Presentation (September 2022)
33 slides from Rayonier Advanced Materials's investor presentation, September 2022
Slide 1: Investor Presentation
Investor Presentation September 2022
Slide 2: Safe Harbor
Safe Harbor Forward-Looking Statements 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 RYAM’s future events, developments, or financial or operational per
Slide 3: Safe Harbor
Safe Harbor Business and Operational Risks (continued): We are dependent upon attracting and retaining key personnel, the loss of whom could adversely affect our business; Failure to develop new products or discover new applications for our existing products, or our inability to protect the intellec
Slide 4: 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 income (loss) from continuing operations and adjusted net debt. These non-GAAP measures are reconcile
Slide 5: Business Highlights
Business Highlights
Slide 6: RYAM Overview
RYAM Overview Business Description Diverse Business Segments High Purity Cellulose Paperboard High-Yield Pulp Formed in 2014 when Rayonier Inc. separated the • Dissolving Wood Pulp • Kallima® brand performance fibers business from its land resources o Acetate • Packaging • Mechanical business, Ray
Slide 7: RYAM Attraction
RYAM Attraction Market Leader in High Purity Cellulose with Best Products and Technical Acumen Unparalleled Security of Supply Offering a Broad and Diversified Portfolio of Cellulose-Based Products Leading R&D Platform with Innovation & BioFuture Opportunities Sustainable Raw Material & Natural-base
Slide 8: Near-Term Initiatives
Near-Term Initiatives Opportunistically refinance Senior Notes maturing in June 2024 2022 Guidance — Improved balance sheet through $43 million sale of shares in GFP and repaid $20 million of Senior Notes Adjusted EBITDA to Completed extensive planned maintenance outages in all facilities exceed
Slide 9: BioFuture Opportunities
BioFuture Opportunities Making Renewable to Remarkable a Reality 9
Slide 10: Sustainability Framework
Sustainability Framework Board of Directors Oversight of Sustainability Environmental Social Governance Forest Stewardship Safety Driven Board Sustainability Committee “Everyone going home safe, everyday” • Created in 2021 with specific oversight • Access to multiple forestry certifications across o
Slide 11: Driving EBITDA Growth
Driving EBITDA Growth Not to scale 9% 2021 Adjusted CS Price Increases Cost Inflation Cost Surcharge Increased Return on R&D/Innovation EBITDA Margin EBITDA Margin Reliability & Strategic Lower Cost Investments Current Near-Term Medium-Term Future 11
Slide 12: Disciplined and Balanced Capital Allocation
Disciplined and Balanced Capital Allocation Cash Flow From Operations ~$100-110 million of annual custodial Maintain Assets CapEx Adjusted Free Cash Flow Reduce Leverage Target 2.5x Net Leverage Value Driven Approach focused on Risk Adjusted Returns on Invested Capital Investment in the Return of Ca
Slide 13: Capital Structure & Liquidity
Capital Structure & Liquidity $274 million of liquidity, including $108 $148 million of cash $274 $148 — Repaid $20 million of Sr Notes million — $43 million from sale of GFP shares $18 Adjusted Net Debt of $764 million 2022 Capital Allocation focused on: — $140-150 million of CapEx Cash Facto
Slide 14: Market Overview
Market Overview
Slide 15: High Purity Cellulose Value Chain
High Purity Cellulose Value Chain Market Pulp Industry: 76 MMT* CS Market Segmentation Dissolving Pulp: Cellulose Specialties* 1.5 MMT Dissolving Pulp: Ethers Commodity Viscose 6 MMT 32% Acetate 35% Fluff Pulp 6 MMT Other CS 33% Increasing Commodity Specialization 62 MMT Market Pulp & Sales Prices 2
Slide 16: High Purity Cellulose Landscape
High Purity Cellulose Landscape Primary Demand Size Products End Markets Competitors Outlook (000s tons) Acetate 0-1% 505 Pulp Ethers Pulp 4-5% 475 Other CS 2-3% 490 Total Cellulose Specialties 1,470 Viscose Various 6-7% 6,200 Pulp Fluff Pulp Various 3-4% 6,300 Total Commodity 12,500 Total High Puri
Slide 17: A Global Leader in High Purity Cellulose
A Global Leader in High Purity Cellulose 775k MT Cellulose Specialties Capacity + 245k MT Commodity Capacity = > 1,000k MT Total Capacity Capacity RYAM Line Wood Tech (kMT) Fernandina Softwood Sulfite 155 Hardwood/ Jesup A Kraft Softwood 330 Jesup B Hardwood Kraft Jesup C Softwood Kraft 245 Tartas S
Slide 18: The RYAM Recipe
The RYAM Recipe Hardwood Softwood Customer application Customized for each Kraft Sulfite Pulping Bleaching Finishing Customer End Uses Acetate Ethers Other CS Filter Plastic LCD/Film Food Pharmaceuticals Industrial Tire Cord Casings Filtration Nitro Best Product Offering • Highest Technical Acumen •
