Rayonier Advanced Materials Inc. · NYSE:RYAM
Rayonier Advanced Materials — Q3 2024 Earnings Presentation
27 slides from Rayonier Advanced Materials's earnings presentation, Nov 6, 2024
Slide 1: Third Quarter 2024 Financial Presentation Materials
Third Quarter 2024 Financial Presentation Materials November 6, 2024
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 pe
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures This earnings release and the accompanying schedules contain certain non-GAAP financial measures, including EBITDA, adjusted EBITDA, adjusted free cash flows, adjusted income from continuing operations, adjusted net debt, and net secured debt. The Company believes these n
Slide 4: Q3'24 Financial Highlights
Q3’24 Financial Highlights Revenue by Segment/Product ⎔ Revenue of $401 million; +$32 million from Q3’23 ⎔ Operating Loss of $17 million; -$3 million from Q3’23 Paperboard 14% ⎔ Adjusted Free Cash Flow generation of $99 million YTD ⎔ Adjusted EBITDA of $51 million; +$27 million from Q3’23 – High Pur
Slide 5: High Purity Cellulose
High Purity Cellulose Operating Income Bridge Quarter Ended $ millions Key Financials Sept 28, Jun 29, Sept 30, 2024 2024 2023 $ millions Net Sales $325 $332 $292 (1) (2) S e me S m a ment Operating Income (6) 30 (6) Sa es t e e st n e n te S s ens n Adjusted EBITDA 59 66 27 ⎔ Net price for HPC incr
Slide 6: Paperboard
Paperboard Operating Income Bridge Quarter Ended Key Financials Sept 28, Jun 29, Sept 30, $ millions 2024 2024 2023 $ millions Net Sales $55 $60 $57 Operating Income 7 12 13 e me st S Adjusted EBITDA 11 15 17 Sa es t e Paperboard - Volume and Price ⎔ Sales prices decreased 4% compared to Q3’23, prim
Slide 7: High-Yield Pulp
High-Yield Pulp Operating Income Bridge Quarter Ended Key Financials Sept 28, Jun 29, Sept 30, $ millions 2024 2024 2023 $ millions Net Sales $28 $33 $25 Operating Income - 1 (6) e me st S Adjusted EBITDA 1 2 (5) Sa es t e ⎔ External sales prices increased 14% compared to High-Yield Pulp - Volume an
Slide 8: Consolidated Operating Income
Consolidated Operating Income BR D E ’ T ’ ⎔ Higher sales prices in High Purity Cellulose and High-Yield Pulp, partially offset by lower sales prices in Paperboard ⎔ Increased sales volumes in cellulose specialties drove a favorable sales mix, more than offsetting the decrease in HPC commodity volum
Slide 9: Capital Structure & Liquidity
Total Liquidity Capital Structure & Liquidity Cash ⎔ Adjusted Net Debt of $653 million; $90 million reduction from Q3’23 $135 $281 $136 Factoring (France) Million ABL (North America) – Net Secured debt of $622 million ⎔ $281 million of liquidity, including $136 million $10 of cash ⎔ Net secured leve
Slide 10: Pro Forma Capital Structure
Pro Forma Capital Structure ⎔ $700 million Term Loan – 5-year maturity – Grid pricing with an initial spread of SOFR + 7.0% Q3 Pro Forma – Leverage < 2.5x: S + 6.5% Capitalization Adjustments Capitalization Interest Rate Maturity – Leverage ≤ 3.5x: S + 7.0% Extended ABL Revolver - - - S + 2.0% Novem
Slide 11: 2024 Initiatives
2024 Initiatives ⎔ Successfully completed the refinancing of our ⎔ Asset optimization capital structure – Reduce commodity exposure and earnings volatility, and – Secured 5-year $700 million term loan to refinance the full operate assets only when market conditions support capital structure profitab
