berry plastics group investor presentation 2013 - august

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(NYSE “BERY”) August 2013

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Berry Plastics Group Investor Presentation 2013 - August

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Page 1: Berry Plastics Group Investor Presentation 2013 - August

(NYSE “BERY”)

August 2013

Page 2: Berry Plastics Group Investor Presentation 2013 - August

Safe Harbor Statements

Forward-Looking Statements

This presentation contains “forward-looking statements” which involve risks and uncertainties. You can identify forward-looking statements because they contain words such as “believes,” “expects,” “may,” “will,” “should,” “would,” “could,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” or “anticipates” or similar expressions that relate to our strategy, plans or intentions. All statements we make relating to our estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates and financial results or to our expectations regarding future industry trends are forward-looking statements. In addition, we, through our senior management, from time to time make forward-looking public statements concerning our expected future operations and performance and other developments. These forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those that we expected. We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. All forward-looking statements are based upon information available to us on the date of this presentation. Important factors that could cause actual results to differ materially from our expectations, which we refer to as cautionary statements, are disclosed under “Risk Factors” in our public filings including, without limitation, in conjunction with the forward-looking statements included in this presentation. All forward-looking information in this presentation and subsequent written and oral forward-looking statements attributable to us, or to persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements. Some of the factors that we believe could affect our results include: risks associated with our substantial indebtedness and debt service; changes in prices and availability of resin and other raw materials and our ability to pass on changes in raw material prices on a timely basis; performance of our business and future operating results; risks related to our acquisition strategy and integration of acquired businesses; reliance on unpatented know-how and trade secrets; increases in the cost of compliance with laws and regulations, including environmental, safety, production and product laws and regulations; risks related to disruptions in the overall

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cost of compliance with laws and regulations, including environmental, safety, production and product laws and regulations; risks related to disruptions in the overall economy and the financial markets may adversely impact our business; catastrophic loss of one of our key manufacturing facilities, natural disasters and other unplanned business interruptions; risks of competition, including foreign competition, in our existing and future markets; general business and economic conditions, particularly an economic downturn; the ability of our insurance to cover fully our potential exposures; and the other factors discussed in the section of our public filings titled “Risk Factors.” We caution you that the foregoing list of important factors may not contain all of the material factors that are important to you. In addition, in light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this presentation may not in fact occur. Accordingly, investors should not place undue reliance on those statements. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

No Offer or Solicitation; Further Information

This presentation should be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and the related notes thereto included in our public filings.

Non-GAAP Financial Measures

This presentation includes certain non‐GAAP financial measures intended to supplement, not substitute for, comparable measures. Reconciliations of non‐GAAP financial measures to GAAP financial measures are provided at the end of the presentation. Investors are urged to consider carefully the comparable GAAP measures and the reconciliations to those measures provided.

Page 3: Berry Plastics Group Investor Presentation 2013 - August

Berry Plastics at a Glance

� Significant Scale

• Leading provider of value-added plastic consumer packaging and engineered materials

• #1 or #2 market position in > 76% of LTM sales (1)

• 80+ manufacturing facilities primarily in North America

� Attractive Growth Characteristics

• Focused on growing, consumer-centric end markets

3

• Proven R&D platform creates breakthrough products and technologies

• Established track record as an industry consolidator

� Strong Free Cash Flow Profile

• LTM 06/29/13 PF Adj. Free Cash Flow of $266 (2)

• 17.5% LTM 06/29/13 Adjusted EBITDA margin

• LTM 06/29/13 Net Sales and Adj. EBITDA of $4,647 and $811 (3)

(1) Per managements estimate(2) See slide 13(3) Adjusted EBITDA reflects pro forma acquisitions and unrealized cost reductions

Note: Dollars in millions

Significant Management Ownership – Incentivized to C reate Shareholder ValueSignificant Management Ownership – Incentivized to C reate Shareholder Value

Page 4: Berry Plastics Group Investor Presentation 2013 - August

Our Business

Rigid Open Top Revenue: $1.1 BillionAdj. EBITDA: $241 MillionAdj. EBITDA Margin: 21%

Engineered MaterialsRevenue: $1.4 BillionAdj. EBITDA: $202 MillionAdj. EBITDA Margin: 15%

4

Flexible PackagingRevenue: $0.7 BillionAdj. EBITDA: $80 MillionAdj. EBITDA Margin: 11%

Rigid Closed TopRevenue: $1.4 BillionAdj. EBITDA: $288 MillionAdj. EBITDA Margin: 21%

LTM Revenue and Adjusted EBITDA as of 06/29/13

Page 5: Berry Plastics Group Investor Presentation 2013 - August

Berry Serves a Diverse Customer Base Across a Broad Range of Growing, Consumer-Centric End Markets

Sales by End Market Low Customer Concentration

� Longstanding relationships with diverse mix of leading multi-national, regional and local customers

� Over 13,000 customers; top customer represents 3% of sales with top 10 customers represent 17% of sales

23%

3% Food / Beverage

Industrial

Oil & Gas

� Over 76% of sales in stable, consumer oriented end markets

5

Note: Customer concentration based on fiscal 2012 net sales; list of customers to which Berry has sold products in the last 2 years.

