Ccl Industries Inc. Class A · TSX:CCL.A
Ccl Industries Inc. Class A — Investor Day (September 2008)
134 slides from Ccl Industries Inc. Class A's investor day presentation, Sep 23, 2008
Slide 1: CCL Industries Inc. Investors' Day
CCL Industries Inc. CCL Industries Inc. Investors’ Day Donald G. Lang – Executive Chairman September 23, 2008
Slide 2: Disclaimer
Disclaimer Any forward-looking statements contained in this presentation, including statements relating to the outlook of CCL Industries Inc.’s various divisions and products and CCL’s growth and expansion plans, involve risks, uncertainties and assumptions and should not be taken as guarantees of f
Slide 3: In Attendance
In Attendance Donald Lang Executive Chairman Geoff Martin President & CEO Steve Lancaster Executive VP and Acting CFO Günther Birkner Group VP, Food & Beverage, CCL Label Worldwide Robert Ryckman VP, Sales & Marketing, CCL Label Healthcare Worldwide Jan Wade Senior VP, Human Resources & Corporate Co
Slide 4: Agenda
Agenda 7:30 - 8:00 a.m. Continental breakfast, registration/sign-in 8:00 - 8:15 a.m. Welcome & Introduction D. Lang Financials S. Lancaster 8:15 - 8:35 a.m. G. Martin 8:35 - 9:35 a.m. Introduction to Operations – CCL Container – CCL Tube – CCL Label Introduction and Home & Personal Care 9:35 - 9:45
Slide 5: Today's Objectives
Today’s Objectives • General business update • Short-term operating tactics and growth opportunities • Longer-term strategic plans • Open informal dialogue • Presentations: – 5 presenters with time for questions at the end of each presentation or as necessary, allowing for more informal dialogue – m
Slide 6: CCL At A Glance
CCL At A Glance • World-class Specialty Packaging company headquartered in Toronto – 3 divisions: Label, Container and Tube – 56 locations in 17 countries – 5,500 employees • 2007 financial summary – excluding discontinued operations – $1,144 million in sales, $207 million of EBITDA and $131 million
Slide 7: CCL At A Glance
CCL At A Glance • TSX: CCL.B and CCL.A (September 12, 2008) – Market cap. $1,066 million – Dividend yield 1.7% – 6 year stock investment appreciation (Dec. 2001 to Dec. 2007) of 291% • Net Debt/Cap. approximately 32% (June 30, 2008) 32% 68% Net Debt Equity 7
Slide 8: CCL At A Glance – A Global Player
CCL At A Glance – A Global Player 2007 Total Sales $1,144 million (12 months ended December 31, 2007) U.S. & Puerto Rico 38% Europe 39% Mexico & Brazil Asia Canad 8% 3% a 12% 8
Slide 9: Comparable Company Analysis
Comparable Company Analysis (US$M unless stated otherwise) Stock MarketEnterprise EBITDA EBIT Net Debt/ Net Debt/ Symbol Cap Value Sales Margin Margin EBITDA Capital CCL* CCL.B C$1066 C$1422 C$1132 18.2% 11.4% 1.7x 28.8% Aptar ATR $2733 $2808 $2053 17.5% 11.1% 0.2x 4.5% Brady BRC $1860 $2133 $1489 1
Slide 10: Comparable Benchmarks: EV/EBITDA
Comparable Benchmarks: EV/EBITDA 7.8x 8.1x 8.0x 7.8x 7.6x 7.4x 7.3x Median = 7.6X 6.9x 6.0x N/A CCL Aptar Brady Bemis Pactiv Sealed Winpak Avery Cenveo Multi- Air Color Source: BMO Nesbitt Burns Estimates, Capital IQ, as of September 12, 2008 10
Slide 11: Comparable Company Analysis: Price/Earnings
Comparable Company Analysis: Price/Earnings 25.9 18.5 16.8 16.5 16.9 15.4 15.5 15.6 Median = 16.1X 12.0 13.4 CCL Aptar Brady Bemis Pactiv Sealed Winpak Avery Cenveo Multi- Air Color Source: BMO Nesbitt Burns Estimates, Capital IQ, as of September 12, 2008 11
Slide 12: Comparable Company Analysis: Net Debt/Capital
Comparable Company Analysis: Net Debt/Capital 51.2% 50.0% 47.3% 36.7% 28.8% 26.8% Median = 28.8% 18.1% 4.5% 4.6% nm CCL Aptar Brady Bemis Pactiv Sealed Winpak Avery Cenveo Multi- Air Color Source: BMO Nesbitt Burns Estimates, Capital IQ, as of September 12, 2008 12
Slide 13: Comparable Company Analysis: Net Debt/EBITDA
Comparable Company Analysis: Net Debt/EBITDA 5.3x 5.2x 2.7x 2.3x 2.3x 2.1x 2.0x 1.9x 1.7x 1.5x 1.5x 1.4x 1.5x 1.3x 1.1x 1.0x 0.2x 0.3x n n/a m CCL Aptar Brady Bemis Pactiv Sealed Winpak Avery Cenveo Multi- Air Color LTM Q2 ’08 December 2001 Source: BMO Nesbitt Burns Estimates, Capital IQ, as of Sept
Slide 14: Comparable Benchmark Takeaways
Comparable Benchmark Takeaways • Aptar and Brady are good benchmarks for “specialty packaging companies” • CCL’s EBIT and EBITDA margins are at the median and high of the range, respectively • CCL is under leveraged but at the median of the range • CCL’s capital plan funded by operating cash flows w
Slide 15: CCL Industries Inc.
