RBC Capital Markets Forest Products Investor Day INVESTOR - PowerPoint PPT Presentation

RBC Capital Markets Forest Products Investor Day INVESTOR PRESENTATION April 16, 2015 Toronto, Ontario

Forward-Looking Statements This presentation and comments associated with it contain forward-looking statements including statements relating to U.S. housing recovery, the potential for constrained lumber supply, energy-related opportunities, earnings sensitivity and estimated annual capital expenditures. These statements are subject to the cautionary statement which introduces West Fraser’s 2014 Annual Management’s Discussion & Analysis which can be accessed on the Company website www.westfraser.com. 2

Our Goals • To be a leading forest products manufacturer, focused on solid wood products • Strong financial results through the business cycle • Long-term growth and shareholder value enhancement • Stable, conservative financial structure 3

Our Strategy • Operational excellence • Diversification • Product differentiation • Integration 4

Operational Excellence • Managing to ensure a committed workforce • Cost control and efficiency • Continuous reinvestment • Internal and external benchmarking and competition • Straightforward, consistent business model 5

Product Diversification LUMBER PANELS PULP & PAPER 27 mills 7 mills 5 mills SPF 3.9 Bfbm Plywood: 830 MMsf3/8” NBSK: 570 Mtonnes SYP 2.3 Bfbm MDF: 300 MMsf3/4” BCTMP: 650 Mtonnes Total 6.2 Bfbm LVL: 3.2 MMcf Newsprint: 135 Mtonnes • North America’s largest lumber producer • Largest plywood producer in Canada • Third largest pulp producer in Canada 6

Trend Sales Mix ($) Pulp & Paper 23% Lumber Panels 66% 11% 7

Operations diversified by geography Geographic diversification Lumber Capacity B.C. U.S. 40% 37% Alberta 23% 8

Product Differentiation • Wood as the best environmental choice • Renewable resource, sustainable business • Expanding applications • Bioenergy, full use of the resource 9

Integration (in Canada) • Lumber, panels, pulp, newsprint and energy • Substantial fibre self-sufficiency • Fuller utilization of resource • Some benefits from counter-cyclicality • Better able to respond to new opportunities such as bioenergy 10

Earnings Growth Drivers - Lumber Demand - North American housing - Chinese construction and industrial applications - Japanese housing Supply - Fibre limitations - Residual offtake - Mill closures - People Efficiency - Capital investment - Business model 11

Returns on Lumber EBITDA Margin (%) - Lumber 40% 35% 30% 25% Average: 16% 20% 15% 10% 5% 0% -5% -10% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 12

U.S. Housing Pent Up Housing Demand (conventional + mobile) 2.25 2.00 1.75 Million Units 1.50 1.25 1.00 0.75 Production Underlying Demand 0.50 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Significant pent up demand bodes well for long-term recovery 13 Source: FEA, Q4 2014

US Housing Single Family Share well below 30 year average Share of single-family housing starts 90% 85% 80% 75% 70% 65% 30 year average share = 76% 60% 55% 50% 14 Source: FEA

Unlike Single-Family, Multi-family has Recovered Thousands 2,000 500 1,800 450 1,600 400 1,400 350 1,200 300 1,000 250 800 200 600 150 400 100 200 50 0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Single-Family (Left Scale) Multi-Family (Right Scale) 15 Source: U.S. Census Bureau

U.S. Lumber End Use U.S. Lumber End-use 2013 U.S. Lumber End-use Normalized Nonresidential/ Nonresidential/ Mobile, 7% Mobile, 5% Single Family Construction, 24% Industrial Single Family Production, 23% Construction, Industrial 37% Production, 30% Multifamily Construction, 3% Multifamily Residential Residential Construction, 4% Improvements, Improvements, 29% 38% 16 Source: FEA and WF

Canadian Shipments to China 3,500 Equivalent to 300,000 housing starts * 3,000 2,500 2,000 Mmfbm 1,500 1,000 500 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 * Based on consumption of 11.5 Mfbm per U.S. housing start (average mix of single and multi family) 17 Source: Council of Forest Industries, February 2015

