Loews Corporation · NYSE:L
Loews — Altium Packaging — Debt Investor Presentation (January 2021)
36 slides from Loews's debt investor presentation, Jan 25, 2021
Slide 1: Lender Presentation
Lender Presentation January 25, 2021 THE COMPANY HAS REPRESENTED THAT THE INFORMATION CONTAINED IN THIS LENDER PRESENTATION IS EITHER PUBLICLY AVAILABLE OR DOES NOT CONSTITUTE MATERIAL NON-PUBLIC INFORMATION WITH RESPECT TO THE COMPANY OR ITS SECURITIES. THE RECIPIENT OF THIS LENDER PRESENTATION HAS
Slide 2: Disclaimer
Disclaimer Safe Harbor This document is not intended to and does not constitute an offer to sell, or an invitation to subscribe for or purchase, any securities or the solicitation of any offer or invitation to subscribe for or purchase any securities in any jurisdiction, nor shall there be any sale,
Slide 3: Presenters
Presenters Altium Packaging • Sean Fallmann, President and Chief Executive Officer • Pete Bitter, Vice President of Corporate Development and Treasurer • Rob Endom, Vice President of Financial Planning & Analysis Citi • Chris Wood, Managing Director 3
Slide 4: Agenda
Agenda 1. Transaction Overview 2. Company Overview 3. Credit Highlights 4. Financial Summary 5. Syndication Overview 6. Appendix 4
Slide 5: 1. Transaction Overview
Altium Packaging 1. Transaction Overview
Slide 6: Executive Summary
Executive Summary Altium Overview • Leading North American manufacturer of rigid plastic packaging solutions and a large high density polyethylene recycler serving a wide variety of end markets, including Food & Beverage, Household Chemical, Pharma, and Industrial & Auto ‒ Operates 67 North American
Slide 7: Senior Secured Term Loan Indicative Terms
Senior Secured Term Loan Indicative Terms Borrower: Altium Packaging LLC Guarantors: Same as existing credit facilities Security: Same as existing credit facilities Facility: $1,050 million New Secured Term Loan Maturity: Seven years after the closing date Amortization: Same as existing credit facil
Slide 8: Transaction Overview
Transaction Overview ($M) Sources Uses Source of Funds Amount % Use of Funds Amount % New Secured Term Loan $1,050 100% Refinance Existing Debt $830 79% Fund Dividend 200 19% Estimated Fees, Expenses and OID 14 1% Cash to Balance Sheet 6 1% Total Sources $1,050 100% Total Uses $1,050 100% Pro Forma
Slide 9: 2. Company Overview
Altium Packaging 2. Company Overview
Slide 10: Altium Packaging Overview
Altium Packaging Overview FY2020 PF Net Sales: $1,044M ~8,000+ Customers FY2020 PF Adj. EBITDA: $215M 7 Acquisitions Since 2017 % Margin: 21% ~400M+ Pounds New Business Pipeline • Specialty Chemical A leading North American manufacturer of rigid plastic packaging, with capabilities in HDPE, PE
Slide 11: Vision & Strategy to Maximize Long-Term Value
Vision & Strategy to Maximize Long-Term Value VISION – How we create value We enable our customers to grow their business by designing, developing and producing packaging solutions tailored to their business, and deliver these solutions through a flawless customer experience GOALS – Required to acco
Slide 12: Strong Performance Fueled by Organic Growth and M&A
Strong Performance Fueled by Organic Growth and M&A 2014 – 2017 2017 – 2020 • Instilled new, cohesive culture • Enhanced Commercial Excellence program and expanded Altium Production System (APS) focused on customer experience • Investments in R&D and innovation generating rapid growth from new produ
Slide 13: 3. Credit Highlights
Altium Packaging 3. Credit Highlights
Slide 14: Key Credit Highlights
