Consumer PackagingConsumer Packaging
Mike BalduinoMike Balduino
22
Converting Businesses Integrated to IP’s Coated Paperboard DivisionConverting Businesses Integrated to IP’s Coated Paperboard DivisionShorewood Packaging
High end packaging manufacturer $700MM in salesInnovative packaging for Home Entertainment, Tobacco and Consumer Products marketsCreative talent, advanced manufacturing techniques
Foodservice BusinessLeading producer of foodservice disposable products with over $400MM in sales– Quick-serve restaurants– Theaters– Convenience stores– Specialty coffee chains
World class graphics capability, global engineering support and equipment manufacture
ConsumerPackaging
33
14 Plants11 Sales Offices
5 Plants4 Sales Offices
2 Plants 2 Sales Offices
1 Plant1 Sales Offices
Shorewood Packaging Foodservice Business
2 Plants 1 Sales Offices
2 Plant3 Sales Offices
Europe
Americas Australasia
Middle East1 Plant1 Sales Office
ConsumerPackagingGlobal Customers Are Looking
for Global PartnersGlobal Customers Are Lookingfor Global Partners
44
Foodservice Strength: Providing Value-Added Packaging to Major Chains in Fastest Growing Segments
Foodservice Strength: Providing Value-Added Packaging to Major Chains in Fastest Growing Segments
Focus:QSR’s: outstanding quality, service and innovationTheaters / convenience stores: drive food / beverage purchases through graphics and production designSpecialty coffee: Selectively grow with industry leaders with product performance
Challenges:Higher input costs, contract management, capacity utilization / seasonality
FoodserviceBusiness
“Focus on Core Products Line to Key Customers” Strategy ““Focus on Core Products Line to Key CustomersFocus on Core Products Line to Key Customers”” Strategy Strategy
55
Our CustomersOur Customers FoodserviceBusiness
66
Base Case3Q06
Annualized
Market Growth Customer ValueDevelopment
ContractFlexibility
OperationalExcellence
Inflation Year 2009@Current
Price/Cost
Foodservice – Path ForwardFoodservice – Path Forward FoodserviceBusiness
* Component symbols used for illustrative purposes only, proportions not indicative of actual EBIT impact
ROCE
Sales $410MM $500MMROCE 3% 7%
77
Shorewood Strength: Innovative Solutions to Major Multinational CustomersShorewood Strength: Innovative Solutions to Major Multinational Customers
Focus:Home entertainment: specialty & collectible items, new substrates technologiesTobacco: migration from soft to hard pack, privatization of tobacco industry in AsiaConsumer products: selective target segments, integrated packaging solutions
Challenges:Customer consolidation, higher input costs, Asian migration
ShorewoodPackaging
“Position Assets to Serve Key Customers” Strategy““Position Assets to Serve Key CustomersPosition Assets to Serve Key Customers”” StrategyStrategy
88
We Are Proud to Support Leading Global BrandsWe Are Proud to Support Leading Global Brands
ShorewoodPackaging
99
Strategic Fit Within IP: Providing Integrated Solutions to CustomersStrategic Fit Within IP: Providing Integrated Solutions to Customers
Unilever – one of Shorewood’s top 5 accountsSupplying integrate value added solution from folding cartons and POP displays to container, papers and distributionOne voice to the customer, collaborative innovation
ShorewoodPackaging
Shorewood65%
Papers, xpedx, etc.15%
Container U.S., Europe & Asia
20%
1010
Base Case3Q06
Annualized
Customers /Markets
OperationalExcellence
S&A Reduction SelectiveGrowth
Inflation Year 2009@Current Price /
Cost
ROCE
Shorewood – Path ForwardShorewood – Path Forward ShorewoodPackaging
Sales $690MM $1,040MMROCE 0% 6%
* Component symbols used for illustrative purposes only, proportions not indicative of actual EBIT impact
1111
Consumer Packaging Moving ForwardConsumer Packaging Moving Forward
Foodservice:Profitable share growthContract redesign / margin improvementPlanning for Starbucks business
Shorewood:Top line growth outside NARestructuring plans / cost reductionProcess improvement / business simplification
ShorewoodPackaging
2007 Priorities 2007 Priorities 2007 Priorities
1212
A Stronger, More Valuable IPA Stronger, More Valuable IP