ANNU ANNUAL AL GENERAL GENERAL MEETING MEETING April 19, 2018 - - PowerPoint PPT Presentation

ANNU ANNUAL AL GENERAL GENERAL MEETING MEETING

April 19, 2018 Quesnel, B.C.

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Financial Results

5.13

Billion in sales

2017 2016 2004

Sales 5,134 4,450 2,400 Adjusted EBITDA 1,112 674 622 Earnings 596 326 212

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Lumber Financial Results

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Lumber mills

2017 2016 2004

Production (MMfbm) SPF 3,809 3,796 2,470 SYP 2,424 2,139 302 Sales 3,671 3,145 1,475 Adjusted EBITDA 836 508 517

250 300 350 400 450 2013 2014 2015 2016 2017

Benchmark Lumber Prices

SPF #2 & Better 2x4 (per Mfbm) SYP #2 West 2x4 (per Mfbm)

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U.S. Housing Starts

Source: US Census Bureau, FEA Forecast 01-18

Expect that the recovery has room to continue

200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F 2019F 2020F

Thousands

Total Single Multi Underlying Demand

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Source: US Census Bureau, Statistics Canada, West Fraser Forecast

Demand for lumber expected to grow by 2B board feet per year

75 72 64 51 43 43 45 48 50 53 56 58 60 62 64 10 20 30 40 50 60 70 80 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F 2019F 2020F US Consumption Canadian Consumption

North American Lumber Consumption

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North American Lumber Production

Billion Bf

Source: US Census Bureau & Statistics Canada, West Fraser Forecast

US South only significant growth region

5 10 15 20 25 10 20 30 40 50 60 70 80

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F 2019F 2020F

U.S. Canada Canada West (R Axis) Canada East (R Axis) US West (R Axis) US South (R Axis)

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North American Lumber Supply & Demand

Source: US Census Bureau & Statistics Canada, West Fraser Forecast

52 54 56 58 60 62 64 66 68 70 72 2015 2016 2017 2018F 2019F 2020F Production Demand On North American Mills Billion bf

Imports 2005: 3.0 billion bf Imports 2010: 0.5 billion bf Imports 2017: 1.4 billion bf 2020: 4.2 billion bf

Potentially growing gap in lumber supply

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Panels Financial Results

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mills

2017 2016 2004

Plywood Production (MMsf 3/8” basis) 838 826 249 MDF Production (MMsf 3/4” basis) 191 160 285 LVL Production (Mcf) 2,676 2,215

• Sales

600 529 284 Adjusted EBITDA 113 89 74

375 425 475 525 2013 2014 2015 2016 2017

Benchmark Plywood Prices

Plywood Production (MMsf 3/8” basis)

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Pulp & Paper Financial Results

5

mills

2017 2016 2004

Production (Mtonnes) NBSK 498 527

• BCTMP

674 665 522 Newsprint 122 128 135 Sales 988 887 641 Adjusted EBITDA 172 79 45

475 675 875 1075 1275 2013 2014 2015 2016 2017

Benchmark Pulp Prices

NBSK – U.S. (per tonne) NBSK – China (per tonne) Newsprint (per tonne)

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Our objective: Low-cost, high margin producer in each of our product lines, diversified across geographic regions We’re prepared for the future. We’ve invested in:

• Growing footprint of our operations
• Modernized mills and upgraded

technology

• Safety
• Employee development

Achieving Our Potential

#1

Lumber Producer

North America

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Gilman Acquisition

#1

US South Lumber Producer

• Welcomed 900 new

employees

• 6 mills, finger-joint

plant and a regional

• ffice
• Now 22 facilities and 2 offices strong

in the US South

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West Fraser 2017

50+

locations

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Increased Capacity

BC 34% Alberta 23% U.S. 43% 2017 Lumber Capacity (7.2 billion feet)

BC Alberta U.S.

7.2

billion board feet

0% 20% 40% 60% 80% 100%

2017 Revenue Mix: Lumber Pulp Panels

BC 75% Alberta 12% U.S. 13% 2004 Lumber Capacity (2.76 billion feet)

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North American Lumber Capacity

1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000

SPF SYP Other

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Our objective: Low-cost, high margin producer in each of our product lines, diversified across geographic regions We’re prepared for the future. We’ve invested in:

• Growing footprint of our operations
• Modernized mills and upgraded

technology

• Safety
• Employee development

Achieving Our Potential

#1

Lumber Producer

North America

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Capital Spending

100 200 300 400 2013 2014 2015 2016 2017

Capital Expenditure

$ Millions

$1.6

Billion in capital

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61

Major projects since 2012

Modernizing our Operations

Major rebuilds of 11 sawmills Upgraded 13 planers Built 6 energy and bioproducts projects Added 33 continuous kilns

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Our objective: Low-cost, high margin producer in each of our product lines, diversified across geographic regions We’re prepared for the future. We’ve invested in:

• Growing footprint of our operations
• Modernized mills and upgraded

technology

• Safety
• Employee development

Achieving Our Potential

#1

Lumber Producer

North America

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Safety

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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

• ther

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. 2016
• Recordable Incidents and Loss Time Accidents

(LTA's) reduced by 30%

Safety

12%

serious injuries

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Our objective: Low-cost, high margin producer in each of our product lines, diversified across geographic regions We’re prepared for the future. We’ve invested in:

• Growing footprint of our operations
• Modernized mills and upgraded

technology

• Safety
• Employee development

Achieving Our Potential

#1

Lumber Producer

North America

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Promote within

• We are committed to supporting

employee’s development

– Internal courses and skills training – Partnerships with educational

• rganizations

Our People

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Recognition

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Part of our Communities

$3.2

Million in donations

2015-2017

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

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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

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10.40% 7.30% 6.30% 6.30% 5.50%

0% 2% 4% 6% 8% 10% 12%

West Fraser TSX Competitor A Competitor B Competitor C

2005 - 2017

Source: Toronto Dominion Bank

Total Shareholder Return (Annual)

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$1,000 invested: 2005 - 2017

$3,640 $2,510 $2,230 $2,200 $2,000

500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

West Fraser TSX Competitor A Competitor B Competitor C

Source: Toronto Dominion Bank

Total Shareholder Return (Annual)

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• Timber base in Western Canada
• Softwood lumber dispute
• Transportation
• Operational excellence

Challenges

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Investing to Compete in BC

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Major capital projects since 2011

In British Columbia, we’ve invested in our facilities so we’re prepared to compete:

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,

2013

• 100 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), 2015

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