Slide 1: Investor Presentation August 2022
INVESTOR PRESENTATION AUGUST 2022
Slide 2: Forward-Looking Information & Non-GAAP Measures
FORWARD-LOOKING INFORMATION & NON-GAAP MEASURES Forward-Looking Information: This release contains forward-looking information about Interfor Corporation’s (“Interfor” or the “Company”) business outlook, objectives, plans, strategic priorities and other information that is not historical fact. A sta
Slide 3: Interfor Investment Highlights
INTERFOR INVESTMENT HIGHLIGHTS Pure-play North American lumber producer • Top four lumber producer in North America, with 30 strategically located facilities • High exposure to US South and Eastern Canada with attractive log costs Compelling lumber market fundamentals • Strong demand across all end-
Slide 4: Investor Value Proposition
INVESTOR VALUE PROPOSITION Attractive Earnings Through the Cycle Consistently Growing Volumes ADJUSTED EBITDA MARGIN PER UNIT ($C/MBF) LUMBER PRODUCTION VOLUMES (MMBF) $500 4,000 $450 3,500 $400 3,000 $350 $300 2,500 $250 2,000 $200 1,500 $150 10-year avg = $138/MBF 1,000 $100 500 $50 $- - Increasin
Slide 5: Pure-Play North American Lumber Producer
PURE-PLAY NORTH AMERICAN LUMBER PRODUCER
Slide 6: Pure-Play Lumber Producer
PURE-PLAY LUMBER PRODUCER Interfor is the only publicly traded pure-play lumber producer of scale REVENUES BY BUSINESS SEGMENT (1) (2) PEER #1 PEER #2 PEER #3 PEER #4 PEER #5 LUMBER PULP / PAPER ENGINEERED WOOD / PANELS TIMBERLANDS OTHER (1) Based on public filings for 2021; peers include West Frase
Slide 7: Industry Landscape
INDUSTRY LANDSCAPE Interfor is a top four lumber producer in North America NORTH AMERICAN LUMBER PRODUCTION BY COMPANY – 2021 (BBF)(1) 7.00 6.00 5.00 4.00 3.00 2.00 1.00 - Source: International Wood Markets/FEA Canada Wood Markets Monthly March 2022. 8 (1) Figures are pro forma for publicly announce
Slide 8: Interfor Operating Regions
INTERFOR OPERATING REGIONS EASTERN CANADA BC INTERIOR 985 MMBF (21%) 750 MMBF (16%) • 4 stud mills; 3 dimension mills; 1 I-Joist • 3 dimension mills; 1 remanufacturing facility; 1 remanufacturing facility facility (Sumas, WA) • SPF • Douglas-Fir, Hem-Fir, SPF, Cedar • Efficient, well-maintained and
Slide 9: Key Products & Markets
KEY PRODUCTS & MARKETS Diverse lumber species and end-use mix; high leverage to key US market LUMBER SALES BY SPECIES (1) LUMBER SALES BY MARKET (1) USA Spruce-Pine-Fir 85% 24% Hem-Fir 5% Southern Yellow Pine 47% Doug Fir/ Larch Japan 23% 1% Other Cedar 1% China/Tw/HK Canada 1% 1% 12% (1) By Volume
Slide 10: Compelling Lumber Market Fundamentals
COMPELLING LUMBER MARKET FUNDAMENTALS
Slide 11: Lumber Prices
LUMBER PRICES Recent prices finding support at historically attractive levels NORTH AMERICAN BENCHMARK LUMBER PRICES (US$/MBF) $1,800 $1,600 Southern Yellow Pine $1,400 US Northwest Hem-Fir Western SPF $1,200 Eastern SPF $1,000 $800 $600 $400 $200 Source: Random Lengths (includes prices up to July 2
Slide 12: Lumber Demand
LUMBER DEMAND Diversified end-use demand drivers across R&R, industrial and housing NORTH AMERICAN LUMBER DEMAND BY END-USE (BBF) 80 Domestic Residential Repair & Remodel (R&R) 70 Domestic Industrial/Commercial Domestic Residential New Home Construction Offshore Exports 60 50 40 30 20 10 - 2005 2006
Slide 13: Lumber Demand: Key Drivers
LUMBER DEMAND: KEY DRIVERS Underlying housing fundamentals remain favourable US HOUSING STARTS AGE OF US HOUSING STOCK (MILLIONS SEASONALLY ADJUSTED) (MEDIAN AGE IN YEARS) 1.8 Single-Family Multi-Family 1.7 43 1.6 1.5 41 1.4 1.3 39 1.2 1.1 37 1.0 35 0.9 0.8 33 0.7 0.6 31 0.5 0.4 29 0.3 0.2 27 0.1 -
Slide 14: Lumber Supply
