Q2 Earnings

PresentationJuly 2019

22

General: This presentation and comments associated with it contains

historical information, descriptions of current circumstances and

statements about potential future developments and anticipated financial

results. Readers are cautioned that this presentation is qualified in its

entirety by reference to, and must be read in conjunction with, the

information contained in West Fraser Timber Co. Ltd.’s (WFT’s)

management’s discussion and analysis for the annual and interim periods

ended December 31, 2018 and June 30, 2019 respectively, (MD&A), and

the company’s annual audited and interim financial statements available

on SEDAR (www.sedar.com). A person is not entitled to rely on parts of

the information contained in this presentation to the exclusion of others.

Forward-looking Statements: This presentation contains “forward-

looking statements” (including those under the headings Supply

Conditions and Summary) within the meaning of applicable securities

laws. Forward-looking statements, are presented to provide reasonable

guidance to the reader but their accuracy depends on a number of

assumptions and is subject to various risks and uncertainties. In some

cases, forward-looking statements can be identified by the use of

forward-looking terminology such as “plans”, “targets”, “expects” or

“does not expect”, “an opportunity exists”, “outlook”, “prospects”,

“strategy”, “intends”, “believes”, or variations of such words and phrases

or state that certain actions, events or results “may”, “could”, “would”,

“might”, “will”, “will be taken”, “occur” or “be achieved”. In addition, any

statements that refer to expectations, intentions, projections or other

characterizations of future events or circumstances contain forward-

looking information. Statements containing forward-looking information

are not historical facts but instead represent management’s

expectations, estimates and projections regarding future events or

circumstances. By their nature, forward-looking statements involve

numerous assumptions, inherent risks 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 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.

.

Accordingly, readers should exercise caution in relying upon forward-

looking- statements and WFT undertakes no obligation to publicly

update or revise any forward-looking statements, whether written or

oral, to reflect subsequent events or circumstances except as required

by applicable securities laws.

Non-IFRS Measures: This presentation makes reference to certain

non-IFRS measures, such as EBITDA, Adjusted EBITDA and net debt

to capital ratio. Non-IFRS measures do not have a standardized

meaning prescribed by IFRS and are therefore unlikely to be

comparable to similar measures presented by others. For further

information regarding the use of non-IFRS measures please refer to the

“Non-IFRS Measures” section in the MD&A External Information:

Where this presentation quotes any information or statistics from any

external source, it should not be interpreted that WFT has adopted or

endorsed such information or statistics as being accurate. Some of the

information presented herein is based on or derived from statements by

third parties and has not been independently verified by or on behalf by

WFT, and no representation or warranty, express or implied, is made as

to, and no reliance should be placed on, the fairness, accuracy,

completeness or correctness of this information or any other information

or opinions contained herein.

Currency: In this presentation, all amounts are in Canadian dollars,

unless otherwise indicated.

Terminology: References in this presentation to “MMfbm” or “mmfbm”

mean million board feet, “SPF” means spruce-pine-fir and “SYP” means

southern yellow pine. For any other technical terms used in this

presentation, please see the Glossary of Industry Terms found in our

most recent Annual Report.

33

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

$270

$280

$290

$300

$310

$320

$330

$340

$350

Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119

Expenditures % change

Demand conditions U.S.

0

20

40

60

80

100

120

140

J F M A M J J A S O N D

U.S. Housing Starts (not seasonally adjusted)

2017 2018 2019

Seasonally adjusted:

2017: 1,203

2018: 1,250

2019: 1,238 ytd June

Repair and renovation growth

continues

Leading indicator of Remodeling ActivityMonthly

$B

4 Q

trM

ovin

g I

mpro

vem

ents

and R

epairs

4 Q

trM

ovin

g r

ate

of

Change

Source: US Census Bureau Source: Harvard Joint Centre for Housing Studies

Limited growth needed for increased demand of 1 – 2 billion board feet

U.S. Housing Forecast (000) 2019 2020

RBC 1,313 1,335

Wells Fargo 1,270 1,290

Mortgage Bankers 1,268 1,3285

RISI 1,265 1,290

NAHB 1,250 1,286

FEA 1,248 1,339

APA 1,230 1,220

Fannie May 1,229 1,257

Average (May 2019 Fcst) 1,259 1,292

50k annual increase in

housing starts

3% growth in repair and renovation

~600Mfbm

increase in

lumber demand

~1,000Mfbm

increase in

lumber demand

44

0

100

200

300

400

500

600

700

800

2018Q4 2019 Q1 2019 Q2

North America Curtailments

Supply conditions

0

5

10

15

20

25

BC Canada US Total NA

Lumber Supply

Ytd 04-18 Ytd 04-19

Down 16%

Down 9%

Up 1%

Down 4%

Source: Western Wood Products Association, management estimates Source: Industry analysts, public filings, management estimates, FEA

