Q3 Earnings Presentation October 2019 2 General: This presentation - PowerPoint PPT Presentation

Q3 Earnings Presentation October 2019

2 General: This presentation and comments associated with it contains Accordingly, readers should exercise caution in relying upon forward- historical information, descriptions of current circumstances and looking- statements and WFT undertakes no obligation to publicly statements about potential future developments and anticipated financial update or revise any forward-looking statements, whether written or results. Readers are cautioned that this presentation is qualified in its oral, to reflect subsequent events or circumstances except as required entirety by reference to, and must be read in conjunction with, the by applicable securities laws. Ltd. ’s (WFT’s) information contained in West Fraser Timber Co. management’s discussion and analysis for the annual and interim periods Non-IFRS Measures: This presentation makes reference to certain ended December 31, 2018 and September 30, 2019 respectively, non-IFRS measures, such as EBITDA, Adjusted EBITDA and net debt company’s (MD&A), and the annual audited and interim financial to capital ratio. Non-IFRS measures do not have a standardized statements available on SEDAR (www.sedar.com). A person is not meaning prescribed by IFRS and are therefore unlikely to be entitled to rely on parts of the information contained in this presentation to comparable to similar measures presented by others. For further the exclusion of others. information regarding the use of non-IFRS measures please refer to the “Non -IFRS Measures” section in the MD&A External Information: Forward-looking Statements: This presentation contains “forward - Where this presentation quotes any information or statistics from any statements” looking (including those under the headings Supply external source, it should not be interpreted that WFT has adopted or Conditions and Summary) within the meaning of applicable securities endorsed such information or statistics as being accurate. Some of the laws. Forward-looking statements, are presented to provide reasonable information presented herein is based on or derived from statements by guidance to the reader but their accuracy depends on a number of third parties and has not been independently verified by or on behalf by assumptions and is subject to various risks and uncertainties. In some WFT, and no representation or warranty, express or implied, is made as cases, forward-looking statements can be identified by the use of to, and no reliance should be placed on, the fairness, accuracy, forward-looking terminology such as “plans”, “targets”, “expects” or completeness or correctness of this information or any other information “does not expect”, “an opportunity exists”, “outlook”, “prospects”, or opinions contained herein. “strategy”, “intends”, “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, Currency: In this presentation, all amounts are in Canadian dollars, “might”, “will”, “will be taken”, “occur” or “be achieved” . In addition, any unless otherwise indicated. statements that refer to expectations, intentions, projections or other Terminology : References in this presentation to “ MMfbm ” or “ mmfbm ” characterizations of future events or circumstances contain forward- mean million board feet, “SPF” means spruce-pine-fir and “SYP” means looking information. Statements containing forward-looking information management’s are not historical facts but instead represent southern yellow pine. For any other technical terms used in this expectations, estimates and projections regarding future events or presentation, please see the Glossary of Industry Terms found in our circumstances . By their nature, forward-looking statements involve most recent Annual Report. numerous assumptions, inherent risks and uncertainties, both general and specific, which contribute to the possibility that the predictions, forecasts and other forward-looking statements will not occur. Actual outcomes and results of these statements will depend on a number of “Risks factors including those matters described under and Uncertainties”, in our MD&A and may differ materially from those anticipated or projected. Reference should be made to the other factors discussed in public filings with securities regulatory authorities. .

Demand conditions 3 Leading indicator of Remodeling Activity U.S. Housing Starts ( not seasonally adjusted) $330 8.0% 140 $B 4 Qtr Moving Improvements and Repairs $320 7.0% 120 4 Qtr Moving rate of Change $310 6.0% 100 M Starts $300 5.0% 80 Seasonally adjusted: $290 4.0% 60 2017: 1,203 $280 3.0% 40 2018: 1,250 $270 2.0% 2019: 1,250 ytd September 20 $260 1.0% 0 $250 0.0% J F M A M J J A S O N D Q117Q217Q317Q417Q118Q218Q318Q418Q119Q219Q319 Expenditures % change 2017 2018 2019 Source: US Census Bureau Source: Harvard Joint Centre for Housing Studies North America Offshore Exports World Chemical Pulp Shipments 600 6.0 500 5.5 400 MM tonnes MMfbm 300 5.0 2017: 5,462 200 2017: 61.7 2018: 5,199 4.5 100 2018: 61.1 2019: 2,773 ytd July 2019: 40.9 ytd August 0 4.0 J F M A M J J A S O N D J F M A M J J A S O N D 2017 2018 2019 2017 2018 2019 Source: PPPC Source: Statistics Canada, US Census

