Slide 1: First Quarter 2023 Earnings Review
1 First Quarter 2023 Earnings Review May 9, 2023 © 2023 Sylvamo Corporation. All rights reserved.
Slide 2: Cautionary statement concerning forward-looking statements
Cautionary statement concerning forward-looking statements 2 This presentation contains information that includes or is based upon forward-looking statements. Forward-looking statements forecast or state expectations concerning future events. These statements often can be identified by the fact that
Slide 3: Statement relating to non-U.S. financial GAAP measures
Statement relating to non-U.S. financial GAAP measures 3 While Sylvamo reports its financial results in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"), during the course of this presentation, certain non-U.S. GAAP financial measures are presented. Managem
Slide 4: Achieved our key objectives in 1Q23
Achieved our key objectives in 1Q23 4 Adjusted Adjusted Adjusted Net debt-to-adjusted Operating EPS EBITDA EBITDA Margin EBITDA $2.51 $208 million 22% 1.1x • Price & Mix favorable to our outlook • Volume affected by channel inventory destocking and seasonality • Input and transportation costs more f
Slide 5: Received formal SBTi approval of our greenhouse gas reduction goal
Received formal SBTi approval of our greenhouse gas reduction goal 5 Our 2030 Goal Reduce our Scope 1, 2 & 3 greenhouse emissions by 35% from a 2019 baseline and define a pathway to net zero emissions Our purpose is to produce paper in the most responsible and sustainable ways © 2023 Sylvamo Corpora
Slide 6: 1Q23 Results
1Q23 Results 6 Net Sales Adjusted EBITDA Free Cash Flow¹ Adjusted Operating $ Million $ Million and Margin Earnings per Share $ Million $959 $927 $84 $2.51 $208 $821 $170 $1.97 $146 $1.34 $32 $2 18% 18% 22% 1Q22 4Q22 1Q23 1Q22 4Q22 1Q23 1Q22 4Q22 1Q23 1Q22 4Q22 1Q23 ¹As expected, 1Q23 Free Cash Flow
Slide 7: Generated excellent Adjusted EBITDA and Margin, in line with our outlook
Generated excellent Adjusted EBITDA and Margin, in line with our outlook 7 1Q23 vs. 4Q22 $ Million 1Q23 Outlook ($15) - ($20) ($5) - ($10) $10 - $15 $29 $5 - $10 $15 - $20 $200 - $215 (Feb 10, 2023) 250 $17 $208 $14 200 $170 ($8) $31 ($34) $18 150 Price & Mix • Lower global pulp prices and stable pa
Slide 8: UFS Industry Conditions
UFS Industry Conditions 8 1Q23 2Q23 Outlook Channel Inventory • Reduced domestic shipments in Europe & • Continuing, but nearly complete by end of 2Q Destocking North America • Seasonally weakest quarter in Latin America • Seasonally stronger in Latin America Demand • Brazilian textbook program dela
Slide 9: Imports peaked in October 2022, now returning to historical levels
Imports peaked in October 2022, now returning to historical levels 9 Europe North America 000 Short Tons 000 Short Tons 110 121 96 90 77 84 72 68 47 56 51 58 52 57 60 48 45 45 41 1H'22 Jul'22 Aug'22 Sep'22 Oct'22 Nov'22 Dec'22 Jan'23 Feb'23 1H'22 Jul'22 Aug'22 Sep'22 Oct'22 Nov'22 Dec'22 Jan'23 Feb'
Slide 10: 2Q23 Adjusted EBITDA Outlook: $115 - $125 Million
2Q23 Adjusted EBITDA Outlook: $115 - $125 Million 10 2Q23 vs. 1Q23 $ Million Decreasing: ($45) - ($50) Price and Mix Realization of prior price decreases for pulp in all regions and paper in Europe; less favorable product mix Improving: $10 - $15 Volume Seasonally stronger in Latin America Increasin
Slide 11: Two-thirds of planned maintenance outage costs are scheduled for 2Q23
Two-thirds of planned maintenance outage costs are scheduled for 2Q23 11 $90 $59 $29 $0 $2 1Q23 2Q23 3Q23 4Q23 2023 Europe Latin America North America Total maintenance outage costs in $ millions (shown for Sylvamo mills only) include direct maintenance outage costs plus unabsorbed fixed costs for a
Slide 12: Capital Allocation
Allocating cash to drive shareowner value 12 Maintain Strong Fortified balance sheet Financial Position Dividends Return Cash to Shareowners Capital Opportunistic share repurchases Allocation Maintain low-cost assets Reinvest in High-return projects Our Business Opportunistic bolt-ons © 2023 Sylvamo
Slide 13: Maintained strong financial position, strengthening ability to return more cash
Maintained strong financial position, strengthening ability to return more cash 13 • Repurchased 80% of $450 million, 7%, 2029 notes • Reduced interest expense with a $300 million, ~6%, 2028 Term Loan A and subsequent five-year floating to fixed rate swaps • Eliminated notes covenant that limited ca
Slide 14: Reinvesting in our assets and strengthening our businesses in 2023
Reinvesting in our assets and strengthening our businesses in 2023 14 Non-Discretionary Capital Cost Reduction & Strategic Capital $175 - $190 million $35 - $45 million • Safe operations so that all employees, contractors Eastover $8 million Chemical Recovery Project and visitors remain safe and wel
Slide 15: Revised 2023 Outlook
Revised 2023 Outlook 15 Adjusted EBITDA Free Cash Flow $720 - $770 million $250 - $280 million • wo-thirds of planned Firstmaintenance Half outages • ne-third of planned Second Half outages maintenance • Lower paper demand and longer period of • Improved volume channel inventory corrections − Favora
Slide 16: Remain confident in our ability to create shareowner value
Remain confident in our ability to create shareowner value 16 Commercial Excellence Operational Excellence Financial Discipline • Strong supply positions and • Low-cost mills in attractive • Maintain strong financial position iconic brands regions and Brazilian forestlands • Return cash to shareowne
