Rayonier Advanced Materials Inc. · NYSE:RYAM
Rayonier Advanced Materials — Q1 2018 Earnings Presentation
20 slides from Rayonier Advanced Materials's earnings presentation, May 8, 2018
Slide 1: First Quarter 2018 Financial Presentation Materials
First Quarter 2018 Financial Presentation Materials
Slide 2: Safe Harbor
Safe Harbor Certain statements in this document regarding anticipated financial, business, legal or other outcomes including business and market conditions, outlook and other similar statements relating to Rayonier Advanced Materials’ future events, developments, or financial or operational performa
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures These presentation materials contain certain non-GAAP financial measures, including EBITDA, adjusted free cash flows, adjusted operating income, adjusted net income and adjusted net debt. These non-GAAP measures are reconciled to each of their respective most directly com
Slide 4: First Quarter 2018 Financial Highlights
First Quarter 2018 Financial Highlights Benefiting from greater scale and diversification Revenue by Segment** Revenue: $522 million Operating Income: $46 million; EBITDA: $86 million 18% — Strong demand for high-yield pulp and lumber contributed to strong pricing driving 4% sales growth* $522 1
Slide 5: High Purity Cellulose – 1Q'18 Results & Outlook
High Purity Cellulose – 1Q’18 Results & Outlook Overview: • Four facilities with six manufacturing lines in US, Canada and France • Cellulose Specialties capacity of 775,000 MT with additional 245,000 MT of commodity capacity • Ranks as the #1 or #2 global manufacturer of acetates, ethers, MCC, tire
Slide 6: Forest Products – 1Q'18 Results & Outlook
Forest Products – 1Q’18 Results & Outlook Overview: • Seven facilities with total capacity of 770,000 MBF • Produces a range of lumber products primarily for residential and commercial construction • Integrated facilities provide chip capacity to supply raw material fiber to Canadian pulp assets Qua
Slide 7: Pulp – 1Q'18 Results & Outlook
Pulp – 1Q’18 Results & Outlook Overview: • Footprint comprised of two Canadian facilities • Total capacity is 570,000 MT of high-yield pulp Results: Quarter Ended Sales increased $21 million and EBITDA $17 March 31, March 25, 2018 2017* million due to 36% increase in high-yield pulp prices drive
Slide 8: Paper – 1Q'18 Results & Outlook
Paper – 1Q’18 Results & Outlook Overview: • Footprint comprised of two Canadian facilities • Total capacity is 180,000 MT of paperboard and 205,000 MT of newsprint • Paperboard focus on coated printing bristols for graphical end-uses in the Northeast, Midwest and Canada Results: Quarter Ended Marc
Slide 9: Consolidated 1Q'18 Financial Highlights
Consolidated 1Q’18 Financial Highlights ($ Millions) Quarter Ended Combined* 1Q 2018 1Q 2017 1Q 2017 • 4% increase in pro forma sales: — 36% increase high-yield pulp Sales $ 522 $ 201 $ 502 prices — 30% increase in lumber prices Operating Income 46 27 58 — Offset by 12% decline in High Purity Cellul
Slide 10: Capital Resources & Allocation
Capital Resources & Allocation ($ Millions) Three Months Ended March 31, 2018 March 25, 2017 Cash Provided by Operating Activities $ 33 $ 38 Cash Used for Investing Activities (29) (14) Cash Used for Financing Activities (12) (5) Change in Cash Balances $ (8) $ 19 Adjusted Free Cash Flows* 13 24 Div
Slide 11: Strategic Pillars of Growth
Strategic Pillars of Growth Well Positioned to Drive EBITDA Growth Strategic Pillars provide a framework to achieve an incremental ~$155 million of EBITDA opportunities by 2020 before cost inflation and changes in commodity sales prices ➢ Cost Transformation of $100 million, including $75 million
Slide 12: 3-Year Outlook
3-Year Outlook ~$155 million EBITDA* opportunity by end of 2020 including $50 million target in 2018 $200 $150 $25 $15 $100 $15 $75 Synergy $50 $25 Legacy $0 Investments/ Cost Transformation Market Optimization New Products Acquisitions *Cost improvements before inflation and changes in commodity pr
Slide 13: Disciplined & Balanced Capital Allocation
Disciplined & Balanced Capital Allocation Cash Flow From Operations Maintain Assets $100-110 million of annual capex Adjusted Free Cash Flow Reduce Leverage Target 2.5x Net Leverage Value Driven Approach Focused on Risk Adjusted Returns on Invested Capital Investment in the External Strategic Return
Slide 14: Appendix
RAYONIER Advanced Materials. Appendix
Slide 15: Key Production & Pricing
Key Production & Pricing Q1’17 Q4’17 Q1’18 2017 Sales Average Average Average Product Volumes Index* Index Price Index Price Index Price (000s) Cellulose • 662 MT • None • N/A • N/A • N/A Specialties High Purity • Bleached Kraft Fluff • $1,028 • $1,168 • $1,223 • 317 MT Commodity • Viscose Pulp deli
Slide 16: Definitions of Non-GAAP Measures
Definitions of Non-GAAP Measures EBITDA is defined as earnings before interest, taxes, depreciation and amortization. EBITDA is a non-GAAP measure used by our Chief Operating Decision Maker, existing stockholders and potential stockholders to measure how the Company is performing relative to the ass
Slide 17: Basis of Presentation for March 25, 2017
Basis of Presentation for March 25, 2017 Combined net sales and operating income (loss) represents the combination of Tembec’s net sales and operating earnings as of March 25, 2017, adjusted to reflect the estimated conversion from International Financial Reporting Standards to U.S. Generally Accept
Slide 18: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ($ Millions) High Forest Purity Corporate Three Months Ended: Products Pulp Paper Cellulose & Other Total March 31, 2018 Net Income $ 10 $ 23 $ 5 $ 25 $ (39) $ 24 Depreciation and amortization 2 1 5 29 — 37 Interest expense, net — — — — 15 15 Income tax expense —
Slide 19: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ($ Millions) March 31, 2018 March 25, 2017 Adjusted Net Debt Reconciliation Current maturities of long-term debt $ 11 $ 10 Long-term debt & capital lease obligation 1,226 771 Total debt $ 1,237 $ 781 Original issue discount, premiums and debt issuance costs 5 8 Ca
Slide 20: Reconciliation of Reported to Adjusted Earnings
Reconciliation of Reported to Adjusted Earnings ($ Millions, except per share amounts) Three Months Ended March 31, 2018 December 31, 2017 March 25, 2017 Per Per Per Diluted Diluted Diluted Adjusted Operating and Net Income (a): $ Share $ Share $ Share Operating Income $ 46 $ 1 $ 27 Acquisition rela
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