Investor Presentation October 2013 Safe Harbor Forward-Looking - - PowerPoint PPT Presentation

October 2013

Investor Presentation

Investor Presentation, October 2013 | 2

Safe Harbor

Forward-Looking Statements This presentation contains certain forward-looking information within the meaning of the Private Securities Litigation Reform Act of 1995. The words “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “aspiration,” “objective,” “project,” “believe,” “continue,” “on track” or “target” or the negative thereof and similar expressions, among others, identify forward-looking statements. All forward-looking statements are based on information currently available to management. Such forward-looking statements are subject to certain risks and uncertainties that could cause events and the company’s actual results to differ materially from those expressed or implied. Please see the disclosure regarding forward-looking statements immediately preceding Part I of the company’s Annual Report on Form 10-K for the fiscal year ended Oct. 31, 2012. The company assumes no obligation to update any forward-looking statements. Regulation G This presentation includes certain non-GAAP financial measures like EBITDA and other measures that exclude special items such as restructuring and other unusual charges and gains that are volatile from period to period. Management of the company uses the non-GAAP measures to evaluate ongoing operations and believes that these non-GAAP measures are useful to enable investors to perform meaningful comparisons of current and historical performance of the company. All non-GAAP data in the presentation are indicated by footnotes. Tables showing the reconciliation between GAAP and non-GAAP measures are available at the end of this presentation and on the Greif website at www.greif.com.

Investor Presentation, October 2013 | 3

Highlights

• Global industry leader
• Diversification

 Geography  Markets  Substrates

• Three global growth platforms
• Strong history of cash dividends

Investor Presentation, October 2013 | 4

Overview

• Founded in 1877 as a packaging company
• Initial public offering in 1926
• Global leader in rigid industrial

packaging and flexible products packaging

• Over 245 facilities in more than 50 countries

Investor Presentation, October 2013 | 5

Diversified Business Platform

12 months ended July 31, 2013 (Dollars in millions)

Rigid Industrial Packaging & Services

Sales

$ 3,044

EBITDA(1)

$ 278 Paper Packaging Sales $ 777 EBITDA(1) $ 140 Land Management Sales $ 33 EBITDA(1) $ 21

(1)

EBITDA is defined as net income plus interest expense, net plus income tax expense less equity earnings of unconsolidated subsidiaries, net of tax plus depreciation, depletion and amortization expense Note: A reconciliation of the differences between all non-GAAP financial measures used in this presentation with the most directly comparable GAAP financial measures is included in the financial schedules that are part of this presentation

Flexible Products & Services

Serve diverse end markets such as chemicals, paints and pigments, food and beverage, petroleum, industrial coatings, agricultural, pharmaceutical, minerals and building products

Sales $ 4,303 EBITDA(1) $ 451

Sales

$ 449

EBITDA(1)

$ 12

Investor Presentation, October 2013 | 6

Strategy

• Continue to strengthen the core

 Industry consolidation  Emerging markets  Product line extensions

• Pursue adjacencies that leverage macro trends
• Optimize and embed the Greif Business System
• Leverage sustainability to create long-term competitive

advantage and cost savings

• Fix, sell or close underperforming assets

Investor Presentation, October 2013 | 7

Most Comprehensive Industrial Packaging Products and Services Portfolio

Schutz Mauser

#1 #1 #2 #3 #1 #1 #1

Global Presence Steel Plastic Fibre Rigid Intermediate Bulk Containers Filling & Blending Closures Reconditioned Rigid Industrial Packaging Flexibles

Investor Presentation, October 2013 | 8

Greif, Inc. – Profile

• Global industry leader
• Diversification: geography, markets, substrates
• Significant timberland holdings
• Modest leverage profile and substantial liquidity

Net sales by geographic market

(1)

Competitive advantages EBITDA

(2)

Net sales

(1)

Twelve months ended July 31, 2013

(2)

EBITDA is defined as net income plus interest expense, net plus income tax expense less equity earnings of unconsolidated subsidiaries, net of tax plus depreciation, depletion and amortization expense Note: A reconciliation of the differences between all non-GAAP financial measures used in this presentation with the most directly comparable GAAP financial measures is included in the financial schedules that are part of this presentation

North America $2,040 EMEA $1,609 APAC LAMR $654

$4,303

(1) (1)

(Dollars in millions) $2,790 $3,462 $4,248 $4,270 $4,303 2009 2010 2011 2012 2013 $288 $430 $460 $430 $451 2009 2010 2011 2012 2013

