Rayonier Advanced Materials Inc (RYAM) 2023 Q2 法說會逐字稿

Good morning, and welcome to the Rayonier Second Quarter 2023 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

早上好，歡迎參加 Rayonier 2023 年第二季度收益電話會議。 （操作員指示）謹此提醒，本次會議正在錄製中。

I would now like to turn the call over to your host, Mr. Mickey Walsh, Treasurer and Vice President of Investor Relations. Thank you, Mr. Walsh, you may begin.

現在我想將電話轉給東道主、財務主管兼投資者關係副總裁米基·沃爾什先生。謝謝沃爾什先生，您可以開始了。

Thank you. Good morning. Welcome again to RYAM Second Quarter 2023 Earnings Conference Call and Webcast. Joining me on today's call are De Lyle Bloomquist, our President and Chief Executive Officer; and Marcus Moeltner, our Chief Financial Officer and Senior Vice President of Finance.

謝謝。早上好。再次歡迎參加 RYAM 2023 年第二季度收益電話會議和網絡廣播。參加今天電話會議的還有我們的總裁兼首席執行官 De Lyle Bloomquist；以及我們的首席財務官兼財務高級副總裁 Marcus Moeltner。

Our earnings release and presentation materials were issued last evening and are available on our website at ryam.com.

我們的收益發布和演示材料已於昨晚發布，可在我們的網站 ryam.com 上獲取。

I'd like to remind you that in today's presentation, we will include forward-looking statements made pursuant to the safe harbor provisions of federal securities laws. Our earnings release as well as our filings with the SEC list some of the factors which may cause actual results to differ materially from the forward-looking statements we may make. They are also referenced on Slide 2 of our presentation materials.

我想提醒您，在今天的演示中，我們將包含根據聯邦證券法安全港條款做出的前瞻性陳述。我們的收益發布以及向美國證券交易委員會提交的文件列出了一些可能導致實際結果與我們可能做出的前瞻性陳述存在重大差異的因素。我們的演示材料的幻燈片 2 中也引用了它們。

Today's presentation will also reference certain non-GAAP financial measures, as noted on Slide 3 of our presentation. We believe non-GAAP measures provide useful information for management and investors, but non-GAAP measures should not be considered an alternative to GAAP measures. A reconciliation of these measures to their most directly comparable GAAP financial measures are included on Slide 17 through 26 of our presentation.

今天的演示文稿還將引用某些非 GAAP 財務指標，如演示文稿幻燈片 3 中所述。我們認為非公認會計原則措施為管理層和投資者提供了有用的信息，但非公認會計原則措施不應被視為公認會計原則措施的替代方案。我們演示文稿的幻燈片 17 至 26 中包含了這些指標與其最直接可比的 GAAP 財務指標的調節表。

I'll now turn the call over to De Lyle.

我現在將電話轉給德萊爾。

Thank you, Mickey, and good morning. I will start this call with a review of the quarter before turning the call to Marcus to provide additional details on each of the business segments as well as an update on our capital structure and liquidity. After Marcus' update, I will provide an update on our key 2023 initiatives and guidance before opening up the call to questions.

謝謝你，米奇，早上好。我將首先回顧本季度，然後再致電馬庫斯，提供有關每個業務部門的更多詳細信息以及我們資本結構和流動性的最新信息。在 Marcus 更新最新情況後，我將在開始提問之前提供有關 2023 年關鍵舉措和指導的最新信息。

Let's now turn to Slide 4 to review our performance in the second quarter of 2023. EBITDA declined $7 million compared to the prior year, with a total of $27 million generated in the quarter. The results were below our expectations, mainly due to destocking in certain cellulose specialties and paperboard market sectors and ongoing declines in commodity prices, in particular for viscose and paper pulp. As we experienced softness in our business, we increased our focus on generating positive free cash flow. Adjusted free cash flow generation was $16 million in the second quarter, driven primarily by an impressive $55 million of working capital benefits.

現在讓我們轉向幻燈片 4 來回顧我們 2023 年第二季度的業績。與上一年相比，EBITDA 下降了 700 萬美元，本季度總計產生了 2700 萬美元。結果低於我們的預期，主要是由於某些纖維素特種產品和紙板市場部門的去庫存以及大宗商品價格的持續下跌，特別是粘膠和紙漿。隨著我們業務的疲軟，我們更加註重產生正的自由現金流。第二季度調整後的自由現金流量為 1,600 萬美元，這主要是由令人印象深刻的 5,500 萬美元的營運資本收益推動的。

As I mentioned, the challenges we experienced in our high Purity Cellulose segment were primarily due to the decline in commodity prices and lower cellulose Specialties volumes. However, it's worth highlighting that despite these challenges, prices for our cellular Specialties products remained strong, with an increase of 13% compared to the prior year period.

正如我所提到的，我們在高純度纖維素領域遇到的挑戰主要是由於大宗商品價格下跌和纖維素特種產品銷量下降。然而，值得強調的是，儘管面臨這些挑戰，我們的蜂窩特種產品的價格仍然強勁，與去年同期相比增長了 13%。

Paperboard segment declined $4 million with the higher prices helping offset the impact of the lower sales volumes. High-yield pulp EBITDA increased $1 million, driven by higher realized prices and improved sales volumes over prior year. Corporate expenses improved by $4 million attributed to lower variable stock-based compensation and severance costs.

紙板業務下降了 400 萬美元，價格上漲有助於抵消銷量下降的影響。由於實現價格上漲和銷量比上年增加，高收益紙漿 EBITDA 增加了 100 萬美元。由於可變股票薪酬和遣散費降低，公司開支減少了 400 萬美元。

Considering the lower-than-expected EBITDA results, a weak outlook for commodity prices and destocking in certain cellulose Specialties and paperboard end markets, we are updating our adjusted EBITDA guidance to $185 million to $200 million. It's important to emphasize that most of our cellulose Specialties markets remain stable and ratable including our acetates, nonconstruction ethers, nitrocellulose fungus and other specialties. Our ability to participate in all the cellulose Specialties markets, whether it be acetate, ethers and other CS, has provided a strong sales foundation that we can rely on.

考慮到低於預期的 EBITDA 結果、大宗商品價格前景疲弱以及某些特種纖維素和紙板終端市場的去庫存，我們將調整後的 EBITDA 指引更新為 1.85 億至 2 億美元。需要強調的是，我們的大多數纖維素特種產品市場保持穩定且可評級，包括我們的醋酸酯、非建築醚、硝化纖維素真菌和其他特種產品。我們參與所有纖維素特種市場的能力，無論是醋酸酯、醚還是其他纖維素，為我們提供了可以信賴的強大銷售基礎。

Despite the lower EBITDA guidance, we are committed to enhancing efficiency and financial resilience. As such, we are raising our adjusted free cash flow to $55 million to $70 million due to better-than-expected working capital monetization, reduced interest expense and lower CapEx expenditures.

儘管 EBITDA 指引較低，我們仍致力於提高效率和財務彈性。因此，由於營運資金貨幣化好於預期、利息支出減少和資本支出減少，我們將調整後的自由現金流提高至 5500 萬至 7000 萬美元。

Now I'd like to turn this meeting over to Marcus to take us through the financial details for the quarter.

現在我想將這次會議交給馬庫斯，讓他向我們介紹本季度的財務細節。

Thank you, De Lyle. Starting with our HPC segment on Slide 5. Sales for the quarter decreased by $2 million or 1% to $300 million as a result of a 4% decrease in sales prices. The decrease was primarily driven by weakening commodity markets, while our CS products experienced a 13% increase in price as a result of contract negotiations. Sales volumes increased by 4% to 214,000 metric tons due to a higher mix of commodity sales. Commodity sales volumes increased 72% from prior year, while CS volumes declined 27% as a result of destocking for certain products, including construction ethers, MCC and filtration products. Sales for the quarter included $22 million of biomaterial sales, primarily from green energy and lignin. EBITDA for the segment declined $8 million to $28 million. The impact of higher sales volumes was more than offset by the weaker sales mix and higher labor and maintenance expenses.

謝謝你，德萊爾。從幻燈片 5 上的 HPC 部分開始。由於銷售價格下降 4%，本季度銷售額下降 200 萬美元或 1%，降至 3 億美元。下降的主要原因是大宗商品市場疲軟，而由於合同談判，我們的 CS 產品價格上漲了 13%。由於商品銷售組合的增加，銷量增加了 4%，達到 214,000 噸。大宗商品銷量較上年增長 72%，而 CS 銷量由於某些產品（包括建築醚、MCC 和過濾產品）去庫存而下降 27%。該季度的銷售額包括 2200 萬美元的生物材料銷售額，主要來自綠色能源和木質素。該部門的 EBITDA 下降了 800 萬美元，至 2800 萬美元。銷量增加的影響被銷售組合疲軟以及勞動力和維護費用增加所抵消。

Turning to Slide 6. Paperboard segment sales decreased by $15 million, driven by a 27% decrease in sales volumes as a result of lower productivity and significant customer destocking. Sales prices were up 4%, supported by continued demand for sustainable packaging. EBITDA for the segment declined $4 million to $10 million as higher sales prices were more than offset by lower sales volumes.

