Interfor (IFP) investor relations material

Executive summary

• 2025 was marked by historically weak lumber prices, significant market volatility, and a net loss of $104.6 million in Q4'25, but operational discipline, improved liquidity, and employee turnover gains were achieved.

• The company is a top-three North American softwood lumber producer with 26 facilities, a diversified geographic footprint, and a strong ESG focus.

• Portfolio actions included permanent closure of two high-cost U.S. South mills, significant inventory reductions, and ongoing divestitures.

• The final phase of the Thomaston Mill in Georgia is nearing completion, expected to enhance long-term cost structure.

• Maintains a balanced capital allocation strategy, focusing on growth, M&A, and shareholder returns, supported by strong liquidity.

Financial highlights

• Q4 2025 Adjusted EBITDA was negative CAD 29 million (US$29.2 million), an improvement from Q3, with Q4 sales of $600.6 million and revenues of $2.8 billion for 2025.

• Cash flow from operations was break even in Q4, aided by working capital recovery, and cumulative cash flow from operations exceeded CAD 300 million over three years.

• Net debt to capitalization ratio at year-end was 36.5%, with pro forma available liquidity of CAD 482 million ($482 million).

• Maintained strong cash flow and disciplined capital deployment, with ~$2.5 billion reinvested and ~$636 million returned to shareholders from 2020 to 2025.

• Net loss per share was $1.59 in Q4'25, and adjusted EBITDA margin was -4.9%.

Outlook and guidance

• 2026 economic environment remains uncertain, with risks from trade, tariffs, labor shortages, and geopolitical developments.

• Capital spending for 2026 is projected at CAD 75–80 million, dropping to around CAD 60 million in 2027, focused mainly on maintenance and mill upgrades.

• Free cash flow will be directed toward leverage reduction; timing depends on lumber prices and market conditions.

• Early signs of lumber market improvement noted, but planning assumptions remain conservative.

• Multi-year capex plan targets optimization to sustain high-margin operations.