West Fraser Timber Co. Ltd. · TSX:WFG
West Fraser Timber — CIBC World Markets Conference 2003
22 slides from West Fraser Timber's conference presentation, Feb 28, 2003
Slide 1: CIBC World Markets Conference
CIBC World Markets Conference Whistler B.C., February 28, 2003 Hank Ketcham, President, Chairman & CEO
Slide 2: Lumber
Lumber n 2,600 MMfbm Capacity - 2nd largest in Canada - 4th largest in North America Chasm sawmill, B.C.
Slide 3: Panels
Panels n 510,000 Msf Capacity - 29% of MDF capacity in Canada, 8% of capacity in North America - 12% of plywood capacity in Canada WestPine MDF, Quesnel, B.C.
Slide 4: Pulp & Paper
Pulp & Paper n 1,120,000 tonnes capacity - largest market mechanical pulp mill in world - 20% of BCTMP capacity in world - lowest cost newsprint mill in North America Quesnel River Pulp mill, Quesnel, B.C.
Slide 5: Consolidated Earnings
Consolidated Earnings 2002 2001 2000 Sales $1,632 $1,562 $1,505 Earnings 138 115 131 EBITDA 344 311 367 EPS 4.07 3.00 3.76 EBITDA Margin 21% 20% 24% D/Cap 11% 22% 38%
Slide 6: Integration: Canadian operations
Integration: Canadian operations 2.3 billion fbm 1.0 million odt’s softwood chips 5.5 million m3 1.1 million tonnes pulp & paper 66% Fibre Self-Sufficiency 100% Residual Balanced
Slide 7: Product Diversification
Product Diversification Lumber and Plywood MDF Pulp Linerboard and Kraft paper Newsprint
Slide 8: Geographic Diversification
Geographic Diversification
Slide 9: Our Strengths
Our Strengths m@ TIMBER
Slide 10: Our Strengths, cont’d
Our Strengths, cont’d n MODERN FACILITIES Chasm sawmill, B.C.
Slide 11: Our Strengths, cont’d
Our Strengths, cont’d n STRONG BALANCE SHEET (At December 31, 2002 - $millions ) Debt (net of cash) 165 Shareholders’ Equity 1,292 TOTAL CAPITALIZATION 1,456 Net Debt/Total Capitalization 11%
Slide 12: Our Strengths, cont’d
Our Strengths, cont’d n CULTURE - committed labour force, focus on cost control, consistent reinvestment
Slide 13: Leading Results Over 5 Years
Leading Results Over 5 Years EBITDA % - 5 Year Average 25% 22.2% WFT Industry Average 15.1 20% 18.8% 17.0% 15.7% 15% 13.9% 13.4% 13.0% 11.3% 10.8% 10% 5% 0% Source: Goldman Sachs with the exception of WFT & Slocan EBITDA % Formula for WFT & Slocan: Operating Income + Depreciation / Net Sales (Compan
Slide 14: Leading Results Over 5 Years
Leading Results Over 5 Years ROE – 5 Year Average 15% Industry Average 6.0 WFT 10.0% 10% 8.6% 8.2% 6.1% 5.2% 5.1% 4.8% 4.8% 5% 1.3% 0% Source: Goldman Sachs with the exception of WFT & Slocan ROE Formulas for WFT & Slocan: Net Income / Average Shareholders’ Equity (Companies included: CFP, DTC, IP,
Slide 15: Consistent Dividend Policy
Consistent Dividend Policy Quarterly Dividends - Adjusted for 10% stock dividends 0.16 0.14 0.12 0.10 Cash Dividends/ Qtr: 1986 - .08 0.08 Mar 87 - .08 Stock Dividends: Jan 88 - 10% Mar 88 - .0825 0.06 Dec 88 - 10% Mar 89 - .0925 Mar 93 - 10% Mar 90 - .10 Mar 94 - 10% Mar 96 - .11 0.04 Mar 95 - 10%
Slide 16: Share Trading Liquidity
Share Trading Liquidity n Issued seven 10% stock dividends since going public in 1986 n Issued equity when required as part of acquisition n Willing to issue equity for expansion opportunities
Slide 17: West Fraser Specific Issues
West Fraser Specific Issues n Kitimat n Alberta Newsprint - Income Fund
Slide 18: Kitimat
Kitimat n 450,000 tonnes capacity - superior, high-quality products - modern, world class facility - ongoing operational issues Eurocan Pulp & Paper, Kitimat, B.C.
Slide 19: ANC Income Fund
ANC Income Fund n Compelling values n Markets disappeared for this type of investment n Will consider again if values return
Slide 20: Industry Issues
Industry Issues n Trade file n US/Cdn exchange rate n Changes to B.C. forest policy n First Nations
Slide 21: Where Do We Go From Here?
Where Do We Go From Here? n Strong balance sheet equals growth opportunities
Slide 22: West Fraser
West fraser
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