Q1 Earnings Presentation April 2020 2 General: This presentation - PowerPoint PPT Presentation

Q1 Earnings Presentation April 2020

2 General: This presentation and comments associated with it contains Accordingly, readers should exercise caution in relying upon forward- historical information, descriptions of current circumstances and looking- statements and WFT undertakes no obligation to publicly statements about potential future developments and anticipated financial update or revise any forward-looking statements, whether written or results. Readers are cautioned that this presentation is qualified in its oral, to reflect subsequent events or circumstances except as required entirety by reference to, and must be read in conjunction with, the by applicable securities laws. Ltd. ’s (WFT’s) information contained in West Fraser Timber Co. management’s discussion and analysis for the annual and interim periods Non-IFRS Measures: This presentation makes reference to certain ended December 31, 2019, (Annual MD&A) and for the interim period non-IFRS measures, such as EBITDA, Adjusted EBITDA and net debt ended March 31, 2020 (Q1 MD&A), and the company’s annual audited to capital ratio. Non-IFRS measures do not have a standardized and interim financial statements for such periods available on SEDAR meaning prescribed by IFRS and are therefore unlikely to be (www.sedar.com). A person is not entitled to rely on parts of the comparable to similar measures presented by others. For further information contained in this presentation to the exclusion of others. information regarding the use of non-IFRS measures please refer to the “Non -IFRS Measures” section in the MD&A External Information: “forward - Forward-looking Statements: This presentation contains Where this presentation quotes any information or statistics from any statements” looking (including those under the headings Supply external source, it should not be interpreted that WFT has adopted or Conditions and Summary) within the meaning of applicable securities endorsed such information or statistics as being accurate. Some of the laws. Forward-looking statements, are presented to provide reasonable information presented herein is based on or derived from statements by guidance to the reader but their accuracy depends on a number of third parties and has not been independently verified by or on behalf by assumptions and is subject to various risks and uncertainties. In some WFT, and no representation or warranty, express or implied, is made as cases, forward-looking statements can be identified by the use of forward- to, and no reliance should be placed on, the fairness, accuracy, looking terminology such as “plans”, “targets”, “expects” or “does not completeness or correctness of this information or any other information expect”, “an exists”, “outlook”, “prospects”, “strategy”, opportunity or opinions contained herein. “intends”, “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might”, “will”, Currency: In this presentation, all amounts are in Canadian dollars, “will be taken”, “occur” or “be achieved” . In addition, any statements that unless otherwise indicated. refer to expectations, intentions, projections or other characterizations of Terminology : References in this presentation to “MMfbm” or “mmfbm” future events or circumstances contain forward-looking information. mean million board feet, “SPF” means spruce-pine-fir and “SYP” means Statements containing forward-looking information are not historical facts management’s but instead represent expectations, estimates and southern yellow pine. For any other technical terms used in this projections regarding future events or circumstances . By their nature, presentation, please see the Glossary of Industry Terms found in our forward-looking statements involve numerous assumptions, inherent risks most recent Annual Report. and uncertainties, both general and specific, which contribute to the possibility that the predictions, forecasts and other forward-looking statements will not occur. Actual outcomes and results of these statements will depend on a number of factors including those matters described under “Risks and Uncertainties”, in our Annual MD&A and in our Q1 MD&A and may differ materially from those anticipated or projected. Reference should be made to the other factors discussed in public filings with securities regulatory authorities. .

Demand conditions 3 Leading indicator of Remodeling Activity U.S. Housing Starts ( not seasonally adjusted) $B 4 Qtr Moving Improvements and Repairs $340 8.0% 140 $330 7.0% 120 4 Qtr Moving rate of Change $320 6.0% 100 $310 M Starts 5.0% 80 $300 Seasonally adjusted: 4.0% 60 $290 2018: 1,250 3.0% 40 2019: 1,298 $280 2.0% $270 20 1.0% $260 0 $250 0.0% J F M A M J J A S O N D Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Q219 Q319 Q419 Q120 2018 2019 2020 Expenditures % change Source: US Census Bureau Source: Harvard Joint Centre for Housing Studies World Chemical Pulp Shipments North America Offshore Exports 6.5 600 500 6.0 400 MM tonnes MMfbm 5.5 300 5.0 2018: 5,967 200 2018: 61.1 2019: 4,960 4.5 2019: 63.5 100 2020: 551 YTD 2020: 9.63 YTD 0 4.0 J F M A M J J A S O N D J F M A M J J A S O N D 2018 2019 2020 2018 2019 2020 Source: PPPC Source: Statistics Canada, US Census