Investor Presentation, October 2013 | 9

Rigid Industrial Packaging & Services

• Leading product position
• Strong global footprint
• Compelling value proposition
• Strong customer relationships
• Largest global drum reconditioner

Served markets Competitive advantages EBITDA

(2)

Net sales

Lubricants, Oils and Additives Chemicals Agriculture Pharmaceutical

(1) (1) (1)

Twelve months ended July 31, 2013

(2)

EBITDA is defined as net income plus interest expense, net plus income tax expense less equity earnings of unconsolidated subsidiaries, net of tax plus depreciation, depletion and amortization expense Note: A reconciliation of the differences between all non-GAAP financial measures used in this presentation with the most directly comparable GAAP financial measures is included in the financial schedules that are part of this presentation

(Dollars in millions) $2,267 $2,588 $3,014 $3,076 $3,044 2009 2010 2011 2012 2013 $196 $332 $300 $280 $278 2009 2010 2011 2012 2013

Investor Presentation, October 2013 | 10

Flexible Products & Services

• Attractive growth opportunities include:
• Flexible intermediate bulk container

$3 billion

• Shipping sacks

$5 billion

• Geotextiles and other woven products

$4 billion

• Leading global position in FIBC market
• 50/50 joint venture
• 30% of customers use rigid industrial packaging products
• Greif Business System capabilities

Market Size

Served markets Competitive advantages EBITDA

(1),(3)

Net sales

(1)

Food, Agriculture & Minerals Chemicals Other

(2) (1)

2009 reflects only information for the multiwall bag business in North America. 2010 reflects the acquisition of four major FIBC companies between February and September.

(2)

Twelve months ended July 31, 2013

(3)

EBITDA is defined as net income plus interest expense, net plus income tax expense less equity earnings of unconsolidated subsidiaries, net of tax plus depreciation, depletion and amortization expense Note: A reconciliation of the differences between all non-GAAP financial measures used in this presentation with the most directly comparable GAAP financial measures is included in the financial schedules that are part of this presentation

(Dollars in millions) $44 $233 $538 $453 $449 2009 2010 2011 2012 2013

(2)

$10 $2 $32 $17 $12 2009 2010 2011 2012 2013

Investor Presentation, October 2013 | 11

Paper Packaging

• Champion of the independent
• Integrated containerboard network
• Highly efficient sheet feeder footprint
• Efficient Frontier strategy
• Automotive
• Building Products
• Food
• Packaging

Served markets Competitive advantages EBITDA

(2)

Net sales

(1) (1) (1)

Twelve months ended July 31, 2013

(2)

EBITDA is defined as net income plus interest expense, net plus income tax expense less equity earnings of unconsolidated subsidiaries, net of tax plus depreciation, depletion and amortization expense Note: A reconciliation of the differences between all non-GAAP financial measures used in this presentation with the most directly comparable GAAP financial measures is included in the financial schedules that are part of this presentation

(Dollars in millions) $458 $624 $675 $714 $777 2009 2010 2011 2012 2013 $57 $85 $106 $115 $140 2009 2010 2011 2012 2013

Investor Presentation, October 2013 | 12

Land Management

Competitive advantages EBITDA

(2)

Net sales

(1)

Twelve months ended July 31, 2013

(2)

EBITDA is defined as net income plus interest expense, net plus income tax expense less equity earnings of unconsolidated subsidiaries, net of tax plus depreciation, depletion and amortization expense

(3)

Includes 11,850 acres in Canada Note: A reconciliation of the differences between all non-GAAP financial measures used in this presentation with the most directly comparable GAAP financial measures is included in the financial schedules that are part of this presentation

• Book value $216 million at July 31, 2013
• Total acres owned

280,950

• Core timberland

235,550

• Special use land

45,400(3)

• Active harvesting and regeneration in U.S. to

achieve sustainable long-term yields

• Revenue growth opportunities
• Alabama
• Louisiana
• Mississippi

(1) (1)

(Dollars in millions) $21 $16 $21 $27 $33 2009 2010 2011 2012 2013 $25 $11 $22 $19 $21 2009 2010 2011 2012 2013

Investor Presentation, October 2013 | 13

Financial Profile

* Compounded Annual Growth Rate

(1)

EBITDA is defined as net income plus interest expense, net plus income tax expense less equity earnings (losses) of unconsolidated subsidiaries, net of tax plus depreciation, depletion and amortization

(2)

Working capital represents current assets less current liabilities

(3)

Free cash flow is defined as cash provided by operating activities less capital expenditures and timberland purchases

(4)

