Investor Presentation January 2019 Forward-Looking Statements This - PowerPoint PPT Presentation

Investor Presentation January 2019

Forward-Looking Statements This presentation and comments associated with it contain forward-looking statements including statements relating to U.S. housing recovery, demand for lumber, the potential for constrained lumber supply, log cost inflation, lumber industry production, pulp demand and capacity, the timeline associated with countervailing and anti-dumping duty cases, earnings sensitivity and estimated annual capital expenditures. These statements are subject to the cautionary statement which introduces West Fraser’s 2017 Annual Management’s Discussion & Analysis which can be accessed on the Company website www.westfraser.com. 2

Market Overview

U.S. Lumber End Use and Consumption U.S. Lumber End Use 2017 Nonresidential/Mobile, 6% Single Family Construction, 27% Industrial Production, 24% Multifamily Construction, 4% Residential Improvements, 39% U.S. Lumber Consumption (Billion ft) 35 30 25 20 15 10 5 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Housing Construction Repair/Remodeling Industrial/Other Residential construction and renovation the key driver of lumber demand 4 Source: FEA and WF

North American Lumber Consumption 80 75 72 70 64 64 62 60 58 60 56 53 51 50 48 50 45 43 39 43 40 30 20 10 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F 2019F 2020F US Consumption Canadian Consumption Lumber demand growth trending at ~ 2 billion board feet per year 5 Source: US Census Bureau, Statistics Canada, West Fraser Forecast

North American Lumber Production 80 30 70 25 60 20 50 40 15 Billion Bf 30 10 20 5 10 0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F 2019F 2020F U.S. Canada Canada West (R Axis) US South (R Axis) Lumber production growth constrained in western Canada 6 Source: US Census Bureau & Statistics Canada, West Fraser Forecast

Annual Allowable Cut on the decline in British Columbia British Columbia Interior 70 16 65 14 Billion BF (softwood lumber production) 60 12 Million m3 (AAC & Harvest) 55 10 50 8 45 6 40 4 Log supply constraints will create price 35 2 pressure 30 0 AAC (m3) Harvest (m3) Softwood Lumber Production (BBF) Pine beetle and fires impacting log supply 7 Source: FEA

Regional share of North American Lumber Production 35% 30% 25% 20% 15% 10% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Canada West Canada East US South US West Western Canada supply facing reduced by log availability 8 Source: US Census Bureau & Statistics Canada,

North American Lumber Supply & Demand 70 Imports Exports Net (Billion bf) 68 2005: 3.0 (2.7) 0.3 2020: 2010: 0.5 (4.8) (4.3) 3.0 Billion bf 66 2017: 1.4 (5.5) (4.1) Impact of 64 Announced Capacity 62 additions 60 58 56 54 52 50 2015 2016 2017 2018F 2019F 2020F Production Demand On North American Mills Production before New Capacity Demand expected to absorb supply 9 Source: US Census Bureau & Statistics Canada, West Fraser Forecast

Pulp End-Use Products Chemical Pulp Mechanical Pulp Box Board, 6% Specialty, Printing 8% Fluff, 10% and Tissue, Writing, 34% Tissue, 5% 38% Other, 3% Specialty, 22% Printing Box and Board, Writing, 46% 28% Diversified end uses and markets 10 Source: PPPC 2017

Market Pulp Supply and Demand Chemical Pulp BCTMP Chemical Pulp Demand (M tonnes ) • No new major capacity additions 2018 to 2020 30,000 40% • Pulp demand projected to grow 2.2% over next 5 25,000 years 35% • 20,000 Demand growth driven by tissue and packaging demand 15,000 30% • Growth will be primarily in Asia 10,000 25% • Conversions of chemical hardwood to dissolving pulp 5,000 will constrain hardwood pulp supply 0 20% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 China Demand % of World Demand (R axis) Growth in China demand for pulp creates favorable market dynamics 11 Source: PPPC

West Fraser Overview

Integration - We Attain Value from 100% of Our Resources Sustainably managed forest lands Reforestation Lumbe ber Ply lywood od Reman anuf ufact actur urer ers Sawdust ust and shaving vings Chip ips Bark k (Fuel el) Supply y agreem emen ents s BCTMP Pulp lp NBSK Pulp lp MDF Bio ioprod oduct ucts Heat and Ele lect ctrici icity (e.g. e.g. pelle llet pla lants) nts) Integrated fiber strategy to maximize the value of the log 13

Operations Diversification Strong presence in key lumber producing regions and forest product markets 14

