fastmarkets risi international containerboard … · pak on demand™ pouch system”, and...

© 2 0 1 9 W E S T R O C K C O M P A N Y . A L L R I G H T S R E S E R V E D .

FASTMARKETS RISIINTERNATIONAL CONTAINERBOARD CONFERENCE

November 14, 2019

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 “Successfully Integrating KapStone”, “WestRock’s Fiber-Based Packaging is Replacing Plastic”, “Sustainable Packaging Solutions: Pak On Demand™ Pouch System”, and “Award-Winning Sustainable Packaging Solution: First Alert Home Safety Solutions” that give guidance or estimates for future periods as well as statements regarding, among other things, that (1) we expect to realize more than $200 million in run-rate synergies from the KapStone acquisition by the end of fiscal 2021; (2) we expect that the North Charleston mill reconfiguration will reduce annual linerboard capacity by 288,000 tons and our annual costs by approximately $40 million; (3) we estimate ongoing maintenance and return generating capital investments at KapStone of approximately $100 million per year; (4) the current addressable market for plastic replacement is estimated to exceed $5 billion; and (5) statements we make with respect to the potential benefits of the Pak On Demand™ pouch system on slide 13 and the First Alert Home Safety Solution on slide 14.

Forward-looking statements are based on our current expectations, beliefs, plans or forecasts and are typically identified by words or phrases such as "may," "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. WestRock’s businesses are subject to a number of general risks that would affect any such forward-looking statements, including, among others, decreases in demand for their products; increases in energy, raw materials, shipping and capital equipment costs; reduced supply of raw materials; fluctuations in selling prices and volumes; intense competition; the potential loss of certain customers; the scope, costs, timing and impact of any restructuring of our operations and corporate and tax structure; the occurrence of a natural disaster, such as hurricanes or other unanticipated problems, such as labor difficulties, equipment failure or unscheduled maintenance and repair; our desire or ability to continue to repurchase our stock; risks associated with integrating KapStone’s operations into our operations and our ability to realize anticipated synergies and productivity improvements; risks associated with completing our strategic capital projects on the anticipated timelines and realizing our anticipated EBITDA improvements; and adverse changes in general market and industry conditions. 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 1A under the caption "Risk Factors" in our Annual Report on Form 10-K for the year ended September 30, 2018. The information contained 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.

FORWARD LOOKING STATEMENTS

2

Approx. $18 billion

sales(1)

50,000 teammates

300 operations

Americas, Europe and Asia-Pacific

#1 North America Consumer Paperboard

#2 North America Folding Carton

#1 North America Merchandising Displays

#2 Beverage Multi-Pack Packaging

#2 North America Containerboard

#2 North America Corrugated Packaging

#2 Brazil Corrugated Packaging

*Includes North America, Brazil and India; pie pieces not to

(1) WestRock FY2019 net sales.

Source of rankings: Company and market research. Rankings are based on capacity

WESTROCK HAS BUILT AN $18 BILLION GLOBAL PAPER AND PACKAGING LEADER

3 © 2019 WESTROCK COMPANY. ALL RIGHTS RESERVED.

