Mercer International Inc. · NASDAQ:MERC
Mercer International — Investor Presentation (April 2015)
34 slides from Mercer International's investor presentation, Apr 7, 2015
Slide 1: Investor Discussion Materials April 2015
Exhibit 99.1 Investor April 2015 Discussion Materials
Slide 2: Forward Looking Statements
Forward The statements and Mercer. update NASDAQ:MERC uncertainties Private forward For Looking relating Securities morelooking that information Statements | to TSX:MRI.U could results Litigation statements significantly ofregarding operations |Reform www.mercerint.com basedthese affect Act onand un
Slide 3: Mercer International
Mercer International NASDAQ:MERC | TSX:MRI.U Inc. | www.mercerint.com 3
Slide 4: Corporate Structure
Corporate Mercer’s Mercer Stendal Celgar 100% Rosenthal 360,000 (1) NASDAQ:MERC In September 100% –conducts –ADMT BC, operations Germany Structure – Germany Germany 100% Canada +operations 2014, 57 |(1) TSX:MRI.U Celgar have MW one the Mercer aonly of 520,000 combined BC, through thetwo completed Ca
Slide 5: Strategically Located Mills with Access to Global Markets
Strategically The the 660,000 Stendal Rosenthal (Germany) 360,000 Europe Mercer Thailand 1% Other US Indonesia 4% (1) NASDAQ:MERC Not largest 32% Germany Italy mills’ 2014 including ADMT 8%(B.C., strategic European 520,000 Other Located Pulp Celgar Japan Canada) Germany Sales |Asia locations TSX:MRI
Slide 6: Growing Mercer's Revenue Streams: Green Energy and Chemicals
Growing Mercer Since Mercer’s 2.0 1.70 $93.0 1.64 1.6 $65.4 1.2 (m 0.81 0.48 0.65 0.4 2009 Green NASDAQ:MERC (US 1.85 1.45 $ $22.0 1.71 Energy CAGR: 0.52 $66.0 2010 energy $92.2 m) electricity has recognized CAGR: 1.44 Energy Electricity mm) 5.1% 2011 been Revenue and $88.0 $63.5 $94.8 2012 $110.0 a
Slide 7: Globally Competitive, Low Cost Mills
Globally Mercer’s Low 900 International Newer, (Ilim) apacity (ktpa) Mills 700 C 450 Nanaimo Mill Södra Weyer- Average Domtar Smaller NBSK 150 Mondi Pulp Korsnas Billerud 50.0 Source: Note: NASDAQ:MERC Mercer Age: Metsä SCA 40.0 production Mills NBSK NBSK Asia 100 Producer West 600 FisherSolve Stora
Slide 8: Mercer Investment Thesis
Mercer The Permanent Continued Demand End Growth Low Achieving Mercer’s Significant Revenue Recent Acquired Simplified Reduced Added NASDAQ:MERC NBSK uses capital more refinancing Investment infor was long such mills green minority high growth structure closure and market requirements NBSK flexibili
Slide 9: The NBSK Market
The NBSK Market| TSX:MRI.U | www.mercerint.com 9 NASDAQ:MERC
Slide 10: Introduction: Current Themes in the NBSK Market
Introduction Current The NASDAQ:MERC effect net potential impact supply themes ofofto China supply digital additional impact the surrounding |Major TSX:MRI.U and impact media ofother hardwood mill Themes on of the emerging closures, integrated paper NBSK | www.mercerint.com incapacity NBSK demand ma
Slide 11: Global Pulp Market Components
Global Components Chemical Spruce Other Core Bleached Hardwood Kraft Long, Characteristics: Sulphite 0% Major Tissue NBSK (1) NASDAQ:MERC Source: 3%Production Kraft 14% slender, Uses Specialty commands Pulp /Better Pine Kraft Softwood Bleached Pulp Softwood 27% PPPC for Market of /structure thin-wal
Slide 12: Demand Fundamentals: Changes in End Use Markets
Demand Changes The From Annual 15.0 3.5 CAGR Printing 30% P&W: 9.0 ton 2.0 of Tissue: 40% 1.0 +10% 6.0 Tissue 17% Specialty 3.0 Other: Others 22% 2003 NBSK’s (1) NASDAQ:MERC tonn Significant Source: Printing 0.6 Writing increased 3.3 2.5 1.0 1.6 0.2 2013 2003 es Others 0.8 +4% 2003 millions Tissue &
Slide 13: Demand Fundamentals: Growing China Demand
Demand BSK 12 4.8 to6.0 1.2 2.4 Global 28.0 CAGR: 2004 W. 21.0 Other: % tonnes of 7.0 P&W 1995 +7.7% (1) NASDAQ:MERC f 14.0 millions China Month Europe: Source: onnes 10% 40% 30% Deliveries 2005 – 2000 Woodfree: 2.0% tonnes BSK 2013 20% 4.0 Fundamentals P&W: 16.0 12.0 3.6 Rolling 2006 2005 PPPC (0.3
