Tredegar Corporation · NYSE:TG
Tredegar — Q3 2023 Earnings Presentation
36 slides from Tredegar's earnings presentation, Nov 28, 2023
Slide 1: 2023 Third Quarter Financial Results
2023 Third Quarter Financial Results November 28, 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements contained in this presentation are forward-looking statements. Pursuant to federal securities regulations, we have set forth cautionary statements relating to those forward-looking statements in our Annual Report on Form 10-K for the year ended December
Slide 3: Tredegar Corporation 2023 Third Quarter and First Nine Months Results
Tredegar Corporation 2023 Third Quarter and First Nine Months Results (in millions, except per share data) 3Q 2023 3Q 2022 YTD 2023 YTD 2022 Net Sales1 $159.5 $229.0 $515.5 $720.8 Net Income (Loss) from Ongoing Operations2 $(5.1) $4.8 $(4.6) $38.9 Diluted Earnings (Loss) per share from Ongoing Opera
Slide 4: Aluminum Extrusions (Bonnell Aluminum)
Aluminum Extrusions (Bonnell Aluminum) 2023 Third Quarter and First Nine Months Results Third Quarter Performance First Nine Months Performance (in millions) 3Q 23 3Q 22 (in millions) 2023 2022 Volume (lbs.) 32.5 45.5 (29)% Volume (lbs.) 105.5 137.4 (23)% Net Sales1 $109.4 $161.6 (32)% Net Sales1 $3
Slide 5: Aluminum Extrusions (Bonnell Aluminum) Open Orders and ABI Index
Aluminum Extrusions (Bonnell Aluminum) Open Orders and ABI Index • Open orders at the end of the third quarter of 2023 were 17 million pounds (versus 20 million pounds at the end of the second quarter of 2023 and 59 million pounds at the end of the third quarter 2022). This level is below the quarte
Slide 6: PE Films (Surface Protection, Polyethylene Overwrap Films & Films for Other Markets)
PE Films (Surface Protection, Polyethylene Overwrap Films & Films for Other Markets) 2023 Third Quarter and First Nine Months Results Third Quarter Performance First Nine Months Performance (in millions) 3Q 23 3Q 22 (in millions) 2023 2022 Volume (lbs.) 7.2 7.1 2% Volume (lbs.) 20.8 27.3 (24)% Net S
Slide 7: Flexible Packaging Films (Terphane)
Flexible Packaging Films (Terphane) 2023 Third Quarter and First Nine Month Results Third Quarter Performance First Nine Months Performance (in millions) 3Q 23 3Q 22 (in millions) 2023 2022 Volume (lbs.) 22.2 28.9 (23)% Volume (lbs.) 65.7 82.2 (20)% Net Sales1 $30.1 $47.3 (36)% Net Sales1 $94.9 $128
Slide 8: Corporate Strategic Initiatives: Agreement to Sell Terphane
Corporate Strategic Initiatives Agreement to Sell Terphane On September 1, 2023, the Company announced that it had entered into a definitive agreement to sell Terphane to Oben Group (the “Contingent Terphane Sale”). Completion of the sale is contingent upon the satisfaction of customary closing cond
Slide 9: Corporate Strategic Initiatives: Pension Plan Termination
Corporate Strategic Initiatives Pension Plan Termination On September 27, 2023, the Company borrowed $30 million under the Credit Agreement in anticipation of the final funding expected for terminating its defined benefit pension plan obligation. On October 31, 2023, the Company used this cash to co
Slide 10: Corporate Strategic Initiatives: Leverage, Debt Covenants and Debt Refinancing
Corporate Strategic Initiatives Leverage, Debt Covenants and Debt Refinancing The Company previously disclosed its intent to reduce the risk of a debt covenant violation during a severe cyclical downturn impacting all of its businesses at the same time (like the Company is currently experiencing) by
Slide 11: 2023 Year-to-Date Financial Highlights
Tredegar Corporation 2023 Year-to-Date Financial Highlights ($ in millions) Cash Flows provided by Operations $44.2 Capital Expenditures $22.3 Dividends Paid1 $8.9 Net Debt (Cash)2 $106.4 Net leverage ratio3(as of 9/30/2023) 3.33x Net leverage ratio3(pro forma – pension plan final funding) 4.21x 1.
