ANNUAL MEETING 2018
ANNUAL
MEETING
2018
2018 Annual Meeting
Forward Looking Statements & Non-GAAP Measures
2
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, 2017, in our Quarterly
Report on Form 10-Q for the quarter ended March 31, 2018 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 included under “Supplemental Information” in this presentation and 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.
2018 Annual Meeting
Agenda
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• Tredegar Financial Report
Drew Edwards, Vice President and Chief Financial Officer
• Update on Surface Protection
Bapi DasGupta, President Surface Protection
• Update on Personal Care
Steve Prince, President Personal Care
• Concluding Remarks
John Gottwald, President and Chief Executive Officer
• Questions
Tredegar Financial Report
Drew Edwards
Vice President and Chief Financial Officer
2018 Annual MeetingBridge of Tredegar First Quarter 2017 to 2018 EPS from Ongoing Operations
5
($ Millions Except EPS Data)
$0.18
$0.26
$0.39
0.09 0.03 0.01 (0.05) 0.04
0.09
Q1-17 EPS
Ongoing
Ops.
PE Films
(OP ↑ $5.0)
Terphane
Operations
(OP ↑ $1.5)
Bonnell
(OP ↑ $0.4)
Corporate &
Interest, Net
Sub-total
Q1-18 EPS
Ongoing
Ops.
Terphane
Lower D&A
from Q4-17
Impairment
(OP ↑ $2.3)
Effective
Income Tax
Rate (22.1%
vs. 39.2%)
Q1-18 EPS
Ongoing
Ops.
2018 Annual Meeting
Tredegar EPS from Ongoing Operations Since 2012
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$1.20 $1.15 $1.13 $1.01
$0.69 $0.91 $0.99
$0.04 $0.09
$1.12
2012 2013 2014 2015 2016 2017 TTM Mar-18
Impact of Δ in US Tax Law
Impact of Lower Depreciation & Amortization from Terphane Asset Impairment
EPS from Ongoing Operations Before Impacts of Terphane Impairment & Δ in US Tax Law
2018 Annual Meeting
Tredegar Debt, Net of Cash (“Net Debt”)
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($ Millions)
$87.6
$59.8 $67.0 $65.5
$164.1
$115.5 $104.9
Jun-15 Dec-15 Mar-16 Dec-16 Mar-17 Dec-17 Mar-18
Δ in Net Debt = Net Cash Flow
Surface Protection
Bapi DasGupta
President Surface Protection
2018 Annual Meeting
Surface Protection Introduction
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• Leading provider of highly specialized films used to protect extremely
sensitive surfaces of critical components, including optical films and
specialty substrates in display devices (TVs, tablets, phones, etc.)
• Value Proposition – Improve yields and ensure pristine quality during
customer manufacturing processes & shipment = $$$ savings to customers +
supply reliability
Technology and Quality Leader in Industry
2018 Annual Meeting
Surface Protection Financial Performance
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• Display industry = $185 billion;
Projected 5-Year CAGR = 4-5%*;
Industry is cyclical
• Surface Protection 10 year sales
CAGR in line with industry at 6%
with record operating profit in
2017
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
SURFACE PROTECTION OPERATING PROFIT HISTORY
*Source: IHS Display Long Term Demand Forecast Tracker – Q3 2017
2018 Annual Meeting
Surface Protection Threats, Challenges and Countermeasures
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Risks
• Product substitution ($5 - $10
million operating profit
exposure)
• Customer concentration
• Electronics industry
cyclicality and pricing
pressure
Proactively addressing threats & challenges
Countermeasures
• Customer diversification
• # 1 business priority
• Value-added new products
• Continuous improvement in
quality for higher
performance devices
2018 Annual Meeting
Surface Protection Growth Strategy
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2018 Annual Meeting
Surface Protection Growth Opportunities
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• Growth opportunities driven by “Internet of Things”
and demand for higher performance displays:
• Flexible displays
• Automotive displays
• Higher performance mobile phone market
• Large screen displays
• Touch screens
Supported by robust product pipeline including potential technology disruptors
Personal Care
Steve Prince
President Personal Care
Feminine
Care
Products
2018 Annual Meeting
What Does Personal Care Do?
