Q2 Earnings Presentation July 2020 2 General: This presentation - PowerPoint PPT Presentation

Q2 Earnings Presentation July 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 June 30, 2020 (Q2 MD&A), and the company’s annual audited and to capital ratio. Non-IFRS measures do not have a standardized 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. .

Consolidated Financial Results 3 $ Millions $ Millions Adjusted EBITDA Q2-20 Q1-20 Q2-20 Q1-20 Lumber $ 156 $ 106 Sales $ 1,276 $ 1,195 Cost and Expenses 1,193 1,182 Panels 20 8 Pulp & Paper 10 11 Operating earnings 83 13 Corporate/Other (2) 2 Finance Expense (13) (16) Other 9 12 Total $ 184 $ 127 Earnings before Tax $ 67 $ 9 Adjusted EBITDA 14.40% 10.06% margin Tax recovery (provision) (19) 3 Net earnings $ 48 $ 12 Improved pricing and volume in lumber segment * Adjusted EBITDAis defined as operating earnings plus amortization, equity-based compensation, and export duties.

Q2 EBITDA Reconciliations 4 $ millions Consolidated EBITDA Reconciliation Lumber EBITDA Reconciliation Improved pricing and costs over Q1

Q2-20 versus Q1-20 5 $ millions unless Q2 2020 Q1 2020 Change otherwise indicated Lumber Production (MMfbm) 1,424 1,501 (77) Temporary curtailments offset by increased productivity Catch up from Q1 delays, increased export shipments Lumber Shipments (MMfbm) 1,591 1,426 165 Lumber price and cost benefits, insurance claim gain in panels Adjusted EBITDA $184 $127 $57 Improved earnings, seasonal working capital liquidation and Cash flow from operations $439 ($122) $561 income tax refunds Major projects on track Capital Expenditure $60 $59 $1 Net Debt $939 $1,325 ($386) Debt paid down from operating cash flow Net Debt to Capital 28% 33% (5%) Cumulative duties on deposit US$ $436 $407 $29 Rates set to adjust in Q4 2020 Earnings and cash flow improved despite uncertain conditions

6 Liquidity Available liquidity improved to $800 million Cash consists of cash and short-term investments less cheques issued in excess of funds on deposit.

Demand conditions 7 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: 1,290 $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 Q220 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: 4,968 4.5 2019: 63.5 100 2020: 1,655 YTD 2020: 25.9 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

U.S. Housing Situation 8 Supply of new U.S. housing (1968-2019) 1982 is the only year before 2008 with 2,500 fewer units than 1.2 million units 2,000 A deficit in housing has accumulated over the last 10+ years 1,500 Millions 1,000 500 0 1959 1964 1969 1974 1979 1984 1989 1994 1999 2004 2009 2014 2019 US Housing Stock Age Low levels of new construction has led to an aging housing stock Years in age 50 40 39 37 35 34 40 32 31 31 30 29 29 27 27 30 20 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 Supply deficit, aging stock Source: U.S. Census, FEA and https://www.census.gov/construction/nrc/historical_data/index.html

Favourable Demographics 9 US Population by Age (at July 1, 2020) 5,000 4,500 29-30 year-olds are the largest age groups in 2020 4,000 3,500 3,000 MILLIONS 2,500 2,000 1,500 1,000 500 - 1 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 96 Source: FEA and https://www.census.gov/data/tables/time-series/demo/popest/2010s-national-detail.html

Supply conditions 10 10 North America Lumber Supply (Production) 20 6 5 15 Billion Board Feet Billion Board Feet 4 10 3 2 5 1 0 0 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 North America BC US South US West Coast East of Rockies Source: FEA R-axis North America Offshore Imports 500 2018: 1,548 450 2019: 1,508 400 350 MMfbm 300 250 200 150 100 50 0 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Source: Statistics Canada, US Census, FEA Lumber supply constraints

11 11 McDavid, Florida Update Project Cost: $23 million USD Project Scope: Replace the existing primary breakdown line with new technology capable of operating 50% faster than the previous system with a reduced headcount and improved recovery and grade mix. Project Timeline: The project was commissioned in Q4 2019 with a month of downtime required to integrate the new equipment into the existing mill. The project was completed on time and on budget.