轉向幻燈片 6。由於生產力下降和客戶大幅去庫存，銷量下降 27%，導致紙板業務銷售額下降 1500 萬美元。由於對可持續包裝的持續需求，銷售價格上漲了 4%。該部門的 EBITDA 下降了 400 萬美元至 1000 萬美元，因為較高的銷售價格被較低的銷量所抵消。

Turning to the high-yield pulp segment on Slide 7. Sales improved by $4 million from prior year, reflecting a 5% increase in external sales prices and 9% higher sales volumes due to stronger demand, increased productivity and improved logistics. EBITDA for the segment was $1 million as compared to breakeven in the prior year.

轉向幻燈片 7 上的高產紙漿部分。銷售額比上年增加 400 萬美元，反映出外部銷售價格上漲 5%，由於需求強勁、生產率提高和物流改善，銷量增加 9%。與上一年的盈虧平衡相比，該部門的 EBITDA 為 100 萬美元。

Turning to Slide 8. On a consolidated basis, we had an operating loss for the quarter of $7 million. Sales price improvements across CS, paperboard and high-yield pulp were more than offset by $16 million of unfavorable mix in HPC and lower paperboard volumes. Costs increased $16 million, driven primarily by inflation on labor and maintenance costs. SG&A and other costs improved $7 million due to lower variable stock compensation and severance costs.

轉向幻燈片 8。在合併基礎上，我們本季度的運營虧損為 700 萬美元。 CS、紙板和高得率紙漿的銷售價格上漲被 HPC 和紙板產量下降的不利組合 1600 萬美元所抵消。成本增加了 1600 萬美元，主要是由於勞動力和維護成本的上漲。由於可變股票薪酬和遣散費降低，SG&A 和其他成本減少了 700 萬美元。

Turning to Slide 9. Net debt declined to $682 million, a reduction of $82 million from the same period in 2022, reflecting our unwavering focus on overall debt reduction. As part of the recent refinancing of our 2024 senior unsecured notes, we demonstrated this commitment by reducing our debt balance by an additional $68 million. As we continue to repay debt, we are still preserving strong liquidity. Liquidity ended the quarter at $272 million, including $157 million of cash. On a pro forma basis post refi, the company's liquidity is $187 million, net of $85 million allocated to support the refi activities.

轉向幻燈片 9。淨債務下降至 6.82 億美元，比 2022 年同期減少 8200 萬美元，反映出我們對整體債務削減的堅定不移的關注。作為近期 2024 年高級無抵押票據再融資的一部分，我們通過將債務餘額額外減少 6800 萬美元來證明這一承諾。在我們繼續償還債務的同時，我們仍然保持著強勁的流動性。本季度末流動性為 2.72 億美元，其中包括 1.57 億美元現金。按預計再融資後計算，該公司的流動資金為 1.87 億美元，扣除分配用於支持再融資活動的 8,500 萬美元。

We remain dedicated to ensuring our assets operate efficiently and effectively, allowing us to deliver consistent and sustainable results while continuing to deliver positive recurring free cash flow. As such, we are reducing our outlook for maintenance CapEx to approximately $95 million from our previous guidance of $100 million to $105 million. In working with each of our plants, we believe this is a level that will deliver our desired production and sales targets.

我們仍然致力於確保我們的資產高效、有效地運營，使我們能夠提供一致和可持續的結果，同時繼續提供積極的經常性自由現金流。因此，我們將維護資本支出的預期從之前的 1 億美元至 1.05 億美元下調至約 9500 萬美元。在與我們每個工廠的合作中，我們相信這個水平將實現我們期望的生產和銷售目標。

Additionally, we have reduced our strategic capital spend that's $30 million net of financing. These investments are discretionary and are targeted towards high-return projects that deliver immediate and incremental benefits to our business. Net leverage ended the second quarter at 3.4x, slightly above our expectations, reflecting the lower EBITDA, partially offset by the lower net debt.

此外，我們還減少了戰略資本支出，扣除融資後淨額為 3000 萬美元。這些投資是酌情決定的，旨在為我們的業務帶來直接和增量效益的高回報項目。第二季度淨槓桿率為 3.4 倍，略高於我們的預期，反映出 EBITDA 較低，但被淨債務較低所部分抵消。

Turning to Slide 10. I am pleased to have the refinancing completed we secured a $250 million term loan with a 4-year maturity. The interest rate is based on SOFR plus 8% with a 3% SOFR floor. Despite the higher interest rate, we managed to partially offset the higher cost by reducing the overall sizing by $68 million. The loan was issued with a 3% discount at origination and is callable after 1 year with a 3% premium and after 2 years with a 1% premium. Importantly, the loan facility provides operational flexibility to support our strategic objectives. The company will continue to be balanced from a capital allocation perspective, focused on debt repayment and working towards our 2.5x net leverage target while also pursuing investments in our biomaterials business.

轉向幻燈片 10。我很高興再融資完成，我們獲得了 2.5 億美元、期限為 4 年的定期貸款。利率基於 SOFR 加 8%，SOFR 下限為 3%。儘管利率較高，我們仍設法通過將總體規模減少 6800 萬美元來部分抵消較高的成本。該貸款在發放時按 3% 的折扣發放，1 年後可按 3% 的溢價贖回，2 年後可按 1% 的溢價贖回。重要的是，貸款安排提供了運營靈活性，以支持我們的戰略目標。公司將繼續從資本配置的角度保持平衡，重點關注債務償還，努力實現 2.5 倍的淨槓桿目標，同時也尋求對生物材料業務的投資。

With that, I'd like to turn the call back over to De Lyle.

說到這裡，我想把電話轉回給德萊爾。

Thank you, Marcus. Now let's shift our focus to Slide 11 where I'll update you on our 2023 initiatives. We are forecasting approximately $45 million of negative impact due to declining commodity prices for viscose, Fluff, Paper pulp and high-yield pulp. Additionally, the lower-than-expected sales orders due to destocking in construction ethers, MCC and filtration and paper port market sectors have impacted results by approximately $15 million.

謝謝你，馬庫斯。現在，讓我們將焦點轉移到幻燈片 11，我將在其中向您介紹我們 2023 年舉措的最新情況。我們預計，由於粘膠、絨毛、紙漿和高得率紙漿的商品價格下降，將產生約 4500 萬美元的負面影響。此外，由於建築醚、MCC、過濾和造紙港口市場領域的去庫存導致銷售訂單低於預期，對業績產生了約 1500 萬美元的影響。

While we see this inflation in some key raw material inputs, we continue to experience high prices and/or inflationary pressures for some key raw materials, including wood, caustic soda, labor and MRO supplies. In response, our management team is proactively reducing our expenses in the second half by nearly $40 million to largely mitigate these impacts. These mitigation actions include reducing contractor services; reducing overtime in a hiring freeze; lower wood, caustic and freight purchase prices; and improved productivity; and higher power sales prices. Consequently, we can provide an update to the 2023 EBITDA guidance of $185 million to $200 million. That will exceed both prior year results in our current fixed charges.

雖然我們看到一些關鍵原材料投入出現通貨膨脹，但我們仍然面臨一些關鍵原材料的高價格和/或通脹壓力，包括木材、燒鹼、勞動力和 MRO 供應。為此，我們的管理團隊積極減少下半年的開支近 4000 萬美元，以很大程度上減輕這些影響。這些緩解措施包括減少承包商服務；減少招聘凍結中的加班時間；降低木材、腐蝕劑和運費的採購價格；並提高生產力；以及更高的售電價格。因此，我們可以將 2023 年 EBITDA 指導更新為 1.85 億美元至 2 億美元。這將超過我們當前固定費用的前一年結果。

Despite the lower EBITDA outlook, we are raising our guidance for our 2023 free cash flow to $55 million to $70 million. To date, we have generated $52 million of free cash flow primarily from the monetization of working capital. We expect that this will be partially reversed in the back half of the year as we rebuild the depleted inventories at (inaudible) following their annual shutdowns.

儘管 EBITDA 前景較低，但我們仍將 2023 年自由現金流指引上調至 5500 萬至 7000 萬美元。迄今為止，我們已經產生了 5200 萬美元的自由現金流，主要來自營運資金的貨幣化。我們預計，隨著我們在年度停產後（聽不清）重建耗盡的庫存，這種情況將在今年下半年部分扭轉。

Also, we reduced our forecast for total CapEx spending for the year to $125 million. This includes $30 million of strategic CapEx, which remains discretionary. Flexibility is key right now, and we'll dial back the strategic capital accordingly if needed.

