Jan 31, 2013 | Posted in Corporate News, News

Note:  Financial references in US dollars unless otherwise indicated.


  • Full year earnings of $1.65 per share ($1.59 per share diluted)
  • 2012 EBITDA of $188 million – a fourfold increase over the prior year
  • Q4 EBITDA of $70 million – better than Q3 and eight times higher than Q4 2011
  • North Central benchmark OSB price averaged $271 per Msf – a 46% increase vs. 2011 and the highest average in seven years
  • North American OSB shipments 8% higher in stronger pricing environment
  • Annual production records at five of Norbord’s eight operating OSB mills
  • Company-wide safety recordable rate of 0.74 – a best-ever result

TORONTO, ON (January 31, 2013) – Norbord Inc. (TSX: NBD, NBD.WT) today reported earnings of $72 million or $1.65 per share ($1.59 per share diluted) for the full year 2012 compared to a loss of $11 million or $0.25 per share in 2011.  The Company recorded earnings of $38 million or $0.86 per share ($0.76 per share diluted) in the fourth quarter of 2012 versus a loss of $9 million or $0.21 per share in the same quarter of 2011.

Norbord generated EBITDA of $188 million in 2012 compared to $45 million in 2011.  North American and European operations recorded EBITDA of $165 million and $39 million, respectively, versus $14 million and $44 million, respectively, in the prior year.  In the fourth quarter of 2012, Norbord delivered EBITDA of $70 million versus $66 million in the previous quarter and $9 million in the fourth quarter of 2011.

“Our improved 2012 financial results reflect a better-than-expected recovery in the US housing market and this recovery is gaining momentum,” said Barrie Shineton, President and CEO.  “In North America, we increased shipments and were able to benefit from higher OSB pricing in the second half of last year.  I expect this strong improvement in OSB demand to continue as we move through 2013.  We are therefore advancing our plans to bring back some of our mothballed capacity.  However, in spite of these plans, and the restarts announced by some of our competitors, the lag in bringing back this capacity suggests to me improving OSB demand will continue to outstrip supply for at least the next three quarters.”

“In Europe, our panel business delivered another strong result in spite of the challenging macroeconomic environment.  Panel markets remain surprisingly stable and we continue to benefit from an ongoing currency advantage due to a weaker Pound Sterling.  Both our customer order files and panel pricing trends indicate a positive start to the year.”

Market Conditions

US housing starts finished the year at 780,000, up 28% from 610,000 in 2011.  Permits were 30% higher year-over-year.  The seasonally-adjusted US housing starts number for December was 954,000, 37% ahead of the 2011 end-of-year pace.  This is an encouraging number for what is typically a seasonally slower period for the construction industry and OSB demand.

North American OSB prices improved significantly in the second half of the year.  North Central benchmark OSB prices strengthened from a February low of $188 per thousand square feet (Msf) (7⁄16-inch basis) to finish the year at an annual high of $370.  North Central prices averaged $271 in 2012 compared to $186 in 2011, a 46% increase.  In the South East region, where approximately 55% of Norbord’s North American OSB capacity is located, prices averaged $241 per Msf compared to $169 in the prior year.

In the fourth quarter, North Central benchmark OSB prices averaged $332 per Msf, up $19 from the prior quarter and $142 from the fourth quarter of 2011.  South East prices averaged $296 per Msf in the quarter, up $22 from the prior quarter and $130 from the fourth quarter of 2011.

In Norbord’s primary European markets, housing activity remained stable but unremarkable with UK housing starts decreasing 9% and German housing starts increasing approximately 7% compared to 2011.  In the UK, where the majority of Norbord’s European assets are located, home prices remain steady and mortgage lending restrictions are easing.

European panel prices decreased modestly in 2012.  OSB prices declined 11% from 2011 peak levels while particleboard and MDF prices held firm.  The Pound Sterling remained weak versus the Euro and this continues to benefit Norbord’s primarily UK-based operations.


North American OSB shipments for the full year increased 8% compared to the prior year.  In the fourth quarter, shipments were 3% lower than the third quarter and 12% higher than the same quarter in 2011.  In 2012, Norbord’s operating OSB mills ran at 95% of nameplate capacity versus 80% in 2011.

Norbord’s 2012 North American OSB cash production costs per unit (excluding incentive compensation) decreased by 1% versus 2011.  Excluding the impact of higher raw material prices and higher maintenance costs, production costs per unit decreased by 3%.

In Europe, panel shipments increased 2% over the prior year.  Production was also higher as Norbord’s four panel mills ran on full operating schedules.  Effective for 2012, Europe’s stated annual OSB capacity was increased by 90 MMsf (3/8-inch basis), reflecting improvements from both capital investments and operating efficiencies at the Genk, Belgium mill.  Norbord’s European mills operated at the same 95% of capacity in both 2012 and 2011, although the 2012 percentage was impacted by the stated capacity increase.