Slide 19: Paperboard Value Chain
Paperboard Value Chain North American Paperboard Industry: 4.5 MMT Market Share RYAM 2021 Sales by Geography RYAM ~5% Canada 30% United States 70% RYAM’s Kallima® is a unique 3-ply product with greater surface to weight ratio than North American competitors Source: Fastmarkets (RISI) and company est
Slide 20: High-Yield Pulp Value Chain
High-Yield Pulp Value Chain Market Pulp Industry: 76 MMT* Dissolving Pulp: Cellulose Specialties* 1.5 MMT Dissolving Pulp: Commodity Viscose 6 MMT Other High-Yield Pulp Fluff Pulp 6 MMT Producers 96% RYAM 4.5 million MT 4% High-Yield Pulp Commodity Market 62 MMT Market Pulp RYAM High-Yield Pulp focu
Slide 21: Paperboard & High-Yield Pulp Overview
Paperboard & High-Yield Pulp Overview Paperboard High-Yield Pulp Location Temiscaming, Quebec Temiscaming, Quebec Capacity 180k MT 290k MT — 65k MT sold internally to Paperboard Key Raw 80-90k MT of NBHK & NBSK Pulp Hardwood (Maple & Aspen) Materials Chemicals Chemicals & Energy Primary 3-ply Kallim
Slide 22: Financial Update
Financial Update
Slide 23: Q2'22 Financial Highlights
Q2’22 Financial Highlights Revenue of $399 million from continuing operations; up $58 million or 17% from Q2 2021 Revenue by Segment Operating loss from continuing operations of $3 million; 15% $4 million lower than Q2 2021 10% $399 $34 million of Adjusted EBITDA from continuing operations; Mi
Slide 24: Consolidated Operating Income/(Loss) from Continuing Operations
Consolidated Operating Income/(Loss) from Continuing Operations ($ Millions) 70 Bridge Q2’21 to Q2’22 60 50 40 30 20 10 1 (3) 0 (10) Q2'21 Price Volume / Cost SG&A / Q2'22 Sales Mix Other Operating loss of $3 million; down $4 million from prior year Improved prices across commodity High Purity C
Slide 25: Market Assessment
Market Assessment Strong demand to continue for High Purity Cellulose Double-digit price increases with higher sales volume negotiated for cellulose specialties in 2022, plus $146/ MT cost surcharge implemented in Q2 High Purity Cellulose Commodity prices remain elevated Extensive planned fa
Slide 26: Appendix
Appendix
Slide 27: Definitions of Non-GAAP Measures
Definitions of Non-GAAP Measures EBITDA is defined as net income (loss) before interest, taxes, depreciation and amortization. EBITDA is a non- GAAP measure used by our Chief Operating Decision Maker, existing stockholders and potential stockholders to measure how the Company is performing relative
Slide 28: Net Sales and Operating Income by Segment
Net Sales and Operating Income by Segment ($ Millions) Three Months Ended Net sales June 25, March 26, June 26, (in millions) 2022 2022 2021 High Purity Cellulose $ 302 $ 281 $ 255 Paperboard 63 54 57 High-Yield Pulp 40 22 37 Eliminations (6) (5) (8) Total net sales $ 399 $ 352 $ 341 Three Months En
Slide 29: Consolidated Statements of Income
Consolidated Statements of Income ($ Millions) Three Months Ended June 25, 2022 March 26, 2022 June 26, 2021 Net Sales $ 399 $ 352 $ 341 Cost of Sales (372) (346) (319) Gross Margin 27 6 22 Selling, general & administrative expenses (28) (20) (18) Foreign exchange gain (loss) 2 (1) (2) Other operati
Slide 30: Consolidated Balance Sheet
Consolidated Balance Sheet ($ Millions) June 25, December 31, 2022 2021 Assets Cash and cash equivalents $ 148 $ 253 Other current assets 554 523 Property, plant and equipment, net 1,165 1,146 Other assets 515 523 $ 2,382 $ 2,445 Liabilities and Stockholders’ Equity Debt due within one year $ 35 $ 3
Slide 31: Reconciliation of EBITDA by Segment
Reconciliation of EBITDA by Segment ($ Millions) Three Months Ended June 25, 2022 High Purity High-Yield Corporate & EBITDA by Segment (a): Cellulose Paperboard Pulp Other Total Income (loss) from continuing operations $ 6 $ 11 $ (1) $ (41) $ (25) Depreciation and amortization 30 3 1 — 34 Interest e
Slide 32: Reconciliation of Adjusted Income
Reconciliation of Adjusted Income ($ Millions) Three Months Ended June 25, March 26, June 26, 2022 2022 2021 Income (Loss) from Continuing Per Diluted Per Diluted Per Diluted Operations (a): $ Share $ Share $ Share Income (Loss) from Continuing Operations $ (25) $ (0.39) $ (24) $ (0.38) $ 8 $ 0.13 P
Slide 33: Commodity Prices Mixed
Commodity Prices Mixed Price ($ / MT) Viscose Price ($ / MT) Fluff 1,400 Delivered to China 2,200 Delivered to North America 2,070 1,130 * 2,000 1,200 1,105 1,770 1,020 1,800 1,647 1,640 1,618 940 935 1,000 905 1,600 1,400 1,285 800 675 1,175 1,165 615 1,200 600 1,000 400 800 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
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