Rayonier Advanced Materials Inc. (RYAM) Earnings Call Transcript

Good morning. My name is Mickey Walsh, Treasurer and Vice President of Investor Relations. On behalf of the entire company, I'd like to welcome you to RYAM's 2023 Investor Day. We're webcasting here live from the New York Stock Exchange in Downtown Manhattan. We've got a room full of analysts, investors and colleagues. First, I'm obliged to remind you that during today's presentation, we may make reference to forward-looking statements made pursuant to safe harbor provisions and securities laws as well as non-GAAP measures. A full overview of these can be found on Pages 2 and 3 of the presentation material. We've got a great agenda for you today. De Lyle Bloomquist, who was appointed our President and CEO last May, will begin the day with an overview of our strategy designed to deliver sustained growth and shareholder value. Next, Joshua Hicks, our Senior Vice President of High Purity Cellulose since December of 2021, will detail our commercial strategy for our core high-purity cellulose segment. Christian Ribeyrolle, our Vice President of Biomaterials and the President of our French businesses, has nearly 40 years of industry experience. He'll provide the vision for our high-growth biomaterial business. Next, Ken Duffy, our Vice President of Paperboard and High-Yield Pulp, who has over 35 years of sales and marketing experience in the industry, will review the key aspects of these markets. Michael Osborne, who joined RYAM earlier this year as Vice President of Manufacturing Operations, will then review our operational footprint as well as opportunities to improve our margins. Then Ben Chambers, our Director of Sustainability and External Affairs, will then discuss our sustainability journey and where we're taking our business. Marcus Moeltner, our Chief Financial Officer and Senior Vice President of Finance, will then provide a vision for the -- financial vision for the company, including capital allocation targets and financial outlook. To conclude today, De Lyle Bloomquist will come back for some concluding remarks before we open the -- open all the presenters back up to take questions from the audience and from the live listening webcast. I'll provide further instructions at that time. In addition to our presenters, we also will have Dr. Larissa Fenn, our Director of New Products; and Miki Thomaston, our Director of Technical Marketing, available for the Q&A. With the formalities complete, let me introduce to you our first speaker. De Lyle Bloomquist has been on the Board of RYAM since our inception in 2014, and he recently stepped on into the role as President and CEO. He has over 30 years of chemical industry experience, including as a prior public company CEO with General Chemical and most recently as President of the Global Chemical business at Tata Chemicals. With that, I give you De Lyle Bloomquist.

Well, good morning, everybody, and thank you for your time and for your interest in RYAM. We think we have a very full presentation day. We give you insights to our thinking about our strategy and about how we're going to deal with some of the challenges that we currently face. Before I dive into my presentation, I did want to take the opportunity right upfront to just address some of the top-of-mind issues that we will be talking more about in the presentations in some detail, but I thought let's just clear the slate right now and let you know what's going on and what do we think are the important issues. So I think one of the top mind issues to start with is the GP closure. This, in my mind, is an inflection point for the industry. And why I say that is that it's going to address about 50% of the excess capacity in the Specialty Cellulose business. Now we'll push the capacity utilization into the 90s and obviously, that has a fairly material effect on how we extract value for our products going forward. It also addresses about 50% of our -- at RYAM's excess capacity for cellulose specialty products. And so again, very material. The big impact it will have is that it will allow us to substitute quicker than we thought, cellulose specialty for our more volatile and low-margin commodity business, and we'll be able to move on that in the short to medium term pretty quickly, and that will have a material effect on our business. The question may arise, does the closure of GP have any effect on our strategic review of our 2 sulfite mills in North America? And the answer to that is no. We're continuing forward with that review. As I mentioned earlier, the ETP closure only addresses about 50% of our problem with respect to our exposure to commodity business, so we still have quite a bit of work to do. One thing to state is that we have come to the conclusion, after some review, that we can operate the paperboard in the high-yield lines in Temiscaming independent of the high purity line in Temiscaming. And why that's important is that we don't have to run the high-purity line to operate the paperboard and high-yield lines going forward. We think that we can do those independently at each other now. If you take that with the actions of -- and our commitment to suspend operations when it makes economic sense to do so. Obviously, that has -- gives us some degrees of freedom, with respect to how we will operate the facilities, our HPC line and any of our lines with respect to commodity exposure going forward. Michael will talk a little bit about cost reduction plan that we have for Fernandina Beach. I'm going to some detail with that. So with respect to the review of options that continues to go forward, and we're still continuing to press forward with that even in the light of the GP closure. With respect to our '26 senior debt, we will be refinancing that in '24. And we will be working as hard and it will be a high priority to position ourselves as best as possible to be able to negotiate a favorable outcome with respect to that refinancing. One of the goals that we'll be focusing on is reducing our debt, the actual magnitude of the debt to be refinanced. Plan is the usual things, monetize working capital but also to look into sales and passive assets and also look at possibly selling some of our non-core assets that are still very healthy and very attractive assets. So we've actually retained an investment banker to help us pursue the possible sale of some of our non-core assets in Temiscaming. So what that means is looking at our paperboard and high-yield business than possible sale. With respect to the other side of the equation when it comes to leverage, we do think that '24's EBITDA will be better. The GP closure, obviously has -- well, which should give us strong tailwinds as we go into '24 and as we enter into negotiations for pricing on our CS business. There's obviously the favorable mix change that will occur because of that closure, we'll have less commodity sales and more CS sales, which have a significantly higher margin. And some of the investments we've made in '23 from a strategic perspective, we'll start enjoying the benefits of those investments in '23, the most obvious being the Tartas bioethanol plant that will be completed towards the end of this year, and we'll be starting up in the first quarter of 2024. Question around the business, the biomaterials business. Christian will spend a lot of time talking about that business plan, giving you details about the different projects and about the time when they will come to fruition. Big question is, how we're going to pay for it. Well, we've got a clear line of sight on financing that plan with 85% of the financing will be done through available green capital. It's a very low cost, and we'll give you some color on that, both Marcus and Christian will give you some color on that later. The last point before I dive in, is about '23 guidance. Q3 was again another weak quarter, unfortunately, due to the continued suppression of the demand for ethers, principally in Europe, are also a lower-than-expected pricing in our commodity business. So Q3 results will be lower than Q2 results. We do believe that Q4 will be much stronger. We're seeing -- already have orders on the books to see that point to a much better sales mix for us, but also commodity prices have bounced off the bottom and are starting to increase. So we are very confident that Q4 will be better than what we saw in Q2 and Q3. But the bad news is that we're still seeing some headwinds from some of our principal markets. And Marcus will dive into some more detail about that in his presentation. So now let's deep dive into my formal presentation. First question is what is RYAM? Most of you know who we are, but a quick 30,000-foot overview of the business. RYAM as a business has been around for almost 100 years. And we have been sustainable from the start, in that we produce natural cellulose fiber products from renewable resources and have since day 1 for the -- that goes into a myriad of end-use consumer products. You'll be surprised on how many products that we get -- that our product is in. We are the leading producer of specialty cellulose products, and that's not really our core business. But we're also the sole producer of 3-ply paperboard and are also in a roughly 290,000 tons a year in high-yield pulp, where we believe that we have some differentiation from other producers in the commodity market. We have 4 production facilities in 3 different countries. We'll get a dive into a little bit about why those 4 facilities have -- are unique and why we operate them a little later. And then with respect to biomaterials, we believe this is a very unique opportunity. It's a low-cost, high-value opportunity for us. And again, I'll talk a little bit -- not only myself, but others will talk a little bit more about what that all means. So the question here is, why should you consider investing in RYAM going forward? Really comes down to that the narrative of the company is changing, not only via the new vision that we have for the company, but also about how we operate the business relative to our historical practice. And we'll dive into that in detail as we go through the presentations. We have a unique low-cost, high-value growth opportunity for our core business. If we didn't even have the biomaterial business, there is still an inherent growth to the core business, the cellulose specialty business that makes this business attractive. We have a number of very attractive investments that we have, very high return, very low cost that will increase the margins, the profitability of the business going forward. And we'll talk about that, and Michael will talk about that in his presentation. But on top of that, of course, is the biomaterial upside. And we'll talk -- and when Chris gives up, he'll give you some detail on that. And then we believe that we have a credible financial plan to realize this vision. Really at the end of the day, that is -- in my mind, that's the critical path and the thing that has to be managed more than anything else. We're not [indiscernible]. We know we have problems and constraints to deal with. And point in fact, we got a balance sheet that we don't want. And a consequence, we have to deal with it. And that will be our priority in '24. What that means from a growth perspective is that the cash flow from our core business will be limited for growth opportunities, as we deal with this priority of paying down our debt. So we will need to find other sources of capital to grow this business. And we believe we've done that, and we'll talk about that. And finally, what this all means is that the challenge will be for us is to execute on our narrative, this vision, while being highly disciplined financially. So it may seem like a straight narrow path that we have to stay on. But we do think we have the wherewithal and the capability to do that. One of the things I believe, and I think is a truism in business, specialty commoditizes over time. So as a consequence, if you're going to be a specialty products producer and enjoy the margins that come from specialty products and the growth that comes from specialty products, you've got to innovate. What this slide really shows is that innovation is in RYAM's DNA. We've been doing innovation since, again, day 1. If you go back to the 1930s, we invented rayon. Rayon, obviously comes from our title, our name, Rayonier. And that obviously is -- today is a key of fiber for textiles. In the World War II, we worked with the U.S. government to develop nitrocellulose to support the war effort. Nitrocellulose, of course, is used in explosives. 1960s roll around, and we come out with plastic acetates, goes into film, goes into eyeglass frames, goes into screwdriver handles, many different applications. 1970s rolls around, and with J&J, we come up with an absorptive product, fluff, that is used in diapers. So we have the muscle memory in RYAM to innovate. This is -- we've been doing this forever. We have the capability and that we have the resources to continue that forward. And currently, we're focused on finding substitutes for the cotton linter pulp, which we see as a tremendous opportunity for us. Also using some of our byproducts to make value-added products like prebiotics into animal feed and a number of other applications. So this is something that we continue to focus on and believe it's imperative, if we're going to be a player in the specialty market. Quick global overview. We have 2,500 employees globally. We do have the 2 research facilities. Josh will get into a little more detail about our capabilities there. 4 manufacturing facilities, as I mentioned. An interesting point that I want to make about the production facilities. With the GP closure, we're the only producer in the world now with a softwood kraft specialty line now. And what that means is that there are certain products now that we are the only producer that can make, right? And again, Josh, when he gets into his presentation, he'll expand on that a little bit more. We're also -- given that we have 4 lines or 4 plants -- actually 5 production lines. We're the only competitor in the industry that has more than 1 line. And it provides us a very compelling security of supply that's important to our customers. And our sales network, obviously, we sell around the world. So we have sales offices in Japan, China, London, the U.S. to service our customers and to make ourselves available to them. I'm going to spend some time on this slide. I find this slide will highlight where we believe our competitive advantages, relative to the other players in the industry. It all starts with a tree from a working forest. We don't harvest old growth. We harvest trees from working for us that are planted to be harvested. And then when they're harvested, they are replaced by seedlings that then 20 years later can be harvested again, all right? Important distinction, and when Ben gets up and talks about his -- about sustainability, he'll talk about why that's particularly important. After the tree has been harvested and processed, we then extract the cellulose fibers via chemical and mechanical means to create the specialized products that we make and sell. And we do that through 2 processes, the kraft and sulfite processes. Jesup, Georgia is a kraft process, the other 3 operations are sulfite processes. Important distinction, some products that can be made by the kraft process, and there are some products that can be made by the sulfite process. There's very little overlap between the 2. We also can consume both softwood and hardwood. All of our competitors could consume either the hardwood or softwood, not both. Again, an important distinction with respect to the capability to make products or to make various different products. Then it goes into finishing. Finishing means you're just putting the product into a form that the customer wants. I think and then we plug it into the process. And we're in a position where we can do both bales and roles. Not all of our competitors can do that. So I talked about competitive advantage. So if you look through the -- this process going left to right, we believe that we have got competitive advantage in each one of those steps. So talk about the tree first. As I