The Story of WestRock

Transcription

1 The Story of WestRock RISI 33 rd Annual North American Conference Steve Voorhees Chief Executive Officer, WestRock October 11, 2018

2 Forward Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including but not limited to the statements on the slides entitled Enhanced Scale and Expanded Product Offering and WestRock 2018 and Beyond that give guidance or estimates for future periods as well as statements regarding, among other things, (a) that we expect to generate $16.3 billion of net sales in fiscal 2018; (b) that we expect combined net sales from WestRock and KapStone of approximately $20 billion, with 63% from corrugated packaging and 37% from consumer packaging; and (c) that we have the cash flow available to invest for growth on a disciplined basis and also have the ability to return significant cash to stockholders via dividends and share repurchases. BROAD PORTFOLIO Forward-looking statements are based on OF our DIFFERENTIATED current expectations, beliefs, plans or forecasts and are typically identified by words or phrases such as "may," SOLUTIONS "will," "could," "should," "would," "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "target," "prospects," "potential" and "forecast," and other words, terms and phrases of similar meaning. Forward-looking statements involve estimates, expectations, projections, goals, forecasts, assumptions, risks and uncertainties. WestRock cautions readers that a forward-looking statement is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statement. With respect to forward-looking statements, WestRock has made assumptions regarding, among other things, the results and impacts of the acquisition of KapStone; the timing of consummating the acquisition of KapStone; economic, competitive and market conditions generally; DISCIPLINED volumes and price levels of purchases by customers; competitive conditions in WestRock s businesses and possible adverse actions of their customers, competitors CAPITAL and suppliers. Further, WestRock s businesses are subject to a number of general risks that would affect any such forward-looking statements. ALLOCATION Such risks and other factors that may impact management's assumptions are more particularly described in our filings with the Securities and Exchange Commission, including in Item OUTSTANDING 1A under the caption "Risk Factors" in our Annual Report on Form 10-K for the year ended September 30, 2017 and our Quarterly Report on Form 10-Q for the EXECUTION quarters ended & December 31, 2017, March 31, 2018 and June 30, The information contained DELIVERY herein speaks as of the date hereof and WestRock does not have or undertake any obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise. 2

3 Creating WestRock January 2015 We are creating a global industry leader in consumer and corrugated packaging, a company with true competitive advantages, including an outstanding organization, a market-focused customer-centric strategy and scale. Corrugated and Consumer Packaging are attractive businesses, where scale and differentiation matter. We offer a set of products, services and scale that can't be offered by any other company. We have the cash flow available to invest for growth on a disciplined basis, and also have the ability to return significant cash to stockholders via dividends and share repurchases.

4 Our vision is to be the premier partner and unrivaled provider of winning solutions to our customers

5 Building a Paper and Packaging Leader Packaging ACQUIRED 2015 ACQUIRED 2016 JOINT VENTURE SPIN OFF ACQUIRED 2017 SOLD ACQUIRED 2017 ACQUIRED 2017 ACQUIRED ACQUIRED ACQUIRED ACQUIRED FUTURE GROWTH 2018 ANNOUNCED JULY

6 WestRock Today $16.3B 1 GLOBAL PAPER AND PACKAGING COMPANY $25B # 1 or # 2 IN ASSETS INVESTED ACROSS >300 OPERATING AND BUSINESS LOCATIONS MARKET POSITIONS HELD IN GROWING CONSUMER AND CORRUGATED PACKAGING MARKETS 55% CORRUGATED PACKAGING NET SALES 1 $16.3B 45% CONSUMER PACKAGING 45,000 EMPLOYEES 6 (1) WestRock forecasted FY18 sales, as presented in the investor presentation filed with the SEC on August 13, 2018

7 Enhanced Scale and Expanded Product Offering COMBINED $16.3B 1 SALES $3.4B 1 SALES CORRUGATED PACKAGING CONSUMER PACKAGING 13.4M TON MILL SYSTEM ACROSS 27 MILLS 3.0M TON MILL SYSTEM ACROSS 4 MILLS NET SALES 1 37% 300 OPERATING AND BUSINESS LOCATIONS 86+ OPERATING AND DISTRIBUTION FACILITIES 63% ~$20B A LEADER IN GROWING CONSUMER AND CORRUGATED PACKAGING SEGMENTS # 5 LARGEST NORTH AMERICAN CONTAINERBOARD PRODUCER 7 (1) WestRock forecasted FY18 sales, as presented in the investor presentation filed with the SEC on August 13, 2018; KapStone sales trailing 12 months as of 6/30/2018