39%

23%

9%8%7%

6%3%

2%

FoodservicePersonal Care

Healthcare

Household

Retail

Other

ConsumerOriented

End Markets

Page 6: Berry Plastics Group Investor Presentation 2013 - August

Strong Financial Performance

Net Sales Adjusted EBITDA

6

Note: Reflects calendar year results. Dollars in millions. 2012 Adj. EBITDA reflects pro forma acquisitions and unrealized cost reductions.

$408

$462

$494

$552 $8

14

$1,1

70

$1,4

32

$3,1

14 $3,6

15

$3,2

02

$4,4

18

$4,6

57

$4,7

01

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12

$80 $1

11

$114

$119 $1

61 $213 $2

75

$419 $4

54 $496 $5

59

$686

$812

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12

EBITDA Growth Every Year Since 1990EBITDA Growth Every Year Since 1990

Page 7: Berry Plastics Group Investor Presentation 2013 - August

Strong Margins and Free Cash Flow

06/29/13 LTM Adj. EBITDA Margin 06/29/13 LTM Adj. EBITDA – Capex Margin

17.6% 17.5%

13.6% 14%

16%

18%

12.2%

11.4% 11.1%

10.5%

9.7% 10%

11%

12%

13%

14%

7

Berry has Leading EBITDA and Cash Flow MarginsBerry has Leading EBITDA and Cash Flow Margins

Note: EBITDA figures adjusted for special and non-recurring items such as share-based incentive compensation, business consolidation costs, restructuring expenses, and debt extinguishment.Source: Public filings

13.6% 13.4%

12.5% 12.3% 12.2%

12.0%

10%

12%

14%

ATR BERY SLGN BLL SEE BMS CCK SON

9.7%

9.1%

8.6%

7.5%

6%

7%

8%

9%

10%

BERY ATR SEE SLGN BMS BLL CCK SON

Page 8: Berry Plastics Group Investor Presentation 2013 - August

Proven Ability to Manage Resin Price Volatility

Increased Profitability Despite Volatile Resin Pric ing Resin – Primary Raw Material

Cen

ts p

er L

BS

� Resin comprises approximately 50% of cost of goods sold

� Vast majority of resin movements passed through to customers

• Approximately 70% of resin cost increases pass through within 60 days and 95% passed through within 90 days

25.0%

30.0%

35.0%

40.0%

80

90

100

110

8

Market Based

Monthly

Bi-Monthly

Quarterly

Other

25%

35%10%

25%

5%

Resin Price Pass-Through Mechanisms

Cen

ts p

er L

BS

Source: Company Management and CMAI.

PP Price PE Price Operating EBITDA Margin

5.0%

10.0%

15.0%

20.0%

40

50

60

70

Page 9: Berry Plastics Group Investor Presentation 2013 - August

Capital Structure

Flexible, Long-Dated Capital Structure Liquidity Profile

Maturity Jun 2013

Cash and cash equivalents $25

Capital Leases and Other Various $102

Revolving line of credit (L+2%) Jun 2016 -

Incremental Term Loan ([L or 1% floor]+2.5%) Feb 2020 1,397

Jun-13

Revolver availability 650$

Borrowing base reserve (68)

Letters of credit (43)

Outstanding revolver 0

Cash balance 25

Total Liquidity 564$

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� Minimal near term debt maturities

� Minimal short-term annual debt repayment obligations

� Liquidity in excess of $560 million at quarter end

� Negligible covenant requirements

� Reduced interest expense by $25 million versus PY quarter

Advantageous Structure

Note: Dollars in millions

Term Loan (L+2%) Apr 2015 1,125

9.5% Second Priority Notes May 2018 500

9.75% Second Priority Notes Mar 2021 800

Group Term Loan (L+7%) Jun 2014 18

Total Net Debt $3,917

LTM Adjusted EBITDA $811

Total Net Debt / Adjusted EBITDA 4.8x

Page 10: Berry Plastics Group Investor Presentation 2013 - August

� Disciplined approach

� Focused on Latin America and Asia

� At or above Company’s average EBITDA margins

� Leader in plastic packaging –highest growth substrate

� Focused on stable end-markets with favorable long-termgrowth dynamics

� Interface of rigid and flexible

Strategic Goals to Increase Shareholder Value

10

� Leverage reduction goal of ½ turn per year

� Residing in a 2-4x range

� Replacing higher cost debt with lower cost debt

� Value accretive acquisitions

� History of exceeding synergy estimates

Page 11: Berry Plastics Group Investor Presentation 2013 - August

New Product Innovation

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Unique New Product Innovations at the Interface of Rigid and Flexible TechnologyMore than 20 Patents on Versalite, NuSeal, and Barr icade