DIFFERENTIATED

PAPER AND PACKAGING

SOLUTIONS

Broadest product portfolio

Ability to meet customer needs across enterprise

Differentiated packaging machinery solutions

Supported by hundreds of structural and graphic designers

300 OPERATING AND

BUSINESS LOCATIONS

Scale of North American container network serving attractive end-markets

North American and European consumer converting assets

Broad portfolio of label, insert and display solutions

31CONTAINERBOARD AND

PAPERBOARD MILLS

16.4 million tons of containerboard and paperboard capacity

Broadest substrate offering

67% | 33%VIRGIN / RECYCLED

FIBER MIX

Virgin / recycled mix provides balance and flexibility

A leading U.S. recycler with stable source of high-quality recycled fiber


WESTROCK: THE CIRCULAR ECONOMY IN ACTION

COMBINED

13.4MTON MILL SYSTEM

ACROSS 27 MILLS 3.0MTON MILL SYSTEM

ACROSS 4 MILLS

300OPERATING AND

BUSINESS LOCATIONS 86+OPERATING AND

DISTRIBUTION FACILITIES

A LEADER IN GROWING CONSUMER

AND CORRUGATED

PACKAGING SEGMENTS

#5LARGEST NORTH

AMERICAN

CONTAINERBOARD

PRODUCER

KAPSTONE ACQUISITION ENHANCES SCALE AND EXPANDS PRODUCT OFFERING

37%

63%

CORRUGATED

PACKAGING

CONSUMER

PACKAGING

© 2019 WESTROCK COMPANY. ALL RIGHTS RESERVED. 5

KAPSTONE FACILITIES FILL OUT WESTROCK’S PRESENCE IN NORTH AMERICA

KapStone enhances WestRock’s

West Coast footprint improving

ability to better serve national

customers

WestRock Containerboard Mills

Former KapStone Containerboard Mills

WestRock Corrugated Converting

Former KapStone Corrugated Converting


KAPSTONE FURTHER EXPANDS OUR COMPREHENSIVE RANGE OF DIFFERENTIATED CORRUGATED & KRAFT PRODUCTS

WHITE TOP

LINER-BOARD

RECYCLED LINERBOARD /

MEDIUM

SEMI-CHEMICAL

MEDIUM

KRAFT PAPER

ENGINEERED TO MEET DEMANDING END-USE REQUIREMENTS…

…WITH TARGETED VALUE-ADDED INNOVATION

INDUSTRIAL PIZZA PRODUCE HIGH GRAPHICS WHITE TOP SHIPPING

TECHNIFLUTE BOX ON DEMANDAUTOMATED PACKAGING

SYSTEMSMULTI-WALL KRAFTPAK DURASORB

VIRGIN LINERBOARD/

MEDIUM


SUCCESSFULLY INTEGRATING KAPSTONE

8

SG&A reduction largely complete

Sourcing synergies realized

IT application integration underway

Consolidated four converting plants

Announced North Charleston mill reconfiguration

– Expect to reduce annual linerboard capacity by 288,000 tons

– Expect to reduce annual costs by approx. $40 million

Estimated ongoing maintenance and return generating

capital investments of approximately $100 million per

year

KAPSTONE INTEGRATION UPDATE

Expect to realize more than $200 million in

run-rate synergies by the end of FY21

$ in millions

$90

$160

$200+

FY19 FY20E FY21E

© 2019 WESTROCK COMPANY. ALL RIGHTS RESERVED.

OUR VISION

OUR VISION IS

TO BE THE PREMIER PARTNER AND

UNRIVALED PROVIDER

OF WINNING SOLUTIONS

TO OUR CUSTOMERS.


OUR VALUE PROPOSITION

WestRock creates customized, value-added solutions using the world’s most

comprehensive portfolio of sustainable paper and packaging products.

We add value to our customers by helping them:

We solve our customers’ most challenging problems.


INDUSTRY’S MOST COMPREHENSIVE PRODUCT PORTFOLIO DRIVING GROWTH

11

BROADEST PORTFOLIO OF DIFFERENTIATED PAPER GRADES AND PACKAGING SOLUTIONS

SBS URBCRBCNK® WHITE TOP LINERBOARD

RECYCLED LINERBOARD/

MEDIUM

SEMI-CHEMICAL

MEDIUM

KRAFT PAPER

VIRGIN LINERBOARD/

MEDIUM

80

100

120

140

160

FY16 FY17 FY18 FY19

NU

MB

ER

OF

C

US

TO

ME

RS

$4.0

$5.0

$6.0

$7.0

FY16 FY17 FY18 FY19

SA

LE

S

(BIL

LIO

NS

)

CUSTOMERS BUYING MORE THAN $1 MILLION FROM EACH SEGMENT

102

152

NET SALES TO CUSTOMERS BUYING MORE THAN $1 MILLION FROM EACH SEGMENT

$4.7

$7.3


WESTROCK’S FIBER-BASED PACKAGING REPLACING PLASTIC

$50 million $10 million$20 million $20 million

ANNUAL RUN-RATE OF INCREMENTAL SALES

• Achieved more than $100 million in annual run-rate sales since July 2018 with our consumer, corrugated and machinery

solutions

• Current addressable market estimated to exceed $5 billion and is expanding across multiple end markets as consumers

demand more sustainable packaging

FOOD & FOODSERVICE BEVERAGE

RETAIL & E-COMMERCE

CONSUMER & HEALTHCARE

12© 2019 WESTROCK COMPANY. ALL RIGHTS RESERVED.