said earlier, we can consume both softwood and hardwood. But our plants are located in areas where the actual species of tree that we're harvesting, provides us the necessary characteristics to make the customized products we do. So for example, in the U.S. Southeast, where we've got 2 of our facilities. Start off with that, it's the second lowest cost fire basket in the world. So it's cheap. And the second thing to note is that the species of pine -- there's a species of pine there, called the slash pine, which is only found in that part of the world. It's very highly-priced for its high absorptivity. And so for the making of fluff products for baby diapers and so forth, that is a strong characteristic, and it's a highly valued characteristic for the products we make. In Europe, our Tartas facility is located in the largest Maritime pine forest. In Maritime pine produces a very high viscosity ether that is highly-priced by most of the ether customers. They're looking for a thick, viscous product, and the Maritime pine provide that. In Canada, we're 1 of 2 producers that uses Maple to produce our high-yield pulp. It is priced for its bulkiness. We get an ultra low weight for a given surface area. Customers love that when it comes to folding boxboard, because it produces logistics cost on a per unit basis. So again, something -- a competitive advantage that's tied to the species of the tree. Mentioned that we're the only producer that uses both hardwood and softwood. Some products you can make with hardwood, principally acetate. You're using only hardwood, you really can't get into the other CS business. You can't get into ethers, very difficult, if not impossible. Same with softwood, usually, you can get into other CS products and into ethers, but it's hard to get into acetate. So again, there's some advantage that comes from the fact that we can consume both. Talked about that we're the only producer in the world that has both kraft and sulfite lines, fully different processes. They handle the fibers differently and therefore, both processes produce products with different characteristics. As a result of the fact that we have all this flexibility relative to our competition, they can produce all kinds of grades, all the grades that can be produced for cellulose specialty and for high purity. And then when you look at our paperboard and high-yield business, because of the access to the Maple species, we make a product that's differentiated and highly-valued. Now why do I mention all this? Why is this even important? Comes down to, given all these capabilities that we have that our competition does, doesn't. It presents a high barrier to entry to our customers. We're the only one that can do some of the products that are made for our customers. High barrier entry means low substitutability, which today translates into high price elasticity. And that is what -- that is the core of our new operating strategy, about extracting more value from our products going forward. I'm not going to dive into all the different end uses that we -- that we can -- that our product is into. I can tell you that even as early as we are, it's before 8:30. I can -- probably a high degree of probability that everybody in this room has already used products that our product is in. We're in everything. The cell phone screens that you have. It's got our -- likely it's got our product in it. Things like food, our product is in. Construction materials, even things as exotic as explosives, our product is in. Josh will give you even more detail about how diverse our demand is. We are everywhere. We are used every day and we're used by almost every one. One of those products is hidden, but it's there. This slide, we use this internally to drive alignment of our initiatives and our objectives. The key thing I want to bring home here is that we're focused on a total shareholder return as a management team. Principal drivers we're looking at to drive total shareholder return is revenue growth. We target 3% to 5% revenue growth per annum on a CAGR basis. EBITDA growth, we seek to achieve 10% on average over a 5-year period. EBITDA margin expansion, so we want us to become more profitable, 30 to 50 basis points per year. And the last one is debt reduction, which over the next year will be a top priority for us. Those elements around the circle are what we call our 5 critical success factors, those things that we believe from RYAM perspective will drive total shareholder return going forward. Just quickly to run through those for you on strength in identity. That success factor is all about increasing the company's valuation multiple. And frankly, we have a lot of work to do there. I think the biggest issue we have is that when you look at our EBITDA margins and the earnings volatility that we have demonstrated, it's more akin to a commodity business, not a specialty business. And the underlying issue there is that is our reliance to fill out our capacity with commodity production. And why is that an issue? If you look at just our CS business, our cellulose specialty business, those products, the EBITDA margin on those products is 24%. It's being masked by the losses that we're seeing on the EBITDA losses we're seeing on the commodity business. I mentioned in the last earnings call, we lose roughly $50 million a year on the non-fluff commodity business, negative 30% margins on that. So one of our drivers, one of our key success factors is getting away from commodity business to reduce the volatility of earnings and actually eliminate that masking of our profitability of our core business. Obviously, we have too much debt, talked about that. One of the big issues there is that our goal is to decrease at 3% to 5% a year. That has to be accelerated. The environment has changed on us. Interest rates are going up, all those things. The fixed charges, as a result, is eating away at our cash flow. We need to get that dealt with. And then finally, our growth of our core. I would say our core business is a little under inspiring. It's GDP kind of related. So we need to grow our business faster. Next one is increased efficiency and effectiveness. Low cost always wins. It's a great strategy. It's something that we should be -- and it's complementary to a product differentiation strategy, I believe. So there will be a focus on investing in low capital cost, low cost but high value options in that arena. We have an investment threshold that any strategic investment needs to have a 2-year or less payback or -- and a 30% or greater ROE. That's a pretty high threshold when it comes to investments. Part of that is that high threshold is because our capital is limited, but also because we have, I believe, a target-rich environment within the company to achieve that. Accelerated innovation. I mentioned innovation and the importance of innovation for a specialty company. Biomaterials also addressing that particular driver. Diversified customer base. The top 10 customers in our CS business represents 75% of our sales. So if one of those customers sniffles, we will catch the cold, so to speak. We need to diversify away from that. We're focused on acquiring smaller customers in emerging markets, where the growth -- the inherent growth will be higher. And then finally, collective accountability. At the end of the day, each of us have our own initiatives that we're responsible for that we are -- our variable compensation is tied to, but we do track and monitor our progress on those initiatives to make sure that -- additional resources are needed to make sure those initiatives are brought home that is identified and resources are brought to bear. Talk about yesterday, today and tomorrow. What we're doing different today than we were doing maybe a year ago? What we plan to be doing a year from now going forward? Looking at the vision, this new approach through 3 critical elements: commercial, operational and investment. When we talk about commercial, I'm really talking and focusing on price. In the past, when we -- in the fairly recent past, our focus was really on share, maximizing our production of CS. And by doing so, that would have an impact on pricing. We're going to -- we're doing things different now. And that is that we've taken on -- given we're the largest player we've taken on the role of price steward the industry. We don't chase volume with price. They go after volume, by the value we provide to our customers. Again, talking -- going back to the supply chain and our competitive advantages there, we believe that our competitive advantages are strong, that we should be able to win over customers by the value we provide. Operationally, this is more than just operating the facilities as efficiently and as effectively as possible. Of course, that's important. But we're also focusing on the mix of assets we've got and how we're going to operate them, particularly from the perspective of the impact it will have on price. And really what this comes down to is that today, we're operating on a demand-driven operating strategy. We match demand or production to demand. That requires today that we fill up the remaining -- the available capacity that may be on a line with commodity products to minimize fixed cost absorption or to maximize fixed cost absorption. But that is different from the past. In the past, obviously, we're very focused on share and operating rates. Tomorrow, when we look at operations, it's about -- what I've already mentioned, is about minimizing our exposure to the commodity business. We'll share with you in some -- in the presentations about how we're going to be doing that. Obviously, the GP closure addresses a good chunk of it, in that we think there's just roughly 50% of our current capacity on commodities will shift over to the specialty business. But we still have the other 50% we need to deal with, and we'll talk in some more depth about that. On investment, in the past, our investment into our core assets, was underinvested, undercapitalized. That resulted in poor reliability. Part of the issue is around the fact that we had too much debt. And when you take it -- take the level of debt we have and you added the earnings volatility comes from the exposure to commodity business, there are times that you do -- you need to cut back on your custodial CapEx. You just don't have enough cash flow. We need to get out of that cycle. Today, we're focused on catching up on the custodial investment and reducing our debt. Tomorrow, we're going to be -- we will make investments in the facilities that are low cost and high value. Again, meeting those investment thresholds that we already talked to you about. Reduce cost, improve reliability. Don't focus on capability or capacity. Get more production by increasing availability through better reliability. Obviously, if you're going to change the commercial and operational mindset of how we run the business, that will require a possible change in our asset base and capital allocation. We are evaluating our assets and the businesses for strategic fit. And as part of that evaluation, we come to the end, and we'll determine what we want to do with those assets. Either make them better, sell them or close them. At the assets core, we'll make it better. We'll invest in this cost structure. We'll invest in making -- improving its reliability and so on improving the capability of the facility. If it's noncore, it obviously falls into 1 of the other 2 buckets. We prefer to sell them, if we can. If we get good price for them, we're not going to fire sales what we think are some exceptional assets. But it's an option that we need to consider, and we look at. And closing, of course, is always the last option. However, one of the things -- a point I want to make is that closure doesn't mean -- doesn't necessarily mean it has to be permanent. We believe that we can temporarily suspend operations if needed, if economic conditions are required to do so. And we're demonstrating that today, right? But now it's on Friday that we're shutting down the paperboard and high-yield lines for a good part of October, and that is to correct some high inventories that we have in paperboard. The impact to EBITDA will be nominal because of the low fixed cost in that business, low capital intensity we have there. Also, we're going to be closing the Tartas facility during the Christmas break. Again, for the same purpose, bringing down the inventories there because of this very slow ethers demand that we've seen there and a consequential buildup of inventories we've seen. So we're practicing what we're preaching here. And it's not just non-core assets, Tartas is a core asset. We're looking at running the business in the best way possible from an economic perspective. On the biofuture, Christian will go into more detail here. So I'm not going to spend a lot on this. There's a couple of points I wanted to raise. This is a natural business for us, and we believe we have a very unique position in it. It promises very high EBITDA margins that will be well above our historical profile. We believe that they'll enjoy first quartile cost position here, and that will be driven by the fact that the feedstock in the biomaterials will be the byproducts that comes off the CS line -- or lines, and it will have also significant economies of scale. And now we're going to cite these facilities at our existing core assets. The return on equity will be very attractive. The capital intensity to get into these businesses is low on a unit of capacity basis. And that's due to brownfield economics. And also, the technology is essentially off the shelf. So it's proven and it's known. We're not having any event technology here. And then as I alluded to earlier, and then what we talked about in some detail a little later, is RYAM's capital contribution, using -- use of our own cash will be low, very low here, as we take advantage of the low cost green capital that's out there in the universe. So what does that all mean when you get to the -- from get down to the brass text in the bottom line, as we believe that this is a very compelling vision. Raises EBITDA, almost doubles it over the 5-year period from '22 to '27. The CAGR on the EBITDA growth exceeds our target, 13%, could be higher. 5 years is a long time. So things will change, but I think you'll find that our assumptions on this slide are fairly conservative. If you look at the $114 million of increased value from sales price and volume. That represents across all our businesses, not just our core but also paperboard and high-yield of a price increase or EBITDA increase of 1% per year. It's not -- we don't think that's outlandish, we think that's achievable. The HPC mix of $35 million. That's a swapping out of commodity business that we currently have for business that we would acquire as a result of the GP closure. The biomaterial business, $42 million. Real exact number, I know -- there's a lot of detail behind that number, and Chris will share that with you. And strategic cost reduction, again, pretty exact number, but that's -- we've got detail to that. And Michael Osborne will show you some color on that. And obviously, we've got some inflation and other offsets on that. So if you look at the different components to it, it's, I think, doable, achievable, realistic. All due to the highlights on the far right, stable core. We need to get away from the commodity business, but continue to reinforce the core business. We have appealing growth, growth prospects in the core as well as with the biomaterials opportunity. Strong cash flow generation, and then obviously, the key operating parameter is matching our CS production to our specialty demand and that will give us the stable earnings that we're after going forward. So with that, I'm now going to turn the time over to Joshua. Josh, who is our Senior Vice President of High Purity Cellulose. He's been at the company a little longer than I have, but he's adding exceptional value to the company, in turn to focusing on value over volume. His experience -- his tremendous experience coming from the chemical industry, running chemical assets and businesses, and extracting value for the products that he's produced. So I'll turn it over to you.

