Slide 1: Third Quarter 2022 Earnings Review
1 Third Quarter 2022 Earnings Review November 10, 2022 © 2022 Sylvamo Corporation. All rights reserved.
Slide 2: Cautionary statement concerning forward-looking statements
Cautionary statement concerning forward-looking statements 2 This presentation contains information that includes or is based upon forward-looking statements. Forward-looking statements forecast or state expectations concerning future events. These statements often can be identified by the fact that
Slide 3: Statement relating to non-U.S. financial GAAP measures
Statement relating to non-U.S. financial GAAP measures 3 While Sylvamo reports its financial results in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"), during the course of this presentation, certain non-U.S. GAAP financial measures are presented. Managem
Slide 4: A year of significant achievements
A year of significant achievements 4 Closed Russian Divestiture Initiated Repaid Quarterly Term Loan B Dividend <$1 Billion Share Agreed to Gross Debt Executed Building the Repurchase Acquire Spinoff World’s Paper Company Authorization Nymolla Mill Exited TSA OCT 2021 4Q21 1Q22 2Q22 3Q22 OCT 2022 Ad
Slide 5: 3Q22 Financial Highlights
3Q22 Financial Highlights 5 +14% • $968 million Net Sales Adjusted EBITDA • $216 million Adjusted EBITDA +24% Adjusted Operating • 22.3% Adjusted EBITDA Margin EPS • $2.51 Adjusted Operating EPS +192% Free Cash Flow • $114 million Free Cash Flow 3Q22 vs. 2Q22 © 2022 Sylvamo Corporation. All rights r
Slide 6: Strong 3Q22 Results
Strong 3Q22 Results 6 Net Sales Adjusted EBITDA Free Cash Flow Adjusted Operating $ Million $ Million $ Million Earnings per Share $968 $912 $216 $731 $189 $2.51 $2.02 $131 $117 $114 $1.52 $39 17.9% 20.7% 22.3% 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 3Q21 financial figures repres
Slide 7: 3Q Results at high end of guidance
3Q Results at high end of guidance 7 3Q22 vs. 2Q22 Adjusted EBITDA $ Million 300 $14 ($46) $60 $3 ($3) 250 $216 $189 200 150 100 50 20.7% 22.3% 0 2Q22 Price & Mix Volume Operations Maintenance Input and 3Q22 and Costs Outages Transportation Costs © 2022 Sylvamo Corporation. All rights reserved.
Slide 8: Strong Regional Performances
Strong Regional Performances 8 3Q22 Adjusted EBITDA Region 3Q22 vs. 2Q22 Highlights $ Million Margin • Realization of price increases Europe $24 18% • Outperformed industry shipments Latin • Good operations America $74 27% • Executed Mogi Guacu annual outage effectively • Price & Mix outpaced energy
Slide 9: Favorable UFS Industry Fundamentals
Favorable UFS Industry Fundamentals 9 Western Europe Latin America North America Demand Growth (2%) +22% +3% (2022 YTD vs. 2021) Imports (1%) (20%) (19%) (2022 YTD vs. 2019) Capacity Change (20%) (10%) (21%) (2022 YTD vs. 2019) Source: Pulp and Paper Products Council: Demand Growth as of September Y
Slide 10: Benefiting from Commercial Excellence
Benefiting from Commercial Excellence 10 Growing with Key Customers Optimizing Mix Growing in Higher-Margin Segments © 2022 Sylvamo Corporation. All rights reserved.
Slide 11: Perspective on our Russian Divestiture
Perspective on our Russian Divestiture 11 • Principle-based decision to exit Russia • Received $390 million in net proceeds • Avoided $220 million of boiler capital • Reduced exposure to market pulp by 30% • Decreased geopolitical risk and uncertainty © 2022 Sylvamo Corporation. All rights reserved.
Slide 12: Strengthening our Commitment to UFS
Strengthening our Commitment to UFS 12 Nymolla, Sweden UFS - 500,000 tons Saillat, France UFS - 265,000 tons Market Pulp - 130,000 tons Annual capacity is management estimate in short tons; Expect to close Nymolla, Sweden acquisition no later than 1Q23 subject to customary closing conditions, includ
Slide 13: Nymolla Mill Overview
Nymolla Mill Overview 13 • One of Europe’s largest integrated uncoated freesheet facilities • 85% of energy needs generated from carbon-neutral, renewable biomass residuals • Cutsize, business forms, digital papers and offset • Iconic brands © 2022 Sylvamo Corporation. All rights reserved.
