logging in or signing up 2008 ccl investors' day presentation (lite) bandi04 Download Post to : URL : Related Presentations : Share Add to Flag Embed Email Send to Blogs and Networks Add to Channel Uploaded from authorPOINT lite Insert YouTube videos in PowerPont slides with aS Desktop Copy embed code: (To copy code, click on the text box) Embed: URL: Thumbnail: WordPress Embed Customize Embed The presentation is successfully added In Your Favorites. Views: 36 Category: Education License: All Rights Reserved Like it (0) Dislike it (0) Added: January 19, 2012 This Presentation is Public Favorites: 0 Presentation Description coke Comments Posting comment... Premium member Presentation Transcript CCL Industries Inc. Investors’ Day : CCL Industries Inc. Investors’ Day Donald G. Lang – Executive Chairman September 23, 2008 CCL Industries Inc. Disclaimer : 2 Disclaimer Any forward-looking statements contained in this presentation, including statements relating to the outlook of CCL Industries Inc.’s various divisions and products and CCL’s growth and expansion plans, involve risks, uncertainties and assumptions and should not be taken as guarantees of future performance. A number of factors could cause actual results, performance or achievements to vary materially from those anticipated in forward-looking statements, including: general economic and business conditions and specific conditions affecting the sector in which CCL operates, including pricing pressures; CCL’s ability to attract and retain its customer base; technological change; competition; changes in, or failure to comply with, existing government regulations or failure to obtain required permits or licenses; changes in business strategy or development plans; risks associated with operating and product hazards; the ability to attract and retain qualified personnel; and other factors. The forgoing list of factors is not exhaustive of the factors that may affect the actual outcome of events that are the subject of forward-looking statements. Unless noted otherwise, all amounts are expressed in Canadian dollars. In Attendance : 3 In Attendance Donald Lang Geoff Martin Steve Lancaster Günther Birkner Robert Ryckman Jan Wade Executive Chairman President & CEO Executive VP and Acting CFO Group VP, Food & Beverage, CCL Label Worldwide VP, Sales & Marketing, CCL Label Healthcare Worldwide Senior VP, Human Resources & Corporate Communications Agenda : 4 Agenda 7:30 - 8:00 a.m. 8:00 - 8:15 a.m. 8:15 - 8:35 a.m. 8:35 - 9:35 a.m. 9:35 - 9:45 a.m. 9:45 - 10:10 a.m. 10:10 - 10:35 a.m. 10:35 - 11:00 a.m. Continental breakfast, registration/sign-in Welcome & Introduction Financials Introduction to Operations CCL Container CCL Tube CCL Label Introduction and Home & Personal Care Break CCL Label Healthcare CCL Label Food & Beverage CCL Label Specialty Products and Wrap-up D. Lang S. Lancaster G. Martin R. Ryckman G. Birkner G. Martin Today’s Objectives : 5 Today’s Objectives General business update Short-term operating tactics and growth opportunities Longer-term strategic plans Open informal dialogue Presentations: 5 presenters with time for questions at the end of each presentation or as necessary, allowing for more informal dialogue microphone to be used for all presentations & questions to ensure clarity for the live webcast target finishing by 11 a.m. including a break CCL At A Glance : 6 CCL At A Glance World-class Specialty Packaging company headquartered in Toronto 3 divisions: Label, Container and Tube 56 locations in 17 countries 5,500 employees 2007 financial summary – excluding discontinued operations $1,144 million in sales, $207 million of EBITDA and $131 million in EBIT ITW’s sleeve label business acquisition (completed January 2007), added sales exceeding expectations of $90 million and EBIT of $15 million Entered Durables market with CD-Design acquisition in Germany (completed January 2008) purchased for $10 million plus contingent consideration of $4.5 million at the end of 2008 Significantly expanded our wine label business and market with acquisition of Clear Image in Australia (completed April 2008) purchased for $34 million CCL At A Glance : 7 CCL At A Glance TSX: CCL.B and CCL.A (September 12, 2008) Market cap. $1,066 million Dividend yield 1.7% 6 year stock investment appreciation (Dec. 2001 to Dec. 2007) of 291% Net Debt/Cap. approximately 32% (June 30, 2008) CCL At A Glance – A Global Player : 8 CCL At A Glance – A Global Player 2007 Total Sales $1,144 million (12 months ended December 31, 2007) U.S. & Puerto Rico 38% Canada 12% Europe 39% Asia 3% Mexico & Brazil 8% Comparable Company Analysis(US$M unless stated otherwise) : 9 Comparable Company Analysis(US$M unless stated otherwise) Stock Symbol EBITMargin EnterpriseValue Sales EBITDAMargin Net Debt/EBITDA Net Debt/Capital CCL* CCL.B C$1422 C$1132 18.2% 11.4% 1.7x 28.8% Avery 14.4% 10.4% 2.3x 50.0% Aptar ATR $2808 $2053 17.5% 11.1% 0.2x 4.5% Brady BRC $2133 $1489 17.8% 13.8% 1.0x 18.1% Bemis BMS $3581 $3746 12.0% 7.6% 1.5x 26.8% Pactiv PTV $5058 $3507 18.5% 13.3% 2.3x 51.2% Sealed Air SEE $5348 $4867 14.5% 11.0% 2.0x 36.7% Winpak* WPK C$378 C$524 12.1% 6.9% 0.3x 4.6% Cenveo 11.7% 8.4% 5.3x nm Multi-Color 11.8% 8.2% n/a 47.3% Median 14.4% 10.7% 1.7x 28.8% AVY CVO LABL $7283 $1881 $396 $6869 $2194 $237 MarketCap C$1066 $2733 $1860 $2843 $3543 $3954 C$347 $4999 $512 $276 * TSX – all others NYSE Source: BMO Nesbitt Burns Estimates, Capital IQ, as of September 12, 2008 Comparable Benchmarks: EV/EBITDA : 10 Comparable Benchmarks: EV/EBITDA Source: BMO Nesbitt Burns Estimates, Capital IQ, as of September 12, 2008 N/A Comparable Company Analysis: Price/Earnings : 11 Comparable Company Analysis: Price/Earnings Source: BMO Nesbitt Burns Estimates, Capital IQ, as of September 12, 2008 Comparable Company Analysis: Net Debt/Capital : 12 Comparable Company Analysis: Net Debt/Capital Source: BMO Nesbitt Burns Estimates, Capital IQ, as of September 12, 2008 nm Comparable Company Analysis: Net Debt/EBITDA : 13 Comparable Company Analysis: Net Debt/EBITDA Source: BMO Nesbitt Burns Estimates, Capital IQ, as of September 12, 2008 n/a nm Comparable Benchmark Takeaways : 14 Comparable Benchmark Takeaways Aptar and Brady are good benchmarks for “specialty packaging companies” CCL’s EBIT and EBITDA margins are at the median and high of the range, respectively CCL is under leveraged but at the median of the range CCL’s capital plan funded by operating cash flows will drive future EBITDA levels and ratios CCL is undervalued relative to all benchmarks CCL Industries Inc. : CCL Industries Inc. Steven W. Lancaster, Executive Vice President and Acting CFO September 23, 2008 CCL Industries Inc. First Half 2008 Financial Highlights : 16 First Half 2008 Financial Highlights 2008 sales up 3% excluding currency translation compared to a robust first half of 2007 Negative currency transactions impact: 5 cents per share; and negative currency translation impact: 10 cents per share Excluding 15 cent currency impact, EPS excluding restructuring etc. was up a healthy 16% Sales $608M $620M (2)% EPS as reported $1.60 $1.62 (1)% EPS excluding restructuring & other items and favourable tax adj. $1.54 $1.46 +5% Impact of Changes In Exchange Rates : 17 Impact of Changes In Exchange Rates A continuous unfavourable effect on EPS… but may be reversing with weaker C$ EPS Growth 2005 to 2007 Continuing Operations : 18 EPS Growth 2005 to 2007 Continuing Operations Significant operational improvements and accretive acquisitions EPS per B Share before Restructuring & Other Items & Favourable Tax Adjustments Strong Gross Cash Flow Generation From Continuing Operations Despite Currency Impact : 19 Strong Gross Cash Flow Generation From Continuing Operations Despite Currency Impact EBITDA ($M) Capital Spending vs. Depreciation : 20 Capital Spending vs. Depreciation Capex in 2008 expected to be $190 million Capex ($M) Depreciation ($M) and amortization Note: Capex includes discontinued operations Working Capital Improvement : 21 Working Capital Improvement Working capital reduction program generated significant cash and is at a “best-in-class” level Non-cash Working Capital DaysYears ended Dec. 31 *Excludes receivable on sale of ColepCCL Strong Debt & Capital Structure : 22 Strong Debt & Capital Structure Net Debt ($M) Net Debt to Total BookCapitalization Ratio Current Net Debt – $356M : 23 Current Net Debt – $356M A portion of some of these