Raymond James Institutional Investors Conference March 8, 2016
Notices Forward-Looking Statements & Non-IFRS Financial Information All financial references are expressed in US$ unless otherwise noted. This presentation contains forward-looking statements and estimates. Actual company results could differ materially from a conclusion, forecast or projection in the forward-looking information. Certain material factors or assumptions were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information. Additional information can be found in the Company s annual information form, annual MD&A, and on Norbord s website (www.norbord.com) about the material factors that could cause actual results to differ materially from the conclusion, forecast or projection in the forward-looking information, and the material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information. During the course of this presentation, certain non-ifrs financial information will be presented. Definitions and reconciliation of terms can be found in the Company s annual and quarterly MD&A. 2
Company Overview
Company Overview Norbord Snapshot Leading manufacturer of wood-based panel products Largest global producer of Oriented Strand Board (OSB) Stated OSB capacity of 8.0 Bsf-3/8 (1) (2) Stated panel capacity (including particleboard & MDF) of 8.9 Bsf-3/8 (1) (2) Approximately 2,600 employees at 17 plants across the US, Canada and Europe Listed on the NYSE and TSX ( OSB ) Report in US dollars and in accordance with IFRS 2015 sales of $1.5 billion (2) US 43% Panel Capacity by Region Europe 20% North America Europe 8.9 Bsf-3/8" (1)(2) Canada 37% Oriented Strand Board (OSB) Particleboard Medium Density Fibreboard (MDF) Furniture (1) Excludes the incomplete 600 MMsf-3/8 Grande Prairie, Alberta Line 2 ( GP2 ). (2) Results reflect combined performance following completion of merger with Ainsworth 4
Enterprise Value ($USmm) OSB Capacity (Bsf-3/8") Company Overview The Leading Global OSB Company Top 10 Global OSB Producers 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 Norbord Louisiana-Pacific Georgia-Pacific Weyerhaeuser Kronospan Huber Tolko KronoSwiss Egger Martco $3,000 $2,500 $2,000 $1,500 $1,000 $500 $- Enterprise Value West Fraser Louisiana-Pacific Norbord Canfor Corp. Interfor Western Forest Products Source: Bloomberg and company filings. Enterprise values as at February 8, 2016. 5
Company Overview Norbord s Products Norbord s operations include 15 OSB mills and two other plant locations in the UK producing particleboard, MDF and related value-added products OSB 90% of Capacity New home construction Repair and remodel Light commercial construction Industrial applications Particleboard 6% of Capacity New home construction Repair and remodel Furniture Fixtures MDF 4% of Capacity Furniture Fixtures Mill work 6
Industry Overview
Industry Overview Typical Uses for OSB Products OSB is an innovative, affordable and environmentally sustainable structural panel Serves many of the same uses as plywood, but produced at a lower cost Norbord expects OSB will continue to capture market share from plywood Currently, OSB represents 66% of total North American structural panel production Roof Window Header Webstock Wall Sheathing Garage Door Header Flooring Rimboard Door Header Source: APA, January 2016. 8
Industry Overview Global OSB Industry Industry OSB Capacity (MMsf-3/8 ) 30 20 10 0 North America Europe South America Asia Norbord operates in the two significant global OSB producing regions Source: Company documents and other public filings 9
Industry Overview North American & European OSB Industries North American OSB Industry European OSB Industry Huber 8% Tolko 8% Other Martco 3% 3% 26% Sonae 7% Kalavela 4% Others 2% Smartply 5% Kronospan 39% Weyerhaeuser 11% Industry Capacity 28 Bsf-3/8" 11% Industry Capacity 8 Bsf-3/8" Georgia- Pacific 19% Louisiana- Pacific 22% Egger 12% KronoSwiss 20% Norbord is a significant player in both key markets Source: Company documents and other public filings stated industry capacity 10
Industry Overview Demand Growth Ahead in Both Key Markets 75% OSB Share of Structural Panels 50% North America 25% 0% Europe 1980 1985 1990 1995 2000 2005 2010 2015-25% Source: FEA and Norbord estimates 11
