Mercer International Inc. · NASDAQ:MERC
Mercer International — TD Paper and Forest Products (September 2023)
21 slides from Mercer International's conference presentation, Sep 26, 2023
Slide 1: TD Paper and Forest Products Investor Presentation
Mercer International Inc. Transforming biomass into bioproducts for a more sustainable world TD Paper and Forest Products Investor Presentation Richard Short CFO and Secretary Tuesday, September 26, 2023 1
Slide 2: Forward-looking Statements
Forward-looking Statements The Private Securities Litigation Reform Act of 1995 provides a “safe For more information regarding these harbor” for forward-looking statements. risks and uncertainties, review Mercer’s filings with the United States Securities and Exchange Commission. Certain informatio
Slide 3: Bioproducts: Part of the Solution
Bioproducts: Part of the Solution The tolerance for carbon-intensive products is rapidly waning. Sustainably sourced wood and wood derivatives are part of the solution. However, wood supply is precious; only the most efficient and innovative producers and products will be capable of meeting demand.
Slide 4: Transforming biomass into bioproducts for a more sustainable world
Transforming biomass into bioproducts for a more sustainable world Be Safe & Be Be Be Healthy. Sustainable. Respectful. Bold.
Slide 5: Global Megatrends Driving Long-Term Demand
Global Megatrends Driving Long-Term Demand Growing Population Middle Class By 2030, Increasing Growth worldwide Higher Consumption population is Living Global Megatrends Standards projected to reach 8.3 billion, with Increasing Housing Urbanization Demographics 4.9 billion Changing classified as Reg
Slide 6: Maximizing Value through Purposeful Diversification
LUMBER TALL OIL Maximizing TURPENTINE Value through MASS TIMBER LIGNIN Purposeful Diversification PALLETS GREEN ENERGY PULP BIOFUELS 6
Slide 7: Evolving Sales Mix
Evolving Sales Mix Consolidated Revenue ($ millions) Pulp Segment 3,000 10% Germany Bio-extractives/Other 32% China 2,500 27% Solid Wood US Product Mix(1)(2) Other Green Electricity 2,000 31% Specialty Paper 9% 19% Pulp 1,500 Solid Wood Segment(3) 1,000 72% 15% 33% Germany 500 Pulp US Solid Wood Pro
Slide 8: Leveraging Geographic Clusters to Maximize Value
Residual fiber for pulp Leveraging Geographic Sawdust for pallet components and biofuels Clusters to Maximize Value Unplaned lumber for further processing Low quality lumber for pallets Mercer Rosenthal Mercer Stendal Mercer Stendal Mercer Torgau Mercer Friesau Mercer Rosenthal Mercer Friesau Mercer
Slide 9: Pulp: Continued Optimization
Pulp: 2.3 3rd NBSK/NBHK 475K ADMT Largest Continued million Producer of Market Optimization NBSK 1,790K ADMT ADMT NBSK 2,500 Capacity Additions (000s ADMT) +1,935K 2,000 tonnes 1994 – 2022 1,500 Greenfield Investments +552K tonnes 1,000 Efficiency and Capacity Investments +398K tonnes 500 Aquisition
Slide 10: Solid Wood: Continued Expansion to Capture Synergies
Solid Wood: 960 Lumber Sales Expansive range Revenue by Region of metric and US (% of Revenue) dimension grades MMfbm for all major 7% world markets Continued 13% Lumber 7% 24% Mercer Friesau Mercer Torgau Expansion to Capture Top No. Synergies 29% 55% 5 1Largest EPAL Largest softwood sawmill pallet
Slide 11: Mass Timber: Continued Geographic Expansion
35% 45,000 m3 Glulam North Mass Timber: America’s 210,000 m3 CLT Leading of North American Mass Timber Mass Timber Panel Continued 5 NA Facilities with Wide Capacity (1) Geographic Reach Producer Geographic 2 State of the Art Global CLT Market Value(2) Facilities in Northwest ($US Billions) Expansio
Slide 12: Bioenergy & Biomaterials: Development of Green Alternatives
Green Electricity Our mills generate 890 GWh of surplus power from Bioenergy & biomass each year, enough to power Biomaterials: 83,700 homes without fossil fuels Refined Lignin Development of Mercer Lignin Resin adhesives Functional fillers Center Green Fossil-Fuel Advanced battery elements Complete
Slide 13: Sustained Growth and Diversification
Sustained Growth and Diversification KRAFT PULP 2.3 million ADMT 100% Capacity Growth 1994 Mercer Rosenthal (% of Q1 2023 Capacity) BIOENERGY 431.5 MW 2004 Mercer Celgar LUMBER 75% 2005 Mercer Stendal 960 MMfbm 2017 Mercer Friesau CLT + GLULAM 255,000 m3 Mercer 50% 2018 Peace River Mercer PELLETS +
Slide 14: Balanced Capital Allocation
Balanced Capital Allocation Senior Debt Maturity Debt composition Composition(2) $875 optimized when ($ millions) opportunistic(2): Weighted average maturity: 2028 Weighted average coupon: 5.22% $300 Debt Rating: B+ (S&P); Ba3 (Moody’s) Liquidity: $445.6 million 2024 2025 2026 2027 2028 2029
Slide 15: Fit for Future
Fit for Future Environmental and Social Responsibility SBTi Validated UN Global ESG-Linked Fit for Future Targets Compact Loan 2022 2022 Annual Sustainability Five-year €300 million Report highlights our Validated 35% reduction Alignment with a revolving credit facility commitment to becoming an tar
Slide 16: Financial Performance
Financial Performance Annual Operating EBITDA (1)(2) $600 $1,600 $500 Operating EBITDA NBSK Prices ($/ADMT) Lumber Prices ($/m3) (8) $1,190 $537 $1,200 $400 $479 ($ millions) Price ($ / unit) $300 $365 $800 $534 $200 $254 $187 $210 $193 $192 $400 $100 - - 2016 2017 2018 2019 2020 2021 2022 LTM Q2 20
Slide 17: Current Market Conditions
Current Market Conditions(1) Current low-price environment is expected to be short-lived but may be a long, sustained recovery over multiple quarters. Chinese stimulus, falling inventories and recovery in Europe will eventually create Softwood positive conditions for price increases. Additionally, t
Slide 18: Future Growth Engines
Investment Highlights Pulp: Continuous optimization of our History of current asset base Future Growth Engines Sustained Growth Prudent financial Lumber: Continued expansion to management capture synergies Strategic purposeful diversification focused on synergistic biomass operations that Mass Timbe
Slide 19: Reconciling Net Income (Loss) to EBITDA
Reconciling Net Income (Loss) to EBITDA LTM Consolidated (US$ millions) 2018 (1)(2) 2019 (2) 2020 (2) 2021 (2) 2022 (2)(3) Q2 2023 (2)(3)(4) Net Income (Loss) Attributable to Common 128.6 (9.6) (17.2) 171.0 247.0 (72.7) Shareholders Add: Income Tax Provision 48.7 19.2 6.1 89.6 98.3 1.7 Add: Interest
Slide 20: Reconciling Net Income (Loss) to EBITDA
Reconciling Net Income (Loss) to EBITDA Note: For other reconciliations of Net Income (Loss) to Operating EBITDA in periods not shown, please refer to that period’s respective Form 10-Q or 10-K, which can be found on our website (www.mercerint.com) Operating EBITDA is defined as operating income (lo
Slide 21: Contact Information
Contact Mercer International Inc. Information P: +1 (604) 684 1099 info@mercerint.com Suite 1120, 700 West Pender St Vancouver, B.C. Canada www.mercerint.com V6C 1G8 21
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