greenfirst forest products
TRANSCRIPT
GreenFirst Forest ProductsInvestor PresentationApril 2021
Legal Disclaimer 4/12/2021 2
Important: You Must Read the Following Before Continuing
This Presentation is being provided to you by GreenFirst Forest Products Inc. (“GreenFirst” or the “Company”) for informational purposes only. This Presentation
is not, and under no circumstances is it to be construed as, a prospectus or an advertisement, and the communication of this Presentation is not, and under no
circumstances is it, to be construed as an offer to sell or a solicitation of an offer to purchase securities of the Company. The information contained herein has
been prepared for the sole purpose of providing interested parties with general information to assist them in their evaluation of the Company and this
presentation should not be used for any other purpose. By accepting and reviewing this Presentation, you acknowledge and agree to not copy, reproduce or
utilize, in whole or in part, any of the information contained herein or otherwise received, except as expressly authorized by the Company. You will be liable for
any damage caused by, or resulting from, any unauthorized use of the information contained herein.
The information presented herein: (i) has been prepared by the Company for illustrative purposes only; (ii) is provided as of the date hereof and is subject to
change without notice; (iii) does not purport to contain all the information with respect to the Company; and (iv) is not to be considered as a recommendation
by the Company that any person make an investment in the Company. No reliance should be placed upon the contents of this Presentation by any person who
decides to acquire securities of the Company. The Company, its associates or any of their respective directors, officers, employees, partners, members, agents,
professional advisers, representatives or consultants (the “Company Parties”) do not: (i) make any representation, warranty or guarantee, express or implied,
as to the fairness, accuracy, completeness, reliability, reasonableness or currency of the information contained in this Presentation; or (ii) undertake to provide
any additional information or updates, or to correct any information or statements (including, but not limited to, forward-looking information (as defined below))
in this Presentation which such Company Party becomes aware was incorrect or incomplete as of the date of this Presentation, or which subsequently becomes
incorrect or incomplete due to any subsequent event or as a result of new information, future developments or otherwise. To the maximum extent permitted by
law, none of the Company Parties will be responsible or liable whatsoever with respect to any use or reliance by any person upon any of the information
contained in this Presentation (other than with respect to fraud on the part of such Company Party).
This Presentation may have been accessed by you or sent to you in electronic form. You are reminded that documents transmitted by these mediums may be
altered or changed during the process of electronic transmission. You are responsible for protecting against viruses and other destructive items. Your access or
receipt of this electronic transmission is at your own risk and it is your responsibility to take precautions to ensure that it is free from viruses and other items of
a destructive nature. As a consequence of the above, neither the Company nor any director, officer, employee or agent of any of them or any affiliate of any
such person accepts any liability or responsibility whatsoever in respect of any difference between the document distributed to you in electronic format and the
hard copy version that may be made available to you.
In this Presentation all amounts are in Canadian dollars unless stated otherwise.
Cautionary Note Regarding Forward-Looking Information
This Presentation includes information, statements, beliefs and opinions which are forward-looking, and which reflect current estimates, expectations and
projections about future events referred to herein and which constitute “forward-looking information” or “forward-looking information” within the meaning of
applicable Canadian and U.S. securities legislation (collectively referred to herein as “forward-looking information”).
Forward-looking information contained in this Presentation is based on certain assumptions regarding expected results of operations, performance, industry
trends and opportunities. While management considers these assumptions to be reasonable, based on information available, there can be no assurance that
forward-looking information will prove to be accurate or that the Company will perform as anticipated. Forward-looking information in this Presentation includes,
but is not limited to, statements relating to: business characteristics of the Company (including its industry positioning, operational capacity, valuation
(including with respect to its share value and against other comparable companies), production capacity, property and assets, capital structure and the
leadership and experience of management); execution and maximization of the Company’s existing and future business opportunities and perceived
advantages; execution of the Company’s strategy, overall business model and approach (including any focus on the pure play lumber industry and future
potential investments); and the Company’s future outlook and anticipated events and catalysis for growth (including expected lumber supply constraints and
growth in demand and related triggers as well as market opportunities). Even if the outcome and financial effects of the plans and events described herein are
consistent with the forward-looking information contained in this Presentation, those results or developments may not be indicative of results or developments
in subsequent periods.