Slide 14: Demand Fundamentals: China's Demand (Cont'd)
(1) Demand China’s free, Modern wood 6.00 Tissue 5.25 Income 10 4.50 3.75 Over /3.00 Closure 2.25 CAGR: 1.50 2014E: kgYear (2) 10 $8.0 $7.0 $6.0 $5.0 $4.0 $3.0 $2.0 Implementing time, fiber Demand Year 4.92 per NASDAQ:MERC Source:demand 12th maximums +7.4% +8.8% of paper Source: Fundamentals that fi
Slide 15: Demand Fundamentals: Softwood Fiber Characteristics
Demand Fiber Softwood Each For This NBSK Printing component Tissues & 40% 60% 20% Uncoated (1) NASDAQ:MERC writing Source: this, is explains 35% 10% NBSK Characteristics provides gives Usage advantageous /& NBSK Fundamentals Towels Coated Fiber 40% 10% grades Writing in FPInnovations fiber strength
Slide 16: Demand Fundamentals: Digitalization and NBSK-BEK Price Spread
(1) Demand Digitalization In increases Pulp The $f$150 (US tissue) causing Nov-09 ($50) End orcontrast, tensile paper product $100 Price are their Oct-10 Source: Fundamentals NASDAQ:MERCdemand grades strength continuing Implications the needs, list ofdevelopment Sep-11 RISI traditionally prices whic
Slide 17: Supply Fundamentals: Slowing Global Capacity Growth
Supply From Bleached CAGR: 28.0 2014E-2018E 1995-2013 24.0 25.0 26.0 27.0 of 1995 17.0 18.0 19.0 20.0 21.0 22.0 (1) NASDAQ:MERC millions Source: 1996 1995 Fundamentals +1.4% Softwood 1997 CAGR: to PPPC 2013, 1998 (November | +1.8% TSX:MRI.U Kraft BSK –1999 Slowing capacity Global tonnes 2000 2014) |
Slide 18: Supply Fundamentals: Recent Capacity Changes
Supply Recent In have During Bratsk (490,000 Bay tpa) Perry Future There announcements BSK online; projects These future (1) (Finland) (Belarus) (2) (Czech NASDAQ:MERC the For Kamloops mill been mill capacity USA last have integration new Expectations mill History however, example: Republic) this Fu
Slide 19: Resulting in a Balanced Market Going Forward
Resulting In Going emerging markets, NBSK 17.5 16.5 15.5 tonnes 13.5 12.5 11.5 10.5 Mercer (1) change dissolving Recovered NASDAQ:MERC recent Sources: 70% 100% 95% 90% 80% 75% 65% forward, 14.5 Market in expects such history, markets, mil 2009A Supply NBSK pulp Paper Capacity 85% Actual ply that Bal
Slide 20: Strong Demand and Improving Supply Fundamentals
Strong Demand Improving Strengthening Supply -Minimal Meaningful With (1) NASDAQ:MERC Tissue Printing Only Limited Some Source: strong one Long-Term Fundamentals growth capacity in Fundamentals for NBSK new &China: economic new Hawkins capacity demand NBSK writing agent capacity potential mill new a
Slide 21: Financial Performance and Recent Developments
Financial Performance NASDAQ:MERC | TSX:MRI.U and Recent | www.mercerint.com Developments 21
Slide 22: Putting NBSK Price in Perspective
Putting Days $900 ($ US Price Shortage! NBSK $400 $300 After (1) NASDAQ:MERC /t) Sources: $800 48 8 1996 $700 of undergoing History: Price surge NBSK’s Global 401998 price Global Factset Stocks $600 BSK Price History 2000 32 significant |24 TSX:MRI.U BSK are FOEX Inventory & Inventory 2002 low, Glob
Slide 23: Significant Annual and Quarterly Performance
Significant Annual $360 20% 17% $90 10% 13% 2006 Energy $33 Revenue Quarterly $100 $81 $75 $44 DA 24% 22% 23% $25 11% Q1 7% 2010 (1) recurring performance as (2) converted NASDAQ:MERC aThe For Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3 10% $50 10% $35 $85 $69 28% 18% measure 12% 19% $57 10% $32 $28 $21 2007 40% 2011 a& C
Slide 24: Recent Corporate Developments
Corporate On were Two Also, Rosenthal: An Stendal In Around Mercer’s NASDAQ:MERC September November estimated loan used certain Acquisition the Recent corporate facilities Refinancing to €25 same refinance mill $168 2014, 26, million Developments time, level 2014, |related million structure TSX:MRI.
