Canfor Corporation · TSX:CFP
Canfor — CIBC World Markets Whistler Institutional Investor Conference 2011
21 slides from Canfor's conference presentation, Jan 20, 2011
Slide 1: Canfor Corporation
PAGE 1 Canfor Corporation Thomas Sitar – Vice President, Finance and CFO CIBC World Markets – Whistler Institutional Investor Conference January 20, 2011 C A N F O R C O R P O R A T I O N
Slide 2: Forward Looking Statements
PAGE 2 Forward Looking Statements ► 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 different from any future results, performance or achievements
Slide 3: Canfor Operations
PAGE 3 Canfor Operations Locations 1 Chetywnd 2 Ft. St. John 3 Grand Prairie, AB Core Holdings 4 Houston 14 sawmills in Canada 5 Isle Pierre (4.3 Bfbm) 9 6 Mackenzie 26 4 sawmills in US (0.6 7 Plateau Bfbm) 8 Polar 50.2% interest in Canfor 22 9 Prince George 25 Pulp (3 BC interior pulp 21 24 1
Slide 4: Canfor Overview
PAGE 4 Canfor Overview 2009 Revenues ($2.1 billion) Assets ($2.7 billion) 2% 20% Lumber Lumber 43% 48% Pulp 55% Pulp Unallocated Unallocated 32% 2.5 Market Capitalization (billions $) – at January 14/11 2.0 1.5 1.0 0.5 0.0 WFT CFP NBD CFX TMB IFP C A N F O R C O R P O R A T I O N
Slide 5: Our Markets - Lumber
PAGE 5 Our Markets - Lumber SYP 12% SPF 88% Offshore 26% China 16% Market Focus ► Grow Asian markets US 52% • Expand SPF uses in China Canada 22% ► Grow high value customers • Increase integration with U.S. retail customers • Key Asian customers Represents September 2010 YTD volumes C A N F O R C O
Slide 6: Geographic Market Diversification (SPF only)
PAGE 6 Geographic Market Diversification (SPF only) 2010 Estimate (2.8 Bfbm) 2005 (5.1 Bfbm) Offshore 7% Offshore 26% Canada 14% US 52% US 79% Canada 22% Offshore Markets Offshore Markets China 16 % China 0.3 % Japan 8% Japan 6% Korea/Other Asia 2% Korea/Other Asia 0.7 % C A N F O R C O R P O R A T
Slide 7: Product Offerings
PAGE 7 Customer Centric Product Offerings Offshore Home Centre Construction Reman Premium Grade Grade Grade C A N F O R C O R P O R A T I O N
Slide 8: North American Supply and Demand - Lumber
PAGE 8 North American Supply and Demand - Lumber New Home R&R Non-Residential Industrial Canada Asia North American Capacity Bbf 90 2004 Average: $517 US Housing Starts 80 (000’s) 2010 – 590 70 2011 – 750 2012 – 950 60 2013 – 1,275 2014 – 1,350 50 40 30 20 10 0 Source: Woodbridge Associates Inc., Co
Slide 9: Canfor Shipments to China
PAGE 9 Canfor Shipments to China Mmfbm 900 800 700 600 500 400 ► Long term commitment to China 300 ► Building codes are now more 200 conducive to wood frame 100 construction (“WFC”) 0 ► Establishing 2 x 4 for the 2005 2006 2007 2008 2009 2010 2011F emerging WFC housing sector Low Grade #2 & Better C
Slide 10: Market Price Compression and the "China Effect"
PAGE 10 Market Price Compression and the “China Effect” 450 2,500 450 400 400 SPF 2x4 #2&B SPF 2x4 #2&B in USD (left axis) 2,000 350 350 300 300 1,500 250 250 200 200 1,000 150 150 SPF 2x4 Utility #3 100 100 500 US Housing Starts 000's (right axis) 50 50 Average excess price of #2&B to Utility #3 in
Slide 11: China – Opportunities
PAGE 11 China – Opportunities • Affordable high density multi-story hybrid dwellings • Residential • Commercial • Public buildings • 6 story & under • Interior / exterior in-fill • Roofs • 7 – 18 story • Interior in-fill walls • Low-density wood frame dwellings • Villas / 2-3 story townhomes • Singl
Slide 12: China – End Uses (Current and Projected)
PAGE 12 China – End Uses (Current and Projected) 2010 C A N F O R C O R P O R A T I O N
Slide 13: Canfor Pulp
PAGE 13 Canfor Pulp ► Controlling interest in Canfor Pulp Limited Partnership ► 2010 declared cash distributions of $92 million ► NBSK pulp markets remain tight (high prices) North America Europe Asia Canfor’s distributions from Canfor Pulp 37% 45% 30 1050 1000 18% 25 950 20 900 850 15 800 10 750 70
Slide 14: Leveraged to a Lumber Market Recovery
PAGE 14 Leveraged to a Lumber Market Recovery 2,000 US Housing Starts EBITDA Sensitivity ($ millions) 1,500 1,000 500 Full Capacity 0 2011 2012 2013 2014 RISI FEA RJ 500 SPF 2x4 #2&B Price (USD) Current Capacity 400 300 200 0 10 20 30 40 50 100 US$10 Lumber Price Change 0 2011 2012 2013 2014 RISI FE
Slide 15: Optimistic about the future
PAGE 15 Optimistic about the future ► U.S. lumber market will recover ► Continued growth in Asia ► Constraints facing global fibre supply ► Improving lumber prices ► Supply/Demand metrics point to lumber shortage in the future C A N F O R C O R P O R A T I O N
Slide 16: Appendix
PAGE 16 Appendix C A N F O R C O R P O R A T I O N
Slide 17: Capitalization and Liquidity (as at September 30, 2010)
PAGE 17 Capitalization and Liquidity (as at September 30, 2010) Long Term Debt $ Millions Liquidity $ Millions Senior Unsecured Notes 8.03% 2011 32 Syndicated credit facility Oct 2013 350 Senior Unsecured Notes 6.18% 2011 52 Other credit facilities 2011/12 48 Senior Unsecured Notes 6.33% 2012 52 Out
Slide 18: Capital Expenditures
PAGE 18 Capital Expenditures ► 2010 projected capital spend of $90 million: Maintenance capital - $25 million ► 2011 projected capital spend - $130 million Mill modernization and cost reduction Improvement projects have a high ROI (+ 20%) 400 350 300 250 200 150 100 50 0 2005 2006 2007 2008 20
Slide 19: BC Fibre Outlook – Production Capacity
PAGE 19 BC Fibre Outlook – Production Capacity 70 60 50 40 30 20 70 10 60 0 50 2010 2020 40 30 Pine Spruce/Other Species 20 10 0 2010 2020 Pine Spruce/Other Species 100 80 60 40 20 0 2010 2020 Pine Spruce/Other Species 80 70 60 50 40 30 20 10 0 2010 2020 Pine Spruce/Other Species C A N F O R C O R P
Slide 20: CFP Trading Liquidity
PAGE 20 CFP Trading Liquidity CFP WFT IFP 600,000 500,000 400,000 300,000 200,000 Major Shareholders* 100,000 The Pattison Group 36% 0 2006 2007 2008 2009 2010 Mackenzie Cundill 14% Jarislowsky Fraser 12% CFP WFT IFP 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 2006 2007 2
Slide 21: TSX:CFP
PAGE 21 Canfor Corporation These materials have been prepared by Management of the Company. No regulatory authority has approved or disapproved of the contents of these materials. These materials do not constitute an offer to sell or the solicitation of an offer to buy any securities of the Company
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