West Fraser Timber Co. Ltd. · TSX:WFG
West Fraser Timber — Q3 2010 Earnings Presentation
12 slides from West Fraser Timber's earnings presentation, Oct 25, 2010
Slide 1: Third Quarter 2010 Results
Third Quarter 2010 Results October 25, 2010
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains historical information, descriptions of current circumstances and statements about potential future developments and anticipated financial results. The latter, which are forward-looking statements, are presented to provide reasonable guidance to
Slide 3: Third Quarter 2010
Third Quarter 2010 Highlights Summary Financial Results Lumber Panels Pulp & Paper Eurocan Consolidated Outlook 3
Slide 4: Q3 2010 Highlights
Q3 2010 Highlights Financial Strong earnings and cash flows despite lower lumber and plywood prices Net cash balance of $213 million at end of Q3 Dividend increased to $0.06 in Q3 Capital spending approvals for $125 million in Lumber business Debt rating upgrade by Standard & Poor’s Markets Lower lu
Slide 5: Lumber
Lumber (Canadian $ millions) Q3/10 Q2/10 Q3/09 EBITDA 49 75 3 EBITDA Margin 12% 16% - Lumber price summary SPF 2X4 benchmark price down 16% - US$222 (Q2 - US$264) SYP 2X4 #2 West benchmark price down 34% - US$248 (Q2 - US$377) Shipments up 3% - 1,219 MMfbm (Q2 - 1,188 MMfbm) Increased shipments to A
Slide 6: Panels
Panels (Canadian $ millions) Q3/10 Q2/10 Q3/09 EBITDA 20 20 19 EBITDA Margin 18% 19% 19% Plywood Benchmark prices decreased 13% -Cdn$327 (Q2 - Cdn$377) Shipments up 14% at 218 Mmsf (Q2 - 192 Mmsf) Production down 2% at 203 Mmsf (Q2 - 207 Mmsf) MDF Benchmark prices up 3% at US$550 (Q2 - US$536) Shipm
Slide 7: Pulp & Paper
Pulp & Paper (Canadian $ millions) Q3/10 Q2/10 Q3/09 EBITDA 55 49 18 EBITDA Margin 27% 22% 10% Benchmark NBSK pulp prices slightly higher US$1,000 (Q2 - US$993) Shipments down 12% at 284,000 tonnes (Q2 - 324,000 tonnes) Production up 18% at 337,000 tonnes (Q2 - 286,000 tonnes) Record pulp production
Slide 8: Eurocan
Eurocan (Canadian $ millions) Q3/10 Q210 Q3/09 Earnings from discontinued operations (1) 1 (99) Eurocan mill closed January 2010 Product sales from inventory nearly complete Working capital further reduced by $8 million in quarter Process for asset disposal expected to continue through 2011 8
Slide 9: Consolidated Financial Results
Consolidated Financial Results Revenue and Earnings (Canadian $ millions) Q3/10 Q2/10 Q3/09 Sales 707 772 612 Operating earnings 63 103 (40) Earnings from continuing operations 46 62 (100) Net Earnings 45 63 (199) Diluted earnings per share (dollars) 1.04 1.46 (4.64) EBITDA 109 151 41 EBITDA Margin
Slide 10: Consolidated Financial Results: Cash Flows
Consolidated Financial Results Cash Flows (from continuing operations) (Canadian $ millions) Q3/10 Q2/10 Q3/09 Cash from Operations 79 130 15 Working Capital Changes 37 83 67 Capital Spending (10) (6) (1) Dividends (3) (1) (1) Other 3 1 1 Change in cash, excluding debt 106 207 81 10
Slide 11: Consolidated Financial Results: Balance Sheet
Consolidated Financial Results Balance Sheet (Canadian $ millions) End of Q3/10 Q2/10 Q3/09 Working Capital, excluding net debt 226 283 376 Property Plant & Equipment 1,531 1,572 1,678 Other Assets 471 477 456 Other Liabilities 378 393 374 Total Debt, net 113 235 484 Shareholders’ Equity 1,737 1,704
Slide 12: Q4 - 2010 Outlook
Q4 - 2010 Outlook Lumber Continued low U.S. housing starts and lumber demand will pressure lumber prices Demand in China expected to grow Panels U.S. plywood imports are expected to continue until Canadian dollar weakens or U.S. housing improves Pulp Prices somewhat lower but at profitable levels 12