Greif Inc. · NYSE:GEF
Greif — Non-Deal Roadshow (September 2017)
55 slides from Greif's roadshow presentation, Sep 8, 2017
Slide 1: September 2017 Investor Meetings
SEPTEMBER 2017 INVESTOR MEETINGS
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: A global, diversified industrial packaging solutions provider
A global, diversified industrial packaging solutions provider Rigid Industrial Paper Packaging & Flexible Products & Land Packaging & Services Services Services Management Trailing four quarter Trailing four quarter Trailing four quarter Trailing four quarter $2,463.1M Revenue $766.9M Revenue $279.3
Slide 4: A global, diversified industrial packaging solutions provider
A global, diversified industrial packaging solutions provider • The leading global partner to petro and chemical companies, pharmaceuticals, agricultural and Rigid Industrial food companies Packaging & Services • Leading global product share and services offering; growing at industrial plus growth r
Slide 5: Leading product positions worldwide
Leading product positions worldwide Steel Fibre Closures Flexible IBCs Filling Reconditioning #1 #1 #1 #1 Plastic IBC Containerboard and corrugated sheets #2 #3 Note: ranking denotes standing in global market. Based on company estimates. September 8, 2017 – P.5
Slide 6: Global footprint operating in more than 40 countries
Global footprint operating in more than 40 countries 2016 Net Sales 15% 48% 36% AMER EMEA APAC September 8, 2017 – P.6
Slide 7: Key strategic priorities and strategy in place
Key strategic priorities and strategy in place In industrial packaging, be the best performing Vision customer service company in the world People & Teams Customer Service Excellence Performance • Colleague engagement • Superior customer satisfaction • Growth aligned to value • Environment, health a
Slide 8: Committed to health, safety and environmental protection
Committed to health, safety and environmental protection Medical case rate 1.5 1.4 1.3 1.2 Carbon reduction 1.1 1 • Targeting a 10% reduction by YE 2020 0.9 Energy reduction 0.8 • Targeting a 10% reduction by YE 2020 0.7 Waste reduction 0.6 2014 2015 2016 Trailing four • Divert 90% of waste in N. Am
Slide 9: Pursuing customer service excellence globally
Pursuing customer service excellence globally Customer Satisfaction Index (CSI) score • Customer service index in place 100.0 Target = 95 across all segments of the business 90.0 80.0 • Internal performance measure 70.0 against selected parameters of the 60.0 customer experience 50.0 40.0 • Provides
Slide 10: Greif Business System: reinvigorated and center led
Greif Business System: reinvigorated and center led The Greif Business System drives customer service excellence and margin expansion September 8, 2017 – P.10
Slide 11: Key financial metrics
Key financial metrics Operating Profit Before Free Cash Flow ($M)3 Special Items ($M)1 $300 $500 $400 $200 One time $20M $300 tax benefit $200 $100 $100 $0 $0 2015 2016 2017 run 2020 2 2015 2016 2017 2020 2 rate target commitment guidance commitment Trailing twelve month Class A Dividends per share
Slide 12: Sustained operational improvement is evident
Sustained operational improvement is evident 22.00% 20.00% 18.00% 16.00% 14.00% 12.00% 10.00% 8.00% 1 Gross Profit Margin SG&A ratio OPBSI Margin FY 2014 Trailing four Q3 2017 baseline (actual) quarters 1 OPBSI margin is defined as operating profit before special items divided by net sales. Note: A
Slide 13: Financial flexibility to execute capital priorities
Financial flexibility to execute capital priorities Total debt ($M) Capital priorities $1,300 Reinvest in the business • Fund maintenance and organic growth opportunities that exceed required returns 1,230 Maintain financial flexibility $1,200 • Current leverage ratio of 2.2x (target 2.0 – 2.5x) Ret
Slide 14: Debt maturity schedule
Debt maturity schedule $M $800 $700 $600 $500 $400 $300 $200 Make whole provisions prevent $100 early retirement $0 2017 2018 2019 2020 2021 Short-Term Borrowings 7.75% Senior Notes - 2019 7.375% Senior Notes - 2021 US Asset Securitization US Revolver - FY 2021 Other September 8, 2017 – P.14