CCL Industries Inc. CCL Industries Inc. Steven W. Lancaster, Executive Vice President and Acting CFO September 23, 2008
Slide 16: First Half 2008 Financial Highlights
First Half 2008 Financial Highlights Continuing Operations 2008 2007 Change Sales $608M $620M (2)% EPS as reported $1.60 $1.62 (1)% EPS excluding restructuring & other items and favourable tax adj. $1.54 $1.46 +5% • 2008 sales up 3% excluding currency translation compared to a robust first half of 2
Slide 17: Impact of Changes In Exchange Rates
Impact of Changes In Exchange Rates Negative Impact of 1H 2008 2007 Act 2006 Act 2005 Act 2004 Act 2003 Act vs. vs. vs. vs. vs. vs. Currency on EPS 1 H 2007 2006 Act 2005 Act 2004 Act 2003 Act 2002 Act Currency translation $ 0.10 - $ 0.15 $ 0.11 $ 0.05 $ 0.12 Currency transactions $ 0.05 $ 0.09 $ 0.
Slide 18: EPS Growth 2005 to 2007 Continuing Operations
EPS Growth 2005 to 2007 Continuing Operations EPS per B Share before Restructuring & Other Items & Favourable Tax Adjustments $2.48 $1.9 $1.6 8 25% 30% 8 18% 31% 2005 2006 2007 Excluding Currency Impact • Significant operational improvements and accretive acquisitions 18
Slide 19: Strong Gross Cash Flow Generation From Continuing Operations
Strong Gross Cash Flow Generation From Continuing Operations Despite Currency Impact EBITDA ($M) $207 $176 18% $148 20% $111 31% 2004 2005 2006 2007 19
Slide 20: Capital Spending vs. Depreciation
Capital Spending vs. Depreciation Capex ($M) Depreciation ($M) and amortization $163 $156 $150 $112 $112 $76 $67 $71 $56 $58 $48 $47 2002 2003 2004 2005 2006 2007 2002 2003 2004 2005 2006 2007 • Capex in 2008 expected to be $190 million Note: Capex includes discontinued operations 20
Slide 21: Working Capital Improvement
Working Capital Improvement Non-cash Working Capital Days Years ended Dec. 31 35 22 17 15 7 2 (1)* 2001 2002 2003 2004 2005 2006 2007 • Working capital reduction program generated significant cash and is at a “best-in-class” level *Excludes receivable on sale of ColepCCL 21
Slide 22: Strong Debt & Capital Structure
Strong Debt & Capital Structure Net Debt ($M) Net Debt to Total Book Capitalization Ratio $436 45.6% 45.2% 43.6% 44.2% $366 $355 33.3% 32.7% $345 29.9% $317 $307 $282 2001 2002 2003 2004 2005 2006 2007 2001 2002 2003 2004 2005 2006 2007 Years ended Dec. 31 Years ended Dec. 31 22
Slide 23: Current Net Debt – $356M
Current Net Debt – $356M As at June 30, 2008 $M Cdn Cash $ 104M Debt: Long-Term Notes Amount Coupon Rate Repayment Maturity 1997 US$ 47M 6.97% US$9.4M/yr Sep/12 $ 48M 1998 US$110M 6.90% 3 Bullets *Jul/10,13,18 112M 2006 US$60M 5.29% Bullet Mar/11 61M 2006 US$110M 5.57% Bullet Mar/16 112M Term Bank R
Slide 24: New Financing Pending
New Financing Pending • CCL has had substantial cash over the last decade and wants to maintain liquidity to be opportunistic • CCL went to the U.S. Private Placement market in late August to raise up to US$150M in 5 and 10 year notes • Market conditions deteriorated due to credit crunch • However,
Slide 25: Debt Capacity – Additional
Debt Capacity – Additional As at June 30, 2008 $M Cdn Equity (at book) - $24.33 per share $ 775M Target Net Debt at 45% Debt:Total Capitalization $ 634M Current Net Debt $ 356M Incremental Investment capacity at 45% $ 278M • With new financing, there is further substantial debt capacity and cash on
Slide 26: Key Strategic Metrics
Key Strategic Metrics • Earnings Per Share (EPS) growth of +10% per annum over time excluding one-time items (achieved 19% in 2006 and 2007) • Return on Equity (ROE) equal to leading specialty packaging peers 12%-14% (13% in each of 2006 and 2007) • Debt rating BBB high (Investment Grade) – Debt to
Slide 27: Key Strategic Metrics
Key Strategic Metrics • Working capital management – maintain “best-in-class” performance (end of 2006 – 2 days and 2007 at (1) vs 35 days in 2001) • Dividends, 20%-25% EPS excluding unusual items (was 17% at Dec. 2007 therefore increased dividend by 17% in March 2008 to achieve metric range) • Rein
Slide 28: Questions
COL LIRA BD ovestions 4 Bek | (‘* Bl i 28
Slide 29: CCL Industries Inc.
