Ranpak Holdings Corp · NYSE:PACK
Ranpak — Investor Presentation (June 2019)
40 slides from Ranpak's investor presentation, Jun 27, 2019
Slide 1: Investor Presentation June 27, 2019
0 Investor Presentation June 27, 2019
Slide 2: Caution about Forward-Looking Statements
CAUTION ABOUT FORWARD - LOOKING STATEMENTS This presentation contains “forward - looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amen ded (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Our forwa
Slide 3: Table of contents
2 Table of contents Introduction Ranpak Business Overview Industry Overview Financial Overview 5 3 2 1 Appendix Growth Opportunities 4
Slide 4: Introduction
3 Introduction
Slide 5: Snapshot of Ranpak
4 Snapshot of Ranpak Industry leader offering full suite of environmentally sustainable, systems - based packaging solutions for e - Commerce and industrial supply chains Installed base of over 98,000 machines using Ranpak consumables exclusively Global business with strong presence in U.S. and Euro
Slide 6: Attractive Business Model with Strong Tailwinds
5 Attractive Business Model with Strong Tailwinds $7bn (1) addressable global market with growth driven by e - Commerce Significant growth potential , particularly in wrapping, thermal and APAC Ranpak can serve as a platform for additional industry - leading eco - friendly solutions (developed
Slide 7: The new Ranpak team
The new Ranpak team Board of Directors 6 Ranpak Senior Leadership Team Collective experience Collective experience Omar Asali Executive Chairman of Ranpak Chairman & CEO of One Madison Corp. - Former Chairman & CEO, HRG Group Robert King Director of One Madison Corp., Gehl Foods (Chairman), Fresh Pe
Slide 8: Ranpak Business Overview
7 Ranpak Business Overview
Slide 9: Attractive and diverse business fundamentals
8 Attractive and diverse business fundamentals Compelling financial attributes – high growth and high margins Market leader in sustainable systems Full suite of solutions for global commerce Innovative IP protected systems and technology Razor / razorblade model drives high retention rates
Slide 10: Fast growing, high return and resilient worldwide leader
9 Fast growing, high return and resilient worldwide leader in sustainable systems - based packaging solutions Compelling financial attributes – high growth and high margins (1) Adjusted EBITDA is a non - GAAP measure. Refer to the Appendix to this presentation for a reconciliation of Adjusted EBITDA
Slide 11: Strong growth driven by machine placement
24 24 27 31 36 45 50 52 54 57 60 64 70 76 82 91 97 104 02A 03A 04A 05A 06A 07A 08A 09A 10A 11A 12A 13A 14A 15A 16A 17A 18A 19E 10 Strong growth driven by machine placement $85 $89 $100 $112 $128 $149 $158 $144 $156 $176 $176 $188 $216 $218 $233 $246 $264 $289 02A 03A 04A 05A 06A 07A 08A 09A 10A 11A
Slide 12: Global infrastructure to support growth
11 Global infrastructure to support growth Concord Township, OH (1997) Machine Assembly x Paper Conversion x Shanghai , China (2014) Sales Office Tokyo, Japan (2012) Sales Office Heerlen, Netherlands (1991) Machine Assembly x Paper Conversion x e3neo Assembly x Reno , NV (2002) Paper Conversion x Ka
Slide 13: Full suite of solutions for global commerce
12 Full suite of solutions for global commerce Wrapping (7% of sales) Cushioning (45% of sales) e3neo (4% of sales) Void - Fill (44% of sales) Focused on filling empty space in secondary packages System converts paper to fill empty spaces in a package and limit object movement 2018A Sales: $11
Slide 14: Continuous innovation leading to patent-protected systems
Cushioning 45% Void - fill 44% Wrapping 7% Automation 4% Void Fill 8% Cushioning 92% 13 Continuous innovation leading to high - quality, patent - protected systems WrapPak PS WrapPak FS Geami HV Wrapping Geami Exbox Consistent new product innovation and geographic expansion have fueled growth 2003 2
