Mercer International Inc. · NASDAQ:MERC
Mercer International — CIBC Western Institutional Investor Conference 2025
29 slides from Mercer International's conference presentation, Jan 20, 2025
Slide 1: CIBC Western Institutional Investor Conference
Transforming biomass into bioproducts for a more sustainable world CIBC Western Institutional Investor Conference January 22 – 24, 2025
Slide 2: Forward-Looking Statements
Forward-Looking Statements The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Certain information included in this presentation contains statements that are forward-looking, such as statements relating to results of operations and financial
Slide 3: Transforming biomass into bioproducts
Our Vision Our Strategic Pillars Financial Synergistic Diversification Circular Economy Transforming Strong financial results Synergistic diversification Meaningful contributions biomass into through business cycles of operations to the circular economy bioproducts Our Values for a more + Be Safe &
Slide 4: Investment Highlights
Investment Highlights History of sustained growth with prudent financial management Environmental and social responsibility leader with ESG ingrained in our strategy Strategic, purposeful diversification to reduce earnings cyclicality and contribute positively to the circular economy Pulp Segment So
Slide 5: Global Megatrends Driving Long-Term Demand
Global Megatrends Driving Long-Term Demand Increasing Population Growth Climate Change Urbanization + Growing + Higher living + Increasing + Housing + Changing + Fossil fuel + Circular + Resource middle class standards consumption demographics regulations replacement economy scarcity 348 million 15%
Slide 6: Purposeful Diversification
Maximizing Pulp Value Through Pallets Pellets Purposeful RESOURCE EFFICIENCY Diversification + FOSSIL FUEL ALTERNATIVES Lumber Green Energy Mass Timber Bioproducts / Materials Sustainably Managed Forests www.mercerint.com 6
Slide 7: Sustained Growth and Diversification
Sustained Growth and Diversification 2,300,000 ADMT(1) (pulp) 426.5 MW (bioenergy) 960 mmfbm (lumber) 160,000 255,000 m3 (mass timber) 550 57 MR = Mercer Rosenthal MS = Mercer Stendal 140,000 MC = Mercer Celgar MTP = Mercer Timber Products MPR = Mercer Peace River 17,000,000 17,000,000 units (pallet
Slide 8: Evolving Sales Mix
Evolving Sales Mix Diversified Geographies and Products(1)… …Continued Commitment to Sustained Growth > Pulp Segment(2) Consolidated Revenue (US$mm) Bio-Extractives / Other 11% $2,025 China Green Electricity 38% 22% Other > Product Mix Specialty Paper Germany Solid Wood North America 5% 29% Pulp 23%
Slide 9: Leveraging Geographic Clusters to Maximize Synergies
Leveraging Stendal Geographic Torgau Sawmill Clusters Friesau Torgau Rosenthal Unplaned lumber for processing to Sideboards for pallets Maximize Pulp mills Stendal & Rosenthal German Geographic Synergies Cluster and Value Sawmill Friesau www.mercerint.com 9
Slide 10: Pulp Segment
Pulp Segment GERMANY Mercer Rosenthal Mercer Stendal • Rosenthal am Rennsteig • Arneburg • 360,000 tonnes NBSK • 740,000 tonnes NBSK • 57 MW green energy • 148 MW green energy CANADA Mercer Celgar Mercer Peace River • Castlegar • Peace River • 520,000 tonnes NBSK • 475,000 tonnes NBSK / NBHK • 100 M
Slide 11: Continued Optimization
Continued Optimization Mercer’s Pulp Capacity has Increased Over 10-Fold Since 1994 Total Capacity (000s tonnes) Decrease resulting from divestiture of Cariboo Pulp & Paper interest NBSK 1,620,000 tonnes + 2,000K tonnes NBSK / NBHK (1994 – 2024) 475,000 tonnes(1) 2,300 2,200 2,095 Current production
Slide 12: Solid Wood Segment
GERMANY Solid Wood Mercer Torgau Mercer Timber Products (Friesau) • Torgau Segment • Saalburg-Ebersdorf • 410,000 mfbm sawn lumber, • 550,000 mfbm sawn lumber • 17 million pallets • 13 MW green energy • 80,000 tonnes briquettes • 150,000 tonnes pellets • 15 MW green energy USA Mercer Spokane Mercer
Slide 13: Continued Expansion to Capture Synergies
Continued Expansion to Capture Synergies Mercer’s two sawmills are amongst the largest globally…. …And is the Largest EPAL Pallet Producer Total capacity of 960 mmfbm 550 mmfbm 410 mmfbm 17 million Annual pallet production capacity Mercer Friesau Mercer Torgau 80,000 tonnes Annual briquette producti
Slide 14: Mercer Mass Timber
Grounded in Wood Science. Driven by Innovation. Mercer Mass Timber Speed of Assembly Biophilic Properties Mass timber construction is ~30% Wooden environments can improve faster than traditional steel and productivity, learning, and overall concrete construction wellbeing Sustainability Impact Desig
Slide 15: Largest Mass Timber Panel Manufacturer by Installed Capacity
