BMS - Investor Briefing December 2013
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BMS - Investor Briefing December 2013 BMS - Investor Briefing December 2013 Presentation Transcript

  • INVESTOR BRIEFING December 2013
  • Safe Harbor Statement This presentation includes forward‐looking statements within the meaning of the Safe Harbor  provisions of the Securities Litigation Reform Act of 1995. Such statements include, but are  not limited to, statements relating to the expected future performance of the company and  its objectives, expectations and intentions for the future. These forward‐looking statements  are based on the current beliefs and expectations of Bemis Company’s management and are  subject to risks and uncertainties. The forward‐looking statements speak only as of the date  of this presentation, and Bemis Company does not undertake to update such statements to  reflect changes that occur after that date. There are a number of factors that could cause  actual results to differ from those set forth in the forward‐looking statements. These factors  include, but are not limited to: general economic conditions, competitive conditions in our  markets, regional governmental regulations, the cost and availability of raw materials, and  our ability to pass these price changes on to our customers or otherwise manage commodity  price fluctuation risks. These and other risks, uncertainties, and assumptions are identified  from time to time in our filings with the Securities and Exchange Commission including our  most recent Annual Report on form 10‐K and our quarterly reports on Form 10‐Q. Such  reports are available on the website of the Securities and Exchange Commission  (www.sec.gov).  Page  2
  • Bemis Company Profile  Packaging industry leader  since 1858  since 1858  $5.1 billion 2012 net sales  F Fortune 500 500  S&P 500 19%  Vertical integration creates Vertical integration creates  competitive advantage  74 facilities in 11 countries 74 facilities in 11 countries  ~ 20,000 employees  worldwide Page  3 2012 Net Sales by Region 9% 69% 3%     North America Latin America Europe Asia Pacific
  • 2012 Highlights  Record adjusted EPS of $2.15  Increased dividend payable to shareholders Increased dividend payable to shareholders   Announced new reportable segment structure:  U S Packaging U.S. Packaging  Global Packaging  Pressure Sensitive Materials  Substantially completed facility consolidation program  to close 9 manufacturing locations  Increased footprint in Asia‐Pacific Page  4
  • Net Sales & Adjusted Op Profit* % by Segment ($ i millions) ) in illi Global  Packaging U.S.  Packaging Pressure Sensitive Materials 16% 8% $3,040 $3 040 43% $1,544 $1 544 12% 64% $556 57% 100%  $3,000 13.0% 12.8% 15.0% North America Europe  $3,000 11.0% 10.0% 10 0%  $2,000  $2,000 $2,822  5.0%  $1,000 15.0% 10.0%  $2,000 10.0% 8.8% 8.8% 7.4% $3,111  $3,040   $1,000 Latin America 15.0% Asia Pacific  $3,000 7.0% $1,451  $1,637  $1,543  $ , 5.9% 0.0% 2010 Page  5 2011 2012  $‐ 0.0% 2010 2011 2012 6.6% 5.0% 5.0%  $1,000 $563   $‐ 6.3% $574  $556   $‐ 0.0% 2010 * See appendix for reconciliation from GAAP to Adjusted Operating Profit excluding certain items. 2011 2012
  • U.S. Packaging Profile Percent of 2012 Net Sales Percent of 2012 Net Sales 30% 20% 10% 0% Meat & Cheese Dairy & Liquids Specialty Dry Foods Beverage Candy, Health & Other Food & Wraps Snacks & Hygiene Non‐food Meals Bakery  Extends shelf life of  perishable foods (meat,  cheese, dairy, produce) cheese dairy produce)  Proprietary and patented  film structures  Premium manufacturing Premium manufacturing  scale and printing  capabilities support both  national and regional  brands Page  6
  • U.S. Packaging Growth Drivers U.S. Packaging Growth Drivers  Conversion from jars and  cans to pouches Glass jar Pouch  Single serving /  Single serving / convenience sizes  Material content and  weight reduction for  sustainability and cost  management Paper envelope Stand up pouch w/window  Convenient cook‐in  packages f PVdC  Eli i ti Elimination of PVdC content from plastic cups Can Page  7 Cook-in Pouch
  • Global Packaging Profile Percent of 2012 Net Sales 20% 10% 0% Medical & Dairy & ed ca & a y & Pharma Liquids Meat & eat & Cheese Health & Specialty Beverage Candy, ea t & Spec a ty e e age Ca dy, Ot e Other Hygiene Food Wraps Snacks & Non‐food Bakery  Expanding consumer  markets in Latin America  and Asia  Sterility and quality are Sterility and quality are  paramount for medical  applications Page  8
  • Global Packaging Growth Drivers Global Packaging Growth Drivers  Food safety regulations in  emerging markets  New generation of  consumers looking for  convenience features  Wal-Mart located in China Need for shelf stable foods  due to lack of available  refrigeration space refrigeration space Retort Page  9
  • Pressure Sensitive Materials Profile Percent of 2012 Net Sales 60% 40% 20% 0% Technical Page  10 Graphic Label
  • Disciplined Capital Stewardship Priorities: 1) 30 consecutive years  of increasing  dividend payments 2) Fund organic growth Fund organic growth  to enhance revenues  and returns 3) Fund acquisitions  ) d 4) Balance share  repurchases and  repurchases and deleveraging $500 Cash Flow from Operations ($ in millions) $400 $300 $200 $100 $0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 $1.20 $1.00 Cash Dividends Cash Di idends $0.80 $0.60 $0.40 $0 40 $0.20 $0.00 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Page  11
  • Share Repurchase History $161  $154  $27  2004 M M&A Transaction 2005 2006 2007 2008 2009 M M&A Transaction 2003 M M&A Transaction $18  2002 $46  ($203) Page  12 2010 2011 2012 Deleveraging $50 
