Ranpak Holdings Corp · NYSE:PACK
Ranpak — SPAC Merger (January 2019)
47 slides from Ranpak's SPAC merger presentation, Jan 29, 2019
Slide 1: Investor Presentation
0 Investor Presentation
Slide 2: Disclaimer
1 Disclaimer CAUTION ABOUT FORWARD - LOOKING STATEMENTS The information in this press release may contain “forward - looking statements” within the meaning of Section 27A of the Securiti es Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as ame
Slide 3: Table of contents
2 Table of contents Introduction Ranpak Business Overview Industry Overview Growth Opportunities 4 3 2 1 Appendix Financial and Valuation Overview 5
Slide 4: Introduction
The Paper Packaging Experts ™ 3 Introduction
Slide 5: Situation overview
4 Situation overview One Madison Corp. (NYSE: OMAD) is a special purpose acquisition company launched in 2018 to acquire an operating business that produces stable revenues and robust free cash flow, with pricing power and significant opportunities for growth Ranpak Corporation (“Ranpak”) is the lea
Slide 6: Why One Madison likes Ranpak
5 Why One Madison likes Ranpak $7bn addressable global market with growth driven by e - Commerce Significant growth potential , particularly in wrapping, thermal and APAC Ranpak is a platform for additional industry - leading eco - friendly solutions (developed organically and through acquisit
Slide 7: The circular economy demands sustainable solutions
6 The circular economy demands sustainable solutions Environmental sustainability mindshare is accelerating among policymakers, companies, and consumers Source: Citi “Rethinking Single - Use Plastics August 2018”. Straws Cotton buds Cutlery European Union All plastic packaging must be recyclable or
Slide 8: Snapshot of Ranpak
7 Snapshot of Ranpak Industry leader offering full suite of environmentally sustainable, systems - based packaging solutions for e - Commerce and industrial supply chains Installed base of over 90,000 machines using Ranpak consumables exclusively Global business with strong presence in U.S. and Euro
Slide 9: Transaction overview
8 Transaction overview Pro forma enterprise value of $1.1 billion Compelling valuation of 11.5x ’19E Adj. EBITDA Omar Asali to serve as Executive Chairman post - closing Completion of transaction is expected in Spring 2019 $592 million of available equity Common stock private placement: $1
Slide 10: Transaction structure
Public investors 43% Anchor investors 28% Private placement 21% Sponsor promote 8% 9 Transaction structure Note: The sources and uses of funds presented herein are forward - looking statements and reflect the Company’s current plans and expectations regarding financing for the business combination.
Slide 11: The new Ranpak team
The new Ranpak team Board and Operating Advisors 10 Ranpak Collective experience Collective experience PICKAND MATHER & CO Omar Asali Chairman & CEO of One Madison Corp. - Former Chairman & CEO, HRG Group Robert King Director of One Madison Corp., Gehl Foods (Chairman), Fresh Pet, and Arctic Glacier
Slide 12: Ranpak Business Overview
The Paper Packaging Experts ™ 11 Ranpak Business Overview
Slide 13: Attractive and diverse business fundamentals
12 Attractive and diverse business fundamentals Compelling financial attributes – high growth and high margins Clear market leader in sustainable systems Full suite of solutions for global commerce Innovative IP protected systems and technology Razor / razorblade model drives high retentio
Slide 14: Fast growing, high return and resilient worldwide leader
13 Fast growing, high return and resilient worldwide leader in sustainable systems - based packaging solutions Compelling financial attributes – high growth and high margins (1) FCF Conversion defined as Adj. EBITDA - Maintenance Capex / Adj. EBITDA. >29,500 Broad Customer Base 15 Months Payback Per
Slide 15: Strong growth driven by machine placement
24 24 27 31 36 45 50 52 54 57 60 64 70 76 82 90 97 104 02A 03A 04A 05A 06A 07A 08A 09A 10A 11A 12A 13A 14A 15A 16A 17A 18E 19E 14 Strong growth driven by machine placement $85 $89 $100 $112 $128 $149 $158 $144 $156 $176 $176 $188 $216 $218 $233 $246 $267 $289 02A 03A 04A 05A 06A 07A 08A 09A 10A 11A
Slide 16: Global infrastructure to support growth
15 Global infrastructure to support growth Concord Township, OH (1997) Machine Assembly x Paper Conversion x Shanghai , China (2014) Sales Office Tokyo, Japan (2012) Sales Office Heerlen, Netherlands (1991) Machine Assembly x Paper Conversion x e3neo Assembly x Reno , NV (2002) Paper Conversion x Ka
Slide 17: Full suite of solutions for global commerce
Note: User Fees make up remaining 5% portion of sales. Installed base as of December 2017. Unaudited sales figures gross of 1% c ustomer payment discount. 16 Full suite of solutions for global commerce Wrapping (6% of sales) Cushioning (41% of sales) e3neo (3% of sales) Void - Fill (45% of sales)