Supply conditions 4 Lumber Supply North America Curtailments Billion fbm MMfbm 40 1,200 Down 5% 35 1,000 Mix of 30 temporary 25 800 and Flat permanent 20 600 Down 11% 15 400 10 Down 18% 5 200 0 0 BC Canada US Total NA 2018Q4 2019 Q1 2019 Q2 2019 Q3 Ytd 07-18 Ytd 07-19 Source: Western Wood Products Association, management estimates Source: Industry analysts, public filings, management estimates, FEA North America Offshore Imports 600 2017: 1,411 500 2018: 1,575 2019: 866 ytd July 400 MMfbm 300 200 100 0 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Source: Statistics Canada, US Census Curtailments potentially have a larger impact on supply going forward

Consolidated Financial Results 5 $ Millions Adjusted EBITDA Q3-19 Q2-19 Q3-19 Q2-19 Sales $ 1,190 $ 1,317 Lumber $ 39 $ 39 Cost and Expenses 1,245 1,375 Panels 13 10 Restructure/Impairment (1) 26 Pulp & Paper 3 7 Operating earnings (54) (84) Corporate/Other - - Finance Expense (12) (13) Total $ 55 $ 56 Other 2 (6) EBITDA margin 4.6% 4.2% Earnings before Tax $ (64) $ (103) Tax recovery 19 45 Net earnings $ (45) $ (58) Diluted EPS $ (0.73) $ (0.92) Challenging conditions continue * Adjusted EBITDA is defined as operating earnings plus amortization, equity based compensation, restructuring and impairment charges and export duties.

Q3 Consolidated Adjusted EBITDA Reconciliation 6

Q3 Lumber Adjusted EBITDA Reconciliation 7

Q3-19 versus Q2-19 8 $ millions unless Q3 Q2 Change otherwise indicated 2019 2019 Lumber Production (MMfbm) 1,493 1,536 (43) Chasm Closure, 100 Mile House shift reduction, BC variable (3%) operating schedules, offset by US productivity improvements Lumber Shipments (MMfbm) 1,541 1,686 (145) Shift reductions, Chasm closure, AB downtime (9%) Pulp and Paper Shipments 323 305 19 Higher NBSK production rates, recovery from maintenance (Mtonnes) 6% shut downs Adjusted EBITDA $55 $56 $(1) Adjusted EBITDA lower in pulp due to lower pricing offset by increase in panels, lumber flat Cash flow from operations $116 $187 $(71) Better cash flow before working capital in Q3, smaller working capital drawdown in Q3 Capital Expenditure $133 $82 $51 Continuing to execute on capital plans and US South modernization program Net Debt $983 $942 $41 Net debt up slightly from prior quarter, significant financial flexibility and wide margin of safety Net Debt to Capital 28% 26% Cumulative duties on deposit $344 $312 $32 Significant duties on deposit US$ Share buybacks - $31 $(31) Evaluating market conditions Despite difficult 2019 so far, maintaining focus on priorities

9 Liquidity Scheduled maturities Available liquidity $900 $900 $800 $800 $700 $700 $600 $600 $500 $500 $400 $400 $300 $300 $200 $200 $100 $100 $0 2017 2018 Q1-17 Q1-18 Q1-19 Q2-19 Q3-19 -$100 $0 2019 2020 2021 2022 2023 2024 Bank lines Cash Term loan Notes Revolver Ample financial flexibility Cash consists of cash and short-term investments less cheques issued in excess of funds on deposit.

Recent US South Capital Projects 10 10 Joyce, Louisiana McDavid, Florida - Log merchandiser - New canter line - Improved reliability, reduced operating - Improved recovery costs - Greater product mix flexibility - Input flexibility - Unlocks capacity in remainder of mill - Improved recovery Operationalizing US South Modernization

Recent US South Capital Projects 11 11 Perry, Florida Augusta, Georgia - Continuous Dry Kilns - Planer mill - Grade improvements - Grade improvements - Removes bottleneck, unlocks capacity in - Improved working conditions to reduce remainder of mill turnover, increase throughput - Energy efficiency and residuals utilization - Reduced operating costs Operationalizing US South Modernization