annual meeting - tredegar corporation

ANNUAL

MEETING

2021

Annual Meeting Business Report

John Gottwald

Chairman of the Board

of Directors

2021 Annual Meeting

Agenda

3

• Annual Meeting Business Report

• Introduction and 2020 Highlights

John Steitz, President and Chief Executive Officer

• Tredegar Financial ReportDrew Edwards, Executive Vice President and Chief Financial Officer

• Terphane Business Update

Jose Bosco Silveira, Jr., President – Terphane

• Tredegar Surface Protection Business Update

Bapi DasGupta, President – Tredegar Surface Protection

• Bonnell Aluminum Business Update

Brook Hamilton, President – Bonnell Aluminum

• Questions

Annual Meeting Business Report

John Gottwald

Chairman of the Board

of Directors

Introduction and 2020 Highlights

John Steitz

President and

Chief Executive Officer

2021 Annual Meeting

Forward Looking Statements & Non-GAAP Measures

6

Certain statements contained in this presentation are forward-looking statements. Pursuant to federal

securities regulations, we have set forth cautionary statements relating to those forward-looking

statements in our Annual Report on Form 10-K for the year ended December 31, 2020 and in other

filings with the Securities and Exchange Commission. We urge readers to review and carefully consider

these cautionary statements and the other disclosures we make in our filings with the SEC.

This presentation contains non-GAAP financial measures that are not determined in accordance with

United States GAAP. These non-GAAP financial measures should not be considered in isolation, as an

alternative to, or more meaningful than measures of financial performance determined in accordance

with United States GAAP. A reconciliation of those financial measures to United States GAAP financial

measures is available on the company’s website at www.tredegar.com under “Investors”.

The presentation speaks as of the date thereof. Tredegar is not, and should not be deemed to be,

updating or reaffirming any information contained therein. We do not undertake, and expressly

disclaim any duty, to update any forward-looking statements made in this presentation to reflect any

change in management’s expectations or any change in conditions, assumptions or circumstances on

which such statements are based.

http://www.tredegar.com/

7

2021 Annual Meeting

2020 in Review• Sold Personal Care Films business, resulting in net cash proceeds of ~ $46 million

• Paid a special dividend of $5.97 per share in December 2020

• Generated $22 million contribution margin from new products in Surface Protection

• Doubled EBITDA from ongoing operations in Terphane vs. 2019 in a sustainable manner

• Rebounded in key markets in Bonnell during pandemic; appear to have outperformed the industry

• Drove a safety-oriented culture, with significant gains in Aluminum Extrusions

• Achieved solid cash generation and improved earnings per share (EPS) and EBITDA from ongoing

operations versus 2019:

• EPS from ongoing operations of $1.51¹

• Consolidated EBITDA of $95.8 million¹

• Net cash of $77.8 million, excluding $200 million special dividend¹

¹ Net income from ongoing operations, EPS from ongoing operations, Consolidated EBITDA, and Net Debt are non-GAAP financial measures. More information on these non-GAAP measures, reconciliations to the most comparable GAAP measures and the identification of notable items is available on our website at www.tredegar.com by selecting “Investors.”


Tredegar Financial Report

Drew Edwards

Executive Vice President and

Chief Financial Officer

2019 to 2020 Net Income & EBITDA Bridge for Ongoing Operations¹ ($ Millions Except EPS Data)

9

$47.6

$91.7 $95.8

$50.8

(10.6) 4.0

15.9 (5.0) (0.2)

2019 Net Inc.

Ong. Ops.

($1.42/Sh.)

2019 Consol.

EBITDA Ong.

Ops.

BonL

($55.1 vs.

$65.7)

PE Films

($45.1 vs.

$41.1)

Terphane

($30.6 vs.

$14.7)

Pensions

(-$14.6 vs.

-$9.6)

Corp.

Expenses,

Net

(-$20.5 vs.

-$20.3)

2020 Consol.

EBITDA Ong.

Ops.

2020 Net Inc.

Ong. Ops.

($1.51/Sh.)

Volume down

10.5% plus

higher costs

partially offset

by higher

prices

Volume &

sales up 2.7%

& 4.1% from

higher sales

unrelated to

maskingless

Volume up

7.4% plus net

lower resin

and other

costs

2021 ongoing operations uncertainties: Bonnell recovery from COVID-19-driven downturn; customer product transition in Surface Protection; Brazil stability & anti-dumping duty extensions at Terphane



Debt Net of Cash (“Net Debt”) Trends¹($ Millions)

10

$65.5

$164.1

$115.5

$67.1

$10.6 $7.9

$(5.9)$(28.0)

$122.2

De

c-1

6

Ma

r-17

De

c-1

7

De

c-1

8

De

c-1

9

Ma

r-20

Ju

n-2

0

Se

p-2

0

De

c-2

0

Δ in Net Debt = Net Cash FlowLeverage ratio 2.4x Leverage ratio

1.4x (max

permitted 4.0x)

Controlled 2020 capital expenditures for ongoing operations to $21 in 2020 COVID-19 environment. Capital expenditures in 2021 projected at $35 versus past 5-year average of $28.



