Rayonier Advanced Materials (RYAM) 17th Annual Southwest IDEAS Conference summary

Business overview and segment performance

• Operates four facilities across the US, France, and Canada, producing natural cellulose fibers used globally in everyday products.

• Five segments: cellulose specialties (core), cellulose commodities, biomaterials (future growth), paperboard, and high-yield pulp.

• Specialty products are used in food, pharmaceuticals, cigarette filters, plastics, and automotive filtration.

• Commodities include fluff for hygiene products and viscose for textiles; assets can shift between specialties and commodities based on demand.

• Paperboard and high-yield pulp, mainly in Canada, face market challenges but have new product launches like freezer board.

Financial performance and outlook

• 2023 guidance revised from $215–$235 million EBITDA to $135–$140 million due to tariffs, currency, and operational issues, mainly in France.

• Tariff headwinds have shifted to tailwinds, with zero tariffs on most exports and new tariffs supporting US manufacturing.

• Industry harmed by imports from Brazil and Norway; additional tariffs pending.

• Targeting a baseline EBITDA of $195 million, aiming to double to $315 million by end of 2027 through price, volume, cost reductions, and biomaterials investments.

Growth strategies and market dynamics

• Price increases and volume growth in cellulose specialties expected, with industry utilization at 90% and no new capacity until at least 2029.

• Market analysts expect 4–6% annual price growth; management is more bullish for 2026.

• Plans to convert commodity production to specialty grades for margin enhancement.

• Biomaterials segment to leverage existing assets for new products like bioethanol, green energy, and prebiotics, with $80 million EBITDA potential from $60 million capital over 2–3 years.

• Exploring sustainable aviation fuel and pilot-scale bioethanol projects with external partners and grants.