loans have been swapped into euros * US$31M due in July 2010 ** extendible annually New Financing Pending : 24 New Financing Pending CCL has had substantial cash over the last decade and wants to maintain liquidity to be opportunistic CCL went to the U.S. Private Placement market in late August to raise up to US$150M in 5 and 10 year notes Market conditions deteriorated due to credit crunch However, CCL raised US$130M with 8 investors; 7 are prior lenders to CCL Terms: US$52M bullet 5 year @ 5.86% US$78M bullet 10 year @ 6.62% No material change in covenants (no EBITDA related tests) except investors can put the notes back to the Company at par if there is a change of control Closing anticipated on Sept. 24 and funding on Sept. 26 Debt Capacity – Additional : 25 Debt Capacity – Additional With new financing, there is further substantial debt capacity and cash on hand to invest opportunistically Target Net Debt at 45% Debt:Total Capitalization $ 634M Key Strategic Metrics : 26 Key Strategic Metrics Earnings Per Share (EPS) growth of +10% per annum over time excluding one-time items (achieved 19% in 2006 and 2007) Return on Equity (ROE) equal to leading specialty packaging peers 12%-14% (13% in each of 2006 and 2007) Debt rating BBB high (Investment Grade) Debt to capitalization of 45% (currently 32%) Net interest coverage to EBITDA, minimum 6xs (currently 10.3) Maintain liquidity of $100M in cash or unused lines of credit Key Strategic Metrics : 27 Key Strategic Metrics Working capital management – maintain “best-in-class” performance (end of 2006 – 2 days and 2007 at (1) vs 35 days in 2001) Dividends, 20%-25% EPS excluding unusual items (was 17% at Dec. 2007 therefore increased dividend by 17% in March 2008 to achieve metric range) Reinvestment capex hurdle of +17% ROI Divisional ROS >10% (2006 and 2007 – 12%) Acquisitions Complementary and accretive in 1st year Slide 28: 28 Questions ? CCL Industries Inc. : CCL Industries Inc. Geoffrey T. Martin, President and CEO September 23, 2008 CCL Industries Inc. 2008 Estimated Sales by Division and Geography : 30 2008 Estimated Sales by Division and Geography Sales by Division $1.2B Sales by Geography $1.2B *Sales from products manufactured in Canada are 10% Label 82% Tube 5% Container 13% EmergingMarkets 12% U.S. &Canada* 45% WesternEurope 43% 2008 Estimated Sales by Market : 31 2008 Estimated Sales by Market CCL Container : CCL Container CCL Industries Inc. CCL Container Products : 33 CCL Container Products Aerosol Containers Aluminum Bottles CCL Container Markets : 34 CCL Container Markets Household Beverage Personal Care Our Manufacturing Process - Impact Extrusion : 35 Our Manufacturing Process - Impact Extrusion Decoration and Finishing : 36 Decoration and Finishing 4. Internal Spray Coating 5. Dry Offset Print 6. Neck Down CCL Container Strong Market Position : 37 CCL Container Strong Market Position Focus on NAFTA region only One of only two producers with approx 50% share Main competitors are alternatives Steel/Tin Plate Aerosols Plastic Trigger Sprays/Pumps Coil-to-Can Aluminum Beverage Bottles Specialty Glass & Plastic Bottles Facilities in the U.S., Canada and Mexico (2) 87% of sales in the U.S.; balance in Mexico Canadian Plant: US$ Exchange Rate Headwind : 38 Canadian Plant: US$ Exchange Rate Headwind US$ Operating Incomeimpact $ millions fromprior year US$:C$Exchange Rate Aluminum Cost Challenges : 39 $1,000 $2,000 $3,000 $4,000 2004 2006 2005 Source: Reuters, 3 month LME spot price Aluminum Cost Challenges (US$/ton) 2008 Aug.30 2007 CCL Container Last Five Year Performance : 40 CCL Container Last Five Year Performance 2003 2004 2005 2006 2007 $M Sales $US M OI $US M CCL Container 2008 vs. 2007 YTD Performanceat June 30th : 41 CCL Container 2008 vs. 2007 YTD Performanceat June 30th Factors impacting revenue ABS Bag-on-Valve business sold in Q1 2008 = $2.2 million Loss of Home Care contract in mid 2007 = $10 million C$ Translation = $8 million based on virtually all customers’ purchases in US$ U.S. and Mexican operations performing well Weak performance in Penetanguishene exchange rate impact: $2.3 million $77.8 $96.6 $8.1 $11.5 $12.9 $17.1 $11.4 $1.7 Note: excluding ABS business $Millions Growing Profitability in Mexico : 42 Growing Profitability in Mexico CCL Container Sales Mexico 11% Mexico 11% CCL Container Operating Income Mexico 1% Mexico 25% 2003 2003 2007 2007 New Plant in Guanajuato Mexico : 43 New Plant in Guanajuato Mexico Investment in Guanajuato will reach $35 million by year end CCL Container Mexico Strategy : 44 CCL Container Mexico Strategy Mexico City plant (older lines) focus on: Local aerosols sold to Mexican contract fillers and customers filling in California, Texas, New Mexico and Arizona Specialty containers with high labour content currently made in the U.S. Guanajuato plant (new lines) focus on: High volume aerosols for key Global Customers Bottles for Mexican Beverage Customers CCL Container Focus for 2008-2010 : 45 CCL Container Focus for 2008-2010 Continue to drive improvements in the US: service, innovation, productivity, pricing, leveraging cross-CCL customer relationships Downsize and reduce cost in Canadian operation Successful execution of Mexican strategy 2010 goal to reach 20% ROI, significant upside potential once US consumer spending returns to normal levels CCL Tube : CCL Tube CCL Industries Inc. CCL Tube Market Share : 47 CCL Tube Market Share CCL15% US$400Million North AmericanExtruded Tube Market CCL Tube Customers : 48 CCL Tube Customers Focus on high-end decorated premium priced consumer brands CCL Tube Last Five Years Performance : 49 CCL Tube Last Five Years Performance $US M 2003 2004 2005 2006 2007 EBITDA 6.5 5.3 7.6 10.3 6.8 Presented in $US as business is primarily U.S based CCL Tube 2008 vs. 2007 YTD Performanceat June 30th : 50 CCL Tube 2008 vs. 2007 YTD Performanceat June 30th Q3 & Q4 will be favourable due to weak 2nd half of 2007 Order levels good in market circumstances Business returned to profit, but margins not at acceptable levels $30.9 $34.0 $3.8 $5.2 $M CCL Tube Los Angeles – New More Efficient Facility : 51 CCL Tube Los Angeles – New More Efficient Facility From this… …to this CCL Tube Focus 2008-2010 : 52 CCL Tube Focus 2008-2010 Successful relocation in Los Angeles Merging U.S. sales team with CCL Label HPC group to leverage relationships Focus operations on service, decoration innovation and improving mix Review small (but profitable) operation in Mexico 2010 objective: 10% ROI Slide 53: 53 Questions ? CCL Label : CCL Label CCL Industries Inc. Three Label Markets : 55 Three Label Markets Variable Information Printing Bar Codes Information Processing Applications Packaging and Presentation Personal Care Premium Food and Beverage Healthcare and Chemicals Product Identification Automotive Consumer Electronics: Computers, Cell Phones, Audio-Visual Consumer Durables: White Goods CCL Label Products – Global Leadership : 56 CCL Label Products – Global Leadership Pressure sensitive labels – global leader Expanded content labels – global leader Sleeves – #2 globally Niche player: – In-mould labels – Film wrap labels – Paper cut & stack labels Plus… CCL Label Services : 57 CCL Label Services Brand “Icons” & creative development Artwork and design management Label supply chain & inventory management Label application consulting New development initiatives “problem solving” Global Packaging Market Trends : 58 Asia Pacific Now Larger than N. America and W. Europe Global Packaging Market Trends Source: Heidelberger Druckmaschinen - * Adjusted for price changes and currency fluctuations – Base year 2004 € billion 387 482 64 104 111 108 104 116 143 119 Largestmarket Global Packaging Market Trends : 59 Global Packaging Market Trends 10 Fastest Growing Markets(2005-2010 CAGR) Source: Pira 2005 Global Label Market : 60 Global Label Market Volume: 41 billion m2 Market Volume(2007) Pressure Sensitive labels 39% Sleeves/Film Wraps 9% Cut andStack 50% In-mould 2% Market Growth Rates(% p.a.) Source: 2008 Global AWAreness Report, 2008/03 Global Pressure Sensitive Label MarketEmerging Markets Continue to Represent Best Growth Opportunities : 61 Global Pressure Sensitive Label MarketEmerging Markets Continue to Represent Best Growth Opportunities PS Label Market Volume(2007) PS Label Market Growth Rates(% p.a.) Source: 2008 Global AWAreness Report, 2008/03 Volume: 16 billion m2 N. America 33% Emg. AP 