Tredegar Corporation · NYSE:TG
Tredegar — Q4 2022 Earnings Presentation
33 slides from Tredegar's earnings presentation, Apr 4, 2023
Slide 1: 2022 Fourth Quarter Financial Results
2022 Fourth Quarter Financial Results April 4, 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements 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
Slide 3: 2022 Fourth Quarter and Full Year Results
Tredegar Corporation 2022 Fourth Quarter and Full Year Results (in millions, except per share data) 4Q 2022 4Q 2021 2022 2021 Net Sales1 $182.8 $213.3 $903.6 $798.2 Net Income from Ongoing Operations2 $0.5 $6.2 $39.4 $39.6 Diluted EPS from Ongoing Operations2 $0.02 $0.18 $1.17 $1.18 1 See Note 1 in
Slide 4: Aluminum Extrusions (Bonnell Aluminum)
Aluminum Extrusions (Bonnell Aluminum) 2022 Fourth Quarter and Full Year Results Fourth Quarter Performance Full Year Performance (in millions) 4Q 22 4Q 21 (in millions) 2022 2021 Volume (lbs.) 37.2 44.6 (17)% Volume (lbs.) 174.7 183.4 (5)% Net Sales1 $127.8 $144.8 (12)% Net Sales1 $637.9 $539.3 18%
Slide 5: PE Films (Surface Protection, Polyethylene Overwrap Films & Films for Other Markets)
PE Films (Surface Protection, Polyethylene Overwrap Films & Films for Other Markets) 2022 Fourth Quarter and Full Year Results Fourth Quarter Performance Full Year Performance (in millions) 4Q 22 4Q 21 (in millions) 2022 2021 Volume (lbs.) 5.6 9.4 (40)% Volume (lbs.) 32.9 39.4 (17)% Net Sales1 $15.0
Slide 6: PE Films: Customer Product Transitions and Other Factors in Surface Protection
PE Films Customer Product Transitions and Other Factors in Surface Protection The Surface Protection component of PE Films supports manufacturers of optical and other specialty substrates used in flat panel display products. These films are primarily used by customers to protect components of displa
Slide 7: Flexible Packaging Films (Terphane)
Flexible Packaging Films (Terphane) 2022 Fourth Quarter and Full Year Results Fourth Quarter Performance Full Year Performance (in millions) 4Q 22 4Q 21 (in millions) 2022 2021 Volume (lbs.) 24.5 25.9 (6)% Volume (lbs.) 106.7 104.6 2% Net Sales1 $40.0 $37.4 7% Net Sales1 $168.1 $140.0 20% Ongoing Op
Slide 8: 2022 Financial Highlights
Tredegar Corporation 2022 Financial Highlights ($ in millions) Cash Flows from Operations 1 $(20.8) (includes $50M special contribution to the pension plan) Capital Expenditures $36.9 Dividends Paid2 $17.0 Net Debt (Cash)3 $117.8 Net leverage ratio4 1.39x 1. See Tredegar’s Form 10-K for the year end
Slide 9: Appendix
‘Tredegar an < ) Appendix
Slide 10: Major Product Groups, Primary End Markets, Customers and Competitors
Major Product Groups Primary End Markets Customers Competitors Aluminum Extrusions Custom designed, fabricated and Building and Construction: commercial windows & Glazing contractors and Hydro Extrusions North finished aluminum extrusions; value- doors, curtain walls, storefronts & entrances, automa
Slide 11: Tredegar's Global Presence
Tredegar’s Global Presence 10
Slide 12: Tredegar at a Glance
Tredegar at a Glance Business Strengths Aluminum Extrusions ➢ Industry-leading position in non-residential building and construction and value-added OEM components in North American extrusions market ➢ Market-focused manufacturing operations (including aluminum log casting capabilities) and world-cl
Slide 13: Aluminum Extrusions Business Profile
Aluminum Extrusions Business Profile Key Market Drivers • Strong demand for finished products, including anodized, $638 million LTM Net Sales1 painted products and fabricated components 9% • Growing aluminum content in vehicles, driven by CAFE Electrical & (corporate average fuel economy) standards
Slide 14: Building & Construction
Aluminum Extrusions Index of North American Industry Volume for Bonnell’s Key Markets 1.6 14.0 1.4 12.0 Auto/Light Trucks & Specialty 1.2 10.0 Building & Construction 1.0 8.0 0.8 6.0 0.6 4.0 0.4 0.2 2.0 - - 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 200
Slide 15: Key Markets - B&C/Automotive/Specialty
Aluminum Extrusions Key Markets - B&C/Automotive/Specialty 14
Slide 16: Automotive Aluminum Extrusion Applications
Aluminum Extrusions Automotive Aluminum Extrusion Applications ➢ Crash management systems – beams and mounting plates, crush cans ➢ Roof rails ➢ Electrical battery trays ➢ Air conditioner tube connectors Aluminum Overview Film Products Financials 15 Extrusions
Slide 17: Aluminum Extrusions Annual Historical Financials
Aluminum Extrusions Annual Historical Financials 2 Net Sales1 ($ in millions) EBITDA from Ongoing Ops ($ in millions) 638 $80 66 66 67 $600 573 539 530 55 56 456 $40 $300 $0 $0 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 Volume (lbs. in millions) Capital Expenditures ($ in millions) 300 $30 24