Net debt represents long-term debt plus the current portion of long-term debt plus short-term borrowings less cash and cash equivalents Note: A reconciliation of the differences between all non-GAAP financial measures used in this presentation with the most directly comparable GAAP financial measures is included in the Appendix to this presentation

(Dollars in millions) 2009 2010 2011 2012 2012 2013 Net sales 2,790 $ 3,462 $ 4,248 $ 4,270 $ 15% 4,303 $ 1,103 $ 1,130 $ EBITDA(1) 288 $ 430 $ 460 $ 430 $ 14% 451 $ 124 $ 132 $ Net income attributable to Greif, Inc. 105 $ 202 $ 175 $ 122 $ 5% 136 $ 38 $ 47 $ Working capital(2) 246 $ 347 $ 348 $ 188 $

• 9%

315 $ 304 $ 315 $ Net cash provided by (used in) operating activities 267 $ 178 $ 172 $ 473 $ 21% 258 $ 155 $ 80 $ Free cash flow(3) 141 $ 13 $ 6 $ 304 $ 29% 134 $ 109 $ 53 $ Net debt(4) 646 $ 920 $ 1,391 $ 1,185 $ 22% 1,221 $ 1,251 $ 1,221 $ CAGR* 2009-2012 12 Months Ended 7/31/13 Three Months Ended July 31,

Investor Presentation, October 2013 | 14

$475 - $500 $145 - $205 ($125) ($85) ($75) ($45 - $10) GAAP EBITDA Guidance CapEx Investments Interest Payments Cash Tax Payments Working Capital Change Free Cash Flow

For the Year Ended October 31, 2013 (Dollars in millions)

Cash Flow Bridge – FY2013 Forecast

(1) (2)

(1)

EBITDA is defined as net income plus interest expense, net plus income tax expense less equity earnings (losses) of unconsolidated subsidiaries, net of tax plus depreciation, depletion and amortization

(2)

Free cash flow is defined as cash provided by operating activities less capital expenditures and timberland purchases

Investor Presentation, October 2013 | 15

Company Outlook

• Fourth Quarter 2013

 Modest sales growth  Stable raw material costs  Challenging market conditions in Rigid Industrial Packaging including a

delayed agricultural season lower than last year in Europe and North America

 Capacity utilization challenges related to new facilities to offset

increased sales volumes and recent operational efficiency gains

 Favorable market conditions in Paper Packaging

• Fiscal 2013

 EBITDA guidance between $475 million and $500 million

Investor Presentation, October 2013 | 16

Highlights

• Global industry leader
• Diversification

 Geography  Markets  Substrates

• Three global growth platforms
• Strong history of cash dividends

APPENDIX

Investor Presentation, October 2013 | 18

Condensed Consolidated Statements of Income

(Dollars in millions) 2009 2010 2011 2012 2012 2013 Net sales 2,789.5 $ 3,461.8 $ 4,248.2 $ 4,269.5 $ 4,302.8 $ 1,102.9 $ 1,129.7 $ Cost of products sold 2,293.6 2,760.5 3,449.9 3,489.9 3,501.6 900.7 912.4 Gross profit 495.9 701.3 798.3 779.6 801.2 202.2 217.3 Selling, general and administrative expenses 271.3 365.3 453.7 471.0 483.9 116.8 118.2 Restructuring charges 66.6 26.7 30.5 33.4 15.9 3.9 4.2 Asset gains, net (34.4) (11.4) (16.1) (7.6) (7.3) (3.3) (1.8) Operating profit 192.4 320.7 330.2 282.8 308.7 84.8 96.7 Interest expense, net 53.6 65.5 76.0 89.9 84.0 21.9 19.2 Debt extinguishment charges 0.8

• 1.3
• Other expense, net

7.1 7.1 14.1 7.5 14.7 (1.8) 4.0 Income before income tax expense and equity earnings of unconsolidated affiliates, net 130.9 248.1 240.1 185.4 208.7 64.7 73.5 Income tax expense 22.7 44.5 67.3 58.8 65.3 25.0 25.9 Equity earnings (loss) of unconsolidated affiliates, net of tax (0.4) 3.6 4.8 1.3 1.5 (0.7) 1.2 Net income 107.8 207.2 177.6 127.9 144.9 39.0 48.8 Net income attributable to noncontrolling interests (3.2) (5.7) (2.9) (5.5) (8.6) (1.5) (2.1) Net income attributable to Greif, Inc. 104.6 $ 201.5 $ 174.7 $ 122.4 $ 136.3 $ 37.5 $ 46.7 $ 12 Months Ended 7/31/13 Three Months Ended July 31,