CCL Industries Inc. CCL Industries Inc. Geoffrey T. Martin, President and CEO September 23, 2008
Slide 30: 2008 Estimated Sales by Division and Geography
2008 Estimated Sales by Division and Geography Sales by Division Sales by Geography $1.2B $1.2B Western Europe 43% Label Container 82% 13% Tube U.S. & 5% Canada* Emerging 45% Markets 12% *Sales from products manufactured in Canada are 10% 30
Slide 31: 2008 Estimated Sales by Market
2008 Estimated Sales by Market Specialty 15% Food & Beverage 25% Home & Personal Care Healthcare 40% 20% 31
Slide 32: CCL Container
CCL Industries Inc. CCL Container
Slide 33: CCL Container Products
CCL Container Products Aerosol Containers Aluminum Bottles 33
Slide 34: CCL Container Markets
CCL Container Markets Personal Care Household Beverage 34
Slide 35: Our Manufacturing Process - Impact Extrusion
Our Manufacturing Process - Impact Extrusion 1. 250 tons of force applied 2. Aluminum flows up the through a mandrel wall of the mandrel 3. Completed cylinder Punch extrudes Punch aluminum stroke is and wall is halted, formed maintaining required The slug is bottom-end gravity fed thickness into die
Slide 36: Decoration and Finishing
Decoration and Finishing 4. Internal Spray Coating 5. Dry Offset Print 6. Neck Down 36
Slide 37: CCL Container Strong Market Position
CCL Container Strong Market Position • Focus on NAFTA region only • One of only two producers with approx 50% share • Main competitors are alternatives – Steel/Tin Plate Aerosols – Plastic Trigger Sprays/Pumps – Coil-to-Can Aluminum Beverage Bottles – Specialty Glass & Plastic Bottles • Facilities i
Slide 38: Canadian Plant: US$ Exchange Rate Headwind
Canadian Plant: US$ Exchange Rate Headwind US$ Operating Income US$:C$ impact $ millions from Exchange Rate prior year $4.5 $1.40 $3.6 $3.0 $2.7 $2.5 US$:$C $1.9 $1.20 $1.5 US$ OI impact $0.0 $1.00 2004 2005 2006 2007 38
Slide 39: Aluminum Cost Challenges
Aluminum Cost Challenges (US$/ton) Average for year Hedge Impact $4,000 $12,000 $1,725 $1,900 $2,600 $2,640 $2,860 Hedge Impact $3,000 $8,000 $2,000 $4,000 LME spot price $1,000 $0 2004 2005 2006 2007 2008 Aug.30 Source: Reuters, 3 month LME spot price 39
Slide 40: CCL Container Last Five Year Performance
CCL Container Last Five Year Performance OI $US M Sales $US M 20 200 160 15 Sales 120 10 80 5 OI 40 0 0 2003 2004 2005 2006 2007 $M 2003 2004 2005 2006 2007 Investment $83.5 $98.3 $123.4 $130.7 $137.0 ROI 16.2% 14.0% 15.0% 11.2% 12.0% Impact C$ Transactions $2.7 2.6 1.9 3.6 40
Slide 41: CCL Container 2008 vs. 2007 YTD Performance
CCL Container 2008 vs. 2007 YTD Performance at June 30th • Factors impacting revenue – ABS Bag-on-Valve business sold in Q1 2008 = $2.2 million – Loss of Home Care contract in mid 2007 = $10 million – C$ Translation = $8 million based on virtually all customers’ purchases in US$ • U.S. and Mexican o
Slide 42: Growing Profitability in Mexico
Growing Profitability in Mexico CCL Container Sales 2003 2007 Mexico Mexic o 11% 11% CCL Container Operating Income 2003 2007 Mexico Mexico 1% 25% 42
Slide 43: New Plant in Guanajuato Mexico
New Plant in Guanajuato Mexico Investment in Guanajuato will reach $35 million by year end 43
Slide 44: CCL Container Mexico Strategy
CCL Container Mexico Strategy • Mexico City plant (older lines) focus on: – Local aerosols sold to Mexican contract fillers and customers filling in California, Texas, New Mexico and Arizona – Specialty containers with high labour content currently made in the U.S. • Guanajuato plant (new lines) foc
Slide 45: CCL Container Focus for 2008-2010
CCL Container Focus for 2008-2010 • Continue to drive improvements in the US: service, innovation, productivity, pricing, leveraging cross-CCL customer relationships • Downsize and reduce cost in Canadian operation • Successful execution of Mexican strategy • 2010 goal to reach 20% ROI, significant
Slide 46: CCL Tube
building on OUr Strengths CCL Tube
Slide 47: CCL Tube Market Share
CCL Tube Market Share North American Extruded Tube Market US$400Million CCL 15% 47
Slide 48: CCL Tube Customers
