meadwestvaco 09/08UBS_Pres


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meadwestvaco 09/08UBS_Pres

  1. 1. MeadWestvaco UBS Global Paper & Forest Products Conference John A. Luke, Jr. – Chairman & Chief Executive Officer September 16, 2008
  2. 2. 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.
  3. 3. Key Investment Considerations Business transformation delivering better performance Packaging business well-positioned to capture global growth opportunities and expand margins Strong financial position helping to fuel profitable growth Land business delivering new, sustainable cash flow
  4. 4. MWV’s Transformation 2007 2003 Strategic packaging Commodity supplier partner Industrial & Consumer Packaging Consumer focus Packaging and Fine Papers 51% Innovative solutions Highly cyclical Global balance Results: Sales Growth Operating Cash ROIC
  5. 5. MWV Today: A Global Leader in Packaging and Packaging Solutions MWV total sales MWV Packaging sales by by segment 1H 2008 major locations 1H 2008 - $3.2 Billion* - - $2.4 Billion* - Non-U.S. Developed Consumer North Other MWV America Packaging Businesses Emerging Markets** * Excludes N. Charleston Kraft sales ** Africa, India, China, E. Europe, Central & South America, Emerging Asia Pacific
  6. 6. Growth Outlook in Targeted Markets Global % Annual Developed Emerging Outlook Growth Markets Markets 6% - 8% Healthcare Personal Care 3% - 5% and Beauty Home and 2% - 4% Garden Food and 1% - 3% Beverage 0% - 1% Tobacco
  7. 7. Focused on Key Profit Improvement Drivers Action Lever Innovation – developing value-added offerings Emerging Markets – expanding with existing Growth customers; making select investments Pricing – combating input cost inflation Manufacturing – optimizing footprint and reducing waste Productivity Sourcing & Supply Chain – leveraging outsourcing; improving logistics SG&A – variabilizing cost structure Land sales – segmenting and enhancing and realizing values above timber Land Business Development – entitling and master planning most valuable lands
  8. 8. Packaging Innovation 10% of 1H 2008 sales from innovative products* Focus on personal care and healthcare markets 45 new products and product enhancements launched in 2008 Shellpak prescription drug solution Natralock plastic clam-shell replacement solution Keltec airless & foamer dispensers CNK® large-glass corrugated replacement solution Growing new product pipeline at Center for Packaging Innovation * Cumulative sales of new products introduced between 2006 - 2008
  9. 9. Investing to Capture Global Growth New New press New, larger beverage for high-quality packaging line packaging facility Wilmington, NC Bydgoszcz, PL Moscow Healthcare Packaging J.V. New primary w/ Bilcare Ltd. packaging St. Petersburg, FL line Wuxi Expanded pine chemicals New consumer refinery paperboard DeRidder, LA service center Wuxi New (6th) box plant New Aracatuba activated carbon plant Pine chemicals Fujian Refinery JV w/ Chemserve Lages - 1H 2008 total EM* Revenues +22% - * Africa, India, China, E. Europe, Central & South America, Emerging Asia Pacific
  10. 10. Pricing Aggressively Driving Price to Offset Rapid Input Cost Inflation $ millions $70 $140 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 Q2-08 Price/Mix Energy/Materials/Freight $Oil (Avg.)
  11. 11. Productivity Priorities Increase manufacturing efficiency Reduce waste and rejection rates – – Utilize cost-effective formulations Leverage strategic sourcing Outsource non-strategic elements – – Focus on insights, designs, innovation Supply-chain initiatives Improve freight & warehousing network – Asset optimization Consolidate capacity to high-quality, low- – cost locations 11
  12. 12. MWV Land Strategy Accomplishments Last 365 Days Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 • Announced sale • Completed GA & AL • Unveiled East • Appointed VP of • Announce CDLM as new agreement for GA & AL forestlands sale Edisto preliminary Planning and reporting segment forestlands and for WV • Commenced $400 Master Plan Entitlement • Commence enhanced forestlands mil. share repurchase • Commenced • Completed sale of small-tract marketing • Refined East Edisto w/ forestland sale planning and 7,300 acres of small- program Master Plan based on proceeds entitlement on 4 tract sales for avg. • Added 10,000 acres to community input commercial & price of $3,300/acre the small-tract sales • Completed WV industrial projects • Moved 60,000 acres pipeline forestlands sale into sales pipeline 12
  13. 13. Why Invest in MWV? Successfully transforming company to capture profitable growth in global packaging markets Good progress on initiatives to expand margins Strong financial flexibility Land strategy on-track to deliver sustainable cash flow; maximizing shareholder value