12% Dev. AP 14% Aus/NZ 2% E. Eur 6% S. Eur 11% N. Eur 17% L. America 5% Asia biggest growth Industry Structure : 62 Industry Structure Converters (Entrepreneurs/Consolidators) Laminators & Film Extruders (Avery-Bemis-Mitsubishi) Primary Materials (UPM-Dow-Shell-BASF) Proximity to Point of Use Degree of Scale Mission : 63 Mission To be the global supply chain leader of innovative premium package, and promotional, label solutions for the world’s largest consumer and healthcare corporations CCL Label Main Engine for Growth : 64 CCL Label Main Engine for Growth 2002 $21.5 $36.3 2003 $34.8 $42.8 2004 $35.9 $64.2 2005 $79.2 $92.2 2006 $88.5 $131.7 2007 $121.0 $167.3 Capex EBITDA $M CCL Label 2008 vs 2007 YTD Performance at June 30th : 65 CCL Label 2008 vs 2007 YTD Performance at June 30th Soft HPC market in the U.S. and Western Europe Strong Results from Healthcare & Specialty globally Growing Sleeve and Beverage businesses, highly seasonal Emerging Markets performance strong across the board Acquisitions performing to expectations $496 $483 $77 $72 $108 $100 $M CCL Label Four Major Markets : 66 CCL Label Four Major Markets Home andPersonal Care $300M Healthcare& Specialty $350M Beverage& Battery $175M SleeveLabels $150M …Plus Durables (CD-Design) - $25million: $1+B revenue CCL Label Home and Personal Care Around The World : 67 CCL Label Home and Personal Care Around The World 12 plants 4 in the U.S. 4 in Europe 2 in Latin America 2 in Asia 2 in Russian JV Total revenues of US$300 million 3-4 times larger than the nearest competitor 25%+ Global Market Share Profitability at CCL Label average Revenue Breakdown Europe 34% U.S. 36% Emerging Markets 30% Top 10 Global Beauty Care Players : 68 Top 10 Global Beauty Care Players Name 2007 Total Sales (US$B) HQ Location Procter & Gamble 76.5 U.S. L’Oréal 25.1 France Unilever 59.2 UK-NL Colgate-Palmolive 13.8 U.S. Estēe Lauder 7.0 U.S. Avon Products 9.9 U.S. Beiersdorf 8.5 Germany Johnson & Johnson 61.1 U.S. Shisheido 6.9 Japan Kao Corp 12.6 Japan Five Global Accounts For Home & Personal Care : 69 Five Global Accounts For Home & Personal Care Represents 70% of Home & Personal Care Label sales Balance is in regional players and specialty retailers Global Personal Care Market Shift : 70 Global Personal Care Market Shift W. Europe N. America Japan Emerging Markets Industry estimates Global Home & Personal Care Presence 2008 : 71 Global Home & Personal Care Presence 2008 …Now with presence in Moscow andSt. Petersburg through our joint venturewith CCL-Kontur Global Home & Personal Care Presence 2010 : 72 Global Home & Personal Care Presence 2010 …with new Asian investments Growing Through Greenfield Sites – Investment to Date : 73 Growing Through Greenfield Sites – Investment to Date Poland (2006) $13M China (2005) $14M Thailand (2003) $17M Greenfield Site Relocations – Investments : 74 Relocation to new state-of-the-artfacilities to meet customer needs Greenfield Site Relocations – Investments Paris Relocation $16M Mexico City Relocation $30M CCL Label’s Global Partners : 75 CCL Label’s Global Partners Company Total EU Asia NA LA P&G 13 Unilever 12 L’Oréal 9 J&J 8 Beiersdorf 7 5 4 3 2 1 2 2 1 - 2 4 4 3 4 2 2 2 2 2 2 CCL Label HPC sites trading with Global partners CCL Label Home & Personal Care Strategy : 76 CCL Label Home & Personal Care Strategy Continue to invest in Emerging Markets, largely through greenfield sites Invest in Decoration Innovation Broaden category presence in North America – Home Care Focus on improving profitability in Europe Build service programs in Design Management and Label Supply Management Cross Leverage Container and Tube organization in North America Slide 77: 77 Questions ? Global Healthcare Group : Global Healthcare Group Presented by: Robert Ryckman, VP, Marketing and Sales, CCL Label Healthcare Worldwide September 23, 2008 CCL Industries Inc. Agenda : 79 Agenda Key strengths markets served key customers locations & technology Growth initiatives Healthcare strategy Q&A Healthcare Group History : 80 Healthcare Group History Group was formed in 2003 to target the Healthcare market Designated “Focused” factories to meet unique market needs Invested in new production and inspection equipment specifically designed to service the Healthcare market Completed strategic acquisitions to fill product line needs and broaden geographic footprint Specialized Sales Force to service customers on a global basis A Strong Growth Record : 81 A Strong Growth Record Markets Served : 82 Markets Served CCL Healthcare provides innovative packaging solutions globally to the following industries: Prescription Drugs Generic Drugs Clinical Trials Ophthalmic (Eye Care) Biotechnology Medical Devices Animal Health Products Nutraceuticals Well Positioned in a Large Market : 83 Well Positioned in a Large Market Healthcare MarketUS$2B CCL is a large player in a fragmented global market Many Global Blue Chip Customers : 84 Many Global Blue Chip Customers 2007 Sales by Geography : 85 Total Global Sales= US$239 M 2007 Sales by Geography EuropeUS$120M 48% North AmericaUS$119M 52% Excellent Geographic Footprint to Service Both North America and Europe : 86 Excellent Geographic Footprint to Service Both North America and Europe CANADA 1. Toronto 2. Montreal US 3. Hightstown, NJ 4. Baltimore, MD 5. Sioux Falls, SD 6. St. Louis, MO 7. Upland, CA PUERTO RICO 8. Cidra 9. San German DENMARK 10. Copenhagen 11. Randers ITALY 12. Milan NETHERLANDS 13. Oss UK 14. Ashford 15. Ditchling FRANCE 16. Chilly Mazarin State-of-the-Art cGMP Facilities : 87 State-of-the-Art cGMP Facilities Digital Inspection Machine State-of-the-Art cGMP Facilities : 88 State-of-the-Art cGMP Facilities Product segregation to avoid mixing batches State-of-the-Art cGMP Facilities : 89 State-of-the-Art cGMP Facilities “White Room” Manufacturing Environment State-of-the-Art cGMP Facilities : 90 State-of-the-Art cGMP Facilities Digital Proofing for copy integrity State-of-the-Art cGMP Facilities : 91 State-of-the-Art cGMP Facilities Digital Press for short run and sequential bar codes Broad Range of Products : 92 Expanded Content IV Hanging Label Shrink Sleeve Closure Multi Ply Medical Device Label Pressure Sensitive Broad Range of Products Agenda : 93 Agenda Key strengths markets served key customers locations & technology Growth initiatives Healthcare strategy Q&A Growth Initiatives - Product Innovations : 94 Growth Initiatives - Product Innovations RIFD Track and trace and electronic pedigree applications Brand protection product line Overt solutions Covert features Intelligent labels Time & Temperature indicators Braille Labels Chemical indicators Sterilization indicators Child Resistant Senior Friendly Packaging Direct to Foil to reduce packaging spend Market timing is critical, meeting the regulatedchanges ahead of the curve Growth Initiatives - Product Line Extensions : 95 Growth Initiatives - Product Line Extensions Blister Foils For unlabeled products common in Europe Special constructions with Pattern Adhesive technology IVHL Medical device Expanded Content Labels (ECL) with more pages for regulatory support Now with more than 100 pages is possible Growth Initiatives & Market Trends – Type 2 Diabetes : 96 Growth Initiatives & Market Trends – Type 2 Diabetes Type 2 Diabetes is now a World Pandemic CCL is well positioned with the leading Healthcare companies that manufacture insulin and glucose monitoring devices Many new products are in development with CCL as a label solutions partner Growth Initiatives & Market Trends – ePedigree : 97 Growth Initiatives & Market Trends – ePedigree California will require that all prescription drugs carry a method of traceability from the time the product is made to the time it is dispensed CCL has several ways to deliver a solution through RFID and Bar coding CCL is investing in variable data print engines and variable data inspection equipment to enable its customers to meet this new requirement The first systems have been installed and running ahead of the demand which is scheduled to begin in Q3 2009 for 2010 release Agenda : 98 Agenda Key strengths markets served key customers locations & technology Growth initiatives Healthcare strategy Q&A Strategy Going Forward : 99 Strategy Going Forward Pursue acquisitions that will enhance CCL’s global footprint and Healthcare product offering Focus on global customers and sell our worldwide supply chain capability Greenfield site