Mr. Ray Ferris reports

WEST FRASER ANNOUNCES SECOND QUARTER 2022 RESULTS

West Fraser Timber Co. Ltd. has released the second quarter results of 2022 (Q2 2022). All dollar amounts in this news release are expressed in U.S. dollars unless noted otherwise.

Second Quarter Highlights

• Sales of $2.887 billion and earnings of $762 million, or $7.59 per diluted share
• Adjusted EBITDA1 of $1,124 million, representing 39% of sales
• Lumber segment Adjusted EBITDA1 of $449 million
• North America Engineered Wood Products ("NA EWP") segment Adjusted EBITDA1 of $623 million
• Pulp & Paper segment Adjusted EBITDA1 of negative $3 million
• Europe Engineered Wood Products ("Europe EWP") segment Adjusted EBITDA1 of $54 million
• Returned $1.475 billion of capital to shareholders through the repurchase of approximately 16.0 million West Fraser common shares

1.Adjusted EBITDA is a non-GAAP financial measure. Refer to the "Non-GAAP and Other Specified Financial Measures" section of this document for more information on this measure.

"West Fraser generated strong financial results again in the second quarter of 2022, supporting the return of more than $1.5 billion of capital to shareholders through share repurchases and our quarterly dividend," said Ray Ferris, West Fraser's President & CEO. "The acute transportation challenges facing the company in recent quarters showed signs of improvement in the second quarter, in large part because of the dedication and determination of our people. Even so, our ability to ship products in a timely manner to meet the demands of our customers is not where it needs to be and therefore transportation and logistics remain key focus areas for the company. Inflationary cost pressures persist across our various supply chains, although an environment of strong demand and above-average product pricing has helped to absorb most of these cost increases. And while we recognize the risks of near-term macro headwinds, including rising mortgage rates and elevated energy prices, we also note that demand for our products has been resilient, and we continue to see favourable long-term market fundamentals in support of our wood building products business."

"In 2021, we took important steps toward becoming a sustainability leader, and today we are sharing our progress with the release of our 2021 Sustainability Report," said Ferris. "We understand the importance, and necessity, of doing the right thing for the environment, our communities and our employees while sustainably and profitably growing our business. We are proud of our past, but even more excited about our future."

Results Summary

Second quarter sales were $2.887 billion, compared to $3.110 billion in the first quarter of 2022. Second quarter earnings were $762 million, or $7.59 per diluted share, compared to $1,090 million, or $10.25 per diluted share in the first quarter of 2022. Second quarter Adjusted EBITDA1 was $1,124 million compared to $1,592 million in the first quarter of 2022.

Liquidity and Capital Allocation

Cash and short-term investments decreased to $1.281 billion at June 30, 2022 from $1.568 billion at December 31, 2021.

Capital expenditures in the second quarter were $88 million.

We paid $26 million of dividends in the second quarter and announced an increase to our quarterly dividend for the dividend to be paid in the third quarter, raising it to $0.30 per share from $0.25 per share.

In the second quarter of 2022, we repurchased 4,120,222 million shares under our Normal Course Issuer Bid ("NCIB") for aggregate consideration of $329 million. As of July 26, 2022, 7,197,924 million shares have been repurchased under the current NCIB, leaving 2,996,076 million shares available to purchase at our discretion until the expiry of the NCIB.

We completed a substantial issuer bid ("SIB") in the second quarter of 2022 and a total of 11,898,205 common shares were taken up and purchased for cancellation at a price of $95.00 per share for an aggregate purchase price of $1.13 billion.

As of July 26, 2022, we have repurchased for cancellation 36,745,718 of the Company's Common shares since the closing of the Norbord acquisition on February 1, 2021 through the completion of the 2021 SIB and the 2022 SIB as well as normal course issuer bids, equalling 67% of the shares issued in respect of the Norbord Acquisition.

Outlook

Markets

Several key trends that have served as positive drivers in recent years are expected to continue to support medium- and longer-term demand for new home construction in North America.

The most significant uses for our North America lumber, OSB and wood panel products are residential construction, repair and remodelling and industrial applications. Over the medium-term, we expect that an aging housing stock, lagging completions of previously started new home construction and greater acceptance of work-from-home practices may offset near-term headwinds and drive repair and renovation spending that supports lumber, plywood and OSB demand. Over the longer-term, growing market penetration of mass timber in industrial and commercial applications is also expected to become a more significant demand growth driver for wood building products in North America.

The seasonally adjusted annualized rate of U.S. housing starts averaged 1.56 million units in June 2022, with permits issued averaging 1.69 million units, according to the U.S. Census Bureau. However, demand for new home construction and for our wood building products may be reduced in the near-term should interest rates continue to rise and consumer sentiment and housing affordability continue to be impacted.

The demand for our European products is also expected to remain robust over the longer-term as use of OSB as an alternative to plywood continues to grow, and an aging housing stock supports long-term repair and renovation spending and additional demand for our wood building products. While near-term challenges, including rising interest rates, ongoing geopolitical developments and inflationary pressures akin to those we are seeing in North America may cause a temporary slowing of demand for our products in Europe, we are confident that we will be able to navigate through these periods and capitalize on opportunities for long-term growth ahead.