Slide 12: 2024 Guidance
2024 Guidance ADJUSTED FREE CASH FLOW GUIDANCE OF $115-125 MILLION ($ Millions) $205-215 Capital allocation decision to repay debt or invest in high return strategic capital $171 YTD projects $(71) YTD 7 $115-125 39 (93) $39 YTD $20 YTD 15 0 $(3) YTD $(50) YTD $99 YTD 25 $15 YTD (5) $(22) YTD (78) (
Slide 13: Market Outlook
Market Outlook High Purity Cellulose ⎔ 2024 cellulose specialties prices to increase by a low single-digit percentage versus 2023 ⎔ Sales volumes for cellulose specialties to increase due to competitor plant closure, modest uptick in ethers demand, and additional volumes sold to customers affected b
Slide 14: Reducing Net Leverage via EBITDA Growth & Debt Reduction
Reducing Net Leverage via EBITDA Growth & Debt Reduction 16% 16.0% 10.0x 10.0x 14% 14.0% 12.7% ~ 12.5% 12.0% Net Debt/Adjusted EBITDA 7.5x 10.3% 10.0% EBITDA Margin 9.0% 8.5% 5.4x 7.4% 5.2x 8.0% 5.0x 4.0x 6.0% $1,095 4.2x 3.1x ~ 3.2x $937 $859 ~ 2.8x 2.8x (1) < 2.5x 4.0% 2.5x $797 $789 $788 2.0% 0.0
Slide 15: Appendix
Appendix
Slide 16: Definitions of Non-GAAP Measures
Definitions of Non-GAAP Measures EBITDA Net income (loss) before interest, taxes, depreciation and amortization. EBITDA is a non-GAAP measure used by our Management, existing stockholders and potential stockholders to measure how the Company is performing relative to the assets under management. Adj
Slide 17: Net Sales and Operating Income by Segment
Net Sales and Operating Income by Segment ($ MILLIONS) 17
Slide 18: Consolidated Statements of Operations
Consolidated Statements of Operations ($ MILLIONS) 18
Slide 19: Consolidated Balance Sheets
Consolidated Balance Sheets ($ MILLIONS) 19
Slide 20: Reconciliation of EBITDA by Segment
Reconciliation of EBITDA by Segment ($ MILLIONS) 20
Slide 21: Reconciliation of EBITDA Guidance
Reconciliation of EBITDA Guidance ($ MILLIONS) 21
Slide 22: Reconciliation of Adjusted Free Cash Flow
Reconciliation of Adjusted Free Cash Flow ($ MILLIONS) 22
Slide 23: Reconciliation of Adjusted Free Cash Flow Guidance
Reconciliation of Adjusted Free Cash Flow Guidance ($ MILLIONS) 23
Slide 24: Reconciliation of Adjusted Net Secured Debt
Reconciliation of Adjusted Net Secured Debt ($ MILLIONS) 24
Slide 25: Reconciliation of Adjusted Income from Continuing Operations
Reconciliation of Adjusted Income from Continuing Operations ($ MILLIONS) 25
Slide 26: Future CS Supply and Demand Dynamic
Future CS Supply and Demand Dynamic MARKET DYNAMICS TIGHTEN AMID CAPACITY RATIONALIZATION Reflects ~10% reduction in CS industry capacity Shipment to Capacity 85% 81% 82% 83% 80% 87% 90% 92% 91% Ratio(1) 1.6 1.4 MILLIONS OF TONNES (2) 0.2 0.3 0.2 0.1 0.3 0.1 0.1 1.2 0.3 0.2 1.0 0.8 0.6 1.2 1.2 1.2 1
Slide 27: Commodity Prices Mixed
Commodity Prices Mixed Viscose Delivered to China Fluff Delivered to North America 1,100 970 950 955 2,800 905 900 890 905 2,208 2,138 850 2,300 1,977 1,890 1,833 1,873 PRICE ($ / MT) PRICE ($ / MT) 900 1,747 1,755 1,800 700 1,300 500 800 300 300 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2022
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