Slide 1: Fourth Quarter and Fiscal 2019 Earnings Conference Call
FOURTH QUARTER AND FISCAL 2019 EARNINGS CONFERENCE CALL DECEMBER 5, 2019
Slide 2: Safe harbor
Safe harbor FORWARD-LOOKING STATEMENTS • This presentation contains certain forward-looking statements 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: Record Fiscal Year (FY) 2019 performance
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 accomplishments across all strategic priorities • Completed Caraustar acquisition in
Slide 4: Fourth quarter fiscal year (FY) 2019 summary
Fourth quarter fiscal year (FY) 2019 summary CorrChoice, Louisville, KY Financial performance Markets & operations • Net Sales: $1,232.1M, +24.7% • RIPS: YoY ‒ Continued demand softness in Western/Central Europe; SE Asia; • Gross Profit: $259M, +26.5% United States; market strength in YoY Eastern Eu
Slide 5: Rigid Industrial Packaging & Services (RIPS) review
Rigid Industrial Packaging & Services (RIPS) review $M Q4 2019 Q4 2018 FY 2019 FY 2018 Quarter Highlights: • Net sales down 4.2%, excluding F/X1, from prior year quarter Net sales $619.0 $657.9 $2,490.6 $2,623.6 ‒ Solid demand in Eastern Europe, the Middle East and North Africa, offset by trade rela
Slide 6: Flexible Products & Services (FPS) review
Flexible Products & Services (FPS) review $M Q4 2019 Q4 2018 FY 2019 FY 2018 Quarter Highlights: Net sales $70.9 $77.5 $297.5 $324.2 • Net sales down 5.5%, excluding F/X1, from prior year quarter ‒ Softer demand conditions in Western Europe Gross profit $14.2 $15.7 $64.2 $65.2 • Adj. EBITDA2 up 9.4%
Slide 7: Paper Packaging & Services (PPS) review
Paper Packaging & Services (PPS) review $M Q4 2019 Q4 2018 FY 2019 FY 2018 Quarter Highlights: • Net sales up 118.6% from prior year quarter Net sales $535.1 $244.8 $1,780.0 $898.5 ‒ Caraustar addition: $322.6M Gross profit $128.5 $69.8 $425.4 $222.5 ‒ Softer containerboard conditions and lower YoY
Slide 8: Caraustar integration progressing to plan
Caraustar integration progressing to plan Synergy outlook ($M) Integration update Original diligence synergy estimates Current synergy estimates >$70M • FY19 realized synergies ahead of initial estimates driven by: ‒ Accelerated productivity savings at Mills >$60M ‒ Better than forecasted freight sa
Slide 9: Q4'19 vs. Q4'18: financial comparison
Q4’19 vs. Q4’18: financial comparison Key financial metrics ($M and $/sh) Q4 2019 Q4 2018 Net Sales, Excluding the Impact of Currency Translation1 $1,245.8 $987.7 Gross Profit $259.0 $204.8 SG&A $130.4 $91.5 Adjusted EBITDA2 $186.8 $141.5 Interest expense $32.4 $12.6 Other expense $1.6 $3.4 Net Inco
Slide 10: FY20 guidance and key modeling assumptions
FY20 guidance and key modeling assumptions Fiscal 2020 guidance1 ($/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 $267.8 Fiscal 2020 key modelling assumptions ($M and %) FY 2020 Assumption FY 2019 Actual DD&A expe
Slide 11: Capital allocation priorities
Capital allocation priorities 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 2 De-lever the balance • Current compliance leverage ratio = ~3.5x sheet • Aim to achieve target
Slide 12: Why invest in Greif?
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 cash demonstrated commitment variety of end markets and margin enhancement flow expa
Slide 13: Appendix
GREIF PACKAGING SUCCESS TOGETHER™ APPENDIX
Slide 14: Q4 Price, Volume and Foreign Currency Impact to Net Sales for Primary Products
Q4 Price, Volume and Foreign Currency Impact to Net Sales for Primary Products: December 4, 2019 – P.14
Slide 15: Key assumptions and sensitivity
Key assumptions and sensitivity FY 2020 Foreign Exchange Exposure Paper Packaging & Services Assumptions & Sensitivity 10% strengthening of the USD; Cumulative impact PPS Stats Currency impact to EBITDA before hedging Containerboard production ~1M tons per year Euro $(9M) – $(11M) $(9M) – $(11M) URB
Slide 16: Becoming a world class customer service organization
Becoming a world class customer service organization Customer Satisfaction Index (CSI)1 NPS Score Evolution Expectation RIPS Wave 9 6 26 67 = 61 PPS Wave 1 11 38 51 = 40 FPS 0 20 40 60 80 100 50 60 70 80 90 100 Q4'19 Q4'18 Detractors Passives Promoters 1PPS CSI for Q4’19 includes Caraustar Note: CSI
Slide 17: Unlocking value through Caraustar synergies
Unlocking value through Caraustar synergies Synergy Detail Run-rate synergy detail • Cross-selling opportunities with existing containerboard customers Operational • Integrating URB volumes into legacy Greif converting network Enhancements Transport / • Integrating heavy weight linerboard into the C
Slide 18: 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 19: GAAP to Non-GAAP reconciliation
GAAP to Non-GAAP reconciliation: Segment and Consolidated Financials: Q4 2019, Q4 2018, FY2019, FY2018 (11) EBITDA is defined as net income, plus interest expense, net, including debt extinguishment charges, plus income tax expense, plus depreciation, depletion and amortization. However, because the
Slide 20: GAAP to Non-GAAP reconciliation
GAAP to Non-GAAP reconciliation: Reconciliation of Net Sales to Net Sales Excluding the Impact of Currency Translation $Millions December 4, 2019 – P.20
Slide 21: GAAP to Non-GAAP reconciliation
GAAP to Non-GAAP reconciliation: Reconciliation of Net Income to Adjusted EBITDA(13) $Millions (13) Adjusted EBITDA is defined as net income, plus interest expense, net, including debt extinguishment charges, plus income tax expense, plus depreciation, depletion and amortization expense, plus restru
Slide 22: GAAP to Non-GAAP reconciliation
GAAP to Non-GAAP reconciliation: Reconciliation of Segment Operating Profit to Adjusted EBITDA(14) ($Millions) (14) Adjusted EBITDA is defined as net income, plus interest expense, net, including debt extinguishment charges, plus income tax expense, plus depreciation, depletion and amortization expe
Slide 23: GAAP to Non-GAAP reconciliation
GAAP to Non-GAAP reconciliation: Net Income and Class A Earnings Per Share Excluding Adjustments $Millions and $/sh December 4, 2019 – P.23
Slide 24: GAAP to Non-GAAP reconciliation
GAAP to Non-GAAP reconciliation: Adjusted Free Cash Flow(15) and Projected 2020 Adjusted Free Cash Flow guidance December 4, 2019 – P.24