West Fraser Timber Co. Ltd. Q4 FY2024 earnings call

• Financial Results: Q4 2024 adjusted EBITDA $140M (10% margin), full year 2024 adjusted EBITDA $673M (11% margin) covering capital, dividends, and share buyback. - Balance Sheet: Near $1.7B available liquidity at year-end. - 2025 Outlook: Initial operational guidance for 2025 with targeted product shipments and $400M-$450M capital expenditures. - Operational Actions: Portfolio optimization, cost reduction via mill closures/curtailments, modernization in lumber, and ramp-up of Allendale OSB mill. - Tariff Considerations: Monitoring U.S. tariffs, scenario planning, and preparing for potential impacts on operations.

West Fraser generated $140 million of adjusted EBITDA in Q4 2024 with a 10% margin. Results varied by segment: North American Engineered Wood Products had $127 million adjusted EBITDA in Q4, up slightly from Q3; Lumber had $21 million adjusted EBITDA in Q4, a sequential improvement but with reduced Southern Yellow Pine lumber volumes; Pulp & Paper incurred a $10 million adjusted EBITDA loss in Q4 due to a major maintenance shutdown; Europe had $2 million adjusted EBITDA in Q4 but faced tempered demand and a $70 million goodwill impairment. Full year 2024 adjusted EBITDA was $673 million (11% margin), a meaningful improvement from 2023, and pro forma EBITDA including Norbord was $430 million higher than 2019.

• 2025 Operational Guidance: Targeted ranges for key product shipments and capital expenditures $400M-$450M (moderate decrease from 2024 but aligned with countercyclical investing). - Tariff Impact: Will evaluate tariff impact on operations and update forecasts as needed.

• Tariffs and Trade: Uncertainty from U.S. tariffs and global trade affecting demand and inflation. - Market Conditions: Elevated mortgage/interest rates shaping home sales and remodeling spending; challenging Southern Yellow Pine lumber volumes. - Operational Challenges: Pulp & Paper's major maintenance shutdown, low log inventory affecting mill efficiency.

Q: What are you doing and seeing from peers and downstream in terms of preparing for tariffs? Are you seeing lumber move differently?

A: Maintaining normal inventory and selling patterns; focus on flexible operating schedules. Customer purchasing within normal range, uncertainty doesn't drive purchasing.

Q: In scenario planning for tariffs, what's the frame of mind for U.S. vs. Canadian portfolio?

A: Difficult to predict, but well-positioned to react in both regions to meet customer needs.

Q: Perspective on ability to pass on tariff costs to customers with slack in wood product markets?

A: Hard to say exactly, as multiple factors impact trading levels; additional costs add to cost floor and drive supply chain decisions.

Q: Labor cost relief in U.S. markets?

A: Labor market still tight, but some relief felt, though magnitude is minor and context is post-pandemic labor pressure.

Q: Hopes for BC government's timber sales program review?

A: Hopeful, working with BC government to improve timber access and stability for long-term viability.

Q: OSB production from Canada to U.S.?

A: Large majority of Canadian OSB production crosses the border, with about 40% of capacity in Canada and destination shipments in MD&A