BEMIS COMPANY Advancing Innovation Investor Briefing February 2007
Safe Harbor Statement Information included in this presentation, including content relating to the future performance of the Company, is forward-looking and is presented pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. Such content involve risks and uncertainties. Among other things, general economic conditions, competitive conditions in our markets, regional governmental regulations, and the cost and availability of raw materials, may cause the results to differ materially from those set forth in this presentation. These and other risks, uncertainties and assumptions are identified from time to time in our filings with the Securities and Exchange Commission including our most recent Annual Report on Form 10-K and our quarterly reports on Form 10-Q. 2 02/07
Bemis Company, Inc. $3.6 billion net sales in 2006 $3.0 billion Flexible Packaging $0.6 billion Pressure Sensitive Materials 55 plants in 10 countries 2006 Achievements Completed restructuring program, closing 6 plants GAAP Earnings per share increased 9% Excluding restructuring, EPS increased 18% Cash from operations was a record $349 million 3 02/07
4 02/07 Broad Market Participation 25% 20% 15% Food packaging 55% Non-food packaging 27% Pressure sensitive materials 18% 10% 5% 0% Meat and cheese Confectionery & snack Dairy & liquids Multipacks Bakery Dry foods Other food Health & hygiene Medical & pharmaceutical Industrial Other non-food Label products Graphic products Technical products % of Net Sales
Diversified, Defensive Markets Food & Consumer products 75% Food & Consumer products 75% Other 25% Top 10 customers represent only 26% of sales Top 50 customers represent about 44% of sales 5 02/07
Top Bemis Accounts Boston Scientific Colgate ConAgra Doane Pet Care General Mills Grampian Great Lakes Cheese Hershey Foods Hormel Foods Johnson & Johnson Kellogg s Kimberly-Clark Kraft Malt-O-Meal Master Foods (Mars) Nestle Owens-Corning Fiberglas Pepsico Procter & Gamble Sara Lee SC Johnson Smithfield Foods Sadia Tyson Foods Unilever 6 02/07 World-class Customer Base
Global Manufacturing Presence Bemis Elsham Lincolnshire, UK Perfecseal Londonderry, Northern Ireland MACtac Genk, Belgium Bemis Valkeakoski Valkeakoski, Finland Bemis Monceau Charleroi, Belgium 31 Mfg Locations in U.S. Perfecseal Puerto Rico CSP Swansea Swansea, Wales Bemis Clysar Le Trait, France Europe and Asia Locations Bemis Asia Pacific Selangor, Malaysia Bolsas Bemis & MACtac Mexico San Luis Potosi, Mexico Bemis Flexible Mexico Tultitlan, Mexico Rondonópolis, Brazil Cambé, Brazil Londrina, Brazil Curitiba, Brazil Bemis Dixie Toga Parnamirim, Brazil Locations Votorantim, Brazil São Paulo, Brazil Guarulhos, Brazil Buenos Aires, Argentina MACtac Soignies, Belgium 10-28-06 7 02/07
Bemis Growth Strategy Through technology, Bemis will develop proprietary processes and unique material combinations to create products with characteristics that are not available from our competitors and provide superior performance for our customers. 8 02/07
A Proven Formula for Excellence Technology & Innovation Customer Focus Value Manufacturing Excellence 9 02/07
Technology = Material Science Bemis engineers have unique knowledge of and expertise in the chemical properties of specialty polymer resins and adhesives Identification of practical applications for newly developed resins, blends and adhesives Proprietary manufacturing processes create unique material characteristics State-of-the-art R&D lab offers cost effective, science-oriented solutions to customer packaging challenges 10 02/07
Innovative Solutions Material Science Technologies Manufacturing Process Technologies New Solutions Packaging Feature Technologies 11 02/07
12 02/07 EZ Peel Product Application
Multilayer Film Sandwich Polyester tie Aluminum Oxide Coated Polyester tie Polypropylene EZ Peel Polypropylene Polyester Provides a heat resistant layer for running on the packaging equipment; Tie Bonds two different materials together and withstands the retort process; Aluminum Oxide coated Polyester Provides oxygen barrier and extends product shelf life; EZ Peel Patented system; Operates independent of packaging machine conditions; Provides consistent seals and peelability; Polypropylene Provides seal integrity (seals to the cup). 13 02/07
14 02/07 EZ Peel Product Extensions
Multilayer Film Sandwich Polyester tie Polyethylene tie Polyester EZ Peel Polyester Polyester Provides a heat resistant layer for running on the packaging equipment; Tie Bonds two different materials together; Polyethylene Provides bulk and strength EZ Peel Patented system; Operates independent of packaging machine conditions; Provides consistent seals and peelability; Polyester Provides seal integrity (seals to the tray). 15 02/07
Focus on Cost Management Productivity improvement is Key! Engineering teams focused on reducing waste Measurably improve output on existing equipment Plant safety Challenge employees to beat industry safety standards, reducing lost time and health care costs, improving morale and quality Purchasing Use global purchasing power to reduce costs and increase supplier competition Logistics Improve production processes and capacity utilization to eliminate work-in-process shipping Reduce raw materials and finished goods shipping costs 16 02/07
Long-term Financial Objectives Target average annual sales growth of 6% - 8% EPS target growth rate of 10%+ Strong growth in net cash flow from operations of 10%+ 17 02/07
Net Sales 10 Year Net Sales Growth = 8.0% $3,474 $3,639 $ in million $1,690 $1,918 $1,889 $1,962 $2,164 $2,293 $2,369 $2,635 $2,834 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 18 02/07
Earnings Per Share 10 Year EPS Growth* = 6.6% $1.98-$2.08 $1.54 $1.67 $1.46** $1.51 $1.83** $0.97 $0.94 $0.95 $1.09 $1.22 $1.32 19 02/07 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Est. 2007 * EPS growth excludes the impact of restructuring charges ** 2003 EPS was $1.37 plus approximately $0.09 restructuring added back. 2006 EPS was $1.65 plus $0.19 restructuring added back.
