Rayonier Advanced Materials Inc. · NYSE:RYAM
Rayonier Advanced Materials — Q4 2020 Earnings Presentation
24 slides from Rayonier Advanced Materials's earnings presentation, Feb 26, 2021
Slide 1: Fourth Quarter 2020 Financial Presentation Materials
Fourth Quarter 2020 Financial Presentation Materials February 24, 2020
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 Our operations are subject to a number of risks and uncertainties including, but not limited to, those listed below. When considering an investment in our securities, you should carefully read and consider these risks, together with all other information in our Annual Report on Form 10-K
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: Delivering against 2020 Financial Goals & Adapting to COVID-19
Delivering against 2020 Financial Goals & Adapting to COVID-19 Reduce Costs and Improve Free Cash Flow Goal Actions Operating Cost Improvements: $15 million of savings Operating costs reduced by $24 million, primarily from through efficiencies in supply chain and continuous improvements in sourc
Slide 6: 2020 Financial Highlights
2020 Financial Highlights Revenue by Segment Revenue of $1.7 billion; Operating Income of $27 million Adjusted EBITDA of $153 million; $78 million above 2019 21% — High Purity Cellulose declined 5% on lower commodity prices and a greater mix of commodity sales offset by $1.7 10% lower cost from
Slide 7: High Purity Cellulose
High Purity Cellulose Quarter Ended Year Ended $ Millions 7 Operating Income/(Loss) Bridge 7 20 Dec 31, Sep 26, Dec 31, Dec 31, Dec 31, 2020 2020 2019 2020 2019 0 Key Financials ($ millions) (20) Net Sales $294 $253 $304 $1,051 $1,127 (40) Operating (3) 8 (4) 7 7 (60) Income/(Loss) Adjusted EBITDA 2
Slide 8: Forest Products
Forest Products Operating Income/(Loss) Bridge $ Millions Quarter Ended Year Ended Dec 31, Sep 26, Dec 31, Dec 31, Dec 31, 100 80 80 2020 2020 2019 2020 2019 60 Key Financials ($ millions) 40 Net Sales $137 $103 $77 $392 $299 20 Operating (31) 0 60 25 (4) 80 (31) Income/(Loss) (20) Adjusted EBITDA 4
Slide 9: Paperboard
Paperboard Operating Income/(Loss) Bridge $ Millions Quarter Ended Year Ended Dec 31, Sep 26, Dec 31, Dec 31, Dec 31, 20 18 2020 2020 2019 2020 2019 15 Key Financials ($ millions) 10 Net Sales $49 $47 $49 $190 $200 4 5 Operating 4 3 3 18 4 0 Income/(Loss) Adjusted EBITDA 8 7 8 33 22 (5) 2019 Price V
Slide 10: Pulp & Newsprint
Pulp & Newsprint Pulp & Newsprint Operating Income/(Loss) Bridge Quarter Ended Year Ended $ Millions Dec 31, Sep 26, Dec 31, Dec 31, Dec 31, 10 2 2020 2020 2019 2020 2019 0 Key Financials ($ millions) (10) Net Sales $45 $38 $54 $172 $215 (20) Operating (8) (6) (2) (25) 2 (25) Income/(Loss) (30) Adju
Slide 11: Consolidated Operating Income/(Loss)
Consolidated Operating Income/(Loss) Bridge 2019 to 2020 ($ Millions) 40 27 20 0 (20) (40) (60) (80) (83) (100) 2019 Price Volume / Cost SG&A / 2020 Sales Mix Other Operating Income of $27 million; up $110 million from prior year Significant improvement to lumber price in Forest Products partial
Slide 12: Refinance Overview
Refinance Overview In USD millions Total Liquidity $215 • Refinanced Term Loans with Senior Secured $196 Notes & Revolver with ABL 94 • Maintained solid liquidity 83 • Extended maturities to 2024 • Removed financial maintenance covenants 97 102 • Corporate ratings improved to B1/B- 16 19 Q3'20 Q4'20
Slide 13: Sustainability Framework
Sustainability Framework Board of Directors Oversight of Sustainability Environmental Social Governance Forest Stewardship Safety Driven Shareholder Engagement • Manage over 25 million acres of “Everyone going home safe, • Contacted >60% of Investors FSC certified wood everyday” in 2020 • 50% of woo
