Slide 1: July 2020 Investor Presentation
July 2020 Investor Presentation
Slide 2: Safe harbor
Safe harbor FORWARD-LOOKING STATEMENTS • This presentation contains certain forward-looking information 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: Who we are
GREIF “"" PACKAGING SUCCESS TOGETHER™ July 2020 — P.3
Slide 4: Leading industrial packaging solutions provider
Who we are How we operate Why invest in Greif? Business segment overview Appendix Leading industrial packaging solutions provider 2019 Performance ($M) Highlights and capabilities Differentiations Revenue $4,595.0 • Leading product positions in • Demonstrated commitment to multiple packaging substra
Slide 5: Leading positions in multiple packaging substrates
Who we are How we operate Why invest in Greif? Business segment overview Appendix Leading positions in multiple packaging substrates Upstream Operations Industrial Packaging Steel Industrial Fibre Flexible IBCs #2 Closures Uncoated Recycled Paperboard (URB) #3 #1 #1 #1 #1 Coated Recycled Paperboard
Slide 6: How we operate
GREIF “o> PACKAGING SUCCESS TOGETHER™ GREIF PACKAGING SUCCESS TOGETHER™ July 2020 - P.6
Slide 7: Supporting stakeholders during the COVID-19 pandemic
Who we are How we operate Why invest in Greif? Business segment overview Appendix Supporting stakeholders during the COVID-19 pandemic Colleagues Customers Communities The health and safety of our global Responding to customer needs in Leveraging operational skills and colleagues is our #1 priority
Slide 8: Our values and behaviors
Who we are How we operate Why invest in Greif? Business segment overview Appendix Our values and behaviors Values Behaviors Communicate with respect, candor, and trust Think Act with the Greif mindset of a first champion Model the behaviors of a servant leader July 2020 – P.8
Slide 9: What we do for customers
Who we are How we operate Why invest in Greif? Business segment overview Appendix What we do for customers Exceed their expectations with customer Protect their Enhance their service, products sustainability flexibility, and innovations • Leverage our diverse geographic • Offer sustainable solutions
Slide 10: Experienced leadership team with track record of success
Who we are How we operate Why invest in Greif? Business segment overview Appendix Experienced leadership team with track record of success Peter G. Watson Lawrence A. Hilsheimer Ole G. Rosgaard Timothy L. Bergwall Hari K. Kumar President and Chief Executive Vice President, Senior Vice President and
Slide 11: Greif's purpose, vision and strategic priorities
Who we are How we operate Why invest in Greif? Business segment overview Appendix Greif’s purpose, vision and strategic priorities To safely package and protect our customers goods and materials to Purpose serve the essential needs of communities around the world In industrial packaging, be the best
Slide 12: Strategic priority: engaged teams
Who we are How we operate Why invest in Greif? Business segment overview Appendix 1 Strategic priority: engaged teams Teams in the top quartile of those Gallup1 has Gallup Overall Engagement Score studied have… 21% Higher profitability 4.2 Manufacturing sector 4.17 percentile ranking 89th 17% Higher
Slide 13: Strategic priority: differentiated customer service
Who we are How we operate Why invest in Greif? Business segment overview Appendix 2 Strategic priority: differentiated customer service Customer Satisfaction Index (CSI) Net Promoter Score (NPS) 100 Net Promoter Wave 9 Score 90 = 61 80 6 26 67 70 60 Wave 1 50 11 38 51 = 40 40 30 FY15 FY16 FY17 FY18
Slide 14: Strategic priority: enhanced financial performance
Who we are How we operate Why invest in Greif? Business segment overview Appendix 3 Strategic priority: enhanced financial performance Anticipated synergy over 36 months ($M) Caraustar run-rate synergy detail $75 $70 Transport / Logistics $65 Procurement / $60 Materials Operational $55 Enhancements
Slide 15: Strategic priority: enhanced financial performance
Who we are How we operate Why invest in Greif? Business segment overview Appendix 3 Strategic priority: enhanced financial performance NA plastic unplanned downtime NA IBC units per man hour 1.40 1.10 1.30 0.90 1.20 1.10 0.70 1.00 0.50 0.90 FY17 FY18 FY19 FY17 FY18 FY19 FPS 4-loop units per man hour
Slide 16: Strategic priority: enhanced financial performance
Who we are How we operate Why invest in Greif? Business segment overview Appendix 3 Strategic priority: enhanced financial performance Innovating and adapting virtually through the Greif Business System July 2020 – P.16
Slide 17: Strategic priority: enhanced sustainability performance
Who we are How we operate Why invest in Greif? Business segment overview Appendix 3 Strategic priority: enhanced sustainability performance 2016 2018 2019 Join UN Global Achieved an Achieved an “A” Compact “A- Leadership” MSCI ESG rating 2017 CDP score Sustainability goals established 2015 2016 2017
Slide 18: Strategic priority: 2019 sustainability report highlights
Who we are How we operate Why invest in Greif? Business segment overview Appendix 3 Strategic priority: 2019 sustainability report highlights E Environment • • 3.5 million containers reconditioned, 830,000 recycled in FY19 82 facilities diverted > 90% of their waste from landfills. 31 facilities ach
Slide 19: Why invest in Greif?