Terphane Business Update

Jose Bosco Silveira, Jr.

President, Terphane

Protection withLower Impact

Waste Reduction

Food Protection

Financial highlights Product mix (2020) by net salesCustomer mix (2020) by net sales

Business overview

$135mm NET SALES

(2020)

$31mmEBITDA2

(2020)

51,000 mTSALES VOLUME

(2020)

Highly specialized, high-performance products

Standard44%

Value-Added

56%

Company A9%

Company C7%

Company B7%

Company D5%

Company F4%

Company E5%

Other63%

2STATE-OF-THE-ART

PRODUCTION FACILIT IES

1 Reported EBITDA – U.S. GAAP

Terphane at a glance: market leader in BOPET films with a long track record of product innovation

◼ Sold in Americas under well-recognized Terphane, Sealphane and trademarks

◼ High-performance films provide excellent oxygen, aroma, and water-barrier properties

~70% | 42%BRAZIL | LATAM

MARKET SHARE

108124 134 135

811

15

31

2017 2018 2019 2020

Net sales ($mm) EBITDA ($mm) 1

✓

Leader in specialized bi-oriented polyester (BOPET) film manufacturing for food,

powdered beverage, pet food, and industrial applications

✓Market leading position in Brazil, broader Latin America, and North America

✓

Consistent innovation R&D oriented to market needs and trends and innovation,

with ~15 products introduced each year for the past 7 years✓

Strong focus on Value Added products, with 20% volume growth in 2020

13

19%

Market leading position in Brazil, broader Latin America, and North

America

U.S. & CANADA

OTHER LATAM

BRAZIL

ARGENTINA

EUROPE & ROW27% 31%

5% 6% 5%

64% 56% 56%

7% 6% 5%

5% 5% 3%

Volume Revenue ContributionShaded areas represent the countries

Terphane has a presence in

250+ customersin global and regional food

packaging production and converting

across

25 countries

14

8%

5%4% 4% 4% 4%

3% 3% 3%2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2%

1%

Even as global BOPET utilization has stabilized Terphane continues to

differentiate itself

Source: Wood Mackenzie “World BOPET Film Market Annual Review” issue of May 2020. According to Wood Mackenzie, in most cases the utilization rate of 80%–85% is typically considered as “fully” utilized (capacity is measured at

nominal maximum annual production possible. Terphane is not included in the top 20.

Global BOPET Thin Film

Top 20 Global BOPET Film (Thick & Thin) Players Capacity Share

67%

79%

74%82%

40%

Global industry utilization bottomed out

Global BOPET market remains very fragmented

Jiangsu

Shuangxing

Jiangsu

Sanfangxiang

Group

Mitsubishi

Polyester

Film

Corporation

PolyPlex

Corporation

JBF Rak Jindal

Group

Genzon

Group

Kolon SRF Nan Ya

PlasticsTerphaneToray Uflex SKC Hengli

Petro-

chemical

Billion

Industrial

Indorama /

DuPont

Teijin

Yongsheng

Plastic

Chemicals

Shaoxing

Xiangyu

Zhejiang

Ningbo

Jinyuan

Oben Others

◼ Global capacity utilization stabilized in recent years◼ Develop differentiated products and services to

protect from competitor oversupply

Tailwind: Preserving impact:

60%

70%

80%

90%

100%

0

2,000

4,000

6,000

8,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Utiliz

atio

n

Vo

lum

e (

00

0’s

mT

)Capacity Production Utilization %

15

Accelerating expansion of technology towards smaller carbon footprint

2020Installation of state-of-the-

art Metallizer #3 in Brazil

2022New Metallizer #4 expected

installation and start-up

Packaging solutions that offer a smaller carbon footprint than traditional packaging are Terphane’s top priority. Our developments and investments in

new technologies help lower the environmental impacts of packaging materials, both in the production process and after the product’s use.

Metallized flexible plastic packaging is rapidly replacing traditional aluminum-foil packaging and rigid containers. In both Europe and South America,

this trend is far ahead of the U.S., with leading categories including tomato-based products, powdered milk, soups and coffee, particularly with stand

up pouches.

