Mercer International Inc. · NASDAQ:MERC
Mercer International — Q3 2025 Earnings Presentation
24 slides from Mercer International's earnings presentation, Nov 7, 2025
Slide 1: Mercer International Inc. Q3 2025 Earnings Call
Mercer International Inc. Transforming biomass into bioproducts for a more sustainable world Q3 2025 Earnings Call November 7th, 2025 Juan Carlos Bueno – President & CEO Richard Short – CFO, Executive VP & Secretary
Slide 2: Forward-looking Statements
Forward-looking Statements The Private Securities Litigation Reform Act of 1995 provides a For more information regarding these “safe harbor” for forward-looking statements. risks and uncertainties, review Mercer’s filings with the United States Securities and Exchange Commission. Certain informatio
Slide 3: Financial Results Overview
Financial Results Overview EBITDA Decreased Quarter-Over-Quarter Key Drivers • Lower sales realizations was the primary Change driver of a non-cash inventory impairment EBITDA (US$ millions) Q2 2025 Q3 2025 (+/-) of $20 million in Q3. • EBITDA decreased quarter-over-quarter Pulp Segment(1) ($10) ($1
Slide 4: Pulp Prices
Pulp Segment Pulp Prices Pricing Overview Realized Prices Decreased in Q3 Realized Pulp Price (US$ / tonne) Region Q2 2025 Q3 2025 NBSK List Price (US$ / tonne) $1,000 Domestic $1,820 $1,700 $800 China (net) $734 $690 Europe $1,553 $1,497 $600 NBHK List Price (US$ / tonne) $400 Domestic $1,310 $1,20
Slide 5: Key Performance Indicators
Pulp Segment Key Performance Indicators Sales Volume (000s tonnes) Major Maintenance Downtime (Days) 453 Q4 2025: 427 • 18 days (Stendal) Q2 2025 Q3 2025 6 Production Volume (000s tonnes) 457 490 459 480 23 20 Q2 2025 Q3 2025 Q2 2025 Q3 2025 Planned Start-up Production (Actual) Production (Adjusted)
Slide 6: Lumber Overview
Solid Wood Segment Lumber Overview Benchmark Lumber Price Lumber Operations (mmfbm) Random Lengths WSPF 2&btr 2x4 (US$ / mfbm) $1,500 $1,200 120 121 115 110 $900 $600 $300 - 2021 2022 2023 2024 2025 Q2 2025 Q3 2025 Production Sales 6
Slide 7: Electricity and Mass Timber
Electricity and Mass Timber Electricity Mass Timber Revenue (US$mm) 216 204 $11 $11 Q2 2025 Q3 2025 Sales Volume (GWh) $90 $106 Q2 2025 Q3 2025 Despite headwinds our mass timber business has a Q2 2025 Q3 2025 healthy order book; we expect improved results in Price ($ / MWh) 2026 7
Slide 8: Financial Position
Financial Position Summary One Goal, One Hundred US$mm unless otherwise stated • Goal to improve profitability by $100 million by the end of Measure Q2 2025 Q3 2025 Change (+/-) 2026, using 2024 as a baseline • $30 million in cost savings Net Loss ($86) ($81) ($5) anticipated for 2025 Loss per Share
Slide 9: Headwinds
Headwinds Trade Uncertainty • Operating results were negatively impacted by trade uncertainty, dampening both paper and lumber demand Internal Focus Pulp Pricing Pressure Focusing on controllable factors: • Chinese overcapacity and cheap hardwood are driving mill reliability is beginning to yield gr
Slide 10: Strategic Focus: One Goal, One Hundred
Strategic Focus: One Goal, One Hundred • Targeting $100 million in EBITDA improvements by the end of 2026 compared to 2024 • Expecting to realize $30 million in reliability related savings for 2025 $100 million • Initiative also includes targeting ~$20 million reduction in working capital and ~$20 m
Slide 11: Macroeconomic Headwinds: Tariffs & Fiber Supply
Macroeconomic Headwinds: Tariffs & Fiber Supply Increased Visibility on Tariff Impacts Strategic Position & Mitigation • Celgar is strategically positioned to mitigate fiber cost U.S. Section 232 review subjects both Canadian pressure due to existing access to the U.S. fiber market and European lumb
Slide 12: Pulp Markets
