Mercer International Inc. · NASDAQ:MERC
Mercer International — 18th Annual Whistler Institutional Investor Conference (CIBC), January 2015
34 slides from Mercer International's conference presentation, Jan 20, 2015
Slide 1: 18th Annual Whistler Institutional Investor Conference
Exhibit 99.1 Exhibit18th CIBC Investor January 99.1 2015 Discussion Annual Whistler Materials Institutional Investor Conference
Slide 2: Forward-Looking Statements
Forward The statements and Mercer. update NASDAQ:MERC uncertainties Private forward-looking For Looking relating Securities morethat information Statements | to TSX:MRI.U could results Litigation statements significantly ofregarding operations |Reform www.mercerint.com basedthese affect Act onand un
Slide 3: Mercer International Inc.
Mercer International NASDAQ:MERC | TSX:MRI.U Inc. | www.mercerint.com 3
Slide 4: Corporate Structure and Mercer's Operations
Corporate Mercer’s Mercer Rosenthal the Stendal Celgar 360,000 Rosenthal—Germany Celgar—BC, 520,000 100% 660,000 Stendal—Germany (1) 4NASDAQ:MERC In only September (1) –conducts –ADMT two BC, operations Germany Structure – Germany NBSK Canada +operations 2014, 57 100 148 | TSX:MRI.U market have MW o
Slide 5: Strategically Located Mills with Access to Global Markets
Strategically The China 660,000 Stendal Rosenthal (Germany) 360,000 Europe Middle Mercer Indonesia Thailand North Germany Italy European Other NASDAQ:MERC mills’ 7% America –2013 United the ADMT –China 31% (B.C., strategic 520,000 the world’s Located Pulp East largest 3% Celgar Japan Union Canada) S
Slide 6: Growing Green Energy and Chemical By-Product Revenue
Growing Mercer are 2.0 Production 1.6 1.64 (mm) MWh 0.8 0.48 0.4 Mercer’s Chemical $110.0 $94.8 mm) $88.0 $Energy $63.5 Revenue 2(US — $22.0 CAGR: LTM Green NASDAQ:MERC 009 $66.0 by-products 1.82 1.45 0.65 0.52 $65.4 2010 1.2 $93.0 0.71 electricity has recognized 5.0% 10.8% 10.4% 1.44 $44.0 Energy E
Slide 7: Globally Competitive, Low Cost Mills
Globally Mercer’s Low Strong 600 28.8 500 Larger Nanaimo Södra (Ilim) 400 haeuser Catalyst 300 Metsä Canfor Heinzel Fibre Aditya Capacity Domtar 200 Stora Older, Asia Smaller 100 NBSK -Pulp 60.0 Source: Average NASDAQ:MERC - Average Weyer- International Resolute Enso Billerud- years 50.0 production
Slide 8: Mercer Investment Thesis
Mercer The Permanent Demand End Growth Low Mercer’s Significant Revenue Recent Acquired Simplified Reduced Added NASDAQ:MERC NBSK uses capital more refinancing Investment infor was long such mills green minority high structure closure and market requirements NBSK flexibility ~$102 term as are energy
Slide 9: The NBSK Market
The NBSK Market| TSX:MRI.U | www.mercerint.com 9 NASDAQ:MERC
Slide 10: Introduction: Current Themes in the NBSK Market
Introduction Current The NASDAQ:MERC effect net potential impact supply themes ofofto China supply digital additional impact the surrounding |Major TSX:MRI.U and impact media ofother hardwood mill Themes on of the emerging closures, integrated paper NBSK | www.mercerint.com incapacity NBSK demand ma
Slide 11: Global Pulp Market Components
Global Components Chemical Bleached Sulphite Unbleached Northern Produced Spruce Core North Long, Characteristics: Better Major Tissue NBSK (1) NASDAQ:MERC Source: Production America, slender, softness structure Uses Specialty commands Pulp / Pine 1% Bleached Hardwood Softwood From: Pulp PPPC for Kr
Slide 12: Demand Fundamentals: Changes in NBSK End Use
Demand Changes The From Significant Annual NBSK 15.0 Printing 12.0 (6%) P&W: 30% Writing Tissue: Tissue Specialty Specialties Others 2003 Rest 3.0 2.0 1.9 2.5 China tonnes 1.5 of millions 0.5 1.2 21.4 — 0.8 NBSK’s (1) NASDAQ:MERC 012 61% 0.9 22% Source: 17% 1.8 1.4 1.0 increased Writing CAGR of 2013