此外，我們還將今年資本支出總額的預測下調至 1.25 億美元。其中包括 3000 萬美元的戰略資本支出，該支出仍可酌情決定。目前靈活性是關鍵，如果需要，我們將相應地縮減戰略資本。

We are maintaining our focus on capturing high value for our specialty products, particularly in our Cellular Specialty segment. Notably, our cellulose specialty prices have increased by 13% compared to the prior year period, contributed to the successful contract negotiations for 2023. Moving forward, we will continue to prioritize the value of our cellulose specialties, ensuring a strategic approach to optimize profitability across the cycle.

我們始終專注於為我們的特種產品獲取高價值，特別是在我們的蜂窩特種產品領域。值得注意的是，我們的纖維素特種產品價格較上年同期上漲了13%，為2023 年合同談判的成功做出了貢獻。展望未來，我們將繼續優先考慮纖維素特種產品的價值，確保採取戰略方法來優化整個業務的盈利能力循環。

Finally, in response to the severe pricing volatility affecting our commodity products. We have initiated a review of strategic options for our viscose and paper pulp businesses. Our cellulose specialties and pulp businesses are core businesses. And paperboards, a solid EBITDA contributor provides very promising long-term growth potential. In aggregate, these businesses will deliver nearly $300 million of EBITDA in 2023, exclusive of corporate overhead. This is a strong performance given today's challenging environment.

最後，為了應對影響我們大宗商品的嚴重價格波動。我們已開始對粘膠和紙漿業務的戰略選擇進行審查。我們的特種纖維素和紙漿業務是我們的核心業務。紙板作為 EBITDA 的重要貢獻者，提供了非常有前景的長期增長潛力。總的來說，這些企業將在 2023 年實現近 3 億美元的 EBITDA（不包括公司管理費用）。考慮到當今充滿挑戰的環境，這是一個強勁的表現。

Conversely, the viscose and paper pulp businesses will subtract an estimated $50 million of EBITDA due to the current low sales prices with most of these losses concentrated in the North American sulphite mills. We historically used the production and sale of commodity products to maintain high utilization rates at our 6 high-purity production lines to maximize fixed cost absorption. However, the production and sales of commodity products have masked the strength and profitability of our Cellulose Specialty segment. and, in times like these, only provide marginal financial benefit.

相反，由於目前銷售價格較低，粘膠和紙漿業務將減少約 5000 萬美元的 EBITDA，其中大部分損失集中在北美亞硫酸鹽工廠。我們歷來利用商品產品的生產和銷售來維持 6 條高純度生產線的高利用率，從而最大限度地吸收固定成本。然而，大宗商品的生產和銷售掩蓋了我們纖維素特種業務部門的實力和盈利能力。而且，在這樣的時期，只能提供邊際經濟利益。

Consequently, it's time to reconsider our strategy. So over the course of the next couple of months, we will review our options to mitigate most of these commodity losses in 2024. The potential EBITDA of our core business is significantly greater than the market gives us credit for. And so the strategic review, we'll look to optimize our asset base to reduce cost and minimize exposure to these commodity businesses to ensure the long-term success and sustainable growth of our overall enterprise.

因此，是時候重新考慮我們的策略了。因此，在接下來的幾個月中，我們將審查我們的選擇，以在 2024 年減輕大部分商品損失。我們核心業務的潛在 EBITDA 遠高於市場對我們的預期。因此，在戰略審查中，我們將尋求優化我們的資產基礎，以降低成本並儘量減少對這些商品業務的敞口，以確保我們整個企業的長期成功和可持續增長。

Now let's shift our attention to Slide 12, where we'll review our progress against our 2023 guidance for EBITDA and free cash flow. The waterfall chart reinforces our commitment to achieving free cash flow within the $55 million to $70 million range, with EBITDA expected to be $185 million to $200 million for the year. We're also projecting lower cash outflows to more than offset the lower EBITDA, including interest expense, CapEx and other liabilities while increasing working capital monetization targets to achieve our goal.

現在，讓我們將注意力轉移到幻燈片 12，我們將根據 2023 年 EBITDA 和自由現金流指引回顧我們的進展。瀑布圖強化了我們實現自由現金流在 5500 萬至 7000 萬美元範圍內的承諾，預計今年的 EBITDA 為 1.85 億至 2 億美元。我們還預計較低的現金流出將足以抵消較低的 EBITDA，包括利息支出、資本支出和其他負債，同時增加營運資本貨幣化目標以實現我們的目標。

With the refinancing complete, we have a clear line of sight to $65 million of cash interest for the year. This fixed charge is likely to increase next year to about $70 million as we realize the full impact of the higher interest rates. Maintenance CapEx remains at $90 million on a normalized basis, but we are now removing most of the catch-up capital in 2023 as we can sustain our current operating levels without the need for the additional capital spend. With $86 million of working capital benefits captured through the first 6 months, we expect to retain the majority of those benefits with a $55 million target for the year.

再融資完成後，我們對今年的現金利息有 6500 萬美元的明確預期。隨著我們意識到利率上升的全面影響，明年這項固定費用可能會增加到約 7000 萬美元。正常情況下，維護資本支出仍為 9000 萬美元，但我們現在將在 2023 年消除大部分追趕資本，因為我們可以維持當前的運營水平，而無需額外的資本支出。前 6 個月獲得了 8600 萬美元的營運資本收益，我們預計將保留其中大部分收益，今年的目標為 5500 萬美元。

Lastly, we are engaged in ongoing discussions with our government partners in France regarding the deferred energy liabilities for which we expect nonpositive outcomes. As previously discussed, our free cash flow will be strategically allocated to either repay debt or invest in attractive strategic projects. On Slide 13, we delve deeper into the expected performance of each of our businesses in the second half of 2023.

最後，我們正在與法國政府合作夥伴就遞延能源負債進行持續討論，我們預計會產生負面結果。如前所述，我們的自由現金流將被戰略性地分配用於償還債務或投資於有吸引力的戰略項目。在幻燈片 13 中，我們更深入地探討了 2023 年下半年每項業務的預期業績。

So special prices are expected to finish the year at a high single-digit percentage increase compared to 2022. However, we anticipate a decrease in sales volumes for Cellulose specialties compared to the prior year, driven by weakened demand and significant customer discipline. Market demand for commodity products is expected to remain resilient, albeit at lower prices than those observed in the first half of the year. Notably, prices have declined compared to 2022 levels aligning with industry forecast. Those prices are expected to reach a bottom in Q3, followed by a slight uptick in Q4.

因此，與 2022 年相比，特殊價格預計今年將以高個位數百分比增長。然而，由於需求疲軟和嚴格的客戶紀律，我們預計纖維素特種產品的銷量將比上一年有所下降。儘管價格低於上半年，但大宗商品的市場需求預計將保持彈性。值得注意的是，與 2022 年的水平相比，價格有所下降，符合行業預測。這些價格預計將在第三季度觸底，然後在第四季度略有上升。

While certain input costs are moderating, it is important to note that most of these costs continue to remain at elevated levels. As part of our ongoing growth strategy, we are attributing it to investments in our biomaterials business. Exciting progress is being made with the bioethanol in Tartas, and we're pleased to report that remains on track for production commencement in early 2024.

雖然某些投入成本正在放緩，但值得注意的是，其中大部分成本仍保持在較高水平。作為我們持續增長戰略的一部分，我們將其歸因於對生物材料業務的投資。 Tartas 的生物乙醇正在取得令人興奮的進展，我們很高興地報告，該項目仍有望於 2024 年初開始生產。

Second generation ethanol produced at this facility is projected to provide an EBITDA benefit of $8 million to $10 million annually, further bolstering our position as we forge ahead with intervision of sustainable and profitable growth. We're excited about our Biobusiness plan. Over the next 3 to 5 years, the phase of this plan is expected to yield an additional [$100 million] in revenue and about $42 million of EBITDA annually. We expect most of these projects come with low-cost financing to make them extremely attractive investments. We are also working on the second rephases of this business plan that would create further sustainable growth.

該工廠生產的第二代乙醇預計每年可帶來 800 萬至 1000 萬美元的 EBITDA 效益，進一步鞏固我們在可持續和盈利增長方面的地位。我們對我們的生物商業計劃感到興奮。在未來 3 到 5 年內，該計劃的階段預計每年將產生額外 [1 億美元] 的收入和約 4,200 萬美元的 EBITDA。我們預計這些項目中的大多數都具有低成本融資，使其成為極具吸引力的投資。我們還在致力於該業務計劃的第二階段，這將創造進一步的可持續增長。

In paperboard prices are expected to moderate slightly over the balance of the year but remain elevated as compared to 2022 levels. Sales volumes are expected to improve in the second half of the year as destocking eases. As evidenced, we did see orders pick up in July. Raw material prices are expected to reduce further as pulp markets decline. In high-yield pulp prices are expected to be impacted by both the global economic slowdown and new capacity coming into the market.

