Weyerhaeuser Company · NYSE:WY
Weyerhaeuser — Investor Day (June 2023)
46 slides from Weyerhaeuser's investor day presentation, Jun 20, 2023
Slide 1: Western Operations Tour
WEYERHAEUSER Western Operations Tour DEVIN STOCKFISH President & Chief Executive Officer June 2023 Exhibit 99.1
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
FORWARD-LOOKING STATEMENTS AND NON-GAAP FINANCIAL MEASURES This presentation contains statements and depictions that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including without limitation with respect to the followin
Slide 3: Weyerhaeuser Investment Thesis
Weyerhaeuser Investment thesis Unmatched Portfolio Industry-Leading Performance Disciplined Capital Allocation Strong ESG Foundation Superior Shareholder Value 3
Slide 4: Key 2022 Accomplishments
TIMBERLANDS GROWTH MADE STRATEGIC ACQUISITION IN THE CAROLINAS NATURAL CLIMATE SOLUTIONS SIGNED CARBON CAPTURE AND SEQUESTRATION AGREEMENTS FOR TWO PROJECTS IN THE GULF SOUTH OPERATIONAL EXCELLENCE CAPTURED $40 MILLION IN OPX IMPROVEMENTS ACROSS OUR BUSINESSES COMPETITIVE POSITION RANKED #1 IN EBITD
Slide 5: 2025 Year-End Targets
2025 YEAR-END TARGETS Driving Growth and Shareholder Value TIMBERLANDS GROWTH MAKE DISCIPLINED INVESTMENTS OF $1 BILLION FROM 2022 TO 2025 NATURAL CLIMATE SOLUTIONS GROW ANNUAL EBITDA TO $100 MILLION OPERATIONAL EXCELLENCE CAPTURE IMPROVEMENTS OF $175-250 MILLION FROM 2022 TO 2025 GREENHOUSE GAS RED
Slide 6: Timberlands
WEYERHAEUSER Timberlands TRAVIS KEATLEY Senior Vice President, Timberlands June 2023
Slide 7: Timberlands Strategy for Success
Timberlands Strategy for Success How We Work Together To Deliver the Company Vision Performance WHAT WINNING LOOKS LIKE Safe, High-Performing, Diverse Team | Portfolio Value Growth Over Time | Superior Execution Industry-Leading Cash Flows | Sustainability Leader | Forest Benefits Beyond Timber We L
Slide 8: Timberlands Portfolio
TIMBERLANDS PORTFOLIO Superior Holdings Create Value Today and Tomorrow Highly productive planted pine forests Balanced mix of grade & fiber logs Scale operations in every major region U.S. SOUTH Premium Southern Yellow Pine 7 MILLION ACRES Premium land west of Cascade mountains Sawlogs are ~90% of
Slide 9: Customer Segments
Customer segments Capture Full Value Through a Diverse Customer Portfolio THIRD- PARTY DOMESTIC 52% WY MILLS 23% EXPORT CUSTOMER 25% 9 Mills provide year-round demand for timberlands Weyerhaeuser Internal Mills Mills are aligned with our geographic footprint Leveraging fee volume and outside purchas
Slide 10: Timberlands Export Markets
Scale + Consistent Product Quality + Supply Chain Reliability = Export Competitive Advantage Weyerhaeuser TIMBERLANDS EXPORT MARKETS Unrivaled Market Position and Supply Chain Expertise UNIQUE JAPAN EXPORT BUSINESS Multi-decade relationships supplying post & beam housing market Western timberlands o
Slide 11: Timberlands Superior Execution
TIMBERLANDS Superior execution Creating Value Through Forestry and Capturing Value Through Supply Chain Expertise HEALTHY FORESTS We Are Timber-Growing Experts Our Timber Supply Chain Expertise Is Unrivaled Best-in-class genetics are the foundation for value creation Establishment excellence ensures
Slide 12: Competitive Position: Largest Timber REIT
COMPETITIVE POSITION We Are the Largest Timber REIT Our Scale Across All Major Wood Baskets Our Integrated Manufacturing Allows us to flex volume and maximize overall returns Our Delivered Log Business Model Enables us to capture higher margins Acres in millions (2) TIMBER REITS OWNERSHIP Weyerhaeus