Why invest in Greif? July 2020 – P.19
Slide 20: Global trends support Greif's future growth
Who we are How we operate Why invest in Greif? Business segment overview Appendix Global trends support Greif’s future growth Trend Details Greif Actions • Emerging economies driving • Optimize capacity to serve increased demand Growth of emerging economies greater consumption of goods and from emer
Slide 21: Pivoting to plastic in RIPS
Who we are How we operate Why invest in Greif? Business segment overview Appendix Pivoting to plastic in RIPS Industry volume CAGR by substrate (‘19 - ‘24)1 Greif Global IBC volume 6.0% 5.8% 5.6% 5.4% 5.2% 5.0% Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19
Slide 22: Advancing low risk growth priorities close to our core
Who we are How we operate Why invest in Greif? Business segment overview Appendix Advancing low risk growth priorities close to our core IBC and IBC reconditioning Containerboard integration • Organic IBC investments completed at • New Palmyra, PA sheet feeder enhances Houston, Spain and Russia to e
Slide 23: Track record of delivering on stated outlook
Who we are How we operate Why invest in Greif? Business segment overview Appendix Track record of delivering on stated outlook Adjusted Class A Earnings Per Share1: guidance provided versus actual results $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 Q2 Q3 ACT Beg Q1 Q2 Q3 ACT Beg Q1 Q2 Q3 ACT Beg Q1 Q2 Q3 AC
Slide 24: Clear capital allocation priorities in place
Who we are How we operate Why invest in Greif? Business segment overview Appendix Clear capital allocation priorities in place 1 Reinvest in • Fund maintenance to sustain cash generation and advance organic growth opportunities that the business exceed required returns 2 • Current compliance leverag
Slide 25: Solid balance sheet and liquidity profile
Who we are How we operate Why invest in Greif? Business segment overview Appendix Solid balance sheet and liquidity profile Debt maturities as of 4/30/2020 ($M) $1,400 Key liquidity statistics • Covenant net debt to EBITDA requirement = $1,200 4.75x; GEF currently 3.6x (Q2’20) • ~77% of debt is fixe
Slide 26: Taking proactive steps to mitigate uncertainty
Who we are How we operate Why invest in Greif? Business segment overview Appendix Taking proactive steps to mitigate uncertainty 1 Variable cost COGS Breakdown1 reduction plans • Includes plant rationalization; furloughs; shift reductions developed RIPS PPS 2 SG&A reduction • Targeted reductions or
Slide 27: Anticipate significant EBITDA and FCF Expansion
Who we are How we operate Why invest in Greif? Business segment overview Appendix Anticipate significant EBITDA and FCF Expansion FY’22 Adj. FY’22 Adj. Free Path to 2022 Adjusted EBITDA ($M) $M EBITDA1 Cash Flow2 $1,000 RIPS $288 – $315 $820 - $900 $800 PPS $490 – $530 $600 $503.2 FPS $30 – $40 $400
Slide 28: Why invest in Greif?