紙板價格預計在今年餘下時間將略有放緩，但與 2022 年的水平相比仍處於較高水平。隨著去庫存的緩解，預計下半年銷量將有所改善。事實證明，我們確實看到 7 月份訂單有所增加。隨著紙漿市場下滑，原材料價格預計將進一步下降。高產紙漿價格預計將受到全球經濟放緩和新產能進入市場的影響。

As a result of the line in Q3 as we take necessary downtime in July and August and in response to prevailing market conditions. We are continuing to operate 1 of our 2 high-yield pulp in our paperboard operations. Corporate expenses are expected to be higher than in 2022, primarily drive expenses associated with the ERP implementation in absence of foreign exchange benefits, rapidly impacted in 2022, statistically in the third quarter of last year that are not expected to repeat this year.

由於第三季度的生產線，我們在七月和八月進行了必要的停機，以應對當前的市場狀況。我們將繼續在紙板業務中運營 2 個高產紙漿中的 1 個。企業費用預計將高於 2022 年，主要是在沒有外匯收益的情況下推動與 ERP 實施相關的費用，這將在 2022 年迅速受到影響，據統計，去年第三季度的情況預計今年不會重演。

As already noted, we have a CapEx guidance to $125 million net of financing, of which $95 million will be earmarked as maintenance CapEx and the remainder strategic CapEx. We have raised the investment hurdle for new strategic capital projects to help mitigate the (inaudible) rates. Projects now need to generate at least a 30% return on equity and have a 2-year (inaudible) . Turning to Slide 14. We picked progression of our EBITDA margin growth in (inaudible) decline. Throughout the year, we anticipate our margins to remain within the 10% to 11% range, which as noted, is a weighted average of the strong margins we enjoy in the cellulose specialties and paperboard segments and the negative margins expected in the viscose and other Commodity businesses. Net leverage is expected to increase to 3.8x for the full year at the midpoint of the lower EBITDA guidance.

如前所述，我們的資本支出指導值為 1.25 億美元（扣除融資後），其中 9500 萬美元將指定為維護資本支出，其餘為戰略資本支出。我們提高了新戰略資本項目的投資門檻，以幫助降低（聽不清）利率。項目現在需要產生至少 30% 的股本回報率，並有 2 年期限（聽不清）。轉向幻燈片 14。我們選擇 EBITDA 利潤率增長（聽不清）呈下降趨勢。全年，我們預計我們的利潤率將保持在10% 至11% 的範圍內，如前所述，這是我們在纖維素特種和紙板領域享有的強勁利潤率以及在粘膠和其他領域預計的負利潤率的加權平均值。商品企業。預計全年淨槓桿率將增至 3.8 倍，處於較低 EBITDA 指引的中點。

However, we remain good to drive toward our target net leverage ratio up to 2.5x over the next 3 to 5 years. I'm confident that the second half of 2023 results will be stronger than the first half. Paperboard sales volumes are showing signs of normalizing, and I believe that our businesses that are more GDP sensitive will pick up in the second half. 3 of the 4 scheduled plant outages are now behind us, including the absence of our 2 largest facilities, thus we will see improved productivity and lower spending.

然而，我們仍然願意在未來 3 至 5 年內將淨槓桿率目標提高到 2.5 倍。我有信心2023年下半年的業績將強於上半年。紙板銷量呈現出正常化的跡象，我相信我們對GDP更加敏感的業務將在下半年有所回升。 4 座工廠停運中的 3 座現在已經過去，其中包括我們最大的 2 座工廠的停工，因此我們將看到生產力的提高和支出的降低。

And we will execute on the nearly $40 million in expense reductions in the $10 million to $15 million at CapEx contains. Now I'd like to direct your attention to Slide 15 of the presentation materials, where we have an exciting announcement to share with you. We (inaudible) attend our Investor Day on Tuesday, October 10, 2023 at the New York Stock Exchange. To secure your attendance, (inaudible) through the e-mail address provided. As the date draws near, we will provide you with the more comprehensive details about the event. We're looking forward to this occasion as it will pass the opportunity to connect, discuss our strategic vision and explore future growth plan details about our biomaterials business plan. We continued our continued support and engagement means a lot to us, and we are able to share our insights and progress at our upcoming Investor Day. With that, operator, please open the call to questions.

我們將在 1000 萬至 1500 萬美元的資本支出中削減近 4000 萬美元的費用。現在我想請您注意演示材料的幻燈片 15，其中我們有一個令人興奮的公告要與您分享。我們（聽不清）參加 2023 年 10 月 10 日星期二在紐約證券交易所舉行的投資者日活動。為了確保您的出席，（聽不清）通過提供的電子郵件地址。隨著日期的臨近，我們將為您提供有關該活動的更全面的詳細信息。我們期待這次活動，因為它將提供一個相互聯繫、討論我們的戰略願景並探索有關我們的生物材料業務計劃的未來增長計劃細節的機會。我們繼續提供持續的支持和參與對我們來說意義重大，我們能夠在即將到來的投資者日分享我們的見解和進展。那麼，接線員，請打開提問電話。

(Operator Instructions) Our first question is George Staphos with Bank of America.

（操作員說明）我們的第一個問題是美國銀行的 George Staphos。

So (inaudible) expense on a cash basis, you said is [$70 million] , given the refinancing, but I hear that right? And would there be any additional noncash that we should as we from our P&L estimates for next year?

因此，考慮到再融資，您所說的（聽不清）現金支出為 [7000 萬美元]，但我聽到的是嗎？根據明年的損益預測，我們是否應該有任何額外的非現金？

So George, yes, the $65 million is reflective of issuers estimate and reflects the timing of when we did (inaudible) And the cash we were carrying. On a more normalized basis, you should model just over $70 million.

所以喬治，是的，6500 萬美元反映了發行人的估計，反映了我們這樣做的時間（聽不清）以及我們攜帶的現金。在更標準化的基礎上，您的模型應該剛剛超過 7000 萬美元。

Okay. Cash -- and cash is booked? Or is there a little bit of uptick additionally for book?

好的。現金——現金已預訂？或者圖書的價格是否還有一點上漲？

Yes, maybe 4 or 5.

是的，也許 4 或 5 個。

Okay. Okay. And secondly, so just to put a finer point on that, $70 million plus on cash, plus $4, $5 million noncash.

好的。好的。其次，更具體地說，7000 萬美元以上的現金，加上 4、500 萬美元的非現金。

Correct.

正確的。

Okay. On the cost reduction activities, the back half of the year, one of the elements was productivity, specifically there and then across the other categories, how volume sensitive are those? So or said differently, how pressure tested, how confident are you that you're going to get all of that cost reduction activity to your credit to the bottom line in the second half of the year?

好的。在下半年的成本削減活動中，要素之一是生產力，特別是在其他類別中，這些對數量的敏感度如何？那麼，或者換句話說，壓力測試有多大，您對將所有這些成本削減活動在下半年實現盈利的信心有多大？

George, this is De Lyle. I'm pretty -- I'm very confident that we're going to get the $40 million. The first comment I would make is the $40 million is conservative. We think there's some upside to it. In other words, I tipped a little bit in my back pocket, just to make sure that we get to the $40 million. I would say that of that $40 million, roughly 60% of it is, I would call recurring. In other words, the savings will survive '23, and we'll be able to look to '24 to continue to see some of these savings. I mean, as you note, some of it is tied to productivity.

喬治，這是德萊爾。我很漂亮——我非常有信心我們能夠拿到 4000 萬美元。我首先想說的是，4000 萬美元是保守的。我們認為它有一些好處。換句話說，我在後兜里塞了一點小費，只是為了確保我們能拿到 4000 萬美元。我想說，在這 4000 萬美元中，大約 60% 是我稱之為經常性的。換句話說，節省的費用將持續到 23 年，我們將能夠期待 24 年繼續看到其中的一些節省。我的意思是，正如您所指出的，其中一些與生產力有關。

And I would say the productivity is not so much tied to how much production volume that we generate more around improved material usage variances. For example, better wood yield, things like better plastic usage per ton and so forth. And this is really being driven by a lot of activity at our plants to improve the efficiency and effectiveness of our operations.

我想說，生產率與我們圍繞改善材料使用差異而產生的產量並沒有太大關係。例如，更好的木材產量，每噸更好的塑料使用量等等。這實際上是由我們工廠為提高運營效率和效益而開展的大量活動推動的。

And we're beginning to see and enjoy some of those benefits from earlier activity this year. The other 40% in terms of the $40 million, they're not just onetime events. I mean, they're deferrals. And I would suggest that the deferrals are -- we can defer for the medium term without any significant risk. Although there's...

我們開始看到並享受今年早些時候活動帶來的一些好處。就 4000 萬美元而言，另外 40% 並不是一次性事件。我的意思是，他們是延期。我建議推遲——我們可以在中期推遲，而不會有任何重大風險。雖然有...

What do you mean by deferral.

你說的延期是什麼意思。

I was just going to say with respect to the 40% of the $40 million is kind of deferrals, taking spending, for example, in contractor services or engineering services, things around head count, for example, producing and strictly managing it over time and putting a freeze on hiring.