Slide 13: Western Timberlands
Western timberlands Unmatched Quality, Scale and Market Access Our Timber Inventory Is Primarily High-Value Species Sources: Forisk Ownership Database 2022, tax parcel data, public presentations, WY reports TIMBER REITS OWNERSHIP We have premium timberlands west of the Cascade mountains We hold the
Slide 14: Southern Timberlands
Southern timberlands Peer-Leading Scale and Market Access Our Scale is Unmatched Across Southern Markets 14 (3) Atlantic Coast includes Florida, Georgia, North Carolina and South Carolina. WY PCH(2) RYN Sources: Forisk Ownership Database 2022, tax parcel data, public presentations and filings, WY re
Slide 15: Operational Excellence: Timberlands
OPERATIONAL EXCELLENCE Delivering Sustainable Margin Improvement Through the Cycle SUSTAINABLE MARGIN IMPROVEMENT Achieved ~$370 Million from 2014-2022 Targeting $45-90 Million from 2023-2025 Harvest & Haul • Silviculture • Marketing • Merchandising Future Value Seedling Survival Thinning Execution
Slide 16: Innovation Driving Significant Improvements
Innovation Driving Significant Improvements Through Accelerated Focus Seedling Planting Tethered Logging Nursery Weeding Forest Health Assessments Herbicide Application Harvest Assessments Land Care Robot Autonomous Nurseries Log Scanning Tree Identification Water Mapping Robotic/AI Timber Inventory
Slide 17: Timberlands Sustainability
100% OF OUR TIMBERLANDS ARE REFORESTED AFTER HARVEST TIMBERLANDS SUSTAINABILITY We Balance Our Harvesting with a Strong Foundation of Environmental Stewardship WE PLANT 130-150 MILLION TREES EVERY YEAR WE HARVEST ONLY 2% OF OUR FORESTS ON AVERAGE EACH YEAR WE LEAVE TREE BUFFERS ALONG WATERWAYS TO PR
Slide 18: Wood Products
WEYERHAEUSER Wood Products KEITH O’REAR Senior Vice President, Wood Products June 2023 June 2023
Slide 19: Wood Products: What Winning Looks Like
TALENTED PEOPLE COMPETITIVE COST STRUCTURE SUPERIOR RELIABILITY TARGETED CUSTOMERS Industry-Leading Margins | Profitable Through the Cycle | Earn the Right To Grow Supplier of Choice | Attract & Retain the Best People | Recognized Sustainability Excellence WHAT WINNING LOOKS LIKE Caring Workplace Cu
Slide 20: Wood Products Manufacturing Footprint
LUMBER ORIENTED STRAND BOARD ENGINEERED WOOD PRODUCTS DISTRIBUTION 2nd Largest Producer in North America 19 Lumber Mills (5.5 BBF) 4th Largest Producer in North America 6 Oriented Strand Board Mills (3.1 BSF) Located in the Largest Homebuilding Markets 19 Distribution Centers #1 Engineered Wood Capa
Slide 21: Wood Products Competitive Advantages
Wood products competitive advantages Quality Products and Preferred Supplier WE MANUFACTURE A SIGNIFICANT MIX OF ENHANCED PRODUCTS STANDARD SHEATHING 41% 21 Reliable Supply Geographic Fit (1) Percentages based on 2022 3rd party sales volumes. (2) Percentages based on 2022 3rd party sales dollars. (3
Slide 22: Superior Reliability Roadmap
Superior reliability Roadmap To Delivering Peer-Leading Performance 1 2 3 DO THE BASICS WELL MANAGE CONSTRAINTS Identify Issue Correct Issue 5 MEASURE RESULTS STRONG FOUNDATION Leadership Accountability + Technical Training Core Reliability Fundamentals Improve or Remove Highest Return Opportunities
Slide 23: Capital Expenditures
CAPITAL EXPENDITURES Organic Investments To Sustain and Enhance Our Operations Principles Reduce costs Maximize raw materials recovery Improve reliability and productivity of existing assets Replicate proven, high-return technologies Strategies Invest in regions where margins are most attractive ove
Slide 24: Operational Excellence: Wood Products
