West Fraser Timber Co. Ltd. · TSX:WFG
West Fraser Timber — Q2 2011 Earnings Presentation
12 slides from West Fraser Timber's earnings presentation, Jul 22, 2011
Slide 1: Second Quarter 2011 Results
Second Quarter 2011 Results July 22, 2011
Slide 2: Forward-Looking Statements, EBITDA and Benchmark Prices
Forward-Looking Statements, EBITDA and Benchmark Prices Please see our cautionary statements concerning forward-looking statements, EBITDA and benchmark prices contained in our 2010 Management’s Discussion and Analysis which is on our website (www.westfraser.com) and on SEDAR (www.sedar.com). These
Slide 3: Second Quarter 2011 Highlights
Second Quarter 2011 Highlights Summary Financial Results Lumber Panels Pulp & Paper Consolidated Outlook 3 3
Slide 4: Q2 2011 Highlights
Q2 2011 Highlights Financial Lower earnings on struggling economic recovery Canadian dollar continued strengthening – $1.033 Markets Building products prices down in Q2 ‘Normal’ U.S. spring building season did not transpire Lumber shipments to China increased Operational Operations ran well 4 4
Slide 5: Lumber
Lumber Q2-11 Q1-11 YTD-11 Q2-10 YTD-10 Sales - $ millions 438 411 849 464 873 EBITDA - $ millions 11 56 67 75 142 EBITDA margin - % 3 13 8 16 16 Lumber price summary $US SPF 2 x 4 down 18% from Q1-11 (down 8% from Q2-10) $US SYP 2 x 4 down 14% from Q1-11 (down 29% from Q2-10) Shipments up 18% from Q
Slide 6: Panels
Panels Q2-11 Q1-11 YTD-11 Q2-10 YTD-10 Sales - $ millions 96 91 187 108 208 EBITDA - $ millions (1) 4 3 20 31 EBITDA margin - % n/a 4 2 19 15 Plywood Benchmark prices down marginally from Q1-11 (down 20% from Q2-10) Shipments up 10% from Q1-11 (up 2% from Q2-10) Production flat from Q1-11 (down 6% f
Slide 7: Pulp & Paper
Pulp & Paper Q2-11 Q1-11 YTD-11 Q2-10 YTD-10 Sales - $ millions 211 209 420 226 429 EBITDA - $ millions 38 47 85 53 95 EBITDA margin - % 18 22 20 23 22 Benchmark NBSK pulp prices up 6% from Q1-11 (up 3% from Q2-10) Shipments relatively flat from Q1-11 and Q2-10 Production flat from Q1-11 (up 13% fro
Slide 8: Consolidated Financial Results
Consolidated Financial Results Revenue and Earnings (Canadian $ millions) Q2-11 Q1-11 YTD-11 Q2-10 YTD-10 Sales 720 687 1,407 772 1,460 Operating Earnings 22 35 57 109 166 Earnings from continuing operations 11 20 31 67 105 Earnings 10 19 29 67 96 EPS from continuing operations1 (0.07) 0.46 0.73 1.2
Slide 9: Consolidated Financial Results: Cash Flow
Consolidated Financial Results Cash Flow (Canadian $ millions) Q2-11 Q1-11 YTD-11 Q2-10 YTD-10 Cash from operating activities before working capital changes 54 33 87 162 348 Non-cash working capital changes 61 (89) (28) 83 (29) Capital spending, net of GTP (35) (11) (46) (27) (54) Financing (19) (6)
Slide 10: Consolidated Financial Results: Balance Sheet
Consolidated Financial Results Balance Sheet (Canadian $ millions) End of Q2/11 Q4/10 Q2/10 Working Capital 450 400 338 Property, Plant, Equipment & Timber 1,401 1,434 1,502 Other Assets 371 387 378 Other Liabilities 395 387 421 Long-term Debt 290 300 320 Shareholders’ Equity 1,537 1,534 1,477 Net D
Slide 11: Short-term Outlook
Short-term Outlook Lumber Demand remains soft due to continued low U.S. housing starts Lumber prices will remain under pressure as a result Demand in China could increase, dependent on economy staying strong Panels Competition from U.S. plywood imports will continue until the Canadian dollar weakens
Slide 12: Longer-term Outlook
Longer-term Outlook Lumber Positive outlook for lumber as demand improves due to US home construction returns to trend levels Growing demand in new markets (China, India, etc.) Sustained higher lumber prices should reduce trade friction with U.S. Pulp Growing demand in Asia should offset growth in m