LUMBER SUPPLY Measured supply growth in the US South, offset by ongoing declines in BC NORTH AMERICAN LUMBER PRODUCTION (BBF) (1) Region 2018 2019 2020 2021 2022 US SOUTH Measured growth (three-year CAGR of 4%), limited by labour availability South 18.8 19.4 20.8 20.9 21.0 and long equipment lead ti
Slide 15: Lumber Supply: BC Interior
LUMBER SUPPLY: BC INTERIOR Declining log supply across BC, but Interfor well-positioned in southern BC Mountain Pine Beetle Cumulative Percentage of Merchantable Forest Volume Killed Since 1999 Very High (>45%) High (31-45%) Moderate (16-30%) Low (<16%) None (0%) Adams Lake Castlegar Grand Forks Sou
Slide 16: Softwood Lumber Dispute
SOFTWOOD LUMBER DISPUTE Moderate exposure to duties with 62% of lumber capacity based in the US U.S. COUNTERVAILING & INTERFOR SOFTWOOD LUMBER ANTI-DUMPING CASH DEPOSIT RATES DUTIES HIGHLIGHTS COMPANY 2017-20(1) 2020-21(2) 2021-22(3) 2022-23(4) US$401 MM West Fraser 23.56% 8.97% 11.14% 8.25% Duties
Slide 17: Growth-Focused Strategy
GROWTH-FOCUSED STRATEGY — eu
Slide 18: Growth & Diversification Strategy
GROWTH & DIVERSIFICATION STRATEGY Long-standing strategy of growth and geographic lumber diversification (1) 2001 2012 2021 2022 19% 16% 17% 4% 39% 42% 47% 21% 57% 83% 20% 19% 16% 0.8 BBF 1.7 BBF 3.9 BBF 4.7 BBF BC Interior US Northwest Eastern Canada BC Coast US Southeast (1) Charts reflect product
Slide 19: Growth & Diversification Strategy
GROWTH & DIVERSIFICATION STRATEGY Interfor's strategy has been consistent over time and across regions Acquisitions have focused on assets with upside potential Efforts post-acquisition are then focused on operational excellence and the establishment of best practices, followed by capital investment
Slide 20: Multi-Year Strategic Capex Plan
MULTI-YEAR STRATEGIC CAPEX PLAN Multi-year strategic capex plan underway, primarily focused in the US South 2018 2019 2020 2021 2022 2023 2024 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O
Slide 21: Multi-Year Strategic Capex Plan
MULTI-YEAR STRATEGIC CAPEX PLAN Mill rebuilds, machine center upgrades, debottlenecking & optimization projects Eatonton, Georgia Monticello, Arkansas Canter Lines Continuous Kilns Molalla, Oregon Adams Lake, British Columbia 22
Slide 22: Capital Spending Profile
CAPITAL SPENDING PROFILE Strategic investments resulting in a well-capitalized, high-margin sawmill portfolio HISTORICAL CAPITAL EXPENDITURES & OUTLOOK ($MM) $280 Capital Expenditures - Discretionary $260 Capital Expenditures - Maintenance (Includes Woodlands Roads) $240 Depreciation, Depletion & Am
Slide 23: Top Tier Lumber Margins & Returns
TOP TIER LUMBER MARGINS & RETURNS
Slide 24: Top Tier Lumber Margins
TOP TIER LUMBER MARGINS Top tier margin performance across all market conditions $1,075 LUMBER SEGMENT ADJ. EBITDA MARGINS ($/MBF) (1) $975 $875 $775 PEER GROUP HIGH/LOW RANGE $675 $575 $475 $375 $275 $175 $75 $(25) $(125) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2019 2020 2021 2022 (1) Based on pu
Slide 25: Top Tier Return on Capital
TOP TIER RETURN ON CAPITAL Disciplined and balanced capital deployment is having an impact EBIT RETURN ON CAPITAL EMPLOYED (%) (1) 100% 90% 80% 70% = 69% 60% Peer #1 = 53% 50% Peer #2 = 47% 40% 30% 20% 10% 0% -10% (2) 2016 2017 2018 2019 2020 2021 2022 Q1 2022 Q2 (1) Based on public filings; peers i
Slide 26: Balanced Capital Allocation with Significant Financial Flexibility
BALANCED CAPITAL ALLOCATION WITH SIGNIFICANT FINANCIAL FLEXIBILITY
Slide 27: Balanced Capital Allocation
BALANCED CAPITAL ALLOCATION Disciplined and multi-faceted capital allocation tailored to maximize returns HISTORICAL CAPITAL DEPLOYMENT ($MM) $1,000 $900 Capex M&A Share Buy-Backs Special Dividend $800 $700 $600 $500 $400 $300 $200 $100 $- (1) (2) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 20