Slide 14: Strategic Investments in Reliability & Innovation
Strategic Investments in Reliability & Innovation Recent Strategic Investments Green Energy Sawline Upgrades Description Invested in a green energy Upgraded sawline technology project to increase improve to increase productivity and energy efficiency, reduce costs reduce costs and supply green energ
Slide 15: Commodity Prices Trending Up
Commodity Prices Trending Up EBITDA 2020 Market Price 2020 Sensitivity to Segment Product Average Indications Volumes 1% change in Price for 2021** Price* High Purity Cellulose Specialties ↓ Slightly $992 976k MT $10 million Cellulose Commodity ↑ 23% Forest Flat Full Year SFP Lumber $524 611 MMbf $3
Slide 16: Key Investment Highlights
Key Investment Highlights Leader in High-Value Cellulose Specialties Broad and Diversified Portfolio of Cellulose-based Products Leading R&D Platform with New Product Opportunities Proven Ability to Control Costs and Manage Cash Flows Solid Liquidity and Financial Flexibility with No Significant Nea
Slide 17: Appendix
RAYONIER Advanced Materials. Appendix
Slide 18: Definitions of Non-GAAP Measures
Definitions of Non-GAAP Measures EBITDA is defined as income from continuing operations before interest, taxes, depreciation and amortization. EBITDA is a non-GAAP measure used by our Chief Operating Decision Maker, existing stockholders and potential stockholders to measure how the Company is perfo
Slide 19: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ($ Millions) Forest Pulp & High Purity Corporate Three Months Ended: Products Paperboard Newsprint Cellulose & Other Total December 31, 2020 Income (loss) from continuing operations $ 60 $ 4 $ (6) $ (4) $ (45) $ 9 Depreciation and amortization 3 4 1 32 1 41 Intere
Slide 20: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ($ Millions) Forest Pulp & High Purity Corporate Twelve Months Ended: Products Paperboard Newsprint Cellulose & Other Total December 31, 2020 Income (loss) from continuing operations $ 81 $ 18 $ (20) $ 5 $ (83) $ — Depreciation and amortization 12 16 4 116 4 151 I
Slide 21: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ($ Millions) Dec 31, Dec 31, 2020 2019 Adjusted Net Debt Reconciliation Debt due within one year $ 17 $ 19 Long-term debt & finance lease obligation 1,067 1,063 Total debt $ 1,084 $ 1,082 Original issue discount, premiums and debt issuance costs 11 6 Cash and cash
Slide 22: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ($ Millions) Year Ended Dec 31, Dec 31, Adjusted Free Cash Flows: 2020 2019 Cash provided by operating activities of continuing operations $ 124 $ 22 Capital expenditures (51) (75) Adjusted Free Cash Flows $ 73 $ (53) 22
Slide 23: Reconciliation of Reported to Adjusted Earnings
Reconciliation of Reported to Adjusted Earnings ($ Millions, except per share amounts) Three Months Ended Twelve Months Ended September 26, December 31, December 31, 2020 2020 December 31, 2019 December 31, 2020 2019 Adjusted Operating Income (Loss) Per Per Per Per Per and Income (Loss) from Diluted
Slide 24: Key Index Pricing
Key Index Pricing Q4’20 Q3’20 Q2’20 Q1’20 Average Average Average Average Product Index* Index Price Index Price Index Price Index Price Cellulose • None • N/A • N/A • N/A • N/A Specialties • Bleached Kraft Fluff • $1,165 • $1,175 • $1,183 • $1,122 High Purity • Viscose Pulp delivered to • $675 • $6
Rayonier Advanced Materials — Q4 2020 Earnings Presentation on 6ix