ANNUAL GENERAL MEETING. April 19, 2018 Quesnel, B.C.

Transcription

1 ANNUAL GENERAL MEETING April 19, 2018 Quesnel, B.C.

2 Financial Results Billion in sales Sales 5,134 4,450 2,400 Adjusted EBITDA 1, Earnings

3 Lumber Financial Results 450 Benchmark Lumber Prices 34 Lumber SPF #2 & Better 2x4 (per Mfbm) SYP #2 West 2x4 (per Mfbm) mills Production (MMfbm) SPF 3,809 3,796 2,470 SYP 2,424 2, Sales 3,671 3,145 1,475 Adjusted EBITDA

4 U.S. Housing Starts Thousands 2,200 2,000 1,800 1,600 1,400 1,200 1, F 2019F 2020F Total Single Multi Underlying Demand Expect that the recovery has room to continue Source: US Census Bureau, FEA Forecast

5 North American Lumber Consumption F 2019F 2020F US Consumption Canadian Consumption Demand for lumber expected to grow by 2B board feet per year Source: US Census Bureau, Statistics Canada, West Fraser Forecast 5

6 Billion Bf North American Lumber Production F 2019F 2020F U.S. Canada Canada West (R Axis) Canada East (R Axis) US West (R Axis) US South (R Axis) 0 US South only significant growth region Source: US Census Bureau & Statistics Canada, West Fraser Forecast 6

7 Billion bf North American Lumber Supply & Demand Imports 2005: 3.0 billion bf Imports 2010: 0.5 billion bf Imports 2017: 1.4 billion bf 2020: 4.2 billion bf F 2019F 2020F Production Demand On North American Mills Potentially growing gap in lumber supply Source: US Census Bureau & Statistics Canada, West Fraser Forecast 7

8 Panels Financial Results 525 Benchmark Plywood Prices mills 375 Plywood Production (MMsf 3/8 basis) MDF Production (MMsf 3/4 basis) Plywood Production (MMsf 3/8 basis) LVL Production (Mcf) 2,676 2,215 - Sales Adjusted EBITDA

9 Pulp & Paper Financial Results Benchmark Pulp Prices 5 mills NBSK U.S. (per tonne) NBSK China (per tonne) Newsprint (per tonne) Production (Mtonnes) NBSK BCTMP Newsprint Sales Adjusted EBITDA

10 Achieving Our Potential Our objective: Low-cost, high margin producer in each of our product lines, diversified across geographic regions #1 Lumber Producer North America We re prepared for the future. We ve invested in: Growing footprint of our operations Modernized mills and upgraded technology Safety Employee development 10

11 Gilman Acquisition #1 US South Lumber Producer Welcomed 900 new employees 6 mills, finger-joint plant and a regional office Now 22 facilities and 2 offices strong in the US South 11

12 West Fraser locations 12

13 Increased Capacity 2017 Lumber Capacity (7.2 billion feet) 7.2 billion board feet 2004 Lumber Capacity (2.76 billion feet) U.S. 13% Alberta 12% BC 75% U.S. 43% Alberta 23% BC 34% BC Alberta U.S Revenue Mix: Lumber Panels Pulp 0% 20% 40% 60% 80% 100% 13

14 North American Lumber Capacity 8,000 7,000 6,000 5,000 SPF SYP Other 4,000 3,000 2,000 1,

15 Achieving Our Potential Our objective: Low-cost, high margin producer in each of our product lines, diversified across geographic regions #1 Lumber Producer North America We re prepared for the future. We ve invested in: Growing footprint of our operations Modernized mills and upgraded technology Safety Employee development 15

16 Capital Spending $ Millions 400 $1.6 Billion in capital Capital Expenditure 16

17 Modernizing our Operations 61 Major projects since 2012 Major rebuilds of 11 sawmills Upgraded 13 planers Added 33 continuous kilns Built 6 energy and bioproducts projects 17

18 Achieving Our Potential Our objective: Low-cost, high margin producer in each of our product lines, diversified across geographic regions #1 Lumber Producer North America We re prepared for the future. We ve invested in: Growing footprint of our operations Modernized mills and upgraded technology Safety Employee development 18

19 Safety 19

20 Safety 12% serious injuries It s up to each of us to achieve our goal, to eliminate serious incidents and injuries Safety excellence is operational excellence High performance is achieved by working safely and productively, not choosing one over the other 2017 Serious injuries down 12% in 2017 This is on top of a 25% reduction in serious injuries between 2015 and 2016 Our medical incident rate is down 16% vs Recordable Incidents and Loss Time Accidents (LTA's) reduced by 30% 20

21 Achieving Our Potential Our objective: Low-cost, high margin producer in each of our product lines, diversified across geographic regions #1 Lumber Producer North America We re prepared for the future. We ve invested in: Growing footprint of our operations Modernized mills and upgraded technology Safety Employee development 21

22 Our People Promote within We are committed to supporting employee s development Internal courses and skills training Partnerships with educational organizations 22

23 Recognition 23

24 Part of our Communities $3.2 Million in donations Hinton s West Fraser Guild and the Williams Lake West Fraser Aquatic Centre and Sam Ketcham Pool, Maplesville High Homecoming, West Fraser Centre arena in Quesnel 24

25 Part of our Communities 500+ Organizations received donations in 2017 Edmonton Habitat for Humanity, Leola AR Millin and Grillin at Timberfest, architecture students visiting Mansfield AR, West Fraser Outdoor Discovery Park near Sundre, AB 25

26 Total Shareholder Return (Annual) % 10% 10.40% 8% 7.30% 6% 6.30% 6.30% 5.50% 4% 2% 0% West Fraser TSX Competitor A Competitor B Competitor C Source: Toronto Dominion Bank 26

27 Total Shareholder Return (Annual) $1,000 invested: ,000 $3,640 3,500 3,000 2,500 2,000 $2,510 $2,230 $2,200 $2,000 1,500 1, West Fraser TSX Competitor A Competitor B Competitor C Source: Toronto Dominion Bank 27

28 Challenges Timber base in Western Canada Softwood lumber dispute Transportation Operational excellence 28

29 Investing to Compete in BC In British Columbia, we ve invested in our facilities so we re prepared to compete: 16 Major capital projects since 2011 Planers Williams Lake Sawmill planer project, 2013 Fraser Lake Sawmills planer, 2017 Pacific Inland Resources planer upgrade, (in construction) Sawmill rebuilds Chetwynd Forest Industries sawmill expansion and planer upgrades, Mile Lumber sawmill upgrade, 2015 Continuous Kilns Pacific Inland Resources continuous kilns, 2014 and 2018 Chetwynd Forest Industries continuous kiln, 2017 Quesnel Sawmill continuous kilns, 2017 and 2018 Energy & Bioproducts Cariboo Pulp (50%) Turbogenerator, 2011 Quesnel River Pulp low consistency refiner, 2014 and Single stage refining 2018 Chetwynd Forest Industries organic rankin cycle (ORC), 2015 Fraser Lake Sawmills organic rankin cycle (ORC),

30 30