CCL Tube Customers • Focus on high-end decorated premium priced consumer brands 48
Slide 49: CCL Tube Last Five Years Performance
CCL Tube Last Five Years Performance $US M 2003 2004 2005 2006 2007 Sales 55.7 57.0 55.9 60.0 54.4 Operating Income 0.8 0.2 2.4 4.3 0.4 EBITDA 6.5 5.3 7.6 10.3 6.8 Capex 7.4 7.8 5.8 8.4 8.6 Cash Flow -1.5 -1.1 2.0 3.4 -1.7 Investment 88.3 84.4 77.4 75.4 79.4 Presented in $US as business is primarily
Slide 50: CCL Tube 2008 vs. 2007 YTD Performance
CCL Tube 2008 vs. 2007 YTD Performance at June 30th $M $30.9 $34.0 $3.8 $5.2 Sales EBITDA 2008 2007 • Q3 & Q4 will be favourable due to weak 2nd half of 2007 • Order levels good in market circumstances • Business returned to profit, but margins not at acceptable levels 50
Slide 51: CCL Tube Los Angeles – New More Efficient Facility
CCL Tube Los Angeles – New More Efficient Facility From this… …to this 51
Slide 52: CCL Tube Focus 2008-2010
CCL Tube Focus 2008-2010 • Successful relocation in Los Angeles • Merging U.S. sales team with CCL Label HPC group to leverage relationships • Focus operations on service, decoration innovation and improving mix • Review small (but profitable) operation in Mexico • 2010 objective: 10% ROI 52
Slide 53: Questions
COL LIRA BD ovestions 4 Bek | (‘* Bl i 83
Slide 54: CCL Label
CCL Industries Inc. CCL Label
Slide 55: Three Label Markets
Three Label Markets • Variable Information Printing – Bar Codes – Information Processing Applications • Packaging and Presentation – Personal Care CCL Focus – Premium Food and Beverage – Healthcare and Chemicals • Product Identification – Automotive – Consumer Electronics: Computers, CCL New Opportu
Slide 56: CCL Label Products – Global Leadership
CCL Label Products – Global Leadership • Pressure sensitive labels – global leader • Expanded content labels – global leader • Sleeves – #2 globally • Niche player: – In-mould labels – Film wrap labels – Paper cut & stack labels Plus… 56
Slide 57: CCL Label Services
CCL Label Services • Brand “Icons” & creative development • Artwork and design management • Label supply chain & inventory management • Label application consulting • New development initiatives “problem solving” 57
Slide 58: Global Packaging Market Trends
Global Packaging Market Trends Asia Pacific Now Larger than N. America and W. Europe € billion 482 387 104 Rest of World 64 116 W. Europe 104 143 Largest Asia Pacific 111 market N. America 108 119 2005 2010 Source: Heidelberger Druckmaschinen - * Adjusted for price changes and currency fluctuations
Slide 59: Global Packaging Market Trends Fastest Growing Markets
Global Packaging Market Trends 10 Fastest Growing Markets (2005-2010 CAGR) 14% 12% 12% 10% 10% 10% 9% 9% 8% 8% India Philippines Poland Taiwan Indonesia Brazil China Argentina Egypt Lithuania Source: Pira 2005 59
Slide 60: Global Label Market
Global Label Market Market Volume Market Growth Rates (2007) (% p.a.) Wraps/ Sleeves 9% Pressure Sensitive labels 39% I n-mould 6% Cut and Pressure Stack Sensitive 5% 50% Labels In-mould 2% Wet Glue 3% Sleeves/Film Wraps 9% Volume: 41 billion m2 Source: 2008 Global AWAreness Report, 2008/03 60
Slide 61: Global Pressure Sensitive Label Market
Global Pressure Sensitive Label Market Emerging Markets Continue to Represent Best Growth Opportunities PS Label Market Volume PS Label Market Growth (2007) Rates (% p.a.) N. America 33% Emg. AP 14.7% L. America E. Europe 8.0% 5% L. America 8.0% Emg. AP Aus/NZ 3.0% 12% N. Eur 17% Dev. AP 2.6% N. Eur
Slide 62: Industry Structure
Industry Structure Converters (Entrepreneurs/Consolidators) Proximity to Point of Use Laminators & Film Extruders (Avery-Bemis-Mitsubishi) Primary Materials (UPM-Dow-Shell-BASF) Degree of Scale 62
Slide 63: Mission
Mission To be the global supply chain leader of innovative premium package, and promotional, label solutions for the world’s largest consumer and healthcare corporations 63
Slide 64: CCL Label Main Engine for Growth
CCL Label Main Engine for Growth OI (US$M) Sales (US$M) $120 $1,000 $750 $80 Sales $500 $40 $250 OI $0 $0 2002 2003 2004 2005 2006 2007 $M 2002 2003 2004 2005 2006 2007 Capex $21.5 $34.8 $35.9 $79.2 $88.5 $121.0 EBITD $36.3 $42.8 $64.2 $92.2 $131.7 $167.3 A 64