Our Areas of Focus:
Acquisition Distribution
Layer
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We develop Topsheet, Acquisition Distribution Layer & Elastic Products for
Feminine Care Pads, Diapers and Adult Incontinence Applications
Elastics
Adult Incontinence
Under Garments Baby & Adult
Diapers
Topsheet
2018 Annual Meeting
Personal Care Net Sales Trend
16
396 402368
288
238 246
2012 2013 2014 2015 2016 2017
($ Millions)
2018 Annual Meeting
Personal Care R&D Spending to Drive Growth
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0%
1%
2%
3%
4%
5%
-
2
4
6
8
10
12
2012 2013 2014 2015 2016 2017
$ M
illio
ns
R&D GS&A R&D as % of Revenue
2018 Annual Meeting
Personal Care Elastics Growth
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• Now offering “zoned” elastic materials
• Expecting continued growth in Elastics volumes in 2018
• New materials have captured new customers and applications
• Breathable elastic films and fabrics promoting quality of life
Investing $25 Million in North America Elastics
• Two state of the art manufacturing assets in Terre Haute, IN
• Leveraging off of successes with European Elastics
Become the “Go To” supplier and solution provider for Comfort, Fit & Confidence
Moving Toward Full Utilization of $10 Million European Elastics Investment
Baby & Adult
Diapers
2018 Annual Meeting
Personal Care Topsheet Strategy
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Successful launch of ADL for baby diapers in Latin America
• $14 million revenue in 2017
Leverage win in Latin America to globally penetrate ADLs
• Solve our customers’ toughest problem: Grow market share
with improved product performance at lower costs
• Dedicated R&D resources to launch next generation ADLs
• Enhance consumer’s diapering experience with superior dryness & comfort
• Plan to launch in North America and Europe in May 2018
AquiDry™ PlusADL
2018 Annual Meeting
Personal Care Acquisition Distribution Layer (ADL) Growth
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• Strategy: Deliver Unsurpassed Comfort, Fit and Dryness by Emphasizing our Hydroforming Technology
• Expect Two New Platforms to Launch in 2019
• Cottony soft films
• Laminate fabrics that deliver a best-in-class combination of
softness, dryness, and leakage prevention
Establish Tredegar as the Topsheet Leader and Broaden Customer Base
2018 Annual Meeting
Personal Care Summary
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Personal Care Going Through a Total Transformation
• Historical dependence on P&G
Strategic Focus to Drive Growth
• Diversifying our customer base
• Execute Elastics growth initiatives
• Continue to grow the ADL business with new products
• Develop and sell new Hydroformed Film & Laminate Topsheets
Phoenix Rising
PERSONAL CARE
Concluding Remarks
John Gottwald
President and Chief Executive Officer
2018 Annual Meeting
Tredegar Rolling TTM EPS from Ongoing Operations Since Q4-14
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$1.13
$0.63
$1.12
0.40
0.50
0.60
0.70
0.80
0.90
1.00
1.10
1.20Q
4-1
4
Q1-1
5
Q2-1
5
Q3-1
5
Q4-1
5
Q1-1
6
Q2-1
6
Q3-1
6
Q4-1
6
Q1-1
7
Q2-1
7
Q3-1
7
Q4-1
7
Q1-1
8
• Record Year in 2017
• Strategic Focus:
• New Products
• New Customers
2018 Annual Meeting
Surface Protection
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2018 Annual Meeting
Personal Care Challenge
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396 402368
288
238 246
2012 2013 2014 2015 2016 2017
($ Millions)
$70 Million Sales Decline on the Horizon
• Invest
• $35 Million Capital in Elastics
• $11 Million R&D Spending in 2017
• Objective
• New Products
• New Customers
2018 Annual Meeting
Answer
26
Questions
GAAP to Non-GAAP Reconciliations
29
PE Films includes personal care materials, surface protection f ilms, polyethylene overw rap f ilms and f ilms for other markets. Flexible Packaging Films is comprised of
our polyester f ilms business, Terphane Holdings LLC. Aluminum Extrusions results include the acquisitions of AACOA, Inc. on October 1, 2012 and Futura Industries Corporation
on February 15, 2017. Due to rounding, numbers presented throughout this presentation may not add up precisely to the totals provided and percentages may not precisely
reflect the absolute f igures.
