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2014 Annual General Meeting
May 2, 2014
2014 Annual General Meeting May 2, 2014 Robert J. Harding Chair - - PowerPoint PPT Presentation
2014 Annual General Meeting May 2, 2014 Robert J. Harding Chair - - PowerPoint PPT Presentation
2014 Annual General Meeting May 2, 2014 Robert J. Harding Chair May 2, 2014 Peter Wijnbergen President & CEO May 2, 2014 Forward Looking Statements and Non-IFRS Financial Measures All financial references are expressed in US$
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Peter Wijnbergen President & CEO May 2, 2014
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May 2, 2014
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- 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 restated and 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.
- 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 factors that could cause actual results to differ materially from the conclusion, forecast or projection in the forward-looking information, and the material factors
- r assumptions that were applied in drawing a conclusion or making a forecast
- r projection as reflected in the forward-looking information.
- 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.
Forward Looking Statements and Non-IFRS Financial Measures
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May 2, 2014
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2013 Highlights US housing starts up 20%; UK starts up 30% Safely restarted Jefferson, Texas mill North American OSB prices highest since 2005 Initiated CAD $0.60 quarterly dividend
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Slower Start to 2014 Due to Extreme Winter, Stronger Second Half Expected
May 2, 2014 (US $ millions, except per share and price information)
Q1 2013 Q1 2014 NC OSB Price $ 417 $ 219 Sales 365 303 EBITDA 111 27 Earnings 67 7 EPS (diluted) 1.26 0.13
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Norbord Committed to Returning Cash to Shareholders Through Dividends
May 2, 2014
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Dividend reflects positive view of core markets 2014 Cash Commitments 2012 EBITDA 2013 EBITDA Maintenance capex 175 188 287
(US$ millions)
Dividends Interest
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2013 Best Result Since 2005
May 2, 2014 (US $ millions, except per share and price information)
2012 2013 NC OSB Price $ 271 $ 315 Sales 1,149 1,343 EBITDA 188 287 Earnings 71 149 EPS (diluted) 1.56 2.79 ROCE 23% 35%
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Credit rating upgrades from DBRS and Moody’s Added to S&P/TSX Composite Index Refinanced 2015 bonds at lowest ever coupon - 5.375% Minimized warrant dilution
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Balance Sheet Improved Rapidly
May 2, 2014
Strong Liquidity
(US$ millions)
Q4 2013
Cash $ 193 Bank Lines 241 Securitization 100 Liquidity $ 534
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May 2, 2014
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Jefferson Mill Now Operating at Capacity
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May 2, 2014
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Production Increasing to Meet Growing Demand
60% 65% 70% 75% 80% 85% 2009 2010 2011 2012 2013
Norbord Stated Capacity - % Utilization
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May 2, 2014
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World-Class Safety Performance
Injury Rate (OSHA Recordable Injury Rate*)
3.21 2.24 2.12 1.70 0.89 1.52 1.30 0.74 0.78 2005 2006 2007 2008 2009 2010 2011 2012 2013
* Per 200,000 hours worked
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1,800 1,354 905 554 587 609 780 927 1,100 1,360 1,550
2006 2007 2008 2009 2010 2011 2012 2013 2014F 2015F 2016F
US Housing Starts Recovering
Source: US Housing economists consensus May 2, 2014
US Housing Starts (000s)
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3 4 5 6 7 Q1 Q2 Q3 Q4 Effective Capacity Demand
North American OSB Market Will Tighten as 2014 Progresses
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Industry OSB Volume (Bsf 3/8”)
May 2, 2014 Source: Norbord Estimates
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100 150 200 250 300 05 06 07 08 09 10 11 12 13 14F 15F
Source: Random Lengths & Analyst Estimates
15 year Average North Central Benchmark OSB Price (US$ per Msf 7/16”)
Forecast OSB Prices Above Long-Term Average
May 2, 2014
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$255
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50 100 150 200 250 2009 2010 2011 2012 2013 2014F
UK +30% in 2013 Germany +12% per year
Core European Housing Markets Recovering
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Housing Starts (000s)
May 2, 2014
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32 35 81 4 17 37 44 39 46 2005 2006 2007 2008 2009 2010 2011 2012 2013
European EBITDA (US$ millions)
May 2, 2014
Consistently Strong Performance in Europe
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Focus on OSB Growth in North America and Europe
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Norbord Operates in the Two Significant Global OSB Markets
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May 2, 2014
10 20 30 North America Europe South America Asia Industry OSB Capacity (MMsf 3/8”)
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Demand Growth Ahead in Both Key Markets
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May 2, 2014
OSB Share of Structural Panels 0% 25% 50% 75% 80 85 90 95 00 05 10
North America
Source: FEA and Norbord estimates
Europe
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Norbord a Strong Regional Player in Europe
May 2, 2014
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Norbord OSB mills
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Reinvesting to Optimize North American Mills
40 80 120 160
Capex Greenfield Expansion
Capex Investment (US$ millions)
May 2, 2014
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- Stated capacity 500 MMsf
- Preliminary work focused on continuous press rebuild
Huguley Mill Rebuild Underway
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May 2, 2014
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- Develop a world class safety culture
- 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
Norbord’s Strategy Focused on Growth in OSB
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May 2, 2014
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2014 Annual General Meeting
May 2, 2014