8 WestRock s Global Operating Platform CONVERTING CONVERTING 74 BOX* 31 FOLDING CARTON** 23 SHEET PLANTS 8 LABELS 7 SHEET FEEDERS 7 LITERATURE 7 PREPRINT + PREPRESS 4 CARD 1 TUBE 1 MACHINERY 224 NORTH AMERICA 37 EUROPE 19 FOLDING CARTON 7 LITERATURE 7 LABEL 1 MACHINERY 1 RIGID PACKAGING 1 SHEETING EXTRUSION 1 TUBE MILL 13 CONTAINERBOARD 13 PAPERBOARD 2 SHEETING EXTRUSION CONVERTING 4 BOX 2 PARTITION (RTS)* 7 10 ASIA- PACIFIC CONVERTING 6 FOLDING CARTON 2 BOX* 1 LITERATURE MILL 1 CONTAINERBOARD (INDIA) MILL 1 CONTAINERBOARD (BRAZIL) SOUTH AMERICA 8 *Includes joint venture operations **Includes beverage, folding carton and MPS operations

9 WestRock Today: Part of the Growing Circular Economy 65% / 35% VIRGIN / RECYCLED FIBER MIX 27 CONTAINERBOARD AND PAPERBOARD MILLS >200 OPERATING FACILITIES DIFFERENTIATED PAPER AND PACKAGING SOLUTIONS Provides access to attractive fiber consistent and attractive fiber basket Provides balance and flexibility A leading U.S. recycling business with stable source of high-quality recycled fiber 9.3M ton corrugated packaging mill system 4.2M ton consumer packaging mill system Broadest substrate offering Scale of North American container network serving attractive end-markets North American and European consumer converting Labels, inserts and displays Broadest product portfolio Ability to meet customer needs across enterprise Differentiated packaging machinery solutions Supported by 470 structural and graphic designers 9

10 Packaging Matters Packaging is the only element of the marketing mix that connects with every consumer, independent of how they buy or interact with products and brands. Success drivers: Protection Personalization Experience

11 WestRock Leverages an Unrivaled Set of Capabilities that help our customers face their critical challenges. Industry-leading insights, design and package innovation Full range of innovative fiber-based substrates Comprehensive printing & converting capabilities State-of-the-art packaging systems Manufacturing and supply chain consulting & optimization 11

12 Creative New Uses for Products 12

13 Ames Shovel Box on Demand CHALLENGE Varying product mix Finding the right-sized box for variable orders Packaging products for shipping SOLUTION Box on Demand Reduced storage floor space by half Eliminated waste and lost dollars from obsolete pre-made box inventory Reduced packing labor costs Increased the number of shipments per day SOLVED PAIN POINTS Ship in Own Container (SIOC) Frustration-free Packaging Improved customer experience Flexibility for order variety 100% recyclable 13

14 2018 Industry-Leading Design 31 DESIGN OF THE TIMES MERCHANDISING DISPLAY AWARDS 14

15 Merchandising Displays Largest North American producer of point-of-purchase displays Delivered a successful mass market retail launch for Harry s, which previously had been limited to e-commerce and mail order promotions 15

16 Safely Leading the Way 13 YEARS SAFE Jacksonville, Florida, Graphics Solutions team 16

17 Safely Leading the Way 1000 DAYS WITH NO INJURY Scarborough, Maine 17

18 Safely Leading the Way 1000 DAYS WITH NO INJURY St. Louis, Missouri, Foodservice 18

19

20 My job touches a lot of different areas in the mill. As the IT project manager, I make sure the mill s technology systems are running optimally. This provides the right information so the team can make the best decisions for the production of the high-quality containerboard that goes to our box plants. When we do our job well, our products become corrugated boxes that show up in stores and on doorsteps all over the world. Terrance Brewer Project Manager, IT Fernandina Beach, Florida 20

21 I complete the necessary pre-work and post-work to ensure that the information printed on our pharmaceutical packaging labels is correct. My work ensures we re providing consumers with the proper instructions when they pick up a medication from the shelf. Qian Zhang Technical Support Kunshan, Jiangsu, China 21

22 Making the CONNECTION 22

23 WestRock 2018 and beyond We have created a global industry leader in consumer and corrugated packaging, a company with true competitive advantages, including an outstanding organization, a market-focused customer-centric strategy and scale. Corrugated and Consumer Packaging are attractive businesses, where scale and differentiation matter. We offer a set of products, services and scale that can't be offered by any other company. We have the cash flow available to invest for growth on a disciplined basis, and also have the ability to return significant cash to stockholders via dividends and share repurchases.

24