Slide 14: Excellent fit with our three-pronged Strategy
Excellent fit with our three-pronged Strategy 14 Complementary UFS Product Mix • Iconic brands, including Multicopy Commercial Excellence • Strategic channel partnerships • Complementary geographic mix • Customer-focused culture and shared values Low-cost Mill in Attractive Location • ~$40 million p
Slide 15: Acquisition expected to increase Free Cash Flow and shareowner value
Acquisition expected to increase Free Cash Flow and shareowner value 15 Financial Discipline • $150 million purchase price Transaction EBITDA Multiples • Targeting $20 million in synergies, including pulp mill capital investment benefits LTM 6/30/22 2.5x ‒ $15 million one-time costs and capital to a
Slide 16: 4Q22 Outlook
4Q22 Outlook 16 Adjusted EBITDA Outlook of $180 - $190 million Adjusted Operating Price & Mix improving by $30 - $35 million vs. 3Q22 Continued price increase realizations in all regions Earnings per Share Volume flat to decreasing by $0 - $5 million vs. 3Q22 Seasonally weaker in Europe and North Am
Slide 17: Allocating cash to create value
Allocating cash to create value 17 Generate Free Cash Flow Maintain Strong Return Cash Reinvest in Financial Position to Shareowners our Business © 2022 Sylvamo Corporation. All rights reserved.
Slide 18: Fortified Financial Position
Fortified Financial Position 18 Gross Debt $ (in Millions) $1,520 $1,397 • Renegotiated restricted payment $1,227 provisions in credit agreement $957 • Interest expense to decline >$20 million in 2023 • Gross Debt <1.5x Adjusted EBITDA Initial Gross 4Q21 3Q22 OCT 22 Debt Bonds Term Loan F Term Loan
Slide 19: Well-positioned to create value for shareowners
Well-positioned to create value for shareowners 19 • Fortified financial position Maintain Strong • Reduced debt and interest expense Financial Position • $128 million of spinoff payments will not recur • $10 million cash dividends paid in 2022 Return Cash • $150 million share repurchase authorizati
Slide 20: Appendix
20 Appendix © 2022 Sylvamo Corporation. All rights reserved.
Slide 21: Contacts
Contacts 21 Hans Bjorkman Vice President, Investor Relations Investor Relations +1-901-519-8030 hans.bjorkman@sylvamo.com Adam Ghassemi Senior Manager, Corporate Communications Media +1-901-519-8115 adam.ghassemi@sylvamo.com © 2022 Sylvamo Corporation. All rights reserved.
Slide 22: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation 22 4Q22 FY 2022 $ Million 3Q21 2Q22 3Q22 Outlook Outlook Cash from Continuing Operations $137 $76 $146 > $89 > $365 Cash Invested in Capital Projects ($20) ($37) ($32) ($64) ($155) Free Cash Flow $117 $39 $114 > $25 > $210 Free cash flow is a non-GAAP measure and the mo
Slide 23: Adjusted EBITDA and Margin Reconciliation
Adjusted EBITDA and Margin Reconciliation 23 $ Million 3Q21 2Q22 3Q22 4Q22 FY 2022 Net Income (Loss) $92 ($59) $57 Outlook Outlook Less: Discontinued operations, net of tax 33 (143) (52) Net Income From Continuing Operations $59 $84 $109 $87 - $94 $335 - $342 Depreciation, Amortization, Cost of Timb
Slide 24: Adjusted EBITDA and Margin Reconciliation
Adjusted EBITDA and Margin Reconciliation 24 $ Million 3Q21 2Q22 3Q22 Adjusted EBITDA $131 $189 $216 Europe 4 22 24 Latin America 59 79 74 North America 68 88 118 Total Business Segment Adjusted EBITDA $131 $189 $216 Net Sales (excluding Inter-segment Sales eliminations) $732 $933 $989 Europe 85 135
Slide 25: Adjusted Operating Earnings per Share Reconciliation
Adjusted Operating Earnings per Share Reconciliation 25 $ Million 3Q21 2Q22 3Q22 4Q22 Net Income (Loss) $92 $(59) $57 Outlook Less: Discontinued operations, net of tax 33 (143) (52) Net Income From Continuing Operations $59 $84 $109 $87 - $94 Special Items Expense (Income) 8 6 3 5 Adjusted Operating
Slide 26: 3Q22 vs. 3Q21 Adjusted EBITDA
3Q22 vs. 3Q21 Adjusted EBITDA 26 $ Million 450 $232 $12 ($42) 400 ($3) ($113) 350 300 $216 250 200 $131 150 100 50 17.9% 22.3% 0 3Q21 Price & Mix Volume Operations Maintenance Input Costs 3Q22 Outages © 2022 Sylvamo Corporation. All rights reserved.