  • World Class Customer Base Why customers choose Bemis: U i Unique technological and engineering  h l i l d i i resources  Reduced waste in production and  p distribution system   Flexible capacity to accommodate  new product launches new product launches  Reliable supply; Quality product  Investment grade supplier Investment grade supplier  Global supply capabilities Page  13
  • Strategic Priorities Optimize & Leverage  p g Our Scale Grow in Target Areas Accelerate Innovation Accelerate Innovation Page  14
  • Optimize & Leverage our Scale Complete Facility Consolidation C l F ili C lid i World Class Operations Management Ongoing Specification Consolidation Ongoing Specification Consolidation Page  15
  • Grow in Target Areas Packaging demand from  developing countries • Emerging economies  demanding/regulating  g g g food safety and  convenience features • Lack of refrigeration  creates need for shelf  stable packaging • Increasing consumer  populations Page  16 Medical and  pharmaceutical  pharmaceutical industries • Demographics  continue to drive  growth • Modern bio‐technology  requires more complex  p packaging g g • Opportunities for  smart packaging to  solve emerging market  needs High barrier packaging  opportunities • New products continue  to win business in  established U.S. food  applications • Expanding  opportunities for high  pp g barrier film in Latin  America and Asia
  • Accelerate Innovation Polyethylene Unique  Polymer  Polymer Technologies Polyester Nylon Polypropylene Barrier resins EZ Peel/Reseal Consumer  Convenience  Features IntegraCut / IntegraScore Microwaveable/self venting Weight reduction Proprietary sealants Antimicrobial coatings Retort technologies Reduced transportation Food  Food Safety Sustainability Reduced packaging material Less food and material waste Lower carbon footprint Page  17
  • Our Sustainability Commitment Economic sustainability E i t i bilit Environmental Sustainability Transparency and  good governance are  good governance are Social Sustainability fundamental tools for  2020 Targets:  Reduce electricity and  delivering long‐term  fuel use by 10% We are a responsible  value to shareholders  Reduce use of solvents member of the  use of solvents  b f th by 20% communities in which   Zero waste to landfills we operate and make   Zero process water  sa ety ou u be o e safety our number one  discharged priority in each of our  global operations  Page  18
  • 2013 Guidance 2013 Guidance Adjusted EPS guidance of $2.24 to $2.30 Cash flow from operations ~ $400 million • Reflects ~$40 million of pension contributions • Includes ~$50 million of cash payments for facility  consolidation activities • Cash flow from operations expected to be $500 million  beginning in 2014 Capital expenditures of ~$130 to 140 million Note: Guidance as of October 25, 2013 Page  19
  • An Attractive Investment Strong balance  sheet and cash  flow World‐class  customer base Disciplined capital  allocation Strong market  position Expanding global  market reach Patented and  p p proprietary  y products Page  20
  • APPENDIX
  • Reconciliation of Non‐GAAP Earnings Per Share Reconciliation of Non‐ Q313 Actual Q213 Actual Q113 Actual 2012 Actual Q412 Actual Q312 Actual Q212 Actual Q112 Actual GAAP EPS $         0.52 $         0.51 $         0.47 $      1.66 $         0.38 $         0.45 $         0.40 $         0.42 Special charges: Acquisition related costs Facility consolidation and other costs Gain on sale of Clysar plant Gain on sale of land and building                ‐              0.10             ‐           (0.02)                ‐              0.13          (0.03)                ‐                ‐              0.06             ‐                ‐           0.04                ‐              0.01              0.02              0.02           0.45              0.14              0.14              0.12              0.05             ‐             ‐             ‐             ‐             ‐             ‐                ‐                ‐                ‐                ‐ Adjusted EPS $         0.60 $         0.61 $         0.53 $      2.15 $         0.52 $         0.60 $         0.54 $         0.49 Page  22
  • Facility Consolidation Program Financial Summary Q411 2011 Expense $        38.4           38.4 Cash Paid $          3.3               3.3 Q112 Q212 Q312 Q412 2012               8.3           19.7           21.4          19 3 19.3           68.7               8.0               4.5           11.2          11 5 11.5           35.2               5.0            3 0 3.0               8.0 Q113 Q213 Q313 Q413 Estimate 2013 Estimate               9.3          20 9 20.9           15.8             ‐           46.0           10.8          11 7 11.7           10.2           24.2           56.9               7.5         12 5 12.5               6.0               6.0            32.0 Total Facility  Consolidation Impact $       153.1 Expected Annual Savings Run‐Rate $        95.4 *Savings net of increased costs associated with consolidation activities. Page  23 Net Cost Net Cost Savings* $        50.0
  • Components of Change in Net Sales – Q313 Components of Change in Net Sales – Net Sales Net Sales ($ i n mi l l i ons ) Third Quarter Third Quarter 2013 2012 % Change U.S. Packaging Divestiture effect Divestiture effect Optimization effect Organic (Price/Mix/Volume) growth $               750.7 $               774.9 (3.1%) (2.5%) (1.5%) 0.9% Global Packaging Currency effect                    370.8                    377.5 (1.8%) (5.7%) Acquisition effect Optimization effect Organic (Price/Mix/Volume) growth  4.8% (3.0%) 2.1% Pressure Sensitive Materials Currency effect Organic (Price/Mix/Volume) decline                    137.0                    135.4 1.2% 1.7% (0.5%) Total Net Sales Currency effect Acquisition/Divestiture effect Optimization effect Optimization effect Organic (Price/Mix/Volume) growth $             1,258.5 $             1,287.8 (2.3%) (1.5%) (0.1%) (1.8%) (1 8%) 1.1% Page  24