[PPT] - Barclays High Yield Bond & Barclays High Yield Bond & PowerPoint Presentation

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Barclays High Yield Bond & Barclays High Yield Bond & Syndicated Loan Conference

Robin Lampard SVP & CFO Robin Lampard, SVP & CFO Phoenix, AZ - May 2014

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Forward-Looking Statements and Non-IFRS Financial Information

All financial references are expressed in US$ unless otherwise noted.
Financial numbers prior to 2010 were prepared in accordance with CGAAP, while

numbers from 2010 onward have been prepared in accordance with IFRS.

This presentation contains forward-looking statements and estimates.
Actual company results could differ materially from a conclusion, forecast or

projection in the forward-looking information. projection in the forward looking information.

Certain material factors or assumptions were applied in drawing a conclusion or

making a forecast or projection as reflected in the forward-looking information.

Additional information can be found in the Company’s annual information form,

annual MD&A and on Norbord’s website (www norbord com) about the material annual MD&A, and on Norbord s website (www.norbord.com) about the material factors that could cause actual results to differ materially from the conclusion, forecast or projection in the forward-looking information, and the material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information. p j g

During the course of this presentation, certain non-IFRS financial information will

be presented. Definitions and reconciliation of terms can be found in the Company’s annual and quarterly MD&A.

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Company Snapshot

I. COMPANY OVERVIEW
Norbord is a leading manufacturer of wood-based panel

products and one of the largest global producers of OSB I t ll d OSB it f 5 B f

Panel Capacity by Region

─ Installed OSB capacity of over 5 Bsf ─ 1,950 employees at 13 plants across the US, Europe and Canada

Listed on TSX (“NBD”)

US 61% Europe 27%

6 1 Bsf

Reports in US dollars and in accordance with IFRS
As at March 29, 2014:

─ Total assets of $1,213 million LTM sales of $1 281 million

Canada 12%

6.1 Bsf ─ LTM sales of $1,281 million ─ LTM EBITDA of $203 million

CANADA

Europe Oriented Strand Board

UNITED STATES

North

GERMANY BELGIUM UNITED KINGDOM

Medium Density Fibreboard Oriented Strand Board Furniture Particleboard

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America

FRANCE

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Norbord’s Products

I. COMPANY OVERVIEW
Norbord’s operations include 11 OSB mills, two particleboard mills, one

medium density fibreboard (“MDF”) mill and one furniture plant

New home construction

R i d d l

OSB – 84% of Capacity

y ( ) p

Repair and remodel
Light commercial construction
Industrial applications

Particleboard – 10% of Capacity Particleboard 10% of Capacity

New home construction
Repair and remodel
Furniture
Fixtures

MDF – 6% of Capacity

Fixtures

Furniture
Fixtures

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Mill work

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Typical Uses for OSB Products

II. INDUSTRY OVERVIEW

Roof Roof Walls Flooring

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Norbord Operates in the Two Significant Global OSB Markets

II. INDUSTRY OVERVIEW

Industry OSB Capacity (MMsf 3/8”) 20 30 Industry OSB Capacity (MMsf 3/8 ) 10 North America Europe South America Asia

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Source: Company Documents and Other Public Filings

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Norbord a Significant Player in Both Key Markets

II. INDUSTRY OVERVIEW

y

North American OSB Industry European OSB Industry

Egger 8% Smartply 6% Louisiana- Pacific* 22% Tolko 8% Other 7%

t

e ca OS dust y u opea OS dust y

Kronospan 37% Sonae 13% Huber 8%

Industry C Industry C

Georgia- Pacific 19% Ainsworth* 9%

Capacity 28 Bsf Capacity 5 Bsf

Kronoswiss 21% Norbord 14% Norbord 16% Weyer- haeuser 11%

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Source: Company Documents and Other Public Filings - Installed Capacity *On September 4, 2013, Louisiana-Pacific announced an agreement to acquire all of the outstanding common shares of Ainsworth

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Demand Growth Ahead in Both Key Markets

II. INDUSTRY OVERVIEW

75% OSB Share of Structural Panels 75% 50%

North America

25%

Europe

0% 80 85 90 95 00 05 10

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Source: FEA and Norbord Estimates

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US Housing Starts Recovery is Real

II. INDUSTRY OVERVIEW
Leverage to US housing recovery
Favourable long-term OSB industry fundamentals

2 0

US Housing Starts (millions) Favourable long term OSB industry fundamentals

1.5 2.0

OVER built

0 5 1.0

Housing Starts

UNDER built

0.0 0.5

g Underlying Demand

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Source: FEA

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II. INDUSTRY OVERVIEW

Additional OSB Capacity Restarting to Meet Additional Demand

38 Mills in Operation 8 Mills Indefinitely Curtailed North American OSB Installed Capacity: 6 Mill (R ) t t d i 2013

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Source: Company Documents and Other Public Filings