Slide 27: Europe Adjusted EBITDA
Europe Adjusted EBITDA 27 40 3Q22 vs. 2Q22 $12 ($2) $2 $0 ($10) 35 30 $24 $22 25 20 15 10 16% 18% 5 0 2Q22 Price & Mix Volume Operations Maintenance Input Costs 3Q22 Outages $ Million 60 3Q22 vs. 3Q21 $46 $1 ($7) $0 ($20) 50 9% 40 19% $24 30 20 $4 10 9% 18% 0 3Q21 Price & Mix Volume Operations Maint
Slide 28: Latin America Adjusted EBITDA
Latin America Adjusted EBITDA 28 120 3Q22 vs. 2Q22 $16 $2 ($6) ($7) 100 $79 ($9) $74 80 60 40 20 32% 27% 0 2Q22 Price & Mix Volume Operations Maintenance Input Costs 3Q22 $ Million Outages 140 3Q22 vs. 3Q21 $63 $2 ($23) 120 $0 ($27) 9% 100 $74 19% $59 80 60 40 20 30% 27% 0 3Q21 Price & Mix Volume Op
Slide 29: North America Adjusted EBITDA
North America Adjusted EBITDA 29 3Q22 vs. 2Q22 $21 ($27) 160 $32 $2 $2 $118 140 120 $88 100 80 60 40 16% 20% 20 0 2Q22 Price & Mix Volume Operations Maintenance Input Costs 3Q22 $ Million Outages 250 3Q22 vs. 3Q21 $123 $9 ($14) ($3) ($66) 200 9% 150 $118 19% 100 $68 50 15% 20% 0 3Q21 Price & Mix Vol
Slide 30: Quarterly Business Segment Operating Results
Quarterly Business Segment Operating Results 30 Sales D&A Adjusted EBITDA $ Million 3Q21 2Q22 3Q22 3Q22 3Q21 2Q22 2Q22 Europe $85 $135 $130 $3 $4 $22 $24 Latin America $200 $249 $270 $14 $59 $79 $74 North America $447 $549 $589 $13 $68 $88 $118 Segment Total $732 $933 $989 $30 $131 $189 $216 Sum of
Slide 31: 3Q22 Sales Volume
3Q22 Sales Volume 31 Latin North 000 Short Tons Europe Sylvamo America America Uncoated Papers 61 273 402 736 Market Pulp 36 28 22 86 Total 822 Sales volume includes revenue recognition © 2022 Sylvamo Corporation. All rights reserved.
Slide 32: Capacity by Grade
Capacity by Grade 32 000 Short Tons Uncoated Papers Market Pulp Total Saillat 265 130 395 Europe 265 130 395 Luis Antonio 385 130 515 Mogi Guacu 460 35 495 Tres Lagoas 260 - 260 Latin America 1,105 165 1,270 Eastover 700 115 815 Ticonderoga 275 - 275 North America 975 115 1,090 Sylvamo 2,345 410 2,7
Slide 33: Price & Mix continued to outpace Input Costs in 3Q22
Price & Mix continued to outpace Input Costs in 3Q22 33 Change of Price & Mix 3Q22 vs. 2Q22 Input Costs vs. Input Costs Change By Region $ Million $ Million Europe Latin America North America (3) (5) $232 (8) (5) (1) (3) (1) (1) ($10) ($9) $113 (11) $60 $46 (5) 3Q22 vs 2Q22 3Q22 vs 3Q21 (3) ($27) Pr
Slide 34: Total Maintenance Outage Costs - 2022 Outlook
Total Maintenance Outage Costs - 2022 Outlook 34 4Q22 FY 2022 $ Million 1Q22 2Q22 3Q22 Outlook Outlook Europe - - - - - Latin America - - $7 $11 $18 North America $8 $24 $3 $20 $55 Total $8 $24 $10 $31 $73 Total maintenance outage costs (shown for Sylvamo mills only) include direct maintenance outag
Slide 35: Ability to return more cash to shareowners
Ability to return more cash to shareowners 35 Restricted Payment Limits in Revised Credit Agreement Gross Debt-to- Original Revised Adjusted EBITDA Restricted Amount Restricted Amount $ Million per Year $ Million per Year > 2.5x $25 $25 2.0 – 2.5x $50 $60 < 2.0x $75 $90 © 2022 Sylvamo Corporation. A
Slide 36: No significant debt maturities until 2027
No significant debt maturities until 2027 36 Debt Maturity Profile $ Million as of October 31st $450 $397 $26 $26 $26 $26 $7 $0 2022 2023 2024 2025 2026 2027 2028 2029 Term Loans Bonds © 2022 Sylvamo Corporation. All rights reserved.
Slide 37: Selected Guidance
Selected Guidance 37 2022 2021 $ Million Outlook Actual (Revised) Total Maintenance Outage Costs $81 $73 Maintenance, Regulatory & Reforestation $70 $140 Capital Spending High-return Projects - $15 Total $70 $155 Depreciation & Amortization $126 $126 Interest Expense $17 $65 Income Tax Rate 29% 28 -
Slide 38: Our Investment Thesis at the Spinoff
Our Investment Thesis at the Spinoff 38 The World’s Paper Company We will be the world’s paper company: the employer, supplier and investment of choice. We believe in the promise of paper and are confident in our ability to create long-term value for shareowners. Our Strategy We will execute a three
Slide 39: Our Revised Investment Thesis
Our Revised Investment Thesis 39 The World’s Paper Company A Simple, Focused Plan We are the world’s paper company, the: We focus on uncoated freesheet and will create long-term • Employer of Choice value through: • Supplier of Choice • Talented teams • Investment of Choice • Iconic brands We believ
Slide 40: Building a better future for people, the planet and our company
40 Building a better future for people, the planet and our company © 2022 Sylvamo Corporation. All rights reserved.