Slide 1: Second Quarter 2019 Earnings Conference Call
SECOND QUARTER 2019 EARNINGS CONFERENCE CALL JUNE 6, 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: Second Quarter Fiscal Year (FY) 2019 summary
Second Quarter Fiscal Year (FY) 2019 summary Key performance statistics Key themes / markets Caraustar update Trailing 12 mos Customer Satisfaction Index • Adjusted EBITDA and Adjusted • Closed on acquisition on Class A EPS up ~31% and ~7%, February 11th; integration respectively, versus prior year
Slide 4: Rigid Industrial Packaging & Services (RIPS) review
Rigid Industrial Packaging & Services (RIPS) review • Net sales up 0.3%, excluding F/X1, from prior year $M Q2 2019 Q2 2018 ‒ Solid volume demand in the Middle East, North Africa, and Southern and Eastern Europe, offset by continued softness in Net sales $631.6 $662.7 West/Central Europe, APAC and U
Slide 5: Paper Packaging & Services (PPS) review
Paper Packaging & Services (PPS) review • Caraustar acquisition closed on Feb. 11; significant $M Q2 2019 Q2 2018 impact on quarterly results • Net sales up 132.6% from prior year Net sales $497.6 $213.9 ‒ Caraustar addition: $293M Gross profit $108.3 $49.9 ‒ 27K tons of containerboard economic down
Slide 6: Caraustar synergies revised significantly higher
Caraustar synergies revised significantly higher Caraustar run-rate synergy estimate ($M) Caraustar run-rate synergy detail $60 Transport/ logistics Operational enhancements Procurement/ materials $45 SG&A Other fixed costs Original Estimate Revised Estimate Now expect to realize at least $60M in ru
Slide 7: Flexible Products & Services (FPS) review
Flexible Products & Services (FPS) review • Net sales down 1.0%, excluding F/X1, from prior $M Q2 2019 Q2 2018 year Net sales $77.0 $84.1 ‒ Soft market conditions in Western Europe persist Gross profit $16.6 $17.6 • Gross profit dollars down 5.7% from prior year, but margin % up Adjusted EBITDA2: $7
Slide 8: Q2'19 vs. Q2'18: financial comparison
Q2’19 vs. Q2’18: financial comparison Key financial metrics ($M and $/sh) Q2 2019 Q2 2018 Net Sales, Excluding the Impact of Currency Translation1 $1,252.9 $968.3 Gross Profit $248.7 $195.3 SG&A $140.0 $102.7 Adjusted EBITDA2 $162.0 $123.3 Interest expense $33.9 $13.0 Other expense $2.3 $2.5 Net Inc
Slide 9: 2019 guidance and key modeling assumptions
2019 guidance and key modeling assumptions FY 2019 Guidance @ FY 2019 Guidance @ Fiscal 2019 guidance1 ($/sh and $M) Q1’19 call Q2’19 Adjusted Class A Earnings Per Share1 $3.60 - $4.00 $3.70 - $4.00 Adjusted Free Cash Flow2 $215 - $245 $230 - $250 FY 2019 Assumption @ FY 2019 Assumption @ Fiscal 201
Slide 10: Near term capital priorities: fund maintenance and de-lever
Near term capital priorities: fund maintenance and de-lever 2019 Capital Expenditure allocation1 Fiscal 2019 capital priorities Fund maintenance capital Discretionary • Fund maintenance and organic growth opportunities that Maintenance exceed required returns De-leverage the balance sheet Growth • T
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: Q2 Price, Volume and Foreign Currency Impact to Net Sales for Primary Products
Q2 Price, Volume and Foreign Currency Impact to Net Sales for Primary Products: Excluding Divestitures TOTAL SALES VOLUME PRICE FX VARIANCE RIPS NA -4.3% 5.6% -0.2% 1.1% ($9.1) $11.9 ($0.5) $2.2 RIPS LATAM -6.3% 21.1% -21.4% -6.6% ($2.5) $8.3 ($8.4) ($2.6) RIPS EMEA 1.4% 0.4% -8.7% -6.9% $4.0 $1.2 (
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 Customer Satisfaction Index (CSI) NPS Score Evolution Expectation PPS Wave 8 7 29 64 = 57 RIPS Wave 7 10 30 60 = 50 FPS Wave 1 11 38 51 = 40 70 75 80 85 90 95 100 0 20 40 60 80 100 Q2'19 Q2'18 Detractors Passives Promoters *Note: CSI is
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
GAAP to Non-GAAP reconciliation: Segment and Consolidated Financials: Q2 2019, Q2 2018 June 5, 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 June 5, 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 $Millions June 5, 2019 – P.19
Slide 20: GAAP to Non-GAAP reconciliation: Segment Operating Profit to Adjusted EBITDA
GAAP to Non-GAAP reconciliation: Reconciliation of Segment Operating Profit to Adjusted EBITDA ($Millions) June 5, 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 June 5, 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 June 5, 2019 – P.22