Unique New Product Innovations at the Interface of Rigid and Flexible TechnologyMore than 20 Patents on Versalite, NuSeal, and Barr icade

Page 12: Berry Plastics Group Investor Presentation 2013 - August

Focus on Growing Internationally

� Plastics - preferred material globally

� Disciplined approach to growth

� Focused on Latin America and Asia

� At or above Company’s average EBITDA margins

12

Rigid Closed Top Division - 3

Corporate Headquarters

Engineered Materials Division - 8

Flexible Packaging Division - 2

� Growth opportunities with long-standing customer relationships

� 96% net sales in North America –significant opportunity for global expansion

� Recently committed capital in Brazil

New Brazil investment in specialty closures underwa y for existing global customersNew Brazil investment in specialty closures underwa y for existing global customers

Page 13: Berry Plastics Group Investor Presentation 2013 - August

7.0

8.0

Every 1x of deleveraging equates to ~$6.73 per share of equity value creation (2)

Attractive Cash Flow Characteristics

Components of Free Cash Flow Net Debt / Adjusted EBITDA

LTM 06/29/13 Adjusted EBITDA $811

Less: Capex (net) (216)

Less: PF - Cash Interest (216)

Less: PF - Adjustments (18)

7.3x

6.5x

6.0x

13

3.0

4.0

5.0

6.0

Dec '10 Jun '11 Dec '11 Sept '12 Jun '13

Note: Dollars in millions, except per share amounts.(1) Includes changes in working capital, acquisition integration costs, management fee and certain other costs.(2) Based on diluted shares of 120.6 million as of 06/29/13.

Strong Free Cash Flow Generation and Earnings Growt h Results in Deleveraging

Less: PF - TRA Payment (57)

Less: Working Capital and Other (1) (38)

Adj. Free Cash Flow $266

Adj. Free Cash Flow per Share (2) ~ $2.21

6.0x

5.5x

4.8x

Leverage reduction goal of ½ turn per year; residing in a 2-4x range

Page 14: Berry Plastics Group Investor Presentation 2013 - August

5

7

10

13

19901990--1995199519961996--20002000

20012001--20052005

20062006--20132013

Unparalleled Track Record as Industry Consolidator

� 35 acquisitions over 25 years

� Core competency of integrating acquisitions

� Disciplined purchase prices drive significant value creation

� Bolt-ons that add complementary products

� Track record of strong synergy capture

14

Alpha ProductsAlpha Products

APMAPM

5

Number of acquisitions

Page 15: Berry Plastics Group Investor Presentation 2013 - August

Long Term Corporate Vision to Maximize Shareholder Value

Sustainable CompetitiveAdvantages

Proven AcquisitionGrowth Strategy

Long-standingDiversified Blue Chip

Customer Base

Proven OrganicGrowth Strategy

15

Consistently StrongFinancial Performance

Leading Position inMany Product Lines

Deep and ExperiencedManagement Team

Page 16: Berry Plastics Group Investor Presentation 2013 - August

Appendix: Financial Data

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(1) Adjusted EBITDA, Adjusted free cash flow, and Adjusted net income should not be considered in isolation or construed as an alternative to our net income (loss) or other measures as determined in accordance with GAAP. In addition, other companies in our industry or across different industries may calculate Adjusted EBITDA, Adjusted free cash flow, and Adjusted net income and the related definitions differently than we do, limiting the usefulness of our calculation of Adjusted EBITDA, Adjusted free cash flow, and Adjusted net income as comparative measures. EBIT, Operating EBITDA, Adjusted EBITDA, Adjusted free cash flow, and Adjusted net income are among the indicators used by the Company’s management to measure the performance of the Company’s operations and thus the Company’s management believes such information may be useful to investors. Such measures are also among the criteria upon which performance-based compensation may be based.

Page 17: Berry Plastics Group Investor Presentation 2013 - August

EXHIBIT 1

Four Quarters Ended

June 29, 2013

June 30, 2012

June 29, 2013

Net income $40 $9 $54

Add: interest expense 57 82 269 Add: income tax expense 22 7 28 EBIT $119 $98 $351

Quarterly Period Ended

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Add: depreciation and amortization 86 86 351 Add: restructuring and impairment 1 4 8 Add: extinguishment of debt — — 64 Add: other expense 2 11 19 Operating EBITDA $208 $199 $793

Add: pro forma acquisitions — 4 Add: unrealized cost savings 1 14 Adjusted EBITDA $209 $811

Note: Dollars in millions.

Page 18: Berry Plastics Group Investor Presentation 2013 - August