The forward-looking information contained in this Presentation is presented for the purpose of assisting you in understanding the Company’s financial
performance objectives, vision and strategic goals, and may not be appropriate for other purposes. Statements containing the words “believe”, “expect”,
“intend”, “should”, “could”, “seek”, “anticipate”, “will”, “positioned”, “project”, “risk”, “plan”, “may”, “might”, “likely”, “target”, “estimate” or, in each case, their
negative and words of similar meaning are intended to identify forward-looking information.
By its very nature, forward-looking information contained in this Presentation is based on a number of inherent risks and uncertainties, which give rise to the
possibility that projections, forecasts, expectations or conclusions will not prove to be accurate, that assumptions may not be correct and that financial
performance objectives, vision and strategic goals will not be achieved. We caution readers not to place undue reliance on these statements as a number of
risk factors could cause actual results to differ materially from expectations expressed in such forward-looking information. These risk factors, many of which
are beyond the Company’s control and the effects of which can be difficult to predict include: the Company’s dependence on key projects; risks relating to
changes in the condition of the economy and the Company’s industry; risk relating to current and future competition; the Company's ability to hire, retain and
motivate qualified personnel; failure to finance operations and capital needs; the Company’s dependence on strategic relationships with third parties; and the
Company's dependence on senior management and other key employees. Although the Company has attempted to identify important factors, there may be
other factors that cause actions, events or results to differ from those anticipated, estimated or intended. We caution that the foregoing list of risk factors is not
exhaustive and other factors could also adversely affect results. When relying on forward-looking information to make decisions with respect to the Company,
you should carefully consider the foregoing factors and other uncertainties and potential events.
Forward-looking information contained herein is made as of the date hereof and, except as required by applicable law, the Company does not undertake to
update any forward-looking information, whether written or oral, that may be made from time to time by the Company or on behalf of the Company.
Historical statements contained in this Presentation regarding past trends or activities should not be taken as a representation that such trends or activities will
continue in the future. In this regard, certain financial information contained herein has been extracted from, or based upon, information available in the public
domain and/or provided by the Company. In particular historical results should not be taken as a representation that such trends will be replicated in the
future.
Cautionary Note Regarding Future-Oriented Information
To the extent any forward-looking information in this Presentation constitutes “future-oriented financial information” or “financial outlooks” within the meaning
of applicable Canadian securities laws, such information is being provided to demonstrate the anticipated market penetration of the Company. The reader is
cautioned that this information may not be appropriate for any other purpose and the reader should not place undue reliance on such future-oriented financial
information and financial outlooks. Future-oriented financial information and financial outlooks, as with forward-looking information generally, are, without
limitation, based on the assumptions and subject to the risks set out above under the heading “Cautionary Note Regarding Forward-Looking Information”.
GreenFirst’s actual financial position and results of operations may differ materially from management’s current expectations and, as a result, GreenFirst’s
revenue, expenses and other financial metrics may differ materially from the revenue, expenses and other financial metrics in this Presentation. Such
information is presented for the purpose of assisting prospective investors in understanding the Company’s financial performance objectives and may not be
an indication of GreenFirst’s actual financial position or results of operations. No statement in this Presentation is intended to be nor may be construed as a
profit forecast. Future-oriented financial information or financial outlooks in this Presentation include, but are not limited to, statements relating to: the
Company’s projections, anticipated use of capital generally; the Company’s revenue model and strategy for asset optimization; and the Company’s anticipated
financial outlook, performance and results.
Use of Non-GAAP Measures
This Presentation refers to adjusted earnings before interest, tax, depreciation and amortization (“Adjusted EBITDA”) and adjusted earnings per share
(“Adjusted EPS”), which do not have standardized meanings under GAAP.
Management uses Adjusted EBITDA to assess the Company’s operational and financial results (including the Company’s ability to generate cash flows and
service debt) and to forecast results. Other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way the
Company calculates such measures and, accordingly, the Company’s calculation of Adjusted EBITDA may not be comparable to such similarly titled non-GAAP
measures.
Management defines Adjusted EPS as adjusted net earnings per common share in the capital of the Company. Management believes that certain investors
and analysts use this measure, among others, to assess the performance of the Company’s businesses without the effects of severance, acquisition and other
costs, net losses (gains) on investments, debt redemption costs, impairment of assets and discontinued operations, net of tax and other items. Management
excludes these items because they affect the comparability of our financial results and could potentially distort the analysis of trends in the Company’s
business performance. Excluding these items does not imply they are non-recurring.
