Mercer International Inc. · NASDAQ:MERC
Mercer International — Jefferies 2014 Global Industrials Conference
33 slides from Mercer International's conference presentation, Aug 12, 2014
Slide 1: Jefferies 2014 Global Industrials Conference
Exhibit 99.1 MERCER Jefferies August 14, 2014 INTERNATIONAL 2014 Global IndustrialsGROUP Conference
Slide 2: Forward-Looking Statements
Forward The statements and Mercer. update NASDAQ:MERC uncertainties Private forward-looking For Looking relating Securities morethat information Statements | to TSX:MRI.U could results Litigation statements significantly ofregarding operations |Reform www.mercerint.com basedthese affect Act onand un
Slide 3: Mercer International Inc.
Mercer International NASDAQ:MERC | TSX:MRI.U Inc. | www.mercerint.com MERCER 3
Slide 4: Corporate Structure
Corporate Mercer the Stendal Celgar facilitate The Debt Non-recourse Restricted 100% Rosenthal 360,000 (1) NASDAQ:MERC Pursuant only Corporation Restricted Unrestricted is100% –80% conducts –ADMT two BC, the Germany Structure -–Group Germany Germany 83% to guaranteed acquisition NBSK Canada toGroup
Slide 5: Strategically Located Pulp Mills
Strategically Mercer’s pulp The 660,000 Stendal 360,000 Europe (Germany) Rosenthal (B.C., Celgar 520,000 Middle Japan Mercer States United Indonesia Thailand North Germany Italy Union European Other 5% China NASDAQ:MERC mills’ production 7% Asia America –Canada) 31% 23% 2013 East the ADMT three –str
Slide 6: Growing Green Energy and Chemical Revenues
Growing Mercer chemicals Since Stendal’s Mercer’s P 0.4 0.8 1.2 1.6 2.0 1.45 MWh 0.76 0.70 0.71 0.65 0.52 0.48 -C $22.0 $44.0 $66.0 $88.0 $110.0 $63.5 Energy CAGR: Revenue 2009 aGreen NASDAQ:MERC roduction hemical significant 1.44 2010 energy $65.4 (mm) electricity has recognized 4.9% 10.7% 10.5% (U
Slide 7: Globally Competitive NBSK Mills
Globally Mercer’s Low 0High Average 28.4 Nanaimo (Ilim) Paper International Aditya Domtar Resolute Canfor Catalyst haeuser Weyer- Asia Older, Pulp NBSK Larger Newer, Cell Sodra Mercer Mills Fibre Metsa Heinzel Fraser West Capacity 306,559 60.0 Korsnas Billerud- Marubeni Daishowa- Enso Stora UPM Sour
Slide 8: The NBSK Market
The NBSK Market| TSX:MRI.U | www.mercerint.com MERCER 8 NASDAQ:MERC
Slide 9: Introduction: Current Themes in the NBSK Market
Introduction Current The NASDAQ:MERC effect potential net impact supply themes ofofto China supply digital additional impact the surrounding |Major TSX:MRI.U and impact media ofother hardwood mill Themes on of the emerging closures, integrated paper NBSK | www.mercerint.com incapacity NBSK demand ma
Slide 10: Global NBSK Components and Uses
Global Components Chemical Sulphite Bleached Pulp Other SBSK Northern Produced Spruce Core North Long, Characteristics: Better Major Tissue NBSK (1) NASDAQ:MERC Source: Demand Production 14% America, slender, softness structure Uses 26% Specialty commands Pulp / Pine 1% Bleached Hardwood Softwood Fr
Slide 11: Demand Fundamentals: Significant Changes in NBSK Demand
Demand Changes The From Significant NBSK 15.0 CAGR Total: Others 2003 Annual 2.5 Rest millions 1.8 1.4 2.1 2.2 2012 NBSK’s (1) (2) (3) NASDAQ:MERC Source: 2.0 0.4 0.6 1.0 1.2 increased 12.0 of 2012E 2013 2003 +1% Printing Demand 1.5 1.4 0.8 1.1 1.0 2003 World Tissue of strength Fundamentals to9.0 1.