B.C. Shipments to Japan Mmfbm Thousand 2x4 Starts 1,600 140 Shipments 2x4 Starts 1,400 120 1,200 100 1,000 80 800 60 600 40 400 20 200 0 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 18 Source: Council of Forest Industries, February 2015

North American Lumber Capacity 19

Million (M3) 10 20 30 40 50 60 70 80 Canadian Fibre Supply 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 Quebec 1999 Annual Allowable Cut 2000 2001 2002 2003 Ontario 2004 2005 2006 2007 BC Interior 2008 2009 2010 2011 2012 2013 2014 Source: FEA, Q4 2014 Forecast 2015 2016 2017 2018 2019 2020 20

U.S. South Positive Timber Inventory Bfbm Int’l ¼” 30 25 Projected Excess Growth 20 15 10 Growth Drain 5 0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 21 Source: FEA, Q4 2014

Earnings Growth Drivers - Pulp Demand - China’s paper, tissue and packaging demand - Developing countries’ demand - Price of cotton and similar products Supply - European paper capacity closures - Russian and Canadian start ups - Product diversification (e.g. dissolving pulp) - South American production Reliability - Capital - Technology 22

Chemical Pulp End-Use Products Other Boxboard 4% 5% Fluff Based Products Printing and 10% Writing Papers 31% Specialty Papers 19% Source: PPPC 2013 Tissue 31% 23

BCTMP Pulp End-Use Products Other Newsprint 3% 4% Specialty Papers 8% Boxboard 44% Printing & Writing 41% Source: PPPC 2013 24

Paper — Newsprint North American Newsprint Cost Structure Par Exchange Rate Cdn$/tonne ANC Alberta Newsprint is the lowest cost newsprint producer in North America and a positive contributor to the profitability of our pulp and paper business 25 Source: PPPC Cost Survey 2012

Energy Opportunities • Woodwaste to produce heat and steam to dry wood products and for electricity and steam for pulp mills • Woodwaste to produce electricity to be used or sold • Pulp mill effluent as a source for biogas-electricity generation • Expanding opportunities to generate and sell electricity levering off current business 26

Capital Strategy • Reinvest profits to lower costs, improve efficiency through technology and improved processes • Estimate normalized annual capital spending between $150 and $225 million • Capital spending in 2014 of $410 million and spending in 2015 to approximate $300 million • Growth through opportunistic acquisitions focused on solid wood 27

West Fraser Capital Capital Spending $ Million 450 410 400 358 350 300 250 200 159 150 100 50 0 2012 2013 2014 Maintenance Timber Profit Improvement Energy 28

Why Invest in West Fraser? • Proven ability to generate strong cash flow even in worst markets • Consistent, straightforward business plan • Loyal, long-term employee and management base • Conservative financial management coupled with proven ability to grow strategically • Strong historical shareholder returns 29

Strong Cash Generation ($millions) Total 2014 2013 2012 2011 2010 Cash from Operations 1,595 475 419 195 85 421 Capital Expenditures 1,229 410 358 159 213 89 Acquisitions 238 208 - 30 - - 30

Annualized Shareholder Return (Cdn$) June 2006* – March 31, 2015 18% 16.4% 16% 14% 11.6% 11.2% 12% 10% 7.6% 8% 7.0% 6% 4% 2.6% 2% 0% West Fraser Dow S&P/TSX Competitor A Competitor B Competitor C * June 2006 marked the beginning of the steep decline in U.S. housing starts 31 Source: TD Bank

Share Value Traded Cdn$ Million 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2014 2013 2012 WFT CFP IFP 32

“WFT” – Toronto Stock Exchange www.WestFraser.com These materials have been prepared by Management of the Company. No regulatory authority has approved or disapproved of the contents of these materials. These materials do not constitute an offer to sell or the solicitation of an offer to buy any securities of the Company, and shall not constitute an offer, solicitation or sale of the Company’s securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. Securities of the Company may not be offered or sold in the United States absent their prior registration or qualification or an applicable exemption from the applicable registration or qualification requirements. 33

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