Thank you, De Lyle. Good morning, everybody. Welcome. I appreciate your interest in RYAM and being here with us. It's my -- as De Lyle mentioned, I joined the company just a little less than 2 years ago, and I spent my prior career in specialty chemicals and ingredients, running businesses there. It's my pleasure today to walk you through our core business, what we call High Purity Cellulose, also we refer to as HPC. And I think you'll -- it's an exciting story that we're all excited to share with you. So let me just start with 3 key messages I want you to take away from today's presentation. One is we're the leader in the cellulose specialty market or specialty cellulose market. High-purity cellulose is made up of 3 different business units for us. One, we call cellulose specialties or CS. I'll refer to that acronym that way, CS. Our fluff business and our viscose business. Okay. Most of my comments today are really going to be on the CS business, where we're the market leader. We -- as Lyle mentioned, we are the sole remaining owner of a softwood kraft, specialty cellulose asset in the world, okay, in Jesup, Georgia. We'll talk more about that. It's a key differentiator. We're making that point post the fully closure. Number two, we're executing on a value over volume strategy. As a market leader in CS, we believe in being strong price stewards. We're not out chasing volume with price. We price our products based on the value they deliver and bring to the customer, not based on how much we can produce the volume that our assets can produce. The strategy you'd see obviously with other specialty chemical or specialty material type companies that you may follow. Number three, we're running our business differently. So in the past, our belief is that RYAM has had an opportunity to better manage capacity through cycles. We're taking our role as market leader to manage excess capacity responsibly. And part of that means that we are further concentrating our commodities at our Temiscaming facility, and making our specialties at the appropriate facilities around the globe. So I want to talk a little bit about some key strategic initiatives we have as a company. So starting the top left, customer relationships. So if you look at our CS business on average, our relationships with our customers span over 40 years, to give you an idea. Very, very long relationships. And then as you see up here, our top 5 customers, it's even north of that, over 65 years. So in the applications in which our products go, most of these applications have been developed in partnership with our customers. Not over a matter of months or years, but over decades. So we have highly customized bespoke offerings for our customers that have been developed jointly together. That's the way to think about this business. So think highly sticky -- we are -- we believe our relationships with our customers are the epitome of true partnerships. We have tremendous mutual respect for each other, and it's a must in order to continue to innovate and develop together. Our industry has an annual rhythm to it commercially, okay? So typically, annually, pricing contracts, other commercial terms are negotiated. That being said, we have many multiyear agreements as well as many agreements with Evergreens as part of that. And as De Lyle mentioned, over the past 18 to 24 months, we've really tried to bring more effort and balance to our contracts. And what I mean by balance? Balance in terms of value between us and our customers and balance in terms of risk between us and our customers. All right? So there's been a lot of work around contracts and agreements that we have. Capacity management. So currently, in the current market, we have more CS capacity than the market will absorb that the market will take right now. So -- we're going to continue to act responsibly, manage our assets and produce the market demand. Product optimization. So as we've shared publicly somewhat recently, right, we are committed to minimizing our viscose and paper pulp exposure specifically, which are negative EBITDA businesses, as De Lyle mentioned, and we have the efforts around that area right now. Plant reliability, we continue to reinvest in our assets. These are capital-intensive assets. As I'm sure most of you know, they require the capital to ensure reliability and ensure the quality. And that's really what RYAM is known for it's quality, purity of products and the assets take capital in order to do that in order to maintain that. That being said, we're a big believer in being a low-cost producer. Low cost is a must in our strategy. Continuous improvement is an absolutely must have for us, not a nice to have. Michael is going to spend a little bit more time later talking about this and the efforts around our center of excellence. And then finally, as we operate as industry leader. So again, it takes significant expertise and customization to manufacture and develop our customers' products, a true specialty materials company. So we're going to ensure we're going to continue to capture our fair value for our products and the expertise that we bring to the marketplace. So I just wanted to share a look back of a few years on a couple of key financials. So a couple of things I'll highlight. One is if you look at revenue and EBITDA, you can see in our business, we had an impact due to COVID, you can see that. And then you can see the sort of the subsequent rebound coming out of COVID. So -- and then you've also seen price movements. And this is really a number of our self-help initiatives that we've driven as a company to capture value. Obviously, we were also going through an input cost inflationary environment as well. So that's what you see there. You can see good trends. I do want to highlight, however, though, in the near term, we have some challenges, as De Lyle mentioned. A couple of things. In 2023, we've had weaker commodity pricing, specifically in viscose and paper pulp year-to-date. And we've seen stubbornly persistent destocking in the value chain as obviously, some call it the great destocking. We felt that in our space, not just our customers' inventory, but our customer's customers inventory and further on down the value chain. That's continuing to persist out there. and it's affected in most segments of our business, unfortunately. And then there is weaken market demand right now still in construction ethers in particular. And I'll talk a little bit more about that later. Key point I want to highlight here is if you look at those EBITDA margins. And if you do the math on that, you can see the EBITDA percentages, right? De Lyle mentioned earlier, our CS, our Cellulose Specialties business as very, very attractive margin profile. This is High-Purity Cellulose all in, right, in aggregate. And so you can see commodities are pulling down those margin profiles significantly. Hence, our focus on viscose and paper pulp in particular. So I want to talk a little bit about the market, give all of you a little bit more color on the market, our place in it. So this is a graphic we've used for some time. I'm sure many of you have seen it. I'm going to kind of move my away from bottom up to the top, increasing specialization, all right, and walk you through that. So in the bottom, this commodity market pull, massive market over 59 million tons -- we are already a very small player in this space or a drop, less than 1%. This is where our paper pulp, so when we talk paper-pulp that's where it's going. That goes into applications like printing and writing, tissue paper, things like that. We're largely not differentiated in this space, and we're largely can't control pricing for the most part. It moves based on where the market goes. So again, we're trying to minimize our exposure here, further minimize it, I should say. If you move up, high-yield pulp, I'm not going to talk about that. Ken is going to cover that a little bit later in his section. If you move up to fluff pulp. So again, a good sized market, 6 million-ton market. In any given year, we are about 3% to 4% of that market. So in the fluff pulp business for us is a good business. We are consider ourselves and our customers consider us sort of as a boutique plus supplier. We pursue sort of niche-y higher-value applications for fluff. So think things like adult incontinence products, which align well with the mega trend of aging population. We target geographies around the globe that have rapid emerging market areas. So as a growing middle class, that sort of -- those sort of trends bodes well for this business. So we target those sort of geographies. Most of these products we manufacture in Jesup on our C line. So again, Jesup has 3 lines, A, B and C, our C line is where we primarily manufacture these. And we have a mixture of contract customers there as well as spot business. Then if you move up into the commodity viscose space. So again, large market, we're a small player. And in any given year, of around 1%, maybe as high as 1.5%, somewhere in there. We're a small player. This is the textile market. So again, we have limited differentiation here, somewhat limited control on pricing. I will call out, though, that this is a market that's predominantly -- it's dominated primarily by hardwood, okay? Our offering in the viscose is softwood. And so customers do use our product and pay us a premium over hardwood to a certain extent because it improves processability for them. But as we mentioned, this is -- it's a negative area for us as we're looking to further minimize our exposure here. So then finally, let's get to the most exciting part, the top of the pyramid. So it's niche, but a fantastic area for our business. So this is -- we estimate we have 37% of this market. Again, it's taken a long time to develop this business decades for us. This is where we can control our destiny, okay. The -- it has high barriers to entry. Those high barriers to entry are long qualification process, wood species, I think De Lyle mentioned that a little bit, where our assets are located in places that give us access to wood species that are then custom tailored for our customers' application. So you can't just go drop in a new plant and build on somewhere and assume that the wood you're going to use is going to work fine. So wood species is a huge barrier to entry. Then we have customized chemical systems and processing equipment that we do in order to really make our products unique and different. So the last thing I'll call out here is if you look at the ASP there in the middle of the chart, you can see wildly different pricing and just think that's akin to profitability in these areas, okay? And we believe there's further upside there on the top of the pyramid. So I want to talk a little bit about the players in the spaces and give you a little more color on that. So on the left side is the specialty cellulose market, the right side is commodity viscose. I'm going to start on the left here. First thing I'll draw your attention to is that bar right next to Cotton Linter Pulp, it's not the name of a company. Obviously, that's a market, all right? That is a market in the specialty world. People still use Cotton Linters for various different reasons, primarily for viscosity and brightness. Our goal is to continue to whittle down that bar, which we have been doing. There's continued upside for us as a company to take Cotton Linter Pulp share. There's dozens and dozens of suppliers in this space all over the world. There's high-value applications and low-value applications. Obviously, we're pursuing the high-value applications, but continued opportunity for us to take Cotton Linter Pulp share. Then if you get into the more in-kind competitors. So the first thing you'll notice is we're more than double the size of the next largest player. Moreover, we have five lines. All of our competitors have one. So if you look at Bracell there in Bahia, Brazil, which is the northeastern part of the country, they have one line there that they manufacture from. GP fully in Perry, Florida, which obviously has announced the closure. We'll talk a little bit more about that here in a minute, and they had one line there. Borregaard in Sarpsborg, Norway has a line in this others category, you see a couple of other people in there, AustroCel in Austria, Nippon in Japan. There's a now idled mill called -- in Cosmopolis Washington, which was closed years ago by Weyerhaeuser and then private equity sort of resurrected that plant and ran it for a while, and they haven't now been producing, since December last year. We don't see it as a long-term viable asset due to the cost structure of wood species and things. The key point on the left is there's no new capacity that's been added. No new capacity has been announced and we don't expect new capacity to be announced. And there's a couple of reasons for that. One is -- #1 is the cost and time. So just to kind of give you some data around that. If you look at brownfield capacity addition, okay. You're looking at a cost of around $3,000 a metric ton per ton of capacity, okay, significant capital investment. And if you look at our greenfield capacity, you're close to $3,500 a ton. And these have been in low-cost geos, places like South America. You do something like that in North America, it's going to even be north of that, let alone the regulatory time and requirement to get things done. So -- it's cost prohibitive, kind of where things are at. And then finally, it's a finite market with modest growth rates, right? And so that's why we don't see new capacity coming on the left. On the right, just briefly on the commodity viscose, you have seen new capacity added here. And sometimes there's confusion in the marketplace because you'll hear about new capacity. Well, again, it's on the right, it's not on the left. The assets on the right cannot easily pivot to make specialties on the left, just so we're clear, okay? They are -- they take much less capital to run those viscose assets. And initial capital much less and ongoing maintenance capital significantly less. They're making a lower-purity product, it primarily goes into textiles. So again, you can see we're a small player over there, and that little green bar is because at times we fill excess capacity and cover fixed costs. And that's why you see us in that space. Which -- think of these as 2 separately different markets and businesses. So this is RYAM's view of our capabilities versus the other 3 good-sized players in the specialties market. So a key point is, if you look at the top 4, and I'm going to cite a number of kind of consultants analysis here, but the top 4 are estimated to have around 75% of the market, okay? And obviously, the one on the far right is obviously closing has closed. So then what's really interesting about each of these markets, so acetate, ethers and other CS. It is -- we're really excited about it. I don't think you really see this very often, is if you look at each of those individually, the top 2 players make up a significant amount of that market, okay? So if you take acetate, us and Bracell combined estimated again per consultants estimate to have around 85% of that market. If you look at ethers, our cells and Borregaard estimate to have around 80% of the market. If you look at us in Georgia Pacific in this other CS category, combined around 65% of the market. So quite concentrated. In other CS, this is made up of 5 different submarkets. I'm not going to go into each of those 5 right now. But a key point I'll make is GP was strong in 3 of those 5, filtration, casings and tire cord. We're obviously strong in those as well. And so we'll be managing that and I'll talk about that a little bit more later. We participate in dozens of different end markets. I'll give you a little more flavor on that on the next slide. We are known for our technical expertise. We're known for high quality, high purity, something we call the industry alpha cellulose content, which is really the purity level of the product. We are best in the world, when it comes to this. We have 2 R&D centers, 1 in Bordeaux, France and 1 in Jesup, Georgia U.S. These 2 facilities are staffed with chemists, engineers, Ph.D. chemists, scientists, who their -- one of their primary goals is to uncover customers' unmet needs and then address those needs by customizing our products. So again, it's a bespoke sort of offering to meet our customers' application needs. And our customers place tremendous value on the expertise we provide out of those facilities for them. Manufacturing footprint simply, I covered it. We have 5 lines. The competitors all have one. When it comes to ESG, obviously, with our natural-based products, we've been sustainable from the start. Many of our customers, what I'd highlight for you is many of our customers are hydrocarbon-based, petrochemical-based sort of organizations. They point to us and frequently rely on us to help tell their sustainability story. And there's value there. So they think of us as sort of the natural Intel Inside. Okay. So a little bit about the markets we play in. So again, from an enterprise perspective, 50% of our revenues are in the CS business. Then if you look on the far right, you can see the markets we participate in, in CS. These are the top 5, all right? There's more beyond this that I'm not going to go into. Let me just give you a little bit of color on each of these. So filter 2. Our product is used to make filters for nicotine delivery systems -- nicotine delivery products. This is a very stable, profitable, consistent business for us. This was once believed to be declining sort of 4%, 5%, 6% a year. But in recent years, it's really shifted to a flat to slightly declining business. And there's 2 primary reasons for that. One is smoking decline in Asia has actually slowed recently. And more exciting, #2 because sort of more exciting is there is a segment called heat not burn in this area. This is a product that for the tobacco companies is growing double digit, very nice double-digit percentages year-over-year. And in that heat-not-burn application segment, it consumes 2x the amount of our product. So 2x consumption combined with good growth rates, that's still a small piece of the nicotine delivery market. But that's obviously helping slow the decline. Food and Pharma, Personal Care, we're in a host of different areas here. So I think we're in Beyond Meat Burgers as an example. We're in protein shakes, ice cream, you see the table back there. There's plenty of different products that we're in. Sausage casings, we're in medicine tablets and capsules, shampoos, cosmetics, all kinds of different things. This is a stable and, for the most part, consistent stable business for us. Construction & Coatings. We're in concrete additives, we're in tile adhesives, interior and exterior paints, high-end wood coatings and metal coatings, protective type coatings. Over the cycle, you can see a nice growth rate here, 4% to 5%. And I say over the cycle. I mean this aligns well with, again, another megatrend of growing urbanization and those sorts of things, where people are going to start with the rise in middle class, people will consume higher-end building products, which serves us well. That being said, this is not where we're growing currently, as I highlighted. It is slow right now. One thing I'd tell you is construction historically for this business does rebound quite quickly when it does. But for now, because of persistent destocking and, in particular, higher inflation rates and less consumer spending power in Europe, in particular, we're seeing slowness here. Plastics & Electronics. So this is another high-value application for us. We are in designer eyeglass frames, screw driver handles, toothbrush handles, LCD screens, tablet computer screens, again, very consistent, profitable business for us. Then finally, automotive. We're in a few different areas here. We're in high-performance tires. We are in engine air filters, cabin air filters, oil filters, things like that. So as automotive goes, which, as most of you know, can be -- has its ups and downs. Sort of this business goes as well, but it is a high barrier to entry business, and we add our value there. So I want to make some comments on our asset strategy. So when it comes to asset alignment and how we're running the assets, I really want to draw your attention to really the first 2 rows Temiscaming and Fernandina, where most of that work is occurring as we speak, is underway. Temiscaming is still quite a large viscose producing asset for us. Okay, we're going to -- we do produce some other CS products there as well. Remember that other CS category I was talking about. We do produce some there. We're going to further concentrate viscose at Temiscaming, okay? And why would we do that? It's our lowest variable cost asset, okay, of the group. And so it makes most sense to produce viscose there. So we're going to further concentrate that. Fernandina still has a fair amount of viscose in its asset base as well. We are in the process of concentrating some more specialties there. Fernandina is our most flexible asset, it makes some very high-value grades for acetate and ethers in particular. But again, that remaining 35%, we're looking to further -- to fill that out with specialties. Tartas for the most part, is an ethers facility today. Tartas is a fantastic asset. We refer to as ethers powerhouse. It makes really high viscosity grades and high brightness. So that market lows it. De Lyle mentioned earlier the Maritime pine, which is our wood species there. Our customers love the products that come from that wood species because it allows them to get to viscosity levels and things that they need. So really, really good asset. It's also best suited to replace Cotton Linter Pulp, as I was talking about. This is the asset that really gets us to the quality we need to do that. Jesup, our largest asset, okay, by far. It has 3 lines, it's most diverse asset. Our A line is -- there's not a CS grade that we don't or cannot make on A line. It's the most diverse asset -- most diverse line for us. Our B line is where we make our acetate. That's really the acetate powerhouse for the business, and C Line is where we're making fluff primarily. So in summary, this -- managing the assets the right way is going to help us limit and minimize our volatility around viscose and paper pulp. So with the closure of Foley, I thought it would be worthwhile to give you a view of what's going on in the market. The key takeaway from this slide is that, currently, we're in a long market, okay? With Foley's closure, it's going to move to a more balanced market quite quickly and then into a tight market in short order. If you look at this top ratio, the shipment-to-capacity ratio, this is something one of the consultants has developed and has become pretty widely accepted. The way to think about that is anything under 85% or so, 84%, 85% is a long market. So us currently at 79%, it's a long market for some of the reasons we've already touched on. You get to that 85% to 87% range, it becomes quite balanced. You get north of 87%, it starts getting tight. So you can see our forecast getting into the low-90s because of the GP fully closure. So yes, I would say we -- as RYAM, we estimate about 150,000 tons coming out of the market with that facility. Now for those who are up to speed, I think there's a number of estimates out there from consultants and others talking about 200,000 to 230,000 tons. What we just tell you is that we've done a bottoms-up analysis. Obviously, we're very close to the customers, their customers, our customers. And we estimate, 150 is probably more realistic based on how they've been running recently. They'd had a force majeure in the summer of 2021, which has never formally lifted. And so we think they were running lower than they would have liked to recently. The other key point I'll make here is that ratio up there at the top. This is an aggregate, obviously. You can look at this by asset base as well. And so you can see differences there based on RYAM's asset base or a competitor's asset base. So again, to reiterate, there's been no new capacity added in the space, and we don't expect any to be announced. So in light of the fully closure, we thought it would be useful, beneficial for you all to really see a time line of -- over the -- this gives us sort of the past 20 years, time line of capacity additions and subtractions over that time frame. The Y-axis is our specialty pricing, okay, to give you a feel an average sales price. So back in 2003, IP closed its Natchez, Mississippi facility, which was predominantly an acetate facility. All right. Then in '05, Weyerhaeuser -- actually, the '06 Weyerhaeuser are closed, Cosmo, Washington, which is the one I mentioned earlier, is currently not running, has high wood costs. Then after that, and they were, but in acetate and viscose primarily. Then after those closures, you saw pricing obviously going up during that market. Then Brazil announced that they're going to get into the market with new capacity. It took them a few years between announcement and first tons produced. Then it took them further time, a few more years to go to get from first tons produced to full qualification and then really moved up to where they've gotten basically they've filled their asset. And during that time, you saw pricing coming down, obviously. Then you can see a fair amount of our price work, the self-help initiatives that I was talking about earlier. And then now we have this Foley closure. I think what happens post Foley, what I'd tell you is we believe the market will tighten. Yes, it won't be tight in all areas. Recall GP was strong in 3 areas of the other CS, right, filtration, tire cord, casings. They also had some business in acetate and a little bit of business in ethers, all right? So it's not all things CS, but there are areas that they were quite strong. So where does pricing go? I'm not going to predict pricing for you. I would just tell you, we're mindful of the past and what history shows. And -- but we also believe in capturing fair value for our products, certainly based on all the customization and bespoke offerings that we bring to the market. So last slide, just one -- in summary, I wanted to leave you with, again, a few key messages here. One, we're the market leader in Specialty Cellulose with 37% of the market. We're the only remaining owner of the softwood craft Specialty Cellulose plant in the world. We have 5 production lines versus competitors with one -- this business has significant barriers to entry, a strong competitive moat around the business. We're managing our excess capacity and executing that and producing to market demand. pricing value over volume. And we're running our business differently. We're going to continue to manage our capacity through the cycle, and we'll be minimizing our exposure to viscose and paper pulp. So with that, I'd like to introduce you to Christian Ribeyrolle, our Vice President of Biomaterials and President of our France business.

