Annual Meeting of Stockholders. March 3, 2015

Transcription

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2 Annual Meeting of Stockholders March 3, 2015

3 Safe Harbor Statement Forward-Looking Statements All presentations contain certain forward-looking information within the meaning of the Private Securities Litigation Reform Act of The words may, will, expect, intend, estimate, anticipate, aspiration, objective, project, believe, continue, on track or target or the negative thereof and similar expressions, among others, identify forward-looking statements. All forwardlooking statements are based on information currently available to management. Such forward-looking statements are subject to certain risks and uncertainties that could cause events and the Company s actual results to differ materially from those expressed or implied. Please see the disclosure regarding forward-looking statements immediately preceding Part I of the Company s Annual Report on the most recently filed Form 10-K. The company assumes no obligation to update any forward-looking statements. Regulation G These presentations may include certain non-gaap financial measures like EBITDA and other measures that exclude special items such as restructuring and other unusual charges and gains that are volatile from period to period. Management of the company uses the non-gaap measures to evaluate ongoing operations and believes that these non-gaap measures are useful to enable investors to perform meaningful comparisons of current and historical performance of the company. All non-gaap data in the presentation are indicated by footnotes. Tables showing the reconciliation between GAAP and non-gaap measures are available at the end of this presentation and on the Greif website at 3

4 Board of Directors Vicki L. Avril Former Chief Executive Officer and President, TMK IPSCO Bruce A. Edwards Former Global Chief Executive Officer, DHL Supply Chain Mark A. Emkes Former Commissioner Finance and Administration, State of Tennessee John F. Finn Chairman & Chief Executive Officer, Gardner, Inc. David B. Fischer President and Chief Executive Officer Michael J. Gasser Chairman Daniel J. Gunsett Partner, Baker Hostetler LLP Columbus, Ohio Judith D. Hook Investor John W. McNamara President & Owner, Corporate Visions Limited, LLC Patrick J. Norton Former Executive Vice President & Chief Financial Officer, The Scotts Miracle-Gro Company 4

5 Executive Officers David B. Fischer Peter G. Watson Lawrence A. Hilsheimer Gary R. Martz Ivan Signorelli Addison P. Kilibarda Karen P. Lane Timothy L. Bergwall Daniel R. Lister Nadeem Ali Douglas W. Lingrel David C. Lloyd Christopher E. Luffler Sharon R. Maxwell President and Chief Executive Officer Chief Operating Officer Executive Vice President, Chief Financial Officer Executive Vice President, General Counsel and Secretary Group President, Rigid Industrial Packaging & Services Europe, Middle East, Africa Senior Vice President, Global Strategy Senior Vice President, People Services & Talent Development Division President, Paper Packaging Division President, Flexible Products & Services Vice President, Treasurer Vice President, Chief Information Officer Vice President, Corporate Financial Controller Vice President, Business Managerial Controller Assistant Secretary 5

6 Deloitte & Touche LLP Greg Coy Jamey Halsey John Brown Global Lead Client Service Partner Global Lead Audit Partner Lead Audit Senior Manager 6

7 World s Leading Industrial Packaging Company Diversified Business Platform and Global Footprint $4.24 Billion $ Net sales for 12 months ended October 31, ,500 Approximate number of employees worldwide Rigid Industrial Packaging & Services $ Flexible Products & Services Paper Packaging Land Management $426 1 $707 1 $33 1 Greif serves diverse end markets such as chemicals, paints and pigments, food and beverage, petroleum, adhesives, industrial coatings, agricultural, pharmaceutical, minerals and building products 1 Twelve months ended October 31, 2014 >50 Operations in more than 50 countries 250 Nearly 250 operations 7

8 Fiscal 2014 Priorities 2014 Priorities Continuing to emphasize safety in all facilities and workrelated activities; Making further progress on reducing operating working capital and increasing cash flow; Addressing capacity utilization issues in Flexible Products & Services; Increasing integration levels, capacity and product differentiation efforts in Paper Packaging; Implementing more Greif Business System initiatives to improve performance; and Restructuring selected geographies and assets that persist with unacceptable results Achievements Included Medical Case Rate decreased to 1.45 from 1.47 in fiscal 2013 Free cash flow increased to $204 million from $130 million the prior year Closed KSA fabric hub and revised the FPS business strategy Initiated project to increase mill capacity and announced sixth corrugator in response to market demand Initial reductions in targeted SG&A expenses, portfolio optimization and increased operating efficiencies Restructuring actions in all regions with particular emphasis on underperforming RIPS and FPS operations 8

9 You can trust us Greif picked for Forbes magazine s America s 100 Most Trustworthy Companies 9

10 Together for Sustainability Members 10

11 Greif Awarded Silver Recognition Level 11

12 Michael J. Gasser Global Sustainability Award Recognizes the environmentally focused activities of Greif associates and superior effort and achievement in furthering the improvement of the environment and the company Winner Ivan Signorelli - Life Cycle Analysis The Greif Green Tool Team Project Under the leadership of Ivan Signorelli, The Greif Green Tool was developed to enable our customers to choose the right packaging products that will keep their products safe while helping them meet their sustainability goals. Award Winners Ivan Signorelli, James King, Greg Layer, Nick Sheets, Aysu Katun, Randy Stacy, Gustavo Melo, Philippe Marty, Peter Wittocx and Virginia Hu. 12

13 2015 Goals Safety reduce medical case rate by 10% Execute enterprise-wide transformation process Actively pursue portfolio optimization Increase financial strength and flexibility Continue to abide by The Greif Way 13

