INVESTOR BRIEFING February 2017 NYSE: BMS Our vision: A passionate commitment to the growth and success of our customers will make Bemis the clear choice for inspired packaging solutions
SAFE HARBOR STATEMENT This presentation includes forward-looking statements within the meaning of the Safe Harbor provisions of the Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements relating to the expected future performance of the company and its objectives, expectations, and intentions for the future. These forward-looking statements are based on the current beliefs and expectations of Bemis Company s management and are subject to risks and uncertainties. The forwardlooking statements speak only as of the date of this presentation, and Bemis Company does not undertake to update such statements to reflect changes that occur after that date. There are a number of factors that could cause actual results to differ from those set forth in the forward-looking statements. These factors include, but are not limited to: general economic conditions, competitive conditions in our markets, and changes in governmental regulation. These and other risks, uncertainties, and assumptions are identified from time to time in our filings with the Securities and Exchange Commission including our most recent Annual Report on form 10-K and our quarterly reports on Form 10-Q. Such reports are available on the website of the Securities and Exchange Commission (www.sec.gov). 2
BEMIS: INSPIRED PACKAGING SOLUTIONS We are: a leading solution-provider of flexible and semi-rigid plastic packaging a strong global business with a long-term focus a S&P Dividend Aristocrat with 34 consecutive years of annual dividend increases committed to creating long-term, sustainable shareholder value 17,500 employees BMS NYSE ticker Neenah, WI headquarters 1858 established Leading technologies. Broad product line. Global size & scale. Leading technologies. Broad product line. Global size & scale. 3
2016 FINANCIALS REVENUE $4.0 B ADJ OP PROFIT 10.9% ADJ ROIC 10.6% CASH FROM OPS $437m ADJ EPS DIVIDEND +8% currency neutral $1.16 per share Bemis is on the path to achieve our long-term goals 4
high performance culture OUR STRATEGIC OBJECTIVES accelerate growth focus innovation continuously improve strong financial performance (ROIC, ROS, EBITDA) 5
PERFORMANCE DRIVERS commercialization of new products asset recapitalization program continuous improvement New innovations Leverage existing innovations globally New products higher margins Supports organic growth plan Installation of (primarily) slitters and presses in the U.S. Benefits Increases margin profile of existing business Helps maintain & grow volumes in lessdifferentiated business Efficiency in all functions shop floor to administrative Control costs Improve processes 6
A NEW CUSTOMER EXPERIENCE Bemis Innovation Center Neenah, WI A global hub for customer collaboration, ideation, and innovation 7
$250 CAPITAL SPENDING DISCIPLINE ($ in millions) $200 $150 15% ROIC hurdle-rate, 5 year avg $100 $50 $0 2010 2011 2012 2013 2014 2015 2016 2017-2019 EHS & Maintenance Growth & Productivity D&A Post-audit & continuous review process Supported by a disciplined investment process, CAPEX is focused on growth & productivity 8
THE FLEXIBLE PACKAGING SPACE How we succeed focus innovation. Innovation & sophistication accelerate growth continuously improve the big middle. Recapitalization Size, scale, service 9
GROWTH OPPORTUNITIES U.S. Packaging $2.6b 2016 revenue 15.3% op profit (+100 bps vs 2015) Global Packaging $1.4b 2016 revenue 8.2% op profit.. Format conversions (glass/can/paperboard flexible) Shifting channels Solutions that fit trends (healthy, fresh, convenient) Packaging sophistication (leveraging our technology globally) Food Safety Healthcare (quality; sterility) Leading technologies. Broad product line. Global size & scale. 10