Slide 28: Recent Capital Allocation
RECENT CAPITAL ALLOCATION Balanced approach to recent capital deployment initiatives Internal Growth External Growth Multi-year strategic capital Disciplined lumber-focused M&A; program; total capex spend of WestRock in Q1-2021 approx. $178 MM in 2021 and $225- Georgia-Pacific in Q3-2021 300 MM/year
Slide 29: Capital Structure
CAPITAL STRUCTURE Significant financial flexibility to consider a variety of capital deployment options CAPITAL STRUCTURE DEBT MATURITY SCHEDULE AS OF JUN 30, 2022 ($MM) AS OF JUN 30, 2022 ($MM) Cash $271 $140 $120 Prudential Notes (4.08%) Debt $373 $100 Net Debt $102 $80 Book Equity $2,106 $60 $40
Slide 30: EACOM Acquisition
EACOM ACQUISITION 25% increase to Interfor’s capacity at an attractive valuation • 100% equity acquisition of high-quality Canadian operations which closed on February 22, 2022. • Includes 7 sawmills, 1 I-joist plant, 1 reman plant; • 985 MMbf of production capacity; 25% increase to Interfor’s curre
Slide 31: Georgia-Pacific Acquisition
GEORGIA-PACIFIC ACQUISITION 23% increase to Interfor’s capacity at an attractive valuation • Acquisition of four high-quality US sawmills from Georgia-Pacific, closed on July 9, 2021 • Cash purchase price of US$372 MM, including working capital • Highly complementary to existing operations: • Region
Slide 32: WestRock Acquisition
WESTROCK ACQUISITION Logical tuck-in acquisition with operational and capital investment upside • Acquisition of WestRock’s sawmill in APPROX. LOG PROCUREMENT AREAS Summerville, South Carolina closed on March 12, 2021. • Cash consideration of US$59 MM, included log and lumber inventories. • Mill pro
Slide 33: Positive ESG & Carbon Story
~~ & POSITIVE ESG & CARBON STORY
Slide 34: Enhancing the Natural Carbon Cycle
ENHANCING THE NATURAL CARBON CYCLE Responsible forest management increases long-term carbon storage CO2 CO2 Growing Forest CO2 CO2 CO2 Seedling Mature Forest Decaying / Vulnerable Forest Releases stored carbon CO2 CO2 Comprehensive Replanting Responsible Harvesting in 2021 Interfor planted 10.3 Enab
Slide 35: Sustainable Manufacturing
SUSTAINABLE MANUFACTURING Lumber produced by Interfor stores 4x the carbon emitted in all phases of its production 77% of Interfor sites with kilns use renewable biomass energy for drying lumber 4.4 MM tonnes of CO2 stored in lumber sold by Interfor in 2021 vs. ~400,000 tonnes of CO2e avoided annual
Slide 36: Lumber: Low-Carbon Building Material
LUMBER: LOW-CARBON BUILDING MATERIAL Lumber is a climate-friendly building product vs. other alternatives Compared to the use of: CO2 CO2 Steel Emits 18.0kg CO2* 1m2 of a building constructed using CO2 wood wall studs Stores net 16.7kg CO2* Concrete Emits 27.5kg CO2* * Carbon stored minus production
Slide 37: Responsibility at the Heart of the Company
RESPONSIBILITY AT THE HEART OF THE COMPANY Integrating ESG standards throughout our business and strategy ENVIRONMENT SOCIAL GOVERNANCE Climate: Safety: ESG Oversight: • We contribute meaningfully to the global effort to • We embrace world-leading safety standards and • 91% of directors are independ
Slide 38: Contact Information
CONTACT INFORMATION
Slide 39: Investor Contacts
INVESTOR CONTACTS RICK POZZEBON MIKE MACKAY SVP & Chief Financial Officer VP, Corporate Development & Strategy 604-689-6804 604-689-6846 richard.pozzebon@interfor.com mike.mackay@interfor.com 40
Slide 40: Analyst Coverage
ANALYST COVERAGE BMO CAPITAL MARKETS Mark Wilde (212) 883-5102 mark.wilde@bmo.com CIBC CAPITAL MARKETS Hamir Patel (604) 331-3047 hamir.patel@cibc.com EQUITY RESEARCH Kevin Mason (604) 886-5741 kmason@equityresearchassociates.com ASSOCIATES RAYMOND JAMES Daryl Swetlishoff (604) 659-8246 daryl.swetli