Norbord Mill 6 Mills (Re)started in 2013

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North American OSB Market Will Tighten as 2014 Progresses

II. INDUSTRY OVERVIEW

7 g

Industry OSB Volume (Bsf 3/8”) 6 7

Operating Mills Nameplate Capacity

5 Effective Capacity

4 Demand

3 Q1 Q2 Q3 Q4

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Source: Norbord Estimates

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Attractive OSB Outlook

II. INDUSTRY OVERVIEW
OSB prices are tied to demand for building products, which is influenced by

the general economy, demographics and the need for housing g y g p g

With US housing recovering, OSB prices are projected to remain above trend

North Central Benchmark OSB Price

300 350 400

C Price 16"

200 250 300

nnual Average NC US$ per Msf 7/1

10 year average 100 150 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014F 2015F 2016F

An

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Sources: Random Lengths and FEA

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Core European Housing Markets Recovering

II. INDUSTRY OVERVIEW

Housing Starts (000s) 250 300

Germany +12% per year

200 Germany 12% per year

100 150

UK +30% in 2013

50 100 2009 2010 2011 2012 2013 2014F 2009 2010 2011 2012 2013 2014F

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Source: National House Builder Confederation (NHBC) , Construction Products Association (CPA) & Bundesbank

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Norbord’s Strategy Focused on Growth in OSB

III. BUSINESS STRATEGY
Pursue growth in OSB
Pursue growth in OSB
Own highest-quality assets with

lowest cost position

Maintain a margin-focused operating

culture

Focus on growth customers through

best-in-class service and product development

Allocate capital with discipline

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Norbord’s Growth Focused on OSB

III. BUSINESS STRATEGY

Norbord OSB Capacity (Billion Square Feet 3/8”)

5 6 3 4 5 2 3 1

'92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13

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92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13

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Disciplined Capital Allocation

III. BUSINESS STRATEGY
Track record of disciplined capital

allocation ─ Accretive acquisitions

$160 $180

Capex Investment (US$ millions) ─ Low cost capacity additions ─ Divestment of non-core assets ─ Deleverage on cyclical upturns

$80 $100 $120 $140

─ Dividends ─ Share buybacks

$20 $40 $60 $80 $0

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014F

Capex Greenfield Expansion

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SLIDE 17

Norbord’s Financial House Is In Order

IV. FINANCIAL OVERVIEW

Strong Liquidity

Manageable Debt Maturities (1) Strong Liquidity

245 200 240

250 300 llions

5 375% Revolving B k Li

US$ millions

Q1 2014 Cash 117 Bank Lines 242

200

100 150 200 alue - US $ mi

5.375% Bonds Bank Lines (Undrawn) 7.70% Bonds

Bank Lines 242 A/R Sec.

(1)

100 Liquidity 459

50 100 Principal Va

Moody’s Ba2 (Stable)

Stable Issuer Credit Ratings

2015 2016 2017 2018 2019 2020

ody s

a (S ab e) S&P BB- (Positive) DBRS BB (Stable)

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(1) In addition, the Company has an undrawn $100 million 1-year evergreen A/R securitization program.

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Strong Operating Cash Flow Through Cycle

IV. FINANCIAL OVERVIEW

g y

Total EBITDA (US$ millions)

631 495 $600 $700 Norbord Sensitivity to North American OSB Price Changes: +$10/Msf 7/16” = +$36 million EBITDA (at f ll capacit ) 495 287 $300 $400 $500 10 (at full capacity) 247 42 107 45 188 287 203 $100 $200 $300 10 year average $198 million 42 (60) 45 ($100) $0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 LTM

North Central

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North Central Benchmark OSB Price 369 320 217 161 172 163 219 186 271 315 266

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Stable Results Continue from European Operations

IV. FINANCIAL OVERVIEW

p p

Norbord’s European operations provide greater sales and earnings

diversification than other North American-based competitors

81 $100

European EBITDA (US$ millions)

58 81 46 49

$60 $80

32 35 17 37 44 39 46 49

$20 $40

4 $0 $20

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 LTM

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Attractive Investment Opportunity

V. SUMMARY
Leverage to unfolding US housing recovery

─ Every +$10 in NA OSB price = +$36 million in EBITDA at full capacity Every $10 in NA OSB price $36 million in EBITDA at full capacity

Stable EBITDA contribution from European operations
Low-cost operating platform
Superior margins versus peers

Superior margins versus peers

Track record of disciplined capital allocation
Strong financial liquidity and comfortable debt maturities
Dividend yield of 8% (at current share price)

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Dividend yield of 8% (at current share price)

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