Good morning, everyone. And thank you for your time this morning. I am with RYAM, since 2018, arriving with Tembec -- after the acquisition of Tembec -- and in Tembec, I was in-charge of the Specialty Cellulose business that -- just Joshua just explained with a lot of details and a very nice business. Then -- but today, as De Lyle explained, I'm not here to talk about the CS, but more to talk about the bio future of RYAM and the biomaterials that we are developing. And I am located in France, in Bordeaux, but I'm sure that you have already heard that my very nice accident for my English. And you know that Bordeaux is a very nice region for exceptional wine, but not only because we are able to produce also a very nice CS product in Tartas. And very soon, we will produce a new bio ethanol, a second generation, bio ethanol, close to Bordeaux in our Tartas plant. Then today, I get the really easy job. And why? It's because really it's really exciting way for us. It's -- I will talk about new product, revenue growth, high margins and using some new feedstock in RYAM, especially the sugars. And that could be something that is strange for you to see that I want to talk about sugars in the wood. But yes, in sugar, there are -- in the wood, there are sugars, and I will explain why? And also a new technology and new process that we call the biotech. Biotech is, in fact, the fermentation of the sugars. And the truth here is that is incredibly exciting. The biomaterials future really does have the potential to change everything for RYAM. And as De Lyle and Joshua just explained previously, the fact that -- the way that now we have a different approach of the business, and we are managing differently, it's -- that will change the narrative of RYAM. But biomaterials, of course, could change narrative, but also could change the story of RYAM. And we have really a large opportunity in front of us that we will address, and I will give you, of course, more details during my presentation. The first one is, as you can see on the slide that we think that we are really uniquely positioned in a fast-growing market. And why we are -- we have this positioning. It's because we will use our internal feedstock that is already produced by our 4 different biorefineries. There, it's quite something exceptional for us. And the second point, very important that the fact that the technology is already in place that it's not something new to ferment sugars. It's something that we know how to do that. And also in terms of market risk, we will see that for different reasons, there is more or less 0 risk around this business. Why? Because really the demand will -- is really expected to be higher than the production in the next years. And of course, the -- this market segment will elevate the revenue of the company, but not only the revenue but more the EBITDA of the company. Then here, again, RYAM is really uniquely positioned in terms of bio refineries, and I will explain why? We have 4 plants worldwide, 2 in U.S., 1 in Canada, 1 in France. And in terms of location, it's perfect. We can address the different market segments and different businesses worldwide. And with the different species, wood species that we have and the different processes that we have, kraft and Sulfite, we are able to provide different feedstock that we will use after that to produce some bioproduct or biofuel. But the first question that I would like to ask here, it's really is it the right time to do that. And really, the answer is very easy to -- it's yes. and why? Because the key drivers are really in place. The new bioeconomy and the decarbonization of all the different businesses is really in place and also a global trend for more sustainable and natural project is emerging everywhere worldwide. I'm sure that you have seen a lot of articles and news around that, that more and more we want sustainable and natural product. And in Europe, for example, we have the fact that EU decided to implement what we call the green deal and with -- it's a full set of new rules and regulations that will manage the different economy. And not only in EU, but in U.S., of course, with the IR program that you have implemented and with a very strong target in greenhouse gas reduction, that is also the perfect timing to implement new bioproduct and new bioenergy in the different countries. And the second question that I would like to ask here is, is RYAM well positioned for participating in this bio economy. And the answer, it's again, yes, because we will use a raw material that is already in our process. We will use some effluent that we are already in our 4 biorefineries. And with this effluent and the component of this affluent, we will be able to produce some new bioproduct. Currently, we are using roughly 30% of the wood, and 40% is what it's cellulose, alpha cellulose, a long chain of sugars again, glucose. And of course, we have the 40%, but we have the 60% in the wood. And what can we do with the 60%. That is the right question. And of course, I will try to answer and to give you some details on that. Then everything, in fact, start with the working forest. De Lyle explained that at the beginning, the wood, wood species, working for us is for us something crucial and what we will do arriving in our plant, in our biorefineries. We will chip the wood. It's to transform the wood in very small chips than entering in our 4 plants. And here, we can say that we are more in a concept of biorefinery because with the wood arriving, using energy and chemicals, of course, we will I can say, crack the wood. It's to differentiate the different components of the wood. You can see on the top, you have the 40% of the wood dry solid. That is the cellulose and with the cellulose we will produce -- we will continue to produce what Joshua you explained, but also what Ken will explain very soon, and we can produce specialty silos, viscose, fluff, lyocell, different kind of cellulose. But after that, you have the 60% of the rest. Then here, roughly, you have the lignin, the hemicellulose and the sugars and some extractive the resin that is in the wood -- and with all this kind of product, you can and we can produce new bioproducts. And it's what we call the RYAM's Biofuture. It's -- you can see that with cellulose, we can produce some new NanoCrystal cellulose, what we call CNC with our joint venture that we have with Anomera and for the rest of the different components, we will work to start to produce some lignosulfonate that is already a business for us, for RYAM. But then with the hemi-cellulose and the sugar by fermentation, we can produce some biofuel. And -- but also we can produce some prebiotics, and I will explain in more details what is prebiotics and how we can produce that. And with extractive we can again produce some crude tall oil, some trupentine, that is bio product that we can sell on different market segment. And with the bark and the wood waste, of course, we will burn it and then to produce green steam and green electricity. Then on this slide, you can see that, again, you have on the left, the wood components with the cellulose, Hemi-Cellulose and Sugars, the Lignin, Extractive. And you can see on the middle, the middle column, the business that we are already are producing. You can see the HPC and I don't want to repeat that. Is the Lignin, we are burning and producing some bioenergy and some lignosulfonate. And on the right side, you can see that what we want to develop with the new biomaterials business unit. With the cellulose, we want to go further in terms of production of Cellulose Nano Crystal and Cellulose Microbeads. The Cellulose Microbeads can replace plastic microbeats. That is a huge problem of the pollution today in the ocean, for example. We can find plastic microbeads everywhere with our cellulose microbeads, it's a huge difference. Then with the Hemi-Cellulose, again, we can produce bioethanol, and I will explain more, but we can produce prebiotics, and we could produce also something very new that is a SAF -- sustainable aviation fuel. And again, I will give you some more details on that. And I will not go through all the list of the different products, but you have here something that I would like to highlight that is the last line is a biogenic CO2. What is this very strange word, biogenic CO2 that is CO2. Of course, in our stack, we produce CO2. What is the difference between CO2 and biogenic CO2. It's very simple. The fact that the biogenic CO2 is coming from the burning of green wood and not from fossil fuel. Your CO2 is produced with the green wood. We have, for example, in Tartas plant, we are using only 5% of fossil fuel, 95% of the energy is coming from green bark and green waste wood. Then 95% of our CO2 is what we call biogenic CO2 and why it is so important that with biogenic CO2, we could produce some e-SAF for Electrical, and I will explain why, or e-methanol. In fact, that is e-fuel what we call e-fuel. Then biomaterials portfolio 1, 2 and 3. We have decided to divide our Biomaterials business unit in 3 different steps. The first 1 is a portfolio one. There -- here, you can see that we have 2 projects in terms of bioethanol plants, 1 in France, 1 in Florida, in our Fernandina plant in Florida, 2 Crude Tall Oil plants, again, 1 in France, 1 in Jesup. Of course, we will continue to produce and to emphasize the production in turpentine in our Jesup plant and continuing in terms of biochemicals, the lignosulfonate business, and developing now new prebiotics in Jesup. That is a portfolio one. It's quite something that is easy to implement. The bioethanol plant in France is already under construction. All the fermenter distillation are already in place, and we will start the commissioning of the plant end of this year, beginning of next year and to have a commercial production arriving end of January, beginning of February 2024. And the beauty of this market segment here is the fact that we have already signed a 5 years contract with a major Western energy company. Unfortunately, I cannot say the name, but I'm sure that you will determine what could be this kind of company. And they will use our second generation of bioethanol to introduce into gasoline and to mix with Fossil, gasoline and with the bioethanol to produce E5, Ethane, E85 in Europe and worldwide. For the portfolio 2, that is for the moment under development. We have 2 main projects in the Bioenergy. The first one is AGE. It's a big project that we have in our Jesup plant it's to implement a new big bulk boiler. And with this green team and starting a new big turbine to produce roughly 60 megawatts of green electricity that we will sell on the grid. And of course, that will provide a good return and a good EBITDA for the company. And again, here, we are exploring diligently the SAF business. And we have the possibility to install 2 plants, 1 in France, and I will explain more in details again, and 1 also in Jesup. And for Biochemicals, I will not repeat because I explained previously, the lignosulfonate and the CNC. And something that I would like to highlight again here it's a PhL. PhL it's a very specific affluent that we have in our Jesup plant during the cooking process. And this effluent, we have sugars and Hemi-Cellulose inside. And again, with sugars and Hemi-Cellulose by enzymatic reaction and fermentation. Then again, we can start to produce some bioethanol, some prebiotics or even something different some proteins. And the portfolio [ projects ] we did more an early-stage in our innovation pipeline. And but we have a lot of ideas with [ Larisa ] in our R&D center and new product development in Jesup. And we are working, as you can see on different production of new bio product. For the portfolio 1 on financial, roughly EUR 100 million revenue, EUR 42 million of EBITDA. You have the details by plants in France for the bioethanol and in Fernandina, the Lignosulfonate, the Crude Tall oil, again in Jesup and in Tartas. And you can see that the return is quite exceptional. That is an EBITDA of roughly around 40%. And that is more or less tripling the level of EBITDA that we have in RYAM, today, then it's quite a very exceptional business and with a low risk -- and the CapEx requirement for doing that, it's roughly around EUR 100 million. And Marcus will explain with more details, but roughly today, we have 85% financed through low-cost green capital and really minimizing the cash draw for -- from the parent company. That is exactly what we have developed in terms of structure or financial structure in our bioethanol plant in France. What we want now is to duplicate this financial structure in our different businesses that we want to develop in U.S. And in terms of risk, again, the market and technology, our proven technology, and ferment what we call as a cell, [indiscernible] that we have in our plant in -- [ Lignosulphonate project ] it's something that we know how to do that. We have done a lot of R&D, but also worldwide, we know that there is other players that are doing that. Then it's a very mature market and no issue for doing that. And again, we have signed this, this is famous 5 years contract with a big energy player. The first liter of our bioethanol is already sold in France, and they will take all the production that we will have in France. And we are in negotiation with the same partner because they have -- and we have a right of first negotiation with them for our Fernandina project in U.S. and we are in the middle of this process. What kind of market segment we want to address with the portfolio 1 of our bio future? The bioethanol, it's -- we want to address only one market segment. That is biofuel. Why biofuel? Because we have in Europe and in France, what we call the RED 2, Renewable Energy Directive coming from the Green deal. And here, there is obligation and mandate who's a big gasoline producer to introduce some level of bioethanol in gasoline. And this mandate are increasing over the years. And for us, that is a phenomenal opportunity. Why? And why 2G? Because the bioethanol that we will produce is a bioethanol 2G. What is difference between 1G and 2G? It's the molecule is the same. Ethanol is ethanol. Then the big difference is arriving with the regulation. Ethanol 1G is produced from feedstocks that are coming from agriculture, corn, sugarcane, wheat and so on. And what we don't want with the bioethanol, it's to be in competition with this kind of market segment. And in Europe, the regulators decided that they will cap the level of bioethanol 1G in the gasoline. They can introduce 7% and no more. But the target -- the final target is to grow over 13%, 14% of bioethanol. Then the gap between bioethanol 1G and 2G. It's really the fact that they need to introduce the 2G, and if they are not able to introduce 2G, they will pay the fees to the government because they are not able to do that. Then of course, they prefer to buy 2G, then to have to pay the fees. And it's why there is a higher value for bioethanol 2G, especially in Europe and in France. It's why we want to really to work on this market segment with this 5 years contract, EBITDA already locked because we are controlling the feedstock. We are a fixed price in our contract, 5 years contract. We have the volume mix also then very secure business with this market segment. Lignosulfonate, it's something that we are already doing that I will not take too much time here. The crude tall oil. Crude tall oil is coming from one product that we have already in our plants. It's coming from what we call the [indiscernible]. It's a [ soil ]. What we want now is to transform this [ soil ] in oil. And again, this oil, the crude tall oil could be used to produce some biofuel. Again, we'll not repeat the trend to introduce biofuel in Europe and in France. And what we want to address here is really to penetrate this market segment to go in the biofuel. And we have 2 projects, one in U.S. and one in France. The last one, the prebiotics is totally different. We are not in the energy segment. We are in animal feed. The fact that we have a very unique and specific plant in our Jesup plant. Inside this [ affluent], we have what we call XOS. Sorry, a little bit typical, but what is XOS? It's xylo-oligosaccharide. And with that and with some transformation, we can produce prebiotics. Again, what is prebiotics? We know the probiotics. Probiotics, It's a good bacteria that is present in the gut. The prebiotics in fact, is the feed. We'll be able to feed the good bacteria. And that is energy for the good bacteria. And doing that, -- and the fact that also worldwide utilization of the antibiotics for the animal feed is less and less. Of course, with the prebiotics, you cannot replace totally these antibiotics but you can improve the health of the animal and especially field of poultry. And doing that, we have a better health for the poultry, the better growth also of the poultry without utilization or minimizing the utilization of the antibiotics. But it's a very different market segment, but with a lot of very good opportunity. Bioethanol, again, here, everything starts with a sustainable wood and one concept, biorefinery. With the wood and the biorefinery, you are able to separate the different components in your wood and then to use differently at different components of the group. We will do the fermentation. Of course, after fermentation, you have to separate your bioethanol from the future, then you do a distillation and then you have your bioethanol 2G that you can sell to your customer. And again, I would like to repeat, but we are able to lock a very big player in this market segment. And the bioethanol also in the next timing, I would like to say, would be used to produce some sustainable aviation fuel. With bioethanol, there is a specific process, what we call ethanol to get that starting with the ethanol can go to SAF. And that is a new opportunity in the future for this kind of bioproduct. Time line, I explained, but we'd like to repeat again. for Tartas arriving beginning of 2024, with the capacity of production around 20 million, 21 million liters of bioethanol, 5 million gallons around. And for Fernandina, we are working diligently on the different FEL1, 2, 3 and also the permitting of this project. I hope that we will arrive also with a decision for Fernandina the next months. The portfolio 2. Here, you have the for the product, the CNC and the Microbead Cellulose. The green energy, again, with AGE in Jesup, producing 60 megawatts of green electricity, and SAF. SAF here, it's something that is massive. I'm sure that you have heard a lot around the sustainable aviation fuel. That is today more or less the only way to do the decarbonization of the aviation fuel because electric plan, it's not for tomorrow, hydrogen plan. It's quite even longer, I think, for -- in terms of timing and what is the beauty of the SAF. It's a drop-in cue. You can use it, you can mix it with our actual tourism. Then you have nothing to change. The plane is the same. The motor is the same. The supply chain is the same. Airport, they have nothing to change. You can mix that to your [indiscernible] and you can fly and already today worldwide. There are a lot of, of course, flight with some part of SAF. The problem here is that it's massive. It's billions of gallons needed for the aviation to be able to do the decarbonization. And we have a good opportunity here to produce SAF because we have this very special biogenic CO2. And not only to produce SAF, but to produce what we call e-SAF. In France and in Europe, there is a new legislation for SAF with the same model that they read to introduce some quantity of bioethanol in the gasoline. That is the same -- more as the same model for SAF. But there is something very special. In 2041, they can use only SAF produced from e-SAF. Then if we are not able to produce SAF with biogenic CO2 in 2041, that will stop. Then a project like that, it's billions of dollars. And it's minimum 5 to 6 years to build a new plant. No one will touch of -- for since CO2 just for be able to produce during 10 years, investing million, billions of dollars just for 10 years, it's quite impossible. Then all the people in Europe are looking for biogenic CO2 and we have already some contact today with some company that we'd like to explore with us the possibility to produce in France and in U.S., different kind of SAF or e-SAF and also here in ethanol. What is e-SAF? SAF is a [ pollution ]. You start with your bioethanol, second generation. And then you have to combine with some green hydrogen. And to produce green hydrogen, you need to have green electricity or low-carbon electricity. Then you have your carbon arriving from the CO2. You have your hydrogen, green hydrogen, coming from the hydrolyzing of the water, you mix that simple. Expanding like that, it's very simple. You mix that together and you are able to produce some e-SAF, some e-kerosene. It's a little bit more complicated, of course, but the 3 main topics that you need to have to enter in this kind of market segment, it's 2 of the biogenic CO2. There is a possibility to have access to green electricity or low-carbon electricity and the nuclear in France has just been elected to be a low carbon electricity, and then you can -- we can produce green electricity with the nuclear and then to be able to produce the green hydrogen. And I will stop here for SAF because I can talk during hours. It's a huge, huge market with a lot of potential for us and we are currently exploring this market segment. And the last one, again, it's the [indiscernible] that we have in Jesup. Inside, we have different kind of molecules like sugars and any cellulose. And with that, we could have different possibility by fermentation to produce some bioethanol, prebiotics or even proteins for the fish feed. The key takeaways and in conclusion. The RYAM's biomaterials present significant growth opportunity as you have just seen. And we have a good finance plan in place to be able to fund this new market segment. And with a minimum cash draw from the parent company. That is crucial because then I'll explain exactly what is the target of RYAM today. It's -- we need to decrease debt and then we don't want to introduce more debt in the parent company. And we can offer with biomaterials high margin, revenue growth and exciting new bioproduct or BioEnergy. The Phase I is already started with the plant in France and with bioethanol 2G in France, $100 million revenue, $42 million EBITDA in 2027. Very good positioning of RYAM with our 4 biorefineries and the different processes that we have and that we can manage using our internal feedstock. And again, biomaterials have really a minimal capital and technology risk and access to nondilutive government funds and low-cost project debt to support the growth of our biomaterials market segment. Roughly 85%, and De Lyle, you just said that before, it's of the capital for biomaterials will be sourced from very low-cost green capital. That's what I would like to present to you today. I'm going to give the podium to Mickey.