Slide 12: Appendix
‘Tredegar sonronion® Appendix
Slide 13: Major Product Groups, Primary End Markets, Customers and Competitors
Major Product Groups Primary End Markets Customers Competitors Aluminum Extrusions Custom designed, fabricated and Building and Construction: commercial windows & Glazing contractors and Hydro Extrusions North finished aluminum extrusions; value- doors, curtain walls, storefronts & entrances, automa
Slide 14: Tredegar's Global Presence
Tredegar’s Global Presence 13
Slide 15: Tredegar at a Glance
Tredegar at a Glance Business Strengths Aluminum Extrusions ➢ Industry-leading position in non-residential building and construction and value-added OEM components in North American extrusions market ➢ Market-focused manufacturing operations (including aluminum log casting capabilities) and world-cl
Slide 16: Aluminum Extrusions Business Profile
Aluminum Extrusions Business Profile Key Market Drivers • Strong demand for finished products, including anodized, 1 painted products and fabricated components $492 million LTM Net Sales 9% • Growing aluminum content in vehicles, driven by CAFE Electrical & (corporate average fuel economy) standards
Slide 17: Index of North American Industry Volume for Bonnell's Key Markets
Aluminum Extrusions Index of North American Industry Volume for Bonnell’s Key Markets Note: Index computations based on Aluminum Association data (1982=1.0) through 2022. Specialty includes aluminum extrusions sold to consumer durables, electrical and machinery markets. 16
Slide 18: Aluminum Extrusions Key Markets - B&C/Automotive/Specialty
Aluminum Extrusions Key Markets - B&C/Automotive/Specialty 17
Slide 19: Automotive Aluminum Extrusion Applications
Aluminum Extrusions Automotive Aluminum Extrusion Applications ➢ Crash management systems – beams and mounting plates, crush cans ➢ Roof rails ➢ Electrical battery trays ➢ Air conditioner tube connectors Aluminum Overview Film Products Financials 18 Extrusions
Slide 20: Aluminum Extrusions Annual Historical Financials
Aluminum Extrusions Annual Historical Financials 2 Net Sales1 ($ in millions) EBITDA from Ongoing Ops ($ in millions) 638 $80 66 67 $600 530 539 55 56 492 456 39 $40 $300 $0 $0 2019 2020 2021 2022 LTM 2019 2020 2021 2022 LTM Volume (lbs. in millions) Capital Expenditures ($ in millions) 300 $30 26 2
Slide 21: PE Films Business Profile
PE Films Business Profile 1 Key Growth Drivers $71 million LTM Net Sales • “Internet of Things” leading to greater connectivity and more displays and semiconductors 39% • Thinner devices with increasing resolution and larger Overwrap screen size Packaging • Demographic and workplace trends shifting
Slide 22: End-Use Markets for Surface Protection Products
PE Films End-Use Markets for Surface Protection Products 21
Slide 23: Surface Protection Overview
PE Films Surface Protection Overview Typical LCD Optical Stack (examples: TVs, Smartphones) 22
Slide 24: PE Films Annual Historical Financials
PE Films Annual Historical Financials Net Sales1 ($ in millions) EBITDA from Ongoing Ops ($ in millions) $200 45 41 $40 $150 134 139 119 28 98 $100 71 $20 12 $50 4 $0 $0 2019 2020 2021 2022 LTM 2019 2020 2021 2022 LTM Volume (lbs. in millions) Capital Expenditures ($ in millions) 44 45 $10 9 39 40 3
Slide 25: Flexible Packaging Films Business Profile
Flexible Packaging Films Business Profile $135 million LTM Net Sales 1 Key Growth Drivers • Growing end-user demand for convenience 27% foods, lighter packaging and branded consumer North products America & Other • Packaging innovation driving demand for flexible packaging Customers • Global and reg
