Rayonier Advanced Materials Inc. · NYSE:RYAM
Rayonier Advanced Materials — Q2 2023 Earnings Presentation
27 slides from Rayonier Advanced Materials's earnings presentation, Aug 8, 2023
Slide 1: Second Quarter 2023 Financial Presentation Materials
Second Quarter 2023 Financial Presentation Materials August 8, 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements 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 RYAM’s future events, developments, or financial or operational per
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures This earnings presentation and the accompanying schedules contain certain non-GAAP financial measures, including EBITDA, adjusted EBITDA, adjusted free cash flows, adjusted income from continuing operations and adjusted net debt. The Company believes these non-GAAP financ
Slide 4: Q2'23 Financial Highlights
Q2’23 Financial Highlights Revenue by Segment/Product* ◼ Revenue of $385 million; -$14 million or -4% from Q2’22 ◼ Operating loss of $7 million; -$4 million from Q2’22 ◼ Adjusted Free Cash Flow generation of $52 million ◼ Adjusted EBITDA of $27 million; -$7 million or -21% from Q2’22 — High Purity C
Slide 5: High Purity Cellulose
High Purity Cellulose Operating Income Bridge $ Millions Quarter Ended 25 Key Financials Jul 1, Apr 1, Jun 25, 20 2023 2023 2022 15 ($ millions) 10 7 Net Sales $300 $374 $302 5 0 Operating Income - 13 7 0 Adjusted EBITDA 28 44 36 (5) Q2'22 Price Volume / Cost SG&A / Q2'23 Sales Mix Other High Purity
Slide 6: Paperboard
Paperboard Quarter Ended $ Millions Operating Income Bridge Jul 1, Apr 1, Jun 25, 14 Key Financials 12 2023 2023 2022 10 10 ($ millions) 8 6 6 Net Sales $48 $59 $63 4 Operating Income 6 10 10 2 Adjusted EBITDA 10 13 14 0 Q2'22 Price Volume / Cost SG&A / Q2'23 Sales Mix Other Paperboard - Volume and
Slide 7: High-Yield Pulp
High-Yield Pulp Operating Income Bridge Quarter Ended $ Millions Jul 1, Apr 1, Jun 25, 2 Key Financials 1 1 2023 2023 2022 1 0 ($ millions) (1) Net Sales $44 $42 $40 (1) (2) Operating Income 1 7 (2) (2) (2) Adjusted EBITDA 1 8 - (3) Q2'22 Price Volume / Cost SG&A / Q2'23 Sales Mix Other High-Yield P
Slide 8: Consolidated Operating Income
Consolidated Operating Income ($ Millions) Bridge Q2’22 to Q2’23 ◼ Operating loss of $7 million; down $4 million from the prior year period ◼ Higher sales prices in Cellulose Specialties, Paperboard and High Yield Pulp compared to prior year ◼ Increased sales mix into High Purity Cellulose commodity
Slide 9: Capital Structure & Liquidity
Capital Structure & Liquidity ◼ Adjusted Net Debt of $682 million; Total Liquidity $82 million decline from Q2’22 ◼ $272 million of liquidity, including $157 million of cash as of Q2’23 ◼ Capital Allocation focused on: $109 $272 — Debt repayment million $157 ◼ Debt to be reduced by an additional $68
Slide 10: Refinance Transaction
Refinance Transaction Instrument $250 million 1st Lien Term Loan Structure Guarantees - Same as existing Senior Secured Notes, with all future obligors Collateral - Same as existing Senior Secured Notes Maturity 4 years Interest Rate SOFR + 800 bps SOFR Floor 3.0% Upfront Fees 3.0% Amortization 2% p
Slide 11: Update on 2023 Initiatives
Update on 2023 Initiatives ◼ Completed refinance of 2024 Notes ◼ Raising 2023 Adjusted Free Cash Flow guidance; updating 2023 Adjusted EBITDA guidance — Raising guidance to generate $55-70 million of Adjusted Free Cash Flow — Updating guidance to achieve $185-200 million of Adjusted EBITDA ◼ Adjustm
Slide 12: 2023 Free Cash Flow Guidance
2023 Free Cash Flow Guidance Raising guidance to generate Adjusted Free Cash Flow to $55-70 million ($ Millions) $185-200 Capital Allocation decision to repay $28M YTD debt or invest in high return Strategic ~65 Capital projects ~55 $86M YTD $14M YTD $32M YTD $55-70 20 $25-40 ~90 5 $78M 5 $52M YTD Y
Slide 13: Market Assessment
Market Assessment ◼ 2023 Cellulose Specialties prices are expected to be high single-digit percentage above 2022 prices ◼ Sales volumes for cellulose specialties are expected to decrease from prior year due to significant High Purity customer destocking Cellulose ◼ Fluff sales prices have declined v
Slide 14: Reducing Net Leverage via EBITDA Growth & Debt Reduction
Reducing Net Leverage via EBITDA Growth 12.5x & Debt Reduction 16.0% 15% 14.0% 10.0x 13% 10.0x 12.0% 11.1% Net Debt/Adjusted EBITDA 11% 10.3% 10% 10.0% EBITDA Margin 7.5x 9.0% 7.4% 8.0% 5.4x 5.0x 6.0% 4.0x $1,095 3.4x ~ 3.7x $937 4.0% $859 2.5x 2.5x $839 ~$770 ~$750 2.0% 0.0x 0.0% 2020 Actual 2021 A
Slide 15: Investor Day
Investor Day Tuesday, October 10th, 2023 New York Stock Exchange (NYSE) RSVP to: InvestorRelations@RYAM.com
Slide 16: Appendix
Section Appendix
Slide 17: Definitions of Non-GAAP Measures
Definitions of Non-GAAP Measures EBITDA is defined as net income (loss) before interest, taxes, depreciation and amortization. EBITDA is a non- GAAP measure used by our Management, existing stockholders and potential stockholders to measure how the Company is performing relative to the assets under
Slide 18: Net Sales and Operating Income by Segment
Net Sales and Operating Income by Segment ($ Millions) 18
Slide 19: Consolidated Statements of Operations
Consolidated Statements of Operations ($ Millions) 19
Slide 20: Consolidated Balance Sheets
Consolidated Balance Sheets ($ Millions) 20
Slide 21: Reconciliation of EBITDA by Segment
Reconciliation of EBITDA by Segment ($ Millions) 21
Slide 22: Reconciliation of EBITDA Guidance
Reconciliation of EBITDA Guidance ($ Millions) 22
Slide 23: Reconciliation of Adjusted Free Cash Flow
Reconciliation of Adjusted Free Cash Flow ($ Millions) 23
Slide 24: Reconciliation of Adjusted Free Cash Flow Guidance
Reconciliation of Adjusted Free Cash Flow Guidance ($ Millions) 24
Slide 25: Reconciliation of Adjusted Net Debt
Reconciliation of Adjusted Net Debt ($ Millions) 25
Slide 26: Reconciliation of Adjusted Income
Reconciliation of Adjusted Income ($ Millions) 26
Slide 27: Commodity Prices Mixed
Commodity Prices Mixed Price ($ / MT) Viscose Price ($ / MT) Fluff 1,400 Delivered to China Delivered to North America 2,400 2,230 2,208 1,170 2,138 1,130 2,200 2,070 1,200 1,977 1,020 2,000 940 970 1,770 935 905 1,000 900 1,800 1,647 1,640 1,600 800 1,400 1,200 600 1,000 400 800 Q3 Q4 Q1 Q2 Q3 Q4 Q
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