Slide 65: CCL Label 2008 vs 2007 YTD Performance
CCL Label 2008 vs 2007 YTD Performance at June 30th $M $496 $483 $77 $72 $108 $100 Sales OI EBITDA 2008 2007 • Soft HPC market in the U.S. and Western Europe • Strong Results from Healthcare & Specialty globally • Growing Sleeve and Beverage businesses, highly seasonal • Emerging Markets performance
Slide 66: CCL Label Four Major Markets
CCL Label Four Major Markets Home and Healthcare Beverage Sleeve Personal Care & Specialty & Battery Labels $300M $350M $175M $150M …Plus Durables (CD-Design) - $25million: $1+B revenue 66
Slide 67: CCL Label Home and Personal Care Around The World
CCL Label Home and Personal Care Around The World • 12 plants – 4 in the U.S. – 4 in Europe – 2 in Latin America – 2 in Asia – 2 in Russian JV Revenue • Total revenues of US$300 million Breakdown – 3-4 times larger than the nearest competitor – 25%+ Global Market Share Europe U.S. – Profitability at
Slide 68: Top Global Beauty Care Players
Top 10 Global Beauty Care Players Name 2007 Total Sales (US$B) HQ Location Procter & Gamble 76.5 U.S. L’Oréal 25.1 France Unilever 59.2 UK-NL Colgate-Palmolive 13.8 U.S. Estēe Lauder 7.0 U.S. Avon Products 9.9 U.S. Beiersdorf 8.5 Germany Johnson & Johnson 61.1 U.S. Shisheido 6.9 Japan Kao Corp 12.6
Slide 69: Five Global Accounts For Home & Personal Care
Five Global Accounts For Home & Personal Care • Represents 70% of Home & Personal Care Label sales • Balance is in regional players and specialty retailers 69
Slide 70: Global Personal Care Market Shift
Global Personal Care Market Shift W. Europe N. America Japan Emerging Markets 48% 34% 26% 27% 24% 17% 15% 9% 2007 2017 2007 2017 2007 2017 2007 2017 Industry estimates 70
Slide 71: Global Home & Personal Care Presence
Global Home & Personal Care Presence 2008 …Now with presence in Moscow and St. Petersburg through our joint venture with CCL-Kontur 71
Slide 72: Global Home & Personal Care Presence
Global Home & Personal Care Presence 2010 …with new Asian investments 72
Slide 73: Growing Through Greenfield Sites – Investment to Date
Growing Through Greenfield Sites – Investment to Date Poland (2006) China (2005) Thailand (2003) $13M $14M $17M 73
Slide 74: Greenfield Site Relocations – Investments
Greenfield Site Relocations – Investments Paris Relocation Mexico City Relocation $16M $30M Relocation to new state-of-the-art facilities to meet customer needs 74
Slide 75: CCL Label's Global Partners
CCL Label’s Global Partners CCL Label HPC sites trading with Global partners Company NA LA EU Asia Total P&G 4 2 5 2 13 Unilever 4 2 4 2 12 L’Oréal 3 2 3 1 9 J&J 4 2 2 - 8 Beiersdorf 2 2 1 2 7 75
Slide 76: CCL Label Home & Personal Care Strategy
CCL Label Home & Personal Care Strategy • Continue to invest in Emerging Markets, largely through greenfield sites • Invest in Decoration Innovation • Broaden category presence in North America – Home Care • Focus on improving profitability in Europe • Build service programs in Design Management and
Slide 77: Questions
COL LIRA BD ovestions r = | j os \ = \ i ™ n ( Hl H 77
Slide 78: Global Healthcare Group
CCL Industries Inc. Global Healthcare Group Presented by: Robert Ryckman, VP, Marketing and Sales, CCL Label Healthcare Worldwide September 23, 2008
Slide 79: Agenda
Agenda • Key strengths – markets served – key customers – locations & technology • Growth initiatives • Healthcare strategy • Q&A 79
Slide 80: Healthcare Group History
Healthcare Group History • Group was formed in 2003 to target the Healthcare market • Designated “Focused” factories to meet unique market needs • Invested in new production and inspection equipment specifically designed to service the Healthcare market • Completed strategic acquisitions to fill pro
Slide 81: A Strong Growth Record
A Strong Growth Record Sales (US$M) CAGR $250 $239 23.4% $201 $200 Graphiques Apex acquisition $161 $144 Inprint acquisition $150 $103 Avery acquisition $100 2003 2004 2005 2006 2007 Lucas-Insertco acquisition 81
