Rayonier Advanced Materials Inc. · NYSE:RYAM
Rayonier Advanced Materials — Investor Presentation (February 2022)
28 slides from Rayonier Advanced Materials's investor presentation, Feb 28, 2022
Slide 1: Investor Presentation
Investor Presentation February 2022 Rayonier Advanced Materials Confidential and Proprietary Information
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 Rayonier Advanced Materials’ future events, developments, or financ
Slide 3: Safe Harbor
Safe Harbor Regulatory Risks Our business is subject to extensive environmental laws, regulations and permits that may restrict or adversely affect our financial results and how we conduct business; The potential longer‐term impacts of climate‐related risks remain uncertain at this time. Financial R
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: Business Highlights
Business Highlights Rayonier Advanced Materials Confidential and Proprietary Information
Slide 6: RYAM Overview
RYAM Overview Business Description Diverse Business Segments High Purity Cellulose Paperboard High‐Yield Pulp Formed in 2014 when Rayonier Inc. separated the performance fibers business from its land resources • Dissolving Wood Pulp • Kallima® brand • Mechanical business, Rayonier Advanced Materia
Slide 7: RYAM Attraction
RYAM ATTRACTION Market Leader in High Purity Cellulose with Best Products and Technical Acumen Unparalleled Security of Supply Offering a Broad and Diversified Portfolio of Cellulose‐Based Products Leading R&D Platform with Innovation & BioFuture Opportunities Sustainable Raw Material & Natural‐base
Slide 8: BioFuture Opportunities
BioFuture Opportunities Making Renewable to Remarkable a Reality 8 Rayonier Advanced Materials Confidential and Proprietary Information
Slide 9: Sustainability Framework
Sustainability Framework Board of Directors Oversight of Sustainability Environmental Social Governance Forest Stewardship Safety Driven Sustainability Subcommittee • Access to multiple forestry “Everyone going home safe, everyday” • Created in 2021 with specific oversight certifications across orga
Slide 10: Driving EBITDA Growth
Driving EBITDA Growth 9% 2021 Adjusted CS Price Increases Cost Inflation Increased Reliability Return on Strategic R&D/Innovation EBITDA Margin EBITDA Margin & Lower Cost Investments Current Near‐Term Medium‐Term Future Not to scale 10 Rayonier Advanced Materials Confidential and Proprietary Informa
Slide 11: Reducing Net Debt
Reducing Net Debt Near-term Goal of ~$625 million $ millions 1,000 800 937 877 600 684 ~625 ~625 Target 400 2.5x 200 EBITDA 0 Total Debt Cash Net Debt Cash Tax Cash Value Near‐Term Free Cash Strategic Softwood Long‐Term Refunds of GFP Debt Target Flow Investment Lumber Duty Debt Ratio Shares Deposit
Slide 12: Disciplined and Balanced Capital Allocation
Disciplined and Balanced Capital Allocation Cash Flow From Operations Maintain Assets ~$100 million of annual custodial CapEx Adjusted Free Cash Flow Reduce Leverage Target 2.5x Net Leverage Value Driven Approach focused on Risk Adjusted Returns on Invested Capital Investment in the Return of Capita
Slide 13: Market Overview
Market Overview Rayonier Advanced Materials Confidential and Proprietary Information
Slide 14: High Purity Cellulose Value Chain
High Purity Cellulose Value Chain Market Pulp Industry: 76 MMT* CS Market Segmentation Dissolving Pulp: Cellulose Specialties* 1.5 MMT Dissolving Pulp: Commodity Viscose 6 MMT MM Ethers 32% Acetate Fluff 6 MMT 35% Other CS Increasing Specialization 33% Commodity Market Pulp 62 MMT & Sales Prices 2.6
Slide 15: High Purity Cellulose Landscape
High Purity Cellulose Landscape Primary Demand Size Products End Markets Competitors Outlook (000s tons) Acetate ~(1)% 505 Pulp Ethers Pulp 4‐5% 475 Other CS 2‐3% 490 Total Cellulose Specialties 1,470 Viscose Various 6‐7% 6,200 Pulp Fluff Pulp Various 3‐4% 6,300 Total Commodity 12,500 Total High Pur
Slide 16: A Global Leader in High Purity Cellulose