Operations

The extent of the transportation challenges experienced in Western Canada thus far in 2022 continues to be more acute and of longer duration than originally anticipated, therefore we now expect our SPF lumber shipments for 2022 to be closer to the bottom end of the guidance range of approximately 2.8 to 3.0 billion board feet. We reiterate expectations for our 2022 SYP shipments to be approximately 3.0 to 3.2 billion board feet. On July 1, 2022, stumpage rates increased in B.C. due to the market-based adjustments related to lumber costs, although in the current commodity price environment, B.C. stumpage rates are expected to decrease later in the year. We continue to expect modest log cost inflation in the U.S. South in 2022.

In our NA EWP segment, we expect OSB shipments to increase in 2022 as we account for a full year of contribution from Norbord, recapture production and shipments lost due to temporary disruptions to our operations in 2021, and as we continue to ramp operations at our Chambord OSB mill. However, transportation and logistics constraints across North America remain challenging and demand for our products is showing signs of slowing, and as such we now expect OSB shipments in 2022 to be approximately 5.9 to 6.2 billion square feet (3/8-inch basis), down modestly from our original guidance of 6.1 to 6.4 billion square feet (3/8-inch basis). We also continue to expect that input costs for the NA EWP business will remain elevated in the near-term, due primarily to high energy and resin costs. Work at the Allendale OSB facility is ongoing to prepare the mill for an eventual re-start when warranted by customer demand. However, due to inflationary cost pressures and supply chain challenges the capital investment is expected to increase approximately 10% from the original estimate of approximately $70 million and project completion has been shifted to the end of the first quarter of 2023.

We do not expect to increase our Pulp & Paper segment shipments in 2022.

In our Europe EWP segment we reduce expectations for OSB shipments and now project them to be approximately 1.0 to 1.2 billion square feet (3/8-inch basis) in 2022, down slightly from our original guidance of 1.1 to 1.3 billion square feet (3/8-inch basis). Input costs for the Europe EWP business are expected to remain elevated in the near-term, due primarily to higher energy and resin costs.

Across much of our supply chain, we continue to experience greater than usual inflationary cost pressures and availability constraints for labour, transportation, raw materials such as resins and chemicals, and energy. We expect these cost pressures and availability constraints to remain elevated through 2022.

Based on our current outlook, assuming no deterioration in market conditions during the year and no additional lengthening of lead times for projects underway or planned, we continue to anticipate that we will invest approximately $500 to $600 million in 20221. However, given the rate of 2022 capital spending to-date we now expect full year capital expenditures to be nearer the bottom end of the guidance range.

1.This is a specified financial measure. Refer to the "Non-GAAP and Other Specified Financial Measures" section of this document for more information on this measure.

MD&A

Our Q2 2022 MD&A and interim consolidated financial statements and the related notes are available on our website and the System for Electronic Document Analysis and Retrieval ("SEDAR") and the Electronic Data Gathering, Analysis and Retrieval System ("EDGAR") website under the Company's profile.

Sustainability Report

West Fraser's 2021 Sustainability Report is available on the Company's website. This report reviews the Company's key Environmental, Social, and Governance ("ESG") performance and includes information aligned with the Sustainable Accounting Standards Board ("SASB"), Global Reporting Initiative ("GRI"), the Task Force on Climate-Related Disclosures ("TFCD") and CDP (formerly the Carbon Disclosure Project). In 2021, West Fraser built on its sustainability foundations and strategy by beginning the work to establish robust and credible environmental and social ambitions, goals and targets to guide the company's next chapter. This work included taking the necessary steps to become the first Canadian company committing to join the Science Based Targets Initiative ("SBTi") targets to materially reduce GHG emissions by 2030, aligning with the Paris Agreement.

Risks and Uncertainties

Risk and uncertainty disclosures are included in our 2021 annual MD&A, as updated by the disclosures in our Q2 2022 MD&A, as well as in our public filings with securities regulatory authorities.

Conference Call

West Fraser will hold an analysts' conference call to discuss the Company's Q2 2022 financial and operating results on Thursday, July 28, 2022, at 8:30 a.m. Pacific Time (11:30 a.m. Eastern Time). To participate in the call, please dial: 1-888-390-0605 (toll-free North America) or 416-764-8609 (toll) or connect on the webcast. The call and an earnings presentation may also be accessed through West Fraser's website. Please let the operator know you wish to participate in the West Fraser conference call chaired by Mr. Ray Ferris, President and Chief Executive Officer.

Following management's discussion of the quarterly results, investors and the analyst community will be invited to ask questions. The call will be recorded for webcasting purposes and will be available on the West Fraser website.

About West Fraser

West Fraser is a diversified wood products company with more than 60 facilities in Canada, the United States ("U.S."), the United Kingdom ("U.K."), and Europe. From responsibly sourced and sustainably managed forest resources, the Company produces lumber, engineered wood products (OSB, LVL, MDF, plywood, and particleboard), pulp, newsprint, wood chips, other residuals and renewable energy. West Fraser's products are used in home construction, repair and remodelling, industrial applications, papers, tissue, and box materials.

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