Slide 15: New targets drive Greif towards performance potential
New targets drive Greif towards performance potential Trailing four quarter 2020 consolidated ($M) performance commitments Net Sales $3,538 $3,870 Gross Profit $716 $810 - $830 SG&A $382 $385 - $365 Operating Profit Before $333 $425 - $465 Special Items1,2 Free Cash Flow2,3 $154 $230 - $270 1 A summ
Slide 16: New targets drive Greif towards performance potential
New targets drive Greif towards performance potential 2020 segment commitments ($M) RIPS PPS FPS LAND Net Sales $2,670 $850 $320 $30 Gross Profit $570 - $580 $167 - $175 $61 - $67 $10 - $12 SG&A $280 - $274 $59 - $55 $41 - $37 $3 - $3 Operating Profit Before Special $290 - $306 $108 - $120 $20 - $30
Slide 17: Pursuing three avenues to growth
Pursuing three avenues to growth 1 2 3 Organic growth Capital expansion Merger & Acquisition • Strategic customer share • Guided by strategy alignment to • Solutions aligned to serve expansion via broad portfolio customer needs, markets, strategic customer needs and of products and services products
Slide 18: Risk adjusted framework helps to screen future growth
Risk adjusted framework helps to screen future growth ORGANIC GROWTH CAPITAL EXPENDITURE STRATEGIC NEW EQUIPMENT NEW PLANT NEW PLANT CUSTOMER IN EXISTING IN EXISTING IN NEW ALIGNMENT FACILITY GEOGRAPHY GEOGRAPHY Sell to existing open Add equipment to existing Build a new plant Build a new plant DESC
Slide 19: Risk adjusted framework helps to screen future growth
Risk adjusted framework helps to screen future growth ACQUISITION CONSOLIDATION PRODUCT GEOGRAPHIC PRODUCT PROCESS OF CURRENT EXPANSION / NEW EXPANSION ADJACENCY ADJACENCY FOOTPRINT PLATFORM Acquisition of competitor Acquisition of Acquisition of a company Acquisition of a company Acquisition of a c
Slide 20: Merger and acquisition priorities
Merger and acquisition priorities Steel Plastic Paper Packaging • New and existing regional • IBC expansion • Vertical integration opportunities that align to opportunities, to strategic customer needs • IBC reconditioning include specialty • Global footprint optimized • Plastic drum expansion produ
Slide 21: 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 operations in more than 40 countries that reduces risk and is not easily rep
Slide 22: Business Segment Overviews
GREIF PACKAGING SUCCESS TOGETHER™ BUSINESS SEGMENT OVERVIEWS
Slide 23: RIPS: highlights and differentiation
RIPS: highlights and differentiation Highlights Differentiation and key messages • Global network with industry’s most • Focus on earning value first, volume second comprehensive product line offering • Valued industry partner with strategic customer • Diverse customer mix – petro and chemicals, rel
Slide 24: RIPS: business overhauled through Transformation
RIPS: business overhauled through Transformation Midwest Clean room Clean room Sales, expansion expansion plastic N. America Structure leadership and expansion consolidation Re-org Latin customer Houston Profit pool Opex America service Midwest IBC analysis Leadership footprint training IBC expansio
Slide 25: RIPS: comprehensive product line and customer base
RIPS: comprehensive product line and customer base 2016 primary product sales by Bulk/commodity chemicals 2016 major end users substrate Oil/lubricants Specialty chemicals All other1 Food and juices Other Fibre Paints, coatings, adhesives drums Packaging distributors Steel IBCs drums Agro chemicals
Slide 26: RIPS: strategic growth outpacing the industry
RIPS: strategic growth outpacing the industry Global IBC volumes • Global IBC volumes up 49% since Q1 2015 • Increasing IBC capacity ‒ Germany ‒ Netherlands ‒ Spain Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 ‒ Houston, TX 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 Global large plastic drum volumes
Slide 27: PPS: highlights and differentiation
