Slide 1: Third Quarter 2021 Earnings Review
1 Third Quarter 2021 Earnings Review November 10, 2021 © 2021 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 within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements that do
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: Vision & Mission
Vision & Mission 4 Our Vision To be the world’s paper company: the employer, supplier and investment of choice Our Mission We transform renewable resources into papers that people depend on for education, communication and entertainment © 2021 Sylvamo Corporation. All rights reserved.
Slide 5: The World's Paper Company delivers
The World’s Paper Company delivers 5 Last Twelve Months 9.30.21 $3.3 Billion Sales $535 Million Adjusted EBITDA Operating Profit in 71% Europe and Latin America Gross Debt-to-Adjusted EBITDA Ratio 2.8X as of 9.30.21 Net-Debt-to-Adjusted EBITDA Ratio is 2.6X as of 9.30.21 © 2021 Sylvamo Corporation.
Slide 6: 3Q21: Building momentum for October 1st Sylvamo launch
3Q21: Building momentum for October 1st Sylvamo launch 6 Adjusted Operating Net Sales Adjusted EBITDA Earnings per Share $908 $844 $738 $177 $2.27 $124 19.5% $1.54 $104 $1.16 19.5% 14.6% 14.1% 14.1% 14.7% 3Q20 2Q21 3Q21 3Q20 2Q21 3Q21 3Q20 2Q21 3Q21 Focused on generating cash and strengthening balan
Slide 7: Strong 3Q21 Adjusted EBITDA margin - 19.5%
Strong 3Q21 Adjusted EBITDA margin - 19.5% 7 • Price & Mix offset rising input costs • UFS global demand continues to recover • Low planned maintenance outage quarter • Customer value proposition strengthened Strong commercial and operational performances © 2021 Sylvamo Corporation. All rights reser
Slide 8: 3Q21: Price & Mix outpaced input costs
3Q21: Price & Mix outpaced input costs 8 Change of Price & Mix 3Q21 vs. 2Q21 Input Costs vs. Input Costs ($ Million) Change By Region ($ Million) Europe Latin America North America (2) (3) $80 (4) +$23 (2) (1) (2) $57 ($5) (1) (5) (2) +$4 $30 ($9) (3) $26 ($12) 3Q21 vs 2Q21 3Q21 vs 3Q20 $/Ton $17 $3
Slide 9: Run-full volume and improving mix
Run-full volume and improving mix 9 3Q21 YTD vs. 3Q20 YTD 3Q21 vs. 3Q20 Sylvamo UFS Shipments Sylvamo UFS Shipments +14% +11% +10% +11% North America North America +32% 5.9% +22% Latin America Latin America +3% +1% Europe Europe 3Q20 YTD 3Q21 YTD 3Q20 3Q21 Shipments in tons © 2021 Sylvamo Corporatio
Slide 10: Commercial and operational performances generated strong earnings
Commercial and operational performances generated strong earnings 10 3Q21 vs. 2Q21 Adjusted EBITDA $ Million 250 $27 ($26) 200 $10 $177 $12 $30 150 $124 19.5% 100 14.7% 50 0 2Q21 Price & Mix Volume Operations Maintenance Input Costs 3Q21 Outages © 2021 Sylvamo Corporation. All rights reserved.
Slide 11: Strong commercial and operational performances during transition
Strong commercial and operational performances during transition 11 Supplier of Choice Growing positions with key customers who want a supplier committed to UFS Benefiting from alignment with winning channel partners and customers Commercial Gaining new business and leveraging the strength of
Slide 12: Strong regional performances
Strong regional performances 12 3Q21 Adjusted EBITDA Region 3Q21 vs. 2Q21 Highlights $ Million Margin • Realization of prior price increases in all regions Europe $49 19% • Improving volume in Europe and continued strong volume in Latin America and North America • Good operations Latin America $59 3
Slide 13: Fourth Quarter Adjusted EBITDA Outlook: $140 - $150 Million
Fourth Quarter Adjusted EBITDA Outlook: $140 - $150 Million 13 4Q vs. 3Q Changes (Estimates in $ Million) Improving: $30 - $35 Price & Mix Continued price increase realizations in all regions Stable to Improving: $10 - $15 Volume Seasonally stronger in Latin America Increasing: ($15) Operations Seas
Slide 14: Focused on generating free cash flow to drive shareowner value
Focused on generating free cash flow to drive shareowner value 14 Free Cash Flow Generating strong free cash flow • Fund debt reduction $325 • Fund one-time costs and transition service agreements Expect to generate sufficient cash in 2022 to: • Fund $160 million of capital spending $166 • Continue
Slide 15: Focused on strengthening our balance sheet
Focus on strengthening our balance sheet 15 Debt Maturity Profile Current Debt Structure $ Million Interest Rate $500 Revolving Credit Facility $70 LIBOR + 1.75% (as of 11.10.21) $400 6-year Secured Farm Credit Term Loan F $520 LIBOR + 1.90% (Eligible for an annual rebate) $300 7-year Secured Term L
Slide 16: Creating value for shareowners
Creating value for shareowners 16 $ Generate significant free cash flow Deliver strong Adjusted EBITDA margins Reduce debt, strengthening balance sheet and increasing flexibility Increase equity per share © 2021 Sylvamo Corporation. All rights reserved.
