West Fraser Timber Co. Ltd.

Good morning, ladies and gentlemen, and welcome to West Fraser fourth quarter 2023 results conference call. Please note that all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, please press the star, followed by the two. During this conference call, West Fraser's representatives will be making certain statements about West Fraser's future financial and operational performance, business outlook, and capital plans. These statements may constitute forward-looking information or forward-looking statements within the meaning of Canadian and United States securities. Such statements involve certain risks, uncertainties, and assumptions. which may cause actual results or future results and performance to be materially different from those expressed or implied in these statements. Additional information about these risk factors and assumptions is included both in the accompanying webcast presentation and in our 2023 Annual MD&A and Annual Information Form, which can be accessed on the US Readers website or through CEDAR Plus for Canadian investors. and Edgar for United States investors. I will now hand the call over to Mr. Sean McLaren. Please go ahead.

Thank you, Jenny. Good morning, everyone, and thank you for joining our fourth quarter 2023 earnings call. I am Sean McLaren, President and CEO of West Fraser. Joining me today are Chris Verostek, our Senior Vice President and Chief Financial Officer, Matt Tobin, our Senior Vice President of Sales and Marketing, and other members of our leadership team. I will begin today's comments with a brief overview of West Fraser's Q4 and fiscal 2023 financial results and then pass the call to Chris for additional comments before I share some thoughts on our outlook and make some concluding remarks. West Fraser generated $97 million of adjusted EBITDA in the fourth quarter of 2023 as we continue to experience mixed results across our business segments. was strength in our North American engineered wood business, partially offset by continued soft demand for our North American lumber products. While new home construction in the US remained resilient through the quarter, supporting demand for OSB, relatively high mortgage rates and continued to constrain existing home sales activity, which tempered repair and remodeling spending and lumber demand. For full year 2023, we generated $561 million of adjusted EBITDA representing a 9% margin. On a pro forma basis with the inclusion of Norboard, our 2023 EBITDA was approximately $320 million higher than that of the last down cycle in 2019, reflecting synergies from the Norboard transaction, the benefits of our capital investment program, as well as the acquisitions and strategic initiatives we've undertaken. Consistent with our strategy, we have remained disciplined in our approach to capital allocation and have preserved capital in the event that we have a down market that we are currently experiencing. It is this discipline that has positioned us to be able to execute on our plans and invest in and improve our assets through all market conditions. As we look ahead, our balance sheet remains strong and continues to offer significant financial flexibility, which is a key priority of our capital allocation strategy. With that overview, I'll now turn the call to Chris for additional detail and comments.

Thank you, Sean, and good morning, everyone. And a reminder that we report in U.S. dollars, and all my references are to U.S. dollar amounts unless otherwise indicated. The lumber segment posted negative $51 million of adjusted EBITDA, declining from positive $44 million in the third quarter, a period that had benefited from a $62 million export duty recovery. Our North American EWP segment generated $143 million of adjusted EBITDA, down from $289 million in the prior quarter. The pulp and paper segment generated $2 million of adjusted EBITDA in the fourth quarter, rebounding from the negative $12 million in the prior quarter, while in Europe, adjusted EBITDA was $3 million in the fourth quarter versus $4 million in the third quarter. Lower prices were the largest driver for the sequential EBITDA declines across our North American lumber and engineered wood products businesses. Cash flow from operations was $96 million in the fourth quarter, with our cash balance net of debt still at a healthy $361 million versus $663 million last quarter. This quarter, we invested $157 million back into the business through capital expenditures repurchased $104 million of our shares, returned $25 million to shareholders through dividends, and completed the $100 million acquisition of Spray Lake Sawmills in Cochrane, Alberta. In terms of our outlook for 2024, we are providing initial operational guidance for the year as detailed in our earnings release, including our expectations for key product shipments, as well as our planned capital expenditures, which are in the range of $450 million to $550 million. With that overview, I will now pass the call back to Sean.