Investor Presentation, October 2013 | 19

Condensed Consolidated Balance Sheets

(Dollars in millions) July 31, 2013 October 31, 2012 ASSETS CURRENT ASSETS Cash and cash equivalents 94.9 $ 91.5 $ Trade accounts receivable 489.2 453.8 Inventories 399.8 373.5 Current portion related party note receivable 2.8 2.5 Other current assets 147.6 134.0 1,134.3 1,055.3 LONG-TERM ASSETS Goodwill 985.7 976.1 Intangible assets 182.6 198.6 Related party note receivable 13.1 15.7 Assets held by special purpose entities 50.9 50.9 Other long-term assets 125.6 131.9 1,357.9 1,373.2 PROPERTIES, PLANTS AND EQUIPMENT 1,402.0 1,424.9 Total assets 3,894.2 $ 3,853.4 $ LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable 433.6 $ 466.1 $ Short-term borrowings 65.5 76.1 Current portion of long-term debt 10.0 25.0 Other current liabilities 309.8 300.1 818.9 867.3 LONG-TERM LIABILITIES Long-term debt 1,240.8 1,175.3 Liabilities held by special purpose entities 43.3 43.3 Other long-term liabilities 456.1 456.7 1,740.2 1,675.3 SHAREHOLDERS' EQUITY 1,335.1 1,310.8 Total liabilities and shareholders equity 3,894.2 $ 3,853.4 $

Investor Presentation, October 2013 | 20

Condensed Consolidated Statements of Cash Flows

Note: 2009 amounts presented as originally reported

(Dollars in millions) 2009 2010 2011 2012 2012 2013 CASH FLOWS FROM OPERATING ACTIVITIES: Net income 132.4 $ 207.2 $ 177.6 $ 127.9 $ 144.9 $ 39.0 $ 48.8 $ Depreciation, depletion and amortization 102.6 116.0 144.3 154.8 156.8 37.4 39.5 Increase (decrease) in cash from changes in certain assets and liabilities and other 31.5 (145.1) (149.7) 190.6 (43.9) 78.6 (8.5) Net cash provided by operating activities 266.5 178.1 172.2 473.3 257.8 155.0 79.8 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisitions of companies, net of cash acquired (90.8) (277.6) (344.9)

• Purchases of properties, plants, equipment and timber

properties (125.6) (165.1) (165.8) (169.7) (123.8) (45.8) (27.1) Other 45.2 17.3 10.3 15.9 20.2 15.1 8.0 Net cash used in investing activities (171.2) (425.4) (500.4) (153.8) (103.6) (30.7) (19.1) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds (payments) on debt 40.9 330.8 462.9 (241.9) (45.5) (113.4) (23.0) Dividends paid (88.0) (93.1) (97.8) (97.7) (98.1) (24.4) (24.6) Other (18.2) 6.4 (17.0) (12.6) (5.1) 4.0 0.3 Net cash (used in) provided by financing activities (65.3) 244.1 348.1 (352.2) (148.7) (133.8) (47.3) EFFECTS OF EXCHANGE RATES ON CASH 4.3 (1.7) 0.4 (3.1) (2.1) (3.8) (3.9) Net increase (decrease) in cash and cash equivalents 34.3 $ (4.9) $ 20.3 $ (35.8) $ 3.4 $ (13.3) $ 9.5 $ 12 Months Ended 7/31/13 Three Months Ended July 31,

Investor Presentation, October 2013 | 21

(Dollars in millions)

GAAP to Non-GAAP Reconciliation

EBITDA(1) – Greif, Inc.

(1)

EBITDA is defined as net income plus interest expense, net plus income tax expense less equity earnings of unconsolidated subsidiaries, net of tax plus depreciation, depletion and amortization expense

2009 2010 2011 2012 2012 2013 Net income 107.8 $ 207.2 $ 177.6 $ 127.9 $ 144.9 $ 39.0 $ 48.8 $ Plus: interest expense, net 53.6 65.5 76.0 89.9 84.0 21.9 19.2 Plus: income tax expense 22.7 44.5 67.3 58.8 65.3 25.0 25.9 Plus: depreciation, depletion and amortization expense 102.6 116.0 144.3 154.8 156.8 37.4 39.5 Plus: debt extinguishment charges 0.8

• 1.3
• Less: equity earnings (loss) of unconsolidated affiliates, net of tax

(0.4) 3.6 4.8 1.3 1.5 (0.7) 1.2 EBITDA 287.9 $ 429.6 $ 460.4 $ 430.1 $ 450.8 $ 124.0 $ 132.2 $ 12 Months Ended 7/31/13 Three Months Ended July 31,

