Rayonier Advanced Materials Inc. · NYSE:RYAM
Rayonier Advanced Materials — Investor Presentation (September 2018)
29 slides from Rayonier Advanced Materials's investor presentation, Sep 5, 2018
Slide 1: Investor Presentation September 2018
Investor PresentationSeptember 2018
Slide 2: Safe Harbor
Safe Harbor 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 financial or operational performa
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures These presentation materials contain certain non-GAAP financial measures, including EBITDA, adjusted free cash flows, adjusted operating income, adjusted net income and adjusted net debt. These non-GAAP measures are reconciled to each of their respective most directly com
Slide 4: Overview: A Global Leader of Cellulose-Based Technologies
Granite Considerations---Granite Overview A Global Leader of Cellulose-Based Technologies Acquisition of Tembec completed on November 17, 2017 creates:Stronger, more balanced business with greater scale to drive growthProduct and geographic diversification creates a more balanced CS portfolioStrateg
Slide 5: Rayonier Advanced Materials at a Glance
* Based on 9 months ended September 2017 and excludes eliminations** Based on full year 2017 and excludes Corporate results Granite Considerations---Granite Overview Rayonier Advanced Materials at a Glance Global leader in high purity Cellulose Specialties; #1 or #2 in all product segments2017 Pro F
Slide 6: Global Footprint
Global Footprint Rayonier Advanced Materials Global Headquarters Facilities Capacity Forest Products* Bearn, QC 110,000 MBF Chapleau, ON 135,000 MBF Cochrane, ON 160,000 MBF Hearst, ON 110,000 MBF Huntsville, ON 15,000 MBF Kapuskasing, ON 105,000 MBF La Sarre, QC 135,000 MBF Facilities Capacity Hi
Slide 7: High Purity Cellulose – Segment Overview
High Purity Cellulose – Segment Overview Core Products End Markets Acetate Pulp Tow, High Impact Plastics, Optical Screens Ethers Pulp Construction Material, Food Thickeners, Pharma Other Cellulose Specialties Pulp Filtration, Tirecord, Sausage Casings, Nitrocellulose Viscose Textiles Absorbent Mate
Slide 8: Forest Products – Segment Overview
2017 Sales by Geography* Forest Products – Segment Overview Core Products End Markets Studs Random Length Lumber Specialty Hardwood Residual Chips for Pulp Seven facilities with Total capacity of 770,000 MBFProduces a range of commodity forest products used primarily for residential and commercial c
Slide 9: Pulp & Paper – Segment Overviews
Pulp & Paper – Segment Overviews Core Products End Markets Paperboard Lightweight board, Packaging and Cardstock High-Yield Pulp Writing Materials, Packaging Newsprint Newspapers Footprint comprised of four facilities located in CanadaTotal capacity is 180,000 MT of paperboard, 570,000 MT of high-yi
Slide 10: Second Quarter & YTD Financial Highlights
Granite Considerations---Granite Overview Second Quarter & YTD Financial Highlights Q2 Revenue: $542 millionQ2 Operating Income: $66 million; Q2 Adjusted EBITDA: $106 million 4% increase in Revenue and 23% increase in EBITDA from prior year* driven by strong demand in Pulp and Forest ProductsCost im
Slide 11: Financial Highlights ($ Millions)
Quarter Ended Quarter Ended Combined* Pro Forma2 2Q 2018 1Q 2018 2Q 2017 1Q 2017 2Q 2017 1Q 2017 Sales $ 542 $ 201 $ 521 Operating Income 66 14 42 Adjusted Operating Income* 66 22 54 Net Income 54 5 — Adjusted Net Income* 39 9 — EBITDA* 121 36 76 Adjusted EBITDA* 106 42 86 Diluted Earnings per Share
Slide 12: Capital Resources & Allocation
Capital Resources & Allocation 12 ($ Millions) Six Months Ended Three Months Ended June 30, 2018 March 31, 2018 June 24, 2017 March 25, 2017 Cash Provided by Operating Activities $ 89 $ 87 Cash Used for Investing Activities (64 ) (32 ) Cash Used for Financing Activities (41 ) (12 ) Change in Cash Ba
Slide 13: Stable and Balanced Capital Structure
Stable and Balanced Capital Structure As of Q2’18 Outstanding Leverage Interest Rate Maturity Cash 80 Debt Term Loan A-1 180 LIBOR +2.25% November 2022 Term Loan A-2 439 LIBOR +2.00%* November 2024 Other Secured Debt 104 Avg. 5.8% 2018-2028 Total Secured Debt 723 1.8x Senior Notes 506 5.50% June 202
Slide 14: Full Year Outlook by Segment
Cellulose Specialties – Expect full year pricing down ~4% with volumes down 2%Driven by price declines in acetate, partially offset by gains in ethers and other CS2018 acetate pricing now consistent with competitionTotal impact of ~$40 millionCommodities– Expect comparable volumes to prior year Fore
Slide 15: Strategic Pillars Tracking
