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November 2015 Myers Industries, Inc. Investor Presentation

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Page 1: Myers Industries, Inc. Investor Presentations2.q4cdn.com/555961355/files/doc_presentations/2015/MYE-Presentation-November-2015.pdfQ1 2015. Returning Cash to Shareholders • Increasing

November 2015

Myers Industries, Inc. Investor Presentation

Page 2: Myers Industries, Inc. Investor Presentations2.q4cdn.com/555961355/files/doc_presentations/2015/MYE-Presentation-November-2015.pdfQ1 2015. Returning Cash to Shareholders • Increasing

Forward-looking Statements

Statements in this presentation concerning the Company’s goals, strategies, and expectations for business and financial results may be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and are based on current indicators and expectations. Whenever you read a statement that is not simply a statement of historical fact (such as when we describe what we "believe," "expect," or "anticipate" will occur, and other similar statements), you must remember that our expectations may not be correct, even though we believe they are reasonable. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). You should review this presentation with the understanding that actual future results may be materially different from what we expect. Many of the factors that will determine these results are beyond our ability to control or predict. You are cautioned not to put undue reliance on any forward-looking statement. We do not intend, and undertake no obligation, to update these forward-looking statements. These statements involve a number of risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the applicable statements. Such risks include:

(1) Changes in the markets for the Company’s business segments

(2) Changes in trends and demands in the markets in which the Company competes (3) Unanticipated downturn in business relationships with customers or their purchases (4) Competitive pressures on sales and pricing (5) Raw material availability, increases in raw material costs, or other production costs (6) Harsh weather conditions (7) Future economic and financial conditions in the United States and around the world (8) Inability of the Company to meet future capital requirements (9) Claims, litigation and regulatory actions against the Company (10) Changes in laws and regulations affecting the Company

(11) The Company’s ability to execute the components of its Strategic Business Evolution process

Myers Industries, Inc. encourages investors to learn more about these risk factors. A detailed explanation of these factors is available in the Company’s publicly filed quarterly and annual reports, which can be found online at www.myersindustries.com and at the SEC.gov web site.

2

Page 3: Myers Industries, Inc. Investor Presentations2.q4cdn.com/555961355/files/doc_presentations/2015/MYE-Presentation-November-2015.pdfQ1 2015. Returning Cash to Shareholders • Increasing

Why Myers?

3

• Realigned and refocused business segments • Reduced reportable segments from 4 to 2 (Material Handling and Distribution)

• Enhanced platform to accelerate organic and acquisitive growth • Refined new product development process • Cross-selling opportunities with Scepter across both segments • Attractive bolt-on acquisition platforms in Material Handling and Distribution • Global opportunity for emerging market expansion and penetration

• Strong market positions and brand recognition across both segments • Plans for further penetration of attractive market segments • Re-introducing legacy products at lower costs • Strong reputation for highly engineered product capabilities • Expanded marketing capabilities

• Disciplined capital deployment & strong cash flow generator • Strong and flexible balance sheet, plus history of stable cash flows, provides opportunity for

future value creation • Dedicated to enhancing shareholder value

• Increasing profits through culture of cost discipline • Reducing debt • Returning cash through dividends and share repurchases • Current dividend commitment of $0.54/share annually (yield > 3.8% as of early November)

Page 4: Myers Industries, Inc. Investor Presentations2.q4cdn.com/555961355/files/doc_presentations/2015/MYE-Presentation-November-2015.pdfQ1 2015. Returning Cash to Shareholders • Increasing

4

Business Transformation Over the course of 18 months, Myers has transformed the businesses through a series of planned strategic transactions.