Product & Geographic Diversification LUMBER PANELS PULP & PAPER 34 mills 7 mills 5 mills SPF 3.9 Bfbm Plywood: 860 MMsf3/8” NBSK: 570 Mtonnes SYP 3.2 Bfbm MDF: 250 MMsf3/4” BCTMP: 690 Mtonnes Total 7.1 Bfbm LVL: 2.6 MMcf Newsprint: 135 Mtonnes 2017 Revenue Mix by Business Segment Pulp Lumber Panels 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2017 Revenue Mix by Country Canada China Other US 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Diversified across multiple end uses 15

North American Lumber Capacity West Fraser Lumber Capacity 2004 2.8 Billion feet US South West Fraser 11% Alberta Canfor 12% Weyco Interfor British Columbia Top 10 77% GP represent 48% of capacity Sierra Pacific West Fraser Lumber Capacity 2018 7.1 Billion feet Resolute British Columbia 31% Hampton US South 45% Tolko Idaho Forest 0 2000 4000 6000 8000 Alberta MMfbm 24% Source: Public filings, Forest Economic Advisors and West Fraser estimates West Fraser has largest share of a growing market 16

Financial Results Ytd Q3 Ytd Q3 2017 2016 2018 2017 5 Sales 4,844 3,758 5,134 4,450 Billion Adjusted EBITDA * 1,418 819 1,160 674 in Adjusted EBITDA margin 29.3% 21.8% 22.6% 15.1% annual sales Earnings 781 389 596 326 Strong pricing resulting in significant earnings growth 17 * Adjusted EBITDA is defined as operating earnings plus amortization, equity based compensation and export duties.

Capital Investment Strategy • Reinvest profits to lower costs, improve efficiency through technology and improved processes • Capital spending in 2017 of $336 million New merchandiser and debarker in High Prairie, Alberta • Cumulative capital spending of $1.6B between 2013 and 2017 • Growth through opportunistic acquisitions focused on solid wood New mill being constructed in Opelika, Alabama Prudent capital deployment 18

Significant capital reinvestment Major rebuilds of 12 sawmills Upgraded 11 planers Built 6 energy and bioproducts Added 35 continuous kilns projects 19 Years: 2013-2017

Opelika, Alabama Case Study Investment Rationale • Excellent timber drain • Solid existing work force • Proximity to markets • Site infrastructure • Attractive payback • Low execution risk Project Highlights • Increased capacity of ~ 100Mfbm • Climate controlled operator environment • Completed on time and on budget • Improved grade & recovery • Leading technology Successful modernization expected to result in a high performing mill 20

Cumulative capital allocation $3,000 2015 through September 2018 Retained/ Other Buybacks/ 5% Dividends $2,500 33% Capex 40% $1,113 $920M returned to shareholders $2,000 (55% of free cash flow) $1,500 Acquisitions $2,789 $602 $137 22% $96 $1,000 $824 $1.7B Reinvested in the $56 $500 business $235 $0 Cash from Capex Acquisitions Debt service Dividends Buybacks Other Retained operations and cash flow leverage Consistently deploying capital to create value Free cash flow is defined as cash flow from operations less capital expenditure 21

Share buybacks - history Cumulative Shares repurchased (thousands of share) 20,000 15,985 15,000 10,000 7,849 7,603 3,297 5,000 2,218 65 0 2013 2014 2015 2016 2017 2018 Cumulative investment in repurchases (Millions of dollars) $1,500 $1,058 $1,000 $382 $365 $500 $175 $115 $3 $0 2013 2014 2015 2016 2017 2018 Average repurchase price: 2013 2014 2015 2016 2017 2018 To date $44.60 $51.86 $55.57 $44.06 $68.45 $83.13 $65.88 Track record of returning capital to shareholders 22 As of December 31, 2018

Total liquidity and Debt/EBITDA Total Liquidity $1,000 $800 $302 $282 $258 $231 $132 $600 $50 $86 $100 $400 $562 $553 $553 $551 $551 $556 $444 $200 $400 $- Q4/2016 Q1/2017 Q2/2017 Q3/2017 Q4/2017 Q1/2018 Q2/2018 Q3/2018 Undrawn Bank Lines Cash Debt/EBITDA 1.0 0.8 0.5 0.3 0.0 Q4/2016 Q1/2017 Q2/2017 Q3/2017 Q4/2017 Q1/2018 Q2/2018 Q3/2018 Strong Liquidity, Conservative leverage profile 23