Norbord’s Margin Improvement Program (MIP) delivered $23 million in gains in 2012, primarily from lower raw materials usage and higher productivity achieved from the Company’s resin conversion and fines screening projects.

Capital investments continued to be constrained, totaling $26 million in 2012 versus $25 million in 2011.  Norbord’s 2013 planned capital expenditures have been ramped up to $70 million, including the necessary investments to restart a portion of the Company’s mothballed capacity.

Operating working capital increased by $22 million during the year to $50 million at year-end compared to $28 million at year-end 2011.  This increase reflects the impact of higher North American OSB prices on accounts receivable.

At year-end, Norbord had unutilized liquidity of $455 million, consisting of $242 million in undrawn revolving bank lines, $85 million undrawn under its accounts receivable securitization program and $128 million in cash.  The Company’s tangible net worth was $422 million and net debt to total capitalization on a book basis was 43%, down from 51% a year ago despite repaying $82 million under the accounts receivable securitization program.  Both ratios are well within bank covenants.


In response to increased customer demand for OSB, Norbord intends to restart its curtailed mill in Jefferson, Texas by mid-2013.  The mill has been mothballed since the first quarter of 2009.  The Company will invest approximately $10 million to bring the mill back into production.  Norbord will continue to monitor market conditions, but does not currently expect to restart its mills in Huguley, Alabama or Val-d’Or, Quebec in 2013.

In January, Norbord applied to the Toronto Stock Exchange (TSX) for approval to commence a normal course issuer bid in accordance with TSX rules.  Under the previous bid that expired on December 20, 2012, the Company could have purchased up to 2,178,705 of its common shares, which represented approximately 5% of the 43.6 million issued and outstanding common shares as at November 30, 2011. No share purchases were made under the Company’s previous bid.  Full details of the normal course issuer bid will be announced upon receipt of TSX approval.

Additional Information

Norbord’s year-end 2012 letter to shareholders, news release, management’s discussion and analysis, annual consolidated audited financial statements and notes to the financial statements have been filed on SEDAR ( and are available in the investor section of the Company’s website at  Shareholders are encouraged to read this material.

Conference Call

Norbord will hold a conference call for analysts and institutional investors on Thursday, January 31, 2013 at 11:00 a.m. ET.  The call will be broadcast live over the Internet via and  A replay number will be available approximately one hour after completion of the call and will be accessible until March 1, 2013 by dialing 1-888-203-1112 or 647-436-0148.  The passcode is 5040392.  Audio playback and a written transcript will be available on the Norbord website.

Norbord Profile

Norbord Inc. is an international producer of wood-based panels with assets of $1 billion, employing approximately 1,900 people at 13 plant locations in the United States, Europe and Canada.  Norbord is one of the world’s largest producers of oriented strand board (OSB).  In addition to OSB, Norbord manufactures particleboard, medium density fibreboard (MDF) and related value-added products.  Norbord is a publicly traded company listed on the Toronto Stock Exchange under the symbols NBD and NBD.WT.


Heather Colpitts
Manager, Corporate Affairs
Tel. (416) 365-0705

This news release contains forward-looking statements, as defined in applicable legislation, including statements related to our strategy, projects, plans, future financial or operating performance and other statements that express management’s expectations or estimates of future performance. Often, but not always, words such as  “expect,” “continue,” “suggest,” “intend,”  “should,” “believe,” “forecast,” “appear,” “will,” “will not,” “plan,” “can,” “may,” and other expressions which are predictions of or indicate future events, trends or prospects and which do not relate to historical matters identify forward-looking statements.  Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Norbord to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. 

Although Norbord believes it has a reasonable basis for making these forward-looking statements, readers are cautioned not to place undue reliance on such forward-looking information.  By its nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties, both general and specific, which contribute to the possibility that the predictions, forecasts and other forward-looking statements will not occur.  Factors that could cause actual results to differ materially from those contemplated or implied by forward-looking statements include:  general economic conditions; risks inherent with product concentration; effects of competition and product pricing pressures; risks inherent with customer dependence; effects of variations in the price and availability of manufacturing inputs; risks inherent with a capital intensive industry; and other risks and factors described from time to time in filings with Canadian securities regulatory authorities.

Except as required by applicable laws, Norbord does not undertake to update any forward-looking statements, whether as a result of new information, future events or otherwise, or to publicly update or revise the above list of factors affecting this information.  See the “Caution Regarding Forward-Looking Information” statement in the March 1, 2012 Annual Information Form and the cautionary statement contained in the “Forward-Looking Statements” section of the 2012 Management’s Discussion and Analysis dated January 30, 2013.