Mercer International Inc. · NASDAQ:MERC
Mercer International — Jefferies 2015 Industrials Conference
28 slides from Mercer International's conference presentation, Aug 13, 2015
Slide 1: Jefferies 2015 Industrials Conference
Exhibit 99.1 M E R C13, INTERNATIONAL Jefferies August 2015 E 2015 R Industrials GROUP Conference
Slide 2: Forward-Looking Statements
Forward The statements and Mercer. annual NASDAQ:MERC expectations. uncertainties Private reports For Looking relating Securities more on that Form information Statements | to TSX:MRI.U could results Litigation 10-Ksignificantly of and regarding operations |Reform our www.mercerint.com quarterly the
Slide 3: Mercer International Inc.
Mercer International NASDAQ:MERC | TSX:MRI.U Inc. | www.mercerint.com M E R C E R 3
Slide 4: Corporate Structure
Corporate Mercer’s Mercer the INTERNATIONAL MERCER Rosenthal 360,000 Celgar 520,000 100% Stendal 660,000 (1) NASDAQ:MERC In only September (1) -conducts -ADMT BC, two Germany operations Structure - Germany NBSK Canada +operations 2014, 57 100 148 | TSX:MRI.U market GROUP have one MW MW Mercer of a c
Slide 5: Strategically Located Mills with Access to Global Markets
Strategically The Stendal Rosenthal Europe Middle Celgar Indonesia Thailand Japan United Mercer US Germany Italy Other China (1) NASDAQ:MERC Not 4% mills’ 7% Asia 1% EU –(B.C., 26% States 2014 East including (Germany) the –(1) 32% (Germany) strategic 7% the world’s Located Pulp 23% Canada) largest G
Slide 6: Growing Mercer's Energy and Chemical Revenue
Growing Mercer Since 1MWh 0.4 0.8 1.2 1.6 2.0 Production 1.45 1.64 0.81 0.65 0.48 Mercer’s -$Revenue $22.0 $44.0 $66.0 $88.0 $110.0 $94.8 Chemical 2009 $63.5 $65.4 Energy aGreen NASDAQ:MERC .85 101.5 significant 1.44 CAGR: 0.71 0.52 2010 energy $93.0 (mm) electricity CAGR: has recognized (US$ Energy
Slide 7: Globally Competitive, Modern Mill Operations
Globally Mercer’s Low High Strong All NBSK -IAverage 150 300 450 600 750 900 Nanaimo Metsä Aditya Catalyst Older, Resolute Domtar Asia Heinzel (Paper Billerud- 50.0 (1) (2) NASDAQ:MERC nternational Source: Note: facilities 40.0 production maintenance Pulp runnability Board Smaller Excellence) record
Slide 8: The NBSK Market
The NBSK Market| TSX:MRI.U | www.mercerint.com M ER C E R 8 NASDAQ:MERC
Slide 9: Global NBSK Pulp Market Components
Global Components Chemical Sulphite Unbleached Bleached Other SBSK Major Northern Produced Spruce Core North Long, Characteristics: Better Tissue NBSK (1) NASDAQ:MERC Source: Production 14% America, slender, softness structure Uses 27% Specialty 59% generally Pulp / Pine 0% Bleached Hardwood Softwoo
Slide 10: NBSK Fiber Characteristics and Demand Fundamentals
Demand Fiber Each NBSK For This Pulp Softwood Hardwood Fiber-to-Fiber -200 Current % -T 60% 80% 100% 75% Printing 30% 35% 40% 10% 20% 25% Uncoated (1) NASDAQ:MERC issues NBSK Source: this, is explains um- 75% 30% 10% Fiber NBSK Characteristics provides gives advantageous /NBSK & NBSK Fundamentals To
Slide 11: Significant Changes in NBSK Demand
Demand Changes The From Significant NBSK C 6.0 9.0 12.0 15.0 P&W: Printing Tissue Specialties 2003 Annual millions -R 0.5 2.5 3.0 3.5 1.3 2.0 1.7 China 2013 0.8 1.0 1.5 0.6 NBSK’s (1) (2) NASDAQ:MERC AGR est Source: 1.0 increased of 2013 2014 2003 (6%) 17% Demand 2003 World Tissue & of strength Fund
Slide 12: Demand Fundamentals: Global and Regional Demand
Demand Global 28.0 Region: China: W. N. 24.0 Other: 120.0 — % China’s millions 16.0 14.0 Kraft Fluff P&W: Tissue: 8.0 10.0 12.0 Paper P&W 4.0 -26.0 2.0 (1) (2) NASDAQ:MERC 995 004 China America: Europe: Source: 10% 5% Tissue 35% 30% 25% 20% 15% CAGR: 2000 2007 & Woodfree: Board Board: Woodfree Mecha
Slide 13: Demand Fundamentals: China's Growth
Demand China’s Growth Rising Growing Increased kg 6.00 Tissue 5.25 Income 4.50 3.75 3.00 2.25 1.50 -0.75 1990 000’s (1) (2) (3) ... Shutting Significant Implementing Modern Focus We RISI 2005-2009: 2011: 2012: 2013: 2014E: 2015E NASDAQ:MERC - and /Source: Income believe person $8.0 $7.0 $5.0 Over 10
Slide 14: Market Price Developments: NBSK-BEK Spread
Demand BEK Some Believed Despite NBSK -(Price $50 $100 $150 $200 $250 Nov-09 We (1) NASDAQ:MERC $50) Source: believe Market Spread market Market vs. balanced Nov-10 Fundamentals toBEK that RISI be(US$/tonne) Price participants due Price the price Price Nov-11 World NBSK |Developments in recent TSX:M