investments in China & India to support existing customers Execute new technologies to implement ePedigree and capitalize on this value-add opportunity Continue to leverage security products to grow sales Continue to develop new and innovative packaging solutions to meet our customers needs Slide 100: 100 Questions ? CCL Label Food & Beverage : CCL Label Food & Beverage Presented by: Günther Birkner, Group VP, Food & Beverage, CCL Label Worldwide September 23, 2008 CCL Industries Inc. Agenda : 102 Agenda Key strengths Growth initiatives beer soft drinks wine & spirits dairy & liquid foods Food & beverage strategy Q&A A Strong Growth Record : 103 A Strong Growth Record Note 1: ITW contributed $84M in sales in year acquired - 2007 Strong Organic Growth : 104 Strong Organic Growth $65 $74 $100 $226 $265 Note 1: ITW contributed $84M in sales in year acquired - 2007 Sales (US$M) Growing Market Share : 105 Growing Market Share 20% 15% #2 #2 8% 6% PSL - Beverage Sleeves Fuji Sleeves (Japan/public) Sleever International (France/family-owned) Spear Inc. (USA/private & financial investor) Multicolor Corp. (USA/public) Key Competitors Extensive Global Footprint : 106 Extensive Global Footprint Key Customers – All Global Players : 107 Key Customers – All Global Players Agenda : 108 Agenda Key strengths Growth initiatives beer soft drinks wine & spirits dairy & liquid foods Food & beverage strategy Q&A Beer – A Growing Market : 109 Beer – A Growing Market Top 4 customers share more than 50% of world market North America and Western Europe mature, Emerging Markets growing Premiumization Customer Breakdown US$ Beer – The Move To New Labels : 110 Beer – The Move To New Labels “No-Label Look” decoration replacing paper labels and direct print Marketing and operational benefits Beer – CCL’s Global Customers : 111 Beer – CCL’s Global Customers Beer – CCL Providing Innovative Solutions : 112 Beer – CCL Providing Innovative Solutions “Wash-Off” Labels CCL has unique patented label construction for refillable bottles Labels removable and bottles reusable Refillable bottles provide environmental benefits and represent approx. 50% of beer bottles worldwide Outlook Equipment investment regulates transition to Pressure Sensitive Labels (Emerging Markets!) Today only 5% of all worldwide beer bottlesdecorated with PSL Soft Drinks – Global Market Share : 113 Soft Drinks – Global Market Share Soft Drinks – Global Opportunities : 114 Soft Drinks – Global Opportunities Business dominated by Coca-Cola and Pepsi plus Nestlé and Danone in bottled water category Carbonated soft drinks only grow in emerging markets developed markets move to wellness drinks (enhanced waters, juice), energy drinks and RTD coffee and tea Standard pack format PET bottles, more recently shaped containers which need adaptive label CCL supplies Shrink and Stretch Sleeves to decorate shaped bottles Soft Drinks – CCL Customers & Products : 115 Soft Drinks – CCL Customers & Products Soft Drink Innovation : 116 Soft Drink Innovation “Super-Stretch-Sleeves” (Triple S) Environmentally friendly and cost effective Sleeve decoration for shaped bottles to replace Shrink Sleeves Proprietary patented application system Minimizes material usage, transport, energy consumption Wine & Spirits – CCL’s Major Customers : 117 Wine & Spirits – CCL’s Major Customers Wine makers usually small with regional character Spirits controlled by Diageo (Smirnoff, Johnnie Walker, Baileys) Pernod Ricard (Chivas, Absolut Vodka, Beefeater Gin) and Bacardi Wine & Spirits – Major Global Customers & Brands : 118 Wine & Spirits – Major Global Customers & Brands Wine & Spirits – Opportunities : 119 Wine & Spirits – Opportunities Growth in mature markets (competition with beer) and tax regulated markets e.g. India CCL presence small with Pressure Sensitive Labels and Shrink Sleeves Wine business bolstered by the acquisition of Clear Image Australia need to establish franchises in important wine regions Spot business with spirit companies in all parts of the world but no major position Dairy & Liquid Food – Markets For Growth : 120 Dairy & Liquid Food – Markets For Growth Consumer habits grow “on-the-go” and portioned packs likesmall plastic bottles Brand owners look for differentiation with shaped containers and high-end decoration CCL supplies Sleeves, PSL and In-mould Labels… full choice of premium decoration Existing business predominantly with regional customers in Europe but recent investments will attract multinationals (Nestlé, Unilever, Danone) Growth opportunities Emerging markets (Russia, Asia, Mexico, Brazil) North America with innovations (“Triple S”) Dairy & Liquid Food – Large & Global Customers : 121 Dairy & Liquid Food – Large & Global Customers Danone, Nestlé and Unilever as global players Various regional large customers US$ Dairy & Liquid Food – Customers & Products : 122 Dairy & Liquid Food – Customers & Products Food & Beverage Growth Strategy : 123 Food & Beverage Growth Strategy Focus on multinational customers with global brands accessing CCL’s geographic footprint Focus on premium brands with high-end decorationand new technologies no mature products (paper cut & stack labels, wraparound labels) Focused factories designed to meet customer cost criteria, latest technology Acquisitions to broaden geographic and/or segment scope Slide 124: 124 Questions ? CCL Label Market Niches Represent 20% of Sales : 125 CCL Label Market Niches Represent 20% of Sales Batteries Promotions Chemicals Paints Automotive With higher margins than the average CCL Label Specialty Products : CCL Label Specialty Products Geoffrey T. Martin, President and CEO September 23, 2008 CCL Industries Inc. CCL Industries 2002 – 2007 Proforma : 127 CCL Industries 2002 – 2007 Proforma EBIT Sales ($M) Note: Excludes Custom Manufacturing & ColepCCL CCL Label, Container & Tube Investing in the Future : 128 CCL Label, Container & Tube Investing in the Future $M 93% Capex as a % of Dep’n 181% 216% 274% 242% 221% Note: Excludes Custom Manufacturing & ColepCCL ROI CCL Container, Tube and Label Working Capital : 129 CCL Container, Tube and Label Working Capital Note: Excludes Custom Manufacturing & ColepCCL Capex Outlook : 130 Capex Outlook Capex forecast 2008 of $190 million includes over $60 million of significant & strategic long-term property transactions CD-Design = $13 million New Mexican Guanajuato Container plant = $10 million New Paris HPC Label plant = $8 million New Montreal Healthcare Label plant = $6 million New Los Angeles Tube plant = $4 million Significant plant expansions in the U.K., Germany & Austria = $15 million Land purchases in China, India, Vietnam and Japan Container and Tube Capex of $46 million driven by new plants and equipment in L.A. and Mexico Capex at Label is $144 million and excluding acquisition related Capex = $127 million Expect normalized capex in the $125-$150 million range for 09/10 Including Asian expansions Subject to continuing profit growth and meeting ROI hurdles CCL Container & Tube Strategies : 131 CCL Container & Tube Strategies Focus on North America Only Focus on improving Operating Margin and ROI Cost reduction – Mexican Container plant, downsizing of Penetanguishene Pricing – commodity cost pass throughs, improve mix Capex at or below rate of depreciation for 2009-10 in both businesses Leverage CCL Label Relationships in North America Many common customers in HPC Beverage opportunities CCL Label Business Strategy : 132 CCL Label Business Strategy Focus primarily on large Global Customers Organize around their needs Invest globally in world-class facilities and technologies By market segment and/or label type Increasing focus on product technology innovations Acquire to expand geographic footprint and product range At the right price, largely bolt-on businesses $10-$100 million Many opportunities – focus on Healthcare & Specialty, Food & Beverage and Durables Focus on growth at current margins and ROI CCL Acquisition Approach : 133 CCL Acquisition Approach Focus on selected segments of the Label business Valuations at 4-6+ times historic EBITDA Focus on businesses/people who we know, avoiding auctions Willing to take on troubled situations: at or below tangible asset value Must be a “fit”… product/geography in our global network No “bet the company” deals, always be ready to “walk away” Many opportunities arise in turbulent times Slide 134: 134 Questions ? 