U.S. PACKAGING RETURN ON SALES 2014 13.1% 2015 14.3% 2016 15.3% 2017 expected in line with 2016* 2018 expected margin expansion 2019 15-18% ROS *2017 ROS expectations reflect the offsetting impact of contractual negotiations to secure long-term business (supported by pricing analytics) < - - - - asset recapitalization & innovation drive margin expansion - - - - > 11
GLOBAL PACKAGING RETURN ON SALES 2014 7.6% 2015 8.8% 2016 8.2% 2019 10%+ ROS 2017 drivers: Restructuring program in Latin America (~$7m YOY increase to OP) Improved operations in Latin America & Oshkosh Healthcare (~$9m YOY increase to OP) Global leverage of sophisticated packaging innovations Innovation (increased packaging sophistication) drives long-term margin expansion 12
ADJUSTED ROIC 2016: 10.6% 2019: Top quartile NEW CAPITAL: 15% HURDLE RATE, 5-YEAR AVG ACQUISITIONS: 2014: 9.7% Bottom quartile, peer group ACCRETIVE TO ROIC WITHIN 5 YEARS CAPEX discipline and working capital & margin improvement drive ROIC improvement 13
RETURNING CASH TO SHAREHOLDERS Over $1b of value returned to shareholders (millions) $350 $300 $250 $200 $150 $100 $77 $152 $150 $144 + Emplal acquisition + SteriPack acquisition $50 $104 $108 $108 $110 $114 $0 2012 2013 2014 2015 2016 Dividends Share Repurchases FCF 14
INORGANIC GROWTH STRATEGY adjacencies Steripack speed to market Steripack proprietary technologies complementary geographies Emplal Steripack 15
2017 GUIDANCE 2016 2017 Actual Guidance* $2.69 Adj EPS $2.85 - $3.00 $208 CAPEX ~$200 $437 Cash from ops $440 - $480 16 *As of January 2017 CAPEX & CFO in millions Organic volume expectations: U.S. Packaging +1-2% Global Packaging +3%
WHY INVEST IN BEMIS? strong management & aligned team committed to creating long-term shareholder value expanding margins multiple contributors runway for further growth robust cash flow commitment to return FCF to shareholders global pipeline of accretive projects robust innovation pipeline and asset recapitalization program 17
APPENDIX: OUR BUSINESS
WHERE WE OPERATE 59 FACILITIES 12 COUNTRIES 70%* 7%*...5%* ~17,500 EMPLOYEES WORLDWIDE 18%* $4.0B * PERCENTAGE OF TOTAL BEMIS REVENUE 2016 REVENUE 20
NORTH AMERICA LATIN AMERICA HEALTHCARE* EUROPE ASIA-PACIFIC BEMIS COMPANY PURE PACKAGING ($ in millions) U.S. Packaging $2,621 2016 Net Sales Global Packaging $1,383 2016 Net Sales 50% 27% 12% 11% *Healthcare includes all medical device and pharmaceutical business globally both global and U.S. healthcare facilities roll up to the Global Packaging Segment 21
OUR CUSTOMERS Why customers choose Bemis: Reliable supply; quality product Technology leader with differentiated product Global breadth & scale Longevity & financial stability Broad customer base spanning from large CPGs to small, regional brands 22
OUR SUSTAINABILITY COMMITMENT Economic Sustainability Environmental Sustainability Social Sustainability Delivering value to stakeholders Operating for the long term with a sustainable business philosophy Contributing to the economic stability of our communities Reducing food waste Developing sustainable packaging solutions Minimizing manufacturing waste Reducing our impact on the planet Prioritizing employee safety Supporting programs that promote health and well-being in our communities Providing a positive workplace with opportunities for growth and success 23