Thank you, Chris and fascinating stuff. We've come to the point of the presentation where we're going to take a bit of a break. Probably use a moment to stretch our legs, use the restroom refresh our drink. So we'll restart at 10:00 a.m., so that I'll give everybody about 10 minutes or so to do that. Thank you. [Break]

Welcome back. Thank you, everybody, to welcome back to Rayonier's Investor Day. We'll just keep the show rolling here. Our next presenter is Ken Duffy, who's our Vice President for our high-yield and Paperboard businesses. He started with Tembec in 2011 after previously working with Domtar and Buckman Laboratories in your specialty paper chemical business. He joined RYAM in 2017 with the acquisition of Tembec. So with that, I'll turn the floor to Ken Duffy.

Thanks, Mickey. I'm going to dive right into a little bit of an update and an outlook for the paperboard and high-yield pulp businesses. And I want to pick up on some comments that De Lyle made when he was talking, giving an overview of the business. I mean this is an area of the company we're really bullish on. De Lyle talked about some of the advantages -- inherent advantages we have, as being a smaller niche player, and I'll get into those details. But really, when you see the numbers and you hear the story, I mean, we think it's really compelling in terms of what the future looks like for both the paperboard and high-yield pulp businesses. So what are our key messages? I guess the first one, and this applies to both businesses, both paperboard and high-yield pulp is that we really have unique product offerings. As De Lyle mentioned, right, we're the only North American producer of a multiply board. Everybody else in North America is producing an SPS or a solid bleach sulfate board. So we're the only producer in North America. And we think that gives us some unique characteristics, and I'll touch on those in the ensuing couple of slides. Then on the high-yield pulp space, again, it was mentioned before, right? We're producing in a part of the world in Quebec, predominantly Maple Forest and then maple is a really unique fiber. And really, what it does for us is it really imparts bulk to the end product, whether it's a paperboard like we use for our own paperboard or a specialty paper that's looking for bulk. So to add thickness without adding weight, and I'll talk a little bit more about that. And then the next key message is really about the strong market potential of these businesses. I think that's really driven by when you consider the megatrends and what's happening globally in the world, right? As we continue to move away from single-use plastics and fossil fuel-based materials, the natural fit for a lot of this is fiber. And so we think the multiply board we produce in Temiscaming, the high-yield pulp that goes into this board and the specialty paper applications really fits with the way the world is going. And I think you see that it's almost every month, we see another jurisdiction, another region and not just in North America and the West, but even in other parts of the world that are mandating things around eliminating, reducing time lines for how they're going to move away from single-use plastics and other sort of non-sustainable materials. Then the third key message for both businesses, again, is really about the favorable financial metrics. You'll see the numbers, but these businesses, paperboard, we perceive it a little bit like Joshua's cellulose specialties business. It's really a specialty material. We're positioning that way, and we think that the economics fit with that specialty nature of the business. And then our high-yield pulp. So you could say high yield pulp goes into paper or paperboard can be perceived as a commodity, but the thing that we have, again, going back to the maple. We command a premium on maple high-yield pulp versus the commodity Aspen or softwood high-yield pulp grades that a number of other competitors in the world have. So favorable financial metrics, strong market potential and a really unique product offering in both businesses. So let's get in a little bit of the details. So if you start with the paperboard side on the left here. So both of these businesses are in Quebec, in Eastern Canada. In paperboard, capacity of 180,000 tonnes. We integrate 65,000 tons of our high yield into our paperboard operation and then we buy in the open market pulp for the remaining percentage of the sheet. I think the other thing that's important on paperboard is that we market our product under the brand name Kallima. It has some cachet in the market. People -- this mill was built in the late '80s. People have been using the product for a long time. They see the value in it and they like the Kallima brand. The common about go-to-market strategy on paperboard. So really, it's about this idea about producing a bulky sheet having thickness, having bulk to the sheet, but minimizing weight and De Lyle mentioned that in terms of logistics, but it also means if you're printing something, you can print -- there's more surface area for less weight. And so customers value that. It can be a cost savings for them as well. The other thing to say is on the paperboard side, we're really in 3 main markets. We're in commercial print. So this could be your advertising materials. It could be book covers, it could be puzzlebook covers. We're in packaging. This is a growth area for us. At the back of the room, you may have seen the Twinkies box. We do business for people that supply paperboard to Hostess, for example. So that could even be our box, frankly. And that's a real growth area for us. And then the largest segment of the paperboard business for us is the scratch and win lottery tickets. This is an excellent market. We're North America's leader in this market. We have -- we estimate 75%, 80% of the North American lottery ticket business. So if you're buying from New York State Lottery or in Canada or even around the world, a really high chance probability that that's printed on RYAM board. And then if you pivot over to the high-yield pulp side. So a couple of things to point out about our high-yield pulp business. So that's on the same side as our paperboard business, and one of Joshua's high-purity cellulose operations. We have 2 lines there. The first line we integrate some of that production, as I said, into our paperboard operation than we sell the rest of the market, and the second line is strictly for the market. And the advantage there, what that allows for us, right, is we can -- a little bit of tailor-making the fibers and we also have a backup for our customers if we have a hiccup in one of the lines. A lot of our other competitors are just a single line, similar to what Josh was saying about our 5 CS operations versus our competitors. We only make hardwood grades, really focused on the maple. If you were to look at our product portfolio over the last 5 years, we continue to increase the maple sales and reduce the Aspen, which is more of a commodity product on the high-yield space. The key, again, being around this bulk, right? We seek opportunities. We see growth business with people that value the bulk and are willing to pay for it. And that's what we've been able to do in opening this gap between commodity high-yield pulp and our maple product. And I think the last thing to comment on this slide really, I know Ben will talk -- has a little bit more information on this subject is the last point, last bullet there about FSC. We've done a lot of work as Tembec and continuing on with RYAM and working with our Forestry partners in the region to certify more of these forests under the FSC banner. It's something that is valued our customers in some cases, pay a premium, in other cases it gives us the opportunity to get the business with the FSC. And it's also something that allows us to go into our paperboard, providing FSC high-yield pulp which the market really wants in terms of the paperboard offering as well. So yes, I got into it a little bit before, but just kind of just a little bit more detail about what our advantages, right? So on the paperboard side, this is a really important part as this high surface-to-weight ratio. And that's something that really fits with -- unique to the folding boxboard because we've got a 3-ply sheet, and we're able to put a really bulky fiber in the center ply, which is our own high-yield maple pull. Product positioning, done a lot of work in the lottery sector. 80% of North America's scratch and win lottery tickets are printed on our Board. I think the other thing, though, about that positioning is because of the high value of a lottery ticket versus what you're paying in the raw materials, and there's a lot of technology involved, obviously, in the security. There are significant -- there's a significant barrier to entry for new people to get into that space, right? Because when you've got a ticket that sells for $10 or $20 and doesn't have much in terms of fiber or raw materials in it. They're not willing to play with that. So there's a long qualification period. They know our product and they value our product. And then the last bullet point, right, is we've got the highest bulk, high-yield pulp that's out there in the market in our maple. We continue to work -- our fiber guys continue to source -- try and source more and more maple to -- as this business is growing, right? Again, going back to the megatrends, the high-yield pulp, the #1 application is in paperboard around the world. And I'll talk a little bit about where we sell around the world. So we perceive that this is a growth market that will move even further and further away from the commodity aspen grade, focusing almost -- the goal in the next 5 years to get to 100% maple as it is the highest bulk high-yield pulp commands a premium in the market. Financials for this business. So if we start with paperboard again. You can see we had a little bit of a dip summary, what Josh said in COVID, at the beginning of COVID, especially. But since then, right, we've seen this nice lift in terms of both revenue and EBITDA. I mean, if you look at the 2022 and 2023, you can see the level of both revenue and EBITDA growth. So if you think about paperboard, think about it in terms of currently, a business that's margins in a 20% to 20% -- high 20% ratio. That's what we see going forward. Again, strong growth in this business. Analysts are predicting 3% to 5% growth given the move away from single-use plastics. And then on the high-yield space, that has been a really nice business for the last few years and even over the cycle, right? We've -- margins are typically 10% to 15%. Both of these businesses are low CapEx, low capital intensity, a little bit different than the cellulose specialty business. We don't have the pulp assets that require the number of -- the amount of maintenance, right? So there's a lot of free cash that's thrown off in the paperboard and even the high-yield pulp. Over the cycle, we deliver cash in high-yield pulp. And maybe just a little bit more on that. Just to give you a kind of order of magnitude. So in both these businesses, you're looking at less than $5 million a year in CapEx is typical. It could be $2 million to $5 million, depending if we've got an extra project last year, we had to do some DCS work. It was a little bit higher, but that's kind of the magnitude of the CapEx that goes into these businesses. So just coincidentally, if you look at the paperboard space that we're in, and you look at how you'll pulp, they're both around a 4.5 million tonne in terms of market. The paperboard businesses, currently, there's no export business off and on. We've done a little bit of export here and there. But really, now it's a North American-focused business. 2/3 of sales in the U.S., 1/3 in Canada. We're a small player, but again, a niche player with our folding boxboard versus the traditional SBS sheet. Then the high-yield business, it's really a global business. Most of the mills in North America are either integrated or have moved away from needing high-yield pulp. So it's really an offshore business. It's almost all on the export business, North America, a small percentage of it. One of the things that we've done, and if you had looked at this a few years ago, China would have been closer to 40% of that business. We've moved a little bit away from China. It was a conscious move on our part to reduce our risk in terms of the business we have in China. But also what's happened over the last 3 to 6 years is that the growing market of India, they've put in a lot of paperboard capacity, very similar machines to what we have in Canada and -- but with no fiber, so they need to buy all of their fiber. And again, our maple is a perfect fit for that. So that business has grown from low single digits in 2018 to now where it's a significant portion of our portfolio, but a really good fit, again, because -- just because of the nature of their market. In terms of pricing. So if we just focus on paperboard on the top there, you can see if this went previous to 2020, this line was relatively flat. The grades we sell, this is a proxy. This is 1 grade that RESI or Fast Markets tracks. But it was relatively flat for a long period. You could have gone 2012, '13 to 2020. And this -- the price was hovered between $1,000, $1,100 a tonne. In 2021, we saw the significant lift. And basically, now we're at the stage where analysts and everybody is predicting that prices are going to be relatively stable over the next few years at these elevated levels. So you know, $1,500 to $1,600 a tonne for this 16-point grade. And RISI is predicting for 2 years, relatively stable pricing. A little bit of a dip there in '26 due to some new capacity coming online, but just a small dip for a couple of quarters and then back through the end of '26 back up to that $1,600 tonne level. So really a nice price level. On the high-yield pulp space, so this index is tracking BEK, which is a bleached eucalyptus kraft pulp, it's kind of a proxy for high-yield pulp. And one of the things you can see, it fluctuates. But you can see from where we are now, the next 18 to 24 months is up. And we also get that premium. So we can be higher than those levels, a little bit of dip driven by supply and demand with some new capacity of BEK. It's not really going to affect our space. We don't believe in '25, '26 but then with a nice -- another lift is that capacity to absorb. So when you look at it, we make money over the cycle, low capital intensive, and we can do well at this price level. So just finishing. So what are the key takeaways for this business just to reconfirm, right? Strong contributor to EBITDA and cash. Cash that we can reinvest in any of the businesses, right, in our HBC core business or back into our paperboard and high-yield pulp. Challenge and opportunities. We've got this -- a little bit of a challenge in '26, small drop in terms of the paperboard sector. But really, it's about opportunities, right? Moving away from single-use plastics, government mandates to do this. We think is going to drive success in this and profitability in that business. And then niche position and resilience. We make money through the cycle. We've got a product that's valued and we think it's going to continue to be resilient and provide good results for the company. So that's it really for the paperboard and high-yield pulp businesses. I'm going to turn it over to Michael Osborne, Michael is our VP of Manufacturing Operations, and he'll get into the projects and issues around our manufacturer.

