West Fraser Timber Co. Ltd. · TSX:WFG
West Fraser Timber — Q3 2019 Earnings Presentation
12 slides from West Fraser Timber's earnings presentation, October 2019
Slide 1: Q3 Earnings Presentation
Q3 Earnings Presentation October 2019
Slide 2: Forward-looking statements and non-IFRS measures
2 General: This presentation and comments associated with it contains Accordingly, readers should exercise caution in relying upon forward- historical information, descriptions of current circumstances and looking- statements and WFT undertakes no obligation to publicly statements about potential fu
Slide 3: Demand conditions
Demand conditions 3 Leading indicator of Remodeling Activity U.S. Housing Starts (not seasonally adjusted) $330 8.0% $B 4 Qtr Moving Improvements and Repairs 140 120 $320 7.0% 4 Qtr Moving rate of Change 100 $310 6.0% M Starts 80 $300 5.0% Seasonally adjusted: $290 4.0% 60 2017: 1,203 $280 3.0% 40 2
Slide 4: Supply conditions
Supply conditions 4 Billion fbm Lumber Supply North America Curtailments MMfbm 40 Down 5% 1,200 35 1,000 Mix of 30 temporary 25 800 and Flat permanent 20 Down 11% 600 15 10 400 Down 18% 5 200 0 BC Canada US Total NA 0 2018Q4 2019 Q1 2019 Q2 2019 Q3 Ytd 07-18 Ytd 07-19 Source: Western Wood Products A
Slide 5: Consolidated Financial Results
Consolidated Financial Results 5 $ Millions Adjusted EBITDA Q3-19 Q2-19 Q3-19 Q2-19 Lumber $ 39 $ 39 Sales $ 1,190 $ 1,317 Panels 13 10 Cost and Expenses 1,245 1,375 Restructure/Impairment (1) 26 Pulp & Paper 3 7 Operating earnings (54) (84) Corporate/Other - - Finance Expense (12) (13) Total $ 55 $
Slide 6: Q3 Consolidated Adjusted EBITDA Reconciliation
Q3 Consolidated Adjusted EBITDA Reconciliation 6
Slide 7: Q3 Lumber Adjusted EBITDA Reconciliation
Q3 Lumber Adjusted EBITDA Reconciliation 7
Slide 8: Q3-19 versus Q2-19
Q3-19 versus Q2-19 8 $ millions unless Q3 Q2 Change otherwise indicated 2019 2019 Lumber Production (MMfbm) 1,493 1,536 (43) Chasm Closure, 100 Mile House shift reduction, BC variable (3%) operating schedules, offset by US productivity improvements Lumber Shipments (MMfbm) 1,541 1,686 (145) Shift re
Slide 9: Liquidity
9 Liquidity Available liquidity Scheduled maturities $900 $900 $800 $800 $700 $700 $600 $600 $500 $500 $400 $400 $300 $300 $200 $200 $100 $0 $100 -$100 2017 2018 Q1-17 Q1-18 Q1-19 Q2-19 Q3-19 $0 2019 2020 2021 2022 2023 2024 Bank lines Cash Term loan Notes Revolver Ample financial flexibility Cash c
Slide 10: Recent US South Capital Projects
Recent US South Capital Projects 10 Joyce, Louisiana McDavid, Florida - Log merchandiser - New canter line - Improved reliability, reduced operating - Improved recovery costs - Greater product mix flexibility - Input flexibility - Unlocks capacity in remainder of mill - Improved recovery Operational
Slide 11: Recent US South Capital Projects
Recent US South Capital Projects 11 Perry, Florida Augusta, Georgia - Continuous Dry Kilns - Planer mill - Grade improvements - Grade improvements - Removes bottleneck, unlocks capacity in - Improved working conditions to reduce remainder of mill turnover, increase throughput - Energy efficiency and
Slide 12: Summary
Summary 12 Q3 Update Q4 Outlook ✕ Continued headwinds in lumber ✓ Diligently managing operating and pulp pricing schedule in B.C. ✕ B.C. fiber costs remain elevated ✓ Softwood pulp market showing signs of stability ✓ Improved production rates in NBSK ✓ Ramp down of B.C. lumber supply underway ✓ Comp