Slide 18: Continuous innovation leading to patent-protected systems
Void Fill 8% Cushioning 92% Void Fill 45% Cushioning 41% Wrapping 6% Automation 3% User Fees 5% 17 Continuous innovation leading to high - quality, patent - protected systems WrapPak PS WrapPak FS Geami HV Wrapping Geami Exbox Consistent new product innovation and geographic expansion have fueled gr
Slide 19: Industry-leading intellectual property and patent portfolio
Industry - leading intellectual property and patent portfolio 18 Intellectual property overview Ranpak has maintained a comprehensive patenting program since its inception for its converting equipment and accessories, processes and packaging material Ranpak maintains substantial trade secret kno
Slide 20: Diversified and growing end-markets
% of market ~40% ~5% ~5% ~10% ~2% % of Ranpak sales ~35% ~10% ~8% ~7% ~6% Est growth rate Low to mid teens GDP plus B2C B2B 19 Diversified and growing end - markets Source: Freedonia and US Census. Underlying Market e - Commerce Automotive auto aftermarket IT / electronics Machinery Home goods Int
Slide 21: Ranpak is a leader in sustainability
20 Ranpak is a leader in sustainability and paper offers a compelling substitute to plastic Paper protective packaging possesses favorable environmental sustainability characteristics 9 out of 10 consumers would choose paper - based packaging or labels over other packaging materials Ranpak’s nat
Slide 22: Razor / razorblade model supports long-term relationships
Customers exclusively use Ranpak’s consumables High retention / renewal rates (90%+) with customers due to reliability and high quality Reliable provider of fulfillment service 21 Razor / razorblade model supports long - term relationships and favorable economics Machines provided at low cos
Slide 23: Exclusive distribution network enables sales reach
E - Commerce Auto OE & aftermarket IT / electronics Machinery Home goods Revenue breakdown by relationship length (1) Number of distributor - serviced accounts by size (1) 22 Exclusive distribution network enables sales reach to thousands of small, fragmented end - users while maintaining an asset -
Slide 24: The exclusive relationship is an advantage for distributors and Ranpak
23 The exclusive relationship is an advantage for both distributors and Ranpak , solidifying a key component of the Ranpak model Exclusive relationships benefit Ranpak and distributor partners alike Why Distributors Win Why Ranpak Wins x Reputation as the #1 paper system solution to facilitate sales
Slide 25: Industry Overview
The Paper Packaging Experts ™ 24 Industry Overview
Slide 26: Clear market leader in sustainable, system-based solutions
+ Other additional regional players 50% + 25 Clear market leader in sustainable, system - based solutions for e - Commerce and industrial supply chains Source: Management Estimates, Freedonia . (1) Represents North America and Europe systems based segment. Paper “in - the - box” packaging (1) Global
Slide 27: Fiber is the preferred solution
26 Fiber is the preferred solution … Ranpak’s fiber - based solution is winning in the marketplace Source: Company management, industry research. Fiber Airbags Foam Bubble wrap Loose fill (peanuts) Main application Cushioning Void - fill Wrapping Void - fill Cushioning Insulating Wrapp
Slide 28: Growth Opportunities
The Paper Packaging Experts ™ 27 Growth Opportunities
Slide 29: Compelling building blocks for revenue and Adj. EBITDA growth
28 Compelling building blocks for revenue and Adj. EBITDA growth 4.5% - 6.5% 10.0% e-Commerce Auto aftermarket IT/Electronics Machinery Home goods Other Initiatives Ranpak base growth M&A and global focus on sustainability Wrapping (Geami) Geographic expansion − Asia − E. Europe − C. / S. Americ
Slide 30: e3neo acquisition
e3neo acquisition Acquired in March 2017 Expands automation capabilities and machine product offering − High demand in e - Commerce Allows Ranpak to cross - sell and penetrate new customers − Now better positioned to capitalize on e - Commerce tailwinds Offers critical solutions for customer
Slide 31: Paper packaging, the sustainable solution for in-the-box protection
30 Paper packaging, the sustainable solution for in - the - box protection Sustainable Sourcing Sustainable Resources x 85% of Ranpak’s paper packaging in the US consists of either entirely or partially recycled content x Significant cost savings via reduced packing time and materials Ranpak works e
Slide 32: Priority growth opportunities
Focus on areas with: higher labor costs, internet penetration, IP protection, industrial growth Aggressively pursue growth in China and India, especially related to e - Commerce Leverage relationships with existing multi - national customers Partner with local distributors and end use customers to c