Streamlined Operating Segments

Reduced reportable operating segments from four: • Material Handling • Distribution • Engineered Products • Lawn and Garden

Into two distinct businesses: • Material Handling • Distribution

Divested Non-Core

Businesses Bolt-on

Acquisitions

Acquired Scepter in July 2014 for $157M • Annual Sales of approximately $100M

increases Material Handling revenue by 25%

• Higher margins and better growth potential than combined divested businesses

Divested WEK Industries, Inc. in June 2014 for $20M • Used proceeds to help fund the acquisition of Scepter

Divested Lawn and Garden segment in February 2015 for $110M • Net proceeds from the transaction used to pay down debt

Page 5: Myers Industries, Inc. Investor Presentations2.q4cdn.com/555961355/files/doc_presentations/2015/MYE-Presentation-November-2015.pdfQ1 2015. Returning Cash to Shareholders • Increasing

5

Two core businesses & reporting segments: Material Handling • Highly engineered, polymer-based returnable

packaging and storage and safety products • Specialty molding

Distribution • Largest U.S. distributor of tools, supplies and

equipment for the tire, wheel and undervehicle service industry

• Manufacturer of tire repair and retread products

Company at a Glance (NYSE: MYE) Material Handling | Reusable Containers Distribution | Tire Maintenance Supplies

TTM Net Sales from Continuing

Ops

TTM Adj. Income Before Taxes from

Continuing Ops

Material Handling | Distribution

76%

24% 70%

30%

Page 6: Myers Industries, Inc. Investor Presentations2.q4cdn.com/555961355/files/doc_presentations/2015/MYE-Presentation-November-2015.pdfQ1 2015. Returning Cash to Shareholders • Increasing

Business Segments Material Handling | Reusable Containers Distribution | Tire Maintenance Supplies

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Page 7: Myers Industries, Inc. Investor Presentations2.q4cdn.com/555961355/files/doc_presentations/2015/MYE-Presentation-November-2015.pdfQ1 2015. Returning Cash to Shareholders • Increasing

• Focus on markets that have strong, sustainable growth and profit potential through new product introductions, expanding marketing and cross-selling

• Material Handling: • Food processing • Agriculture • Industrial • Marine

• Distribution: • Auto dealer tire market • Fleet maintenance • E-Commerce

• Invest in organic growth opportunities, process improvements and market development for enhanced value creation

• Drive earnings growth faster than sales growth

• Maintain our commitment to a balanced capital allocation policy supported by our strong and flexible balance sheet

7

Strategic Goals

Page 8: Myers Industries, Inc. Investor Presentations2.q4cdn.com/555961355/files/doc_presentations/2015/MYE-Presentation-November-2015.pdfQ1 2015. Returning Cash to Shareholders • Increasing

Long-Term Financial Goals and Progress

8

• Operating performance in 2014 impacted by poor weather conditions early in the year, freight and logistical issues, weak commodity prices and the troubled Brazilian economic climate

• ROIC in 2014 impacted by acquisition of Scepter which took place mid-year

• Despite challenging year operationally, generated strong free cash flow in 2014

2014 Results:

Metric Goal 2014(5) 2013(5) 2012(5)

Sales Growth(1) > 2.0x GDP 7% 7% 7%

Gross Profit Margin > 30% 26% 29% 30%

Free Cash Flow(2) ≥ 100% of Net Income 308% 205% 90%

ROIC(3) > 10% 5% 17% 15%

Innovation / NPD(4) >10% of Sales 8% 7% 3%

Operations Excellence Savings 3% of COGS (gross) 2% 2% 2%(1) Using real GDP growth rates, 2.0x GDP growth = 4.8%, 4.4% and 4.6% for 2014, 2013 and 2012 respectively.

(2) Free cash flow calculated as cash flow provided by continuing operations - capital expenditures for continuing operations.

(3) ROIC = Net Operating Profit After Tax/(Debt + Equity).

(4) NPD = New Product Development calculation based on products/services introduced within the last three years.

(5) All years reflect discontinued operations presentation. 2012 and 2013 do not include Scepter acquisition completed in 2014.