Who we are How we operate Why invest in Greif? Business segment overview Appendix Why invest in Greif? Compelling customer value Robust and diverse product Numerous avenues for Compelling dividend and proposition due to portfolio with exposure to a incremental low-risk growth opportunity for free ca
Slide 29: Business segment overview
GREIF PACKAGING SUCCESS TOGETHER™ Business segment overview
Slide 30: RIPS: broad product and services capability
Who we are How we operate Why invest in Greif? Business segment overview Appendix RIPS: broad product and services capability Steel Fibre Closures Plastic #1 #1 #1 #2 IBC Earth Minded Filling #3 RIPS is the most comprehensive customer solutions provider in the industry Note: Ranking denotes standing
Slide 31: RIPS: highlights and differentiation
Who we are How we operate Why invest in Greif? Business segment overview Appendix RIPS: highlights and differentiation 2019 Financials ($M) Highlights and Capabilities Differentiation Revenue $2,490.6 • Extensive global expertise and • Industry’s most comprehensive operational footprint product line
Slide 32: RIPS: expanding reconditioning for sustainable solutions
Who we are How we operate Why invest in Greif? Business segment overview Appendix RIPS: expanding reconditioning for sustainable solutions Reconditioning overview Greif today Greif future state • Benefits to customers: • Operate services to facilitate • Closed loop network in place in collection and
Slide 33: RIPS: Favorable end market growth for plastics
Who we are How we operate Why invest in Greif? Business segment overview Appendix RIPS: Favorable end market growth for plastics Industry IBC sales2 by end market (CAGR ‘19 – ‘24)1 Key end markets drive packaging sales 6.8% Denotes the size of the end market relative to global IBC Sales 6.6% 3 • Che
Slide 34: PPS: broad portfolio offering a variety of paper products
Who we are How we operate Why invest in Greif? Business segment overview Appendix PPS: broad portfolio offering a variety of paper products Mills Containerboard Uncoated Recycled Coated Recycled Paperboard Paperboard Recovered Fiber C #2 #3 Converting Corrugated Tube & Core Products #2 Note: Ranking
Slide 35: PPS: highlights and differentiation
Who we are How we operate Why invest in Greif? Business segment overview Appendix PPS: highlights and differentiation 2019 Financials ($M) Highlights and Capabilities Differentiation Revenue $1,780.0 • Niche position in containerboard • Speed – response and lead times Adjusted EBITDA1 $348.3 • Leade
Slide 36: PPS: expanded, integrated and national paper network
Who we are How we operate Why invest in Greif? Business segment overview Appendix PPS: expanded, integrated and national paper network Containerboard Corrugated ~1M tons 7 sheet feeders Packaging 1 box plant Industry Uncoated Boxboard Tubes & Cores Recovered ~700K tons 45 converting plants Various F
Slide 37: PPS: Benefits from boxboard industry capacity reduction
Who we are How we operate Why invest in Greif? Business segment overview Appendix PPS: Benefits from boxboard industry capacity reduction URB Capacity1 (k tons) CRB Capacity1 (k tons) 2700 2250 2650 2200 2150 2600 2100 2550 2050 2500 2000 2450 1950 2400 1900 2350 1850 2014 2015 2016 2017 2018 2019 2
Slide 38: PPS: IPG benefits from diverse end markets
Who we are How we operate Why invest in Greif? Business segment overview Appendix PPS: IPG benefits from diverse end markets • IPG’s diversified end market revenue provides broad Tube/core revenue by end market1 exposure to US economic activity Paper Mill Film • Tube/core market offers limited risk
Slide 39: PPS: Recovered Fiber Group
Who we are How we operate Why invest in Greif? Business segment overview Appendix PPS: Recovered Fiber Group Business Overview and Opportunities • Top 10 recovered fiber business with strategically positioned assets that limits freight/transport costs • Procures, collects, processes and brokers mate
Slide 40: PPS: OCC is PPS' primary raw material
Who we are How we operate Why invest in Greif? Business segment overview Appendix PPS: OCC is PPS’ primary raw material Old corrugated container (OCC) pricing ($/ton) 2019-2020 $100 $80 $60 $40 $20 $0 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Simple sensitivity - Every $10/ton move = ~$1.4M EBITDA per mon
Slide 41: FPS: global market leader with superior capabilities
Who we are How we operate Why invest in Greif? Business segment overview Appendix FPS: global market leader with superior capabilities 1&2 loop bag 4 loop bag Reconditioning Container liners 1-Loop 2-Loop #1 #1 #1 North America FPS is the largest FIBC producer in the world offering the most comprehe
Slide 42: FPS: highlights and differentiation