我只是想說，4000 萬美元中的 40% 是一種延期支出，例如承包商服務或工程服務方面的支出、人員數量方面的支出，例如隨著時間的推移生產和嚴格管理它，凍結招聘。

All those things, I think, can be deferred for the medium term, but there is an opportunity cost for doing that. An example will be engineering services, all those savings I had mentioned earlier in terms of material usage improvements we've seen is being driven by the spending we've had on engineering services to improve the plant operations. So I prefer not to defer those for more than just the medium term, but certainly, we can, but there's a cost to it.

我認為，所有這些事情都可以推遲到中期，但這樣做是有機會成本的。一個例子是工程服務，我之前提到的在材料使用改進方面的所有節省都是由我們為改善工廠運營而在工程服務上的支出所推動的。因此，我寧願不將這些推遲到中期，但當然，我們可以，但這是有代價的。

Sure. And I guess at some point also, you're going to watch that because you can wind up with operational considerations and whether you want to have to take more unplanned downtime, but we'll see how that plays out.

當然。我想在某些時候，您也會看到這一點，因為您最終可能會考慮到運營方面的考慮，以及您是否想要採取更多計劃外停機時間，但我們會看看結果如何。

George, just to address that. We were very mindful not to impact our maintenance spending. We want to maintain the level of productivity and reliability that we have spent a lot of money on the last couple of years to continue forward with that. So the spending that -- the spending and savings that we're noting here, very little of it. I'm looking to the list right now, almost none of it as it relates to our focus on maintaining reliability.

喬治，只是為了解決這個問題。我們非常注意不要影響我們的維護支出。我們希望保持生產力和可靠性的水平，我們在過去幾年中花費了大量資金來繼續實現這一目標。因此，我們在這裡註意到的支出和儲蓄很少。我現在正在查看該列表，幾乎沒有一個，因為它與我們對維護可靠性的關注有關。

Okay. My last one, I'll turn it over. Recognizing it's not October yet or November, but how should we think about the CS pricing outlook for '24 in light of the volume so far in '23? And what's been happening on commodity pricing? So you've had the 13% increase year-on-year. It's going to come off a bit in the back half. It will be high single digits. What's the outlook for '24, given the demand outlook and what you're seeing in commodity? And can you talk about what kind of paperboard volume increase you're seeing year-on-year in the third quarter?

好的。最後一張，我會把它翻過來的。認識到現在還不是 10 月或 11 月，但根據 23 年迄今為止的交易量，我們應該如何看待 24 年的 CS 定價前景？大宗商品定價發生了什麼變化？所以同比增長了 13%。後半部分會稍微脫落。這將是高個位數。鑑於需求前景以及您對大宗商品的看法，24 世紀的前景如何？您能談談第三季度紙板銷量同比增長情況嗎？

Okay. So to answer your first question with respect to pricing for CS in 2024 relative to now and the -- any pressures that you would expect from the fact that commodity prices have declined as significantly as they have, to answer that question is that when it comes to our CS business, we put a priority on the value of that business versus the volume. We will continue to have that focus going forward.

好的。因此，要回答你關於 2024 年相對於現在的 CS 定價的第一個問題，以及大宗商品價格大幅下跌這一事實所帶來的任何壓力，要回答這個問題是，當它到來時對於我們的CS業務，我們優先考慮該業務的價值而不是數量。未來我們將繼續關注這一重點。

The whole idea that commodity business is putting a drag on our ability to raise prices next year, I would say that's not the case. I would suggest that much of our business that we have out there, our products that our customers see the value in and are willing to compensate us for the value that we do provide.

大宗商品業務正在拖累我們明年提價的能力，我想說事實並非如此。我建議我們的大部分業務、我們的產品讓我們的客戶看到了價值，並願意為我們提供的價值給予補償。

With respect to the destocking we've seen this year, I would say that the last thing I want to be doing is chasing a market where the demand is limited by lowering prices. It just makes no sense to do that. Why would anybody lower pricing to get nothing for it? So we continue to focus on making sure at the end of the day that we maintain the pricing and the value that we have in our products. Although if there is competitive activity out there that threatens our share, we will defend it. And that needs to be clear that at the end of the day, we are very jealous about the share that we have, and we will defend it.

就今年我們看到的去庫存而言，我想說的是，我最不想做的事情就是追逐一個因價格下降而限制需求的市場。這樣做毫無意義。為什麼有人會降低價格卻一無所獲？因此，我們繼續專注於確保最終維持我們產品的定價和價值。儘管如果存在威脅我們份額的競爭活動，我們也會捍衛它。需要明確的是，歸根結底，我們非常嫉妒我們所擁有的份額，並且我們將捍衛它。

Paperboard year-on-year?

紙板同比？

Paperboard, yes, I'm sorry. On paperboard, with respect to pricing, we're seeing pricing relatively stable from what we saw in the second quarter of this year going into -- and we forecast going into the second half of this year. We're not really seeing a lot of pressure there given that much of our business is on a contract basis. I think it's too early for me to tell you our forecast what I think is going to happen in '24. Again, we think that there's a significant demand growth there. And we think that at least through '24, that supply will be constrained enough for us to realize additional value in 2024. So that's our expectation.

紙板，是的，對不起。在紙板方面，就定價而言，與今年第二季度相比，我們看到定價相對穩定，並且我們預計將進入今年下半年。鑑於我們的大部分業務都是以合同為基礎的，因此我們並沒有真正看到很大的壓力。我認為現在告訴你們我們的預測還為時過早，我認為 24​​ 年將會發生什麼。我們再次認為那裡的需求增長顯著。我們認為，至少到 24 年，供應將受到足夠的限制，以便我們在 2024 年實現額外價值。這就是我們的預期。

Our next question is from Paul Quinn with RBC Capital Markets.

我們的下一個問題來自 RBC 資本市場的 Paul Quinn。

Just at the beginning of the year, we had a CapEx budget of $140 million to $145 million with $15 million to $20 million of CapEx -- catch-up CapEx. And it looks -- what's happened to that catch-up amount? And how do you figure you still going to maintain the reliability with the reduced maintenance expense?

就在今年年初，我們的資本支出預算為 1.4 億至 1.45 億美元，其中資本支出為 1500 萬至 2000 萬美元——追趕資本支出。看起來——追趕的金額發生了什麼？您如何認為在減少維護費用的情況下仍能保持可靠性？

Well, Paul, the -- and as was mentioned by George, we're not reducing our maintenance expense. All right? So we can continue to invest and make sure the facilities are properly maintained going forward to maintain the current level of productivity. The capital that we were planning to spend that we're pulling back now is to further advance the productivity going into 2024. But the fact of the matter is, is that demand's soft, at least for high-value products. And frankly, I don't need that additional capacity right now. So why spend the money? So let's wait and see and raise capacity and through improved reliability when the time is needed. So that is the focus that we have on that.

嗯，保羅，正如喬治所提到的，我們並沒有減少維護費用。好的？因此，我們可以繼續投資並確保設施得到妥善維護，以維持當前的生產力水平。我們原本計劃支出但現在撤回的資金是為了進一步提高 2024 年的生產率。但事實是，需求疲軟，至少對於高價值產品而言是如此。坦率地說，我現在不需要額外的容量。那麼為什麼要花錢呢？因此，讓我們拭目以待，在需要的時候提高容量並提高可靠性。這就是我們的重點。

Okay. And then the confidence that you've got on the, hey, we're going through a destocking phase as opposed to a drop in demand or consumption. How confident are you that destocking, it's going to bounce back in, say, '24 or '25?

好的。然後你就會相信，嘿，我們正在經歷去庫存階段，而不是需求或消費下降。您對去庫存有多大信心，比如 24 或 25 年會反彈？

I got some confidence in a number of our sectors. There are some areas that were still -- I would suggest are relying upon what our customers are telling us. I'll start with paperboard. Paperboard were actually -- we have seen a fairly significant increase and, I would say, back to normal levels in terms of sales volumes in July. I would expect that, that will continue going forward.

我對我們的許多行業都有信心。有些領域仍然存在——我建議依靠我們的客戶告訴我們的內容。我將從紙板開始。紙板實際上——我們已經看到了相當顯著的增長，我想說的是，就 7 月份的銷量而言，回到了正常水平。我希望這種情況會繼續下去。

With respect to the destocking in some other areas, like if you take high-yield pulp or the mechanical pulp business, we're seeing prices begin to increase. That would suggest that we've kind of -- we've hit bottom, and demand/supply is back in balance, and prices are starting to reflect that. We're also seeing that in our paper pulp business. We're starting to see that rebound a little bit and start hitting in the right direction again for the same reasons.