OPERATIONAL EXCELLENCE Delivering Sustainable Margin Improvement Through the Cycle SUSTAINABLE MARGIN IMPROVEMENT Achieved ~$475 Million from 2014-2022 Targeting $90-120 Million from 2023-2025 Controllable Cost • Recovery • Reliability • Product Mix Future Value • Reliability Improvements • Preventi
Slide 25: Innovation Driving Significant Improvements
innovation Driving Significant Improvements Through Accelerated Focus Automation & Robotics AI & Machine Learning Radio Frequency Identification Energy-Efficient Equipment 25
Slide 26: Wood Products Sustainability
Wood products sustainability Reducing Our Impact | Offering Climate-Friendly Products WE CERTIFY 100% OF OUR WOOD FIBER SUPPLY TO THE Sustainable Forestry Initiative® Fiber Sourcing or Certified Sourcing Standards WE MEET MORE THAN 70% OF OUR OWN ENERGY NEEDS USING RENEWABLE BIOMASS ON AVERAGE WE US
Slide 27: Our OpX Scorecard
DELIVERING SUPERIOR RELATIVE PERFORMANCE Our OpX Scorecard WE ACHIEVED THE Largest Improvement IN DISTRIBUTION MARGIN 2011 THROUGH 2022 WE HELD THE #1 Position IN EBITDA MARGIN IN ALL MANUFACTURING BUSINESSES IN 2022 LUMBER(3) ORIENTED STRAND BOARD(4) ENGINEERED WOOD PRODUCTS(5) DISTRIBUTION WOOD PR
Slide 28: Strategic Growth & Natural Climate Solutions
WEYERHAEUSER Strategic Growth & Natural Climate Solutions RUSSELL HAGEN Senior Vice President & Chief Development Officer June 2023
Slide 29: Focused Growth Strategy
FOCUSED GROWTH STRATEGY Disciplined Approach To Increase Value Across Our Businesses Timberlands portfolio Target: $1 billion of disciplined investments from 2022 to 2025 Complete: $300 million Growing the Value of Our Timber Holdings 2022 EBITDA: $43 million Natural climate solutions Target: $100 m
Slide 30: Growing Timberlands Value
Growing Timberlands value We Are Industry Leaders in a Compelling Asset Class STABLE CAPITAL APPRECIATION THROUGH MARKET CYCLES 460 transactions | 26 million acres | $37 billion 5.4% CAGR 5.0% CAGR Sources: RISI, WY. Excludes outlier and large-scale M&A transactions. Adoption of Wood-Based Building
Slide 31: Weyerhaeuser's U.S. Timberlands
WEYERHAEUSER’S u.s. timberlands Unrivaled Portfolio that Cannot Be Replicated 31 LARGEST private timberlands owner in the U.S. BEST growing regions in the country 120+ YEARS of unmatched expertise High-Value Douglas Fir WEST 3 Million Acres SOUTH 7 Million Acres NORTH 1 Million Acres Premium Souther
Slide 32: Asset Value Optimization (AVO 2.0)
32 On-the-ground Expertise + Technology Platform Enables Portfolio & Market Analytics Compares Portfolio Value Attributes Guides Option Value Suitability & Execution APPLYING AVO 2.0 Asset Value Optimization Maximizing the Full Value from Every Acre Unmatched Expertise, Rigorous Processes and a Prop
Slide 33: Growing the Value of Our Timberlands Portfolio
Rigorous Approach Competitive value & terms Unparalleled deal expertise Reputation as solid deal counter-party Execution Unparalleled Platform To Monetize Value from Every Acre 33 Growing the value of our timberlands portfolio Through Technology Investment, Skilled Professionals and Disciplined Proc
Slide 34: Timberlands Evaluation & Acquisition
Timberlands evaluation & acquisition Highly Selective Process Yields Compelling Results ~3.5 MILLION ACRES $8.5 BILLION ~2.5 MILLION ACRES $6.3 BILLION ~1.1 MILLION ACRES $2.8 BILLION 240,000 ACRES $860 MM Offerings in Priority Investment Zones Proprietary Internal Evaluations Submitted Bids Acquire
Slide 35: Mid-Coast Oregon Acquisition
