meadwestvaco 1_16goldmanpresentationfinal
TRANSCRIPT
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Goldman SachsBasic Materials ConferenceMay 17, 2007
John A. Luke, Jr.Chairman & Chief Executive OfficerMeadWestvaco
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Key Points
A Powerful Global Packaging Solutions Company Improving Margins and Earnings
Packaging transformation delivering higher returns
On track to deliver growth in all key metrics in 2007
Focused on critical operating tasks to drive higher sustainable levels of earnings and cash flow
Q2 outlook remains positive
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Strategy Execution Is Improving Operating Results
Total Revenue $6.5 Bil.
Y-O-Y Revenue Growth 6%
ROIC 6.3%
Operating Cash Flow $567 Mil.
2006
C&OP14%
SCD5%
Pack'g53%
Paper28%
C&OP 16%
Pack'g74%
Other3%
SCD7%
Total Revenue $7.6 Bil.
Y-O-Y Revenue Growth 4%
ROIC 2.3%
Operating Cash Flow $462 Mil.
2003
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Personal / FragranceMediaBeverage Healthcare
Digipak System®FridgeMaster®
Duralift™Surepak™
Dosepak™NoC™
2-4% Growth 4-8% Growth2-3% Growth 6-8% Growth
Our Growing Markets & Competitive Platform
Materials Converting Systems Primary Packaging
With End-to-End Packaging Solutions.
Serving Growing Global Markets…
Klearfold®
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Strong Focus on Innovation
Bringing new products to market and enhancing the features of our traditional offerings to better serve customers and create added value for shareholders
Natralock™ Five Star® Nanocool™NoC ™
Our Center for Packaging Innovation is up and running in Raleigh, North Carolina
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Calmar Enhances Our Global Platform & Customer Base
MeadWestvaco & Calmar Locations
• Manufacturing and sales offices worldwide• Strong customer base• New capabilities in China & India
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Pursuing Global Growth Opportunities
We continue to grow globally with our customers and generate new opportunities
• China
• India
• Eastern Europe
• Brazil
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Consumer Packaging Strategic Imperative
Generate Measurable EBIT Improvement in 2007
FutureProfitable
GrowthManufacturing
ProductivityG&A
SavingsGlobal
SourcingTotal Future Improvement
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New Land Management Group – 1.1 Million Acres
• Actively managing 800,000 acres for long-term value
• 600,000 in high value lands that currently or potentially have values above timber:– Conservation
– Recreation
– Emerging development
– Development
• 200,000 for source fiber– Third-party log sales
– Land lease opportunities
• Currently negotiating sale of 300,000 acres
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Strategy for Capturing Sustainable Value
- 600,000 Acres -
Near-TermSmall Tract Sales
Master Plan-East Edisto-
DevelopmentPartnerships
Segment
SmallTract Sales
Entitlements DevelopmentPartnerships
25+ Years
Master Plan
$300 - $400MMPre-tax ProceedsNext 36 Months
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Master Plan East Edisto: 72,000 Contiguous Acres
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Strong Community Endorsement
“MeadWestvaco’s 70,000-acre plan”“This is a roll-up-the-sleeves moment for our region.”
- Charleston Mayor Joe Riley“I think their timing is perfect.”- Dorchester County Council Chairman Larry Hargett
“They have really done some forward thinking.”- Historic Charleston Foundation Director Kitty Robinson
“MeadWestvaco proposal would blend development, conservation”
Charleston, SC
Columbia, SC
Orangeburg, SC
“MeadWestvaco to work with public on land plan”
“It brings certainty to the future.”- SC Nature Conservancy Director Mark Robertson
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Value Maximization Path – 600,000 Acres
• Land Segmentation
• Retail HBU Sales
• Entitlement• Real Estate
Development
Base Case Value EnhancementNext 25+ Years
Total HBU Value
1 x Timberland(after-tax)
2 x plus Timberland (after-tax)
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Land Strategy Milestones
Announce business leader
Execute 300K land auction and sale agreement
Report as separate segment
Accelerate sales of retail tracts
East Edisto planning
Action Status
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Q2 Y-O-Y Improvement Drivers
Backlogs are solid and pricing is firm at the mill businesses
Overall CSG year-over-year operating profit growth driven by Calmar
Slight input cost moderation versus Q1 2007
Early Back-to-School season indications are healthy
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Goldman SachsBasic Materials ConferenceMay 17, 2007