Slide 82: Markets Served
Markets Served CCL Healthcare provides innovative packaging solutions globally to the following industries: • Prescription Drugs • Generic Drugs • Clinical Trials • Ophthalmic (Eye Care) • Biotechnology • Medical Devices • Animal Health Products • Nutraceuticals 82
Slide 83: Well Positioned in a Large Market
Well Positioned in a Large Market Healthcare Market US$2B ~10% CCL share CCL is a large player in a fragmented global market 83
Slide 84: Many Global Blue Chip Customers
Many Global Blue Chip Customers 84
Slide 85: 2007 Sales by Geography
2007 Sales by Geography Total Global Sales = US$239 M North America Europe US$119M 52% 48% US$120M 85
Slide 86: Excellent Geographic Footprint to Service Both North America and Europe
Excellent Geographic Footprint to Service Both North America and Europe CANADA 1. Toronto 2. Montreal US 3. Hightstown, NJ DENMARK 10. Copenhagen 4. Baltimore, MD 11. Randers 5. Sioux Falls, SD ITALY 12. Milan 6. St. Louis, MO NETHERLANDS 13. Oss 7. Upland, CA UK 14. Ashford PUERTO RICO 8. Cidra 15.
Slide 87: State-of-the-Art cGMP Facilities
State-of-the-Art cGMP Facilities Digital Inspection Machine 87
Slide 88: State-of-the-Art cGMP Facilities
State-of-the-Art cGMP Facilities Product segregation to avoid mixing batches 88
Slide 89: State-of-the-Art cGMP Facilities
State-of-the-Art cGMP Facilities “White Room” Manufacturing Environment 89
Slide 90: State-of-the-Art cGMP Facilities
State-of-the-Art cGMP Facilities Digital Proofing for copy integrity 90
Slide 91: State-of-the-Art cGMP Facilities
State-of-the-Art cGMP Facilities Digital Press for short run and sequential bar codes 91
Slide 92: Broad Range of Products
Broad Range of Products Pressure Sensitive Expanded Content Multi Ply IV Hanging Label Medical Device Shrink Sleeve Label Closure 92
Slide 93: Agenda
Agenda • Key strengths – markets served – key customers – locations & technology • Growth initiatives • Healthcare strategy • Q&A 93
Slide 94: Growth Initiatives - Product Innovations
Growth Initiatives - Product Innovations • RIFD – Track and trace and electronic pedigree applications • Brand protection product line – Overt solutions – Covert features • Intelligent labels – Time & Temperature indicators – Braille Labels – Chemical indicators – Sterilization indicators • Child Re
Slide 95: Growth Initiatives - Product Line Extensions
Growth Initiatives - Product Line Extensions • Blister Foils – For unlabeled products common in Europe • Special constructions with Pattern Adhesive technology – IVHL – Medical device • Expanded Content Labels (ECL) with more pages for regulatory support – Now with more than 100 pages is possible 95
Slide 96: Growth Initiatives & Market Trends – Type 2 Diabetes
Growth Initiatives & Market Trends – Type 2 Diabetes • Type 2 Diabetes is now a World Pandemic • CCL is well positioned with the leading Healthcare companies that manufacture insulin and glucose monitoring devices • Many new products are in development with CCL as a label solutions partner 96
Slide 97: Growth Initiatives & Market Trends – ePedigree
Growth Initiatives & Market Trends – ePedigree • California will require that all prescription drugs carry a method of traceability from the time the product is made to the time it is dispensed • CCL has several ways to deliver a solution through RFID and Bar coding • CCL is investing in variable da
Slide 98: Agenda
Agenda • Key strengths – markets served – key customers – locations & technology • Growth initiatives • Healthcare strategy • Q&A 98
Slide 99: Strategy Going Forward
Strategy Going Forward • Pursue acquisitions that will enhance CCL’s global footprint and Healthcare product offering • Focus on global customers and sell our worldwide supply chain capability • Greenfield site investments in China & India to support existing customers • Execute new technologies to
Slide 100: Questions
ee CIMA BD ovestions
Slide 101: CCL Label Food & Beverage
CCL Industries Inc. CCL Label Food & Beverage Presented by: Günther Birkner, Group VP, Food & Beverage, CCL Label Worldwide September 23, 2008