Key Credit Highlights 1 Rigid Packaging Industry Leader in Resilient, Growing End Markets 2 Commercial Focus Accelerating High Quality Organic Growth 3 National Footprint with Multiple Platform Technology Capabilities 4 Innovative Materials Science & Sustainability Thought Leader 5 Proven M&A Strate
Slide 15: Industry Leading Portfolio of Packaging Solutions Across Attractive End Markets
1 Altium’s Industry Leading Portfolio of Packaging Solutions Across Attractive End Markets Focus Segment Resin Types(1) Principal Products Sample Products Select Customers • PET • Vials, bottles, caps & labels Pharma • PP • Digital & flexographic printing (11% of Sales) • HDPE • Child resistant & co
Slide 16: Commercial Focus Accelerating High Quality Organic Growth
2 Commercial Focus Accelerating High Quality Organic Growth, Driving Customer Retention, and Delivering Results Outperformance Built on Multiple Drivers • Specific strategic focus on improving the underlying quality of Altium’s business portfolio o Emphasis on retaining attractive business with bett
Slide 17: Long-Standing Customer Relationships With Contracted Base and Co-Located Plants
2 Long-Standing Customer Relationships With Contracted Base and Co-Located Plants Overview Top Customers – 2020 Pro forma (1) ($M) • 18 Altium plants co-located on-site at customer % of Net Tenure locations Customer Sales(1) Altium Facilities (# Years) • Across its top 10 customers, Altium serves al
Slide 18: National Footprint with Multiple Platform Technology Capabilities
3 National Footprint with Multiple Platform Technology Capabilities • Only short- to mid-run rigid packaging supplier with a truly national footprint • 65 North American packaging facilities, ~2x larger than next closest direct competitor • 2 recycling facilities covering North America • Multi-techn
Slide 19: Innovative Materials Science & Sustainability Thought Leader
4 Innovative Materials Science & Sustainability Thought Leader Altium’s Innovative Sustainability Strategy Industry-Leading Product Platform • Packaging industry customers seek innovation to differentiate, reduce packaging Total Cost of Ownership (TCO), and improve sustainability footprint • Altium
Slide 20: Proven M&A Strategy Delivering Diversification and Growth
5 Proven M&A Strategy Delivering Diversification and Growth Through Strategic Acquisitions Acquisition End Market Products Agricultural & Industrial 2016 Chemical, Food, Pharma Recycling 0% (2020) Nutraceutical, and Pet Care Household 6% Dairy Retail pharmacy and Chemical 25% 17% pharmaceutical (201
Slide 21: Continuous Improvement Culture Underpins Operational Excellence
6 Continuous Improvement Culture Underpins Operational Excellence APS Summary PM’s, planned and predicative maintenance • APS has been enacted across Altium’s expansive asset base (including PM Planned Envision) and is reaccelerating productivity gains and cost Employee DTM Maintenance FI RCA, opera
Slide 22: Growth Coupled with Robust Cash Flow Generation
7 Growth Coupled with Robust Cash Flow Generation Commentary • Focus on Vision & Strategy has driven 6 consecutive years of earnings growth • Consumer staples-driven market compounding in demand • Technology and sustainability-driven market share growth enabled through a variety of offerings • 2020
Slide 23: High Caliber Management Team with Established Track Record
8 High Caliber Management Team with Established Track Record Altium Management Proven Results Sean Fallmann President & CEO EBITDA CAGR of ~17%(1) 6 years EBITDA margin up ~1,100bps(1) Jeffrey Brubaker SVP, Operations Services Leveraged cohesive culture aligned with vision for 7 years value cr
