Slide 1: Canfor Corporation
Ae Be L - a : Waa ee Canfor Corporation = =). % eit - We May 2023 -—
Slide 2: Canfor Corporation
Canfor Corporation Pat Elliott Dan Barwin CFO & SVP, Sustainability Director, Corporate Finance 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 dif
Slide 3: Company Overview
Company Overview • Global leader in the manufacturing of sustainable forest products • Geographic and product diversification supporting earnings through the cycle Saw mill Pulp mill • Well positioned for further growth Lumber Pulp & Paper Other Operations 37 Sawmills* 3 Mills 16 Value-Added Facilit
Slide 4: Our Sustainability Approach
Our people and communities thrive because we are focused on inclusion, equity and wellness everyday. Safety, Health Indigenous Inclusion Human Community & Wellness Relations & Diversity Rights Engagement We’re committed to a We aspire to be a partner of We will foster a more We are committed to We w
Slide 5: 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 Measure our scope 3 emissions and establish a emissions by 42% by 2030 from a 2020 base year science
Slide 6: Highlights: Growing Lumber Business
Highlights Growing Lumber Business Disciplined Approach to Growth Over 3.0 BBF capacity acquired Executing on diversification strategy to support more stable returns over the cycle through M&A (C$560/Mfbm) since Lumber Shipments 20131 8,000 7,000 300%+ Growth in US South 6,000 Achieved through targe
Slide 7: U.S. Housing Starts Forecast
Considerations U.S. Housing Starts Forecast Millennials Coming of Age 2,200 Single Multi Avg. Underlying Demand Homeownership rate of ages 25-34 Forecast yrs. old are expected to increase 2,000 1-1/2 % per year 353 2.0 Mil surplus 1,800 345 Increased Tenure & Lack of Inventory 336 1,600 Low existing
Slide 8: Total Housing Units for Sale
While new homes for sale reaches high levels, total Total Housing Units for Sale units remain well below historical levels Total US Housing Inventory by Month 4.0 3.5 3.0 Total Units for Sale (Millions) 2.5 2.0 1.5 1.0 0.5 0.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2005 2009 2020 2021 2022
Slide 9: Affordability Index
Affordability Index National Home Affordability Index 1.20 1.10 Improving Declining 1.00 Affordability Index (1984=1.00) 0.90 0.80 0.70 0.60 0.50 0.40 9 9 Source: US Federal Reserve, Canfor Mark et Intelligence
Slide 10: Repair & Remodel Outlook
Considerations Repair & Remodel Outlook Aging in Place Increased levels of retrofitting, R&R Spend Forecast accessibility, and updates Seasonally Adjusted Annual Rate opposed to trading up $300 24 Average Home Size Existing homes are on average 500 sq. ft. smaller than new construction, leading to i
Slide 11: US Imports from Europe
US Imports from Europe • Imports from Europe broke the all-time monthly record in January • A significant decline followed in February (in line with the 2022 monthly average) • Projecting continued decline in European imports in coming months 500 450 400 350 300 MMfbm 250 200 150 100 50 - May May Ma
Slide 12: Russian Export Trends
Russian Export Trends Source: Woodstat, Holz-Kurier 12 12
Slide 13: European Spruce Bark Beetle Update
European Spruce Bark Beetle Update Germany: Damaged, Spruce Harvest & NAI 80 70 60 50 Mln. m3 40 36.1 30 20 10 11 47 33 0 3 4 6 48 2015 2016 2017 2018 2019 2020 2021 Damaged (Biotic) Spruce NAI Spruce total harvest Czechia: Damaged, Spruce harvest & NAI 35 • Spruce Bark Beetle has impacted the lower
Slide 14: 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 14
Slide 15: Canfor High Value Product Diversification
Products that unlock incremental Canfor High Value Product Diversification value with stabilized pricing Appearance J grade & Square Edge Dimension Boards, Pattern, Fascia, Clear Visual appearance is primary purchase variable Application SYP Long Length 22’/24’/26’ SPF & Spruce Metric Sizes Matching
Slide 16: Greenfield Sawmill: DeRidder, LA
Greenfield Sawmill: DeRidder, LA Summary • US$160M investment (~$640/Mfbm) • 250 MMfbm capacity, on track for start-up in early 2023 • High-speed, top-quartile cost operation producing high value products • Complete vision and bio-scanning to maximize grade and lumber recovery • Modern yet proven pr
Slide 17: Greenfield Sawmill: DeRidder, LA
Greenfield Sawmill: DeRidder, LA Fully Operational in Early Q2 17
Slide 18: 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 Q1 2024 Urbana, AR Upgrade – 285 MMfbm (2024) Strategic Alignment • Improves manufacturing efficiency, versatility and flexibility
Slide 19: Greenfield Sawmill: Axis, Alabama
Greenfield Sawmill: Axis, Alabama Summary • US$210M investment ($840/Mfbm) • 250 MMfbm capacity, projected start-up in Q3 2024 • State-of-the-art, top quartile sawmill • Optimizes strong fibre basket in region • Improved manufacturing flexibility provides opportunity to capture market premiums on sp
Slide 20: Pulp Market Update
Pulp Market Update • Supply uncertainty early in 2023 kept prices at elevated levels • Global softwood pulp demand/capacity balance projected at 89% in 2023 steadily increasing to 91% in 2026* • Pulp prices declining in short term as supply chain pressures ease and incremental hardwood capacity ramp
Slide 21: Producer Inventories Are High
Producer Inventories Are High • Producer inventories are elevated for both softwood and hardwood grades • Significant pulp hardwood additions have recently come online with tepid demand • Expect short term price volatility until inventories move into the balanced range Source: PPPC – Market Pulp Rev
Slide 22: Canfor Pulp Well Positioned For China Market
Canfor Pulp Well Positioned For China Market Source: PPPC – Market Pulp Outlook November 2022 22
Slide 23: Softwood Market Capacity Pipeline Relatively Quiet
Softwood Market Capacity Pipeline Relatively Quiet Growth in 2024 mainly the expected ramp up of Metsä Kemi mill project Source: PPPC – Market Pulp Review and Outlook April 2023 23
Slide 24: Q1 2023 Summary
Q1 2023 Summary Financial Highlights Canfor (Excl. CPPI) • Record profitability in in recent years supporting various organic and external growth initiatives • Well positioned to further grow lumber business on a global basis • Canfor Pulp has significant available liquidity to support expanded capi
Slide 25: Significant Growth in Net Assets / Share
Significant Growth in Net Assets / Share Net Assets ($/Share) Canfor Excl. CPPI $36 $35 $28 $17 $14 $12 $9 $11 2016 2017 2018 2019 2020 2021 2022 2023 YTD 25
Slide 26: Capital Allocation
Expanded Capital Program Capital Allocation Capital Expenditures ($M) $625 $555 • Disciplined approach to capital allocation $423 • Continuous reinvestment in operations and targeted external growth $274 • Focus on eliminating debt and maintaining strong balance sheet • Opportunistically repurchasin
Slide 27: Value Proposition
Value Proposition CANFOR / CANFOR PULP Sustainability Differentiated Diversified Well Capitalized Positioned for Focus High-Value Products Global Platform Mills Growth 27
Slide 28: 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