These non-GAAP measures are furnished to provide additional information with respect to the Company only and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with GAAP.
Third Party Information
This Presentation includes market and industry data which was obtained from various publicly available sources and other sources believed by the Company to
be true. Although the Company believes it to be reliable, the Company has not independently verified any of the data from third-party sources referred to in this
Presentation or analyzed or verified the underlying reports relied upon or referred to by such sources, or ascertained the underlying assumptions relied upon by
such sources. The Company does not make any representation as to the accuracy of such information.
Today’s Presenters 34/12/2021
Paul RivettIncoming Chairman
of the Board
Co-founder of NordStar
Capital and current Chair
and Co-Owner of Torstar,
Canada’s largest daily
newspaper
Former President of
Fairfax Financial (TSX:
FFH)
Previous board member
of Resolute Forest
Products and Abitibi
Bowater
Larry SwetsCurrent Chief
Executive Officer &
Director
20+ year career in
financial services as an
investor, founder, CEO,
director and SPAC
sponsor
CEO of FG Financial
Group (Nasdaq:FGF) and
founder of Itasca
Financial
Director of Limbach
Holdings (Nasdaq:LMB)
and Director of Harbor
Custom Development
(Nasdaq:HCDI)
Former CEO of Kingsway
Financial Services
Rick DomanIncoming Chief
Executive Officer &
Director
45+ year career in the
lumber industry
1974-2004 – Doman
Industries, incl. 3 years
as President and CEO
(currently Western Forest
Products)
Founded EACOM Timber
in 2008 (sold to Kelso in
2013)
Mike LiggettChief Financial
Officer
20+ years as a public
company CFO offering
added strategic and
operational expertise
Previously was the CFO of
EACOM Timber, working
closely with Rick and Paul
Mel LemkyVice President
Capital Projects,
Sawmills
45+ years of forest
industry experience
Previously was a VP at
EACOM Timber, where he
led the rebuild of the
Timmins mill and several
other projects
Kyle CerminaraCurrent Chairman of
the Board
20+ year career in
financial services and
technology industries as
an investor, founder, CEO,
director and SPAC
sponsor
Co-Founder & CEO of
Fundamental Global,
Chairman of Ballantyne
Strong (NYSE:BTN), and
Chairman of FG Financial
Group (Nasdaq:FGF)
President of FG New
America Acquisition Corp
(NYSE:FGNA)
Institutional Investor at T.
Rowe Price, Point72 and
Highside Capital
Becoming a Leader in Sustainable Lumber
GreenFirst Forest Products (“GreenFirst”) is focused on investments in the global forest products industry
GreenFirst operators have deep expertise in the acquisition and turnaround of sawmill assets
The Company currently owns one sawmill in Kenora, Ontario with plans to pursue other investments in pure play lumber opportunities across North
America and globally
Currently trades on the TSX Venture Exchange under “TSXV:GFP”
4
Ontario
Kenora Forest
Products
Kenora Sawmill Acquisition
In October 2020, GreenFirst closed the acquisition of a sawmill and related
assets in Kenora, Ontario for C$11.5 million
The sawmill is currently equipped to produce up to ~150 MMfbm of lumber
with the potential to reach ~200 MMfbm through optimization initiatives
Projected to start up second half of 2021
Transaction
Highlights
Attractive purchase price on a per-thousand board foot basis
Sufficient regional fiber supply to achieve nameplate capacity
Opportunity to expand capacity with additional capital
4/12/2021
Assets Position GreenFirst among Top Lumber Producers in Canada 5
The target assets (the “Assets”) consist of 6 softwood lumber mills (4 in
Ontario and 2 in Quebec) and 1 newsprint mill currently held by Rayonier
Advanced Materials Inc. (“RYAM”)
Together, the lumber mills have a current annual production capacity of
~755 MMfbm1
‒ Existing fiber supply licenses expected to support future capacity
increases
‒ Secured chip demand expected to supplement long-term mill operations
With a renewed focus and incremental investment, the lumber Assets are
expected to offer significant upside potential
‒ Collectively, the Assets rank as a top 10 producer of lumber in Canada2
‒ Manufactured products include SPF lumber (studs and random
lengths), wood chips, and by-products
