1. LDVIC 4.76% vs S&P500 10.62% (Change -5.86%)

2. LDVIC 4.76% vs FundSmith 7.46%

3. LDVIC 4.76% vs Berkshire 22.25%

4. Resolute Forest Product (RFP); market cap $400m

5. Resolute Forest Product (RFP)
Leader in the forest products industry:
1) Market pulp
2) Tissue
3) Wood products
4) Newsprint
5) Specialty papers

6. Resolute Forest Product (RFP) Overview 1/3
Market pulp
 -Third largest pulp producer in North America
- packaging, specialty paper products, diapers
2) Tissue
Recycled and virgin paper products, ranging from
premium, value and economy grades
New acquisition (Atlas for $155m) will manufacture
premium and ultra-premium tissue product
-This is the segment that the company hopes
will drive profitability by selling premium products

7. Resolute Forest Product (RFP) Overview 2/3
3) Wood products
-Where it makes most of its bottom line; - Sells into housing market - Supplies wood residue for its other segments, fuels to produce renewable electricity and steam.

8. Resolute Forest Product (RFP) Overview 3/3
4) Newsprint
-Newspaper publishers worldwide
-To commercial printers in North America; inserts and flyers
-Head winds
5) Specialty papers
Largest producer of uncoated mechanical papers in North America
Third largest producer of coated mechanical in North America
Used in books, retail inserts, direct mail, coupons, magazines, catalogues
- Head winds

11. RFP:
MCAP: $400m
Share: ~$4.50 Net debt: ~$761m
EV: ~$1.1B

13. Risks?

14. Risks? No competitive advantage Strong competition
Dependant on price on the market
Supply and demand
Internet
Capital intensive
Debt (due 2023)
Operational leverage (high fixed costs)

15. Advantages

16. Advantages
Geographic location
Established customer relations

20. Valuation for each segment
1) Market pulp
2) Tissue
3) Wood products,
4) Newsprint
5) Specialty papers

21. Valuation for each segment most conservative estimates
Market pulp
New additions coming to the market Put 5x on EBIT; say $215m
2) Tissue
Acquired Atlas for $150m
Target of $8 million to $12 million in annual EBITDA in 2017; say 6x on $43m, $50m
3) Wood products,
Consistent earner
say 6x on $43m, $414m

22. Valuation for each segment
"In the paper segments, we expect that previously announced capacity reductions in the first quarter will support stable market dynamics, particularly in newsprint"
4) Newsprint valued at ? Valued on 4x EBIT, $4m, say $16m?
5) Specialty papers EBIT of $11m, 5x valued at $50m?

23. Valuation for each segment
1) Market pulp $215m
2) Tissue $50m
3) Wood products, $415m
4) Newsprint $16m
5) Specialty papers $50m
Total: $750m; very conservatively with tiny multiples

24. Guidance
-Capex for 2017 $185m vs $250m 2016 (change $65m)
Pensions will become a source of funds of $127m between
+$1b in deferred tax assets

25. 5yr average of $1.2B mcap vs $400m

26. Who owns the stock?

28. Fair Value:
-$8-10 per share (~100% upside)
- +$800m market cap

29. LDVIC 4.76% vs S&P500 10.62% (Change -5.86%)