Greif Inc. · NYSE:GEF
Greif — Investor Presentation (January 2020)
47 slides from Greif's investor presentation, Jan 29, 2020
Slide 1: January 2020 Investor Presentation
January 2020 Investor Presentation
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: Who we are
Who we are January 29, 2020 – P.3
Slide 4: Leading industrial packaging solutions provider
Who we are How we operate Why invest in Greif? Business segment overview Appendix Leading industrial packaging solutions provider 2019 Performance ($M) Highlights and capabilities Differentiations Revenue $4,595.0 • Leading product positions in • Demonstrated commitment to multiple packaging substra
Slide 5: Leading positions in multiple packaging substrates
Who we are How we operate Why invest in Greif? Business segment overview Appendix Leading positions in multiple packaging substrates Upstream Operations Industrial Packaging Steel Industrial Fibre Flexible IBCs #2 Closures Uncoated Recycled Paperboard (URB) #3 #1 #1 #1 #1 Coated Recycled Paperboard
Slide 6: Record Fiscal Year (FY) 2019 performance
Who we are How we operate Why invest in Greif? Business segment overview Appendix Record Fiscal Year (FY) 2019 performance Net Sales Adj. EBITDA1 Adj. EBITDA Adjusted EPS1 Adjusted Free +18.6% to +30.9% to Margin +12.2% to Cash Flow2 $4,595M $658.9M +130BP to $3.96 +50.0% to 14.3% $267.8M Notable ac
Slide 7: How we operate
How we operate January 29, 2020 – P.7
Slide 8: Our values and behaviors
Who we are How we operate Why invest in Greif? Business segment overview Appendix Our values and behaviors Values Behaviors Communicate with respect, candor, and trust Think Act with the Greif mindset of a first champion Model the behaviors of a servant leader January 29, 2020 – P.8
Slide 9: What we do for customers
Who we are How we operate Why invest in Greif? Business segment overview Appendix What we do for customers Exceed their expectations with customer Protect their Enhance their service, products sustainability flexibility, and innovations • Leverage our diverse geographic • Offer sustainable solutions
Slide 10: A clear vision with strategic priorities in place
Who we are How we operate Why invest in Greif? Business segment overview Appendix A clear vision with strategic priorities in place Strategic In industrial packaging, be the best performing Vision customer service company in the world 1 Engaged Teams 2 Differentiated Customer Service 3 Enhanced Perf
Slide 11: Strategic priority: engaged teams
Who we are How we operate Why invest in Greif? Business segment overview Appendix 1 Strategic priority: engaged teams Teams in the top quartile of those Gallup1 has Gallup Overall Engagement Score studied have… 21% Higher profitability 4.0 Manufacturing sector 3.97 percentile ranking 17% Higher prod
Slide 12: Strategic priority: differentiated customer service
Who we are How we operate Why invest in Greif? Business segment overview Appendix 2 Strategic priority: differentiated customer service Customer Satisfaction Index (CSI) Net Promoter Score (NPS) 100 Net Promoter Wave 9 Score 90 6 26 67 = 61 80 70 60 Wave 1 50 11 38 51 = 40 40 30 Detractors Passive P
Slide 13: Strategic priority: enhanced financial performance
Who we are How we operate Why invest in Greif? Business segment overview Appendix 3 Strategic priority: enhanced financial performance Net Sales ($ Millions) Adj. EBITDA ($ Millions) $5,000 $700 $4,600 6.2% 13.8% $4,200 $500 $3,800 $3,400 $3,000 $300 FY15 FY19 CAGR FY15 FY19 ‘15-’19 Adj. EPS ($/sh)
Slide 14: Strategic priority: enhanced financial performance
Who we are How we operate Why invest in Greif? Business segment overview Appendix 3 Strategic priority: enhanced financial performance Anticipated synergy over 36 months ($M) Caraustar run-rate synergy detail $75 $70 Transport / Logistics $65 Procurement / $60 Materials Operational $55 Enhancements
Slide 15: Strategic priority: enhanced sustainability performance
Who we are How we operate Why invest in Greif? Business segment overview Appendix 3 Strategic priority: enhanced sustainability performance 2016 2018 2019 Join UN Global Achieved an Achieved an “A” Compact “A- Leadership” MSCI ESG rating CDP score 2017 Sustainability goals established 2015 2016 2017
Slide 16: Why invest in Greif?
