Investor Presentation June 2014 Solid DrivingAssets Growth Delivering Returns Great Potential
Rebuilding Confidence Management Changes Interim President & CEO Appointed Mr. Richard Ott appointed Interim President & CEO on March 6, 2014 Appointed to Canexus Board of Directors on December 12, 2012 36 years of chemical…
Delivering Results Mandate for 2014 1 2 3 Complete NATO Increase Rebuild expansion and profitability of confidence ramp-up our chemicals operations business New CEO expected early in the second half of 2014 3
About Us Low-Cost Plants, Growth Projects Low-Cost Plants Bruderheim Produce sodium chlorate and chlor-alkali Vancouver Calgary Brandon Used in pulp & paper and water Nanaimo Beauharnois treatment industries 4 plants in Canada…
Canexus of the Future Growing and diversifying our cash flow to reduce risk and increase optionality Realization of long-term free cash generation potential Full impact of NATO projects Chlor-alkali performance improvement NATO…
Q1 2014 Financial Results & Highlights Results Cash operating profit * 25.9 million Highlights Record results from Brazil Solid results from NA sodium chlorate Caustic soda prices up slightly Strong demand for HCI in the…
2014 Expectations Positioning Canexus for the future NATO construction on track for completion in Q3 Brazil expected to outperform 2013 Solid results expected from NA sodium chlorate Modest caustic soda price appreciation…
North America Sodium Chlorate 9
North America Sodium Chlorate Unrivaled Advantage at Brandon Low-Cost Advantage Brandon is the largest facility in the world Significant economies of scale Located in low-cost electricity jurisdiction Manitoba is the lowest cost…
North America Sodium Chlorate Brandon Potential Increased capacity 60% since 2003 11
North America Sodium Chlorate Strong Market Outlook Strong Market Position Canexus operates over 20% of NA capacity Top 3 producers operate 75% of NA capacity and 80% of NA market share NA operating rates exceed 90% Bleached Pulp…
North America Chlor-Alkali 13
North America Chlor-Alkali Positioned for Growth Competitive Advantages Low-cost regional supplier cash costs & logistical advantages Region is net importer of caustic soda (about 300,000 MT/year) Well positioned for growth in…
Chlor-Alkali Market Headwinds Persist Caustic Soda Pricing No meaningful step-change in price until global supply/demand factors balance Regional factors support modest price increases Weaker CAD increases cost of imports…
Brazil Sodium Chlorate & Chlor-Alkali 16
Brazil Stable & Sustainable Cash Flow Our Business Advantage Stable and sustainable cash flow 27-year supply contract (est. 1999) Option to extend 10 years Fixed USD margin per tonne of product Principal Customer Fibria Celulose…
North American Terminal Operations 18
NATO Well Positioned Operation Business Advantages First unit train operation in Alberta Railroad serviced by both CN and CP High demand for transport options in Western Canada Fee-for-service/take-or-pay contracts lower risk…
NATO Compelling Market Drivers Robust Western Canada oil production growth Total oil production growth = 5.3% pa over the next 10 years and 5.9% pa through 2035 In situ production becomes dominant over time, 8.8% pa growth over…
NATO Oil-by-Rail Economics Rail transport allows less diluent, resulting in higher netbacks Diluent required to transport oil sands heavy oil but is an expensive addition Western Canada short diluent Rail transport allows for less…
NATO Project Moving Forward Committed to improving performance Initial phase commissioning complete and ramping up Loaded 30 unit trains to the end of April Planned shutdown prudent to complete project safely and in most cost…
NATO Pipeline Connections Pipeline agreement with Inter-Pipeline will deliver up to 100,000 bbl/d of Cold Lake bitumen to the terminal 23
NATO Contract & Regulatory Update Unit train contract update Three contracts completed for total volume of approximately 6 to 7 unit trains/week (60-70% of planned activity levels) No longer in active discussions with one…
NATO Manifest Business Update Transloading capacity expansions completed Capacity expansion on DBCO loading systems completed in Q3/13 Fully expanded capacity of 30,000 bpd To date, highest daily volume 90% capacity Winter…
Delivering Results Key Focus for 2014 1 2 3 Complete NATO Increase Rebuild & ramp-up profitability of confidence operations our chemicals business We take our Drives free cash commitments Sustains operating seriously flow…
Delivering Results Balance Sheet Metrics Bank Facility Financial Covenants Debt Maturity Profile 600 Q3/13 Q4/13 2014 Q1/15 Q2/15 * Note 2 500 Senior Debt 3.5 4.0 4.5 4.0 3.5 to EBITDA(1) 400 CAD millions Total Debt to 4.0…
In Summary Investment Considerations Solid Assets with Great Potential Low-cost plants are the foundation of our long-term business Brazils 27-year contract provides stable & reliable cash flow As we grow & diversify our cash…
Investor Presentation June 2014 Solid DrivingAssets Growth Delivering Returns Great Potential
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