Packaging Corporation Of America · NYSE:PKG
Packaging Corporation Of America — Packaging Corp of America — Bank of America Global Agriculture & Materials Conference 2024
16 slides from Packaging Corporation Of America's conference presentation, Feb 29, 2024
Slide 1: Packaging Corporation of America – Bank of America Global Agriculture & Materials Conference
Packaging Corporation of America Bank of America Global Agriculture & Materials Conference February 29, 2024 Robert P. Mundy Executive V. P. & CFO Mark W. Kowlzan Chairman & CEO Exhibit 99.1
Slide 2: Forward-looking statements
Certain statements in this presentation are forward-looking statements. Forward-looking statements include statements about our future financial condition, our industry and our business strategy. Statements that contain words such as “anticipate”, “believe”, “expect”, “intend”, “estimate”, “hope” or
Slide 3: Positioned to Continue Industry-Leading Performance in 2024 and Beyond
Improving Packaging segment market conditions in 2nd half of 2023 sets-up great start to 2024 Packaging segment demand continues to strengthen; 1Q24 corrugated products volume exceeding guidance Higher prices in Packaging segment expected from 1Q24 price increases Completing Phase II of Jackson conv
Slide 4: PCA Corrugated Products Volume Growth - Outperformance vs. the Industry Continues
Industry PCA Corrugated Products Volume Growth - Outperformance vs. the Industry Continues % Cumulative Growth in Volume/Day 26% 4% PCA CAGR 2.4% Industry CAGR 0.2% Cumulative Growth
Slide 5: Growing Internal Containerboard Supply Supports Industry-Leading Margins
Containerboard Production Packaging EBITDA Margin % (1) . . . . and Growing Internal Containerboard Supply Supports Industry-Leading Margins 2017 2018 2019 2020 2021 2022 2023 000 Tons Wallula & Jackson Mills (1) See Appendix A for calculation of EBITDA and EBITDA margins = Avg Integration Rate 91.4
Slide 6: Solid Cash Flow Generation Allows Continuous Value-Creating Opportunities
Solid Cash Flow Generation Allows Continuous Value-Creating Opportunities Cash Flow from Operations Free Cash Flow (1) $ Millions (1) See Appendix A for calculation of free cash flow. All-Time Record
Slide 7: Consistently Strong ROIC > WACC Creates Significant Value
$1,000 $500 $600 $700 % Consistently Strong ROIC > WACC Creates Significant Value ROIC 6-Yr Avg: 16.8% WACC 6-Yr Avg: 7.9% Over $3 Billion of Value Creation (Pandemic) $400 $MM (1) See Appendix B for ROIC calculations. $900 $800 $1,100
Slide 8: High Correlation Between Industry-Leading ROIC and Share Price Growth
Y/E Share Price ROIC High Correlation Between Industry-Leading ROIC and Share Price Growth Share Price Average ROIC 16.8% (1) See Appendix B for ROIC calculations. ROIC (1)
Slide 9: Share Price Growth and EPS vs. Key Competitors
Earnings Per Share Price Per Share (3) ( Trendline) ( Trendline) Share Price Growth and EPS vs. Key Competitors EPS Price/Share (1) Start of Pandemic See Appendix C for reconciliation of PCA reported EPS & recurring EPS As of December 31 EPS Price/Share (1) PCA Competitor B (1) EPS Price/Share Compe
Slide 10: Impressive Total Return Track Record vs. Competitors and S&P 500
Impressive Total Return Track Record vs. Competitors and S&P 500 60 – 80%
Slide 11: Meaningful and Sustainable Approach to Dividends
Meaningful and Sustainable Approach to Dividends EPS (1) Dividend Per Share EPS Dividend/Share Annualized 6 Year Average Dividend Payout Ratio 49% (Pandemic) 6 Year Average Yield 3% Y/E Share Price Dividend/Share Annualized Dividend Per Share Share Price (1) See Appendix C for reconciliation of repo
Slide 12: Strong Balance Sheet Provides for Continued Financial Flexibility
Overall Long-term Debt Maturity 15.5 Years Lowest Leverage Among Industry Peers Interest Coverage Strong Balance Sheet Provides for Continued Financial Flexibility 14.3x (1) (1) Excludes one-time debt refinancing charges. Including these charges, the ratio would have been 10.3x and 10.7x for 2019 an
Slide 13: Appendix
Slide 14: Appendix A: EBITDA and EBITDA margin calculation
Packaging segment income $ 950.3$1,045.4$ 963.4$ 829.5$ 1,306.0$ 1,423.7$ 1,074.3 Depreciation, amortization and depletion317.5342.0342.8365.2381.0420.2472.5 EBITDA1,267.81,387.41,306.21,194.71,687.01,843.91,546.8 Special items(1) : -Acquisition-related, facilities closure and other --0.318.2(3.1)(0
Slide 15: Appendix B: ROIC calculation
Return on invested capital (ROIC) is calculated as follows: Income from operations$ 932$ 1,068$ 1,054$ 724$ 1,241$ 1,421$ 1,075 Special items and adjustments: -Facilities closure costs (income)(6)2-28(3)114 -Jackson mill conversion----141411 -Incremental costs for COVID-19---7--- -Goodwill impairmen
Slide 16: Appendix C: Reported EPS to recurring EPS reconciliation
Reported earnings per diluted share $ 7.07$ 7.80$ 7.34$ 4.84$ 8.83$ 11.03$ 8.48 Special items (1) - Jackson mill conversion-related activities----0.110.110.09 - Facilities closure and other costs(0.04)0.01-0.23(0.03)0.010.12 -Acquisition and integration related costs 0.01---0.01(0.01)- -Debt refinan
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