Rayonier Advanced Materials Inc. · NYSE:RYAM
Rayonier Advanced Materials — Q3 2022 Earnings Presentation
24 slides from Rayonier Advanced Materials's earnings presentation, Nov 2, 2022
Slide 1: Third Quarter 2022 Financial Presentation Materials
Third Quarter 2022 Financial Presentation Materials November 2022
Slide 2: Safe Harbor
Safe Harbor Forward-Looking Statements Certain statements in this document regarding anticipated financial, business, legal or other outcomes including business and market conditions, outlook and other similar statements relating to RYAM’s future events, developments, or financial or operational per
Slide 3: Safe Harbor
Safe Harbor Business and Operational Risks (continued): We are dependent upon attracting and retaining key personnel, the loss of whom could adversely affect our business; Failure to develop new products or discover new applications for our existing products, or our inability to protect the intellec
Slide 4: Non-GAAP Financial Measures
Non-GAAP Financial Measures These presentation materials contain certain non-GAAP financial measures, including EBITDA, adjusted EBITDA, adjusted free cash flows, adjusted operating income, adjusted income (loss) from continuing operations and adjusted net debt. These non-GAAP measures are reconcile
Slide 5: Update on Near-Term Initiatives
Update on Near-Term Initiatives ◼ Opportunistically refinance Senior Notes maturing in June 2024 — Improved Net Debt to EBITDA ratio to 5.1x ▪ Reduced Net Debt by $16M to $748 million ▪ Increased LTM Adjusted EBITDA by $35 million to $148 million — Expect improved credit metrics to provide greater o
Slide 6: Q3'22 Financial Highlights
Q3’22 Financial Highlights ◼ Revenue of $466 million from continuing operations; Revenue by Segment* up $92 million or 25% from Q3 2021 ◼ Operating income from continuing operations of $29 million; 14% up $26 million from Q3 2021 8% $466 ◼ $68 million of Adjusted EBITDA from continuing operations; M
Slide 7: High Purity Cellulose
High Purity Cellulose $ Millions Operating Income Bridge Quarter Ended 80 Key Financials Sep 24, Jun 25, Sep 25, 70 60 2022 2022 2021 50 ($ millions) 40 Net Sales $369 $302 $288 30 22 Operating Income 22 7 2 20 10 Adjusted EBITDA 53 36 32 2 0 Q3'21 Price Volume / Cost SG&A / Q3'22 Sales Mix Other Hi
Slide 8: Paperboard
Paperboard Operating Income Bridge Quarter Ended $ Millions 20 Key Financials Sep 24, Jun 25, Sep 25, 2022 2022 2021 16 12 ($ millions) 12 Net Sales $66 $63 $52 8 Operating Income 12 10 2 4 2 Adjusted EBITDA 15 14 6 0 Q3'21 Price Volume / Cost SG&A / Q3'22 Sales Mix Other Paperboard - Volume and Pri
Slide 9: High-Yield Pulp
High-Yield Pulp Operating Income Bridge Quarter Ended $ Millions Key Financials Sep 24, Jun 25, Sep 25, 10 2022 2022 2021 8 8 ($ millions) 6 6 Net Sales $40 $40 $42 4 Operating Income 6 (2) 8 2 Adjusted EBITDA 6 - 9 0 (2) Q3'21 Price Volume / Cost SG&A / Q3'22 Sales Mix Other High-Yield Pulp - Volum
Slide 10: Consolidated Operating Income from Continuing Operations
Consolidated Operating Income from Continuing Operations ($ Millions) Bridge Q3’21 to Q3’22 100 90 80 70 60 50 40 30 29 20 10 3 0 Q3'21 Price Volume / Cost SG&A / Q3'22 Sales Mix Other ◼ Operating income of $29 million; up $26 million from prior year ◼ Improved prices across High Purity Cellulose, P
Slide 11: Capital Structure & Liquidity
Capital Structure & Liquidity ◼ Adjusted Net Debt of $748 million; $16 million decline from Q2’22 — $725 million target by year end 2022 $128 $283 $132 ◼ $283 million of liquidity, including $132 million of cash million — Working Capital providing greater availability under ABL $23 ◼ 2022 Capital Al
Slide 12: Reducing Net Leverage via EBITDA Growth & Debt Reduction
Reducing Net Leverage via EBITDA Growth & Debt Reduction 12.5x 16.0% 15% 14.0% 10.0x 13% 10.0x 12.0% Net Debt/Adjusted EBITDA 10% 10.0% 11% 10.0% EBITDA Margin 7.5x 8.9% 7.4% 8.0% 5.3x 5.1x 5.0x 6.0% 4.1x 4.0% 2.5x 2.5x $1,095 $937 $880 ~$860 ~$750 2.0% 0.0x 0.0% 2020 Actual 2021 Actual 2022 YTD 202