Slide 17: Appendix
17 Appendix © 2023 Sylvamo Corporation. All rights reserved.
Slide 18: Contacts
Contacts 18 Hans Bjorkman Vice President, Investor Relations Investor Relations +1-901-519-8030 hans.bjorkman@sylvamo.com Adam Ghassemi Senior Manager, Corporate Communications Media +1-901-519-8115 adam.ghassemi@sylvamo.com © 2023 Sylvamo Corporation. All rights reserved.
Slide 19: Free Cash Flow Comparison - Quarter-over-quarter
Free Cash Flow Comparison - Quarter-over-quarter 19 $ Million 4Q22 1Q23 Variance Adjusted EBITDA $170 $208 $38 Cash Taxes ($26) ($8) $18 Cash Interest ($12) ($9) $3 Cash Special Items ($3) ($9) ($6) Other Changes in Working Capital $13 ($119) ($132) Cash from Continuing Operations $142 $63 ($79) Cap
Slide 20: Free Cash Flow Comparison - Year-over-year
Free Cash Flow Comparison - Year-over-year 20 $ Million 1Q22 1Q23 Variance Adjusted EBITDA $146 $208 $62 Cash Taxes ($3) ($8) ($5) Cash Interest ($25) ($9) $16 Cash Special Items ($5) ($9) ($4) Other Changes in Working Capital ($65) ($119) ($54) Cash from Continuing Operations $48 $63 $15 Capital Sp
Slide 21: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation 21 2023 $ Million 1Q22 4Q22 1Q23 Outlook Cash from Continuing Operations $48 $142 $63 $460 - $515 Cash Invested in Capital Projects ($16) ($58) ($61) ($210) - ($235) Free Cash Flow $32 $84 $2 $250 - $280 Free cash flow is a non-GAAP measure and the most directly compara
Slide 22: Adjusted EBITDA and Margin Reconciliation
Adjusted EBITDA and Margin Reconciliation 22 $ Million 1Q22 4Q22 1Q23 2Q23 FY 2023 Net Income (Loss) $26 $94 $97 Outlook Outlook Less: Discontinued operations, net of tax (29) 6 - Net Income from Continuing Operations $55 $88 $97 $37 - $44 $338 - $370 Depreciation, Amortization, Cost of Timber Harve
Slide 23: Adjusted EBITDA and Margin Reconciliation
Adjusted EBITDA and Margin Reconciliation 23 $ Million 1Q22 4Q22 1Q23 Adjusted EBITDA Europe 8 16 31 Latin America 56 72 63 North America 82 82 114 Total Business Segment Adjusted EBITDA $146 $170 $208 Net Sales (excluding Inter-segment Sales eliminations) Europe 117 119 248 Latin America 215 289 22
Slide 24: Adjusted Operating Earnings per Share Reconciliation
Adjusted Operating Earnings per Share Reconciliation 24 $ Million 1Q22 4Q22 1Q23 2Q23 Net Income (Loss) $26 $94 $97 Outlook Less: Discontinued operations, net of tax (29) 6 - Net Income from Continuing Operations $55 $88 $97 $37 - $44 Special Items Expense (Income) 4 (1) 11 3 Adjusted Operating Earn
Slide 25: 1Q23 vs. 1Q22 Adjusted EBITDA
1Q23 vs. 1Q22 Adjusted EBITDA 25 $ Million $127 ($31) ($9) $8 ($50) $17 $208 $146 18% 22% 1Q22 Price & Mix Volume Operations Maintenance Input and Nymolla 1Q23 and Costs Outages Transportation Earnings Costs © 2023 Sylvamo Corporation. All rights reserved.
