EARNINGS CALL | OCTOBER 25, 2019
DOMTAR CORPORATION
THIRD QUARTER 2019 EARNINGS CALL
October 25th, 2019
(All financial information is in U.S. dollars, and all earnings per share results are diluted, unless otherwise noted.)
Q3 2019 EARNINGS CALL | OCTOBER 25, 2019
SAFE HARBOR
Forward-Looking Statements
All statements in this presentation that are not based on historical facts are "forward-looking statements." While management has based any forward-looking statements on its current expectations, the information on which such expectations are based may change. These forward- looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties and other factors, many of which are outside of our control, that could cause actual results to materially differ from those projected in the forward-looking statements.
Risk Factors
For a summary of the risk factors, please refer to Domtar's Annual Report on Form 10-K for the year ended December 31, 2018 filed with the Securities and Exchange Commission and as updated by subsequently filed Form 10-Q's.
Non-GAAP Financial Measures
This presentation refers to non-GAAP financial information. For a reconciliation to GAAP financial measures, please refer to the investors section of the company's website at http://www.domtar.com (Refer to Earnings in the Investor Relations section of the website).
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Q3 2019 EARNINGS CALL | OCTOBER 25, 2019
OVERVIEW
Third Quarter 2019
- Solid operating cash flow quarter
- $159 million returned to shareholders through dividends and share buybacks
- Announced reduction of 204,000 tons of uncoated freesheet capacity with two paper machine closures
- Lower maintenance spending and overall favorable raw material costs
- Paper business impacted by market-related downtime costs
- Continued price pressure in global pulp markets
- Good performance in Personal Care, driven by lower raw material pricing and steady progress in our margin improvement plan
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Q3 2019 EARNINGS CALL | OCTOBER 25, 2019
FINANCIAL HIGHLIGHTS
Third Quarter 2019
- Net earnings of $0.32 per share; earnings before items* of $0.89 per share
- EBITDA before items* of $147 million
- Cash flow from operating activities of $108 million
- Capital expenditures of $56 million
- Free cash flow* of $52 million
- Dividend payout of $28 million
- Repurchased 3.9 million shares
* Non-GAAP financial measure. Refer to reconciliation available at www.domtar.com (refer to Earnings in the Investor Relations section of the website) | 4 |
EARNINGS STATEMENT
3Q'19 vs. 2Q'19 (in millions of dollars)
2Q'19 | 3Q'19 | ||
Sales | 1,317 | 1,283 | |
Cost of sales | 1,079 | 1,041 | |
Depreciation and amortization | 74 | 72 | |
SG&A | 105 | 94 | |
Impairment of long-lived assets | 15 | 33 | |
Closure and restructuring costs | 8 | 11 | |
Other operating loss, net | 2 | 3 |
Operating income | 34 | 29 | |
Interest expense, net | 13 | 12 | |
Non-service components of net periodic benefit cost | (2) | (2) | |
Income tax expense (benefit) | 5 | (1) | |
Net earnings | 18 | 20 | |
Q3 2019 EARNINGS CALL | OCTOBER 25, 2019
Mark-to-market of stock based compensation
Closure of two paper machines and Personal Care margin improvement plan
R&D tax credit and lower expected tax rate
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Domtar Corporation published this content on 25 October 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 October 2019 11:15:10 UTC