A Global Leader in High Purity Cellulose 775k MT Cellulose Specialties Capacity + 245k MT Commodity Capacity = > 1,000k MT Total Capacity Capacity RYAM Line Wood Tech (kMT) Fernandina Softwood Sulfite 155 Hardwood/ Jesup A Kraft Softwood 330 Jesup B Hardwood Kraft Jesup C* Softwood Kraft 245 Tartas
Slide 17: The RYAM Recipe
The RYAM Recipe Hardwood Softwood Customer application Customized for each Kraft Sulfite Pulping Bleaching Finishing Customer End Uses Acetate Ethers Other CS Filter Plastic LCD/Film Food Pharmaceuticals Industrial Tire Cord Casings Filtration Nitro Best Product Offering • Highest Technical Acumen •
Slide 18: High-Yield Pulp Value Chain
High-Yield Pulp Value Chain Market Pulp Industry: 76 MMT Dissolving Pulp: Cellulose Specialties 1.5 MMT Dissolving Pulp: Commodity Viscose 6 MMT Other High‐Yield Pulp Fluff 6 MMT Producers 96% RYAM 4.5 million MT 4% High‐Yield Pulp Commodity Market Market Pulp 62 MMT RYAM High‐Yield Pulp focuses on
Slide 19: Paperboard Value Chain
Paperboard Value Chain North American Paperboard Industry: 4.5 MMT Market Share RYAM 2021 Sales by Geography Canada, 30% RYAM, ~10% United States, 70% RYAM’s Kallima® is a unique 3‐ply product with greater surface to weight ratio than North American competitors Source: Fastmarkets (RISI) and company
Slide 20: Paperboard & High-Yield Pulp Overview
Paperboard & High-Yield Pulp Overview Paperboard High‐Yield Pulp Location Temiscaming, Quebec Temiscaming, Quebec Capacity 180k MT 290k MT ‐ 65k MT sold internally to Paperboard Key Raw 80‐90k MT of NBHK & NBSK Pulp Hardwood (Maple & Aspen) Materials Chemicals Chemicals & Energy Primary 3‐ply Kallim
Slide 21: Financial Update
Financial Update Rayonier Advanced Materials Confidential and Proprietary Information
Slide 22: 2021 Financial & Strategic Highlights
2021 Financial & Strategic Highlights Revenue of $1,408 million from continuing operations; Revenue from Continuing Operations by Segment up 5% from 2020 Operating loss from continuing operations of $10 million; 9% $20 million favorable from 2020 15% $128 million of Adjusted EBITDA from contin
Slide 23: Consolidated Operating Income/(Loss) from Continuing Operations
Consolidated Operating Income/(Loss) from Continuing Operations ($ Millions) Bridge 2020 to 2021 80 60 40 20 (30) (10) 0 (20) (40) 2020 Price Volume / Cost SG&A / 2021 Sales Mix Other Operating loss of $10 million; improved $20 million from prior year Improved prices across commodity High Purity
Slide 24: Market Assessment
Market Assessment Strong Demand for Cellulose Specialties (CS) continues Expect double‐digit prices increases for CS with sales volume increases in 2022 High Purity Extensive planned facility outages in 2022 focused on improving reliability Cellulose Commodity prices expected to be slightly
Slide 25: Appendix
Appendix Rayonier Advanced Materials Confidential and Proprietary Information
Slide 26: Definitions of Non-GAAP Measures
Definitions of Non-GAAP Measures EBITDA is defined as net income (loss) before interest, taxes, depreciation and amortization. EBITDA is a non‐GAAP measure used by our Chief Operating Decision Maker, existing stockholders and potential stockholders to measure how the Company is performing relative t
Slide 27: Definitions of Non-GAAP Measures
Definitions of Non-GAAP Measures Adjusted Free Cash Flows – Discontinued Operations is defined as cash provided by operating activities from continuing operations adjusted for capital expenditures excluding strategic capital. Adjusted free cash flows is a non‐ GAAP measure of cash generated during a
Slide 28: Net Sales and Operating Income by Segment
Net Sales and Operating Income by Segment ($ Millions) Three Months Ended Year Ended Net sales December 31, September 25, December 31, December 31, December 31, (in millions) 2021 2021 2020 2021 2020 High Purity Cellulose $ 299 $ 288 $ 294 $ 1,091 $ 1,051 Paperboard 52 52 49 208 190 High-Yield Pulp
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