Key Accomplishment Metrics

Page 9: Myers Industries, Inc. Investor Presentations2.q4cdn.com/555961355/files/doc_presentations/2015/MYE-Presentation-November-2015.pdfQ1 2015. Returning Cash to Shareholders • Increasing

9

Long-term Growth Drivers

Net Sales

Select investments and

acquisitions

Richer product mix

New markets and geographies

Profitability

Optimize capacity

Drive greater operating efficiency

Enhance product mix

Free Cash Flow

Sales growth and profitability

improvement

Capital discipline

Page 10: Myers Industries, Inc. Investor Presentations2.q4cdn.com/555961355/files/doc_presentations/2015/MYE-Presentation-November-2015.pdfQ1 2015. Returning Cash to Shareholders • Increasing

$29

$55

$77

$20

$57

$25

$42

$24

$54

$28 $25 - $30

$0

$20

$40

$60

$80

$100

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Estimate

Solid Cash Flow Generation

10

Notes: 1) Free cash flow calculated as cash flow from continuing operations less capital expenditures for continuing operations. 2) Years 2012 – 2015 have been adjusted to reflect discontinued operations presentation.

Generating Free Cash Flow, Investing for the Future and Returning Cash to Shareholders

$(Millions)

Free Cash Flow

As Reported Continuing Operations

Page 11: Myers Industries, Inc. Investor Presentations2.q4cdn.com/555961355/files/doc_presentations/2015/MYE-Presentation-November-2015.pdfQ1 2015. Returning Cash to Shareholders • Increasing

Strong & Flexible Balance Sheet

11

Notes: 1) Available liquidity at September 30, 2015 was $186M. 2) Data has not been adjusted to reflect discontinued operations.

Maintaining strong balance sheet for investments and returning capital to shareholders

Net Debt $(Millions)

Long-term Target 1.5-2x

$234

$195

$163 $161

$100 $79

$67 $89

$38

$230 $210

$0

$50

$100

$150

$200

$250

$300

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Q3 2015

Page 12: Myers Industries, Inc. Investor Presentations2.q4cdn.com/555961355/files/doc_presentations/2015/MYE-Presentation-November-2015.pdfQ1 2015. Returning Cash to Shareholders • Increasing

Balanced Approach to Capital Allocation

12

Investing for the future and returning cash to shareholders

M&A Growth

Return Capital to

Shareholders

Organic Growth

Core Markets

New Adjacencies

Bolt-on Focus

Share Repurchases

Dividends Debt Reduction

Reinvest in Business

New Product & Market

Development

Process Improvements

Page 13: Myers Industries, Inc. Investor Presentations2.q4cdn.com/555961355/files/doc_presentations/2015/MYE-Presentation-November-2015.pdfQ1 2015. Returning Cash to Shareholders • Increasing

$0.07 $0.08

$0.09

$0.13 $0.135

$0.03

$0.05

$0.07

$0.09

$0.11

$0.13

2011 2012 2013 2014 Q1 2015

Returning Cash to Shareholders

• Increasing Dividends • Increased Q1 2015 quarterly dividend by 4% to $0.135 per share

• Buying Back Shares • Invested $33M to buy back 2.8M shares from 2011 to 2013 • Invested $55M to buy back 2.7M shares in 2014 • Invested $12M to buy back .8M shares YTD September 2015 • 3.2 million shares remaining in Board authorization (as of 9-30-15)

13

Quarterly Dividends Paid $Millions Invested in Share Repurchases

$0.0

$21.0

$4.2 $8.1

$55.0

$12.0

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

2010 2011 2012 2013 2014 2015

Page 14: Myers Industries, Inc. Investor Presentations2.q4cdn.com/555961355/files/doc_presentations/2015/MYE-Presentation-November-2015.pdfQ1 2015. Returning Cash to Shareholders • Increasing

Why Myers?

