Slide 1: First Quarter 2019 Earnings Conference Call
FIRST QUARTER 2019 EARNINGS CONFERENCE CALL FEBRUARY 28, 2019
Slide 2: Safe harbor
Safe harbor FORWARD-LOOKING STATEMENTS • This presentation contains certain forward-looking information within the meaning of the Private Securities Litigation Reform Act of 1995. The words “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “aspiration,” “objective,” “project,” “believe,”
Slide 3: First Quarter Fiscal Year 2019 key takeaways
First Quarter Fiscal Year (FY) 2019 key takeaways Key performance statistics Key themes / markets Caraustar update Trailing 12 mos Customer Satisfaction Index • Adjusted EBITDA and Adjusted • Announced agreement to Class A EPS up 15.4% and 32.7%, acquire Caraustar Industries on respectively, versus
Slide 4: Rigid Industrial Packaging & Services (RIPS) review
Rigid Industrial Packaging & Services (RIPS) review • Net sales up 0.9%, excluding F/X1, from prior year $M Q1 2019 Q1 2018 ‒ Solid volume demand in the Middle East and North Africa and Southern Europe, offset by continued softness in West/Central Net sales $597.9 $615.4 Europe, China, Argentina and
Slide 5: Paper Packaging & Services (PPS) review
Paper Packaging & Services (PPS) review • Net sales up 6.6% from prior year – higher selling prices $M Q1 2019 Q1 2018 and solid unit volume growth • Adj. EBITDA 1 up 29.2% from prior year Net sales $217.3 $203.8 ‒ Solid demand, favorable price/cost environment and improved Gross profit $53.9 $43.3
Slide 6: Flexible Products & Services (FPS) review
Flexible Products & Services (FPS) review • Net sales down 1.4%, excluding F/X1, from prior $M Q1 2019 Q1 2018 year Net sales $75.1 $80.0 ‒ Softer market conditions in parts of Western Europe Gross profit $17.4 $15.2 • Gross profit up 14.5% from prior year ‒ Improved manufacturing efficiencies acros
Slide 7: Q1'19 vs. Q1'18: financial comparison
Q1’19 vs. Q1’18: financial comparison Key financial metrics ($M and $/sh) Q1 2019 Q1 2018 Net Sales, Excluding the Impact of Currency Translation1 $923.8 $905.7 Gross Profit $172.8 $171.7 SG&A $98.1 $103.6 Adjusted EBITDA2 $106.3 $92.1 Interest expense $11.7 $13.3 Other expense $(0.2) $7.7 Adjusted
Slide 8: Caraustar acquisition closed February 11, 2019
Caraustar acquisition closed February 11, 2019 • Combined pro-forma revenue of $5.3 billion and EBITDA(1) of more than $720 million • Generates earnings accretion and substantial free cash flow accretion within first year Compelling • Creates at least $45 million in annual run-rate cost synergy oppo
Slide 9: 2019 guidance now incorporates Caraustar
2019 guidance now incorporates Caraustar FY 2019 Guidance @ FY 2019 Guidance @ Fiscal 2019 guidance1 ($/sh and $M) Q4’18 call Q1’19 Adjusted Class A Earnings Per Share 1 $3.55 – $3.95 $3.60 – $4.00 Adjusted Free Cash Flow2 $175 – $205 $215 – $245 FY 2019 Assumption @ FY 2019 Assumption @ Fiscal 2019
Slide 10: Updated capital priorities: near term focus on de-leveraging
Updated capital priorities: near term focus on de-leveraging Anticipated path to de-leveraging Fiscal 2019 capital priorities (Net debt1 to trailing four quarter Adj. EBITDA2) Reinvest in the business 4.0x • Fund maintenance and organic growth opportunities that ~3.6x Expect to de-leverage exceed re
Slide 11: Why invest in Greif?
Why invest in Greif? 1 Comprehensive packaging provider with leverage to the industrial economy Broad product offering with exposure to favorable long term global trends 2 Diverse global portfolio that mitigates risk Global presence in more than 40 countries that reduces risk and is not easily repli
Slide 12: Appendix
GREIF PACKAGING SUCCESS TOGETHER™ APPENDIX
Slide 13: Q1 Price, Volume and Foreign Currency Impact to Net Sales for Primary Products
Q1 Price, Volume and Foreign Currency Impact to Net Sales for Primary Products: Excluding Divestitures February 27, 2019 – P.13
Slide 14: Key Foreign Exchange assumptions
Key Foreign Exchange assumptions 10% strengthening of the USD; Currency Cumulative impact impact to EBITDA Euro $(9M) – $(11M) $(9M) – $(11M) Next five largest exposures $(7M) – $(10M) $(16M) – $(21M) Turkish Lira $3M – $4M Singapore Dollar $(3M) – $(4M) Russia Ruble $(3M) – $(4M) British Pound $(2M
Slide 15: Striving to become a world class customer service organization
Striving to become a world class customer service organization Greif Customer Satisfaction Index (CSI) PPS RIPS FPS Expectation 70 75 80 85 90 95 100 Q1'19 Q1'18 *Note: CSI is an internal measure of a plant’s or business’ performance against selected parameters that customers experience, giving us a
Slide 16: Non-GAAP financial measures
Non – GAAP financial measures Non-GAAP measures are intended to supplement and should be read together with our financial results. They should not be considered an alternative or substitute for, and should not be considered superior to, our reported financial results. Accordingly, users of this fina
Slide 17: GAAP to Non-GAAP reconciliation: Segment and Consolidated Financials
GAAP to Non-GAAP reconciliation: Segment and Consolidated Financials: Q1 2019, Q1 2018 February 27, 2019 – P.17
Slide 18: GAAP to Non-GAAP reconciliation: Net Sales Excluding Currency Translation
GAAP to Non-GAAP reconciliation: Reconciliation of Net Sales to Net Sales Excluding the Impact of Currency Translation $Millions February 27, 2019 – P.18
Slide 19: GAAP to Non-GAAP reconciliation: Net Income to Adjusted EBITDA
GAAP to Non-GAAP reconciliation: Reconciliation of Net Income to Adjusted EBITDA $Millions February 27, 2019 – P.19
Slide 20: GAAP to Non-GAAP reconciliation: Segment Operating Profit to Adjusted EBITDA
GAAP to Non-GAAP reconciliation: Reconciliation of Segment Operating Profit to Adjusted EBITDA $Millions February 27, 2019 – P.20
Slide 21: GAAP to Non-GAAP reconciliation: Net Income and Class A EPS
GAAP to Non-GAAP reconciliation: Net Income and Class A Earnings Per Share Excluding Adjustments $Millions and $/sh February 27, 2019 – P.21
Slide 22: GAAP to Non-GAAP reconciliation: Adjusted Free Cash Flow
GAAP to Non-GAAP reconciliation: Adjusted Free Cash Flow and projected 2019 Adjusted Free Cash Flow guidance Three months ended January 31, (in millions) 2019 2018 Net cash used in operating activities $ (9.6) $ (53.7) Cash paid for purchases of properties, plants and equipment (26.0) (28.0) Free ca