MeadWestvaco_JPMorgan0608
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MeadWestvaco_JPMorgan0608 MeadWestvaco_JPMorgan0608 Presentation Transcript

  • MeadWestvaco JPMorgan Third Annual Basics & Industrials Conference E. Mark Rajkowski – Senior Vice President & Chief Financial Officer June 4, 2008
  • Forward-looking Statements Certain statements in this document and elsewhere by management of the company that are neither reported financial results nor other historical information are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such information includes, without limitation, the business outlook, assessment of market conditions, anticipated financial and operating results, strategies, future plans, contingencies and contemplated transactions of the company. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors which may cause or contribute to actual results of company operations, or the performance or achievements of each company, or industry results, to differ materially from those expressed or implied by the forward-looking statements. In addition to any such risks, uncertainties and other factors discussed elsewhere herein, risks, uncertainties, and other factors that could cause or contribute to actual results differing materially from those expressed or implied for the forward-looking statements include, but are not limited to, events or circumstances which affect the ability of MeadWestvaco to realize improvements in operating earnings from the company’s ongoing cost reduction initiatives; the ability of MeadWestvaco to close announced and pending transactions, including divestitures; the reorganization of the company’s packaging business units; competitive pricing for the company’s products; changes in raw materials pricing; energy and other costs; fluctuations in demand and changes in production capacities; changes to economic growth in the United States and international economies; government policies and regulations, including, but not limited to those affecting the environment and the tobacco industry; the company’s continued ability to reach agreement with its unionized employees on collective bargaining agreements; the company’s ability to execute its plans to divest or otherwise realize the greater value associated with its forestlands; adverse results in current or future litigation; currency movements; and other risk factors discussed in the company’s Annual Report on Form 10-K for the year ended December 31, 2007, and in other filings made from time to time with the SEC. MeadWestvaco undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Investors are advised, however, to consult any further disclosures made on related subjects in the company’s reports filed with the SEC.
  • Key Investment Considerations Business transformation generating better growth and returns Achievable margin expansion opportunities Land business to deliver new, sustainable cash flows Strong financial position and dividend
  • Strengthened Business Model 2007 2003 75% Packaging 50% Packaging Innovative offerings Cyclical, capital intensive Packaging Primary & secondary 51% Secondary packaging packaging focus Commodity supplier Strategic partner Results: Sales Growth Operating Cash ROIC
  • MWV is a Global Leader in Packaging and Packaging Solutions Operations on 6 continents Employees in 30 countries Customers in 100 nations 50% sales outside U.S.
  • MWV Global Packaging Markets We serve the world’s largest consumer brands in these markets and industries: Healthcare Personal & Beauty Care + 5% Global Growth + 5% Global Growth Home and Garden Beverage, Food & Tobacco + 3% Global Growth + 2% Global Growth
  • Focused on Key Margin Drivers Innovation & Emerging Markets Growth Go-to-Market Strategy Pricing power Manufacturing Productivity Sourcing & Supply Chain SG&A Increase land sales and entitlements Land Business Execute development opportunities
  • Key Margin Drivers: Growth Personal Care and Healthcare focus Innovative Products Primary plastics New products & extending leadership positions New technological capabilities Leveraging investments – Wuxi Growing with customers – SC Johnson Emerging Markets Brazilian business expanding to India agriculture markets 15% growth in 2007; accelerating in 2008 8
  • Key Margin Drivers: Growth Our New Go-to-Market Strategy… Aligns full breadth of capabilities for targeted global markets Accelerates innovation and growth in packaging business Develops valuable customer and consumer insights Increases accountability for sales and marketing Insights Innovation Services Reduces complexity for our customers Primary & Materials Secondary Solutions 9
  • Key Margin Drivers: Pricing Power Continue to Aggressively Drive Price to Offset Rapid Input Cost Inflation ~$125.00 Today $ millions Year-over-Year Increase $60 $120 $50 $100 $40 $80 $30 $60 $20 $40 $10 $20 $0 $0 Q1-06 Q2-06 Q3-06 Q4-06 Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Price / M ix Energy / Raw M aterials / Freight Avg. Oil Price Qtr.
  • Key Margin Drivers: Productivity Increasing manufacturing efficiency Leveraging strategic sourcing Supply-chain initiatives Asset optimization 11
  • Key Margin Drivers: Land Business 2008 2009 - 2010 • Accelerating small-tract sales • Increasing small-tract sales • Begin value enhancement • Continue enhancement activities Retail Land Sales Program 2008 2009 - 2010 • Build development project pipeline • Near-term projects begin to generate cash • East Edisto entitlement process • Secure East Edisto entitlements • Begin master planning other parcels • Secure entitlements for other master plans Real Estate Development 12
  • Why Invest in MWV? Successfully transforming company to win and profitably grow in global packaging markets Good progress on profitable growth initiatives to expand margins Land strategy well on-track to deliver new, sustainable cash flows Attractive dividend yield