Slide 102: Agenda
Agenda • Key strengths • Growth initiatives – beer – soft drinks – wine & spirits – dairy & liquid foods • Food & beverage strategy • Q&A 102
Slide 103: A Strong Growth Record
A Strong Growth Record Sales (US$M) $300 $265 $226 Clear Image acquisition $200 Steinbeis acquisition ITW Sleeves acquisition $100 $100 $65 $74 Pachem acquisition $0 2003 2004 2005 2006 2007 2008 Note 1: ITW contributed $84M in sales in year acquired - 2007 103
Slide 104: Strong Organic Growth
Strong Organic Growth Sales (US$M) $300 30% $265 of growth $226 now organic $200 $100 $100 $65 $74 $0 2003 2004 2005 2006 2007 2008 Note 1: ITW contributed $84M in sales in year acquired - 2007 104
Slide 105: Growing Market Share
Growing Market Share CCL Global Market Share 3 Years Ago Today Ranking PSL - Beverage 8% 20% #2 Sleeves 6% 15% #2 Key Competitors • Fuji Sleeves (Japan/public) • Sleever International (France/family-owned) • Spear Inc. (USA/private & financial investor) • Multicolor Corp. (USA/public) 105
Slide 106: Extensive Global Footprint
Extensive Global Footprint 106
Slide 107: Key Customers – All Global Players
Key Customers – All Global Players Global heavyweights and active consolidators in their segments 107
Slide 108: Agenda
Agenda • Key strengths • Growth initiatives – beer – soft drinks – wine & spirits – dairy & liquid foods • Food & beverage strategy • Q&A 108
Slide 109: Beer – A Growing Market
Beer – A Growing Market • Top 4 customers share more than 50% of world market • North America and Western Europe mature, Emerging Markets growing • Premiumization Customer Breakdown US$ InBev-AB $36B 26% Other 47% 13% SABMiller 8% $21B 6% Carlsberg Heineken $13B $22B 109
Slide 110: Beer – The Move To New Labels
Beer – The Move To New Labels • “No-Label Look” decoration replacing paper labels and direct print • Marketing and operational benefits 110
Slide 111: Beer – CCL's Global Customers
Beer – CCL’s Global Customers Heineken USA Carlsberg Russia InBev Korea Femsa Mexico SABMiller South Africa Carlsberg China 111
Slide 112: Beer – CCL Providing Innovative Solutions
Beer – CCL Providing Innovative Solutions “Wash-Off” Labels • CCL has unique patented label construction for refillable bottles • Labels removable and bottles reusable • Refillable bottles provide environmental benefits and represent approx. 50% of beer bottles worldwide Outlook • Equipment investme
Slide 113: Soft Drinks – Global Market Share
Soft Drinks – Global Market Share Company Ranking Coke Pepsi Nestlé Danone Carbonated Soft Drinks #1 #2 - - Juice #1 #2 - - RTD Coffee, Tea #1 #2 #3 - Sports Drinks #2 #1 - - Water #3 - #1 #2 113
Slide 114: Soft Drinks – Global Opportunities
Soft Drinks – Global Opportunities • Business dominated by Coca-Cola and Pepsi – plus Nestlé and Danone in bottled water category • Carbonated soft drinks only grow in emerging markets – developed markets move to wellness drinks (enhanced waters, juice), energy drinks and RTD coffee and tea • Standa
Slide 115: Soft Drinks – CCL Customers & Products
Soft Drinks – CCL Customers & Products Danone Nestlé Coca Cola Coca Cola Nestlé Coca Cola Gerolsteiner Pepsi 115
Slide 116: Soft Drink Innovation
Soft Drink Innovation “Super-Stretch-Sleeves” (Triple S) • Environmentally friendly and cost effective Sleeve decoration for shaped bottles to replace Shrink Sleeves • Proprietary patented application system • Minimizes material usage, transport, energy consumption 31% SHRINK SLEEVE TRIPLE S 116
Slide 117: Wine & Spirits – CCL's Major Customers
Wine & Spirits – CCL’s Major Customers • Wine makers usually small with regional character • Spirits controlled by Diageo (Smirnoff, Johnnie Walker, Baileys) Pernod Ricard (Chivas, Absolut Vodka, Beefeater Gin) and Bacardi US$ Diageo Other $20B 26% 34% 14% Bacardi $5B 26% Pernod Ricard $12B 117
Slide 118: Wine & Spirits – Major Global Customers & Brands
Wine & Spirits – Major Global Customers & Brands Bacardi Pernod Ricard Diageo Diageo Diageo Bacardi Diageo Mumm 118
Slide 119: Wine & Spirits – Opportunities