OUR LEADERSHIP Bill Austen, President & CEO Driven leader focused on improving Bemis financial performance, helping customers succeed, and creating a high-performance culture Named CEO August 2014 Prior 14 years at Bemis: various leadership roles, including leading Bemis expansion into Asia Prior experience includes 20 years in leadership roles at General Electric Bachelor of Engineering degree in Marine Engineering from the State University of New York Maritime College; Master s degree in Engineering Administration from George Washington University Mike Clauer, SVP & CFO Disciplined leader focused on creating value and influencing change Named CFO December 2014 Prior experience includes BWAY, Apogee Enterprises, Budget Group, and PepsiCo Bachelor of Science degree in Accounting from California State Polytechnic University in Pomona, California Licensed Certified Public Accountant (CPA) Committed to creating long-term shareholder value 24 *See bemis.com for information on the entire Bemis leadership team
OUR PRIMARY MANUFACTURING PROCESSES vertical integration compounding & extrusion printing laminating slitting / rewinding (unique, high-tech processes) technology. service. scale. 25 *Additional core processes include: manufacturing rigid plastic parts, metallizing, bagging, pouching, value-added services, and others
THE CLEAR CHOICE FOR HEALTH & WELLNESS Healthy snacking in a one-handed world Freshness Less preservatives more sophisticated packaging 26
THE CLEAR CHOICE FOR SUSTAINABILITY Extend shelf life To reduce food waste Reduce material weight & volume Reduce & reuse inprocess waste 27
THE CLEAR CHOICE FOR SUSTAINABILITY Reduce material Flexibles replace blow-molded bottles 70% less plastic Reduce material weight & volume Flexibles replace metal can 28
THE CLEAR CHOICE FOR SOPHISTICATION & DIFFERENTIATION Display Shelf appeal & impression 29
THE CLEAR CHOICE FOR FOOD SAFETY Evolving Food Regulations Food Safety Heightened consumer awareness 30
THE CLEAR CHOICE FOR A DIGITAL WORLD LCD Panel (exploded view) 1 2 3 4 5 6 7 8 9 10 11 12 Our high-clarity films protect layers 2,3,5,6, and 8 of the inputs used to make LCD panels. 13 14 Protective films 31
THE CLEAR CHOICE FOR HEALTHCARE Need for zero defects Value Proposition To meet new market expectations, BD will be deploying a Policy of Zero Escapes across all our supplier base this year. Sam Machour, VP Quality Mgmt Consistent quality creates value 32
THE CONVERSION TO FLEXIBLE PACKAGING The demand for flexible packaging Logistics savings Shelf appeal & billboard Less waste at the grocer The speed of conversion Driven by customers' filling line reinvestment 33
APPENDIX: SUPPLEMENTAL FINANCIAL DATA
2016 RESTRUCTURING PROGRAM (LATIN AMERICA) Announced Restructuring Program in July 2016 Closure of four legacy plants in Latin America two closed by Dec 2016 (includes the largest of the 4 total facilities) two to be closed during 2017 no change in net production capacity (moving production to new Emplal facilities) Program cost estimated $28-$30million Program Savings ~$16m (full run-rate: 2018) Approximately half of the savings will offset headwinds from the economic environment in Latin America 35
Feb 2016 SHARE REPURCHASE AUTHORIZATION 20 million shares authorization increase 3-5 years Cash flow funds CAPEX Remaining FCF returned to shareholders (divd & share repurchase) 36
RECENT SHARE REPURCHASE 2010: 1.5m 2011: 5.0m 2013: 2.1m 2014: 3.8m 2015: 3.3m 2016: 3.0m shares repurchased 2016 Q1: 1 million shares repurchased Q2: No share repurchase (Steripack acquired) Q3: 1 million shares repurchased Q4: 1 million shares repurchased 37
2019 FINANCIAL TARGETS ($ millions) 2014 2019 2014 2019 Actual Target Actual Target Revenue Growth ROIC Total $4.3b $5.8b Industry quartile Bottom Top Organic 3.0% Inorganic 3.0% CAPEX* $186 ~$200 Operating Margins* EPS growth* 10% 10%+ U.S. Pkg 13.1% 15-18% Global Pkg 7.6% 10%+ Cash from ops* $248 ~$550 *excludes acquisitions Assumptions: Constant currency (Jan 2015) Effective pass-through of resin prices Cost take-out more than offsets non-raw material inflation SG&A spending is held flat Tax rate: 34% Constant share count Interest rates in line with forward curve (Jan 2015) Primary working capital is 14-16% of sales (2016-2019) 38