Slide 12: Demand Fundamentals: Global BSK Demand
Demand BSK 12 6.0 Global 28.0 21.0 14.0 -7.0 Region: China: W. N. Other: % 1995 (1) (2) China’s 15.0 P&W: millions 2004 NASDAQ:MERC - China America: Month Europe: Source: 2012E 4.8 10% 40% 30% 20% 12.0 Deliveries 2005 2000 2007 Woodfree 2.0% 14.9% BSK 3.6 Chemical 1995-2015E of Fundamentals of 9.0 R
Slide 13: Demand Fundamentals: China's Demand
Demand China’s demand and Rising Growing Increased 6.00 Tissue Income 5.25 4.50 3.75 Over absorb 3.00 kg 2.25 Growth Rate: 1.50 -0.75 1990 (1) (2) … Shutting Significant Implementing constraints Modern NBSK Focus wood We volumes fiber maximums Chinese Closure 2005-2009: 2011: 2012A: 2013E: 2014E: NA
Slide 14: Supply Fundamentals: Slowing Capacity Growth
Supply From Capacity Bleached Global 26 2014E-2018E 27 24 25 CAGR: 23 millions 16 17 18 19 20 21 (1) Forecast NASDAQ:MERC MERCER CAGR: 1995-2013 22 1995 Source: 1995 Market Fundamentals +1.8% 1996 of is Softwood +0.8% tonnes to PPPC forecasted 2013, 1997 Pulp (May | TSX:MRI.U 1998 Kraft Capacity BSK
Slide 15: Supply Fundamentals: Recent Closures and Additions
Supply Recent In have During Bratsk (490,000 Bay Future tpa) There announcements BSK online; projects years realized 2012–2013 Mill Name Hunan Uimaharju Ngodwana Fort Kamloops Perry Jesup Tofte Total These integration (1) ~700,000 (2) (3) NASDAQ:MERC MERCER the For mill Frances Closure been mill cap
Slide 16: Strong Demand, Improving Fundamentals
Strong Demand Improving through Strengthening Digital Supply -Minimal for Meaningful With we (1) NASDAQ:MERC MERCER Tissue Printing Only Limited Some 2016 Source: believe strong one Long-Term substitution Fundamentals growth capacity 2017 in Fundamentals for and NBSK new &China: economic new that Ha
Slide 17: Financial Performance and Recent Developments
Financial Performance NASDAQ:MERC MERCER | TSX:MRI.U and Recent | www.mercerint.com Developments 17
Slide 18: Putting Days of Supply and NBSK Price in Perspective
Putting Days Supply, NBSK $1,100 $1,000 $900 $800 $700 $600 $500 $400 $300 Global Shortage! Current 1996 After (1) NASDAQ:MERC Sources: 48 40 32 24 16 -8 1998 of undergoing History: Price BSK 64 56 NBSK’s Prices: supply Global price 2000 Factset Inventory (US$/t) near Stocks BSK surge Price History
Slide 19: Significant Annual and Quarterly Earnings
Significant Annual $360 40%30% $186 23% 2006 Energy Quarterly $100 EBITDA 40% $44 18% Q1 2010 Pulp (1) impairment income (2) NASDAQ:MERC The For Q2 $81 17% 30% 26% pricing $270 $173 2007 $75 2011 Q3 a& or Consolidated company’s $85 reconciliation (US$mm) Margin 20% $50 Consolidated Chemical 10% 20%
Slide 20: Recent Historical NBSK Price Trends
Recent Historical Price 64% 90% 104% 120% 129% 150% 45% Cumulative -J30% to Jun-90 (Current) NBSK Date Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 +$85 Change Aug-13 We Source: Note: (1) NASDAQ:MERC MERCER an-86 toCalculations believe to 43% 24% US 60% +$65 Producer Dec-93
Slide 21: Recent Developments: Completed Capital Projects
Mercer’s Capital Completed Enhanced Celgar Expected Incurred Amortizing EBITDA The Stendal US$20 2014 NASDAQ:MERC MERCER credit Workforce million Projects Credit received pre-tax Recent based annual pulp facilities Stendal’s loan, Facilities of production covenants charges Developments cost asupport
Slide 22: Recent Developments: Capital Raises and Debt Summary