Supply conditions 4 North America Curtailments Impact Lumber Supply Billion fbm MMfbm 80 3,500 Down 5% 3,000 60 2,500 Down 1% 40 Down 11% 2,000 Up 2% Announced Down 26% to date in Q1 20 1,500 1,000 0 BC Canada US US Total NA 500 South 0 2018 2019 2018 2019 Q12020 Source: WWPA, SFPA, COFI Source: Analyst reports, public filings, management estimates North America Offshore Imports 450 2018: 1,548 400 2019: 1,465 350 300 MMfbm 250 200 150 100 50 0 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Source: Statistics Canada, US Census, FEA Volatile supply chain expected in short term

Consolidated Financial Results 5 $ Millions Adjusted EBITDA Q1-20 Q4-19 Q1-20 Q4-19 Lumber $ 106 $ 69 Sales $ 1,195 $ 1,129 Cost and Expenses 1,182 1,152 Panels 8 13 Restructure/Impairment - 8 Pulp & Paper 11 (1) Operating earnings 13 (31) Corporate/Other 2 (1) Finance Expense (16) (13) Total $ 127 $ 80 Other 12 (2) Adjusted EBITDA 10.06% 7.09% Earnings before Tax $ 9 $ (46) margin Tax recovery 3 4 Net earnings $ 12 $ (42) Improved pricing and lower fibre costs in lumber segment * Adjusted EBITDA is defined as operating earnings plus amortization, equity based compensation, restructuring and impairment charges and export duties.

Q1 Consolidated Adjusted EBITDA Reconciliation 6 $ millions Improved pricing and fibre costs

Q1-20 versus Q4-19 7 $ millions unless Q1 2020 Q4 2019 Change otherwise indicated BC operations on full schedule most of the quarter Lumber Production (MMfbm) 1,501 1,423 78 compared to variable operating schedules in Q4 Increase SYP shipments, some delays in SPF from rail Lumber Shipments (MMfbm) 1,426 1,385 41 blockades Selling prices, favorable Canadian exchange rate Adjusted EBITDA $127 $80 $47 movements, improved fiber costs Seasonal log inventory build consumes working capital Cash flow from operations ($122) $40 ($162) Significant projects underway in prior year, carryover Capital Expenditure $59 $87 ($28) spend moderating in second half Net debt increased for working capital build, additional Net Debt $1,325 $1,051 $274 liquidity available, significant financial flexibility and wide margin of safety Net Debt to Capital 33% 30% 3% Cumulative duties on deposit Deposits continue at 23.56% until AR1 finalized $407 $373 $34 US$ Limited impacts of COVID-19 in the quarter

8 Liquidity Available liquidity Scheduled maturities $1,000 $900 $800 $800 $700 $600 $600 $500 $400 $400 $300 $200 $200 $100 $0 $0 2017 2018 2019 Q119 Q419 Q120 2020 2021 2022 2023 2024 Bank lines Cash Additional Facility Term loan Notes Revolvers Financial Covenants Additional liquidity levers 60% • Approximately $125M of income tax refunds pending 40% • Seasonal log inventory draw down through Q2 and 20% Q3 0% • Government payment deferral programs start in Q2 2017 2018 2019 Q119 Q419 Q120 Actual Maximum Ample financial flexibility Cash consists of cash and short-term investments less cheques issued in excess of funds on deposit.

Summary 9 Q1 2020 Recap Balance of Year Focus ✓ Operational excellence on variable ✓ Fibre costs continue to improve sequentially schedules ✓ Preserve and manage liquidity ✓ Pulp markets showing signs of conservatively, working capital improvement compared to contraction second half of 2019 ✕ COVID-19 impacts late in the ✓ Complete Dudley and Opelika projects quarter necessitates downtime across all segments ✕ Uncertain business environment going forward