至於其他一些領域的去庫存，例如高產紙漿或機械紙漿業務，我們看到價格開始上漲。這表明我們已經觸底，需求/供應恢復平衡，價格開始反映出這一點。我們在紙漿業務中也看到了這一點。我們開始看到一點反彈，並出於同樣的原因再次開始朝著正確的方向前進。

Tire cord in our CS business is also showing signs of increased activity, as the OEMs in the auto industry are beginning to pull increase their demand pull for our products. So I'd say that, that's, again, another nice green shoot that's suggesting that we're getting to the end of destocking.

隨著汽車行業的原始設備製造商開始增加對我們產品的需求，我們的 CS 業務的輪胎帘線也顯示出活動增加的跡象。所以我想說，這又是另一個美好的萌芽，表明我們即將結束去庫存。

On Construction ethers, I would say a lot of that is both destocking as well as a decrease in market demand. It's tied to the higher interest rates we're seeing around the world. And it's had a dramatic impact on construction activity, in our case, principally in Europe. And we're seeing -- we're forecasting that we'll see some sequential improvement in Q4, not necessarily in Q3. And again, to be fully transparent, I -- we have yet to see much of an improvement yet an increased pull in demand for our construction ethers. But again, we're relying on our customers and having them give us some of their forecast on what they think is going to happen through the rest of the year.

在建築領域，我想說，其中很大一部分既是去庫存，也是市場需求的減少。這與我們在世界各地看到的較高利率有關。它對建築活動產生了巨大影響，就我們而言，主要是在歐洲。我們預測，我們將在第四季度看到一些連續的改善，但不一定在第三季度。再說一次，為了完全透明，我們還沒有看到很大的改進，但對我們的建築以太幣的需求卻有所增加。但同樣，我們依賴於我們的客戶，並讓他們向我們提供一些他們認為今年剩餘時間將會發生的情況的預測。

So -- and then the other businesses, particularly around our CS business, whether it's acetate or then on construction ethers and things like nitrocellulose and so forth, the demand for those products have been stable. And we've mentioned this a number of times in the past that roughly 60% to 2/3 of our CS business or -- I guess it's our overall business is recession-resistant. And I would say that, that's -- we're hanging in there. That's holding true.

因此，其他業務，特別是圍繞我們的 CS 業務，無論是醋酸酯還是建築醚以及硝化纖維素等產品，對這些產品的需求一直穩定。我們過去多次提到過這一點，我們的 CS 業務大約有 60% 到 2/3，或者說——我想我們的整體業務是抗衰退的。我想說的是——我們會堅持下去。這確實是事實。

Okay. And it sounded like your -- you've taken downtime in July at one of the lines in Temiscaming on high-yield pulp and expect to continue that through August. I'm just wondering why only the 2 months and why bring it back if you go...

好的。聽起來好像是——7 月份，Temiscaming 的一條高產紙漿生產線已經停工，並預計將持續到 8 月份。我只是想知道為什麼只有兩個月，如果你走了為什麼要把它帶回來......

Just to confirm that, yes, we did take it down. It was due to market conditions. I think we mentioned that in the last analyst call that probably you got to a certain point. We would make that call and take some capacity out. And as mentioned, we did keep one line open so that we could provide the feedstock into our paperboard business. We kept it down for 4 to 6 weeks. And then we started seeing an improvement in pricing and therefore, feel that it's an appropriate time to bring the plant back up, and we'll bring it back up later this month. But again, we reserve the right if we see any kind of degradation in pricing, we'll will again consider whether we need to operate that line or not. So again, it's being driven by the market -- our activity that is being driven by the market conditions.

只是為了確認這一點，是的，我們確實將其刪除了。這是由於市場條件造成的。我想我們在上次分析師電話會議中提到過，您可能已經到了某個階段。我們會做出這樣的決定並取消一些容量。如前所述，我們確實保留了一條生產線，以便我們可以為我們的紙板業務提供原料。我們將其保留了 4 至 6 週。然後我們開始看到價格的改善，因此，覺得現在是恢復工廠的合適時機，我們將在本月晚些時候恢復工廠。但同樣，如果我們看到價格有任何下降，我們保留權利，我們將再次考慮是否需要運營該線路。再說一次，它是由市場驅動的——我們的活動是由市場條件驅動的。

Okay. And last one for me. Just on the strategic alternatives, I suspect that doesn't mean sale of assets. But what's the idea with -- specifically with viscose, just to move the production of that from an existing facility to a different line? Or what do you think that...

好的。最後一張給我。就戰略選擇而言，我懷疑這並不意味著出售資產。但是，特別是粘膠的想法是什麼，只是將其生產從現有設施轉移到另一條生產線？或者說你覺得怎麼樣...

Yes. It's not reshuffling about the deck chairs, so to speak. That's not what we're suggesting here. The typical options you would look at when you're doing a strategic review of businesses, and I won't go through all the different options we're looking at. I will say that we've been looking at this for a few months already. So we're well down the path. -- some more work to do on that. But I would say that we're looking at all the different potential strategic options that someone would typically think of. And we'll be prepared in a couple of months, probably by the November analyst call to give you more clarity on exactly what we want to do.

是的。可以這麼說，這並不是關於躺椅的重新洗牌。這不是我們在這裡建議的。當您對企業進行戰略審查時，您會考慮的典型選項，我不會詳細介紹我們正在考慮的所有不同選項。我想說的是，我們已經研究這個問題幾個月了。所以我們已經在路上了。 ——這方面還需要做一些工作。但我想說，我們正在研究人們通常會想到的所有不同的潛在戰略選擇。我們將在幾個月內做好準備，可能是在 11 月份的分析師電話會議上，讓您更清楚地了解我們到底想要做什麼。

Our next question is from Sandy Burns with Stifel.

我們的下一個問題來自 Stifel 的 Sandy Burns。

Congrats on getting that refi completed in this environment. Maybe first, to talk about the commodities -- the commodity business in HPC. Historically, where has pricing bottomed out in that business? Or if you have like a good number, like how close are we to the bottom in your opinion? And then kind of tied into that also, at current pricing, was that part of your business EBITDA positive in the second quarter?

恭喜您在這種環境下完成了改裝。也許首先要談談商品——HPC 中的商品業務。從歷史上看，該業務的定價在哪裡觸底？或者，如果你有一個不錯的數字，比如你認為我們距離底部有多遠？然後，按照目前的定價，您的業務第二季度的 EBITDA 部分是否為正值？

Those are great questions. Thanks for joining us, by the way, Sandy. I appreciate it. I would say with respect to the paper pulp business and the high-yield pulp business, we're seeing the bottom now. Historically, maybe the prices were lower than in the past. But because of the inflation that the world has seen over the past 12 to 18 months that, that floor has increased. And I think what we're seeing now is it has reached bottom, and we're starting to see the prices move up.

這些都是很好的問題。順便說一下，謝謝你加入我們，桑迪。我很感激。我想說的是，對於紙漿業務和高產紙漿業務，我們現在已經看到了底部。從歷史上看，也許價格比過去低。但由於過去 12 至 18 個月全球出現的通貨膨脹，這一下限有所增加。我認為我們現在看到的是它已經觸底，我們開始看到價格上漲。

With respect to viscose, I would say we're I would say it's roughly the same. We're -- we've been fairly steady and stable on viscose pricing, although we've seen a little bit of deterioration, just $10, $20 a month kind of deterioration. So I would suggest we're very close to the bottom there as well. So I think we're seeing the bottom on all of our commodity businesses.

就粘膠纖維而言，我想說我們是大致相同的。我們的粘膠定價一直相當穩定，儘管我們看到了一點惡化，只是每月 10 美元、20 美元的惡化。所以我建議我們也非常接近底部。所以我認為我們所有的商品業務都已經觸底。

In the past, your comment about whether or not in Q2 and Q1 or the first half of the year Whether it was our commodity business, what I would again define is our viscose and our paper pulp businesses were the positive EBITDA in the first half of the year. I would say that they were marginal and probably close to 0, if not negative in the first half, but I would suggest that the second half will be significantly weaker.

過去您的評論無論是在第二季度、第一季度還是上半年，無論是我們的大宗商品業務，我再次定義的是我們的粘膠和紙漿業務上半年的 EBITDA 為正值那一年。我想說的是，它們是邊際的，可能接近於 0，如果上半場不是負數的話，但我認為下半年會明顯減弱。

Okay. And then on the cellulose specialty side business, you talked a little bit about destocking and how you kind of been cautiously optimistic into the second half of the year. When you've gone through these destocking trends in the past, and I realize this environment seems a lot tougher for chem companies this year, how long has the destocking tended to be? Like how many quarters or so? I mean, I think at some point, customers must work through their inventories and start to stabilize and rebuild their inventories. So like maybe on a historical perspective, how long does the destocking period lasted for?