Slide 24: 4. Financial Summary
Altium Packaging 4. Financial Summary
Slide 25: 2020 Financial Performance Highlights
2020 Financial Performance Highlights Record 2020 with the 6th consecutive year of earnings growth driven by continued volume and margin growth, and despite resin headwinds from the temporary resin lag impact of rising virgin resin prices, enabled by our employees’ commitment and modeling of our G
Slide 26: Q4 2020 Results
Q4 2020 Results QTD Net Sales – Pro forma QTD Pro forma Adjusted EBITDA ($M) ($M) $53 $271 $243 $48 $47 $50 19.5% 18.5% Q4 2019A Q4 2020A Q4 2019 (1)(2) Q4 2020 (2) Estimated temporary resin lag impact(3) = Actual margin percentages = 1. Q4 2019A PF Adjusted EBITDA as reported in March of 2020. 2. Q
Slide 27: FY 2020 Results
FY 2020 Results YTD Net Sales – Pro forma YTD Pro forma Adjusted EBITDA ($M) $1,044 ($M) $225 $989 $196 $215 $196 20.6% 19.8% 2019A 2020A 2019 (1)(2) 2020(2) Estimated temporary resin lag impact(3) = Actual margin percentages = 1. 2019A PF Adjusted EBITDA as reported in March of 2020. 2. 2019A and 2
Slide 28: Growth Driven By Organic Base and Acquisitions
Growth Driven By Organic Base and Acquisitions • Acquisitions accretive to base business earnings growth • Strategic theses playing out as expected with strong synergy realizations and improved segment and product mix for long-term growth Altium Performance – Base vs Acquired Business Adjusted EBITD
Slide 29: Summary Financial Performance
Summary Financial Performance PF Net Sales(1) PF Adjusted EBITDA(1) ($M) ($M) $1,044 $989 $215 $890 $196 $788 $807 $157 $163 $131 (4) (4) 2016A 2017A 2018A 2019A 2020A 2016A 2017A 2018A 2019A 2020A % growth % margin -- 2.4% 10.3% 11.1% 5.5% 16.6% 19.4% 18.3% 19.8% 20.6% Capex(2) Free Cash Flow(3) ($
Slide 30: 5. Syndication Overview
Altium Packaging 5. Syndication Overview
Slide 31: Transaction Timeline
Transaction Timeline January-2021 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Key Date 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Jan. 25th • Launch Term Loan and Host Lender Call • Lender Commitment due at 12:00pm Jan. 29th • Price and Allocate Term Loan 31
Slide 32: Pro Forma Organizational Structure
Pro Forma Organizational Structure Loews Legend Corporation 100% Management Corporation LLC Loews Packaging Group, Inc. 99% 1% Investors P’ship Altium Packaging Corporation Domestic Company 100% Foreign Company Americana Intermediate Holdings, LLC 100% Altium Acquisition 100% Holdings, Inc. Altium P
Slide 33: 6. Appendix
Altium Packaging 6. Appendix
Slide 34: Balance Sheet as of 12/31/2020
Balance Sheet as of 12/31/2020 ALTIUM PACKAGING LLC CONSOLIDATED BALANCE SHEET (in '000's) Actual Actual December 31, December 31, 2020 2019 (Unaudited) (Audited) ASSETS CURRENT ASSETS: CASH $ 10,353 $ 17,657 ACCOUNTS RECEIVABLE, NET 124,909 117,646 INVENTORIES 76,904 60,885 OTHER CURRENT ASSETS 23,
Slide 35: Historical Adjusted EBITDA Reconciliation
Historical Adjusted EBITDA Reconciliation 2016 – 2020 EBITDA Reconciliation Commentary Plant Closure Costs and Related Charges: Completed two plant consolidations ($M) 2016 2017 2018 2019 2020 1 in 2018, and one in 2019 Net Loss ($41.3) ($53.2) $5.2 ($20.5) ($11.3) Certain Professional Fees: Include
Slide 36: HDPE Index Pricing Trends
HDPE Index Pricing Trends - HDPE index prices increased $0.05/lb in Dec’20, which will be passed through into sales in early 2021 - Benchmark HDPE prices are lagged in order to better match the pass-through timing impact of the HDPE price changes in customer sales prices 36
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