Slide 26: Europe Adjusted EBITDA
Europe Adjusted EBITDA 26 1Q23 vs. 4Q22 $17 $31 $16 ($11) $5 $4 ($0) ($0) 13% 13% 4Q22 Price & Mix Volume Operations Maintenance Input and Nymolla 1Q23 and Costs Outages Transportation Earnings $ Million Costs 1Q23 vs. 1Q22 $23 ($2) $17 $31 ($6) ($0) ($9) 9% 19% $8 7% 13% Input and 1Q22 Price & Mix
Slide 27: Latin America Adjusted EBITDA
Latin America Adjusted EBITDA 27 1Q23 vs. 4Q22 $72 ($0) ($27) $11 ($1) $63 $8 25% 28% 4Q22 Price & Mix Volume Operations Maintenance Input and 1Q23 and Costs Outages Transportation $ Million Costs 1Q23 vs. 1Q22 $34 ($12) $7 $0 ($22) 9% $63 19% $56 26% 28% 1Q22 Price & Mix Volume Operations Maintenan
Slide 28: North America Adjusted EBITDA
North America Adjusted EBITDA 28 1Q23 vs. 4Q22 $20 $10 $114 $82 $3 ($7) $6 16% 23% 4Q22 Price & Mix Volume Operations Maintenance Input and 1Q23 and Costs Outages Transportation $ Million Costs 1Q23 vs. 1Q22 $70 ($17) ($10) $8 ($19) $114 9% 19% $82 16% 23% 1Q22 Price & Mix Volume Operations Maintena
Slide 29: Quarterly Business Segment Operating Results
Quarterly Business Segment Operating Results 29 Sales D&A Adjusted EBITDA $ Million 1Q22 4Q22 1Q23 1Q23 1Q22 4Q22 1Q23 Europe $117 $119 $248 $7 $8 $16 $31 Latin America $215 $289 $222 $15 $56 $72 $63 North America $508 $527 $505 $13 $82 $82 $114 Segment Total $840 $935 $975 $35 $146 $170 $208 Sum of
Slide 30: 1Q23 Sales Volume
1Q23 Sales Volume 30 Latin North 000 Short Tons Europe Sylvamo America America Uncoated Papers 137 207 341 685 Market Pulp 35 31 24 90 Total 775 Sales volume includes revenue recognition © 2023 Sylvamo Corporation. All rights reserved.
Slide 31: Capacity by Grade
Capacity by Grade 31 000 Short Tons Uncoated Papers Market Pulp Total Saillat 265 130 395 Nymolla 500 - 500 Europe 765 130 895 Luis Antonio 385 130 515 Mogi Guacu 460 35 495 Tres Lagoas 260 - 260 Latin America 1,105 165 1,270 Eastover 700 115 815 Ticonderoga 275 - 275 North America 975 115 1,090 Syl
Slide 32: 1Q23 Price & Mix vs. Input Costs
1Q23 Price & Mix vs. Input Costs 32 Change of Price & Mix 1Q23 vs. 4Q22 Input Costs vs. Input Costs Change By Region $ Million $ Million 1Q23 vs. 4Q22 1Q23 vs. 1Q22 Europe Latin America North America $10 4 $127 $5 9 4 ($50) 1 1 ($8) $14 (2) (3) Price & Mix Input Costs Price & Mix Input Costs ($1) Fi
Slide 33: Total Maintenance Outage Costs - 2023 Outlook
Total Maintenance Outage Costs - 2023 Outlook 33 2023 $ Million 1Q23 2Q23 3Q23 4Q23 Outlook Europe - $22 - $7 $29 Latin America - $5 - $4 $9 North America - $32 $2 $18 $52 Total - $59 $2 $29 $90 Total maintenance outage costs (shown for Sylvamo mills only) include direct maintenance outage costs plu
Slide 34: Gross debt-to-adjusted EBITDA ratio of 1.3x as of March 31, 2023
Gross debt-to-adjusted EBITDA ratio of 1.3x as of March 31, 2023 34 Gross Debt $ Million $1,520 $1,397 $1,026 $1,049 Initial Gross Debt Dec 21 Dec 22 Mar 23 Bonds Term Loan F Term Loan B Term Loan A Revolver AR Securitization Net debt-to-adjusted EBITDA ratio of 1.1x as of March 31, 2023 © 2023 Sylv
Slide 35: Selected Guidance
Selected Guidance 35 2021 2022 2023 $ Million Actual Actual Outlook Total Maintenance Outage Costs $81 $73 $90 Maintenance, Regulatory & Reforestation $70 $143 $175 - $190 High-return Projects - $6 $30 - $35 Capital Spending Nymolla Synergies - - $5 - $10 Total $70 $149 $210 - $235 Depreciation & Am
Slide 36: Executing on our Investment Thesis
Executing on our Investment Thesis 36 The World’s Paper Company A Simple, Focused Plan We are the world’s paper company, the: We focus on uncoated freesheet and will create long-term • Employer of Choice value through: • Supplier of Choice • Talented teams • Investment of Choice • Iconic brands We b
Slide 37: Building a better future for people, the planet and our company
37 Building a better future for people, the planet and our company © 2023 Sylvamo Corporation. All rights reserved.