Slide 1: Canfor Corporation
Canfor Corporation June 2024
Slide 2: Raymond James Marketing
Raymond James Marketing Don Kayne Pat Elliott President & CEO CFO & SVP, Sustainability The presentation and answers to questions today contain forward-looking statements which involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different f
Slide 3: Company Overview
Company Overview • Global leader in the manufacturing of sustainable forest products • Geographic and product diversification supporting earnings through the cycle Sawmill Pulp mill • Well positioned for further growth LUMBER PULP + PAPER OTHER OPERATIONS 35 Sawmills* 2 Mills 16 Value-Added Faciliti
Slide 4: Our Sustainability Framework
Our Climate Ambition Our Sustainability Framework At Canfor, we’re building a future as sustainable as the forest. Reduce absolute scope 1 and scope 2 carbon emissions by 42% by 2030 from a 2020 base year Our people and communities Our practices and products play Our products are sustainable thrive
Slide 5: Our Climate Ambition
Our Climate Ambition Our Climate Ambition As we make progress on our climate journey, we will continue to explore opportunities to reduce carbon emissions across our value chain Reduce absolute scope 1 and scope 2 carbon Reduce absolute scope 3 emissions by 25% by emissions by 42% by 2030 from a 202
Slide 6: Growing Lumber Business Highlights
Growing Lumber Business Highlights Disciplined Approach to Growth Over 3.0 BBF capacity acquired through M&A Executing on diversification strategy to support more stable returns over the cycle (C$560/Mfbm) since 20131 300%+ Growth in US South 8,000 Lumber Shipments Achieved through targeted CAPEX, s
Slide 7: US Housing Starts Forecast
US Housing Starts Forecast US Housing Starts Forecast Considerations Millennials Coming of Age Homeownership rate of ages 25-34 yrs. old are expected to increase 2,200 Single Multi 1-1/2 % per year 2,000 Increased Tenure & Rates 353 Older homeowners are staying in their homes 345 1,800 an average of
Slide 8: US Home Affordability Index
US Home Affordability Index National Home Affordability Index 1.60 Improving 1.40 Declining Affordability Index (1984=1.00) 1.20 1.00 0.80 0.60 0.40 8 8 Source: US Federal Reserve, Canfor Market Intelligence
Slide 9: Repair + Remodel Outlook
Repair + Remodel Outlook Considerations Aging in Place Increased levels of retrofitting, accessibility, and updates opposed to trading up Average Home Size Existing homes are on average 500 sq. ft. smaller than new construction, leading to increased frequency of home additions Home Price Outlook & S
Slide 10: US Imports from Europe
US Imports from Europe US Imports from Europe Seasonally Adjusted Annual Rate 3,500 3,000 2,500 2,000 MMfbm 1,500 1,000 500 - Germany Other Sweden Austria 10 Source: USDA FAS GATS, Canfor Market Intelligence
Slide 11: Canfor Supply Chain
Canfor Supply Chain • Ability to leverage global platform to support key programs and optimize supply chain • Strong alignment with key customers and channels (e.g. Home Center) • Company’s high-value product mix and diversification efforts supporting more stable returns over the cycle 11
Slide 12: Our High Value Product
J grade & Square Edge Dimension Our Boards, Pattern, Fascia, Clear Appearance High Value Visual appearance is primary purchase variable Product Diversification We make products SYP Long Length 22’/24’/26’ that unlock SPF & Spruce Metric Sizes incremental value Application with stabilized pricing Mat
Slide 13: Greenfield Sawmill: DeRidder, LA
Highlights • 250 MMfbm capacity Greenfield Sawmill: DeRidder, LA • US$160M investment (~$640/Mfbm) • Progressing well through ramp up on 2 shift basis 13
Slide 14: Modernizing Urbana Sawmill
Modernizing Urbana Sawmill Summary • US$130M investment • 115 MMfbm capacity increase, 2 shift operation • Significantly improves cost structure • Projected start-up in Q3 2024 Urbana, AR Upgrade – 285 MMfbm (2024) Strategic Alignment • Improves manufacturing efficiency, versatility and flexibility
Slide 15: Greenfield Sawmill: Axis, AL
Greenfield Sawmill: Axis, AL Summary • US$210M investment ($840/Mfbm) • State-of-the-art, top quartile sawmill (250 MMfbm capacity) • Optimizes strong fiber basket in region • Improved manufacturing flexibility provides opportunity to capture market premiums on specific products • Located in Axis, A
Slide 16: Pulp Market Update
Pulp Market Update Global NBSK Pulp Prices Are Currently Strong Global Producer Pulp Inventories Are Balanced • Pulp prices have experienced a sharp rebound since Q3 2023 across all markets • North American and European markets have demonstrated greater strength during this cycle • While pulp produc
Slide 17: Steady Pulp Operating Rates Forecasted
Steady Pulp Operating Rates Forecasted 17 Source: PPPC – Chemical Long Term Outlook- June 2024
Slide 18: Financial Highlights
Financial Highlights Q1 2024 Summary • Strong cash flow generation in recent years supporting various organic and external growth initiatives (Canfor, Excl. CPPI) • Balance sheet remains strong, with Company well positioned to grow lumber business on a global basis Net Cash $395M Liquidity Historica
Slide 19: Capital Allocation
Capital Allocation Capital Expenditures ($M) $625 $587 $490 $423 $274 2016-2020 2021 2022 2023 2024 Outlook Avg • Disciplined approach to capital Lumber Pulp allocation • Continuous reinvestment in Return to Shareholders Debt operations and targeted external Repayment Capital Allocation Canfor Excl.
Slide 20: Value Proposition
Value Proposition Sustainability Diversified Positioned for Focus Global Platform Growth Differentiated Well Capitalized High-Value Mills Products 20
Slide 21: Investor Contacts
Investor Contacts Pat Elliott Dan Barwin CFO & SVP, Sustainability Director, Corporate Finance Patrick.Elliott@canfor.com Daniel.Barwin@canfor.com (604) 661-5441 (604) 661-5390 21