Mercer International : 2023 Q3 Conference Call

Mercer International Inc.

Transforming biomass into bioproducts for a more sustainable world

Q3 2023 Earnings Conference Call

November 3, 2023

Juan Carlos Bueno - President & CEO

Richard Short - CFO, Executive VP & Secretary

Forward-looking Statements

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements.

Certain information included in this presentation contains statements that are forward-looking, such as statements relating to results of operations and financial conditions, market expectations and business development activities, as well as capital spending and financing sources.

Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ materially from those expressed in any forward-looking statements made by or on behalf of Mercer.

For more information regarding these risks and uncertainties, review Mercer's filings with the United States Securities and Exchange Commission.

Unless required by law, we do not assume any obligation to update forward-looking statements based on unanticipated events or changed expectations.

2

Financial & Operating

Highlights

3

Financial Results Overview

Significant EBITDA Improvement vs. Q2

EBITDA (US$ millions)	Q2 2023	Q3 2023	Change (+/-)
Pulp Segment	($56)	$49	+$105
Solid Wood Segment	($10)	($7)	+$3
Corporate & Other	($3)	($4)	($1)
Total EBITDA(1)	($69)	$38	+$107
Less: Inventory Impairment	$51	-	($51)
Adjusted EBITDA	($17)	$38	+$55

Fibre Costs Down in Both Pulp & Solid Wood

Per Unit Fibre Costs

Due to calamity

wood in Germany; supply expected to continue into 2024

Q4 '21	Q1 '22	Q2 '22	Q3 '22	Q4 '22	Q1'23	Q2 '23	Q3 '23
				Pulp			Solid Wood (2)

1)	Operating EBITDA is a non-GAAP measure. For a Reconciliation of Net Income (Loss) to Operating EBITDA, refer to slide 17	4
2)	Excludes mass timber

Pulp Prices

Pricing Overview

Region	Q2 2023	Q3 2023
NBSK List Price (US$ / ADMT)
China (net)	$668	$680
Europe	$1,247	$1,160
NBHK List Price (US$ / ADMT)
Domestic	$1,277	$1,023
China (net)	$483	$530
NBSK / NBHK Price Gap (US$ / ADMT)
China	$185	$150

Pulp Segment

Pricing Trend

Realized Pulp Price (US$ / ADMT)

Q4 '21	Q1 '22	Q2 '22	Q3 '22	Q4 '22	Q1'23	Q2 '23	Q3 '23
				NBHK			NBSK

5

Key Performance Indicators

Production / Sales Volume (000s ADMT)

	537	487
476	480

Q2 2023

Q3 2023

Production Sales

Pulp Segment

Mill Downtime (Days)

60	26 days of curtailment
				at Celgar due to
				logistics issues
35	39
			26
25
			13
		Q2 2023			Q3 2023
		Planned Maintenance			Curtailment

6

Solid Wood Segment

Lumber Overview

Benchmark Lumber Price	Lumber Operations (mmfbm)

Random Lengths WSPF 2&btr 2x4 (US$ / mfbm)
$1,500								161		Production down due
										to maintenance work
									131	completed in Q3
$1,100										115
										94
$700
$300
Q4 '21	Q1 '22	Q2 '22	Q3 '22	Q4 '22	Q1'23	Q2 '23	Q3 '23	Q2 2023		Q3 2023

Production Sales

7

Electricity and Mass Timber

Electricity				Mass Timber Revenue (US$mm)
250	254
		19
		14
	Q2 2023	Q3 2023
		Sales Volume (GWh)

$106	$113

Q2 2023

Q3 2023

MMT has a growing order book we expect to fulfill

over coming months

Q2 2023	Price ($ / MWh)	Q3 2023

8

Financial Position

Summary

US$mm unless otherwise stated

Measure	Q2 2023	Q3 2023	Change (+/-)
Net Income (Loss)	($98)	($26)	+$72
Earnings (Loss) per Share	($1.48) / share	($0.39) / share	+$1.09 / share
Cash Generated (Used)	($87)	$130	+$217
Liquidity Position	$446	$648	+$202
Cash	$213	$344	+$131
Unwithdrawn Revolvers	$233	$305	+$72
Capital Expenditure	$39	$37	-$2
Dividend	7.5¢ / share	7.5¢ / share	- ¢ / share

Securing Liquidity

• Completed $200mm private senior notes offering due 2028;
• Increased availability of German revolving credit facilities by ~€70mm to €370mm

9

Markets, Capital Plan &

Strategic Initiatives

10