16

Continued efforts to improve sustainability implemented through 3

main action pillars

Operations

Actions directly related to

decrease the Carbon Footprint

and Environmental Impacts of

Terphane Plants (Brazil and US)

Circular economy

Actions to support recycling and

the increase of the recyclability

of BOPET and

packaging structures utilizing

Terphane products

Products / Solutions

Launch of products with lower

carbon footprint inline with

Brand Owners, Customers,

Consumers and

Government expectations

17

One of the Best Companies

to work for in NY state US

One of the Best Companies to work

for in Brazil

First company in

Brazil to utilize a

returnable plastic

rack system

Long-term creation of new company culture

Successful alignment of incentives and continuous investing in employee development

Creating a new company culture Modernized Human Resources

Successful re-branding Awards and industry leader

Aligning all employees on values of:

1. Sustainable results

2. Ownership

3. Excellence

4. Customer focus

5. Transparency

6. People valuing

Reworked HR goals:

1. Targeted management procurement

2. Utilization of internal & external experts

3. Company-wide communication strategies

4. Gave employees tools to

control their HR experience

HR automation tool kit

2020 Brazilian

Packaging Award

– Joint cooperation

with a customer

Active communication Sustainability

leader

25 press releases

in 2020

Webinars /

technical events /

roadshows

Social media

presence

18

Surface Protection Business Update

Bapi DasGupta

President,

Tredegar Surface Protection

ENABLING YOUR TECHNOLOGY THROUGH OURS

Introduction

21


• Global Technology and Quality Leader of highly specialized films which protect extremely

sensitive surfaces of critical components of Optical Displays, Engineered Surfaces and

specialty healthcare PPE; Key component of Display Supply Chain

• Value Proposition – Improve yields, maximize product performance and ensure pristine

quality during customer manufacturing processes & shipment = $$$ savings to customers +

supply reliability (‘Peace of Mind’)

22www.tredegarsurfaceprotection.com | CONFIDENTIAL

Tredegar Surface ProtectionGlobal Footprint

Corporate Office Sales Offices Plants DistributorsTredegar Surface Protection

1100 Boulders Parkway

Richmond, VA. 23225

(804)330-1000

• Atlanta, GA., USA

• Chicago, IL., USA

• Richmond, VA., USA

• Guangzhou, China

• Taiwan

• South Korea

• Guangzhou, China

• Pottsville, PA, USA

• South Korea

• Japan

• Taiwan

• Chicago, IL, USA

Technical Center

• Richmond, VA, USA

(Plant and Technology Center)

COVID-19 Update

• Extensive Screening, Prevention, Monitoring, Contingency Protocols at all SP facilities

• 14 positive cases since 2020 with no disruption in manufacturing

• Impact to display industry primarily in 1st Half 2020

• Demand for displays increased in 2nd Half 2020 due to greater remote work and needs for greater connectivity

• Currently experiencing supply chain disruptions, particularly freight between U.S. and Asia

• SP films continue to be used in manufacturing of Face Shields for COVID-19 PPE

23


Our #1 Priority

is the Safety of our Employees

Business Update –

Positive Impact of Industry Macros

24


• Internet of Things (IoT)

• Recent Pandemic – consumer lifestyle changes/remote

work – higher usage of displays

• Increasing screen sizes, higher resolution, thinner and flexible

form- factors, higher quality

Displays will continue to be ubiquitous and require higher performance →

Reinforces our Value Proposition

Business Headwinds and Counter Measures

25


Headwinds

• Product substitution at key customer – expect substantial impact to EBITDA

• ($18MM) in 2021 versus 2020

• ($4MM) in 2022 versus 2021

• Industry price pressures and commoditization of

certain segments

• Escalating raw material costs

• COVID-19 related supply chain issues

Counter Measures – Implement Polaris

• Expand customer base: 37% growth in CM from new customers in 2020 versus 2019; $23MM CM since 2017

• Drive innovation: $22MM CM from new products

• Focus on higher margin segments: Sustaining EBITDA margins of 35-40%

• Implement value add pricing

• Drive operational productivity: $17.5MM savings since 2017

• Proactively managing freight and raw material issues

$12MM Increase in EBITDA from On-going Operations Unrelated to Product Transitions in Last Two Years