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2008 ccl investors' day presentation (lite) bandi04 Download Post to : URL : Related Presentations : Share Add to Flag Embed Email Send to Blogs and Networks Add to Channel Uploaded from authorPOINT lite Insert YouTube videos in PowerPont slides with aS Desktop Copy embed code: (To copy code, click on the text box) Embed: URL: Thumbnail: WordPress Embed Customize Embed The presentation is successfully added In Your Favorites. Views: 36 Category: Education License: All Rights Reserved Like it (0) Dislike it (0) Added: January 19, 2012 This Presentation is Public Favorites: 0 Presentation Description coke Comments Posting comment... Premium member Presentation Transcript CCL Industries Inc. Investors’ Day : CCL Industries Inc. Investors’ Day Donald G. Lang – Executive Chairman September 23, 2008 CCL Industries Inc. Disclaimer : 2 Disclaimer Any forward-looking statements contained in this presentation, including statements relating to the outlook of CCL Industries Inc.’s various divisions and products and CCL’s growth and expansion plans, involve risks, uncertainties and assumptions and should not be taken as guarantees of future performance. A number of factors could cause actual results, performance or achievements to vary materially from those anticipated in forward-looking statements, including: general economic and business conditions and specific conditions affecting the sector in which CCL operates, including pricing pressures; CCL’s ability to attract and retain its customer base; technological change; competition; changes in, or failure to comply with, existing government regulations or failure to obtain required permits or licenses; changes in business strategy or development plans; risks associated with operating and product hazards; the ability to attract and retain qualified personnel; and other factors. The forgoing list of factors is not exhaustive of the factors that may affect the actual outcome of events that are the subject of forward-looking statements. Unless noted otherwise, all amounts are expressed in Canadian dollars. In Attendance : 3 In Attendance Donald Lang Geoff Martin Steve Lancaster Günther Birkner Robert Ryckman Jan Wade Executive Chairman President & CEO Executive VP and Acting CFO Group VP, Food & Beverage, CCL Label Worldwide VP, Sales & Marketing, CCL Label Healthcare Worldwide Senior VP, Human Resources & Corporate Communications Agenda : 4 Agenda 7:30 - 8:00 a.m. 8:00 - 8:15 a.m. 8:15 - 8:35 a.m. 8:35 - 9:35 a.m. 9:35 - 9:45 a.m. 9:45 - 10:10 a.m. 10:10 - 10:35 a.m. 10:35 - 11:00 a.m. Continental breakfast, registration/sign-in Welcome & Introduction Financials Introduction to Operations CCL Container CCL Tube CCL Label Introduction and Home & Personal Care Break CCL Label Healthcare CCL Label Food & Beverage CCL Label Specialty Products and Wrap-up D. Lang S. Lancaster G. Martin R. Ryckman G. Birkner G. Martin Today’s Objectives : 5 Today’s Objectives General business update Short-term operating tactics and growth opportunities Longer-term strategic plans Open informal dialogue Presentations: 5 presenters with time for questions at the end of each presentation or as necessary, allowing for more informal dialogue microphone to be used for all presentations & questions to ensure clarity for the live webcast target finishing by 11 a.m. including a break CCL At A Glance : 6 CCL At A Glance World-class Specialty Packaging company headquartered in Toronto 3 divisions: Label, Container and Tube 56 locations in 17 countries 5,500 employees 2007 financial summary – excluding discontinued operations $1,144 million in sales, $207 million of EBITDA and $131 million in EBIT ITW’s sleeve label business acquisition (completed January 2007), added sales exceeding expectations of $90 million and EBIT of $15 million Entered Durables market with CD-Design acquisition in Germany (completed January 2008) purchased for $10 million plus contingent consideration of $4.5 million at the end of 2008 Significantly expanded our wine label business and market with acquisition of Clear Image in Australia (completed April 2008) purchased for $34 million CCL At A Glance : 7 CCL At A Glance TSX: CCL.B and CCL.A (September 12, 2008) Market cap. $1,066 million Dividend yield 1.7% 6 year stock investment appreciation (Dec. 2001 to Dec. 2007) of 291% Net Debt/Cap. approximately 32% (June 30, 2008) CCL At A Glance – A Global Player : 8 CCL At A Glance – A Global Player 2007 Total Sales $1,144 million (12 months ended December 31, 2007) U.S. & Puerto Rico 38% Canada 12% Europe 39% Asia 3% Mexico & Brazil 8% Comparable Company Analysis(US$M unless stated otherwise) : 9 Comparable Company Analysis(US$M unless stated otherwise) Stock Symbol EBITMargin EnterpriseValue Sales EBITDAMargin Net Debt/EBITDA Net Debt/Capital CCL* CCL.B C$1422 C$1132 18.2% 11.4% 1.7x 28.8% Avery 14.4% 10.4% 2.3x 50.0% Aptar ATR $2808 $2053 17.5% 11.1% 0.2x 4.5% Brady BRC $2133 $1489 17.8% 13.8% 1.0x 18.1% Bemis BMS $3581 $3746 12.0% 7.6% 1.5x 26.8% Pactiv PTV $5058 $3507 18.5% 13.3% 2.3x 51.2% Sealed Air SEE $5348 $4867 14.5% 11.0% 2.0x 36.7% Winpak* WPK C$378 C$524 12.1% 6.9% 0.3x 4.6% Cenveo 11.7% 8.4% 5.3x nm Multi-Color 11.8% 8.2% n/a 47.3% Median 14.4% 10.7% 1.7x 28.8% AVY CVO LABL $7283 $1881 $396 $6869 $2194 $237 MarketCap C$1066 $2733 $1860 $2843 $3543 $3954 C$347 $4999 $512 $276 * TSX – all others NYSE Source: BMO Nesbitt Burns Estimates, Capital IQ, as of September 12, 2008 Comparable Benchmarks: EV/EBITDA : 10 Comparable Benchmarks: EV/EBITDA Source: BMO Nesbitt Burns Estimates, Capital IQ, as of September 12, 2008 N/A Comparable Company Analysis: Price/Earnings : 11 Comparable Company Analysis: Price/Earnings Source: BMO Nesbitt Burns Estimates, Capital IQ, as of September 12, 2008 Comparable Company Analysis: Net Debt/Capital : 12 Comparable Company Analysis: Net Debt/Capital Source: BMO Nesbitt Burns Estimates, Capital IQ, as of September 12, 2008 nm Comparable Company Analysis: Net Debt/EBITDA : 13 Comparable Company Analysis: Net Debt/EBITDA Source: BMO Nesbitt Burns Estimates, Capital IQ, as of September 12, 2008 n/a nm Comparable Benchmark Takeaways : 14 Comparable Benchmark Takeaways Aptar and Brady are good benchmarks for “specialty packaging companies” CCL’s EBIT and EBITDA margins are at the median and high of the range, respectively CCL is under leveraged but at the median of the range CCL’s capital plan funded by operating cash flows will drive future EBITDA levels and ratios CCL is undervalued relative to all benchmarks CCL Industries Inc. : CCL Industries Inc. Steven W. Lancaster, Executive Vice President and Acting CFO September 23, 2008 CCL Industries Inc. First Half 2008 Financial Highlights : 16 First Half 2008 Financial Highlights 2008 sales up 3% excluding currency translation compared to a robust first half of 2007 Negative currency transactions impact: 5 cents per share; and negative currency translation impact: 10 cents per share Excluding 15 cent currency impact, EPS excluding restructuring etc. was up a healthy 16% Sales $608M $620M (2)% EPS as reported $1.60 $1.62 (1)% EPS excluding restructuring & other items and favourable tax adj. $1.54 $1.46 +5% Impact of Changes In Exchange Rates : 17 Impact of Changes In Exchange Rates A continuous unfavourable effect on EPS… but may be reversing with weaker C$ EPS Growth 2005 to 2007 Continuing Operations : 18 EPS Growth 2005 to 2007 Continuing Operations Significant operational improvements and accretive acquisitions EPS per B Share before Restructuring & Other Items & Favourable Tax Adjustments Strong Gross Cash Flow Generation From Continuing Operations Despite Currency Impact : 19 Strong Gross Cash Flow Generation From Continuing Operations Despite Currency Impact EBITDA ($M) Capital Spending vs. Depreciation : 20 Capital Spending vs. Depreciation Capex in 2008 expected to be $190 million Capex ($M) Depreciation ($M) and amortization Note: Capex includes discontinued operations Working Capital Improvement : 21 Working Capital Improvement Working capital reduction program generated significant cash and is at a “best-in-class” level Non-cash Working Capital DaysYears ended Dec. 31 *Excludes receivable on sale of ColepCCL Strong Debt & Capital Structure : 22 Strong Debt & Capital Structure Net Debt ($M) Net Debt to Total BookCapitalization Ratio Current Net Debt – $356M : 23 Current Net Debt – $356M A portion