Slide 15: Diversified and growing end-markets
% of market ~40% ~5% ~5% ~10% ~2% % of Ranpak sales (1) ~35% ~10% ~8% ~7% ~6% Est growth rate Low to mid teens GDP plus B2C B2B 14 Diversified and growing end - markets Source: Freedonia and US Census. (1) Based on 2018 financial statements of Rack Holdings Inc. included in the Registration Statemen
Slide 16: Why customers choose Ranpak
15 Why customers choose Ranpak #1 #2 No capital outlay required for end users to improve efficiency of their business High speed and reduced handling results in higher productivity Cost Effective Highly protective Systems placed at no cost to end user #3 Throughput and speed Paper is faster th
Slide 17: Razor/razorblade model supports long-term relationships
Customers exclusively use Ranpak’s consumables High customer satisfaction due to reliability and high quality Reliable provider of fulfillment service 16 Razor / razorblade model supports long - term relationships and favorable economics Machines provided at low cost to distributors with bul
Slide 18: Exclusive distribution network enables sales reach
E - Commerce Auto OE & aftermarket IT / electronics Machinery Home goods Sales breakdown by relationship length (1) Number of distributor - serviced accounts by size (1) 17 Exclusive distribution network enables sales reach to thousands of small, fragmented end - users while maintaining an asset - l
Slide 19: Industry Overview
18 Industry Overview
Slide 20: Global protective packaging market
+ Other additional regional players 50% + 19 Market leader in sustainable, system - based solutions for e - Commerce and industrial supply chains Source: Management Estimates, Freedonia . (1) Represents estimates for the North America and Europe systems based segment of protective packaging. Paper “
Slide 21: In-the-box protective packaging formats
“In - the - box” protective packaging formats “In-the-box” protective packaging application Void-fill Wrapping Cushioning and blocking & bracing Foam-in-place Engineered foam Non-random Random and non-random Paper-based Insulated shipping containers Sheet foam Molded pulp Loose-fill Air pillows Loos
Slide 22: Fiber is the preferred solution
21 Fiber is the preferred solution … Ranpak’s fiber - based solution is winning in the marketplace Source: Company management, industry research. Fiber Airbags Foam Bubble wrap Loose fill (peanuts) Main application Cushioning Void - fill Wrapping Void - fill Cushioning Insulating Wrapp
Slide 23: Paper packaging, the sustainable solution
22 Paper packaging, the sustainable solution for in - the - box protection Sustainable Sourcing Sustainable Resources x 85% of Ranpak’s paper packaging in the US consists of either entirely or partially recycled content x Significant cost savings via reduced packing time and materials Ranpak works e
Slide 24: Growth Opportunities
23 Growth Opportunities
Slide 25: Compelling building blocks for targeted growth
24 Compelling building blocks for targeted growth 4.5% - 6.5% 10.0% e-Commerce Auto aftermarket IT/Electronics Machinery Home goods Other Initiatives Ranpak base growth M&A and global focus on sustainability Wrapping (Geami) Geographic expansion − Asia − E. Europe − C. / S. America Cold chain
Slide 26: Compelling e-Commerce and automation tailwinds
$0 $1,000 $2,000 $3,000 $4,000 $5,000 2014 2015 2016 2017 2018E 2019E 2020E 2021E e3neo acquisition Acquired in March 2017 Expands automation capabilities and machine product offering − High demand in e - Commerce Allows Ranpak to cross - sell and penetrate new customers − Now better positione
Slide 27: Priority growth opportunities: APAC and wrapping
Focus on areas with: higher labor costs, internet penetration, IP protection, industrial growth Aggressively pursue growth in China and India, especially related to e - Commerce Leverage relationships with existing multi - national customers Partner with local distributors and end use customers to c