Mercer’s Capital Issued Equity The Mercer At US$mm Long-Term Stendal Senior Project Short-Term Celgar Rosenthal Total Less: LTM Net Note: NASDAQ:MERC MERCER 31-Dec-13 Debt over-allotment EBITDA Debt Cash Excludes Some US$50 Notes Revolver offering Facilities Debt Raises Loan US$mm Recent $779.5 to R
Slide 23: Recent Developments: Performance and Annual Maintenance Shuts
Mercer’s Performance In 50/50 The Annual Completed While Q2 NASDAQ:MERC MERCER June shuts joint joint the 2014, Maintenance (including Recent venture shut venture the BioFilaments Mercer was most Developments is| company completed TSX:MRI.U set aextensive Shuts and short to commercialize Resolute 2-
Slide 24: Mercer Summary
Mercer The Globally Strategically Stable Strong Significant Experienced NASDAQ:MERC MERCER largest and long-term – cost Summary growing leverage “pure-play” management located competitive, NBSK | TSX:MRI.U revenue to mills the NBSK fundamentals team with NBSK modern from market excellent | high-marg
Slide 25: Appendix A: Additional Information on Mercer International
Appendix AInformation Additional NASDAQ:MERC MERCER | TSX:MRI.U on Mercer| www.mercerint.com International Inc. 25
Slide 26: Mercer Balance Sheet
Mercer in Cash, ASSETS Receivables Inventories Property, LIABILITIES Payables Current Debt Due Other Non-Controlling Total TOTAL Note: NASDAQ:MERC MERCER US$ from to $336.1 Current Long-Term Shareholders’ Equity Restricted Some Cash Long-Term Current Liabilities Restricted millions Balance Debt ASSE
Slide 27: Mercer Selected Historical Financial Data
Mercer in Pulp Energy Total Interest Gain Other Net Shareholders Operating Earnings Note: (1) (2) impairment income NASDAQ:MERC US$ Gains Refer Income Revenue (Loss) Revenue Quarterly Some Income millions, and Selected from Expense Per to (losses) Income EBITDA Chemical Appendix charges. (Loss) on n
Slide 28: Appendix B: Detailed Overview of Operations
AppendixOverview Detailed NASDAQ:MERC B | of TSX:MRI.U Operations| www.mercerint.com MERCER 28
Slide 29: Rosenthal Mill
Rosenthal Mercer Location: Pulp Electricity Certification: 2013 Key Built Strategically Close Allows In One Regularly NASDAQ:MERC 2013, Features: of Production Green in proximity the International customers 1999 the Blankenstein, setting Mill Generating largest Electricity mill located –ISO modern t
Slide 30: Celgar Mill
Celgar Mercer Location: Pulp Electricity Certification: 2013 Key Modern Abundant Green In Secured Majority Continues Regularly NASDAQ:MERC 2013, Features: Production Green Energy Mill International and C$57.7 the used Castlegar, setting and to Generating Electricity mill efficient demonstrate ISO Pr
Slide 31: Stendal Mill
Stendal Mercer Location: Pulp Electricity Certification: 2013 Key Completed 83% Debt One In Project Regularly NASDAQ:MERC 2013, Features: of Mercer Production is Green Chemical the Blue 80% International Mill exported Stendal, setting Generating largest inElectricity government owned Mill ISO 2004,
Slide 32: Appendix C: Reconciliation of Net Income to Operating EBITDA
Appendix C of Net Reconciliation NASDAQ:MERC | TSX:MRI.U Income to Operating | www.mercerint.com EBITDA MERCER 32
Slide 33: Reconciling Net Income to Operating EBITDA
Reconciling in Net Add: Note: (www.mercerint.com) its expense of performance. EBITDA income considered Operating NASDAQ:MERC US the own Income Net Income Interest Loss Other Depreciation For Some underlying $ operating (loss) millions and is Income other Income EBITDA (Gain) as Expense not (Loss) nu
Mercer International — Jefferies 2014 Global Industrials Conference on 6ix