Wine & Spirits – Opportunities • Growth in mature markets (competition with beer) and tax regulated markets e.g. India • CCL presence small with Pressure Sensitive Labels and Shrink Sleeves • Wine business bolstered by the acquisition of Clear Image Australia – need to establish franchises in import
Slide 120: Dairy & Liquid Food – Markets For Growth
Dairy & Liquid Food – Markets For Growth • Consumer habits grow “on-the-go” and portioned packs like small plastic bottles • Brand owners look for differentiation with shaped containers and high-end decoration • CCL supplies Sleeves, PSL and In-mould Labels… full choice of premium decoration • Exist
Slide 121: Dairy & Liquid Food – Large & Global Customers
Dairy & Liquid Food – Large & Global Customers • Danone, Nestlé and Unilever as global players • Various regional large customers US$ $95.0B $60.0B $23.0B $9.6B $7.5B $6.0B $3.1B Nestlé Unilever Group Arla Friesland Campina Müller Danone 121
Slide 122: Dairy & Liquid Food – Customers & Products
Dairy & Liquid Food – Customers & Products Arla Danone Unilever Campina Nestlé Müller 122
Slide 123: Food & Beverage Growth Strategy
Food & Beverage Growth Strategy • Focus on multinational customers with global brands accessing CCL’s geographic footprint • Focus on premium brands with high-end decoration and new technologies – no mature products (paper cut & stack labels, wraparound labels) • Focused factories designed to meet c
Slide 124: Questions
n< Ee by ? Questions eee : aN ) ae
Slide 125: CCL Label Market Niches Represent 20% of Sales
CCL Label Market Niches Represent 20% of Sales With higher margins than the average Batteries Promotions Chemicals Paints Automotive 125
Slide 126: CCL Label Specialty Products
CCL Industries Inc. CCL Label Specialty Products Geoffrey T. Martin, President and CEO September 23, 2008
Slide 127: CCL Industries 2002 – 2007 Proforma
CCL Industries 2002 – 2007 Proforma EBIT Sales ($M) $150 $1,200 $100 Sales $1,000 $50 $800 EBIT $0 $600 2002 2003 2004 2005 2006 2007 Note: Excludes Custom Manufacturing & ColepCCL 127
Slide 128: CCL Label, Container & Tube Investing in the Future
CCL Label, Container & Tube Investing in the Future $M ROI $200 20% ROI $160 15% $120 Capex 10% $80 5% $40 Depreciation $0 0% 2002 2003 2004 2005 2006 2007 Capex as a 93% 181 216 274 242 221 % of Dep’n % % % % % Note: Excludes Custom Manufacturing & ColepCCL 128
Slide 129: CCL Container, Tube and Label Working Capital
CCL Container, Tube and Label Working Capital Sales $M Working Capital $M 1600 120 1200 80 Sales 800 40 400 0 Working Capital 0 -40 2002 2003 2004 2005 2006 2007 Note: Excludes Custom Manufacturing & ColepCCL 129
Slide 130: Capex Outlook
Capex Outlook • Capex forecast 2008 of $190 million includes over $60 million of significant & strategic long-term property transactions – CD-Design = $13 million – New Mexican Guanajuato Container plant = $10 million – New Paris HPC Label plant = $8 million – New Montreal Healthcare Label plant = $
Slide 131: CCL Container & Tube Strategies
CCL Container & Tube Strategies • Focus on North America Only • Focus on improving Operating Margin and ROI – Cost reduction – Mexican Container plant, downsizing of Penetanguishene – Pricing – commodity cost pass throughs, improve mix – Capex at or below rate of depreciation for 2009-10 in both bus
Slide 132: CCL Label Business Strategy
CCL Label Business Strategy • Focus primarily on large Global Customers – Organize around their needs • Invest globally in world-class facilities and technologies – By market segment and/or label type – Increasing focus on product technology innovations • Acquire to expand geographic footprint and p
Slide 133: CCL Acquisition Approach
CCL Acquisition Approach • Focus on selected segments of the Label business • Valuations at 4-6+ times historic EBITDA • Focus on businesses/people who we know, avoiding auctions • Willing to take on troubled situations: at or below tangible asset value • Must be a “fit”… product/geography in our gl
Slide 134: Questions
COL LIRA BD ovestions r = | j os \ = \ i ™ n ( Hl H 134