Investor Presentation, October 2013 | 22

(Dollars in millions)

GAAP to Non-GAAP Reconciliation

EBITDA(1) – by Segment

(1)

EBITDA is defined as net income plus interest expense, net plus income tax expense less equity earnings of unconsolidated subsidiaries, net of tax plus depreciation, depletion and amortization expense ; however, the company does not calculate net income by segment, so this table calculates EBITDA by segment with reference to operating profit by subtracting other expense, net and adding depreciation, depletion and amortization expense to achieve the same result

RIPS FPS PPS Land Mgmt Twelve months ended July 31, 2013 Operating Profit 184.5 $ (1.4) $ 109.3 $ 16.3 $ Less: other (income) expense, net 13.0 1.2 0.5

• Plus: depreciation, depletion and amortization expense

106.8 14.5 30.9 4.6 EBITDA 278.3 $ 11.9 $ 139.7 $ 20.9 $ Twelve months ended October 31, 2012 Operating Profit (loss) 185.0 $ (1.0) $ 83.5 $ 15.3 $ Less: other (income) expense, net 10.7 (3.2)

• Plus: depreciation, depletion and amortization expense

105.2 14.7 31.6 3.3 EBITDA 279.5 $ 16.9 $ 115.1 $ 18.6 $ Twelve months ended October 31, 2011 Operating Profit 219.4 $ 16.9 $ 74.9 $ 19.0 $ Less: other expense, net 12.3 1.4 0.4

• Plus: depreciation, depletion and amortization expense

93.1 16.6 31.6 3.0 EBITDA 300.2 $ 32.1 $ 106.1 $ 22.0 $ Twelve months ended October 31, 2010 Operating Profit (loss) 257.5 $ (1.3) $ 55.5 $ 9.0 $ Less: other expense, net 5.1 1.2 0.1 0.7 Plus: depreciation, depletion and amortization expense 79.2 4.9 29.2 2.7 EBITDA 331.6 $ 2.4 $ 84.6 $ 11.0 $ Twelve months ended October 31, 2009 Operating Profit 129.8 $ 8.6 $ 32.0 $ 22.0 $ Less: other expense, net 7.1

• Plus: depreciation, depletion and amortization expense

73.3 1.0 25.2 3.1 EBITDA 196.0 $ 9.6 $ 57.2 $ 25.1 $

Investor Presentation, October 2013 | 23

GAAP to Non-GAAP Reconciliation

Free Cash Flow

(Dollars in millions)

Note: 2009 amounts presented as originally reported

2009 2010 2011 2012 2012 2013 Cash from operations 266.5 $ 178.1 $ 172.2 $ 473.3 $ 257.8 $ 155.0 $ 79.8 $ Less: capital expenditures & timberland purchases 125.6 165.1 165.8 169.7 123.8 45.8 27.1 Free Cash Flow 140.9 $ 13.0 $ 6.4 $ 303.6 $ 134.0 $ 109.2 $ 52.7 $ 12 Months Ended 7/31/13 Three Months Ended July 31,

Investor Presentation, October 2013 | 24

GAAP to Non-GAAP Reconciliation

Balance Sheet Data

(Dollars in millions)

2009 2010 2011 2012 July 31, 2012 July 31, 2013 Long Term Debt 721.1 $ 953.1 $ 1,371.4 $ 1,175.3 $ 1,224.5 $ 1,240.8 $ Plus: current portion of long-term debt 17.5 12.5 12.5 25.0 21.9 10.0 Plus: short-term borrowings 19.6 60.9 134.8 76.1 96.4 65.5 Less: cash and cash equivalents 111.9 107.0 127.3 91.5 91.5 94.9 Net Debt 646.3 $ 919.5 $ 1,391.4 $ 1,184.9 $ 1,251.3 $ 1,221.4 $

Investor Presentation, October 2013 | 25

GAAP to Non-GAAP Reconciliation

Working Capital(1)

(Dollars in millions)

(1)

Working capital represents current assets less current liabilities

2009 2010 2011 2012 July 31, 2012 July 31, 2013 Current Assets 833.5 $ 1,134.5 $ 1,283.2 $ 1,055.3 $ 1,136.7 $ 1,134.3 $ Less: current liabilities 587.4 787.9 935.6 867.3 833.2 818.9 Working Capital 246.1 $ 346.6 $ 347.6 $ 188.0 $ 303.5 $ 315.4 $