Cash Flow from Operations 10 Year Operating Cash Flow Growth =9.9% $235 $186 $210 $318 $287 $311 $272 $277 $349 $136 $144 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 20 02/07
Priorities for Cash Flow Capital investments Dividends Acquisitions Opportunistic share repurchases Authorized to repurchase 4.2 million shares 21 02/07
Capital Structure Strong balance sheet Investing in high quality fixed assets Target debt to total capital ratio of 30 to 40 percent Debt to total capital 43% 25% 31% 33% 32% 37% 41% 31% 27% 36% 33% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 22 02/07
Capital Expenditures Capital Expenditures totaled $159 million in 2006 Investing in new technologies Expanding capacity in high demand areas i.e. shrink bags; medical device packaging plants; North American, South American & European film capacity, high performance adhesive Capex D&A 200 180 160 140 120 100 80 60 40 20 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Est. 2007 23 02/07
Dividend History Bemis has paid common stock dividends since 1922 and has increased the dividend for 24 consecutive years Dividend increased by 11% in 2007 to $0.84 per share Target payout ratio is range of 35% to 45% $0.36 $0.40 $0.44 $0.46 $0.48 $0.50 $0.52 $0.56 $0.64 $0.72 $0.76 $0.84 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 24 02/07
Acquisition Track Record ($ in millions) Sales at Year Acquired Business Name Manufacturing Locations Acquisition 1990 Milprint, Inc. USA $ 70 1993 Princeton Pkg Bakery USA $ 70 1994 Hargro Medical Packaging USA $ 20 1994 Fitchburg Coated Products USA $ 80 1995 Banner Packaging USA $ 60 1996 Perfecseal USA, Northern Ireland $ 65 1997 Paramount Pkg USA $ 130 1997 GPOA catalog mkt USA $ 6 1998 Itap Bemis Ltda joint venture Brazil 1998 Techy Group Belgium $ 10 2000 Viskase shrink USA, Wales, Brazil $ 150 2000 Arrow USA $ 25 2000 Kanzaki USA $ 75 2001 Duralam USA $ 55 2002 Walki Films Finland, France $ 120 2002 Dupont Clysar USA, France $ 100 2003 Multi-Fix Belgium $ 15 2004 Masterpak Mexico $ 35 2005 Dixie Toga Brazil, Argentina $ 325+ 25 02/07
Future Growth Drivers Flexible Packaging Meat & cheese Multipacks Health and hygiene Medical and pharmaceutical Pressure Sensitive Materials Graphic products Technical products 26 02/07
Meat & Cheese Meal kits Single serve, snack sizes Easy open/reclosable Case ready Extended shelf life 27 02/07
Growing core markets for bottled water Expanding package to other applications Multipack 28 02/07
Health & Hygiene Consumer convenience focus Corrugated reduction Blister-pack replacement 29 02/07
Medical & Pharmaceutical Population aging Medical technological advances Growing demand for convenience packaging 30 02/07
Graphics Markets Global economic growth increases advertising Niche products meet customer needs for durability and ease of application 31 02/07
Technical Markets Mechanical fastener replacement Niche products offer custom solutions 32 02/07
Advancing Innovation Leading market positions in core markets Growing market positions in new markets and geographic regions Investing in high growth product technology Innovating our marketplace with better solutions for our customers Delivering value to our shareholders 33 02/07
BEMIS COMPANY, INC Advancing Innovation