Pulp Markets • Pulp markets weakened significantly due to seasonality-driven weak demand and low Current fiber costs in China • Market dynamics have created opportunistic pulp substitution by paper producers as they State run their machines slower • Pulp de-stocking by paper producers is putting add
Slide 13: Lumber Production
Lumber Production Quarterly Lumber Production (mmfbm) (4%) 4% decrease in lumber production compared to Q2 due to planned maintenance at Friesau Expected incremental lumber production at Torgau will provide ~65 million board feet of annual lumber capacity beginning in Q4 120 115 Q2 2025 Q3 2025 13
Slide 14: Fiber Costs
Fiber Costs Fiber Costs Increased for Pulp and Lumber Per Unit Fiber Costs Overall pulp fibre costs relatively flat compared to Q2. In Germany, reduced demand for pulp logs reduced fibre costs. In Canada, costs increased due to higher logistics costs. Q2 '23 Q3 '23 Q4 '23 Q1 '24 Q2 '24 Q3 '24 Q4 '24
Slide 15: Solid Wood Segment
Solid Wood Segment Segment Headwinds Remained Consistent with Q2 Segment continues to be held back by weak European economy Persistent high interest rates on construction Negative $9MM segment EBITDA for Q3 with higher U.S. lumber pricing not offsetting the sustained weak demand for pallets 15
Slide 16: Lumber Markets
Lumber Markets • While U.S. lumber pricing may remain volatile in the short term, significantly higher anti-dumping and countervailing duties is expected to force production curtailments and drive an increase in lumber prices • European lumber prices trending upwards, driven by increasing saw log pr
Slide 17: Pallets & Pellets
Pallets & Pellets Pallet Pellet • Shipping pallet market remains weak due to • Heating pellet prices remained relatively flat in Q3 overhang of European economy (especially • Expect demand and prices to be slightly higher in Germany) Q4 due to increased seasonal demand combined • Once signs of econo
Slide 18: Mass Timber
Mass Timber • Steady growth in incoming project inquiries for the mass timber business, with potential sales volumes of these inquiries exceeding $400 million and over 100 projects per quarter • Order book is growing, with projects being bid on and won today scheduled for construction about nine mon
Slide 19: Capital Allocation
Capital Allocation Strategic and high-return capital projects at Torgau and Celgar mills are recently completed Capital Expenditure Summary • Total Q3 capex of ~$30 million • Expected 2025 capex of ~$100 million • Project will increase annual sawn timber production capacity • Continued prioritizatio
Slide 20: Bioproducts for a More Sustainable World
Bioproducts for a More Sustainable World Carbon Capture Plant • Currently in FEL-2 stage of assessing the installation of a carbon capture plant. • Exciting opportunity to enter the voluntary carbon credit market We believe products like lignin, mass timber, green energy, lumber, and pulp will play
Slide 21: 2025 Outlook
2025 Outlook • Given the disappointing Q3 results and persistent industry headwinds, further measures are being implemented to improve liquidity position, including reductions in cost, capex, and working capital • Strong asset portfolio and experienced management team are well-positioned to navigate
Slide 22: Contact Information
Contact Mercer International Inc. Information P: +1 (604) 684 1099 info@mercerint.com Suite 1120, 700 West Pender St Vancouver, B.C. Canada www.mercerint.com V6C 1G8
Slide 23: Reconciling Net Loss to Operating EBITDA
Reconciling Net Loss to Operating EBITDA Consolidated (US$ millions) Q2 2025 Q3 2025 Net loss ($86.1) ($80.8) Income tax recovery (1.9) (14.8) Interest expense 28.4 28.5 Other expense (income) 1.1 (0.5) Operating loss (58.4) (67.6) Add: Depreciation and amortization 37.5 39.5 Operating EBITDA (20.9)
Slide 24: Reconciling Net Loss to Operating EBITDA
Reconciling Net Loss to Operating EBITDA Note: For other reconciliations of Net 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 loss plus deprecia