Slide 33: Other growth opportunities - One Madison-led initiatives
32 Other growth opportunities - One Madison - led initiatives Ranpak is an attractive platform and brand to grow beyond its current three core applications Massive opportunity in growing grocery delivery / Click & Collect Growth of online Pharmacy, meal kits Cold chain / Thermal Areas of Focus
Slide 34: Financial and Valuation Overview
The Paper Packaging Experts ™ 33 Financial and Valuation Overview
Slide 35: Financial summary
Capex (2) Free cash flow (3) % Growth (constant currency) - 3% 7% 2% 9% 34 Financial summary Source: Company management. Figures shown for historical periods derived from GAAP financial statements. (1) Based on constant currency at € / $ 1.15. 2015 to 2017 results are pro forma for the e3neo acquisi
Slide 36: Ranpak is a best-in-class asset with superior financial metrics
35 Ranpak is a best - in - class asset with superior financial metrics Sales growth Adj. EBITDA margin Return on tangible assets (4) (1%) 1% 2% 2% 4% 5% 5% 5% 5% 5% 5% 6% 6% 8% Ball ITW Nordson Sealed Air Rockwell Automation IDEX Kuehne + Nagel Aptar Middleby Graco CH Robinson CCL Expeditors Ranpak
Slide 37: Superior top-line growth and profitability
36 Superior top - line growth and profitability Source: FactSet, market data as of 1/25/2019. Sales Growth and EBITDA margin Sales Growth 2018E - 2019E EBITDA Margin 2018E Maintains leading margins with strong growth Ranpak Ball Sealed Air CCL Aptar ITW Rockwell Automation IDEX Nordson Middleby Grac
Slide 38: Ranpak valuation in perspective
12.0x 12.4x 12.5x 12.0x 12.4x 13.1x 13.6x 14.2x 15.6x 10.2x 10.8x 12.0x 12.3x 11.5x Kuehne + Nagel CH Robinson Expeditors ITW Middleby Rockwell Automation Nordson Graco IDEX Sealed Air CCL Aptar Ball Ranpak 37 Ranpak valuation in perspective Source: FactSet, market data as of 1/25/2019. (1) After ta
Slide 39: Recurring revenue from consumables made Ranpak recession resistant
38 Recurring revenue from consumables historically has made Ranpak recession resistant Source: Company management. Note: Based on constant currency at € / $ 1.15. Figures based on internal company financial statements (1) Unbleached Kraft Paper 30lb, $ per Ton. (2) Free Cash Flow calculated as Adj.
Slide 40: Investment highlights
39 Investment highlights (1) FCF Conversion defined as Adj. EBITDA - Maintenance Capex / Adj. EBITDA. x Long - term revenue growth – 7.3% 2015A to 2019E CAGR x e - Commerce led growth – 30%+ e - Commerce exposure x Industry - leading EBITDA margin – 33% 2018E Adjusted EBITDA Margin x High cash flow
Slide 41: Appendix
The Paper Packaging Experts ™ 40 Appendix
Slide 42: One Madison Team
41 One Madison Team One Madison has the industry and functional expertise to drive growth at Ranpak Managing Director, Blue Strat Advisors Previous roles − Chief Information Officer for the National Basketball Association (NBA) − Senior Vice President, Application Development for Viacom, MTVN, S
Slide 43: One Madison Team
Most recently at Drivetrain LLC, a provider of independent fiduciary services for companies. Previous roles − Investment Counsel at Harbinger Capital Partners − Weil, Gotshal & Manges LLP, Corporate Department 42 One Madison Team One Madison has the proven M&A capability to enhance growth in Ran
Slide 44: Ranpak's experienced and proven management team
43 Ranpak’s experienced and proven management team Note: Recruitment in progress for CFO. (1) Jean - Yves Sia founded e3neo and has been with Ranpak since 2017 acquisition. Eric Laurensse Managing Director Europe 9 years Larry Thomas Managing Director Americas 1 Year Momentive General Electric
Slide 45: Key financial reconciliation
44 Key financial reconciliation Gross to net revenue $000 FY15 FY16 FY17 Reported net revenue $210,982 $224,708 $244,092 Pro forma e3neo 3,159 4,087 68 Currency adjustment 3,556 4,399 2,119 Pro forma net revenue $217,697 $233,194 $246,239 Pro forma Adjusted EBITDA $000 FY15 FY16 FY17 Net Loss ($69,1
Slide 46: Consolidated statements of comprehensive loss
45 Consolidated statements of comprehensive loss $000 FY15 FY16 FY17 Net sales $210,982 $224,708 $244,092 Cost of sales 96,876 102,782 112,559 Gross profit $114,106 $121,926 $131,533 Intangible asset amortization 40,526 40,506 40,850 Goodwill amortization 54,424 54,345 55,175 Depreciation 20,146 18,
Slide 47: Consolidated balance sheets
46 Consolidated balance sheets $000 FY 15 FY 16 FY 17 Cash and cash equivalents $6,293 $5,322 $8,635 Receivable, net 19,029 20,119 29,436 Inventory, net 8,166 7,066 12,378 Prepaid expenses and other current assets 4,786 6,418 5,944 Total current assets $38,274 $38,925 $56,393 Total property, plant,