‒ Sustainable Forest Licenses in Ontario and Wood Supply Guarantees in
Quebec provide up to ~3.3M m3 of fiber annually
The 205k mt1 newsprint mill is a low-cost operation serving important end-
markets, such as daily newspapers and publications
In FY2020, the Assets generated ~C$580mm in revenues3 and ~C$80mm
of Adj. EBITDA4
The Assets employ ~1,500 people and serve a highly diversified customer
base
Ontario
Québec
Hearst
Chapleau
Kapuskasing
Cochrane
La Sarre
Bearn
Lumber Mills
Annual Production
Capacity (Mfbm)1
Ontario
Chapleau 135,000
Cochrane 160,000
Hearst 110,000
Kapuskasing 105,000
Total - Ontario 510,000
Quebec
La Sarre 135,000
Bearn 110,000
Total - Quebec 245,000
Total Lumber Mills 755,000
Newsprint Mill
Annual Production
Capacity (MT)1
Kapuskasing 205,000
1Rayonier Advanced Materials 10-K filings2FEA Canada, Top 10 Softwood Lumber Producers 20193Net revenue excluding any intercompany eliminations4Adj. EBITDA is unaudited, including adjustments made by GreenFirst management for expected standalone costs and normalizing items; refer to use of non-GAAP measures in legal disclaimer on page 2
4/12/2021
Transaction Highlights 6
Purchase Price Purchase price of US$140 (~C$176) million plus purchase of expected inventory of ~US$74 (~C$93) million at closing
Represents an attractive purchase multiple of US$185/MMfbm1 and ~3.4x 2020 Adj. EBITDA of ~C$80 million2
Transaction Structure
and Financing
Cash free / debt free transaction with ~C$229 million payable in cash and ~C$40 million payable in GreenFirst shares assuming an
aggregate purchase price of ~C$269 million
Cash consideration of ~C$229 million to be funded by a ~C$147 million committed term credit facility provided by a New York based
investment fund and a contemplated rights offering, of which ~C$94 million is backstopped by Senvest Management LLC (including its
related parties and affiliates, “Senvest”)
Senvest minimum investment of ~C$63 million, including a right to appoint an independent board member
~C$25 million ABL provided by the New York based investment fund and Senvest, which is expected to be replaced by a ~C$63 million
undrawn ABL prior to closing
Historical Financials –
Target Assets
E.SPF 2020 average price of ~US$641 per Mfbm and latest E. SPF price of ~US$1,160 per Mfbm
2020 revenue of ~C$580 million and Adj. EBITDA of ~C$80 million2
Pro forma 2020 Adj. EBITDA of ~C$190 million2 assuming forecasted 2021 E. SPF consensus average price of US$790 per Mfbm3
On a pro forma FY20 basis, the assets would have contributed approximatively C$0.20-C$0.25 in Adjusted EPS4 to GreenFirst
Chip Supply Agreement Secured 20-year chip supply agreement with RYAM covering ~60% of annual chip production
Integration and Mill
Optimization Plan
GreenFirst has formed a detailed plan to optimize the target assets
Short-term priorities focused on meaningful cash cost reductions with a longer-term objective of increasing annual production capacity
Closing Subject to customary closing conditions including applicable regulatory approvals
Expected closing before end of calendar Q3 2021
Note: 1.2544 CAD/USD exchange rate, based on the Bank of Canada as of April 9, 20211Excludes inventory and conservatively assumes no value attributed to the Kapuskasing newsprint mill2Adj. EBITDA is unaudited, including adjustments made by GreenFirst management for expected standalone costs and normalizing items3Consensus Research (RBC, CIBC, TD)4Pro forma Adjusted EPS computed using Adj. EBITDA minus D&A, interest on pro forma expected debt outstanding and taxes based on statutory rates, divided by pro forma common shares outstanding
4/12/2021
Financing Plan 7
Consideration of ~C$176 million, assuming a cash and debt free transaction, plus purchase of expected inventory of ~C$93 million at closing, for total
consideration of ~C$269 million to RYAM
‒ ~C$229 million cash consideration
‒ ~C$40 million share consideration
Cash consideration of ~C$229 million to be funded by a ~C$147 million committed term credit facility provided by a New York based investment fund , and a
contemplated rights offering, of which ~C$94 million is backstopped by Senvest with a minimum investment of ~C$63 million, and a committed ~C$25 million ABL
from Senvest and the New York based investment fund
Share consideration of ~C$40 million to be issued to RYAM at a deemed price equivalent to the contemplated rights offering