Slide 26: Flexible Packaging Films End-Use and Value-Add Products
Flexible Packaging Films End-Use and Value-Add Products 25
Slide 27: Flexible Packaging Films Annual Historical Financials
Flexible Packaging Films Annual Historical Financials Net Sales1 ($ in millions) EBITDA from Ongoing Ops ($ in millions) $200 $40 168 32 31 134 135 140 135 $30 27 $100 $20 15 9 $10 $0 $0 2019 2020 2021 2022 LTM 2019 2020 2021 2022 LTM Volume (lbs. in millions) Capital Expenditures ($ in millions) 15
Slide 28: Tredegar Corporation Annual Historical Financials
Tredegar Corporation Annual Historical Financials 1 2 Net Sales ($ in millions) Consolidated EBITDA from Ongoing Ops ($ in millions) 904 $150 $900 797 798 730 698 92 96 $100 81 85 $600 $300 $50 32 $0 $0 2019 2020 2021 2022 LTM 2019 2020 2021 2022 LTM Earnings (Loss) Per Share from Ongoing Ops3 Capit
Slide 29: Capital Expenditures – History & Projections
Tredegar Corporation Capital Expenditures – History & Projections ($ in millions) 2023 2019 2020 2021 2022 Projection2 Aluminum Extrusions $17.9 $10.3 $18.9 $23.7 $19 PE Films1 8.6 6.0 3.0 3.3 2 Flexible Packaging 8.9 5.0 5.6 8.2 4 Corporate 0.2 0.2 (0.1) 1.7 0 Total $35.6 $21.5 $27.4 $36.9 $25 2023
Slide 30: Quarterly Cash Dividend
Tredegar Corporation Quarterly Cash Dividend ($) .13 .12 .11 .09 .07 .06 .045 .04 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Tredegar suspended its quarterly dividend on 8/3/2023. A special dividend of $5.97 per share was paid in 2020 and $0.75 per share was paid in 2012 2
Slide 31: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations
Slide 32: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations On October 30, 2020, the Company completed the sale of its personal care films business ("Personal Care Films"), w hich w as part of its PE Films segment. The transaction excluded the packaging film lines and related operations located at the Pottsville, Pennsylvania
Slide 33: GAAP to Non-GAAP Reconciliations: Summary Financial Information
GAAP to Non-GAAP Reconciliations 2. Summary Financial Information Year Ended Decem ber 31, LTM (in millio ns) 2019 2020 2021 2022 2023 Income and expense relating to ongoing operations: Total EBITDA for segments (a) $ 121.5 $ 130.8 $ 115.3 $ 106.2 $ 52.0 Pension expense (c) (9.6) (14.6) (14.1) - - C
Slide 34: Summary Financial Information (continued)
GAAP to Non-GAAP Reconciliations 2. Summary Financial Information (continued) Notes: (a) Tredegar’s presentation of segment earnings before interest, taxes, depreciation and amortization from ongoing operations (“EBITDA") from ongoing operations aligns w ith key metrics used by the Chief Operating D
Slide 35: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations 4. The after-tax effects of losses associated w ith plant shutdow ns, asset impairments and restructurings, gains or losses from the sale of assets, goodw ill impairment charges, net periodic benefit cost for the frozen defined benefit pension plan and other items (w
Slide 36: GAAP to Non-GAAP Reconciliations: Net Debt
GAAP to Non-GAAP Reconciliations 5. Net debt is a non-GAAP financial measure that is not intended to represent debt as defined by GAAP, but is utilized by management in evaluating financial leverage and equity valuation. A calculation of net debt is show n below : (In millions) September 30, Decembe