Slide 18: PE Films Business Profile
PE Films Business Profile Key Growth Drivers $98 million LTM Net Sales1 • “Internet of Things” leading to greater connectivity and more displays and semiconductors 30% Overwrap • Thinner devices with increasing resolution and larger Packaging screen size • Demographic and workplace trends shifting t
Slide 19: End-Use Markets for Surface Protection Products
PE Films End-Use Markets for Surface Protection Products 18
Slide 20: Surface Protection Overview
PE Films Surface Protection Overview Typical LCD Optical Stack (examples: TVs, Smartphones) 19
Slide 21: PE Films Annual Historical Financials
PE Films Annual Historical Financials Net Sales1 ($ in millions) EBITDA from Ongoing Ops ($ in millions) $200 45 41 139 $40 $150 128 134 32 119 28 98 $100 $20 12 $50 $0 $0 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 Volume (lbs. in millions) Capital Expenditures ($ in millions) 44 45 $10 9 40
Slide 22: Flexible Packaging Films Business Profile
Flexible Packaging Films Business Profile $168 million LTM Net Sales1 Key Growth Drivers • Growing end-user demand for convenience foods, lighter packaging and branded consumer 29% North products America & Other • Packaging innovation driving demand for flexible packaging Customers • Global and regi
Slide 23: Flexible Packaging Films End-Use and Value-Add Products
Flexible Packaging Films End-Use and Value-Add Products 22
Slide 24: Flexible Packaging Films Annual Historical Financials
Flexible Packaging Films Annual Historical Financials Net Sales1 ($ in millions) EBITDA from Ongoing Ops ($ in millions) $200 $40 168 32 31 134 135 140 $30 27 124 $100 $20 15 11 $10 $0 $0 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 Volume (lbs. in millions) Capital Expenditures ($ in millions)
Slide 25: Tredegar Annual Historical Financials
Tredegar Corporation Annual Historical Financials 1 2 Net Sales ($ in millions) Consolidated EBITDA from Ongoing Ops ($ in millions) 904 $150 $900 825 797 798 730 92 96 $100 84 81 85 $600 $300 $50 $0 $0 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 Earnings Per Share from Ongoing Ops3 Capital Ex
Slide 26: Capital Expenditures – History & Projections
Tredegar Corporation Capital Expenditures – History & Projections ($ in millions) 2023 2018 2019 2020 2021 2022 Projection2 Aluminum Extrusions $13.0 $17.9 $10.3 $18.9 $23.7 $26 PE Films1 2.5 8.6 6.0 3.0 3.3 4 Flexible Packaging 5.4 8.9 5.0 5.6 8.2 8 Corporate 0.4 0.2 0.2 (0.1) 1.7 0 Total $21.3 $35
Slide 27: Quarterly Cash Dividend
Tredegar Corporation Quarterly Cash Dividend ($) .13 .12 .11 .09 .07 .06 .045 .04 1996 -- 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Tredegar announced an increase to its quarterly dividend (to 0.13 per share) on August 4, 2022. Special dividends of $5.97 per share in 2020 and
Slide 28: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations
Slide 29: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations On October 30, 2020, the Company completed the sale of its personal care films business ("Personal Care Films"), w hich w as part of its PE Films segment. The transaction excluded the packaging film lines and related operations located at the Pottsville, Pennsylvania
Slide 30: GAAP to Non-GAAP Reconciliations: Summary Financial Information
GAAP to Non-GAAP Reconciliations 2. Summary Financial Information Year Ended Decem ber 31, (in millio ns) 2018 2019 2020 2021 2022 Income and expense relating to ongoing operations: Total EBITDA for segments (a) $ 109.0 $ 121.5 $ 130.8 $ 115.3 $ 106.2 Pension expense (c) (10.4) (9.6) (14.6) (14.1) -
Slide 31: Summary Financial Information (continued)
GAAP to Non-GAAP Reconciliations 2. Summary Financial Information (continued) Notes: (a) Tredegar’s presentation of segment earnings before interest, taxes, depreciation and amortization from ongoing operations (“EBITDA") from ongoing operations aligns w ith key metrics used by the Chief Operating D
Slide 32: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations 4. The after-tax effects of losses associated w ith plant shutdow ns, asset impairments and restructurings, gains or losses from the sale of assets, goodw ill impairment charges, net periodic benefit cost for the frozen defined benefit pension plan and other items (w
Slide 33: GAAP to Non-GAAP Reconciliations: Net Debt
GAAP to Non-GAAP Reconciliations 5. Net debt is a non-GAAP financial measure that is not intended to represent debt as defined by GAAP, but is utilized by management in evaluating financial leverage and equity valuation. A calculation of net debt is show n below : (In millions) December 31, December