Slide 13: Demand Fundamentals: China's Growing BSK Demand
Demand BSK 12 4.8 6.0 1.2 Global 28.0 Region: China: W. N. 21.0 Other: 7.0 1995 China’s P&W: 16.0 12.0 Tissue tonnes 2of — 4.0 millions 2004 CAGR: Kraft Paper P&W Tissue: (1) NASDAQ:MERC 004 14.0 8.0 America: -Month Europe: Source: 10% 40% 30% Fluff Deliveries 2005 2000 2007 – & Woodfree: Board Boar
Slide 14: Demand Fundamentals: China's Growth
Demand China’s Growth Rising Increased 6.00 Tissue 5.25 Income 10 4.50 3.75 person /absorb kg CAGR: 1.50 0.75 — … Shutting Significant Implementing Modern Focus We Chinese Closure (1) (2) NASDAQ:MERC / Year 2.25 — and Source: believe $ on 8.0 7.0 6.0 5.0 2.0 1.0 Demand living 3.00 new its per 10 in
Slide 15: Demand Fundamentals: Fiber Characteristics
Demand Fiber Each For This Pulp Softwood Hardwood Fiber-to-Fiber Printing 100% Tissues 80% NBSK 60% % 35% 25% 10% -20% Uncoated Fine NASDAQ:MERC —40% this, — is explains Fine 30% 10% Fiber NBSK Characteristics provides gives Usage 40% advantageous 30% /& NBSK Fundamentals Towels Coated Fiber 10% Bon
Slide 16: Demand Fundamentals: Explaining the NBSK-BEK Price Spread
Demand Digitalization including Pulp In Softwood The $250 Price ($50) NBSK Nov-09 End (1) NASDAQ:MERC contrast, general, Source: paper current product Price $200 Spread vs. Oct-10 Fundamentals tissue markets grades BEK Implications $150 hardwood RISI the hardwood needs, (US$/tonne) ofdevelopment Sep
Slide 17: Supply Fundamentals: Slowing BSK Capacity Growth
Supply From Bleached CAGR: 28.0 24.0 20.0 1995-2013 2014E-2018E 1995 (1) NASDAQ:MERC (November Source: tonnes 19.0 1996 1995 Fundamentals +1.4% Softwood 18.0 1997 CAGR: to PPPC 2014) 23.0 2013, CAGR: 17.0 27.0 1998 of| +1.8% millions TSX:MRI.U Kraft BSK 26.0 –1999 +1.4% Slowing 25.0 capacity Global
Slide 18: Supply Fundamentals: Recent Closures and Conversions
Supply Recent In During Future There announcements conversions 2012–2013 Mill Name Hunan Uimaharju Ngodwana Fort Kamloops Perry Jesup (1) ~700,000 (2) (3) NASDAQ:MERC the For Frances Closure USA last have Location Expectations China History example: this Fundamentals tpa few Canada Finland South Geo
Slide 19: Resulting in Going-Forward NBSK Balance
Resulting In Going NBSK balance 17.5 Capacity 16.5 15.5 tonnes of millions 12.5 (%) 11.5 10.5 2009A Mercer (1) projects (2) % NASDAQ:MERC /recent NBSK Sources: 70% 100% 95% 90% 75% 65% forward, 14.5 2010A Market expects and 13.5 history, (1) in Supply 85% products Actual does Demand 80% 2011A Balanc
Slide 20: Strong Demand and Improving Fundamentals
Strong Demand Improving Tissue Printing Strengthening Supply Minimal Only Limited Some Meaningful With (1) NASDAQ:MERC Source: strong one capacity in Long-Term Fundamentals growth new &Fundamentals for NBSK China: new economic writing Hawkins capacity demand NBSK capacity mill agent additions potent
Slide 21: Financial Performance and Recent Developments
Financial Performance NASDAQ:MERC | TSX:MRI.U and Recent | www.mercerint.com Developments 21
Slide 22: Putting Prices in Perspective: Days of Inventory
Putting $1,100 Days Stocks $1,000 $900 $/t) $700 Shortage! (US Price NBSK $600 $500 Days) $400 $300 1996 After (1) NASDAQ:MERC $800 Global Sources: 48 price 24 16 8 — 1998 surge of undergoing are History: Price (# 64 56 40 NBSK’s Global BSK low, 32 2000 Inventory Factset areprices BSK Price increasi
Slide 23: Significant Annual and Quarterly Revenue and EBITDA