Slide 13: Drivers of Total Shareholder Return
Drivers of Total Shareholder Return Value Capture Cost Reduction Debt Reduction Innovation ◼ Negotiated double digit price ◼ Invested heavily in H1 2022 ◼ Reduced debt by $59 ◼ Over 95 years of technical increases for CS in 2022 to improve asset reliability million in 2022, inclusive of product deve
Slide 14: Sustainable Value Proposition
Sustainable Value Proposition ◼ Efficient biorefinery process utilizes full value of our natural feedstock from working forests ◼ Opportunities to extract incremental value as consumer demands shift to more renewable Sustainable products Manufacturing ◼ Limited competitors and high barriers to entry
Slide 15: Market Assessment
Market Assessment ◼ Strong demand remains for High Purity Cellulose albeit tempered by slowing global economy ◼ Average sales prices expected to decline modestly driven by greater mix of High Purity commodity volumes as production and logistics constraints improve Cellulose ◼ Key raw material inflat
Slide 16: Appendix
Appendix Section
Slide 17: Definitions of Non-GAAP Measures
Definitions of Non-GAAP Measures EBITDA is defined as net income (loss) before interest, taxes, depreciation and amortization. EBITDA is a non- GAAP measure used by our Chief Operating Decision Maker, existing stockholders and potential stockholders to measure how the Company is performing relative
Slide 18: Net Sales and Operating Income by Segment
Net Sales and Operating Income by Segment ($ Millions) Three Months Ended Nine Months Ended September 24, June 25, September 25, September 24, September 25, (in millions) 2022 2022 2021 2022 2021 High Purity Cellulose $ 369 $ 302 $ 288 $ 952 $ 792 Paperboard 66 63 52 183 157 High-Yield Pulp 40 40 42
Slide 19: Consolidated Statements of Operations
Consolidated Statements of Operations ($ Millions) Three Months Ended Nine Months Ended September 24, June 25, September 25, September 24, September 25, 2022 2022 2021 2022 2021 Net Sales $ 466 $ 399 $ 374 $ 1,217 $ 1,034 Cost of Sales (419) (372) (355) (1,138) (972) Gross Margin 47 27 19 79 62 Sell
Slide 20: Consolidated Balance Sheet
Consolidated Balance Sheet ($ Millions) September 24, 2022 December 31, 2021 Assets Cash and cash equivalents $ 132 $ 253 Other current assets 556 523 Property, plant and equipment, net 1,132 1,146 Other assets 516 523 Total assets $ 2,336 $ 2,445 Liabilities and Stockholders’ Equity Debt due within
Slide 21: Reconciliation of EBITDA by Segment
Reconciliation of EBITDA by Segment ($ Millions) Three Months Ended September 24, 2022 High Purity High-Yield Corporate & Cellulose Paperboard Pulp Other Total Income (loss) from continuing operations $ 23 $ 12 $ 6 $ (23) $ 18 Depreciation and amortization 30 3 — 2 35 Interest expense, net — — — 17
Slide 22: Reconciliation of Adjusted Income
Reconciliation of Adjusted Income ($ Millions) Three Months Ended Nine Months Ended September 24, June 25, September 25, September 24, September 25, 2022 2022 2021 2022 2021 Per Per Per Per Per Diluted Diluted Diluted Diluted Diluted $ Share $ Share $ Share $ Share $ Share Income (loss) from continu
Slide 23: Reconciliation of Adjusted Net Debt
Reconciliation of Adjusted Net Debt ($ Millions) September 24, December 31, 2022 2021 Debt due within one year $ 22 $ 38 Long-term debt 851 891 Total debt 873 929 Debt premium, original issue discount and issuance costs, net 7 8 Cash and cash equivalents (132) (253) Adjusted net debt $ 748 $ 684 23
Slide 24: Commodity Prices Mixed
Commodity Prices Mixed Price ($ / MT) Viscose Price ($ / MT) Fluff 1,400 Delivered to China 2,400 Delivered to North America 2,230 1,170* 2,200 2,070 1,200 1,105 1,130 1,020 2,000 1,770 940 935 1,800 1,618 1,647 1,640 1,000 905 1,600 800 675 1,400 1,285 1,165 1,200 600 1,000 400 800 Q4 Q1 Q2 Q3 Q4 Q
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