Who we are How we operate Why invest in Greif? Business segment overview Appendix FPS: highlights and differentiation 2019 Financials ($M) Highlights and Capabilities Differentiation Revenue $297.5 • Leading position in highly • Exceptional technical capabilities fragmented market and differentiated
Slide 43: Appendix and required reconciliation tables
Appendix and required reconciliation tables
Slide 44: Second Quarter Fiscal Year (FY) 2020 summary
Who we are How we operate Why invest in Greif? Business segment overview Appendix Second Quarter Fiscal Year (FY) 2020 summary Engaged Teams Differentiated Customer Service Enhanced Performance • Scored in the 89th percentile of • Achieved record total company • Adj. EBITDA: $181.3M, +12% all manufa
Slide 45: Strategic priority: enhanced financial performance
Who we are How we operate Why invest in Greif? Business segment overview Appendix Strategic priority: enhanced financial performance Net Sales ($ Millions) Adj. EBITDA ($ Millions) $5,000 $700 $4,600 6.2% 13.8% $4,200 $500 $3,800 $3,400 $3,000 $300 FY15 FY19 CAGR FY15 FY19 ‘15-’19 Adj. EPS ($/sh) Ad
Slide 46: Aligning pay to performance
Who we are How we operate Why invest in Greif? Business segment overview Appendix Aligning pay to performance CEO Total Target Direct Compensation Mix1 Compensation Overview • Based upon operating profit before special items and modified simple free cash Base Salary Short Term Incentive Plan flow •
Slide 47: GAAP to Non-GAAP Reconciliation: Operating Profit to Adjusted EBITDA
Who we are How we operate Why invest in Greif? Business segment overview Appendix GAAP to Non-GAAP Reconciliation: Reconciliation of Operating Profit to Adjusted EBITDA $Millions July 2020 – P.47
Slide 48: GAAP to Non-GAAP Reconciliation: Adjusted Free Cash Flow
Who we are How we operate Why invest in Greif? Business segment overview Appendix GAAP to Non-GAAP Reconciliation: Adjusted Free Cash Flow(1) $Millions (1)Adjusted free cash flow is defines as net cash provided by operating activities, plus cash paid for acquisition-related costs, plus cash paid for
Slide 49: GAAP to Non-GAAP Reconciliation: Earnings per share and Tax Rate
Who we are How we operate Why invest in Greif? Business segment overview Appendix GAAP to Non-GAAP Reconciliation: Earnings per share and Tax Rate $/share and % July 2020 – P.49
Slide 50: GAAP to Non-GAAP Reconciliation: Earnings per share and Tax Rate
Who we are How we operate Why invest in Greif? Business segment overview Appendix GAAP to Non-GAAP Reconciliation: Earnings per share and Tax Rate $/share and % July 2020 – P.50
Slide 51: GAAP to Non-GAAP Reconciliation: Segment Operating Profit to Adjusted EBITDA
Who we are How we operate Why invest in Greif? Business segment overview Appendix GAAP to Non-GAAP Reconciliation: Reconciliation of segment Operating Profit to Adjusted EBITDA(4) $Millions (4) Adjusted EBITDA is defined as net income, plus interest expense, net, including debt extinguishment charge
Slide 52: GAAP to Non-GAAP Reconciliation: Segment Operating Profit to Adjusted EBITDA
Who we are How we operate Why invest in Greif? Business segment overview Appendix GAAP to Non-GAAP Reconciliation: Reconciliation of segment Operating Profit to Adjusted EBITDA(4) $Millions (4) Adjusted EBITDA is defined as net income, plus interest expense, net, including debt extinguishment charge
Slide 53: Q2 Price, Volume and Foreign Currency Impact to Net Sales
Who we are How we operate Why invest in Greif? Business segment overview Appendix Q2 Price, Volume and Foreign Currency Impact to Net Sales for Primary Products: TOTAL SALES VOLUME PRICE FX VARIANCE RIPS NA 1.0% -7.5% -0.5% -6.9% $2.2 ($16.0) ($1.1) ($14.9) RIPS LATAM -16.2% 12.0% -18.1% -22.3% ($6.
Slide 54: Fiscal 2022 financial commitments assumptions
Who we are How we operate Why invest in Greif? Business segment overview Appendix Fiscal 2022 financial commitments assumptions • Net sales will be approximately $5.5B in Fiscal 2022 as a result of strategic growth CapEx, Caraustar inclusion and organic growth • Raw material costs assumed flat again
Slide 55: Credit Agreement Adj. EBITDA & Leverage Ratio
Who we are How we operate Why invest in Greif? Business segment overview Appendix Credit Agreement Adj. EBITDA & Leverage Ratio Trailing Twelve Month Credit Agreement EBITDA TTM (in millions) 4/30/2020 Net income 189.2 Plus: Interest expense, net 126.9 Plus: Debt extinguishment charges 0.1 Plus: Inc
Slide 56: GAAP to Non-GAAP reconciliation: Net Income to Adjusted EBITDA
Who we are How we operate Why invest in Greif? Business segment overview Appendix GAAP to Non-GAAP reconciliation: Reconciliation of Net Income to Adjusted EBITDA July 2020 – P.56
Slide 57: GAAP to Non-GAAP reconciliation: Adjusted Free Cash Flow
Who we are How we operate Why invest in Greif? Business segment overview Appendix GAAP to Non-GAAP reconciliation: Adjusted Free Cash Flow July 2020 – P.57