of some of these loans have been swapped into euros * US$31M due in July 2010 ** extendible annually New Financing Pending : 24 New Financing Pending CCL has had substantial cash over the last decade and wants to maintain liquidity to be opportunistic CCL went to the U.S. Private Placement market in late August to raise up to US$150M in 5 and 10 year notes Market conditions deteriorated due to credit crunch However, CCL raised US$130M with 8 investors; 7 are prior lenders to CCL Terms: US$52M bullet 5 year @ 5.86% US$78M bullet 10 year @ 6.62% No material change in covenants (no EBITDA related tests) except investors can put the notes back to the Company at par if there is a change of control Closing anticipated on Sept. 24 and funding on Sept. 26 Debt Capacity – Additional : 25 Debt Capacity – Additional With new financing, there is further substantial debt capacity and cash on hand to invest opportunistically Target Net Debt at 45% Debt:Total Capitalization $ 634M Key Strategic Metrics : 26 Key Strategic Metrics Earnings Per Share (EPS) growth of +10% per annum over time excluding one-time items (achieved 19% in 2006 and 2007) Return on Equity (ROE) equal to leading specialty packaging peers 12%-14% (13% in each of 2006 and 2007) Debt rating BBB high (Investment Grade) Debt to capitalization of 45% (currently 32%) Net interest coverage to EBITDA, minimum 6xs (currently 10.3) Maintain liquidity of $100M in cash or unused lines of credit Key Strategic Metrics : 27 Key Strategic Metrics Working capital management – maintain “best-in-class” performance (end of 2006 – 2 days and 2007 at (1) vs 35 days in 2001) Dividends, 20%-25% EPS excluding unusual items (was 17% at Dec. 2007 therefore increased dividend by 17% in March 2008 to achieve metric range) Reinvestment capex hurdle of +17% ROI Divisional ROS >10% (2006 and 2007 – 12%) Acquisitions Complementary and accretive in 1st year Slide 28: 28 Questions ? CCL Industries Inc. : CCL Industries Inc. Geoffrey T. Martin, President and CEO September 23, 2008 CCL Industries Inc. 2008 Estimated Sales by Division and Geography : 30 2008 Estimated Sales by Division and Geography Sales by Division $1.2B Sales by Geography $1.2B *Sales from products manufactured in Canada are 10% Label 82% Tube 5% Container 13% EmergingMarkets 12% U.S. &Canada* 45% WesternEurope 43% 2008 Estimated Sales by Market : 31 2008 Estimated Sales by Market CCL Container : CCL Container CCL Industries Inc. CCL Container Products : 33 CCL Container Products Aerosol Containers Aluminum Bottles CCL Container Markets : 34 CCL Container Markets Household Beverage Personal Care Our Manufacturing Process - Impact Extrusion : 35 Our Manufacturing Process - Impact Extrusion Decoration and Finishing : 36 Decoration and Finishing 4. Internal Spray Coating 5. Dry Offset Print 6. Neck Down CCL Container Strong Market Position : 37 CCL Container Strong Market Position Focus on NAFTA region only One of only two producers with approx 50% share Main competitors are alternatives Steel/Tin Plate Aerosols Plastic Trigger Sprays/Pumps Coil-to-Can Aluminum Beverage Bottles Specialty Glass & Plastic Bottles Facilities in the U.S., Canada and Mexico (2) 87% of sales in the U.S.; balance in Mexico Canadian Plant: US$ Exchange Rate Headwind : 38 Canadian Plant: US$ Exchange Rate Headwind US$ Operating Incomeimpact $ millions fromprior year US$:C$Exchange Rate Aluminum Cost Challenges : 39 $1,000 $2,000 $3,000 $4,000 2004 2006 2005 Source: Reuters, 3 month LME spot price Aluminum Cost Challenges (US$/ton) 2008 Aug.30 2007 CCL Container Last Five Year Performance : 40 CCL Container Last Five Year Performance 2003 2004 2005 2006 2007 $M Sales $US M OI $US M CCL Container 2008 vs. 2007 YTD Performanceat June 30th : 41 CCL Container 2008 vs. 2007 YTD Performanceat June 30th Factors impacting revenue ABS Bag-on-Valve business sold in Q1 2008 = $2.2 million Loss of Home Care contract in mid 2007 = $10 million C$ Translation = $8 million based on virtually all customers’ purchases in US$ U.S. and Mexican operations performing well Weak performance in Penetanguishene exchange rate impact: $2.3 million $77.8 $96.6 $8.1 $11.5 $12.9 $17.1 $11.4 $1.7 Note: excluding ABS business $Millions Growing Profitability in Mexico : 42 Growing Profitability in Mexico CCL Container Sales Mexico 11% Mexico 11% CCL Container Operating Income Mexico 1% Mexico 25% 2003 2003 2007 2007 New Plant in Guanajuato Mexico : 43 New Plant in Guanajuato Mexico Investment in Guanajuato will reach $35 million by year end CCL Container Mexico Strategy : 44 CCL Container Mexico Strategy Mexico City plant (older lines) focus on: Local aerosols sold to Mexican contract fillers and customers filling in California, Texas, New Mexico and Arizona Specialty containers with high labour content currently made in the U.S. Guanajuato plant (new lines) focus on: High volume aerosols for key Global Customers Bottles for Mexican Beverage Customers CCL Container Focus for 2008-2010 : 45 CCL Container Focus for 2008-2010 Continue to drive improvements in the US: service, innovation, productivity, pricing, leveraging cross-CCL customer relationships Downsize and reduce cost in Canadian operation Successful execution of Mexican strategy 2010 goal to reach 20% ROI, significant upside potential once US consumer spending returns to normal levels CCL Tube : CCL Tube CCL Industries Inc. CCL Tube Market Share : 47 CCL Tube Market Share CCL15% US$400Million North AmericanExtruded Tube Market CCL Tube Customers : 48 CCL Tube Customers Focus on high-end decorated premium priced consumer brands CCL Tube Last Five Years Performance : 49 CCL Tube Last Five Years Performance $US M 2003 2004 2005 2006 2007 EBITDA 6.5 5.3 7.6 10.3 6.8 Presented in $US as business is primarily U.S based CCL Tube 2008 vs. 2007 YTD Performanceat June 30th : 50 CCL Tube 2008 vs. 2007 YTD Performanceat June 30th Q3 & Q4 will be favourable due to weak 2nd half of 2007 Order levels good in market circumstances Business returned to profit, but margins not at acceptable levels $30.9 $34.0 $3.8 $5.2 $M CCL Tube Los Angeles – New More Efficient Facility : 51 CCL Tube Los Angeles – New More Efficient Facility From this… …to this CCL Tube Focus 2008-2010 : 52 CCL Tube Focus 2008-2010 Successful relocation in Los Angeles Merging U.S. sales team with CCL Label HPC group to leverage relationships Focus operations on service, decoration innovation and improving mix Review small (but profitable) operation in Mexico 2010 objective: 10% ROI Slide 53: 53 Questions ? CCL Label : CCL Label CCL Industries Inc. Three Label Markets : 55 Three Label Markets Variable Information Printing Bar Codes Information Processing Applications Packaging and Presentation Personal Care Premium Food and Beverage Healthcare and Chemicals Product Identification Automotive Consumer Electronics: Computers, Cell Phones, Audio-Visual Consumer Durables: White Goods CCL Label Products – Global Leadership : 56 CCL Label Products – Global Leadership Pressure sensitive labels – global leader Expanded content labels – global leader Sleeves – #2 globally Niche player: – In-mould labels – Film wrap labels – Paper cut & stack labels Plus… CCL Label Services : 57 CCL Label Services Brand “Icons” & creative development Artwork and design management Label supply chain & inventory management Label application consulting New development initiatives “problem solving” Global Packaging Market Trends : 58 Asia Pacific Now Larger than N. America and W. Europe Global Packaging Market Trends Source: Heidelberger Druckmaschinen - * Adjusted for price changes and currency fluctuations – Base year 2004 € billion 387 482 64 104 111 108 104 116 143 119 Largestmarket Global Packaging Market Trends : 59 Global Packaging Market Trends 10 Fastest Growing Markets(2005-2010 CAGR) Source: Pira 2005 Global Label Market : 60 Global Label Market Volume: 41 billion m2 Market Volume(2007) Pressure Sensitive labels 39% Sleeves/Film Wraps 9% Cut andStack 50% In-mould 2% Market Growth Rates(% p.a.) Source: 2008 Global AWAreness Report, 2008/03 Global Pressure Sensitive Label MarketEmerging Markets Continue to Represent Best Growth Opportunities : 61 Global Pressure Sensitive Label MarketEmerging Markets Continue to Represent Best Growth Opportunities PS Label Market Volume(2007) PS Label Market Growth Rates(% p.a.) Source: 2008 Global AWAreness Report, 2008/03 Volume: 16 billion m2 N. America 