Contemplated rights offering intends to issue three rights for each of GreenFirst’s outstanding common shares, with each right being exercisable at a price of
$1.50 per share to acquire a subscription receipt; each subscription receipt will automatically be exchanged for a common share upon closing
In consideration for providing the backstop commitment, Senvest is expected to be granted warrants to acquire common shares equal to ~US$19 million
A ~C$63 million ABL is expected to replace the currently committed ~C$25 million ABL prior to closing and is expected to be undrawn at close
11.2544 CAD/USD exchange rate, based on the Bank of Canada as of April 9, 2021
4/12/2021
Transaction Source and Uses
1 1Sources (C$'000s) Uses (C$'000s)
Term Credit Facility (US$117mm) 146,700 Purchase Price (US$140M) 175,600
Asset-Based Revolving Line of Credit (US$50mm) -- Expected Inventory (US$74M) 92,800
Senvest Rights Offering Backstop (US$75mm) 94,100 Transaction Fees 17,400
GFP Insiders Additional Equity (US$4mm) 5,000
RYAM Equity Rollover (US$32mm - 14.9% of purchase price) 40,000
Total $285,800 Total $285,800
Investment Highlights 8
Realizing Organic Growth
Opportunities
Anticipated ability to significantly reduce cash costs in line with Ontario and Quebec benchmarks represents
meaningful expected operational upside
Optimization plan expected to be largely centered around reorganizing the mill’s management structure, refocusing
the sales effort, and optimizing the supply chain
Combination of elevated E. SPF prices and expectations to reduce cash costs expected to support significant free
cash flow generation, which is expected to be used to reduce leverage and fund capital expenditure plan
Abundant Fiber Supply Owned licenses provide access to ~3.7 million m3 of guaranteed fiber supply across Ontario and Quebec1; licenses
are considered to be perpetual unless they are not being used
Strong expected upside to fiber supply quantities due to historical undercut of fiber basket
Secured Chip Demand Supports
Long-Term Mill Operations
Established chip supply agreements are expected to provide support and steady chip demand from the target assets
lumber operations (20 year agreement, covering an estimated 60% of current chip output)
Several alternatives are expected to be viable in seeking to surface value from the Kapuskasing newsprint asset
Favourable Commodity Supply &
Demand Dynamics
Construction industry has been one of the quickest industries to recover post-COVID –particularly in residential
Changing Canadian cost curve due to B.C.’s mountain pine beetle infestation expected to favor East. Canadian mills
Favorable North American demographic trends and increased interest in mass timber construction projects
Deeply Committed to
Sustainability
Committed to using best practices towards maintaining environmental stewardship and social responsibility
Use of sustainably managed forests help to reduce greenhouse gases, playing a key role in mitigating climate
change
Proven and Experienced
Management Team
Industry veterans with over 100 years of combined experience in the forest products industry
Deep expertise in sawmilling, forestry operations, logistics, and finance
1
2
3
4
4/12/2021
5
6
1Includes licenses for Kenora and the target assets
Realizing Growth Opportunities 91
Sawmill Restart
Kenora sawmill is expected to resume operations
in the second half of 2021
Strategic Investments Plan
GreenFirst expects to strategically invest in capital
projects over the next 36 months, with potential
projects including, but not limited to:
‒ Debarkers relocation
‒ Paving the yard
‒ Building for debarkers
‒ Chip noise control
Land Optimization Plan
Kenora sawmill operations occupy approximately
42 acres of land current, leaving some 72 acres of
excess land available for further monetization
Short-TermMill Optimization
Long-TermCapacity Expansion
Expected Timeframe
Expected Capital
Requirements
Anticipated
Key Metrics
Expected Plan
Overview
Within 18 months Between 18 and 36 months
Non-capital and/or capital-light projects
with quick payback profiles
Capital-intensive projects with longer time
horizons
Cash CostsEvaluation and optimization of
mills with existing resources
Unit RealizationsOpportunity to up-tier