StructureCraft, 4% Kalesnikoff, 4% Largest Mass Timber Vaagen, 4% Panel Manufacturer by Freres, 5% Installed Capacity in North America Element5, 8% 3 North American facilities with wide Mercer Mass Timber, 37% geographic reach 2 State-of-the-art facilities in Northwest and Southwest United States St
Slide 16: Mass Timber Market Overview: Unprecedented Growth
Mass Timber Market Overview Unprecedented Growth North American Forecasted Consumption (000s m 3) 992 Recovering Construction Activity New nonresidential construction is expected to increase 12% in 2027 compared to 2023 levels, respectively, following a slump in 2022. 810 258 214 604 Evolving Buildi
Slide 17: Bioenergy and Biomaterials
Green Energy Performance BioFilaments Bioenergy and Biomaterials • Over 900 GWh of surplus electricity • Mercer’s joint venture with Resolute from biomass every year, enough to Forest Products to develop commercial power ~80,500 homes without fossil applications for cellulose filaments, in fuels. un
Slide 18: Mercer Lignin Centre
Mercer Lignin Centre Overview • Lignin is a traditionally underutilized natural polymer in plant cell walls and can be Mercer Lignin Centre refined into valuable aromatic compounds and chemical building blocks. • Mercer Rosenthal • These offer a huge variety of applications - from resins, paints, gr
Slide 19: Balanced Capital Allocation
Balanced Capital Allocation Capital Allocation is Balanced and Consistent with Mercer’s Strategy Cumulative Capital Allocation, 2018-2023 (US$mm) $800 $599 $600 Growing the Company through acquisitions and high-return capital expenditures Leveraging strategic $400 debt to propel growth amid economic
Slide 20: Shifting Priorities In Line with Economic Conditions
Shifting Priorities In Line with Economic Conditions Past Present Strategy: Inorganic growth through acquisitions, Seeking to reduce debt / deleverage to lower weighted average coupon rate on debt expansion of product offerings Economy: Economic tailwinds, lower interest rates Economic headwinds, hi
Slide 21: 2030 Aspirations
Sustainability Framework 2030 Aspirations Continuously improve Continuously improve Enhance stakeholder Embrace social environmental Mitigate climate change resource efficiencies and Sustainable forestry and rights holder responsibility performance the circular bioeconomy engagement 100% 35% 10% 80%
Slide 22: ESG-Linked Loan
Sustainability Framework ESG-Linked Loan Mercer’s Sustainalytics ESG Risk Rating has Improved by 4.0 Points since 2023 • Mercer has a €370 million revolving credit facility with a five-year term, with borrowing costs linked to ESG performance. Mercer is Among the Lowest Risk Within its Industry Grou
Slide 23: Current and Forward-Looking Market Conditions
Current and Forward-Looking Market Conditions • Lack of material greenfield NBSK capacity additions coupled with closures / curtailments (e.g. Canfor Prince George, Paper Excellence Ashdown, Stora Enso) is maintaining favorable supply-demand fundamentals. Softwood Pulp • Strong demand coupled with g
Slide 24: Canadian NBSK Supply Overview
Canadian NBSK Supply Overview Substantial Decrease in Total Canadian NBSK Capacity Over the Last Few Years Total Canadian NBSK Capacity (000s tonnes) Notable Capacity Changes (> 100,000 tonnes) 6,000 Change Effective Company Mill Location (000s tonnes) Date 5,750 1 West Fraser Hinton Hinton, AB (100
Slide 25: Financial Performance
Financial Performance Cyclical Earnings through the Cycle, Strongly Influenced by Commodity Pricing (Pulp, Lumber) EBITDA (1) (US$mm) Pulp(4) Solid Wood Products (5) $537 $479 $365 $210 $193 $166 $18 2018 2019 2020 2021 2022 2023 Q3 2024 LTM Net Income: $129 ($10) ($17) $171 $247 ($242) ($189) Histo
Slide 26: Well-positioned to drive future growth engines
With a history of growth, and sustainability and synergistic diversification ingrained in its strategy, Mercer is well-positioned to drive its future growth engines. Strong history of Global Synergies from Economies of Innovation Strong ESG positive margin megatrends such continuous scale across pul
Slide 27: Contact Us
CONTACT US info@mercerint.com Suite 1120, 700 W Pender St, Vancouver BC V6C 1G8 +1 (604) 684-1099 www.mercerint.com
Slide 28: Reconciling Net Income (Loss) to Operating EBITDA
Reconciling Net Income (Loss) to Operating EBITDA Consolidated (US$mm)(1)(2)(3) 2018 2019 2020 2021 2022 2023 Q3 2024 LTM Net Income (Loss) $128.6 ($9.6) ($17.2) $171.0 $247.0 ($242.1) ($189.1) Add: Income Tax Provision (Recovery) $48.7 $19.2 $6.1 $89.6 $98.3 ($27.8) ($4.1) Add: Interest Expense $51
Slide 29: Reconciling Net Income (Loss) to Operating EBITDA
Reconciling Net Income (Loss) to Operating EBITDA Note: For other reconciliations of Net Income (Loss) to Operating EBITDA in periods not shown, please refer to that period’s respective Form 10-Q or 10-K, which can be found on our website (www.mercerint.com) Operating EBITDA is defined as operating
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