Notes
1. The after-tax effects of losses associated w ith plant shutdow ns, asset impairments and restructurings and gains or losses from the sale of assets and other items (w hich includes
unrealized gains and losses for an investment accounted for under the fair value method) have been presented separately and removed from income (loss) and earnings (loss) per
share from continuing operations as reported under U.S. GAAP to determine Tredegar’s presentation of net income and earnings per share from ongoing operations. Net income and
earnings per share from ongoing operations are key f inancial and analytical measures used by Tredegar to gauge the operating performance of its ongoing operations. They are not
intended to represent the stand-alone results for Tredegar’s ongoing operations under GAAP and should not be considered as an alternative to net income or earnings per share from
continuing operations as defined by U.S. GAAP. They exclude items that w e believe do not relate to Tredegar’s ongoing operations. A reconciliation is show n below :
(in millions, except per share data) LTM
2012 2013 2014 2015 2016 2017 Q1 2018
Net income (loss) from continuing operations as reported under U.S. GAAP $ 43.2 $ 35.9 $ 36.0 $ (32.1) $ 24.5 $ 38.3 $ 52.7
After tax effects of:
(Gains) losses associated w ith plant shutdow ns, asset impairments and restructurings 3.2 0.9 2.0 3.0 3.1 1.4 0.9
(Gains) losses from sale of assets and other (7.9) 0.5 (1.2) 17.7 (4.9) (96.8) (103.7)
Goodw ill impairment charge - - - 44.5 - - -
Terphane asset impairment loss - - - - - 87.2 87.2
Net income from ongoing operations 38.5$ 37.3$ 36.8$ 33.1$ 22.7$ 30.1$ 37.1$
Earnings (loss) from continuing operations per share under GAAP (diluted) $ 1.34 $ 1.10 $ 1.11 $ (0.99) $ 0.75 $ 1.16 $ 1.60
After tax effects of:
(Gains) losses associated w ith plant shutdow ns, asset impairments and restructurings 0.10 0.03 0.06 0.09 0.09 0.04 0.02
(Gains) losses from sale of assets and other (0.24) 0.02 (0.04) 0.54 (0.15) (2.94) (3.15)
Goodw ill impairment charge - - - 1.37 - - -
Terphane asset impairment loss 2.65 2.65
Earnings per share from ongoing operations (diluted) $ 1.20 $ 1.15 $ 1.13 $ 1.01 $ 0.69 $ 0.91 $ 1.12
(in millions, except per share data)
Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
Net income (loss) from continuing operations as reported under U.S. GAAP $ 3.7 $ 44.2 $ 8.3 $ (17.9) $ 18.2
After tax effects of:
(Gains) losses associated w ith plant shutdow ns, asset impairments and restructurings 0.6 - 0.3 0.5 0.1
(Gains) losses from sale of assets and other 1.7 (35.9) 0.8 (63.4) (5.3)
Terphane asset impairment loss - - - 87.2 -
Net income from ongoing operations 6.0$ 8.3$ 9.4$ 6.4$ 12.9$
Earnings (loss) from continuing operations per share under GAAP (diluted) $ 0.11 $ 1.34 $ 0.25 $ (0.54) $ 0.55
After tax effects of:
(Gains) losses associated w ith plant shutdow ns, asset impairments and restructurings 0.02 - 0.01 0.01 -
(Gains) losses from sale of assets and other 0.05 (1.09) 0.02 (1.92) (0.16)
Terphane asset impairment loss - - - 2.65 -
Earnings per share from ongoing operations (diluted) $ 0.18 $ 0.25 $ 0.28 $ 0.20 $ 0.39
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Notes (continued):
2. 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) June 30, December 31, March 31, December 31, March 31, December 31, March 31,
2015 2015 2016 2016 2017 2017 2018
Debt $ 135.0 $ 104.0 $ 107.0 $ 95.0 $ 193.0 $ 152.0 $ 141.0
Less: Cash and cash equivalents (47.4) (44.2) (40.0) (29.5) (28.9) (36.5) (36.1)
Net debt $ 87.6 $ 59.8 $ 67.0 $ 65.5 $ 164.1 $ 115.5 $ 104.9
3. The rolling quarterly trailing 12 months EPS from ongoing operations was computed using the quarterly reconciliations of US GAAP EPS to non-GAAP EPS from ongoing
operations provided in the quarterly earnings press releases and "Operating Results by Segment" on the Quarterly Results page of the Investors section on Tredegar’s website.