好的。然後在纖維素特種業務方面，您談到了去庫存以及您如何對下半年持謹慎樂觀的態度。當你經歷過這些去庫存趨勢時，我意識到今年的環境對於化工公司來說似乎更加艱難，去庫存的時間有多長？大概有多少個季度？我的意思是，我認為在某個時候，客戶必須處理他們的庫存並開始穩定和重建他們的庫存。那麼從歷史的角度來看，去庫存的時期會持續多久呢？

Well, Sandy, let me just state that we're going through right now in terms of destocking is unprecedented. And I think if you were listen to other analyst calls from our customers, they would say the same thing, particularly in our CS business. Dow and Eastman and Ash, and they all talk about the fact that they're down 20%, 30% on their sales volumes and their construction-related activity. And in fact, some of them would note that they've actually shut down lines as a result of that.

好吧，桑迪，我只想說，我們現在正在經歷的去庫存是前所未有的。我認為，如果你聽我們客戶的其他分析師打電話，他們也會說同樣的話，特別是在我們的 CS 業務中。陶氏化學公司、伊士曼公司和艾什公司，他們都談到了這樣一個事實：他們的銷量和建築相關活動下降了 20%、30%。事實上，他們中的一些人會注意到他們實際上因此關閉了線路。

I think what we're going through right now is unprecedented. It's obviously being driven by the logistics constraints and bottlenecks that we went through last year. And everybody shifted to just-in-case buying activity to, and now we're going back to just-in-time ordering activity. And so what we're going through is something that I've never experienced, and I don't think this business has ever experienced before.

我認為我們現在正在經歷的事情是前所未有的。這顯然是由我們去年經歷的物流限制和瓶頸推動的。每個人都轉向了以防萬一購買活動，現在我們又回到了及時訂購活動。所以我們正在經歷的是我從未經歷過的事情，我認為這個行業以前也沒有經歷過。

But as I said earlier when I was answering Paul's question, we're starting to see some green shoots. We're starting to see pull. We're starting to see demand pull in some activity that would suggest that we're getting to the end, if not at the end, in some of these activities. And some of the softness, though, that we expect to continue does actually relate more, not to destocking, but more to just suppressed market demand because of a lower economic activity.

但正如我之前在回答保羅問題時所說，我們開始看到一些萌芽。我們開始看到拉力。我們開始看到一些活動的需求拉動，這表明我們在其中一些活動中即使沒有結束，也即將結束。不過，我們預計將持續的一些疲軟實際上更多地與去庫存無關，而更多地與經濟活動減少導致的市場需求受到抑制有關。

Okay. And last one for me on the cost reduction actions that you mentioned, and you kind of walked through some of the different specifics. Maybe like in total, how much of it would you say is being implemented at the corporate level that will reduce, we should say, in corporate expenses come down?

好的。我的最後一個關於您提到的成本削減行動，您介紹了一些不同的細節。也許就像總共一樣，您認為其中有多少是在公司層面實施的，我們應該說，這將減少公司開支？

Okay. Let me see if I can answer that question, specifically corporate. Sorry, just give me a second so I can give a reasonable number here. It looks like -- and this includes some activity that isn't specific to a plant. For example, caustic pricing, that was lower caustic pricing that has been negotiated by the corporate sourcing team and lower freight rates, which will apply across all the mills. If I add those 2 up, it's roughly $1.5 million. And then other corporate expenses, we're seeing roughly about $4 million. So a total of about $5.5 million or roughly 13% of the total.

好的。讓我看看我能否回答這個問題，特別是企業問題。抱歉，請稍等一下，以便我可以在這裡給出一個合理的數字。它看起來像——這包括一些不特定於植物的活動。例如，苛性鹼定價，即由公司採購團隊協商的較低苛性鹼定價和較低的運費，這將適用於所有工廠。如果我把這 2 個加起來，大約是 150 萬美元。然後是其他公司開支，我們看到大約 400 萬美元。總共約為 550 萬美元，約佔總額的 13%。

Our next question is from Dmitry Silversteyn with Water Tower Research.

我們的下一個問題來自 Water Tower Research 的 Dmitry Silversteyn。

Just wanted to follow up on a couple of questions that were previously asked, just to make sure that I understand what you're telling. So if you look at the declines that you had in volumes in your cellulose specialty business. You talked about destocking, you talked about market weakness, particularly in the construction segment. But you also talked about sort of your strategy of taking -- or keeping price versus keeping volumes, so playing in that volume price lever. If you had to take a look at sort of those 3 components, particularly in light of your peers in the industry who operate in the same businesses.

只是想跟進之前提出的幾個問題，只是為了確保我理解您所說的內容。因此，如果您看看纖維素特種業務的銷量下降情況。您談到了去庫存，談到了市場疲軟，特別是在建築領域。但你也談到了你的採取策略——或者保持價格與保持數量，所以在數量價格槓桿上發揮作用。如果您必須考慮這三個組成部分，特別是考慮到從事相同業務的業內同行。

How much of the slowdown in volumes that you've seen is -- would you say is due to destocking and market weakness versus your strategy of keeping price and protecting your market share, but certainly not going after new market share?

您所看到的銷量放緩有多少是由於去庫存和市場疲軟，而不是您保持價格和保護市場份額的策略，但肯定不是追求新的市場份額？

Okay. I can unpack that question a little bit. And certainly, if I don't answer completely, then ask for clarification. I'm going to start with the last part of your question there about have we lost any volume due to us holding prices and maintaining value for our CS business. I would say that we have lost some volume, but I'd say it's largely immaterial so far. We haven't yet responded in pricing to that set of action by one of our competitors. The belief being that it's been so far been immaterial.

好的。我可以稍微解開這個問題。當然，如果我沒有完全回答，請要求澄清。我將從您問題的最後一部分開始，即我們是否因維持價格和維持 CS 業務價值而損失了任何銷量。我想說我們已經失去了一些銷量，但我想說到目前為止這基本上是無關緊要的。我們尚未對競爭對手的這一系列行動做出定價回應。到目前為止，這種信念並不重要。

But again, I will go back to an earlier point I made, which is we're going to protect our share. There's -- that should be clear. And frankly, going after share in such a market today where you've got no market growth just seems silly to me. It's something that I don't completely comprehend or understand why someone would do that because we're going to respond and protect that share. But to date, and what we expect going forward, is that we don't expect that we're going to have to protect share. And we have already lost an immaterial amount of share so far. So that's the first part of your question.

但我還是要回到我之前提出的觀點，那就是我們將保護我們的份額。這一點應該很清楚。坦率地說，在當今這樣一個沒有市場增長的市場中追求份額對我來說似乎很愚蠢。我不完全理解或理解為什麼有人會這樣做，因為我們將做出回應並保護該份額。但迄今為止，以及我們對未來的期望是，我們不需要保護份額。到目前為止，我們已經失去了微不足道的份額。這是你問題的第一部分。

The second part of the question is how much of this is due to destocking to versus, call it, general market activity, the lower economic activity because of higher interest rates and so forth. I would say that 60% has been due to just general market GDP activity. And the other 40% so far has been tied to destocking.

問題的第二部分是，其中有多少是由於去庫存造成的，而所謂​​的去庫存是由於一般市場活動、由於利率上升等導致的經濟活動減少所致。我想說，60% 是由於一般市場 GDP 活動造成的。到目前為止，另外 40% 與去庫存有關。

Okay. That's a good number. Okay. The second question, I guess, I have is on the CapEx reduction. I think you've sort of addressed the fact that which you're pushing out in terms of CapEx is discretionary spending in terms of improving productivity and improving production throughput, but, not necessarily, or not at all, I would hope, related to your biomaterials CapEx that you're investing to grow that part of the business. Did I understand your comment correctly? I just want to make sure I got that right.

好的。這是一個很好的數字。好的。我想我的第二個問題是關於資本支出的減少。我認為您已經解決了這樣一個事實，即您在資本支出方面推出的是提高生產力和提高生產吞吐量方面的可自由支配支出，但我希望不一定或根本不與以下方面相關：您為發展這部分業務而投資的生物材料資本支出。我正確理解你的評論嗎？我只是想確保我做對了。

Yes. Dmitry, I think you did understand that correctly. I mean we can remain committed to our biomaterials strategy. As I mentioned earlier, the EBITDA margin improvement, the growth potential, the stability and the low volatility that, that will provide going forward, I think, will be well received by our shareholders. The reduction that you're seeing is really due to us increasing the investment hurdle for that -- for this discretionary strategic capital investments. The $5 million is actually the potential projects that fell out that can't meet that 30% ROE and a 2-year or less payback period. So those just get pushed back on the shelf. And one day, I'll probably pick those back up when capital is more available.

是的。德米特里，我想你的理解是正確的。我的意思是我們可以繼續致力於我們的生物材料戰略。正如我之前提到的，我認為 EBITDA 利潤率的改善、增長潛力、穩定性和低波動性將受到我們股東的好評。你看到的減少實際上是由於我們增加了投資門檻——對於這種可自由支配的戰略資本投資。這 500 萬美元實際上是那些無法達到 30% ROE 和 2 年或更短投資回收期的潛在項目。所以那些只是被推回到架子上。有一天，當資金更充足時，我可能會重新選擇這些。

Got it. Got it. Okay. Great. And then just to clarify, in your previous comment when you talked about the EBITDA of your commodity businesses in the first half of the year, you said it was kind of close to 0, maybe a little bit negative. But did I hear you right, you expect it to get weaker in the second half of the year?