14

• Realigned and refocused business segments • Reduced reportable segments from 4 to 2 (Material Handling and Distribution)

• Enhanced platform to accelerate organic and acquisitive growth • Refined new product development process • Cross-selling opportunities with Scepter across both segments • Attractive bolt-on acquisition platforms in Material Handling and Distribution • Global opportunity for emerging market expansion and penetration

• Strong market positions and brand recognition across both segments • Plans for further penetration of attractive market segments • Re-introducing legacy products at lower costs • Strong reputation for highly engineered product capabilities • Expanded marketing capabilities

• Disciplined capital deployment & strong cash flow generator • Strong and flexible balance sheet, plus history of stable cash flows, provides opportunity for

future value creation • Dedicated to enhancing shareholder value

• Increasing profits through culture of cost discipline • Reducing debt • Returning cash through dividends and share repurchases • Current dividend commitment of $0.54/share annually (yield > 3.8% as of early November)

Page 15: Myers Industries, Inc. Investor Presentations2.q4cdn.com/555961355/files/doc_presentations/2015/MYE-Presentation-November-2015.pdfQ1 2015. Returning Cash to Shareholders • Increasing

Appendix

Page 16: Myers Industries, Inc. Investor Presentations2.q4cdn.com/555961355/files/doc_presentations/2015/MYE-Presentation-November-2015.pdfQ1 2015. Returning Cash to Shareholders • Increasing

Management Team

John C. Orr, President & Chief Executive Officer • Named President and CEO May 2005 • Previously President and COO, responsible for global manufacturing and

distribution • Prior General Manager of Buckhorn • Previous 28 years with Goodyear, including Vice President of Manufacturing

for North America and Director of Manufacturing for Latin America Division

Gregg Branning, SVP, Chief Financial Officer & Corporate Secretary • Joined Myers as CFO in September 2012 • Previously VP of Finance and CFO of Danaher subsidiary, Thomson Industries,

a global industrial manufacturing business • Prior President of Danaher subsidiary, Accu-Sort, global developer and

manufacturer of technological products; also CFO of Joslyn Hi-Voltage • Prior to Danaher, 13 years with Hamilton Sundstrand & 7 in public accounting

16

More than 100 Years of Experience in Manufacturing

Page 17: Myers Industries, Inc. Investor Presentations2.q4cdn.com/555961355/files/doc_presentations/2015/MYE-Presentation-November-2015.pdfQ1 2015. Returning Cash to Shareholders • Increasing

17

More than 100 Years of Experience in Manufacturing

Joel Grant, SVP & General Manager, Material Handling Segment • Named VP & General Manager, Material Handling Segment in November of 2010,

with his title changing to Senior VP & General Manager in July of 2011 • Previously Managing Director of Material Handling & GM of Buckhorn • Prior Director of Operations of Material Handling, Director of Sales & Marketing,

Buckhorn, and Director of Sales, Buckhorn • Over 13 years of experience with the Sonoco Products Company and seven years

with Continental Group of New York (division sold to Sonoco Products)

Alex Williamson, VP & General Manager, Distribution Segment • Joined Myers as VP & General Manager, Distribution Segment in June 2014 • Previously Co-President of Seaman Corporation • Held senior leadership positions at Noveon Inc. (now Lubrizol) • Over 24 years of experience in business management and an extensive background

in marketing, sales, chemistry, and product engineering

Management Team

Page 18: Myers Industries, Inc. Investor Presentations2.q4cdn.com/555961355/files/doc_presentations/2015/MYE-Presentation-November-2015.pdfQ1 2015. Returning Cash to Shareholders • Increasing

18

More than 100 Years of Experience in Manufacturing

Michael Valentino, VP & General Manager, Myers do Brasil, Novel, Scepter & Ameri-Kart • Joined Myers as VP & General Manager, Myers do Brasil, Novel, Scepter and Ameri-Kart

in January 2015 • Previously spent over 15 years with The Marmon Group, a Berkshire Hathaway

Company, holding numerous leadership positions • Most recently served as sector president of Marmon Foodservice Technologies and

president of Prince Castle and Silver King • During tenure with The Marmon Group was instrumental in increasing shareholder

value by improving margins, optimizing resources and developing a pipeline of innovative new products

