Slide 1: Investor Update, Sept 2011
INVESTOR UPDATE Sept, 2011 Duncan Davies President & CEO, International Forest Products Limited INTERFOR
Slide 2: Forward-Looking Statements
Forward-Looking Statements Information contained herein constitutes forward-looking statements. Forward-looking statements, which include all statements that are not historical facts, are subject to certain risks and uncertainties that could cause actual results to differ materially from those antic
Slide 3: Section 1: Introduction
Section 1 Introduction @) & INTERFOR
Slide 4: Timber Tenures
Investor Update _ ‘ . Timber Tenures - AAC 000 m3 B.C. Interior 750 MMbf _ Adams Lake 325 MMbf DFir & SPF Dimension 500 Castlegar 250 MMbf DFir, Cedar & SPF Dimension 500 Grand Forks 175 MMbf SPF & DFir 500 B.C. Coast 315 MMbf Hammond 165 MMbf Cedar Specialty G — 2,000 __ Acorn 150 MMbf Hem & Dfir J
Slide 5: Production capacity by region
Investor Update Southern Southern B.C. outhern B.C. B.C. Interior Interior 7 | 22% U.S. 38% 37% Interior 44% B.C. Coast 79% BC On B.C. Coast 19% Production Capacity Production Capacity Production Capacity 772 MMbf 1,345 MMbf 1,700 MMbf Including Crown Pacific Including Pope & Talbot and and Floragon
Slide 6: Source: Wood Markets monthly – March 2011
5.00 4.50 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 Source: Wood Markets monthly – March 2011 6
Slide 7: Interfor has spent more than $270 million upgrading assets
Investor Update Interfor has spent more than $270 million in the last 9 years to upgrade its assets. Major projects were completed at Adams Lake, Molalla and Port Angeles. Discretionary Capex (excluding acquisitions) $100 million investment in a new sawmill at Adams Lake, completed April ‘O09 \ AN %
Slide 8: Specialty, Commodity, Framing product mix
• Specialty Cedar 16% 10% Structural Specialty 33% Commodity Framing 41% 8
Slide 9: 1000 1200 1400 1/03 1/04 1/05 1/06 1/07 1/08 1/09 1/10 1/11
9 0 200 400 600 800 1000 1200 1400 1/03 1/04 1/05 1/06 1/07 1/08 1/09 1/10 1/11
Slide 10: Plan
1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 '05 '06 '07 '08 '09 '10 '11 Plan 10
Slide 11: Lumber sales by geography
Investor Update 2009 * Japan 7% _ i China 5% ~~ Pacific Rim 7% Canada 18% U.S. 60% Europe & Other 3% Total Lumber Sales $289 million (647 MMbf) * Based on volume 2010 * Japan 6% China 20% 50% Pacific Rim 2% | Canada 20% Europe & Other 2% Total Lumber Sales $482 million (1,102 MMbf) Interfor has a mo
Slide 12: Lumber Volumes to China & Pacific Rim (excluding Japan)
Investor Update Lumber Volumes to China & Pacific Rim (excluding Japan) 140 120 100 80 60 40 I 20 om =m mm t i 08 09 Q@2 Q3 Q4 10 Q2 Q3 Q4 Ti Q4 Ql Ql Ql Interfor’s sales to China have ramped up quarter-over-quarter; sales to China could exceed 350 MMbf in 2011 (2) & INTERFOR
Slide 13: Section: Financial Update
Section 2 Financial Update () & INTERFOR
Slide 14: Selected Income Statement / Cash Flow Items
Investor Update Selected Income Statement / Cash Flow Items !- C$millions H1 ‘11 2010 2009 Sales 367.9 625.6 389.8 Net Income (Loss) (7.0) (5.2) (23.9) Adjusted EBITDA 24.3 48.4 (6.4) Cash from Operations2- 24.5 40.7 (21.6) Capital Expenditures (19.6) (42.2) (27.6) 1. 2010 and H1 2011 under Internat
Slide 15: Selected Balance Sheet Items
Investor Update ° In April ‘11 Interfor sold 8.2 million shares @ $7.00 for gross proceeds of $57.6 million. Proceeds were initially used to repay debt Selected Balance Sheet Items Long-term debt 156.0 144.5 Equity 395.0 347.5 361.4 Net debt 93.1 146.7 140.7 Net debt / invested capital 19% 30% 28% J
Slide 16: Interfor's bank facilities were modified and extended
Investor Update ° Interfor’s bank facilities were modified and extended, effective Jul ‘11 As at Jul ‘11 C$millions Available line of credit Maturity Maximum borrowing available Drawings & letters of credit Unused portion of line Cash & equivalents CAD CAD Seaboard Operating TermLine Operating Line
Slide 17: Section
Section 3 (7) & INTERFOR
Slide 18: EBITDA Margin 2004 - Q2 2011
Investor Update EBITDA Margin 2004 - Q2 20111. 20% 15% Interfor \ oS {~~ ™~ L 7 oy -5% 2 Peer Group 10% 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 200 6mos Rank 5 2 1 1 1 1 3 3 1 Excludes impact of lumber duty refunds 2 Peer group includes Canfor, West Fraser, Western Forest, Pope & Talbot (lumb
Slide 19: Peer Comparison - Share Price Performance
Peer Comparison - Share Price Performance Share Prices Indexed from Jan 1, ’07 to Sep 7, ‘11 150 5 125 4 100 ¥ 75 4 50 7 25 4 gs SS Ss < < ye ye oe ye Interfor ‘s share price has lagged its peers since mid-2008 primarily due to product mix (Canfor and WFT have pulp) (®) & INTERFOR 2 @ © © O LO SP XY
Slide 20: Financial Analysts' Recent EBITDA Estimates / Indicated EV Multiples
Investor Update Financial Analysts’ Recent EBITDA Estimates / Indicated EV Multiples OIE 2012E 2011E 2012E RBC Aug 22 49.0 68.0 6.8x 4.9x Raymond James Aug 5 55.0 85.0 6.1x 3.9x TD Aug 8 45.3 71.8 74x 4.6x BMO Sep 8 48.0 73.0 7.0x 4.6x BNS Aug 5 39.0 86.0 8.6x 3.9x Salman Partners Aug 5 49.3 77.5 6.