Strategic Pillars Tracking 15 * Cost improvements before inflation and changes in commodity prices ~$155 million EBITDA* opportunity by end of 2020$21 million captured through 6 months of 3 year plan $25 Legacy $75 Synergy Investments/ Acquisitions
Slide 16: Significant Synergy Opportunity
Granite Considerations---Granite Overview Significant Synergy Opportunity SG&A/Public Company CostsGeneral corporate cost reductionsConsolidation of duplicate systems and spending Supply Chain & ProcurementLeverage combined spendingReduce transportation costs Operational/ManufacturingApply continuou
Slide 17: Accelerating Synergies
Accelerating Synergies Synergies expected to exceed $15 million target in 2018Global Integration Team accelerating 2019 target by $10 million to $40 millionOn track to deliver $75 million of synergies by 2020 17 * Cost Transformation and Synergy improvements before inflation and changes in commodity
Slide 18: Market Optimization
Market Optimization Position production to maximize value within our markets Ability to Capture Value Market Attractiveness Cellulose Specialty End MarketsAcetate FilmPlasticsAcetate TowYarnCasingsCMCFiltrationMCCNitro.Tire CordEthers CommodityEnd MarketsFluffViscoseFilament Drive towards higher val
Slide 19: New Products Pipeline
New Products Pipeline 19 Stage 1Idea development Stage 2Proof of concept Stage 3Lab Stage 4Pilot/Mill Trials Stage 5Industrial Stage 6Commercial 1 2 3 4 5 Priority 1 Priority 2 Priority 3-4 OptiSilk Sapphire Stage OIdeas Biofloc XV20 19
Slide 20: Disciplined & Balanced Capital Allocation
Disciplined & Balanced Capital Allocation Maintain Assets $100-110 million of annual capex Adjusted Free Cash Flow Return of Capital to Shareholders Stock buybacks and dividends to maximize long-term shareholder returns External Strategic Investments Acquisitions and other investments to complement
Slide 21: Strategic Capital Opportunities
Strategic Capital Opportunities Sizable Opportunity for Attractive Re-Investment 21 Target $65 million, net, of high return capital projects over next three yearsTariff L program* in Quebec helps offset gross capital costsFocused on strongest returns, primarily in High Purity Cellulose and Forest Pr
Slide 22: LignoTech Florida
LignoTech Florida 22 45% ownership in partnership with global leader in lignin Successful start-up of 100,000 ADMT lignin manufacturing facilityOn-time, under $110 million budget with expected capabilitiesMarketing plan for natural based lignin product progressing according to expectationGlobal end
Slide 23: Appendix
RAYONIER Advanced Materials. Appendix
Slide 24: Non-GAAP Measure Definitions
EBITDA is defined as earnings before interest, taxes, depreciation and amortization. EBITDA is a non-GAAP measure used by our Chief Operating Decision Maker, existing stockholders and potential stockholders to measure how the Company is performing relative to the assets under management. Adjusted Fr
Slide 25: Basis of Presentation: Combined Results
Combined net sales and operating income (loss) represents the combination of Tembec’s net sales and operating earnings for the related periods, adjusted to reflect the estimated conversion from International Financial Reporting Standards to U.S. Generally Accepted Accounting Principles for certain m
Slide 26: Reconciliation of Non-GAAP Measures: Three Months
Reconciliation of Non-GAAP Measures($ Millions) 26 Three Months Ended: Forest Products Forest Products Pulp Pulp Paper Paper High Purity Cellulose High Purity Cellulose Corporate & Other Corporate & Other Total Total June 30, 2018 Net Income $ 16 $ 26 $ 9 $ 33 $ (30 ) $ 54 Depreciation and amortizat
Slide 27: Reconciliation of Non-GAAP Measures: Six Months
Reconciliation of Non-GAAP Measures($ Millions) 27 Six Months Ended: Forest Products Forest Products Pulp Pulp Paper Paper High Purity Cellulose High Purity Cellulose Corporate & Other Corporate & Other Total Total June 30, 2018 Net Income $ 27 $ 49 $ 14 $ 57 $ (69 ) $ 78 Depreciation and amortizati
Slide 28: Reconciliation of Non-GAAP Measures: Adjusted Net Debt
Reconciliation of Non-GAAP Measures($ Millions) June 30, 2018 June 30, 2018 June 24, 2017 June 24, 2017 Adjusted Net Debt Reconciliation Current maturities of long-term debt $ 10 $ 13 Long-term debt & capital lease obligation 1,214 769 Total debt $ 1,224 $ 782 Original issue discount, premiums and d
Slide 29: Reconciliation of Reported to Adjusted Earnings
Reconciliation of Reported to Adjusted Earnings($ Millions, except per share amounts) 29 Three Months Ended Three Months Ended Six Months Ended Six Months Ended June 30, 2018 June 30, 2018 March 31, 2018 March 31, 2018 June 24, 2017 June 24, 2017 June 30, 2018 June 30, 2018 June 24, 2017 June 24, 20
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