Capacity (Bsf-3/8") U.S. Housing Starts (mm) Industry Overview US Housing Recovery is Real US Housing Starts and Underlying Demand 2.5 2.0 1.5 mm Over-Built 3.7 mm Under-Built 1.5 1.0 0.5 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 U.S. Housing Starts Underlying Demand North American OSB Demand and Capacity 35.0 30.0 25.0 20.0 15.0 10.0 5.0 22.8 24.0 24.8 25.9 26.9 28.0 28.6 29.2 28.8 28.4 27.8 27.1 26.9 27.1 28.1 28.4 28.6 29.5 21.4 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016F 2017F 2018F 100% 90% 80% 70% 60% 50% 40% 30% Effective Demand / Capacity Effective Capacity Mothballed Capacity Effective Demand / Capacity Source: US Census Bureau and Forest Economic Advisors, LLC (FEA) Favourable long-term OSB industry fundamentals 12
Industry Overview North American Capacity Restarted to Meet Growing Demand North American OSB Installed Capacity: 39 Mills in Operation 8 Mills Indefinitely Curtailed 6 Mills (Re)started in 2013 Norbord Mill Source: Company documents and other public filings 13
Annual Average NC Price US$ per Msf 7/16" Industry Overview Attractive North American OSB Price Outlook OSB prices are tied to demand for building products, which is influenced by the general economy, demographics and the need for housing With US housing recovering, OSB prices are projected to rise above trend North Central Benchmark OSB Price $400 $350 Historical Price Forecasted Price $300 $250 15-year average: $229 $200 $150 $100 $50 $0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016F 2017F Source: Random Lengths and Forest Economic Advisors, LLC (FEA); As of January 2016 14
Industry Overview Core European Housing Markets Recovering 250 Housing Starts (1) (000 s) 50% European OSB Share of Structural Panels 225 200 Germany +6% in 2015 40% 175 30% 150 125 20% 100 75 UK +6% in 2015 10% 50 2009 2010 2011 2012 2013 2014 2015 0% 1980 1985 1990 1995 2000 2005 2010 2015 (1) Values for Germany represent housing completions Source: Euroconstruct and Norbord estimates 15
Industry Overview Japanese Housing Market Stable Significant growth opportunity OSB accounts for only ~10% of the structural panel market in Japan compared to >60% in North America Japanese Housing Starts (000 s) 1,236 1,285 All Other Wooden 693 729 1,061 1,094 556 577 788 358 813 834 353 369 883 396 980 430 892 909 403 504 543 556 505 517 430 460 465 487 550 489 405 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Japanese Ministry of Land, Infrastructure, Transport and Tourism and Company documents 16
Business Strategy
Business Strategy Norbord s Strategy is Well Defined 1 Develop a world-class safety culture 2 Pursue growth in OSB 3 Own high-quality assets with low-cost positions 4 5 6 Maintain a margin-focused operating culture Focus on growth customers through best-in-class service and product development Allocate capital with discipline 18
Business Strategy Norbord s Growth Focused on OSB 8 Norbord OSB Capacity (Bsf-3/8 ) 7 6 5 4 3 2 1 0 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 (1) (1) 2015 reflects Norbord following completion of merger with Ainsworth. Pre 2015 reflects Norbord excluding Ainsworth. 19
Business Strategy Margin Improvement is an Operational Priority Margin Improvement Program (MIP) gains help offset impact of industry-wide rising input costs: Increased productivity Reduced overhead costs Reduced raw material usage Improved product mix Margin Improvement Program Gains (1) ($ in millions) In Control of Our Controllables 56 37 43 (3) MIP has delivered $304 million of margin improvements over the past 12 years with minimal capital investments 28 9 14 29 16 25 23 24 2015 MIP gains of $43 million 0 (2) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 (1) Measured relative to prior year at constant prices and exchange rates (2) The benefits of improved productivity and a richer value-added product mix were offset by higher maintenance spending in 2013 (3) 2015 reflects Norbord following completion of merger with Ainsworth. Pre 2015 reflects Norbord excluding Ainsworth. 20