product with modest capital
Production CapacityMeaningful capital deployed to grow
nameplate capacity
Onboard key lumber and logistics executives
Moderate capital required to up-tier product
offering at select mills
Executing on projects with rapid payback
profiles (<1 year)
Supply chain optimization
Mills expected to earn their right to capital by
executing on cash cost and utilization targets
Larger capital projects to expand capacity at
the mills
GreenFirst management expects to
significantly increase production at the target
assets existing operations
Investing in new equipment and processes
May require securing additional fiber sources
– or increasing existing agreements – to meet
capacity objectives
Kenora Mill
Restart & Optimization Project
4/12/2021
Combination of elevated E. SPF prices and expectations to reduce cash costs will support significant free cash flow generation, which will be used
to reduce leverage and fund capital expenditure plan
Abundant Fiber Supply 102
The Assets are located in rich wood baskets and own
licenses that provide perpetual access to ~3.3M m3 of
fiber from Ontario SFLs and Quebec Wood Supply
Guaranties
‒ Combined access to ~3.7M m3 of fiber including
Kenora
Fiber supply licenses support our business plan to
increase nameplate capacity over time
As GreenFirst continues to optimize mill processes,
lumber recovery rates are expected to improve,
lowering the fiber requirement at existing mills
Forest Management Regions
Ontario
Quebec
Sustainable Forest
Licenses ~2.6M m3
Abitibi River
Gordon Cosens
Martel
Hearst
Romeo Mallette
Algoma
Kenora Forest
Red Lake
Whiskey Lake
Trout Lake
SudburyRepresents Kenora’s Directed
Wood Supply (DWS)
Wood Supply Guaranties ~0.7M m3
Northern Quebec
Abitibi Temiscamingue
Montreal
Existing timber tenures expected to support
95%+ operating rates at the Assets with
potential to increase allowable cuts
4/12/2021
Newsprint,
~30%
Chip Supply
Agreement,
~60%
Market,
~10%
Secured Chip Demand Supports Long-term Mill Operations
11
3
The target lumber mills produced nearly 500k BDMT of chips in 2020, which mainly
supplied the Kapuskasing newsprint mill and the Temiscaming pulp complex
As part of the transaction, GreenFirst has entered into a long-term agreement with
RYAM for the supply of a substantial portion of its chip production
The Kenora mill has a business-to-business MOA with Domtar for timber volumes
from Red Lake Forest and Trout Lake in exchange for a supply of wood chips
Overview of Current Chip Supply
The Kapuskasing Newsprint asset is a historically low-cost mill with annual production
capacity of 205k mt (under two machines)1
100% of its chip supply comes from the target lumber assets (majority provided by
the Kapuskasing lumber asset)
GreenFirst is considering various strategic alternatives in trying to surface value from
the newsprint operation
Newsprint Operations
2020A PF Chip Production End Uses
~60% of chip production is covered by
supply agreements
4/12/2021
1Rayonier Advanced Materials 10-K filings
12
4
Both supply and demand factors are driving what GreenFirst believes will
be a multi-year cycle in strong lumber prices
Historical Supply Constraints
Low prices have driven mill closures and under-investment
Poor forest management has led to fires and disease diminishing log capacity
Expected Demand Growth
Decade of low single-family housing starts has created pent up demand
COVID-19 has accelerated de-urbanization and home purchase trends that lead
to greater demand for single family homes
Work from home trends leading to shift in consumer spending to remodeling
home workspaces
Green initiatives beginning to impact what is expected to be a secular increase
in demand
Newsprint fundamentals also improving with recent price increases of
~US$40 per MT, and future price increases expected on the horizon due
to continued plant closures and temporary shutdowns in North America
U.S. Residential New Housing Starts (in thousands)
Source: FEA, U.S. Census, NAHB, MBA, Fannie Mae, NAR, Consensus Research (RBC, CIBC, TD)
Favourable Commodity Supply & Demand Dynamics
E.SPF 2x4 GL Consensus Forecast (US$/Mfbm)
4/12/2021
Based on Consensus (NAHB, MBA, Fannie Mae, NAR)
Growth % +7.6% +9.7% (0.4%)
1,293 1,391
1,525 1,519
2019 2020 2021E 2022E
641
790
586
250
500
750
1,000
1,250
2020 2021E 2022E
10yr Avg.