Slide 17: Appendix
17 Appendix © 2021 Sylvamo Corporation. All rights reserved.
Slide 18: Contacts
Contacts 18 Hans Bjorkman Vice President, Investor Relations Investor Relations +1-901-419-3525 hans.bjorkman@sylvamo.com Adam Ghassemi Senior Manager, Corporate Communications Media +1-901-419-4436 adam.ghassemi@sylvamo.com © 2021 Sylvamo Corporation. All rights reserved.
Slide 19: Europe: 3Q21 vs. 2Q21 Adjusted EBITDA
Europe: 3Q21 vs. 2Q21 Adjusted EBITDA 19 $ Million 60 $15 ($5) $49 50 $10 ($2) 40 $4 $27 30 19% 20 11% 10 0 2Q21 Price & Mix Volume Operations Maintenance Input Costs 3Q21 Outages © 2021 Sylvamo Corporation. All rights reserved.
Slide 20: Latin America: 3Q21 vs. 2Q21 Adjusted EBITDA
Latin America: 3Q21 vs. 2Q21 Adjusted EBITDA 20 $ Million 90 $3 ($7) 80 $11 $2 ($9) 70 $59 $59 60 50 40 31% 30% 30 20 10 0 2Q21 Price & Mix Volume Operations Maintenance Input Costs 3Q21 Outages © 2021 Sylvamo Corporation. All rights reserved.
Slide 21: North America: 3Q21 vs. 2Q21 Adjusted EBITDA
North America: 3Q21 vs. 2Q21 Adjusted EBITDA 21 $ Million 90 $19 ($12) 80 $69 70 $9 60 $15 ($0) 50 $38 40 15% 30 20 9% 10 0 2Q21 Price & Mix Volume Operations Maintenance Input Costs 3Q21 Outages © 2021 Sylvamo Corporation. All rights reserved.
Slide 22: Sylvamo: 3Q21 vs. 3Q20 Adjusted EBITDA
Sylvamo: 3Q21 vs. 3Q20 Adjusted EBITDA 22 300 $ Million $32 $0 ($57) 250 $18 $80 $177 200 150 $104 100 19.5% 14.1% 50 0 3Q20 Price & Mix Volume Operations Maintenance Input Costs 3Q21 Outages © 2021 Sylvamo Corporation. All rights reserved.
Slide 23: Europe: 3Q21 vs. 3Q20 Adjusted EBITDA
Europe: 3Q21 vs. 3Q20 Adjusted EBITDA 23 $ Million 70 $5 $0 ($7) 60 $4 $49 $20 50 40 $27 30 19% 20 12% 10 0 3Q20 Price & Mix Volume Operations Maintenance Input Costs 3Q21 Outages © 2021 Sylvamo Corporation. All rights reserved.
Slide 24: Latin America: 3Q21 vs. 3Q20 Adjusted EBITDA
Latin America: 3Q21 vs. 3Q20 Adjusted EBITDA 24 $ Million 100 90 $12 ($6) ($18) 80 $7 70 $33 $59 60 50 40 $31 30% 30 20 21% 10 0 3Q20 Price & Mix Volume Operations Maintenance Input Costs 3Q21 Outages © 2021 Sylvamo Corporation. All rights reserved.
Slide 25: North America: 3Q21 vs. 3Q20 Adjusted EBITDA
North America: 3Q21 vs. 3Q20 Adjusted EBITDA 25 120 $ Million $6 ($32) $15 100 $7 $27 80 $69 60 $46 40 15% 12% 20 0 3Q20 Price & Mix Volume Operations Maintenance Input Costs 3Q21 Outages © 2021 Sylvamo Corporation. All rights reserved.
