Graphic Packaging Holding Company · NYSE:GPK
Graphic Packaging — Q1 2023 Earnings Presentation
19 slides from Graphic Packaging's earnings presentation, May 2, 2023
Slide 1: First Quarter 2023 Financial Results
First Quarter 2023 Financial Results May 2, 2023 Michael P. Doss President and Chief Executive Officer Stephen R. Scherger EVP and Chief Financial Officer
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS • Any statements of the Company’s expectations in these slides, including, but not limited to, statements regarding the new CRB mill in Waco, Texas and expected facility closures, value creation, capacity, capital e
Slide 3: Q1 2023 Highlights
Q1 2023 HIGHLIGHTS • Continued net organic sales growth and margin expansion • Investing to capitalize on consumer preference for renewable and recyclable fiber-based packaging • Innovation and consumer trends resonating with leading brands and manufacturers • Raising 2023 Adjusted EBITDA and EPS gu
Slide 4: Q1 2023 Financial Performance
Q1 2023 FINANCIAL PERFORMANCE ($M) ($M) SALES ADJ EBITDA ADJ EPS $2,438 $484 $0.77 Year/Year Year/Year Year/Year 4 Note - Adjusted figures represent Non-GAAP Financial Measures. Please refer to earnings press release for reconciliations to GAAP measures
Slide 5: Coated Recycled Board (CRB) Platform Optimization Progress
COATED RECYCLED BOARD (CRB) PLATFORM OPTIMIZATION PROGRESS K2 RAMP EXCEEDING EXPECTATIONS WACO 550K TON CRB MILL PROJECT UPDATE • Now expect 550K tons of annual • Project began in Q1 2023 production versus original 500K tons investment case • Site clearing and excavation work well underway • Expect
Slide 6: Innovative, New CRB Grades Expand Market Opportunities
INNOVATIVE, NEW CRB GRADES EXPAND MARKET OPPORTUNITIES PACESETTERTM Rainier grade is expected to compete directly with FBB/SBS with superior economics DAIRY BEVERAGE CARRIERS & WRAPS HEALTHCARE & BEAUTY CONFECTIONARY More CRB in FROZEN More Consumer ENTREES Experiences BLISTER CARDS FOOD SERVICE PAC
Slide 7: First to Market Proprietary Cup Innovation Driving Foodservice Growth
FIRST TO MARKET PROPRIETARY CUP INNOVATION DRIVING FOODSERVICE GROWTH INNOVATION CUSTOMER LAUNCH ADDRESSABLE MARKET $2B1 (~600K tons) Proprietary, highly-insulated double-wall cup ✚ Foam – 20 billion cup U.S. market ✚ Plastic – 25 billion cup U.S. market VALUE PROPOSITION Enhanced Consumer Experienc
Slide 8: Q1 2023 Financial Results
Q1 2023 FINANCIAL RESULTS Change ($M excl EPS) Q1 2023 Q1 2022 y/y Business Environment • Backlogs 6 weeks Net Sales $2,438 $2,245 9% • Operating rate ~95%2 Adj. EBITDA $484 $350 38% Diversified Portfolio Benefitting Results • Food, Beverage & Cons. sales +8% y/y Adj. EBITDA Margin 19.9% 15.6% +430b
Slide 9: Raising 2023 Annual Guidance
RAISING 2023 ANNUAL GUIDANCE Original Current 2023 Guidance 2023 Guidance Sales ~$10B ~$10B Adjusted EBITDA ($M) $1,700 - $1,900 $1,800 - $2,000 Adjusted Cash Flow ($M) $600 - $800 $600 - $800 Year-End Net Leverage ~2.5x <2.5x Adjusted EPS $2.50 - $2.90 $2.70 - $3.10 9
Slide 10: Original Vision 2025 Financial Goals to Be Achieved in 2023; Enhanced Goals
ORIGINAL VISION 2025 FINANCIAL GOALS TO BE ACHIEVED IN 2023; ON TRACK TO DELIVER ENHANCED VISION 2025 FINANCIAL GOALS1 2019 2022 2023 Original Enhanced Actual Actual Guidance Vision 2025 Vision 2025 Sales $6.2B $9.4B ~$10B ~$10B $10B – $12B Adjusted EBITDA ($M) $1,030 $1,600 $1,800 - $2,000 $1,800 -
Slide 11: Appendix
APPENDIX This information is confidential and proprietary to Graphic Packaging International. Any reproduction or distribution to any third party is prohibited ©2023 Graphic Packaging International.
Slide 12: Q1 2023 Net Sales Performance
Q1 2023 NET SALES PERFORMANCE ($M) +9% Organic Sales $15M Tama Mill $4M Open Market ($23M) 1 1.The impact of Foreign Exchange is measured as the increase or decrease in sales for the current period by applying 12 prior period foreign currency exchange rates to present a constant currency comparison
Slide 13: Q1 2023 Adjusted EBITDA Performance
Q1 2023 ADJUSTED EBITDA PERFORMANCE ($M) +38% Kalamazoo/CRB $42M Unplanned Maint. Downtime1 ($26M) Planned Maint. Downtime ($5M) 2 1. West Monroe power issue (resolved) 13 2. The impact of Foreign Exchange is measured as the increase or decrease in results for the current period by applying prior pe
Slide 14: Running a Different Race – Compelling Investment Case
RUNNING A DIFFERENT RACE – COMPELLING INVESTMENT CASE LEADING integrated global fiber-based consumer packaging company ADVANCED innovation capabilities, diversified market segments, and sustainable packaging offerings provide runway for organic growth COMPETITIVELY advantaged with lowest-cost operat
Slide 15: Recession Resistant Model
RECESSION RESISTANT MODEL 2023: Diversified Revenue & Customer Profile; Significantly Stronger Financial Position With Material Cash Flow Generation / Solid Balance Last Recession - What happened in 2009? Sheet • Core folding carton volume declined 3.6% y/y • End Market Diversification • Adj. EBITDA
Slide 16: 2023 Annual Guidance Support
2023 ANNUAL GUIDANCE SUPPORT EBITDA SUPPORT Organic Sales Growth 100 - 200bps Price-Commodity Input Cost Relationship $200M - $400M Price $450M-$550M, Commodity Input Cost ($100-$300M) Net Performance $100M - $140M Includes Kalamazoo Labor, Benefits, Other Inflation, FX ($100M - $120M) CASH FLOW SUP
Slide 17: 2023 Year-over-Year Outage Impact Schedule and Other Guidance
2023 YEAR-OVER-YEAR OUTAGE IMPACT SCHEDULE AND OTHER GUIDANCE Price-Commodity Input Cost Relationship 2021 2022 2023 & Net Outage Cost Impacts Actual Actual Guidance Year-over-Year Change ($ in Millions) Pension Expense (excludes pension $6M $5M $9M amortization) Q1A Q2E Q3E Q4E Depreciation1 $403M
Slide 18: Supplemental Information
SUPPLEMENTAL INFORMATION Commodity Annual Consumption 2022 Sales By Currency Categories Units Currency % of Sales Wood (Million tons) 10 USD 71 Recycled Fiber (Million tons) 1.4 EUR 10 Natural Gas (MMBTU) 26 GPB 5 CAD 2 Caustic Soda (000, tons) 79 MXN 2 Starch (Million lbs.) 143 PLN 2 TiO2 (Million
Slide 19: LZZn
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