Supply growth challenges

• Temporary curtailments become permanent in the BC Interior

• Over 1.9 billion feet of North America permanent curtailment already announced

• Curtailments likely to have larger impact on supply in Q3/Q4

• Contractor availability and lead times inhibiting projects in the US South

• Long start up curves on new projects in US South

• Residual markets impacting (new and existing) facilities

Billion fbm MMfbm

Mix of

temporary

and

permanent

Curtailments likely to affect supply in second half

55

* Adjusted EBITDA is defined as operating earnings plus amortization, equity based compensation, restructuring and impairment charges and export duties.

Consolidated Financial Results

$ Millions

Adjusted EBITDA Q2-19 Q1-19

Lumber $ 39 $ 84

Panels 10 15

Pulp & Paper 7 11

Corporate/Other - -

Total $ 56 $ 110

EBITDA margin 4.2% 8.9%

Q2-19 Q1-19

Sales $ 1,317 $ 1,241

Cost and Expenses 1,375 1,231

Restructure/Impairment 26 -

Operating earnings (84) 10

Finance Expense (13) (11)

Other (6) (5)

Earnings before Tax $ (103) $ (6)

Tax recovery 45 1

Net earnings $ (58) $ (5)

Diluted EPS $ (0.92) $ (0.12)

Challenging conditions continue

66Q2 Consolidated Adjusted EBITDA Reconciliation

77Q2 Lumber Adjusted EBITDA Reconciliation

88Q2-19 versus Q1-19

$ millions unless

otherwise indicatedQ2

2019

Q1

2019Change

Lumber Production (MMfbm) 1,536 1,462 74

5%Production up slightly despite similar curtailments in both

quarters due to stronger operating performance

Lumber Shipments (MMfbm) 1,686 1,444 242

17%SPF and SYP shipments higher as inventory reduced during

curtailment periods

Pulp Shipments (Mtonnes) 305 318 (13)

4%NBSK shipments slightly lower coming out of maintenance

shut downs

Adjusted EBITDA $56 $110 $(54)

(49%)Adjusted EBITDA off in all segments due to lower commodity

pricing, fibre costs inflation and curtailment impacts

Cash flow from operations $187 $(228) $(41) Seasonal log inventory reduction in western Canada,

drawdown in lumber inventories

Capital Expenditure $82 $108 $(26) Continuing to execute on capital plans and US

South modernization program

Net Debt

Net Debt to Capital

$930

26%

$1,001

27%

$(71)Net debt down slightly from prior quarter, significant financial

flexibility and wide margin of safety

Cumulative duties on deposit

US$

$312 $276 $36 Significant duties on deposit

Share buybacks $31 $50 $(19) Continued to return capital

Despite difficult 2019 so far, maintaining focus on priorities

99

-$100$0

$100$200$300$400$500$600$700$800$900

2017 2018 Q1-17 Q1-18 Q1-19 Q2-19

Available liquidity

Bank lines Cash Increase in revolving credit facility

Liquidity

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

2019 2020 2021 2022 2023 2024

Term loan Notes Revolver Other

Scheduled maturities

Ample financial flexibility

Cash consists of cash and short-term investments less cheques issued in excess of funds on deposit.

1010Summary

✕ Major maintenance shut downs

at both NBSK mills

✕ Cold and wet weather interrupts

operations, potentially affecting

housing activity

✕ Multiple production curtailments

disrupt operating rhythm

✕ Multiple major capex projects

underway in US South

✓ Resume normal operating

schedules in pulp and lumber

operations

✓ Moderating weather conditions

✓ Potential for supply and demand

of lumber to rebalance

✓ Balance of year capital anticipated

to be less disruptive

First Half Headwinds Second Half Opportunities