Thanks, Ken. Well, I just want to tell you it's really nice to work for a company that combines kind of my background a little bit. I've got a background in pulp and paper, but also specialty chemicals. And we like to think of ourselves as a specialty pulp, specialty chemicals producer and seller. And so I think that's what separates RYAM from other companies in this business. So I want to start here with just a comment about you're not going to see this in slides today, but I do want to make a comment about our safety and environmental compliance. One of the things to be a player in this business today, you have the chip to get in the game. You have to be a safe and environment compliance steward. And so we work very diligently on this. If you look at our numbers on safety rate, our number is consistently going down over the last 5 years. So this is a piece of what we do. We're not going to talk about it as much today, but it's an important topic to make sure that we get in front of you. So if we talk about key messages. First, I want to talk to you about there's 3 key messages that I really want to bring forward to you today. Number one is we're going to improve asset reliability, and we're going to do that through a strategy of being in a more proactive state. Now I'll talk a little bit more here in the next few slides about what proactive state means but it's really about predictive and preventative tools and how we use those tools to get us in a place where we actually run our assets more consistently. And so that proactive state means we can get in front of issues before they even become a problem. The second item is cost improvement. So De Lyle mentioned this earlier, cost always wins. And I think we have to continue to think about that in what we do. Obviously, we are a high-quality sales producer. And so quality has to always be paramount to what we do. But we can also -- we can be high quality and low cost at the same time. So we have to focus on that. And I'm going to give you a few examples of that, how we can reduce costs. And also, it's important for our plants to be profitable across market cycles because we do have ebbs and flows in market demand, and we know that and it's important for us to take charge of that. And then the last topic I want to talk to you about today is manufacturing center of excellence. Josh mentioned it a couple of times. And it's really our tool or our method to learn faster. So how do we implement projects, how do we get new projects develop faster and put them into process. All right. So I'm going to -- there's been a lot of conversation already about our 4 facilities. I do want to give you a few items about each of these facilities. So Jesup, Georgia is our largest specialty cellulose plant in the world. It is obviously our largest plant as well. It's a kraft facility. Lines A and B make specialty cellulose from both hardwood and softwood. Line B is a hardwood only high-quality acetate line, as Joshua mentioned earlier, and Line C is a softwood line that -- it makes about 270,000 tons a year of mainly fluff pulp right now. The key to Jesup and we talked about this earlier, is the ability to be in a wood basket that helps us make the products that we produce. So we talked about earlier the [ slash pine ] that helps us give us the soft absorbent fluff pulp, and [indiscernible] does the same thing for some of our other software products. And then the other key thing is around 100 miles around the Jesup facility, there's a soft hardwood species, mainly gums and species like that, that help us produce the type of specialty cellulose or cellulose specialty products that we make in that facility. Our Fernandina facility is the highest-quality acetate facility in the world. And Joshua mentioned earlier, is a very flexible facility. And that's a really important part of what we do. And again, the same part about the wood basket, that [ slash ] and [indiscernible] are key to what we do. In the Tartas facility, this is a premium ethers producer. And so again, we've already talked about the maritime softwood that we have. It's the largest maritime forest in Europe. And what's key to this is, is it makes great ethers and it's important because it makes it hard for people to come in and do what we do in that space. And then lastly, Temiscaming. We talked about the number -- basically 3 plants in this facility. We mentioned one of the plants has 2 lines. But really, what I want you to think about this is our -- in our high purity cellulose business. We are -- this facility is the low-cost producer with regard to our variable cost. And so that makes it a great place to put our more commodity products that we obviously have to be more cost conscious about. And we also have a tremendous wood basket for hardwood and softwood with the government controlled lands that are around that general area. So what I want to spend some time with you about right now is talking about our maintenance and reliability journey. Where we are, where we're going. And so our desired state is to be in that proactive space that you see up there, where we talk about loss elimination and how do we get ahead of issues before they ever start. So what this really means is having more predictive and preventative tools. And really, if you look at it right now, our Jesup, Georgia facility is the blueprint for what we're doing across all of our other facilities. So they're already the leader in this. If you look down here at the bottom, they're a little bit in that plan statement, but they're moving very quickly toward the proactive state and they're going to be there in the not-too-distant future. I will tell you this starts with good strong leadership at the facilities, not only in the plant leadership but also in the maintenance and reliability teams to really make sure this drive -- we drive this one, but also the operations leadership because a key part of reliability is doing it well on the operations side as well, not just on the maintenance side. And then having a long-term commitment, I will tell you that this leadership team has a long-term commitment to reliability because we know De Lyle mentioned this earlier, is the cheapest way to keep our assets viable and have the right amount of capacity utilization. We don't want to have to go build new capacity. So we use the capacity we've already got and make it highly, highly reliable. That is the goal. So then next, I want to talk to you about improving cost position. So again, we talked about it earlier, cost always wins. So the example I want to give you right now is the Fernandina example. Fernandina is at a higher cost position right now than we want it to be. But it also has the flexibility, as we talked about earlier to make grades that we need to make there. Sometimes the commodity grades that we need to make there currently right now. And then in the future, obviously, more cellulose specialty grades. So how do we win there? We win there by reducing cost. So we've put a lot of emphasis on how do we, over the next 5 years, reduce cost consistently. So we've got a goal in place. We talked about it earlier, $23 million of cost reduction. Now that's accretive to EBITDA, obviously. So we've got $23 million of EBITDA through cost and efficiency improvements. So if you break this down into really into 2 groups, the first increment is that we've already started this work. We're going to have about $9 million of EBITDA improvement by 2025. And so there's a couple of different ways we're getting this. One -- and I just want to give you a couple of examples of the type of projects we're talking about. The Teleo tractor automation project is a project where we're basically -- today, we operate all of our chip and bar handling system needs are operated by individual operators to operate individual tractors. Now we're going to do that through a person sitting in a control room that can do that through an automated path to control multiple units at one time. So obviously, what does that do? That improves efficiency, it improves headcount. And one of the things I want to talk to you about with head count is our key on reducing head count is not just is not necessarily to reduce people. It's obviously an efficiency play, but we want to do that through attrition. And also, one of the things in this post-COVID world that we've learned is that it's very hard to attract talent. And I'm talking about talent to do manual labor jobs on the shop floor and those types of work -- that type of work because you can't pull in person off the street that you wanted to do this type of work. It takes skills and capabilities. And unfortunately, those are -- those people are harder to find now. So automation is a key pathway for us in the future to improve and to be able to maintain our market position. The next one is the finishing roll line automation. This is important for a couple of reasons. One is it's very time-consuming and labor-intensive to do some of our finishing roll line automation, putting labels on roles, having to wrap roles, having to move roles. A lot of that now will all be handled by our finishing roll line automation project. So a lot of robotics and capabilities that you see all over the world. These are key projects for us to become more efficient. One of our key problems right now in Fernandina is we can run fast until we get to the roll line. And so we're working on ways to improve that. But we're actually -- but this roll line automation project will help the speed of that as well, not just reducing the personnel that are involved in that. And lastly, we're in the middle of a shutdown right now at our Fernandina plant. And one of the key projects there is to replace our bleach plant distributive control system. With a new state-of-the-art distributive control system. So what that will do for us is it already makes our automation much better. It makes that distributive control system that we have now is a much more reliable control system. And it also makes our cost per tonne go down because we'll be able to use our bleach plant chemicals much more efficiently and effectively. So that's the value we want to get out of projects. One thing I'll say about the holistic group of these projects, if you look at them across the board, the whole $23 million, what you will see is, on average, these projects have a less than 2-year payback. So we're going after high value, high return on investment type projects. And then the last part, we're going to have another $14 million increment. So this is all incremental. A $14 million improvement in EBITDA by 2028. And I want to just turn your attention to 2 of these projects. One is we've got some projects we did what's called a pinch study or a heat loss analysis. And in that heat loss analysis, we found some opportunities to go after projects that will improve our cost position and also improve our efficiency. Those projects were going to return somewhere in the neighborhood of about $3 million beyond work that we're doing in the bioethanol world. And so that's a big improvement on the efficiency side. On this pulp eye analyzer that we're showing here, the other piece of this is it reduces lab work, it reduces sampling to get to lab samples, but it also gives us the opportunity to get the results much faster. And so with that distributive control system we've got, now we've got inputs to the distributive control system that make -- give us more opportunities to improve efficiencies. So a little bit of this, we'll learn more as we go about efficiencies that we don't even know about yet. So again, highly important projects. So the last thing I want to talk to you about is the Manufacturing Center of Excellence. And what this concept is, it really comes back to you know, have to learn faster and implement faster key strategic projects, key items to improve reliability, to improve our cost structure, those types of things. So if you kind of go right -- to my right or left, so start with global reliability. This is a team that we're already started working with and working on and developing. We actually have a leader in this space right now, and we're developing the team as we speak. But the key to this is networking. How do we do it? So we talked about Jesup's already got a blueprint for this. So how do we go after the work that Jesup's done? For instance, Jesup has done a real good job of driving and implementing vibration -- online vibration analysis. And we've got that at other facilities in our company, but how are they doing it better, how do we learn from that and implement those learnings across all of our facilities. The same thing with Jesup's also trialing right now, a tool that will help bring maintenance and process information together so we can figure out a way to take that information and improve our capabilities on not just our reliability, but how we operate the facility. And so again, learning faster. How do we drive these improvements and learn faster. And then global process automation, we're actually working with that group. The work that's been done so far has been done with a team of people from different facilities. So there's a little bit of this going on, but we want to standardize that more. Make it more standardized and be more consistent and again, deliver opportunities faster. And then these last 2. So I would tell you the first 2 on there are really about how do we win in the cost and reliability and optimization. We want to optimize what we currently have. That's the key, optimize the base case, if you will. On these last 2, how do we standardize better? How do we make sure that we're doing things more consistently. On global project engineering, obviously, we wanted to put together a 5-year plan that says, what capital do we need per asset? And how do those things integrate together we want to treat these assets and we do treat these assets like one facility. So how do we integrate? So we spend the right money at the right facility at the right time, and we do that through part of that global project engineering. And then we properly manage projects, a concept to completion. How do we make sure that when we get a project, we do that very well? And then the last piece on global process technology, this is about deep knowledge, deep capability. You've heard already that we have R&D centers of excellence, if you will, with deeply knowledgeable people. We have that same capability inside the engineering organization and inside the process organization. So we want to now bring that together to have those members that have process expertise that can then help drive improvements again across facilities. So the last thing I want to ask -- talk to you about is what's the purpose of this? And again, we've talked about it a little bit, we want to drive consistency, make sure that we're consistent that we behave as one, like one facility where we can, to learn faster and smarter. Number 2 is to share best practices. How do we make sure that we're sharing things across facilities and again, learning so we can implement? And then the third one is how do we get the most from our resources? So we have limited resources, and we're going to maintain limited resources is that we want to operate lean as possible. So how do we use those resources to go where the work is. So we may have projects that we have a higher level of importance on in Fernandina right now. We're going to move those assets more to Fernandina or we may have a need to move them more to Tartas for a period of time, not just our largest facility, Jesup. So this is really key for us to make sure we do this well. And then the last kind of hidden gem to this is career progression. And today, again, in the post-COVID world, people are looking for the right opportunities for them. And one of the things we want to be able to do is not everybody wants to be Vice President of Manufacturing or to run a facility. And so what we want to make sure is that our engineers or process experts have ways to move up through the organization where they can actually use their expertise for the things they want to do. So this gives them that deep level of expertise without -- and use that deep level of expertise without having to leave our organization. All right. So with that, I'm going to turn it over to Ben Chambers. Ben is our Director of Sustainability and External Affairs.