$5,012 Per Acre MID-COAST OREGON acquisition Highly Tensioned Markets Integrated with Weyerhaeuser’s Santiam lumber mill, strong domestic customers and access to Longview export yard Favorable timber age class with significant harvest volume sustained over first 15 years Above average site productiv
Slide 36: Southwest Alabama Acquisition
SOUTHWEST Alabama acquisition Deep and Expanding Gulf South Markets Bolt-on integration with existing Weyerhaeuser timberland operations and complementary age class to existing footprint Located in one of the strongest inland sawlog and fiber markets in the U.S. South, with a deep and expanding cust
Slide 37: Carolinas Acquisition
Carolinas acquisition Scale in Strong Atlantic Coastal Markets Bolt-on integration offering synergies with existing Weyerhaeuser mill and timberland operations Highly productive planted acreage located in strong Atlantic coast markets with mature age class producing excellent cash flows Expect addit
Slide 38: A&D Performance (2020 – Present)
WEYERHAEUSER A&D PERFORMANCE (2020 – PRESENT) ACTIVE Portfolio MANAGEMENT Increasing Cash Flows and Portfolio Value (1) Acquisitions include mid-coastal Oregon (2020), southwest Alabama (2021), North and South Carolina (2022) and a small property in Coastal Washington (2021). Divestitures include Mo
Slide 39: Natural Climate Solutions Business
NATURAL CLIMATE SOLUTIONS BUSINESS CARBON CAPTURE & SEQUESTRATION RENEWABLE ENERGY MITIGATION & CONSERVATION 39 FOREST CARBON CO2
Slide 40: Natural Climate Solutions: Growing EBITDA as Markets Develop
High-Quality, Highly Credible Credits Maine pilot project nearing completion Developing future project pipeline Leasing Subsurface for Carbon Sequestration 2 agreements in place for projects in the Gulf South ~500,000 acres with suitable subsurface characteristics Leasing Land for Wind and Solar Pro
Slide 41: Forest Carbon Positioned To Scale
Forest CARBON Positioned To Scale 41 WY as developer is key to retaining full economic value Validates WY’s ability to deliver highest integrity credits Milestones Outcomes MAINE PILOT PROJECT 3rd Party Audit Complete Pending Final Approval by American Carbon Registry ~30,000 Credits Expected in Yea
Slide 42: Our Competitive Advantage
UNMATCHED FOUNDATIONAL STRENGTHS GAME-CHANGING VALUE ACCELERATORS PORTFOLIO PEOPLE STRATEGY Unrivaled timber holdings with significant option value OUR COMPETITIVE ADVANTAGE Uniquely Positioned To Drive Portfolio Growth and Option Value 42 Deep technical expertise across the value chain with strong
Slide 43: Appendix: Additional Materials
APPENDIX Additional Materials 43 43
Slide 44: Adjusted EBITDA Definitions and Notes
(1) Adjusted EBITDA is a non-GAAP measure that management uses to evaluate the performance of the company. Adjusted EBITDA, as we define it, is operating income adjusted for depreciation, depletion, amortization, basis of real estate sold, unallocated pension service costs and special items. Adjuste
Slide 45: Wood Products Adjusted EBITDA Reconciliation
$ Millions 2011 2012 2013 2014 2015 2016(1) 2017 2018 2019 2020 2021 2022 Lumber ($7) $130 $317 $319 $212 $289 $459 $459 $183 $799 $1,630 $1,103 OSB (4) 143 247 46 41 183 359 329 59 466 1,292 879 EWP 6 17 45 79 114 145 173 177 207 188 285 585 Distribution (37) (29) (33) 2 10 25 38 32 33 86 176 184 O
Slide 46: Natural Climate Solutions Adjusted EBITDA Reconciliation
(1) Adjusted EBITDA is a non-GAAP measure that management uses to evaluate the performance of the company. Adjusted EBITDA, as we define it, is operating income adjusted for depreciation, depletion, amortization, basis of real estate sold and special items. Adjusted EBITDA should not be considered i