Slide 15: Supply Fundamentals: Recent and Future Capacity Changes
Supply Recent In During Future There Forecasted Name Kymi Svetlogorsk Husum Värö Äänekoski Other Total We Old, Mill Integration (1) ** NASDAQ:MERC the Swing Source: believe Capacity conversions high Södra 1,470+ Various UPM last have Company Expectations History this Fundamentals MetsäBoard cost dis
Slide 16: Financial Performance and Recent Developments
Financial Performance NASDAQ:MERC | TSX:MRI.U and Recent | www.mercerint.com Developments M E R C E R 16
Slide 17: NBSK Price History in Perspective
Putting $1,100 Days NBSK $1,000 $900 $800 $700 Shortage! $600 $500 $400 $300 1996 Global After (1) NASDAQ:MERC Sources: 48 40 price 24 16 -8 1998 of undergoing History: Price BSK 64 56 NBSK’s Global surge 2000 Factset Inventory (US$/t) BSK Price History 2002 32 significant | TSX:MRI.U FOEX Inventory
Slide 18: Annual and Quarterly Operating EBITDA
Significant Annual $360 $270 $297 $186 $180 $90 19% 10% 13% 2006 Energy Quarterly $100 $81 $75 $44 $61 $50 22% 23% $25 11% -7% Q1 2010 EBITDA (1) impairment income (2) NASDAQ:MERC - The For Q2 10% 17% $85 $69 28% 26% 18% 12% $101 10% 24% $21 $233 $173 25% 2007 40% 2011 Q3 a& from Consolidated compan
Slide 19: Recent Developments
Mercer’s obtain offering Stendal extended; maturing Quarterly a mill 100% $250 Recent in cash current May (totalling million economic dividend Developments 2019 facilities in $499 Anof 7.00% interest estimated now $0.115 million senior in Stendal Around per place at$168 September notes share Acquisi
Slide 20: Recent Developments (Cont'd)
Mercer’s role Ure, |Stendal’s TSX:MRI.U of theExecutive Senior Recent Project | www.mercerint.com Vice-President, Developments Blue Chairman Mill was of the Finance (Cont’d) completed Board 20 concurrently David Leadership on schedule M. Gandossi Transition became and ontransitioned the budget Plan
Slide 21: Debt Refinancing Actions and Liquidity
Mercer’s Unrestricted $693 remains Principal Stendal Total Loan mill inRefinancing amount, place Net (4) Group Facility Debt Includes post-transaction; does Lowered $616 $499 Actions not capital $602 include - 2017 future Repaid LTM leases the Senior premium interest EBITDA swap Stendal only Notes m
Slide 22: Mercer Summary
Mercer key management markets – Summary Stable team NASDAQ:MERC and Thegrowing largest “pure-play” revenue | TSX:MRI.U from NBSK high-margin market | www.mercerint.com pulp energy producer & bio-chemical Strong 22 long-term by-product NBSK salesfundamentals Delevered and Globally flexiblecost capita
Slide 23: Appendix A: Detailed Overview of Operations
AppendixOverview Detailed NASDAQ:MERC A | of TSX:MRI.U Operations| www.mercerint.com M E R C E R 23
Slide 24: Rosenthal Pulp Mill
Rosenthal Location: Pulp Electricity Certification: 2014 Key Built Strategically Close Allows One In Regularly New NASDAQ:MERC 2014, Features: of Production 6,000 Green in proximity the customers 1999 the Blankenstein, setting Mill Generating largest tonne Electricity mill located –ISO modern to Cap
Slide 25: Celgar Pulp Mill
Celgar Location: Pulp Electricity Certification: 2014 Key Modern Abundant Green In Secured Majority Continues Regularly NASDAQ:MERC 2014, Features: Production Green Energy Mill and C$57.7 the used Castlegar, setting and to Generating Electricity mill efficient demonstrate ISO Project to lowmillion C
Slide 26: Stendal Pulp Mill
Stendal Location: Pulp Electricity Certification: 2014 Key Completed One In Project Regularly NASDAQ:MERC September 2014, Features: of Production Green Chemical the Blue Mill exported Stendal, setting Generating largest inElectricity Mill ISO 2014, 2004, Sales: Capacity: new was 509,773 biomass 9001
Slide 27: Appendix B: Reconciliation of Net Income to Operating EBITDA
Appendix B of Net Reconciliation NASDAQ:MERC | TSX:MRI.U Income to Operating | www.mercerint.com EBITDA M E R C E R 27
Slide 28: Reconciling Net Income to Operating EBITDA
Reconciling in Net Add: Note: (1) (www.mercerint.com) (2) (3) (4) its expense of performance. EBITDA income considered Operating NASDAQ:MERC US$ the own Quarterly Completed Includes Income Net Income Interest Loss Other Depreciation For underlying millions operating (loss) and is Income other Income
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