Slide 26: 3Q21 Shipments
3Q21 Shipments 26 Latin North 000 Short Tons Europe Sylvamo America America Uncoated Papers 206 275 379 860 Market Pulp 76 30 15 121 Coated Board & Other 33 - - 33 Total 1,014 © 2021 Sylvamo Corporation. All rights reserved.
Slide 27: 4Q21 Corporate Items
4Q21 Corporate Items 27 Estimates in $ Million One-time Costs (Special Item) $9 Transition Services Agreements $8 Interest Expense $17 Effective Tax Rate 26 - 28% Fully Diluted Shares 44.2 million © 2021 Sylvamo Corporation. All rights reserved.
Slide 28: Timing Update on Selected Metrics Guidance
Timing Update on Selected Metrics Guidance 28 $ Million 2020 2021F 2022E 2023E 2024E Direct Maintenance Outage Costs $46 $70 $62 Maintenance, Regulatory & Reforestation $74 $90 $145 Other Capital $1 - - Capital Expenditures Svetogorsk Recovery Boiler - - $15 $75 $100 Total $75 $90 $160 Depreciation
Slide 29: 2021 Direct Maintenance Outage Costs
2021 Direct Maintenance Outage Costs 29 $ Million 1Q21 2Q21 3Q21 4Q21F 2021F Europe $1 $7 $1 $16 $25 Latin America - - $5 - $6 North America - $21 $1 $17 $39 Total $1 $28 $7 $33 $70 Direct maintenance outage costs include only the direct labor & material costs. Total maintenance outage expenses incl
Slide 30: Business Segment Operating Results
Business Segment Operating Results 30 Sales D&A Adjusted EBITDA $ Million 3Q20 2Q21 3Q21 3Q21 3Q20 2Q21 3Q21 Europe $220 $243 $262 $9 $27 $27 $49 Latin America $150 $189 $200 $15 $31 $59 $59 North America $375 $426 $447 $13 $46 $38 $69 Segment Total $745 $858 $908 $37 $104 $124 $177 Sum of Business
Slide 31: Adjusted EBITDA and Margin Reconciliation
Adjusted EBITDA and Margin Reconciliation 31 $ Million LTM 9.30.21 3Q20 2Q21 3Q21 4Q21F Net Income $427 $51 $115 $92 $47 – $55 Depreciation, Amortization, Cost of Timber Harvested 145 38 35 37 37 Interest (Income) Expense, Net (20) (2) (29) 10 17 Income Tax Provision (Benefit) - 12 41 28 18 - 20 Adj
Slide 32: Adjusted EBITDA and Margin Reconciliation
Adjusted EBITDA and Margin Reconciliation 32 $ Million 3Q20 2Q21 3Q21 Adjusted EBITDA $104 $124 $177 Europe 27 27 49 Latin America 31 59 59 North America 46 38 69 Total Business Segment Adjusted EBITDA $104 $124 $177 Net Sales (excluding Corporate and Inter-segment Sales) $745 $858 $908 Europe 220 2
Slide 33: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation 33 3Q20 3Q21 $ Million 2Q21 3Q21 YTD YTD Cash Provided by Operations $140 $157 $225 $379 Cash Invested in Capital Projects ($15) ($22) ($59) ($54) Free Cash Flow $125 $135 $166 $325 Free cash flow is a non-GAAP measure and the most directly comparable GAAP measure is ca
Slide 34: Adjusted Operating Earnings per Share Reconciliation
Adjusted Operating Earnings per Share Reconciliation 34 $ Million 3Q20 2Q21 3Q21 Net Income $51 $115 $92 Special Items Expense (Income) - (47) 8 Adjusted Operating Earnings 51 68 100 Adjusted Operating Earnings per Share $1.16 $1.54 $2.27 At the date of distribution of Sylvamo common shares by Inter
Slide 35: 3Q21 YTD Delivered Cost of Goods Sold
3Q21 YTD Delivered Cost of Goods Sold 35 Distribution 16% Fiber 22% Depreciation 6% $1.6 Woo Labor Billion d 13% Chemicals 14% Energy Fixed 8% 15% Packaging 6% © 2021 Sylvamo Corporation. All rights reserved.
Slide 36: The Sylvamo Promise
The Sylvamo Promise 36 We believe in the promise of paper to educate, communicate and entertain. Paper connects us to one another and is an enduring bond to renewable natural resources. Our purpose is to produce the paper you need in the most responsible and sustainable ways. We aim high, innovate,
Slide 37: Creating the future of paper
37 Creating the future of paper © 2021 Sylvamo Corporation. All rights reserved.