SUSTAINABLE PACKAGING SOLUTIONSPAK ON DEMAND™ POUCH SYSTEM

• Eliminates unnecessary void fill

• Reduces DIM weight and shipping

charges through right-size package

• Increases pack efficiency and decreases

labor costs

• Increases efficiency to keep up with

orders

• Improves consumer experience

through sustainable packaging solution

GROW YOUR

SALES

• Uses less fiber due to right-size

packaging

• Creates a highly protective package

that is 100% recyclable

IMPROVE YOUR

SUSTAINABILITY

• Increases productivity through

innovative automation solution

• Creates custom pouches through 3D

scan of products on a conveyor

MINIMIZE YOUR

RISK

THE SOLUTIONAn innovative, sustainable solution that creates custom, right-sized pouches and seals the

package for shipments. Also provides a recyclable paperboard solution to replace plastic.

LOWER YOUR

TOTAL COST

13

Plastic bubble mailers Pak On Demand pouches


AWARD-WINNING SUSTAINABLE PACKAGING SOLUTIONFIRST ALERT HOME SAFETY SOLUTIONS

• Consolidated SKUs through common card

sizes and blisters

• Use of blister packaging streamlines the

filling and sealing processes

• Improves consumer experience through a

sustainable packaging solution and easier-

to-open package

• Heightened product visibility, protection

and security

GROW YOUR

SALES

• Reduced plastic consumption and

overall package weight with

NatraLock® paperboard

• Minimize waste and improve efficiency

through use of WestRock’s machinery

IMPROVE YOUR

SUSTAINABILITY

• Eliminated any tooling change-over

time between SKUs

• Kept the same overall footprint to

minimize the impact on existing

secondary packaging & SRPs

MINIMIZE YOUR

RISK

THE SOLUTIONReplacing a fully enclosed plastic clamshell package with a

more sustainable, efficient and economical blister and

carded solution.

The redesigned package is more aligned with First Alert’s

sustainability goals, streamlines the manufacturing and

fulfillment processes and is easier for consumers to open.

LOWER YOUR TOTAL

COST

Before After


PROVIDING AWARD-WINNING SOLUTIONS WESTROCK WINS 13 AWARDS AT 2019 NORTH AMERICAN PAPERBOARD PACKAGING COUNCIL AWARDS

SUSTAINABILITY AWARD OF THE YEAR

GOLD AWARDS

EXCELLENCE AWARDS

Representing WestRock: Pat Shields, Wayne Cameron, Cullen

Rosenbrien, Beth Geiger, and John O’Neal


PROVIDING AWARD-WINNING SOLUTIONS WESTROCK HONORED FOR PAPERBOARD AND DESIGN BY THE EUROPEAN CARTON MAKERS ASSOCIATION

Alexander Coles concept design for

alcoholic beverage packaging.

Austrian honey producer,

BienenFink used WestRock’s

CustomKote® paperboard to convey

their brand’s sustainability.

GOLD AWARD PROFESSIONAL YOUNG DESIGNER AWARD


OUR VALUES + BEHAVIORS

VALUES: GUIDES US BEHAVIORS: SHAPES HOW WE WORK


SAFETY EXCELLENCE

100%

SAFE!


© 2 0 1 9 W E S T R O C K C O M P A N Y . A L L R I G H T S R E S E R V E D .

FASTMARKETS RISIINTERNATIONAL CONTAINERBOARD CONFERENCE

November 14, 2019

fastmarkets risi international containerboard … · pak on demand™ pouch system”, and...

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