Slide 25: Recent Developments (Cont'd)
Mercer’s Capital Rosenthal’s Completed Celgar Expected Performance In The NASDAQ:MERC June joint Workforce Projects 2014, Recent venture annual Stendal’s new BioFilaments Mercer 6,000 Developments cost isReduction | TSX:MRI.U set Project savings and tonne to commercialize Resolute Blue per of (Cont’
Slide 26: Mercer's Refinancing Actions
Mercer’s Repaid Actions 30-Sept-14 US$mm overall Stendal 2017 Simplified Impacts Removed Lowered Operating Permanently Total LTM Debt The Note: (1) kind NASDAQ:MERC Principal refinancing note to Senior EBITDA Debt Interest debt Stendal EBITDA Loan US$mm coupon future Refinancing issued Restricted Fa
Slide 27: Mercer's Share Price Performance
Mercer’s $15.00 Volume $14.00 $13.00 12-Nov-14 $$12.00 (US 2014 Announced 31-Oct-13 Price 2013 Sh $8.00 23 $7.00 $6.00 $5.00 Mercer (1) NASDAQ:MERC / Jun 1-May-14 Completed Source: $10.00 results $9.00 3.0 new 1.0 Feb-13 14 12 2014 corporate 30-Oct-14 Share has Price Recent acquisition Feb cellulose
Slide 28: Mercer Summary
Mercer The Globally Strategically Stable the NASDAQ:MERC balance largest and – cost Summary growing “pure sheet located competitive, Experienced play” | TSX:MRI.U revenue mills NBSK with modern from management market excellent | high www.mercerint.com millpulp margin operations access producer team
Slide 29: Appendix A: Overview of Detailed Operations
AppendixOverview Detailed NASDAQ:MERC A | of TSX:MRI.U Operations| www.mercerint.com 29
Slide 30: Rosenthal Mill
Rosenthal Location: Pulp Certification: 2014 Key Built Close One New NASDAQ:MERC Features: of Production 6,000 Green in proximity the 1999 Blankenstein, Mill largest tonne Electricity –ISO modern to Capacity: per biomass 9001, |stable TSX:MRI.U year Sales: and Germany 14001, fiber tall 360,000 power
Slide 31: Celgar Mill
Celgar Location: Pulp Certification: 2014 Key Modern Abundant repayable Regularly NASDAQ:MERC Features: Production Green Mill and Castlegar, capital setting and Electricity efficient ISO low Capacity: funding production 9001 |cost TSX:MRI.U BC,Sales: fiber, and Canada from 520,000 14001 records by $
Slide 32: Stendal Mill
Stendal Location: Pulp Certification: 2014 Key Completed all Project Regularly NASDAQ:MERC ofFeatures: Production Green theBlue Mill shares Stendal, setting inElectricity Mill ISO 2004, of Capacity: new was 9001 |Germany the TSX:MRI.U it’scompleted performance minority Sales: one and660,000 of 14001
Slide 33: Appendix B: Reconciliation of Net Income to Operating EBITDA
Appendix B of Net Reconciliation NASDAQ:MERC | TSX:MRI.U Income to Operating | www.mercerint.com EBITDA 33
Slide 34: Reconciling Net Income to Operating EBITDA
(2) Reconciling in Net Operating Add: website Note: (1) its US Includes Income expenseNet Income Interest Loss Other Depreciation For Quarterly $ operating (www.mercerint.com) millions independent financial income considered or EBITDA NASDAQ:MERC EBITDA own Includes Income other Income (Gain) Expens
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