Significant Annual $360 mm) $297 (US $90 19% -10% 2006 Energy LTM Revenue Quarterly $100 $($81 $73 $50 23% 22% EBITDA 11% 7% — Q1 2010 (1) impairment income (2) NASDAQ:MERC US — $173 -The For Q2 10% 17% $85 $44 $180 mm) 12% $101 10% $21 $270 2007 40% 2011 Q3 $196 a& from Consolidated company’s $87 2
Slide 24: Recent Corporate Developments: Stendal Acquisition and Refinancing
Corporate On $250 $400 The Two 9.50% Also, Stendal: Rosenthal: Celgar: An Stendal In Around Mercer’s NASDAQ:MERC September November estimated proceeds loan million certain Senior C$40 Acquisition the €75 Recent pro corporate facilities Refinancing €25 same million mill in forma $168 were 2014, milli
Slide 25: Mercer's Refinancing Actions and Debt Summary
Mercer’s Repaid Actions Used Simplified Impacts Removed Unrestricted Lowered Permanently Mercer Actual US$mm Stendal 2017 2019 2022 Other Operating Total LTM Debt The Note: (1) NASDAQ:MERC Includes refinancing to Senior EBITDA Debt cash Interest Secured Pro Stendal Debt EBITDA Loan US$mm coupon futu
Slide 26: Mercer's Capital Projects and Recent Developments
Mercer’s Capital Rosenthal’s Completed Enhanced Celgar Expected Performance In The NASDAQ:MERC June joint Workforce Projects 2014, Recent venture annual pulp Stendal’s new BioFilaments Mercer production 6,000 Developments cost isReduction | TSX:MRI.U set Project savings and tonne to commercialize Re
Slide 27: Mercer's Share Price Performance
Mercer’s $15.00 $12.00 Price $7.00 5.0 6.0Shares 7.0 8.0 9.0 10.0 -J4.0 1.0 2.0 3.0 Volume 30-Oct-14 refinancing corporate 12-Nov-14 1-May-14 2014 31-Oct-13 2013 23-Jun-14 Completed 29-Sept-14 Announced new filaments with Mercer (1) NASDAQ:MERC an-13 Source: Traded (mm) cellulose Resolute results Sh
Slide 28: Mercer Summary
Mercer The Globally Strategically Stable balance NASDAQ:MERC largest and –sheet cost Summary growing “pure-play” located Experienced competitive, | TSX:MRI.U revenue mills NBSK with modern management frommarket excellent | high-margin www.mercerint.com millpulp operations team access producer energy
Slide 29: Appendix A: Detailed Overview of Operations
AppendixOverview Detailed NASDAQ:MERC A | of TSX:MRI.U Operations| www.mercerint.com 29
Slide 30: Rosenthal Mill
Rosenthal Location: Pulp Electricity Certification: 2013 Key Built Strategically Close Allows One In Regularly New NASDAQ:MERC 2013, Features: of Production 6,000 Green in proximity the customers 1999 the Blankenstein, setting Mill Generating largest tonne Electricity mill located –ISO modern to Cap
Slide 31: Celgar Mill
Celgar Location: Pulp Electricity Certification: 2013 Key Modern Abundant Green In Secured Majority Continues Regularly NASDAQ:MERC 2013, Features: Production Green Energy Mill and C$57.7 the used Castlegar, setting and to Generating Electricity mill efficient demonstrate ISO Project to lowmillion C
Slide 32: Stendal Mill
Stendal Location: Pulp Electricity Certification: 2013 Key Completed One In Project Regularly NASDAQ:MERC September 2013, Features: of Production Green Chemical the Blue Mill exported Stendal, setting Generating largest inElectricity Mill ISO 2014, 2004, Sales: Capacity: new was over biomass 9001 |G
Slide 33: Appendix B: Reconciliation of Net Income to Operating EBITDA
Appendix B of Net Reconciliation NASDAQ:MERC | TSX:MRI.U Income to Operating | www.mercerint.com EBITDA 33
Slide 34: Reconciling Net Income to Operating EBITDA
Reconciling in Net Add: Note: (www.mercerint.com) (1) its expense of performance. EBITDA income considered Operating NASDAQ:MERC US the own Includes Income Net Income Interest Loss Other Depreciation For Quarterly underlying $ operating (loss) millions and is Income other Income EBITDA (Gain) as Exp