Slide 21: Section: Key Takeaways
Section 4 Key Takeaways IEE () az INTERFOR
Slide 22: Key Takeaways
Key Takeaways Interfor is positioned to take advantage of the recovery Interfor has been radically transformed over the last 7 - 8 years Interfor is positioning its assets to be top quartile (top decile) Interfor has a balanced geographic manufacturing base and diversified product lines and market e
Slide 23: Appendix
APPENDIX ¢ Impact of Mountain Pine Beetle in B.C. e China: Wood Frame Construction Markets e U.S. Housing Market az INTERFOR
Slide 24: Impact of Mountain Pine Beetle in B.C.
APPENDIX Impact of Mountain Pine Beetle in B.C. az INTERFOR
Slide 25: Vancouver
Vancouver Source: Ministry of Forests, 25
Slide 26: Productive Capacity %
Productive Capacity % Interfor West Fraser Canfor BC Interior – Central & Northern 46 79 BC Interior – Southern 44 BC Coast 19 Prairies 18 5 US Pacific NW 37 US South 36 12 Other 3 26
Slide 27: Appendix: China Wood Frame Construction
APPENDIX China: Wood Frame Construction az INTERFOR
Slide 28: China Markets - Wood Frame Construction
China Markets - Wood Frame Construction Wood truss re-roofing (east and north China) Suburban villas (east, north, n-east, s-west) (28) az INTERFOR
Slide 29: China Markets - Sectors under development
China Markets- Sectors under development Public buildings Apartment infill walls / partition walls (29) az INTERFOR
Slide 30: China Markets - Use of B.C. Wood in Construction
China Markets- Use of B.C. Wood in Construction House framed with SPF lumber SPF used for furniture frames j b] 5 Pa Cedar used as siding and for outdoor structures 30 A INTERFOR
Slide 31: Appendix: U.S. Housing Market
APPENDIX U.S. Housing Market az INTERFOR
Slide 32: • • • 2,000 1,500 1,000 '04 '05 '06 '07 '08 J'10 F M
• • • 2,000 1,500 1,000 500 0 '04 '05 '06 '07 '08 09 10 J'10 F M A M J J A S O N D J'11 F M A M J J 32
Slide 33: 9,000 8,000 7,000 6,000 5,000 4,000 3,000 6 2,000 4 1,000 2
9,000 18 8,000 16 7,000 14 6,000 12 5,000 10 4,000 8 3,000 6 2,000 4 1,000 2 0 0 33
Slide 34: U.S. Home Price Trend - S&P's Case-Shiller Indices
U.S. Home Price Trend - S&P’s Case-Shiller Indices * The 10 and 20 City composite index continued to rise m/m in June, the 3'4 consecutive monthly increase, while y/y prices declined in June. ° As of Q2, 2011, average home prices are back to their early 2003 levels. Home Price Index: base value of 1
Slide 35: Estimated Shadow Supply of Housing Inventory
• Estimated "Shadow Supply" of Housing Inventory REO Inventory, Foreclosures in Process, and Seriously Delinquent Loans Number of Homes/Mortgages in Thousands 6,000 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Foreclosure Serious Delinquent REO Source: Mortgage Bankers Associati
Slide 36: Raymond James Housing Affordability Index: 1987 - 2011
• Raymond James Housing Affordability Index: 1987 - 2011 (Based on Median Existing Home Prices, Median Household Income, & Prevailing Mortgage Rates) 155.0 152.5 June 2011 = 151; 150.0 2001 Recession 1990-91 Recession Rates at ~4.7% 147.5 145.0 2007-09 Recession 142.5 140.0 137.5 135.0 132.5 RJ Affo
Slide 37: Sept, 2011
INVESTOR UPDATE Sept, 2011 Duncan Davies President & CEO, International Forest Products Limited INTERFOR