33% Emg. AP 12% Dev. AP 14% Aus/NZ 2% E. Eur 6% S. Eur 11% N. Eur 17% L. America 5% Asia biggest growth Industry Structure : 62 Industry Structure Converters (Entrepreneurs/Consolidators) Laminators & Film Extruders (Avery-Bemis-Mitsubishi) Primary Materials (UPM-Dow-Shell-BASF) Proximity to Point of Use Degree of Scale Mission : 63 Mission To be the global supply chain leader of innovative premium package, and promotional, label solutions for the world’s largest consumer and healthcare corporations CCL Label Main Engine for Growth : 64 CCL Label Main Engine for Growth 2002 $21.5 $36.3 2003 $34.8 $42.8 2004 $35.9 $64.2 2005 $79.2 $92.2 2006 $88.5 $131.7 2007 $121.0 $167.3 Capex EBITDA $M CCL Label 2008 vs 2007 YTD Performance at June 30th : 65 CCL Label 2008 vs 2007 YTD Performance at June 30th Soft HPC market in the U.S. and Western Europe Strong Results from Healthcare & Specialty globally Growing Sleeve and Beverage businesses, highly seasonal Emerging Markets performance strong across the board Acquisitions performing to expectations $496 $483 $77 $72 $108 $100 $M CCL Label Four Major Markets : 66 CCL Label Four Major Markets Home andPersonal Care $300M Healthcare& Specialty $350M Beverage& Battery $175M SleeveLabels $150M …Plus Durables (CD-Design) - $25million: $1+B revenue CCL Label Home and Personal Care Around The World : 67 CCL Label Home and Personal Care Around The World 12 plants 4 in the U.S. 4 in Europe 2 in Latin America 2 in Asia 2 in Russian JV Total revenues of US$300 million 3-4 times larger than the nearest competitor 25%+ Global Market Share Profitability at CCL Label average Revenue Breakdown Europe 34% U.S. 36% Emerging Markets 30% Top 10 Global Beauty Care Players : 68 Top 10 Global Beauty Care Players Name 2007 Total Sales (US$B) HQ Location Procter & Gamble 76.5 U.S. L’Oréal 25.1 France Unilever 59.2 UK-NL Colgate-Palmolive 13.8 U.S. Estēe Lauder 7.0 U.S. Avon Products 9.9 U.S. Beiersdorf 8.5 Germany Johnson & Johnson 61.1 U.S. Shisheido 6.9 Japan Kao Corp 12.6 Japan Five Global Accounts For Home & Personal Care : 69 Five Global Accounts For Home & Personal Care Represents 70% of Home & Personal Care Label sales Balance is in regional players and specialty retailers Global Personal Care Market Shift : 70 Global Personal Care Market Shift W. Europe N. America Japan Emerging Markets Industry estimates Global Home & Personal Care Presence 2008 : 71 Global Home & Personal Care Presence 2008 …Now with presence in Moscow andSt. Petersburg through our joint venturewith CCL-Kontur Global Home & Personal Care Presence 2010 : 72 Global Home & Personal Care Presence 2010 …with new Asian investments Growing Through Greenfield Sites – Investment to Date : 73 Growing Through Greenfield Sites – Investment to Date Poland (2006) $13M China (2005) $14M Thailand (2003) $17M Greenfield Site Relocations – Investments : 74 Relocation to new state-of-the-artfacilities to meet customer needs Greenfield Site Relocations – Investments Paris Relocation $16M Mexico City Relocation $30M CCL Label’s Global Partners : 75 CCL Label’s Global Partners Company Total EU Asia NA LA P&G 13 Unilever 12 L’Oréal 9 J&J 8 Beiersdorf 7 5 4 3 2 1 2 2 1 - 2 4 4 3 4 2 2 2 2 2 2 CCL Label HPC sites trading with Global partners CCL Label Home & Personal Care Strategy : 76 CCL Label Home & Personal Care Strategy Continue to invest in Emerging Markets, largely through greenfield sites Invest in Decoration Innovation Broaden category presence in North America – Home Care Focus on improving profitability in Europe Build service programs in Design Management and Label Supply Management Cross Leverage Container and Tube organization in North America Slide 77: 77 Questions ? Global Healthcare Group : Global Healthcare Group Presented by: Robert Ryckman, VP, Marketing and Sales, CCL Label Healthcare Worldwide September 23, 2008 CCL Industries Inc. Agenda : 79 Agenda Key strengths markets served key customers locations & technology Growth initiatives Healthcare strategy Q&A Healthcare Group History : 80 Healthcare Group History Group was formed in 2003 to target the Healthcare market Designated “Focused” factories to meet unique market needs Invested in new production and inspection equipment specifically designed to service the Healthcare market Completed strategic acquisitions to fill product line needs and broaden geographic footprint Specialized Sales Force to service customers on a global basis A Strong Growth Record : 81 A Strong Growth Record Markets Served : 82 Markets Served CCL Healthcare provides innovative packaging solutions globally to the following industries: Prescription Drugs Generic Drugs Clinical Trials Ophthalmic (Eye Care) Biotechnology Medical Devices Animal Health Products Nutraceuticals Well Positioned in a Large Market : 83 Well Positioned in a Large Market Healthcare MarketUS$2B CCL is a large player in a fragmented global market Many Global Blue Chip Customers : 84 Many Global Blue Chip Customers 2007 Sales by Geography : 85 Total Global Sales= US$239 M 2007 Sales by Geography EuropeUS$120M 48% North AmericaUS$119M 52% Excellent Geographic Footprint to Service Both North America and Europe : 86 Excellent Geographic Footprint to Service Both North America and Europe CANADA 1. Toronto 2. Montreal US 3. Hightstown, NJ 4. Baltimore, MD 5. Sioux Falls, SD 6. St. Louis, MO 7. Upland, CA PUERTO RICO 8. Cidra 9. San German DENMARK 10. Copenhagen 11. Randers ITALY 12. Milan NETHERLANDS 13. Oss UK 14. Ashford 15. Ditchling FRANCE 16. Chilly Mazarin State-of-the-Art cGMP Facilities : 87 State-of-the-Art cGMP Facilities Digital Inspection Machine State-of-the-Art cGMP Facilities : 88 State-of-the-Art cGMP Facilities Product segregation to avoid mixing batches State-of-the-Art cGMP Facilities : 89 State-of-the-Art cGMP Facilities “White Room” Manufacturing Environment State-of-the-Art cGMP Facilities : 90 State-of-the-Art cGMP Facilities Digital Proofing for copy integrity State-of-the-Art cGMP Facilities : 91 State-of-the-Art cGMP Facilities Digital Press for short run and sequential bar codes Broad Range of Products : 92 Expanded Content IV Hanging Label Shrink Sleeve Closure Multi Ply Medical Device Label Pressure Sensitive Broad Range of Products Agenda : 93 Agenda Key strengths markets served key customers locations & technology Growth initiatives Healthcare strategy Q&A Growth Initiatives - Product Innovations : 94 Growth Initiatives - Product Innovations RIFD Track and trace and electronic pedigree applications Brand protection product line Overt solutions Covert features Intelligent labels Time & Temperature indicators Braille Labels Chemical indicators Sterilization indicators Child Resistant Senior Friendly Packaging Direct to Foil to reduce packaging spend Market timing is critical, meeting the regulatedchanges ahead of the curve Growth Initiatives - Product Line Extensions : 95 Growth Initiatives - Product Line Extensions Blister Foils For unlabeled products common in Europe Special constructions with Pattern Adhesive technology IVHL Medical device Expanded Content Labels (ECL) with more pages for regulatory support Now with more than 100 pages is possible Growth Initiatives & Market Trends – Type 2 Diabetes : 96 Growth Initiatives & Market Trends – Type 2 Diabetes Type 2 Diabetes is now a World Pandemic CCL is well positioned with the leading Healthcare companies that manufacture insulin and glucose monitoring devices Many new products are in development with CCL as a label solutions partner Growth Initiatives & Market Trends – ePedigree : 97 Growth Initiatives & Market Trends – ePedigree California will require that all prescription drugs carry a method of traceability from the time the product is made to the time it is dispensed CCL has several ways to deliver a solution through RFID and Bar coding CCL is investing in variable data print engines and variable data inspection equipment to enable its customers to meet this new requirement The first systems have been installed and running ahead of the demand which is scheduled to begin in Q3 2009 for 2010 release Agenda : 98 Agenda Key strengths markets served key customers locations & technology Growth initiatives Healthcare strategy Q&A Strategy Going Forward : 99 Strategy Going Forward Pursue acquisitions that will enhance CCL’s global footprint and Healthcare product offering Focus on global customers and sell our worldwide supply chain capability