West Fraser Timber Co. Ltd. · TSX:WFG
West Fraser Timber — Merger or Acquisition (November 2020)
24 slides from West Fraser Timber's merger presentation, Nov 19, 2020
Slide 1: Creating a Diversified Global Wood Products Leader
Creating a Diversified Global Wood Products Leader November 19, 2020
Slide 2: Forward Looking Statement
Forward Looking Statement General: This presentation and comments associated with it contains historical information, descriptions of current circumstances and statements about potential future developments and anticipated financial results. Readers are cautioned that this presentation is qualified
Slide 3: Creating a Global Wood Products Leader
Creating a Global Wood Products Leader ▪ Adds a leading global oriented strand board (OSB) EMPLOYEES WORLDWIDE LUMBER MILLS PULP & PAPER 850 GWH RENEWABLE producer to West Fraser’s diverse wood products MILLS ENERGY FACILITIES portfolio ▪ Creates the destination provider for a wider range of home an
Slide 4: Diverse Operating Footprint
Diverse Operating Footprint Creating a Diversified Global Wood Products Leader 4
Slide 5: Strategic Alignment, Complementary Operational Approach
Strategic Alignment, Complementary Operational Approach WEST FRASER • Proven ability to grow ALIGNED STRATEGY strategically • Operational excellence with a priority on safety NORBORD • Diverse product portfolio • • Focus on cost and margin improvement Track record of OSB • Leadership in high-efficie
Slide 6: Strategic Rationale: Customer Relevance | Diversification | Growth
Strategic Rationale: Customer Relevance | Diversification | Growth Organizational Capability – Stronger Together • Combining two highly skilled and recognized high performance teams creates a critical mass of talent and capability in key regions • Combination of leadership of both companies in key r
Slide 7: Meaningful Annual Synergies
Meaningful Annual Synergies Transaction expected to improve performance through available, achievable synergies Estimated at US$61 million/year, achievable within 2 years Productivity & Reliability Transportation & Logistics Operations Critical Mass • Combined technical expertise and mill • Coordina
Slide 8: Transaction Summary
Transaction Summary • West Fraser to acquire Norbord via Plan of Arrangement • Will be led by existing West Fraser management team Transaction • Unanimously recommended by the Board of Directors of Combined • West Fraser's Hank Ketcham as Chairman, Ray Ferris as CEO and Structure West Fraser and Nor
Slide 9: Experienced Board and Management
Experienced Board and Management Key leadership following the close of the Transaction Hank Ketcham Raymond Ferris Chairman of the Board Chief Executive Officer Peter Wijnbergen Sean McLaren Chris Virostek President, Engineered Wood President, Solid Wood Chief Financial Officer Creating a Diversifie
Slide 10: Benefits to Norbord Shareholders
Benefits to Norbord Shareholders Meaningful participation in a wood products leader, with greater growth potential and resilience through the cycle ▪ Joining with West Fraser unlocks growth opportunities in our core North American market ▪ Provides the scale that is increasingly important to serve c
Slide 11: More Relevant, Efficient and Valuable to Principal Customer Segments
More Relevant, Efficient and Valuable to Principal Homebuilder, Building Construction and Pro-Dealer Customer Segments Dimension Framing Roof Lumber (Trusses) Sheathing Wall Sheathing Framing Lumber LVL Header Window Header Product Supplier West Fraser Dimension Norbord Framing Lumber (Studs) Both F
Slide 12: Growth, Stability, Resilience: Greater Diversity in Products, Geography and End Use
Growth, Stability, Resilience: Greater Diversity in Products, Geography and End Use KEY STATISTICS 5,909 8,691 LTM MMfbm LUMBER SHIPMENTS LTM MMsf ENGINEERED WOOD SHIPMENTS(1) US$5,920mm US$1,249mm C$7,960mm C$1,679mm LTM REVENUE LTM ADJUSTED EBITDA Note: Engineered Wood includes OSB, Plywood, MDF,
Slide 13: Attractive Adjusted EBITDA and Margin Profile
Attractive Adjusted EBITDA and Margin Profile Creating a Diversified Global Wood Products Leader 13
Slide 14: Balanced Capital Allocation Strategy
Balanced Capital Allocation Strategy ▪ Maintain strong balance sheet and credit profile ▪ Continue to invest in operations to improve safety and invest in high return capital projects to maintain a leading cost position ▪ Balanced capital allocation strategy to consistently create value ▪ Return exc
Slide 15: Pro Forma Capitalization
Pro Forma Capitalization Strong balance sheet and leverage position West Norbord New West (US$mm) Fraser (At Offer)(1) Fraser(1) Market Cap(2) $3,864 $3,069 $6,933 Debt $507 $677 $1,184 Cash & Equivalents $235 $240 $475 Net Debt (Cash) $272 $437 $709 LTM Adj. EBITDA $741 $508 $1,249 Net Debt / LTM A
Slide 16: Enhanced Capital Markets Profile
Enhanced Capital Markets Profile Leading sector pro forma trading liquidity Creating a Diversified Global Wood Products Leader 16
Slide 17: Pro Forma Shareholder Ownership
Pro Forma Shareholder Ownership Meaningful shareholder overlap; ~30% of Norbord shareholders already own West Fraser (1) Source: Bloomberg (1) Based on Bloomberg, publicly disclosed investor filings (2) Based on Bloomberg geographic split on publicly disclosed shareholders Creating a Diversified Glo
Slide 18: At the Forefront of Sustainability
At the Forefront of Sustainability With a larger platform West Fraser will further its commitment to sustainability RENEWABLE NATURAL RESOURCE FIBRE UTILIZATION 63.4 Million native tree seedlings planted in 2019. Productive use of 100% of harvested logs 100% Harvest sites reforested RESILIENT, ENERG
Slide 19: Why Own West Fraser
Why Own West Fraser This Transaction creates a global wood products leader, with greater growth potential and resilience through the cycle ▪ A destination provider for a wide range of home ▪ Disciplined approach to capital allocation and building construction needs ▪ Strong balance sheet and credit
Slide 20: Next Steps
Next Steps Mid-Late November December 2020 January 2021 Q1 2021 2020 Special Meeting Shareholder votes Transaction expected Regulatory materials mailed to Voting support agreements to close submissions West Fraser and in place representing 19% of West Fraser and 43% of Norbord shareholders, Norbord
Slide 21: Appendix
Appendix
Slide 22: Appendix: Pro Forma Financials (C$)
Appendix: Pro Forma Financials (C$) West Norbord New West (US$mm) Fraser (At Offer)(1) Fraser(1) Market Cap(2) $5,048 $4,009 $9,057 Debt $676 $903 $1,579 Cash & Equivalents $313 $320 $633 Net Debt (Cash) $363 $583 $946 LTM Adj. EBITDA $996 $683 $1,679 Net Debt / LTM Adj. 0.4x 0.9x 0.6x EBITDA Net De
Slide 23: Appendix: New West Fraser Leverage
Appendix: New West Fraser Leverage Combined company will have stronger financial ability to weather volatility Creating a Diversified Global Wood Products Leader 23
Slide 24: Appendix: Facilities by Geography
Appendix: Facilities by Geography UNITED STATES CANADA UNITED KINGDOM Alabama Mississippi Alberta Cowie, Scotland PB, MDF, C Huguley OSB Guntown OSB Blue Ridge MDF, L Inverness, Scotland OSB L Lumber Maplesville L North Carolina Edmonton P South Moulton, England PB, F OSB Oriented Strand Board Opeli
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