PPS: highlights and differentiation Highlights Differentiation • 8 highly capitalized and efficient plants • Unique industry position ‒ Containerboard mills – four machines at ‒ Speed – shortest lead time on all products two mill sites producing over 775,000 ‒ Customer service beyond the fundamental
Slide 28: PPS: Greif's sheet feeder PLUS business model is unique
PPS: Greif’s sheet feeder PLUS business model is unique Corrugated Box Plant CPG or Mfg. customer PLUS Corrugator and general converting equipment CorrChoice Sheet Specialty Feeder Converting E-commerce customer Sheet Plant • High speed • Best available Box Converting corrugators technology equipmen
Slide 29: FPS: highlights and differentiation
FPS: highlights and differentiation Highlights Differentiation • Leading position in highly fragmented market • Unmatched global network of production and commercial facilities • Extensive product offering: 1, 2 and 4 loop • Pursuing high end applications flexible intermediate bulk container options
Slide 30: FPS: path to 2020 commitments is clear
FPS: path to 2020 commitments is clear 2020 • Run rate targets 2019 achieved • Optimize go-to-market ‒ >20% gross profit 2018 model margin • Achieve organic targets • Continue targeted in APAC and U.S. ‒ 10% operating profit 2017 organic growth before special items • Fully leverage high end opportun
Slide 31: Land: highlights and differentiation
Land: highlights and differentiation Highlights Differentiation • ~240,000 acres in Louisiana, • Emphasis on generating non-timber related Mississippi, and Alabama revenue • Steady cash flows with minimal • Consulting services and solar capital reinvestment applications • Valued at $1,700 - $2,100/a
Slide 32: Management Biographies
GREIF PACKAGING SUCCESS TOGETHER™ MANAGEMENT BIOGRAPHIES
Slide 33: Greif: management team biographies
Greif: management team biographies Peter G. Watson Pete was named Greif’s President and Chief Executive Officer on November 1, 2015, after having previously served as Chief Operating Officer for Greif. Since joining the company in 1999, Pete has served in a variety of positions, including Group Pres
Slide 34: Greif: management team biographies
Greif: management team biographies DeeAnne Marlow DeeAnne joined Greif in May 2015, as Senior Vice President, Chief Human Resources Officer. Prior to joining Greif, DeeAnne spent nearly seven years at Cummins, Inc., where she was responsible for Human Resources for the Global Power Generation busine
Slide 35: Greif: management team biographies
Greif: management team biographies Michael Cronin Michael joined Greif in May 2015 as Senior Vice President and Group President, Rigid Industrial Packaging & Services – Europe, Middle East, and Africa. In January 2016, he assumed additional responsibility for Rigid Industrial Packaging & Services As
Slide 36: Appendix
GREIF PACKAGING SUCCESS TOGETHER™ APPENDIX
Slide 37: Non-GAAP Financial Measures
Non – GAAP Financial Measures Non-GAAP measures are intended to supplement and should be read together with our financial results. They should not be considered an alternative or substitute for, and should not be considered superior to, our reported financial results. Accordingly, users of this fina
Slide 38: Q3 operating profit before special items up 13%
Q3 operating profit before special items up 13% Financial metric ($M and $/sh) Q3 2017 Q3 2016 Change Net Sales, Excluding the Impact of Divestitures and Currency Translation1 $964.8 $837.4 Gross Profit $187.1 $176.5 Operating Profit Before Special Items2 $94.5 $83.9 Note: Q3’16 Net Income (Loss) At
Slide 39: Q3 Price, Volume and Foreign Currency Impact to Net Sales for Primary Products
Q3 Price, Volume and Foreign Currency Impact to Net Sales for Primary Products: Excluding Divestitures September 8, 2017 – P.39
Slide 40: Foreign Exchange Exposure
Foreign Exchange Exposure 10% strengthening of the USD; Currency Cumulative impact impact to OPBSI Euro $(5M) – $(7M) $(5M) – $(7M) Next five largest exposures $(6M) – $(8M) $(11M) – $(15M) Turkish Lira $3M – $4M Singapore Dollar $(3M) – $(4M) Argentina Peso $(3M) – $(4M) Russia Ruble $(1M) – $(2M)
Slide 41: 2020 target assumptions