Greenfield site investments in China & India to support existing customers Execute new technologies to implement ePedigree and capitalize on this value-add opportunity Continue to leverage security products to grow sales Continue to develop new and innovative packaging solutions to meet our customers needs Slide 100: 100 Questions ? CCL Label Food & Beverage : CCL Label Food & Beverage Presented by: Günther Birkner, Group VP, Food & Beverage, CCL Label Worldwide September 23, 2008 CCL Industries Inc. Agenda : 102 Agenda Key strengths Growth initiatives beer soft drinks wine & spirits dairy & liquid foods Food & beverage strategy Q&A A Strong Growth Record : 103 A Strong Growth Record Note 1: ITW contributed $84M in sales in year acquired - 2007 Strong Organic Growth : 104 Strong Organic Growth $65 $74 $100 $226 $265 Note 1: ITW contributed $84M in sales in year acquired - 2007 Sales (US$M) Growing Market Share : 105 Growing Market Share 20% 15% #2 #2 8% 6% PSL - Beverage Sleeves Fuji Sleeves (Japan/public) Sleever International (France/family-owned) Spear Inc. (USA/private & financial investor) Multicolor Corp. (USA/public) Key Competitors Extensive Global Footprint : 106 Extensive Global Footprint Key Customers – All Global Players : 107 Key Customers – All Global Players Agenda : 108 Agenda Key strengths Growth initiatives beer soft drinks wine & spirits dairy & liquid foods Food & beverage strategy Q&A Beer – A Growing Market : 109 Beer – A Growing Market Top 4 customers share more than 50% of world market North America and Western Europe mature, Emerging Markets growing Premiumization Customer Breakdown US$ Beer – The Move To New Labels : 110 Beer – The Move To New Labels “No-Label Look” decoration replacing paper labels and direct print Marketing and operational benefits Beer – CCL’s Global Customers : 111 Beer – CCL’s Global Customers Beer – CCL Providing Innovative Solutions : 112 Beer – CCL Providing Innovative Solutions “Wash-Off” Labels CCL has unique patented label construction for refillable bottles Labels removable and bottles reusable Refillable bottles provide environmental benefits and represent approx. 50% of beer bottles worldwide Outlook Equipment investment regulates transition to Pressure Sensitive Labels (Emerging Markets!) Today only 5% of all worldwide beer bottlesdecorated with PSL Soft Drinks – Global Market Share : 113 Soft Drinks – Global Market Share Soft Drinks – Global Opportunities : 114 Soft Drinks – Global Opportunities Business dominated by Coca-Cola and Pepsi plus Nestlé and Danone in bottled water category Carbonated soft drinks only grow in emerging markets developed markets move to wellness drinks (enhanced waters, juice), energy drinks and RTD coffee and tea Standard pack format PET bottles, more recently shaped containers which need adaptive label CCL supplies Shrink and Stretch Sleeves to decorate shaped bottles Soft Drinks – CCL Customers & Products : 115 Soft Drinks – CCL Customers & Products Soft Drink Innovation : 116 Soft Drink Innovation “Super-Stretch-Sleeves” (Triple S) Environmentally friendly and cost effective Sleeve decoration for shaped bottles to replace Shrink Sleeves Proprietary patented application system Minimizes material usage, transport, energy consumption Wine & Spirits – CCL’s Major Customers : 117 Wine & Spirits – CCL’s Major Customers Wine makers usually small with regional character Spirits controlled by Diageo (Smirnoff, Johnnie Walker, Baileys) Pernod Ricard (Chivas, Absolut Vodka, Beefeater Gin) and Bacardi Wine & Spirits – Major Global Customers & Brands : 118 Wine & Spirits – Major Global Customers & Brands Wine & Spirits – Opportunities : 119 Wine & Spirits – Opportunities Growth in mature markets (competition with beer) and tax regulated markets e.g. India CCL presence small with Pressure Sensitive Labels and Shrink Sleeves Wine business bolstered by the acquisition of Clear Image Australia need to establish franchises in important wine regions Spot business with spirit companies in all parts of the world but no major position Dairy & Liquid Food – Markets For Growth : 120 Dairy & Liquid Food – Markets For Growth Consumer habits grow “on-the-go” and portioned packs likesmall plastic bottles Brand owners look for differentiation with shaped containers and high-end decoration CCL supplies Sleeves, PSL and In-mould Labels… full choice of premium decoration Existing business predominantly with regional customers in Europe but recent investments will attract multinationals (Nestlé, Unilever, Danone) Growth opportunities Emerging markets (Russia, Asia, Mexico, Brazil) North America with innovations (“Triple S”) Dairy & Liquid Food – Large & Global Customers : 121 Dairy & Liquid Food – Large & Global Customers Danone, Nestlé and Unilever as global players Various regional large customers US$ Dairy & Liquid Food – Customers & Products : 122 Dairy & Liquid Food – Customers & Products Food & Beverage Growth Strategy : 123 Food & Beverage Growth Strategy Focus on multinational customers with global brands accessing CCL’s geographic footprint Focus on premium brands with high-end decorationand new technologies no mature products (paper cut & stack labels, wraparound labels) Focused factories designed to meet customer cost criteria, latest technology Acquisitions to broaden geographic and/or segment scope Slide 124: 124 Questions ? CCL Label Market Niches Represent 20% of Sales : 125 CCL Label Market Niches Represent 20% of Sales Batteries Promotions Chemicals Paints Automotive With higher margins than the average CCL Label Specialty Products : CCL Label Specialty Products Geoffrey T. Martin, President and CEO September 23, 2008 CCL Industries Inc. CCL Industries 2002 – 2007 Proforma : 127 CCL Industries 2002 – 2007 Proforma EBIT Sales ($M) Note: Excludes Custom Manufacturing & ColepCCL CCL Label, Container & Tube Investing in the Future : 128 CCL Label, Container & Tube Investing in the Future $M 93% Capex as a % of Dep’n 181% 216% 274% 242% 221% Note: Excludes Custom Manufacturing & ColepCCL ROI CCL Container, Tube and Label Working Capital : 129 CCL Container, Tube and Label Working Capital Note: Excludes Custom Manufacturing & ColepCCL Capex Outlook : 130 Capex Outlook Capex forecast 2008 of $190 million includes over $60 million of significant & strategic long-term property transactions CD-Design = $13 million New Mexican Guanajuato Container plant = $10 million New Paris HPC Label plant = $8 million New Montreal Healthcare Label plant = $6 million New Los Angeles Tube plant = $4 million Significant plant expansions in the U.K., Germany & Austria = $15 million Land purchases in China, India, Vietnam and Japan Container and Tube Capex of $46 million driven by new plants and equipment in L.A. and Mexico Capex at Label is $144 million and excluding acquisition related Capex = $127 million Expect normalized capex in the $125-$150 million range for 09/10 Including Asian expansions Subject to continuing profit growth and meeting ROI hurdles CCL Container & Tube Strategies : 131 CCL Container & Tube Strategies Focus on North America Only Focus on improving Operating Margin and ROI Cost reduction – Mexican Container plant, downsizing of Penetanguishene Pricing – commodity cost pass throughs, improve mix Capex at or below rate of depreciation for 2009-10 in both businesses Leverage CCL Label Relationships in North America Many common customers in HPC Beverage opportunities CCL Label Business Strategy : 132 CCL Label Business Strategy Focus primarily on large Global Customers Organize around their needs Invest globally in world-class facilities and technologies By market segment and/or label type Increasing focus on product technology innovations Acquire to expand geographic footprint and product range At the right price, largely bolt-on businesses $10-$100 million Many opportunities – focus on Healthcare & Specialty, Food & Beverage and Durables Focus on growth at current margins and ROI CCL Acquisition Approach : 133 CCL Acquisition Approach Focus on selected segments of the Label business Valuations at 4-6+ times historic EBITDA Focus on businesses/people who we know, avoiding auctions Willing to take on troubled situations: at or below tangible asset value Must be a “fit”… product/geography in our global network No “bet the company” deals, always be ready to “walk away” Many opportunities arise in turbulent times Slide 134: 134 Questions ?