West Fraser Timber Co. Ltd. · TSX:WFG
West Fraser Timber — Q3 2020 Earnings Presentation
17 slides from West Fraser Timber's earnings presentation, Oct 27, 2020
Slide 1: Q3 Earnings Presentation
Q3 Earnings Presentation October 2020
Slide 2: Forward-looking statements and non-IFRS measures
2 General: This presentation and comments associated with it contains Accordingly, readers should exercise caution in relying upon forward- historical information, descriptions of current circumstances and looking- statements and WFT undertakes no obligation to publicly statements about potential fu
Slide 3: 2019 ESG Report
3 2019 ESG Report Full 2019 ESG Report SASB, GRI & TCFD disclosures westfraser.com/ESG-Report ESG Report Highlights http://bit.ly/WF-ESG-2019 Attractive ESG attributes, significantly upgraded reporting
Slide 4: Consolidated Financial Results
4 Consolidated Financial Results CAD$ Millions CAD$ Millions Adjusted EBITDA Q3-20 Q2-20 Q3-20 Q2-20 Lumber $552 $ 156 Sales $1,690 $ 1,276 Panels 51 20 Costs and Expenses 1,203 1,193 Pulp & Paper 5 10 Operating earnings 487 83 Corporate/Other (3) (2) Finance Expense (11) (13) Total $605 $ 184 Other
Slide 5: Q3 Consolidated EBITDA Reconciliations
5 Q3 Consolidated EBITDA Reconciliations Strong demand in lumber and panels, continued cost improvement
Slide 6: YTD Consolidated EBITDA Reconciliations
6 YTD Consolidated EBITDA Reconciliations Significant earnings recovery to pre 2019 levels
Slide 7: Q3-20 versus Q2-20
Q3-20 versus Q2-20 7 $ millions unless Q3 2020 Q2 2020 Change otherwise indicated Lumber Production (MMfbm) 1,549 1,424 125 Operated near capacity in Q3-20 Full year shipments slightly ahead of production, SPF shipments Lumber Shipments (MMfbm) 1,507 1,591 (84) down, SYP shipments up Demand resurgen
Slide 8: Liquidity
8 Liquidity Available liquidity improved to $1.3 billion Cash consists of cash and short-term investments less cheques issued in excess of funds on deposit.
Slide 9: Demand conditions
Demand conditions 9 $B 4 Qtr Moving Improvements and Repairs Source: Statistics Canada, US Census, FEA Market fundamentals strong for wood products
Slide 10: Supply conditions
Supply conditions 10 Regional supply rebalancing, limited supply growth
Slide 11: Prices trending higher
(2a) Prices trending higher $/Mfbm SPF 2x4 Benchmark History $1,000 sone $800 $600 2006 2008 2010 2012 2014 2016 2018 2020 a SPF 2x4W Cycle Trough 9 s=——=Cycle Peak —«eeeee Linear (SPF 2x4 W) $/Mfbm SYP 2x4 Benchmark History $1,000 $892 $200 $229 2006 2008 2010 2012 2014 2016 2018 2020 ——— SYP 2x4 W
Slide 12: Lumber price cost impact on US new homes
12 Lumber price cost impact on US new homes Lumber prices a manageable cost impact in context of new home
Slide 13: Joyce, Louisiana Update
13 Joyce, Louisiana Update Project Cost: $30 million USD Project Scope: Replaced the existing debarking, scanning and log merchandising equipment. This resulted in: • Higher production • Lower cash manufacturing costs • Lower turnover • Increased productivity Project Timeline: The project was commis
Slide 14: Joyce, Louisiana
rE) Joyce, Louisiana Production (mfbm / hour) - Achieved targeted production per hour - Continuing to improve recovery - Eliminated bottlenecks —— increase Pre-Project 2020 YTD Cash Manufacturing Costs ($/mfbm) - Per unit cash costs continue to decline with improved production - Startup costs have b
Slide 15: Lumber EBITDA Margin (net of duties)
15 Lumber EBITDA Margin (net of duties) Tightening supply, improving demand, capital and operational execution
Slide 16: Total Shareholder Return
(3) Total Shareholder Return Annualized Total Shareholder return from January 1, 2006 to October 23, 2020! West Fraser TSX Lumber 1 OSB 1 Lumber 2 OSB 2 Source: Capital |Q, Bloomberg Total Shareholder Return comprises share price appreciation plus reinvested dividends 1. January 1, 2006 selected as
Slide 17: Summary
17 Summary Q3 and YTD Recap Looking Forward ✓ Lumber and panel results ✓ Fundamentals for wood product improve substantially demand remain favorable ✓ Progress on cost improvement ✓ Continue to operationalize the in all segments benefits of prior year capital ✓ Liquidity substantially ✓ Preserve and