Slide 28: Value creation levers and growth opportunities
27 Value creation levers and growth opportunities Retail Distribution for Wrapping Enhance Performance through Technology Throughput, machine placement, and servicing Enhanced Branding and Consumer Outreach Cold Chain / Thermal Substantial opportunity in growing grocery, meal kits, and pharma Automa
Slide 29: Financial Overview
28 Financial Overview
Slide 30: Capitalization
($ in mm, except per share values) Shares outstanding (mm) (2) 47.0 Share price (3) $8.98 Equity value $422 Net debt (4) 531 Enterprise value $953 Transaction and leverage multiples EV / '19E Adj. EBITDA ($95) 10.0x Net debt ($531) / '19E Adj. EBITDA ($95) 5.6x 29 Capitalization (1) Adjusted EBITDA
Slide 31: Financial summary
Capex in constant currency (3) Free cash flow (4) % Growth (constant currency) - 3% 7% (1%) 11% 30 Financial summary Source: Company management. Figures shown for historical periods derived from GAAP financial statements. (1) Adjusted net sales is a non - GAAP measure, consisting of net sales presen
Slide 32: Ranpak has started off strong in 2019
31 Ranpak has started off strong in 2019 Note: Figures based on Unaudited Preliminary internal company financial statements. Based on constant currency at € / $ 1.15. (1) Constant currency net sales is a non - GAAP measure, consisting of net sales presented on a constant currency basis for the perio
Slide 33: Best-in-class asset with superior financial metrics
32 Ranpak is a best - in - class asset with superior financial metrics Sales growth Adj. EBITDA margin (2) Return on tangible assets (4) (8%) 4% 7% (1%) 0% 3% 4% 4% 5% 2% 2% 4% 5% 9% Logistics #3 Logistics #2 Logistics #1 Industrial automation #6 Industrial automation #5 Industrial automation #4 Ind
Slide 34: Superior top-line growth and profitability
33 Superior top - line growth and profitability Source: FactSet, market data as of 6/19/2019. Note: Sales growth shown on organic basis. (1) Adjusted EBITDA is a non - GAAP measure. Refer to the Appendix to this presentation for a reconciliation of Adjusted EBITDA to net income for Ranpak Sales Grow
Slide 35: Recurring sales made Ranpak recession resistant
34 Recurring sales from consumables made Ranpak recession resistant in 2008 / 2009 Source: Company management. Note: All figures based on constant currency at € / $ 1.15. Figures based on internal company financial statements (1) Adjusted EBITDA is a non - GAAP measure. Refer to the Appendix to this
Slide 36: Investment highlights
35 Investment highlights (1) Adj EBITDA is a non - GAAP metric. FCF Conversion defined as Adj. EBITDA - Maintenance Capex / Adj. EBITDA. x Long - term sales growth – 7.3% 2015A to 2019E CAGR x e - Commerce led growth – 30%+ e - Commerce exposure x Industry - leading EBITDA margin – 32% 2018A Adjuste
Slide 37: Appendix
36 Appendix
Slide 38: Board of Directors
37 Board of Directors Industry and functional expertise to drive growth at Ranpak Managing Director, Blue Strat Advisors Previous roles − Chief Information Officer for the National Basketball Association (NBA) − Senior Vice President, Application Development for Viacom, MTVN, Showtime Networks,
Slide 39: Ranpak's experienced and proven management team
William Drew Head of Business Development < 1 year Bharani Bobba Head of Growth Strategies < 1 year 38 Ranpak’s experienced and proven management team (1) Jean - Yves Sia founded e3neo and has been with Ranpak since 2017 acquisition. Eric Laurensse Managing Director Europe 9 years Momentive Gene
Slide 40: Non-GAAP reconciliation
Annual Quarterly $000 FY15 FY16 FY17 FY18 Q1 ’18 Q1’19 Net sales Reported net sales $210,982 $224,708 $244,092 $267,860 $61,607 $66,083 Constant currency adjustment 3,556 4,399 2,119 (3,120) (2,084) 465 Constant currency net sales(3) $214,538 $229,107 $246,211 $264,740 $59,523 $66,548 Pro forma e3ne