2020 target assumptions • Annual market growth rate of 0-1% • Raw material costs (including OCC) assumed flat against current indices in the markets in which we participate • Raw material price increases are passed to customers through price adjustment mechanisms in contracts or otherwise with custo
Slide 42: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation: Segment and Consolidated Q3 2017, Q3 2016, Q3 2015 Operating Profit (Loss) Before Special Items September 8, 2017 – P.42
Slide 43: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation: Net Income and Class A Earnings Per Share Excluding Special Items $Millions and $/sh September 8, 2017 – P.43
Slide 44: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation: Reconciliation of Selected Financial Information Excluding the Impact of Divestitures September 8, 2017 – P.44
Slide 45: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation: Reconciliation of Selected Financial Information Excluding the Impact of Divestitures Continued September 8, 2017 – P.45
Slide 46: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation: Reconciliation of Net Sales Excluding the Impact of Divestitures and Currency Translation September 8, 2017 – P.46
Slide 47: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation: Rigid Industrial Packaging & Services Net Sales to Net Sales Excluding the Impact of Divestitures and Currency Translation $Millions September 8, 2017 – P.47
Slide 48: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation: Rigid Industrial Packaging & Services Primary Products Net Sales to Net Sales Excluding the Impact of Divestitures Note: Primary products include manufactured steel, plastic and fibre drums; intermediate bulk containers; linerboard, medium, corrugated sheets and corr
Slide 49: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation: Free Cash Flow and projected 2017 Free Cash Flow guidance Note: Free cash flow is defined as net cash provided by operating activities less cash paid for purchases of properties, plants and equipment Note: No reconciliation of the fiscal year 2017 Class A earnings pe
Slide 50: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation: Free Cash Flow for Fiscal 2014, Fiscal 2015 and Fiscal 2016 Free Cash Flow $ Millions FREE CASH FLOW Twelve months ended October 31, 2016 2015 2014 Net cash provided by operating activities $ 301.0 $ 206.3 $ 261.8 Less: Cash paid for capital expenditures $ (100.1) $
Slide 51: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation: Trailing four quarter Free Cash Flow $Millions Q3 2017 Q2 2017 Q1 2017 Q4 2016 TTM Net cash provided by (used in) operating activities 89.6 59.6 (44.1) 143.0 248.1 Less: Cash paid for purchases of properties, plants and equipment (25.4) (18.4) (21.3) (28.7) (93.8) Fr
Slide 52: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation: Consolidated Operating Profit (Loss) Before Special Items for FY 2014, FY 2015, and TTM Ended October 31, 2016 $Millions Fiscal Year Fiscal Year Fiscal Year 2014 2015 2016 Operating profit $ 249.3 $ 192.8 $ 225.6 Restructuring charges 16.1 40.0 26.9 Acquisition relat
Slide 53: Trailing Twelve Months and Historical
Trailing Twelve Months and Historical: Gross Profit Margin, SG&A Ratio and Operating Profit Before Special Items Margin $Millions Trailing Twelve Q3 2017 Q2 2017 Q1 2017 Q4 2016 FY 2015 FY 2014 Months $ % $ % $ % $ % $ % $ % $ % Net Sales 961.8 887.4 820.9 867.6 3,537.7 $3,616.7 $4,239.1 Gross Profi
Slide 54: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation: Net debt and Operating profit to EBITDA Before Special Items $Millions Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Short Term Borrowings 40.7 44.1 59.4 55.2 51.6 38.9 35.5 18.3 Current Portion of Long-term Debt 30.7 22.2 31
Slide 55: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation: Segment and Consolidated Q3 2017, Q2 2017, Q1 2017, Q4 2016 and trailing four quarters Operating Profit (Loss) Before Special Items Three months ended (in millions) October 31, 2016 January 31, 2017 April 30, 2017 July 31, 2017 Trailing four quarters Operating profit