Why invest in Greif? January 29, 2020 – P.16
Slide 17: Global trends support future growth
Who we are How we operate Why invest in Greif? Business segment overview Appendix Global trends support future growth Trend Comments • World population expected to grow by ~13% by 20301 Global population growth; emerging • Emerging economies are driving greater consumption economies and rise of the
Slide 18: Clear capital allocation priorities in place
Who we are How we operate Why invest in Greif? Business segment overview Appendix Clear capital allocation priorities in place 1 • Fund maintenance to sustain the “cash machine” and organic growth opportunities that exceed Reinvest in required returns the business • Expect FY2020 capex: $160 – $180M
Slide 19: Potential for interest savings in 2021
Who we are How we operate Why invest in Greif? Business segment overview Appendix Potential for interest savings in 2021 Debt maturities as of 10/31/2019 ($M) $1,400 $1,200 $1,000 “Make whole” $800 provisions discourage early $600 debt retirement $400 $200 $0 2019 2020 2021 2022 2023 2024 2025 2026
Slide 20: Industry leading dividend and compelling valuation
Who we are How we operate Why invest in Greif? Business segment overview Appendix Industry leading dividend and compelling valuation Dividend yield 2020E FCF Yield EV / NTM EBITDA Ball International Paper Berry Global Group Aptargroup International Paper Greif Avery-Dennison Graphic Packaging Packag
Slide 21: Anticipate significant EBITDA and FCF Expansion
Who we are How we operate Why invest in Greif? Business segment overview Appendix Anticipate significant EBITDA and FCF Expansion FY’22 Adj. FY’22 Adj. Free Path to 2022 Adjusted EBITDA ($M) $M EBITDA1 Cash Flow2 $1,000 RIPS $288 – $315 $820 - $900 $800 PPS $490 – $530 $600 $503.2 FPS $30 – $40 $400
Slide 22: Why invest in Greif?
Who we are How we operate Why invest in Greif? Business segment overview Appendix Why invest in Greif? Compelling customer value Robust and diverse product Numerous avenues for Compelling dividend and proposition due to portfolio with exposure to a incremental low-risk growth opportunity for free ca
Slide 23: Appendix
GREIF PACKAGING SUCCESS TOGETHER™ Appendix
Slide 24: Business segment overview
Business segment overview January 29, 2020 – P.24
Slide 25: RIPS: broad product and services capability
Who we are How we operate Why invest in Greif? Business segment overview Appendix RIPS: broad product and services capability Steel Fibre Closures Plastic #1 #1 #1 #2 IBC Earth Minded Filling #3 RIPS is the most comprehensive customer solutions provider in the industry Note: Ranking denotes standing
Slide 26: RIPS: highlights and differentiation
Who we are How we operate Why invest in Greif? Business segment overview Appendix RIPS: highlights and differentiation 2019 Financials ($M) Highlights and Capabilities Differentiation Revenue $2,490.6 • Extensive global expertise and • Industry’s most comprehensive operational footprint product line
Slide 27: RIPS: expanding reconditioning for sustainable solutions
Who we are How we operate Why invest in Greif? Business segment overview Appendix RIPS: expanding reconditioning for sustainable solutions Reconditioning overview Greif today Greif future state • Benefits to customers: • Operate services to facilitate • Closed loop network in place in collection and
Slide 28: PPS: broad portfolio offering a variety of paper products
Who we are How we operate Why invest in Greif? Business segment overview Appendix PPS: broad portfolio offering a variety of paper products Mills Containerboard Uncoated Recycled Coated Recycled Paperboard Paperboard Recovered Fiber C #2 #3 Converting Corrugated Consumer Tube & Core Products Packagi
Slide 29: PPS: highlights and differentiation
Who we are How we operate Why invest in Greif? Business segment overview Appendix PPS: highlights and differentiation 2019 Financials ($M) Highlights and Capabilities Differentiation Revenue $1,780.0 • Niche position in containerboard • Speed – response and lead times Adjusted EBITDA1 $348.3 • Leade
Slide 30: PPS: expanded, integrated and national paper network
Who we are How we operate Why invest in Greif? Business segment overview Appendix PPS: expanded, integrated and national paper network Containerboard Corrugated ~1M tons 7 sheet feeders Packaging 1 box plant Industry Recovered Uncoated Boxboard Tubes & Cores Fiber Group ~700K tons 45 converting plan
Slide 31: PPS: IPG benefits from diverse end markets
Who we are How we operate Why invest in Greif? Business segment overview Appendix PPS: IPG benefits from diverse end markets • IPG’s diversified end market revenue provides broad Tube/core revenue by end market1 exposure to US economic activity • Tube/core market offers limited risk as paper remains
Slide 32: PPS: CPG opportunity to grow with differentiated service in the middle market
