Rayonier Advanced Materials Inc. · NYSE:RYAM
Rayonier Advanced Materials — Investor Presentation (May 2022)
31 slides from Rayonier Advanced Materials's investor presentation, May 20, 2022
Slide 1: Investor Presentation May 2022
Investor Presentation May 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 Rayonier Advanced Materials’ future events, developments, or financ
Slide 3: Safe Harbor (continued)
Safe Harbor (continued) Business and Operating Risks Taking into consideration the sale of the lumber and newsprint assets completed in August 2021, our ten largest customers represented approximately 37 percent of our 2021 sales. The loss of all or a substantial portion of our revenue from these la
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 performance fibers business from its land resources • Dissolving Wood Pulp • Kallima® brand • Mechanical business, Rayonier Advanced Materia
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: BioFuture Opportunities
BioFuture Opportunities Making Renewable to Remarkable a Reality 8
Slide 9: Sustainability Framework
Sustainability Framework Board of Directors Oversight of Sustainability Environmental Social Governance Forest Stewardship Safety Driven Sustainability Subcommittee “Everyone going home safe, everyday” • Created in 2021 with specific oversight • Access to multiple forestry certifications across orga
Slide 10: Driving EBITDA Growth
Driving EBITDA Growth 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 Not to scale 10
Slide 11: Disciplined and Balanced Capital Allocation
Disciplined and Balanced Capital Allocation Cash Flow From Operations Maintain Assets ~$100 million of annual custodial 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 Capita
Slide 12: Capital Structure & Liquidity
Capital Structure & Liquidity $302 million of liquidity, including $100 $179 million of cash $302 — $43 million from sale of GFP million $179 shares in Q2 $23 Adjusted Net Debt of $755 million 2022 Capital Allocation focused on: — $100 million of Maintenance Cash Factoring (France) ABL (North
Slide 13: Market Overview
Market Overview
Slide 14: 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 15: High Purity Cellulose Landscape
High Purity Cellulose Landscape Primary Demand Size Products End Markets Competitors Outlook (000s tons) Acetate ~(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 Pur
Slide 16: 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
Slide 17: 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 18: 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 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: 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 21: Financial Update
Financial Update
Slide 22: Q1'22 Financial Highlights
Q1’22 Financial Highlights Revenue by Segment Revenue of $352 million from continuing operations; up $33 million or 10% from Q1 2021 amid strong demand 6% 15% Operating loss from continuing operations of $16 million; $16 million down from Q1 2021 $352 million $20 million of Adjusted EBITDA fro
Slide 23: Consolidated Operating Income/(Loss)
Consolidated Operating Income/(Loss) Bridge Q1’21 to Q1’22 ($ Millions) 50 40 30 20 10 0 (16) 0 (10) (20) Q1'21 Price Volume / Cost SG&A / Q1'22 Sales Mix Other Operating loss of $16 million; down $16 million from prior year Improved prices across commodity High Purity Cellulose, Paperboard and
Slide 24: Market Assessment
Market Assessment Strong demand for cellulose specialties continues Implemented $146/ MT cost surcharge in Q2 and double-digit prices increases negotiated for cellulose specialties in 2022 with sales volume increases High Purity Cellulose Commodity prices are expected to improve to offset high
Slide 25: Appendix
Appendix
Slide 26: Definitions of Non-GAAP Measures
Definitions of Non-GAAP Measures EBITDA is defined as net income (loss) before interest, taxes, depreciation and amortization. EBITDA is a non- GAAP measure used by our Chief Operating Decision Maker, existing stockholders and potential stockholders to measure how the Company is performing relative
Slide 27: Net Sales and Operating Income by Segment
Net Sales and Operating Income by Segment ($ Millions) Three Months Ended Net sales March 26, December 31, March 27, (in millions) 2022 2021 2021 High Purity Cellulose $ 281 $ 299 $ 250 Paperboard 54 52 48 High-Yield Pulp 22 29 28 Eliminations (5) (6) (7) Total net sales $ 352 $ 374 $ 319 Three Mont
Slide 28: Consolidated Statements of Income
Consolidated Statements of Income Three Months Ended ($ Millions) March 26, December 31, March 27, 2022 2021 2021 Net Sales $ 352 $ 374 $ 319 Cost of Sales (346) (361) (299) Gross Margin 6 13 20 Selling, general & administrative expenses (20) (24) (16) Other operating expense, net (2) (3) (4) Operat
Slide 29: Consolidated Balance Sheet
Consolidated Balance Sheet ($ Millions) March 26, December 31, 2022 2021 Assets Cash and cash equivalents............................................................................................. $ 179 $ 253 Other current assets ....................................................................
Slide 30: Reconciliation of EBITDA by Segment
Reconciliation of EBITDA by Segment ($ Millions) Three Months Ended March 26, 2022 High Purity High-Yield Corporate & EBITDA by Segment (a): Cellulose Paperboard Pulp Other Total Income (loss) from continuing operations $ (7) $ 6 $ — $ (23) $ (24) Depreciation and amortization 23 4 — — 27 Interest e
Slide 31: Reconciliation of Adjusted Income
Reconciliation of Adjusted Income ($ Millions) Three Months Ended March 26, December 31, March 27, 2022 2021 2021 Per Per Per Diluted Diluted Diluted Loss from Continuing Operations (a): $ Share $ Share $ Share Loss from Continuing Operations $ (24) $ (0.38) $ (28) $ (0.45) $ (16) $ (0.26) Pension s
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