Financial Performance

26


• Record EBITDA from ongoing operations in

2020 in spite of COVID-19 impact

• Significant progress in executing Polaris

• 11% EBITDA CAGR

• Sustaining EBITDA margin strength

• Q1 2021 will be impacted by product

substitution at large customer

* Industry downturn

18.4

27.529.4 29.8

23.1

37.4

33.4

40.1

43.3

2012 2013 2014 2015 2016 2017 2018 2019 2020

SURFACE PROTECTIONEBITDA from ONGOING OPERATIONS

$ in Millions

* *

Leading via Differentiated New Products

for High Value Applications

27c


PEARL™

UHD TVs

Smart Phones

PEARL PREMIUM™

Next Gen Smart

Phones

8K Displays

JADE™

Foldables

TM

TM

Automotive

Semiconductors

Focused Implementation

of Polaris

28


www.tredegarsurfaceprotection.com

http://www.tredegarsurfaceprotection.com/

Bonnell Aluminum Business Update

Brook Hamilton

President,

Bonnell Aluminum

BONNELL ALUMINUM

BUSINESS UPDATE

SUPERIOR,

FROM EVERY ANGLE.

NEWNAN, GA | CARTHAGE, TN | NILES, MI | ELKHART, IN | CLEARFIELD, UT

ABOUT BONNELL ALUMINUMEXCELLENCE BEYOND EXTRUSION

▪ Leading North American manufacturer of custom fabricated

and finished aluminum extrusions serving the building &

construction, automotive, transportation, consumer durables goods,

electrical, renewable energy, machinery and equipment, and

distribution markets, including 2 branded product lines: Futura

Transitions, TSLOTS by Bonnell Aluminum

▪ Strategic partner and supplier to many high-profile leading industrial

manufacturers

▪ Uniquely positioned within the marketplaces we serve

▪ 1,800 + employees and 5 manufacturing facilities located across

the United States

▪ “Excellence Beyond Extrusion”

Building & Construction

64%

Automotive8%

Specialty Markets

28%

BREAKDOWN BY MARKET(BASED ON 2020 NET SALES)

31

THRIVING IN THE FACE OF ADVERSITYCURRENT ENVIRONMENT

▪ Successfully navigating various hurdles in the current environment:

o Pandemic has led to worker shortages, hampering operational effectiveness

o Supply chain disruptions and trade policies

▪ Our team of leaders, managers and supervisors continuously demonstrating exceptional skills in dealing with

adversity and changing dynamics

▪ Customers continuing to place their trust and support with us, as evidenced by our all-time high backlog

32

OUR “SECRET SAUCE”: OUR CORE BELIEFS AND VALUESBONNELL’S COMPETITIVE ADVANTAGE

Our core beliefs and values are the key driving forces behind Bonnell’s performance

Communication, Safety, Trust, Integrity, Diversity, Respect, Accountability, Celebration

(*): COVID-19

+ =

4.911.8

16.6

27.5

35.640.1

47.0

58.5

65.5 65.7

55.1

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Bonnell AluminumEBITDA from Ongoing Operations

($ million)

33

BONNELL’S JOURNEY TOWARDS ITS BEACONCOMMITTED TO GROWING SHAREHOLDER VALUE

▪ We remain focused on our long-term strategic goals:

o Pursuing top line and margin growth

• 2 new high value-add automotive / EV programs

• Supply major commercial truck manufacturers

• Expanded TSLOTS product line distribution network in the

Midwest

• Focused business development pursuing fabrication

opportunities in specialty markets

o Continuous improvement and best practices

o Supplying value to customers (Velcro)

o Implementing new technologies (Automation, ERP/MES)

34

PROJECTIONS & OPPORTUNITIESCOMMITTED TO GROWING SHAREHOLDER VALUE

▪ Strong economic outlook forecasted through 2022

o Current GDP forecasts: 6.4% (2021), 5.5% (2022)

o Nonresidential construction remains a “watch”

o Bonnell’s market diversification to partially offset potential declines in nonresidential construction

Sources: Wells Fargo, BofA, GSU

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021f 2022f

Real GDP (% annual change)

35

PROJECTIONS & OPPORTUNITIESCOMMITTED TO GROWING SHAREHOLDER VALUE

▪ US government’s proposed infrastructure plan

will benefit demand for products using aluminum

extrusions:

o Building retrofitting, renewable energy

transmission and distribution, EV charging

stations, public transportation, highway and

commercial lighting

▪ Bonnell is a “Critical Infrastructure” manufacturer

36

▪ For over 65 years, Bonnell Aluminum has

been a proven leader in the manufacture of

high-quality extruded aluminum solutions

and value-added services for a wide variety

of markets and applications

▪ We continue to bring a greater perspective

to our customers, expanding our

capabilities to offer them broader solutions

▪ The result is truly innovative solutions

tailor-made to meet the unique needs and

specifications for a growing number of

customers throughout North America

Questions

annual meeting - tredegar corporation

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