Who we are How we operate Why invest in Greif? Business segment overview Appendix PPS: CPG opportunity to grow with differentiated service in the middle market Revenue by product 1 Folding carton Food service Rigid box • Strategically located national plant network • Focused on delivering speed to m
Slide 33: PPS: Recovered Fiber Group
Who we are How we operate Why invest in Greif? Business segment overview Appendix PPS: Recovered Fiber Group Business Overview and Opportunities • Top 10 recovered fiber business with strategically positioned assets that limits freight/transport costs • Procures, collects, processes and brokers mate
Slide 34: FPS: global market leader with superior capabilities
Who we are How we operate Why invest in Greif? Business segment overview Appendix FPS: global market leader with superior capabilities 1&2 loop bag 4 loop bag Reconditioning Container liners 1-Loop 2-Loop #1 #1 #1 North America FPS is the largest FIBC producer in the world offering the most comprehe
Slide 35: FPS: highlights and differentiation
Who we are How we operate Why invest in Greif? Business segment overview Appendix FPS: highlights and differentiation 2019 Financials ($M) Highlights and Capabilities Differentiation Revenue $297.5 • Leading position in highly • Exceptional technical capabilities fragmented market and differentiated
Slide 36: Guidance and required reconciliation tables
Guidance and required reconciliation tables
Slide 37: FY20 guidance and key modeling assumptions
Who we are How we operate Why invest in Greif? Business segment overview Appendix FY20 guidance and key modeling assumptions Fiscal 2020 guidance1 ($/sh and $M) FY 2020 Guidance FY 2019 Actual Adj. Class A Earnings Per Share1 $3.63 - $4.13 $3.96 Adjusted Free Cash Flow2 $245 - $285 $267.8 Fiscal 202
Slide 38: Fiscal 2022 financial commitments assumptions
Who we are How we operate Why invest in Greif? Business segment overview Appendix Fiscal 2022 financial commitments assumptions • Net sales will be approximately $5.5B in Fiscal 2022 as a result of strategic growth CapEx, Caraustar inclusion and organic growth • Raw material costs assumed flat again
Slide 39: Net sales bridge: FY15 to FY18
Who we are How we operate Why invest in Greif? Business segment overview Appendix Net sales bridge: FY15 to FY18 $M $4,500 $4,000 ~$950 $3,500 ~$100 $3,000 ~$400 ~$400 $2,500 $2,000 $1,500 $1,000 $500 $0 FY 2015 Closures/ F/x Profitable revenue Organic FY2018 net sales divestitures headwind transfer
Slide 40: Q4 Price, Volume and Foreign Currency Impact to Net Sales for Primary Products
Who we are How we operate Why invest in Greif? Business segment overview Appendix Q4 Price, Volume and Foreign Currency Impact to Net Sales for Primary Products: January 29, 2020 – P.40
Slide 41: GAAP to Non-GAAP Reconciliation: Operating Profit to Adjusted EBITDA
Who we are How we operate Why invest in Greif? Business segment overview Appendix GAAP to Non-GAAP Reconciliation: Reconciliation of Operating Profit to Adjusted EBITDA $Millions January 29, 2020 – P.41
Slide 42: GAAP to Non-GAAP Reconciliation: Adjusted Free Cash Flow
Who we are How we operate Why invest in Greif? Business segment overview Appendix GAAP to Non-GAAP Reconciliation: Adjusted Free Cash Flow(1) $Millions January 29, 2020 – P.42
Slide 43: GAAP to Non-GAAP Reconciliation: Projected 2020 Adjusted Free Cash Flow
Who we are How we operate Why invest in Greif? Business segment overview Appendix GAAP to Non-GAAP Reconciliation: Projected 2020 Adjusted Free Cash Flow $Millions January 29, 2020 – P.43
Slide 44: GAAP to Non-GAAP Reconciliation: Earnings per share and Tax Rate
Who we are How we operate Why invest in Greif? Business segment overview Appendix GAAP to Non-GAAP Reconciliation: Earnings per share and Tax Rate $/share and % January 29, 2020 – P.44
Slide 45: GAAP to Non-GAAP Reconciliation: Earnings per share and Tax Rate
Who we are How we operate Why invest in Greif? Business segment overview Appendix GAAP to Non-GAAP Reconciliation: Earnings per share and Tax Rate $/share and % January 29, 2020 – P.45
Slide 46: GAAP to Non-GAAP Reconciliation: Segment Operating Profit to Adjusted EBITDA
Who we are How we operate Why invest in Greif? Business segment overview Appendix GAAP to Non-GAAP Reconciliation: Reconciliation of segment Operating Profit to Adjusted EBITDA(4) $Millions (4) Adjusted EBITDA is defined as net income, plus interest expense, net, including debt extinguishment charge
Slide 47: GAAP to Non-GAAP Reconciliation: Segment Operating Profit to Adjusted EBITDA
Who we are How we operate Why invest in Greif? Business segment overview Appendix GAAP to Non-GAAP Reconciliation: Reconciliation of segment Operating Profit to Adjusted EBITDA(4) $Millions (4) Adjusted EBITDA is defined as net income, plus interest expense, net, including debt extinguishment charge