Management Team

Page 19: Myers Industries, Inc. Investor Presentations2.q4cdn.com/555961355/files/doc_presentations/2015/MYE-Presentation-November-2015.pdfQ1 2015. Returning Cash to Shareholders • Increasing

Market Indicators

• Orders are forecasted to be up 1.1% in 2015; shipments are forecasted to grow by 2% in 2015

19

Material Handling

Source: Material Handling Industry (MHI)

(40.0)

(30.0)

(20.0)

(10.0)

0.0

10.0

20.0

30.0

40.0

50.0

60.0

2008 2009 2010 2011 2012 2013 2014 2015

Material Handling Index Annual Rate of Change

Shipments % Orders %

Page 20: Myers Industries, Inc. Investor Presentations2.q4cdn.com/555961355/files/doc_presentations/2015/MYE-Presentation-November-2015.pdfQ1 2015. Returning Cash to Shareholders • Increasing

Market Indicators

• The Outdoor Power Equipment Institute (OPEI) estimates that total outdoor power equipment shipments will increase by 5.7% in 2015.

20

Material Handling

Source: OPEI U.S. Econometric Forecast – October 2015

ACTUAL FORECAST 2009 2010 2011 2012 2013 2014 2015 2016 2017

Consumer Products 6,223,328 6,588,176 5,875,396 6,191,291 6,380,444 5,902,915 6,409,825 6,633,121 6,858,693 Percent Change -10.6 5.9 -10.8 5.4 3.1 -7.5 8.6 3.5 3.4

Commercial Products 131,050 180,226 183,609 182,817 221,200 230,625 242,873 257,409 270,090

Percent Change -34.4 37.5 1.9 -0.4 21.0 4.3 5.3 6.0 4.9

Handheld Products 10,558,563 10,825,352 10,365,472 10,921,443 10,909,630 11,087,864 11,543,820 11,717,540 11,971,529 Percent Change -7.9 2.5 -4.2 5.4 -0.1 1.6 4.1 1.5 2.2

Total 16,912,941 17,593,754 16,424,477 17,295,551 17,511,274 17,221,404 18,196,518 18,608,070 19,100,312

-9.1 4.0 -6.6 5.3 1.2 -1.7 5.7 2.3 2.6 Last Forecast 17,121,135 17,846,631 18,485,298

Page 21: Myers Industries, Inc. Investor Presentations2.q4cdn.com/555961355/files/doc_presentations/2015/MYE-Presentation-November-2015.pdfQ1 2015. Returning Cash to Shareholders • Increasing

Market Indicators

• Although recreational vehicle shipments are forecasted to grow at a slower rate in 2015, it will be the sixth consecutive year for growth

21

Material Handling

Source: RVIA Release

12.4 11.1 2.3

(40)

(30)

(20)

(10)

0

10

20

30

40

50

60

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

450.0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015F

Annu

al R

ate

of C

hang

e (%

)

Uni

ts (0

00)

RV Shipments

RV Unit Shipments (000) % Change from P/Y

Page 22: Myers Industries, Inc. Investor Presentations2.q4cdn.com/555961355/files/doc_presentations/2015/MYE-Presentation-November-2015.pdfQ1 2015. Returning Cash to Shareholders • Increasing

Market Indicators

• The Rubber Manufacturers Association (RMA) projects a slight increase in replacement tire shipments in 2015 (1.1%); YTD shipments are flat

22

Distribution

Source: JP Morgan, RMA

-8.00%

-6.00%

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015F 2016F

Key Indicators for the Tire Market

Miles Driven (B) Repl Tire Shipments Gasoline Sales (Gal/B)

Page 23: Myers Industries, Inc. Investor Presentations2.q4cdn.com/555961355/files/doc_presentations/2015/MYE-Presentation-November-2015.pdfQ1 2015. Returning Cash to Shareholders • Increasing