Thank you, Michael. It's much [indiscernible] easy today, right? Because I think every speaker before me has talked about sustainability. So we'll elaborate on a few of those topics. A little bit of background on me. So I've been with the company for 6 years, the last 3 years in sustainability. Before that, I was in our commercial group in the HPC side. And I started my career with Georgia Pacific. So entire career in this space. So you've heard from all my colleagues, we have a tremendous history, going back almost 100 years, managing renewable feedstock to make remarkable products that support everyday use, right, or the tagline, sustainable from the start. So today's presentation, I'm going to hit a few topics. We're going to talk about working for us in more detail. De Lyle mentioned it in his intro. And I think Chris, John also talked about it, but we're going to go into little bit more detail. We spent a lot of time over the past few years elaborating on our ESG disclosures, so I'm going to talk about a few of those topics. And then in 2021, we set a greenhouse gas emission reduction target by the end of this decade. So we're going to talk a bit about that. So working forest. If you guys haven't gotten the one-page handout that we printed or stopped by to see Mickey or [ Larissa ] back there, you should. Because there's over 5,000 products, consumer products that are used every day that contained cellulose. And so a working forest is a forest that is intentionally grown to be harvested. Meticulously managed, right, produce high yields, but we're going to harvest those trees at some point. There are many other benefits that are working for us that I really want to go into the detail on. So obviously, trees produce oxygen, right? They sequester CO2, they release oxygen. They also enhance water quality, right? So forest provide, I don't know, 70% of the freshwater that we all drink, cleaning the water and then the biodiversity and wildlife. I get challenged a lot from people I think, many of you guys are cutting down trees. What are you doing that for? Why would you ever want to do that? Well, while of -- on biodiversity piece, you need sort of varying age ranges of trees in order to support all forms of wild life. So there are so many advantages there. Let's talk about carbon sequestration. So trees capture more carbon during their early growth years. So if we look at this chart over here, this is illustrative purposes, but it's -- generally, this holds true if you look across a wood basket, all the different types of trees. So over the first 30 to 50 years, a tree is sequestering the most carbon that it's going to sequester in its life. And then beyond that, you can see that left line there declines. And then of course, over its life cycle, if a tree lives a few hundred years, yes, it's going to have more carbon stored in. But the neat thing about our industry and all those products on that table right there, the carbon that's locked up in a tree remains locked up in those products. So the more trees we can encourage planting, right? And we provide a viable economic demand for trees, having those trees growing and producing more of those trees, sequesters more carbon, locks it up for the short term, right? We think about the earth, net zero, 2050, all the ambitious goals that companies have. The more trees we can grow in the next 30 years, the better we're all going to be. So a very valuable tool in our toolbox. Okay. So let's talk about the environmental side of ESG. So I think Ken mentioned the high-yield business in FSC. So for Stewardship Council, FSC trees, what that means is those trees, the trees in the forests are actually certified, right? So the land owner has to go out, have to have a management plan to manage those trees according to FSC's requirements. Roughly 36% as of 2022 of our fiber basket is either FSC or PEFC-certified really the 2 leading global standards. The remaining fiber is all procured to FSC control wood, which just means we have line of sight to where all those trees come from, they're sustainably managed and sustainably harvested. When we bring the wood into our facilities in a very high yields, right, more than 96% of every tree is consumed and used to produce something. Michael talked about environmental stewardship. So if we look over to the processes, almost 80% of our total energy we produce on site, using renewable sources of electricity of energy, primarily Biomass and Hydroelectricity in Canada. Water is important. We use a lot of water, but we treat and return more than 98% of that, right? Almost 100% of all the water we use, we reuse it. We use it and we reuse it multiple times in production and then we send it back to its natural environment. We've got a couple of our other certifications listed here, right, Nordic Swan and the ISCC so those are just additional sort of higher-level sustainability certifications that we've been able to go out and achieve for our customers. And let's talk about our emissions reduction target. So in 2021, we set what we think is an ambitious goal of a 40% reduction target by 2030 against our 2020 baseline. So 10 years to reduce our carbon emissions by 40%. Through the end of 2022, we've already achieved 15% of that 40%, right? So 37.5% there through 2 years, we think we're making awesome progress. When you get back to the product side, our products are sustainable, right? We've always been sustainable as a company. These products provide incredible solutions for our customers. I'm really excited about everything Christian talked about in the expanded biomaterials business. That's going to allow us to meet the sustainability demands of tomorrow's customers. Okay. So the S and the G of ESG, People and Governance. If we talk about some of the social initiatives. So 2022, 14% increase in women holding executive leadership positions. The majority of our workforce belongs to unions. Michael mentioned sort of workforce development. So I think it was 2012, we started an early career development program, primarily for engineers. Over the past few years, we've expanded that to corporate roles as well. So accounting, finance, supply chain, moving employees around, give them varying experience and really see what they want to do with their career. It's been very successful. We expanded the diversity network for new college hires. So how we're going to go out and find new diverse talent, challenge our thinking. It's been really successful for us. If you look at the ESG ratings, we get high marks on governance. So on the right-hand side over there, we've got our governance structure. So I get to lead our Cross-Functional Sustainability Council. There's 14 senior leaders across the company from all sorts of roles. We meet at least monthly. They help me manage all of the sustainability initiatives. Rolls up all the way to the full board, right? In 2021, we established a sustainability committee, so a subcommittee of the Board. We meet with them at all the board meetings. We talk specifically around here's what we're working on, here's what we think is important. They give us real guidance on how to achieve some of those things. When De Lyle moved over to the CEO role to lead the company, we did elect Lisa Palumbo as our first female Board Chair; exciting times. Okay. So we've been sustainable from the very beginning, right? 96 years, I believe, in operations. It just provides us such a unique opportunity in today's ever sort of sustainability conscious world, transforming those renewable resources into marketable solutions that promote sustainability. Keep in mind what I said about working for us, right? We're doing all the right things to incent more trees to be grown, capturing that carbon, providing a myriad of other benefits. And should mentioned the ESG disclosure. So if you guys haven't checked out our website, we just redid it. It looks awesome. On there, you'll find some of our recent ESG disclosures. So in 2021, we published, what I would say is our first comprehensive ESG report. We submitted a progress update earlier this year. We expanded on some key topics there. And then we anticipate another comprehensive ESG report in fall of 2024 to come out. So looking forward to getting feedback from all of you, all of our stakeholders, all of our shareholders, we're going to continue to expand on the narratives that you want to hear about. Thank you for your time. And with that, I'll hand it over to Marcus Moeltner, our Chief Financial Officer; and SVP of Finance.

All right. Good morning, everyone. Thanks again for the time you've invested today to listen to our story. As Ben mentioned, I'm the CFO and SVP of Finance. I've held that position for just over 4 years now. Like my peers, Christian and Ken, I came to RYAM through the acquisition. At Tembec, I led the corporate development function for several years. So I'm going to look to tie things together today from a financial perspective, and really with a focus on activities related to the balance sheet and the free cash flow profile of the company. So maybe some opening comments. We really see the optimization activities on our balance sheet as a key element to drive success. It's really pivotal to our execution. So on strengthening the balance sheet, really, it's all about runway and flexibility, right? And De Lyle mentioned it at the outset, you have our commitment that we are going to take care of the '26 maturity in '24. And additionally, as per our capital allocation framework, continue to focus on debt repayment. I think it was pretty consistent through the presentation today, a real focus on free cash flow. We really see that as the foundation to delever the balance sheet further and improve our capital structure at RYAM. And my peers touched on it. Joshua mentioned on the commercial strategy as it relates to our core business, that focus on value over volume and being price stewards that plays heavily into improving our margin, margins across that business. Ken shared with you the megatrends driving the margin profile in his business. So we really see that paperboard business and its free cash flow capability helping bolster our balance sheet with the free cash flow profile. And then we touched on it as well, De Lyle at the outset, operationally, our focus on making sure we take downtime when it's appropriate and harvest the working capital on our balance sheet. So that's -- those levers are really key to supporting further debt repayment and addressing our balance sheet. And then lastly, Christian shared his aspirations and our aspirations on the biomaterials business, really exciting news there and really giving us the opportunity to have a step change in our margin profile. So let's talk about the balance sheet for a while. On a pro forma basis, you can see from the chart, around $770 million of gross debt after the recent refi. And what we're looking to accomplish here is, as I mentioned, is target a refi of the '26 notes in '24 at the same time, having a line of sight on a further debt reduction of $70 million. So think about 10%. We feel we have the flexibility to address the notes as one tranche or perhaps evaluate the benefits of a uni-tranche refi. In parallel, we'll be looking at avenues to further improve our ABL. We see a line of sight there as well to improve our advance rates and drive some incremental liquidity. And we touched on it and it's highlighted on the slide here, you can see the potential of the sale of noncore assets. Ken shared with you the cash flow profile of the paperboard operation. Paperboard is an industry that's consolidated. It's very profitable. We're an integrated producer. It behooves us as fiduciaries to undertake a process to see if somebody else might value that differently than the market is valuing that right now for RYAM. right? Because certainly, our capitalization does not reflect the sum of the parts right now. So we've talked about the debt. The other element is the free cash flow. So really demonstrating the free cash flow profile of this business. But more importantly, demonstrating the ability to augment that free cash flow. And in the chart here, you can see we've highlighted a couple of key recent items that on an incremental basis, could build on the free cash flow, right? We talked about the Foley development and what that might drive as far as incremental CS volume. We've talked about the bioethanol project that's going to be starting up. We've just put in a placeholder for a half year of that. We've talked about other strategic projects. So you take those all together, there's -- you can see close to $75 million of potential additional free cash flow to allocate towards debt repayment. So if I look at -- De Lyle mentioned, we want to change the narrative, right, based on our vision. So really, from a financial perspective, if I look at the building blocks, the key levers here, we talked about strong cash flow generation, right? That's about the flexibility to evaluate strategic investments, withstand market downturns. Debt repayment that is paramount in our outlook, is it really enhances the financial stability of the company and our credit profile. Margin expansion, Joshua articulated the plans there. Ken's really got a good line of sight on getting that premium for our niche products in our portfolio. And then certainly, growth investments, De Lyle reiterated, our hurdle rates for these strategic investments. We're looking at projects that have a return on equity greater than 30% and better than a 2-year payback. So certainly, there is a strong screening process that goes underway for us to consider these investments. So let's turn to the Biomaterials financing strategy. This is well developed. And what we have here, we have a playbook that we feel we can replicate for the biomaterial plan that Christian shared with you. For our investment that we're completing in France, we had a couple of levers that we pulled. First, low-cost green loans. So think of something for the bioethanol investment that we'll be commissioning in the range of 2%. On top of that, we had access to grants. Think of grants that could be in the range of 20% to 25% of the gross capital cost of these investments. So certainly, the ability to attract capital here is high. In addition, we will be looking to evaluate how does equity play into this, and is there a structure with any partners to improve the returns of these projects. And I think the portfolio that Christian went through as well, these projects all build on one another. So that as we get the bioethanol project running in France, that free cash flow stream can help fund other projects. So the takeaway here is we have a playbook that is scalable, proven and well demonstrated already, and well advanced. So really great to see that we've found investors that can -- that this plan really resonates with. So I'd like to spend some time on the business and just some financial trends. And on the top of the chart, you can see our revenue growth. So we've got around a CAGR of 5% if you take our base of 2019 of $1.4 billion of sales to the $1.8 billion in the LTM period. So we're very much in line with the business planning targets that De Lyle shared at the outset. If you look at our revenue by product, 2/3 of our portfolio is around our core CS grades and the paperboard business that Ken spoke about. So a base that is solidified by very strong margins and business with good growth prospects. On the EBITDA side, you can see our CAGR approaching 15%. If you contrast the LTM period to 2019. And additionally, I'd like to spend some time just talking about the geographic breakdown of our portfolio. One of the reasons RYAM pursued Tembec was to provide diversification of the sales. So you can see our sales geographically are quite diverse. They're the highest in the U.S., you can see at over 30%, but very balanced between China and Europe. And then Ken mentioned some emerging markets that we're focused on in past presentations; India, Indonesia, Korea, are another nice markets to continue to grow our top line. So let's turn to the leverage profile. This has been a journey and the destination has not changed for us. It's -- we're targeting a net leverage of 2.5x and you can see we made strides. We were at over 10x leverage. In the LTM period, we're down to 3.4x. And you can see our target there set out at 2.5x. And I really want to leave you with the message that we're both focused on the numerator and the denominator here, and ensuring that we have the appropriate debt structure. So reduce that absolute debt while growing into that structure with higher EBITDA growth. So let's turn to 2023. De Lyle shared at the outset that the ongoing challenges persist in our business. Q3 will be lower than Q2. And the key themes De Lyle touched on it. We saw considerable destocking again across certain markets, the continued weakness of the etherish market over in Europe. Commodity prices remain depressed, both for fluff, viscose. We started to see some rebound in high yield. And we also saw Paperboard experiencing some destocking, but to a lesser degree. What we're seeing as an outlook, though for Q4 is sequentially stronger Q4. We're seeing our mix improve as we'll see higher shipments of our CS grades. We saw the bottom of the commodity prices, and we're starting to see increases being passed through on commodity prices. And lastly, what we're seeing as well is as we saw this weakness in Q2, we shared with all our stakeholders that we had done a lot of cost mitigation. So cost mitigation on our corporate costs and our mill manufacturing costs. And I can certainly see those have been accelerating as we've turned inventories, and we're starting to see that cost improvement come to the bottom line. And certainly, Q4, we'll see a higher mix of that. And I think the last catalyst you can see on the bottom of the page is as we get smarter on the impacts of GP Foley, it's still dynamic, as Joshua shared, certainly impacts in '24, but we'll see how quickly inventories for their customers, correct is there something else there as well. But I really want to leave you with the message that we are doing everything under our control to ensure that we remain compliant with all our commitments to our stakeholders as they relate to our lending agreements. We're focused on cash flow in the business. That's why you've heard us reiterate that our focus is on working capital and optimizing cash flow in our business. And those are things we can control. So we're taking very proactive steps, formalizing the process as it relates to the strategic review of our assets is another lever that we need to explore to understand what that might mean as well. So I'd like to focus on RYAM's compelling proposition, and it is a value proposition. I think you've all heard some exciting plans. And if you look at the far side of the page, right, we highlighted the key drivers of this value, right? The stable growing CS business, our businesses do have appealing growth prospects based on the megatrends out there as well. Our focus on free cash flow. And certainly, if you overlay the impacts of the biomaterial investment, you can see the base business, the core business, a CAGR of 10% and overlaying the 42%, a CAGR of 13% to project the long-term vision on our EBITDA profile of $325 million. Again, we set out a bridge of the key building blocks of that. You can see, I think it's a doable CAGR on the pricing based on our commercial strategies. We talked about the mix and what that might mean with the GP Foley development. And then certainly, the biomaterials and the strategic investments related to automation are really key catalysts to improve our EBITDA profile and really deliver on what De Lyle mentioned earlier on is our focus on total shareholder return and delivering value to our stakeholders. And with that, I'll turn it back over to De Lyle.