14 The Path of Transformation 14

15 Greif Transformation Video Greif Transformation Video 15

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17 Portfolio Optimization Quadrant Summary Transform or Fix 16 Value Cells 59 Value Cells Invest To Grow 5 Value Cells Divest 13 Value Cells Protect the Core 25 Value Cells 17

18 Portfolio Optimization Quadrant Summary Transform or Fix 16 Value Cells Revenue $788M Revenue * $4,083 Invest To Grow 5 Value Cells Revenue $903M Divest 13 Value Cells Revenue $445M Protect the Core 25 Value Cells Revenue $1,947M * Adjusted revenue (minus divestitures and land management). Note: A reconciliation of the differences between all non-gaap financial measures used in this presentation with the most directly comparable GAAP financial measures is included in the Appendix to this presentation. 18

19 Portfolio Optimization Progress to Date Transform or Fix Top down diagnostic targets developed 100% bottoms up plans received All plans ready for execution by Feb 15 th Divest Strategic review process Several actions completed Balance divestitures with Invest to Grow Invest To Grow Paper Mill Integration CorrChoice Innovative products and services Drum Plant Jubail, Saudi Arabia Protect the Core Top down targets assigned Plans being developed Begin execution by March 31 19

20 Transformation Initiatives Work Streams PMO Talent & Org Health Strategy Portfolio Optimiz-ation SG&A Efficiency Master plan Work stream coordination Track activities & impact Manage communications Talent & skills development Performance management Reward & recognition Organizational health / employee engagement Top-down enterprise strategy Segment level strategy Bottoms-up financial plans Contingencies Strategic planning process 3 year holistic strategic plan Transform / fix Protect the core Invest to grow Potential divest 1 Resource allocation process Quick wins Corporate / business benchmarking Work process redesign GBS Com-Ex GBS Op-Ex GBS Sourcing & Supply Chain Working Capital Reduction Quick win enablers Customer centricity Sales effectiveness Capabilities Supporting the change People development Safety Quality Stability Elimination of waste Network optimization Inventory management Strategic sourcing Sales & operations planning Standardization Logistics Diagnostics Accounts receivable Accounts payable Inventory IT 1 Pending strategic review 20

21 Free Cash Flow and Dividends Paid (Dollars in millions) (1) Free Cash Flow After Purchases of PP&E $141.8 $34.0 $9.8 $307.3 $113.9 $123.9 (2) Dividends Paid Free Cash Flow After Purchases of PP&E / Dividends Paid 1.6x 0.4x 0.1x 3.1x 1.2x 1.3x 21

22 Greif Debt Ratios vs. Industry Peer Group Averages Industry Peer Group Average (1) Greif Fiscal 2013 (1) Greif Fiscal 2014 Greif Forecast 2015 Net Debt (2) /EBITDA (3) 2.5X 2.4X 2.3X 2.5X Total Debt/Capital 58% 48% 49% 48% 1 Provided from a respected industry analyst s report, permission granted to use the information without attribution, the data was compiled under CFA guidelines from publicly available information. 2 Net debt represents long-term debt plus the current portion of long-term debt plus short-term borrowings less cash and cash equivalents. 3 EBITDA is defined as net income plus interest expense, net, plus income tax expense, less equity earnings of unconsolidated subsidiaries, net of tax plus depreciation, depletion and amortization 22

23 Financial Metrics From 2014 To 2017 Impact Value (%) Operating Profit % 7.5% 10.0% 30%+ Improvement Gross Profit % 19.1% 20.0% $50M+ Operating Margin SG&A % 11.7% 10.0% $50M+ Operating Margin Operating Working Capital % 9.7% <7.5% $100M Cash Drivers of Value Targeted Growth by Business Innovation Revenue Mix Business Specific Product Diversification Business Specific Product Diversification 2-3% Net Sales Growth in 2016 & % Net Sales Growth in 2016 &

24 Industry Debt Loads Total Debt/Total Capital 160% 140% Berry Plastics Group, Inc. 120% 100% 80% 60% 40% Avery Dennison Corp Crown Holdings, Inc. Owens-Illinois Inc Silgan Holdings Inc Greif Inc Multi-Color Corp Sealed Air Corp Rexam PLC Graphic Packaging Holding Ball Corp MeadWestvaco Corp Bemis Company, Inc. 20% Sonoco Products Co AptarGroup Inc 0% Total Debt/LTM EBITDA Source: Baird Research, December

25 Questions 25

26 Appendix 26

27 Analysis of Fiscal 2014 Net Sales Excluding Divestitures and Land Management (Dollars in millions) Greif, Inc. As Reported Divestitures Greif, Inc. Excluding Divestitures Land Management Greif, Inc. Excluding Divestitures and Land Management Net Sales $ 4,239.1 $ (126.6) $ 4,112.5 $ (29.5) $ 4,

28 Free Cash Flow and Dividends Paid (Dollars in millions) (1) 2014 (1) Forecast Net cash provided by operating activities $266.5 $178.1 $172.2 $473.3 $250.3 $261.8 $ Purchases of properties, plants and equipment (124.7) (144.1) (162.4) (166.0) (136.4) (137.9) (150.0) Free cash flow after purchases of PP&E Acquisitions of companies, net of cash acquired (90.8) (179.5) (344.9) - - (53.5) - Proceeds from the sale of properties, plants, equipment, businesses and other assets Free cash flow excluding timberland transactions (128.2) (304.1) Purchases of timber properties (1.0) (21.0) (3.4) (3.7) (9.0) (56.8) (34.0) Proceeds from the sale of timber properties Free cash flow including timberland transactions (149.2) (307.5) Class A dividends Class B dividends Dividends paid FCF after purchases of PP&E / dividends paid 1.6x 0.4x 0.1x 3.1x 1.2x 1.3x 28