Business Strategy Further MIP Ahead Through Identified Merger Synergies $45 Million in Annual Merger Synergies (1) Captured $18 million in synergies ($27 million annualized) in 2015 Product Specialization Ainsworth s Forming Technology Order File Optimization Sales & Logistics Corporate Overhead Operational Best Practices Operational Standardization Continuous Press Experience Single Public Company Purchasing Savings (1) Costs to achieve ~50%; Achievable over 18-24 months 21
Business Strategy Diversification From European & Asian End Market Exposure Strong North American footprint 2015 Shipments by Origin (2) Stable margin operations: Europe Asia-focused exports (1) Europe 24% Provides greater diversification than North American-based competitors Europe 7.2 Bsf-3/8" North North America America 76% Better positioned to weather market cycles (1) Exports to Asia are included in North American shipments. Net sales to Asian markets were $48 million in 2015. (2) Results reflect combined performance following completion of merger with Ainsworth 22
Business Strategy Focused Customer Strategy Sets Norbord Apart New housing sales volume growing as US housing starts recover Industrial and export sales at more stable margins Industrial 15% 2015 North American Shipments (1) Export 5% 5.5 Bsf-3/8" New Home Construction (Pro-Dealers) 55% Repair & Remodel (Big Box) 25% (1) Results reflect combined performance following completion of merger with Ainsworth 23
Business Strategy Business Strategy Three main priorities: Investing in our mills Optimizing debt profile Returning cash to shareholders $180 $160 $140 $120 $100 $80 Capex Investment (US$ millions) $60 $40 $20 $0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Target (1) (1,2) Capex Greenfield Expansion (1) 2015 and 2016 numbers reflect Norbord following completion of merger with Ainsworth. Pre 2015 reflects Norbord excluding Ainsworth. (2) Excluding $135 million strategic reinvestment in Inverness, Scotland OSB mill over next two years. 24
Financial Overview
Financial Overview Strong Operating Cash Flow Through The Cycle 921 Total Adjusted EBITDA (US$ millions) 290 802 307 Norbord Combined Adjusted EBITDA Ainsworth Adjusted EBITDA Norbord (excluding Ainsworth) Adjusted EBITDA (2) (1) Norbord Sensitivity to North American OSB Price Changes: +$10/Msf 7/16 = +$58 million Adjusted EBITDA (at full capacity) 631 495 295 48 247 12-year average: $264 million 19 5 42-23 5-60 165 58 107 58 13 45 294 106 188 432 145 287 115 122-60 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 North Central Benchmark OSB Price US Housing Starts (000s) $369 $320 $217 $161 $172 $163 $219 $186 $271 $315 $218 $209 1,956 2,068 1,801 1,355 906 554 587 609 781 925 1,003 1,111 (1) As disclosed in the Q4-2015 MD&A (2) As disclosed in Ainsworth s historical MD&As; converted to USD using annual average exchange rate 26
Financial Overview Stable Results from European Operations Norbord s European operations provide greater sales and earnings diversification than other North American-based competitors European Adjusted EBITDA (US$ millions) 90 80 81 70 60 58 50 40 30 32 35 37 44 39 46 47 38 20 17 10 0 4 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 27
7.70% 5.375% 6.25% Financial Overview Strong Balance Sheet & Liquidity Manageable Debt Maturities (US$ millions) Strong Liquidity Profile (US$ millions) $200 $240 $315 Q4 2015 Cash $ 9 Bank Lines (1) 240 A/R Securitization (2) 95 Liquidity $344 Stable Issuer Credit Ratings 2015 2016 2017 2018 2019 2020 2021 2022 2023 Moody s S&P DBRS Ba2 (Stable) BB- (Stable) BB (Negative) (1) $245 million of bank lines less $5 million outstanding letters of credit drawn at quarter-end (2) $125 million of A/R Securitization limit less $30 million drawn at quarter-end 28
Summary Attractive Investment Opportunity Leverage to unfolding US housing recovery Every +$10 in NA OSB price = +$58 million in Adjusted EBITDA at full capacity Diversification from European operations, North American industrial sales and Asian export sales High quality asset base with low operating costs Focused customer strategy and strong customer partnerships Superior margins versus peers Track record of disciplined capital allocation Strong financial liquidity and comfortable debt maturities 29
Norbord Inc. Suite 600 One Toronto Street Toronto, Ontario, M5C 2W4 Canada Tel: 416-365-0705 Fax: 416-365-3292 www.norbord.com