All right. Well, you made it to the end. And again, thank you for your patience. Thank you for your interest to be here. As being noted by all the participants, we're excited about the future. We do fully understand the near-term challenges that we have to face, so we need to correct. But we think that is more than doable. While we, at the same time, execute on the new vision that we have for the business and to take advantage of the opportunities that are before us. When I think about the business and about what it's going to be a year from now, I think you're going to find a business that is a much different business. We all have been -- it passed the refi on the '26 notes, lower debt, improved EBITDA because of a number of things that are happening now, including the tectonic shift that we're seeing in the industry with the closure of a worthy competitor. And the launch of our Biomaterials business with the start-up and the commencement of the bioethanol plant in Tartas. So all of these are great things, and these are things that you can -- you'll be able to measure, things you'll be able to watch and see as we go through the year. And certainly, we'll make every effort we can to be as transparent and open about how we're progressing on those. So with that, I think that brings the formal end to our presentation. We're going to take a few minute break to move some furniture about to get set up for Q&A. We invite all of you to stay and participate in that. We're here. The whole executive team is here to help you understand the business better. So give us about 5 or 10 minutes, and then we'll get restarted. [Break]

Thanks, De Lyle. Just as we're preparing the room, just some logistics for those on the webcast as well as those kind of in the room. [Operator Instructions] And as De Lyle mentioned, we'll have all of our speakers up here available at the front of the room. We'll also have [ Dr. Fenn and Ms. Thomaston ] available for questions, if you have anything more specific or detailed on either new products or the cellulose specialties. Okay. So we'll bring up the presenters. [indiscernible], yes. De Lyle, you'll hand here.

All right. I think we're -- do we have everybody up here that you need to handle up here. Joshua, so waiting for Joshua. Give him a couple of more minutes. I'm going to serve as gatekeeper. So as you ask the questions, I'll take a first whack at it. But I'll pass it on to my colleagues to get more in depth if needed with respect to the answers. And if you really want to go deep, we have our technical experts here as well. All right. Why don't we get started? Please, there you go.

[ Jim Daly ] from Mizuho. I see the $42 million number for 2026 on the biomaterials. Can you give us a cadence of how that builds up to that? Like what do you expect in '25 and '26, I think in '24 it is like $5 million, if I read that right.

Okay. So with respect to -- you're talking about EBITDA and some of the -- over the course of the next few years. Don't know all the dates by memory, but I know that we're targeting the bioethanol plant that have a start-up in late '25, early '26. Christian, I'm going to lob it over to you and see if you can add any more detail to that question.

Yes, De Lyle. In fact, we have -- in '24, we will have the start-up and the ramp-up of the bioethanol plant in France. The target that we have for the second plant will be in Fernandina. And we are currently working on the different technical survey and also the permitting to start the construction of the project. We forecast to have maybe a start-up of this new plant beginning of 2026. Then that is for the 2 plants of the bioethanol and for the CTO that we could have a start-up also in 2025. And the Prebiotics that is still under development, could be more in the range of 2 to 3 years to be able to have the startup of this Prebiotics plant in Jesup.

I think the question was around EBITDA for each of the projects, just kind of a ballpark estimate on those. Yes. We'll dig up the numbers for you, but we do have those numbers. Then it all add up to $42 million.

Yes. I don't know if we have to -- if we want to share the different EBITDA for the different projects today, but it's -- yes, it could be around maybe $15 million for Fernandina and maybe $10 million to $15 million for the Crude Tall Oil plant turned around maybe $5 million to $7 million for the Prebiotics in term of EBITDA.

Roger Spitz, Bank of America. In the materials, you said you want to move Temiscaming to 100% commodity. Did I read that right? And if so, does that not make all of Temiscaming a noncore asset?

What that does is that -- the answer to your first question is that is the goal. I would also say it's going to take time because as I think was emphasized a number of times in our conversation was that there's -- you have to go through a lengthy qualification process, even when you change the product from one plant to a sister plant because of the change in species of trees or changing processes and all those wonderful things. So there's a qualification process that it we'll have to undergo. So it's going to take time. . Today, it becomes a commodity. We will be 100% focused on commodity business. Remember, though, it's still a high-purity cellulose business. And we believe that Temiscaming has a low variable cost that should be able to make it, allow it to compete. So long as we can make the product at a sufficient production level and meet the quality, particularly around Lyocell, which is especially gradable viscose, we think that we can be successful.

I guess I'm wondering is potential buyers, and you said you hired an investment banker to look at the paperboard, high-yield pulp. And you've been able to operate them separately from the CS mill, but presumably potential buyer would find the whole site if they're interested, perhaps totally interested. Maybe you could consider looking at selling the whole site and then basically buying back capacity rights until -- to make especially CS while you qualify your other plants to do that? Is that way like a cleaner sale?

Okay, that's an option certainly that we can look at. But one of the things I did state is that if it is a core asset, we're going to keep it, right. And last thing I want to do is sell an asset to set up a competitor. So that should help you to address that question.

Dmitry Silversteyn with Water Tower Research. A question on the financing. You talked about the green loans or the green money that you're going to be getting or are getting for your Tartas plant and your other biomaterials expansion projects. It's still a loan. So it still impacts your net debt-to-EBITDA ratio. So how are you thinking about adding those loans onto your books? It's just a question of lowering your average cost of capital? Or is it going to help you actually get to your net debt-to-EBITDA goals.

Thanks for the question. So again, we said it through the presentation, we've got to ensure that our free cash flow from our core businesses addresses our existing capitalization. And for the Biomaterials debt, we will take on that debt as our capacity to take it on is there. So we'll do it in a prudent manner. And I feel the projects are staged in such a way, so it won't come on in these big slugs, so it's manageable. And as we grow into the capital stack with higher EBITDA, we should be able to take that debt on. So it's going to be done in a very specific way such that we're managing those net leverage levels.

Sandy Burns from Stifel. You mentioned for the viscose and paper pulp businesses, you're currently losing $50 million a year. Could you give us a sense like over the cycle or over the last 5, 10 years, what the average EBITDA has been in those businesses?

I personally can't give you an indication on that. I know that currently, I don't -- we project over the next couple of years, we will continue some losses. Josh, do you have any more color you want to add to that?

Yes. I would just maybe add, Sandy. So if you look over the long cycle, it's been a little worse than this at times, but also better. But in a better time, still negative is a way to think about that. So viscose and paper pulp pricing are quite volatile, as I'm sure you know. So even when viscose gets to quite respectable pricing, it's still not a very attractive business for us.

So when you think about potential buyers, what would be the attraction to them? Is it a consolidation play with some of the other players? Potentially, they would have other opportunities to lower costs there? Like how are you positioning it to potential sellers?

Well, the noncore assets we're looking at selling or potentially selling is really focused on the paperboard and high-yield pulp business, which has nothing to do with viscose and the paper pulp business. That's really tied to our high-purity business and commodities in our high-purity business. And all those assets right now, we consider as core. They're not looking to sell those.

Okay. And maybe one -- last one for me. The GP plant closure, I mean, obviously, it's not your company, but just what do you think they're thinking in terms of taking that capacity out? Were they the highest cost producer? Or are there other factors there? I mean GP obviously has unlimited financial resources to sustain a business they want to?

Right. And it's not species of trees and it's not process because we use the same process and just they have the same access to the species that we do and so forth. And so a lot -- there's a possible rationale to it. And again, I'm going to turn it over to Josh to have him give some color. And then if there are some other things that I can handle, I'll do it at the end.

Yes. I mean, again, we're not GP, so I'm going to be cautious about what I said. I mean, I just point you really to their press release, which I think was 3 weeks ago yesterday, as I recall. And they cited not competitive with this asset. Essentially, can't service their customers competitively long term, I think some sort of language like that. Look, I would tell you a couple of things. One is you've heard us talk a lot about value over volume, ensuring you're capturing value for your products, could be part of it. I think also how you run the assets. So what I mean by that is these are very sophisticated, complicated pieces of equipment to run with a lot of rotating parts, et cetera. There's a fair amount of art to the process, okay? And so ensuring you have the right talent to run the assets the right way, to maximize yield is also very important. We pick up from the market that they've had some reliability issues. I mentioned the force majeure in summer 2021, which they never formally lifted to our knowledge. I think they did a good job of protecting certain customers during that. But I think that points to the capital intensity and maintaining the assets well. And lastly, I guess I'd just add also the mix of products. So we've talked a lot about specialties versus commodities and just understand that, that asset had a fair amount of commodities in the mix as well.

Yes. What I would add to it is many analysts out there have estimated that their capacity for CS is 225,000 metric tons, 250,000 metric tons, but they're running it at 150,000 metric tons. So the fixed cost absorption just isn't there. And as a consequence, the unit production cost is probably higher -- much higher than what we experienced even in our sulfite mills. But when you compare it to a comparable operation, which is Jesup, Jesup runs at 600,000 tons. So huge difference in economies. I think that's a big driver.

I am interest holder. Just have a couple of questions that are probably related. One is with respect to your strategic review process that you're currently conducting. Is there an internal timetable for getting that completed?

Sooner the better. And we're going through that process as we speak. We've essentially gone through the evaluation process. It's now, as I said earlier, we're retaining an investment banker to look at the potential sale of core assets. So we're already down that road.

And then second question, maybe a little bit longer term on your biomaterials part of the business. One of the bullet points in your presentation was M&A. And obviously, as you develop these businesses, there's going to be adjacent markets or adjacent products that you'd like to get into, that M&A could help you get into in a bigger way. Can you give us some idea of what areas that you may be looking for. Is this too early to talk about using M&A as a leg and a stool in growing your biomaterials business?