RETURN ON INVESTED CAPITAL 11.0% 10.5% 10.0% Consolidated Adj ROIC* 9.7% 10.5% 10.6% Disciplined approach to measurement & evaluation of returns on all capital projects 9.5% 9.0% 8.5% 8.3% 9.0% 9.3% Increased investment in projects that deliver higher ROIC 8.0% 2011 2012 2013 2014 2015 2016 *Adj ROIC = Net adj operating profit after-tax (NOPAT) divided by debt minus cash plus equity 39
ADJ RETURN ON INVESTED CAPITAL 2016 2015 2014 2013 2012 2011 Net Income $ 236.2 $ 239.3 $ 191.1 $ 212.6 $ 173.8 $ 187.3 Income taxes 1 114.7 120.9 133.2 107.7 104.8 104.9 Interest expense 1 60.2 51.7 61.2 68.2 70.9 76.8 Other non-operating income 1 (1.8) (6.0) (17.0) (7.9) (4.0) (1.6) Earnings before interest and taxes (EBIT) 409.3 405.9 368.5 380.6 345.5 367.4 Restructuring and acquisition-related costs 1 28.6 12.1-44.9 73.3 43.4 Discontinued operations impairment and plant closure - 3.7 68.9 - - - Adjusted EBIT (a) $ 437.9 $ 421.7 $ 437.4 $ 425.5 $ 418.8 $ 408.1 Average Invested Capital 2 Debt 3 $ 1,489.7 $ 1,359.7 $ 1,430.7 $ 1,459.0 $ 1,524.8 $ 1,473.3 Equity 4 1,256.0 1,310.7 1,617.0 1,647.3 1,612.2 1,815.5 Cash (64.9) (66.6) (118.9) (142.9) (117.5) (79.4) Average invested capital (b) $ 2,680.8 $ 2,603.8 $ 2,928.8 $ 2,963.4 $ 3,019.5 $ 3,209.4 Assumed tax rate 5 (c) 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% Adjusted ROIC - (a * (1 - c) / b) 10.6% 10.5% 9.7% 9.3% 9.0% 8.3% 1 - Includes amounts related to both continuing and discontinued operations 2 - Calculated as a five-quarter rolling average 3 - Debt includes current portion of long-term debt, short-term debt, and long-term debt 4 - Excludes noncontrolling interest 5 - Tax rate assumed to be the U.S. federal statutory rate 40
RECONCILIATION OF NON-GAAP EPS 2016 2015 2014 Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Q4 Full Year Continuing Operations: Diluted earnings per share, as reported $ 0.59 $ 0.53 $ 0.72 $ 0.64 $ 2.48 $ 0.58 $ 0.67 $ 0.64 $ 0.58 $ 2.47 $ 0.58 $ 0.60 $ 0.61 $ 0.57 $ 2.36 Non-GAAP adjustments per share, net of taxes Restructuring costs 0.09 0.03 0.04 0.16 0.03-0.01 0.01 0.05 Acquisition-related costs 0.01 0.05-0.01 0.07 0.02 0.01 0.03 Gain on Paper divestiture (0.06) (0.06) Gain on sale of land and building (0.02) (0.02) Diluted earnings per share, as adjusted $ 0.60 $ 0.67 $ 0.75 $ 0.67 $ 2.69 $ 0.61 $ 0.67 $ 0.67 $ 0.60 $ 2.55 $ 0.52 $ 0.60 $ 0.61 $ 0.57 $ 2.30 Compared to prior year, in 2016, net currency translation decreased EPS by approximately $.06. 41
COMPONENTS OF CHANGES IN NET SALES Net Sales ($ in millions) 2016 2015 % Change 2016 2015 % Change U.S. Packaging $ 632.0 $ 655.6 (3.6%) $ 2,621.1 $ 2,747.5 (4.6%) ** Organic growth (decline) * (3.6%) (4.6%) Global Packaging 356.0 327.1 8.8% 1,383.3 1,323.9 4.5% Currency effect (4.1%) (10.7%) Acquisition effect 7.6% 7.3% Organic growth (decline) * 5.3% 7.9% Total Net Sales from Continuing Operations $ 988.0 $ 982.7 0.5% $ 4,004.4 $ 4,071.4 (1.6%) Currency effect (1.4%) (3.5%) Acquisition effect 2.5% 2.4% Organic growth (decline) * (0.6%) (0.5%) *Organic growth (decline) = sum of price, mix, and volume Fourth Quarter Q4 YTD **U.S. Packaging mix reflects the success of the asset recapitalization program; lower sales mix does not reflect lower profits (100 bps of margin expansion in U.S. Packaging in 2016) due to the benefits of the new, efficient converting equipment installed. 42
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