Trends and Changes in the Forest Products Industry

Transcription

1 Trends and Changes in the Forest Products Industry

2 International Paper The world s leading producer of fiber-based packaging, pulp and paper Our vision is to be among the most successful, sustainable, and responsible companies in the world WHO WE ARE We perform sustainably, transform resources efficiently and strengthen our people and communities where we live and work. WHAT WE DO We transform renewable resources into recyclable products that people depend on every day. HOW WE DO IT We do the right things, in the rights ways, for the right reasons, all of the time. COMPANY OVERVIEW

3 IP Investment Thesis Leveraging Selective Choices Strategy Fiber-based Packaging, Pulp and Paper Advantaged positions in advantaged markets Channels to Market Strong market positions Sell products in markets where they are valued Winning with the right customers and segments Renewable Natural Resources Availability and access to low-cost, sustainable fiber in key manufacturing regions Cost Positions Low-cost asset base Mill footprint on cost curve Disciplined capital investment Sustained low-cost positions through operational excellence and optimization 3

4 Expanded Spread of ROIC 1 Above Cost of Capital Increasing Shareholder Value Global Economic Recession 5-Year Average 9.5% 11.0% WACC: 8% 7.5% 8.1% 9.5% 8.3% 9.3% 9.2% 6.3% 6.5% 4.5% 5.0% ROIC = Operating Earnings before Interest / Average Invested Capital [Equity (adjusted to remove pension related amounts in OCI, net of tax) + Interest-Bearing Debt] 4

5 International Paper 2015 Global Portfolio in Packaging and Paper Positioned in attractive markets with low-cost assets that can generate strong free cash flow and returns that can exceed our cost-of-capital North America North America Recognized Leader in Core Segments: Corrugated Pkg. Uncoated Papers Coated Paperboard $17.2B Net Sales EMEA & Russia $2.6B Net Sales India $1.9B 1 Ilim JV Total Sales Asia 2 $1.3B Net Sales Brazil $1.1B Net Sales $0.2B Net Sales Emerging Markets Build Leading Positions in Fiber-based Packaging & Paper Segments in High-Growth Markets Full-year 2015 net sales data 1 Ilim JV total sales are not consolidated (IP owns 50% of JV) 2 Sun JV sold in October

6 Compelling Strategic Acquisition Strengthening IP Global Pulp Business Gdansk, Pomorskie Grand Prairie, Alberta Franklin, VA New Bern, NC Columbus, MS Pensacola, FL Riegelwood, NC Georgetown, SC Port Wentworth, GA Flint River, GA Weyco Market Pulp Mill Weyco Fluff Pulp Mill IP Fluff Pulp Mill Converting facilities 6

7 Compelling Strategic Acquisition Acquisition Assessment Excellent Strategic Fit Improves Core Pulp Business Returns Greater than Cost of Capital Significant Synergies Compelling Economics and Tax Step Up Quality Assets 7

8 Other Recent Strategic Moves Strengthening the IP Portfolio Containerboard Optimization Announced: 2Q2015 Timing: 2016/2017 Strategic Rationale: Reflects IP s commitment to make our best business even better Project Intent: Improves system flexibility, enhances quality, enables further cost reductions and supports future growth potential (as needed) Investment: ~$300MM Madrid Mill Acquisition/Conversion Announced: 1Q2016 Start-up: 2H2017(E) Strategic Rationale: Strengthens IP s Industrial Packaging business in Europe and takes advantage of integration benefits Project Intent: Convert mill to produce recycled containerboard to enhance the value proposition of the EMEA corrugated packaging business Investment: ~$160MM Exit Asia Manufacturing Consumer Packaging Announced: 3Q2015 Concluded: 4Q2015 Industrial Packaging Announced: 4Q2015 Completion: 2Q2016 Strategic Rationale: Improve IP s earnings and returns by supplying the region with globally competitive products primarily through the Ilim JV and from the U.S. Project Intent: Exit Asia manufacturing for Coated Paperboard and Industrial Packaging Economics: Sun JV: $23MM in cash, $400MM of debt removed from balance sheet Industrial Packaging: $150MM in cash Riegelwood Conversion Announced: 1Q2015 Start-up: 2H2016 Strategic Rationale: Increase IP s capability and capacity to serve customers in the growing global fluff pulp market Project Intent: Reposition assets by converting coated paperboard capacity to fluff pulp Investment: $135MM 8

9 IP Transformation Timeline Transformation Plan Divestitures & Strategic Reinvestment Global Recession IP Achieves Cost of Capital Returns $11B Asset Sales Coated Papers Wood Products Forestland Kraft Paper Chemicals Beverage Pkg. China Sun JV Russia Ilim JV NA Weyco Pkg. Acquisition Brazil VCP Land / Mill Swap China SCA Pkg. Franklin Fluff Pulp Conversion Turkey Olmuksan Pkg. Brazil Grupo Orsa Pkg. NA TIN Acquisition India APPM Acquisition TIN Bldg. Products Sale Valliant PM3 xpedx Spin-Off Madrid mill Acquisition Sun JV & Asia Box Sale Riegelwood Fluff Pulp Conversion 9

10 IP - Moving Forward 10

11 Sustaining FORESTS Our entire business depends upon the sustainability of forests. We will continue to lead the world in responsible forest stewardship to ensure healthy and productive forest ecosystems for generations to come. Forest Ecosystem Stewardship Keeping Forestland Forested Maximizing Fiber Recovery & Re-use 11

12 Mega Trends and their impact on our world 12

13 Managing Our Footprint & Handprint Our Footprint Our impact on the planet Our Handprint The good we leave behind One s Fingerprint What one can contribute

14 What Sets IP Apart Sustainability Is In Our DNA Grow. Create. Sustain. 14