$454
Latest
$1,160
Deeply Committed to Sustainability 4/12/2021 135
GreenFirst is dedicated to maintaining the highest standards of sustainability across its business practices
Environmental Stewardship
Sustainable forest management practices
Energy efficiency
Zero deforestation
Maximizing biodiversity and forest health
Social Responsibility
Commitment to a zero-incident workplace
Promoting diversity across all stakeholders
Fostering long-standing relationships with indigenous
communities
GreenFirst is committed to sustainable environmental practices and social responsibility
Green
Advantages
of Lumber
Lumber is carbon negative and is the only renewable major
building material
Lumber building materials require less energy to produce and
transport than alternatives
By-products from lumber production can be used to create
energy with net zero carbon emissions
Growing
Market
Acceptance
Technological improvements in cross-laminated timber (CLT) are
increasing lumber’s competitiveness with steel and concrete in
the construction industry
Building code changes are being contemplated that require
lower carbon footprints, adding to lumber’s attractiveness
Proven and Experienced Management Team 144/12/2021
Paul RivettIncoming
Chairman of the Board
Recently co-founded Nordstar Capital and is the current chair and co-owner of Torstar
7 years as President of Fairfax Financial (TSX: FFH)
Rick DomanIncoming
Chief Executive Officer
45+ years of forest industry experience
Former CEO of EACOM Timber
Michel Lessard President 20+ years of forest industry experience
Mike Liggett Chief Financial Officer 20+ years as a public company CFO offering added strategic and operational
expertise
Mel LemkyVice President Capital
Projects, Sawmills 45+ years of forest industry experience
André Ouimette Vice President, Operations 20+ years of forest industry experience
Mathieu BrièreVice President, Sales and
Marketing 20+ years of forest industry experience
6
Significantly Enhancing Shareholder Value
The proposed transaction is expected to make GreenFirst a leader in the Canadian forest products industry
and serve as a catalyst for its ambitions to hold a best-in-class lumber company investment portfolio
GreenFirst anticipates that the proposed transaction will enhance shareholder value
1. Attractive purchase price
2. Opportunity to generate significant operational efficiencies
GreenFirst is expected to have rights to access approximately 3.7 million m3 of fiber supply across Ontario and Québec1
Secured 20-year chip supply agreement expected to ensure long-term demand
Expected favourable lumber industry dynamics
Strong management team with deep operational experience
154/12/2021
1Includes licenses for Kenora and the target assets
Supplemental MaterialsAppendix
Transaction Timeline 17
Subject to customary closing conditions including applicable regulatory approvals
Transaction expected to close before end of calendar Q3 2021 and not before July 31, 2021
Develop and Refine Integration Plan
April 12, 2021
Transaction
Announcement
June 9, 2021
Record date for rights
offering
Initiate and Receive Regulatory Review
June 2, 2021
Begin rights offering of
subscription receipts
Q3 2021
Close and fund
transaction
May 30, 2021
Expected filing of
prospectus offering
4/12/2021
July 9, 2021
Close rights offering
Historical Financial Summary – Target Assets 18
Revenue 1 Adj. EBITDA 2
(In C$ millions) (In C$ millions)
4/12/2021
~$600
~$500~$580
-67
33
133
233
333
433
533
633
733
FY2018 FY2019 FY2020
1Net revenue excluding any intercompany eliminations2Adj. EBITDA is unaudited, including adjustments made by GreenFirst management for expected standalone costs and normalizing items3Consensus Research (RBC, CIBC, TD)4Pro forma Adjusted EPS computed using Adj. EBITDA minus D&A, interest on pro forma expected debt outstanding and taxes based on statutory rates, divided by pro forma common shares outstanding
$565 $441 $641Avg. E.SPF
Price
(US$/Mfbm)
~$70
(~$25)
~$80
$565
$441
$641
($300)
($100)
$100
$300
$500
$700
-40
-20
0
20
40
60
80
100
120
FY2018 FY2019 FY2020
2021 Consensus3
$790
Latest
$1,160
Avg. E.SPF Price
(US$/Mfbm)
On a Pro Forma FY20 basis, the assets would have contributed approximatively C$0.20-C$0.25 in Adjusted EPS4 to GreenFirst