知道了。知道了。好的。偉大的。然後澄清一下，在您之前的評論中，當您談到上半年大宗商品業務的 EBITDA 時，您說它接近於 0，可能有點負。但我沒聽錯吧，你預計下半年會減弱嗎？

Yes. And again, quite frankly, that was a big guess on my part. I would say that we're going to lose $50 million in EBITDA. That's our estimate right now on the viscose and paper pulp business in 2023, and all that's being driven by prices. And the reason why I bifurcated the 2 is our pricing in the first half was significantly higher than what we're expecting in the second half of the year because pricing, particularly with our high-yield pulp and our paper port business are falling off pretty dramatically in the April/May time frame.

是的。坦率地說，這對我來說是一個很大的猜測。我想說我們將損失 5000 萬美元的 EBITDA。這是我們目前對 2023 年粘膠和紙漿業務的預測，而所有這些都是由價格驅動的。我將兩者分開的原因是我們上半年的定價明顯高於我們下半年的預期，因為定價，特別是我們的高產紙漿和造紙港口業務的定價大幅下降在四月/五月的時間範圍內戲劇性地發生。

But yes, so I would expect that pricing -- or the results for those businesses will be significantly worse than they were in the first half because of the deterioration in pricing we started experiencing starting in April.

但是，是的，所以我預計這些企業的定價或結果將比上半年明顯糟糕，因為我們從四月份開始經歷定價惡化。

Got it. Got it. Okay. That's helpful. And then last question. Typically, in a slowing economic environment, you would see a decline in a lot of the commodity prices that you guys use as raw material inputs. So what is your outlook for sort of raw materials? I know some of your markets or some of your raw materials are a little bit countercyclical, if you will, to the markets. But any outlook on the second half of the year and getting into 2024, perhaps on what you expect your raw materials to do?

知道了。知道了。好的。這很有幫助。然後是最後一個問題。通常，在經濟放緩的環境中，您會看到許多用作原材料投入的商品價格下降。那麼您對某種原材料的前景有何看法？我知道你們的一些市場或一些原材料對市場來說有點反週期。但對今年下半年和 2024 年的前景有何展望，也許是您對原材料的預期？

And that's -- one of the questions we continue to wrestle with almost every day here is to understand where our cost of inputs are going in the near and medium term. I guess the best place to start is that a number of our largest input price -- inputs, their prices on those are continuing to be elevated for some of the reasons I think you're alluding to.

這就是我們幾乎每天都在努力解決的問題之一，那就是了解我們的投入成本在近期和中期的走向。我想最好的起點是我們的一些最大的投入價格——投入，由於我認為你提到的一些原因，它們的價格正在持續上漲。

With respect to wood, I mean you wanted to -- we live off of residual wood and a number of our facilities. When the lumber activity because of housing starts on all that goes down, the supply of residual would also goes down. And therefore, the price of those residual wood goes up. And we're particularly experiencing that in Canada and, to a lesser extent, in France. Here in the states, we are seeing prices come down, but it's on wood. But it's still elevated, significantly higher than we had before we went into pandemic. We do expect that those prices will continue to moderate over the short to medium term. So going into '24 and so forth, we expected that those prices will continue to decline.

關於木材，我的意思是你想——我們靠剩餘的木材和我們的一些設施生活。當由於住房開工而導致的木材活動全部下降時，剩餘的供應也會下降。因此，這些剩餘木材的價格上漲。我們在加拿大尤其經歷過這種情況，在法國也有較小程度的經歷。在美國，我們看到價格下降，但降價的是木材。但它仍然很高，明顯高於我們進入大流行之前。我們確實預計這些價格在中短期內將繼續放緩。因此，進入 24 年等，我們預計這些價格將繼續下降。

But with respect to France and in Canada, the price for wood there is really relying on what the heck happens with the housing market and in the lumber market. And so with a higher interest rate environment and so forth, our thinking is that we're just going to have to plan to live with higher wood prices in those 2 businesses.

但就法國和加拿大而言，木材價格實際上取決於房地產市場和木材市場的情況。因此，在更高的利率環境等情況下，我們的想法是，我們將不得不計劃忍受這兩家企業的木材價格上漲。

The other big spend we have is with caustic soda. And caustic soda pricing in Europe has returned back down to, I would say, normalized levels. But here in the states, they tend to be -- they tend to have stayed elevated. And we expect or hope that those prices will moderate over time, and we're seeing some moderation. It tends to be relatively slow moderation quarter-to-quarter, but we're still very elevated there. And I would hope that as demand softens and supply increases, which we do expect in '24 with the new [Cantech] operations coming in the Gulf that supply, or pricing for caustic soda should improve in 2024.

我們的另一大支出是燒鹼。我想說，歐洲的燒鹼價格已經回到正常水平。但在美國，他們往往會保持較高的水平。我們預計或希望這些價格會隨著時間的推移而放緩，而且我們看到了一些放緩。每個季度的放緩往往相對緩慢，但我們的水平仍然很高。我希望，隨著需求疲軟和供應增加，我們預計 24 年新的 [Cantech] 業務將在海灣地區開展，燒鹼的供應或定價應在 2024 年有所改善。

Maybe just to add to De Lyle, the other area where you're seeing reductions is in container rates the ocean freight. So that element, certainly, I think there's reference points that, that has reduced and continue to use to reduce.

也許除了德萊爾之外，您看到的另一個下降的領域是集裝箱費率和海運費。當然，我認為該元素已經減少並繼續使用來減少參考點。

And we'll see some of the benefit of that in H2.

我們將在下半年看到一些好處。

In the second half of the year. Got it. So if I kind of put it all together, what I'm hearing is your input pricing is probably going to sort of stay flattish but maybe trend down slightly, but we should not be looking for significant raw material relief to help you out on the margins. Would that be sort of the correct takeaway?

下半年的時候。知道了。因此，如果我把所有這些放在一起，我聽到的是，您的投入價格可能會保持平穩，但可能會略有下降，但我們不應該尋求重大的原材料救濟來幫助您擺脫困境邊距。這是正確的結論嗎？

Yes. And Dmitry, I would say that that's correct. And certainly, I think that's the position that we have here at the company, is that we're not counting on our raw material prices to save the day. We're looking at being much more proactive in more strategic things like finding ways to bring balance to the supply/demand equation to improve -- give us better pricing power, looking at ways to reduce our exposure to very volatile parts of our business like the viscose, some paper pulp businesses to eliminate that volatility and concern.

是的。德米特里，我想說這是正確的。當然，我認為這就是我們公司的立場，我們不指望原材料價格來挽救局面。我們正在考慮在更具戰略意義的事情上更加積極主動，例如尋找方法來平衡供需方程，以改善——為我們提供更好的定價能力，尋找方法來減少我們對業務中非常不穩定的部分的敞口，例如粘膠方面，一些紙漿企業為了消除這種波動而擔憂。

Those are the areas that we feel that we can control and that we can get after. The things that are more exogenous like input prices, we just assume that we'll do -- we'll live with what we have, and then we'll figure out how to mitigate that.

這些是我們認為我們可以控制並且可以追求的領域。對於像投入價格這樣更具外生性的事情，我們只是假設我們會做——我們會接受我們所擁有的，然後我們會想出如何減輕這種情況。

Thank you. There are no further questions at this time. I would like to hand the floor back over to De Lyle Bloomquist for any closing remarks.

謝謝。目前沒有其他問題。我想將發言權交還給德萊爾·布盧姆奎斯特 (De Lyle Bloomquist) 以供結束髮言。

Well, thank you all for joining us today. We believe that we continue to make significant strides toward achieving our financial and strategic objectives. I'm incredibly proud of the collective efforts of our team, and I'm very confident that we will continue to enhance the profitability while also working to reduce our debt and our leverage. I look forward to going into more detail at our Investor Day on October 10. So I hope that those on the call will have the opportunity to join us at that time.

好的，謝謝大家今天加入我們。我們相信，我們將繼續在實現財務和戰略目標方面取得重大進展。我對我們團隊的集體努力感到無比自豪，並且非常有信心我們將繼續提高盈利能力，同時努力減少債務和槓桿。我期待在 10 月 10 日的投資者日上詳細討論。所以我希望那些參加電話會議的人屆時有機會加入我們。

In the meantime, if you've got any further questions that you want addressed, our lines are always open. So feel free to reach out to us with any questions if you require further information. So have a great day.

同時，如果您還有任何需要解決的問題，我們的熱線隨時暢通。因此，如果您需要更多信息，如有任何疑問，請隨時與我們聯繫。祝你有美好的一天。

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

今天的會議到此結束。此時您可以斷開線路。感謝您的參與。