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Rexam Plastic Packaging - presentation slides [20 November 2008]
Rexam Plastic Packaging - presentation slides [20 November 2008]
Rexam Plastic Packaging - presentation slides [20 November 2008]
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<strong>Rexam</strong> <strong>Plastic</strong> <strong>Packaging</strong><br />
<strong>20</strong> <strong>November</strong> <strong>20</strong>08<br />
Graham Chipchase<br />
Group Director <strong>Plastic</strong> <strong>Packaging</strong>
• Industry overview<br />
• <strong>Rexam</strong> <strong>Plastic</strong> <strong>Packaging</strong><br />
• A closer look at our businesses<br />
– Closures<br />
– Personal Care<br />
– Healthcare<br />
• Q&A<br />
Agenda
<strong>Rexam</strong> <strong>Plastic</strong> <strong>Packaging</strong><br />
Hitting the sweet spot<br />
<strong>Rexam</strong><br />
Lean & Six Sigma Expertise<br />
Track record in unlocking value through consolidation<br />
Global manufacturing footprint<br />
Local players<br />
Intellectual property<br />
Cash poor<br />
Sub scale<br />
<strong>Plastic</strong> <strong>Packaging</strong> – The rationale<br />
<strong>Plastic</strong>s Market<br />
Selected segments have:<br />
Faster growth<br />
Higher margin<br />
Regional businesses ripe for internationalisation
An industry overview
• Lightweight, durable, safe,<br />
unbreakable<br />
• Highly customisable<br />
– Wide decorative and shaping<br />
possibilities for customers<br />
• Good barrier properties<br />
• Recyclable<br />
Why plastic works for packaging
Source: PIRA Global <strong>Packaging</strong> Database March <strong>20</strong>08<br />
Rigid plastic packaging - global, growing, diverse<br />
Cosmetics<br />
8%<br />
Healthcare<br />
11%<br />
<strong>20</strong>07 total rigid<br />
plastic packaging market $110bn<br />
Beverage<br />
21%<br />
Other<br />
Consumer<br />
13%<br />
Food<br />
47%<br />
Volume growth on average at 4-5% p.a.
<strong>Rexam</strong> <strong>Plastic</strong> <strong>Packaging</strong>
Sales<br />
% of<br />
Group<br />
sales<br />
I Pro forma<br />
<strong>Plastic</strong> <strong>Packaging</strong><br />
Sector created<br />
Delta acquired<br />
Precise<br />
Technology<br />
acquired<br />
17%<br />
£471m<br />
Airspray acquired<br />
FangXin acquired<br />
Truepack<br />
acquired<br />
£709m<br />
OI <strong>Plastic</strong>s<br />
acquired<br />
£880m<br />
Creation of three<br />
divisions<br />
Launch of Fourth<br />
Dimension to<br />
deliver more as<br />
One Sector One<br />
Business,<br />
Capacity<br />
restructuring in US<br />
SAP<br />
implementation in<br />
ex OI plants<br />
<strong>20</strong>05 <strong>20</strong>06 <strong>20</strong>07 <strong>20</strong>08<br />
30% 1<br />
Phase I: Build scale and optimise portfolio Phase II: Crystallise business model<br />
The journey<br />
<strong>20</strong>09 <strong>20</strong>10
• Ongoing sales c £1.2bn 1<br />
• 15,000 employees<br />
– c 40% of them in Asia<br />
<strong>Rexam</strong> <strong>Plastic</strong> <strong>Packaging</strong> – key facts<br />
2<br />
(£m) <strong>20</strong>05 <strong>20</strong>06 <strong>20</strong>07 <strong>20</strong>08(H1)<br />
Sales 471 709 880 617<br />
Operating profit 57 80 105 80<br />
ROS (%) 12.1 11.3 11.9 13.0<br />
I Pro forma<br />
2 As reported in <strong>20</strong>06 Annual Accounts<br />
3 As reported in <strong>20</strong>07 Annual Accounts<br />
4 As reported at Interim Results July <strong>20</strong>08<br />
3 3 4
Source: <strong>Rexam</strong><br />
Closures<br />
inc High Barrier Food 60%<br />
Our served markets in Rigid <strong>Plastic</strong>s<br />
Served Markets*: c.$19bn<br />
Pharma 12%<br />
Primary Healthcare <strong>Packaging</strong> 3%<br />
Prescription <strong>Packaging</strong> 1%<br />
Dispensing Systems 12%<br />
Make Up 8%<br />
Home & Personal Care 4%<br />
<strong>Rexam</strong> serves mostly in specialty segments within Rigid <strong>Plastic</strong>s<br />
*includes: global Market for Dispensing Systems, Make Up and Pharma; N American market for Primary <strong>Packaging</strong> & Prescription; NA & European Market for Home & Personal Care and Closures
• Good growth characteristics<br />
• Opportunities to build strong<br />
barriers to entry<br />
– IP<br />
– Technology<br />
– Global footprint<br />
– Long term customer relationships<br />
• Generally attractive financial<br />
characteristics<br />
• Fragmented market gives<br />
consolidation opportunities<br />
Why chosen segments
* Includes European Closures Markets<br />
Source: <strong>Rexam</strong><br />
A leader in highly fragmented markets<br />
Competition in <strong>Rexam</strong> served markets<br />
c. $19bn*<br />
56% Others<br />
10% <strong>Rexam</strong><br />
8% Aptar<br />
1% each<br />
4% GCS<br />
3% each<br />
2% each<br />
Rank<br />
Alcan<br />
Bericap<br />
Berry <strong>Plastic</strong>s<br />
Sligan<br />
Nypro<br />
Guala Closures<br />
Calmar<br />
Yoshino<br />
Gerresheimer<br />
Consort Medical<br />
Plastek<br />
Drug <strong>Plastic</strong>s<br />
Ypsomed
Rigid <strong>Plastic</strong>: industry leading margins<br />
<strong>Rexam</strong><br />
Pactiv (1)<br />
Plastipak<br />
Constar<br />
0% 5% 10%<br />
Notes:<br />
<strong>Rexam</strong> includes OI <strong>Plastic</strong>. No accurate information on Alpla’s profitability, therefore not shown.<br />
(1) Based on total consumer packaging sales<br />
Aptar<br />
Consolidated<br />
Cont ainers<br />
Graham<br />
Silgan<br />
Berry <strong>Plastic</strong>s<br />
Amcor<br />
Rank<br />
GCS<br />
Ball<br />
Alcan<br />
ROS average: 7.6%
A global footprint for global customers<br />
55 <strong>Plastic</strong> <strong>Packaging</strong> plants
Strong customer base
Personal Care<br />
Sales c £500m<br />
Dispensing Systems<br />
Make Up<br />
Home & Personal Care<br />
I Pro forma<br />
Three customer aligned divisions<br />
<strong>Rexam</strong> <strong>Plastic</strong><br />
<strong>Packaging</strong><br />
£1.2bn 1<br />
Closures<br />
Sales c £400m<br />
Beverage<br />
Specialty<br />
High Barrier Food<br />
Industry leading positions<br />
Healthcare<br />
Sales c £300m<br />
Pharma devices<br />
Primary <strong>Packaging</strong><br />
Prescription
* <strong>20</strong>08 Pro forma<br />
PLASTIC<br />
PACKAGING<br />
30% of sales*<br />
SEGMENT<br />
• Exposed to different growth drivers<br />
– Markets<br />
– Geographies<br />
– Customers<br />
– Technologies<br />
Healthcare<br />
Closures<br />
Personal Care<br />
A portfolio of growth businesses<br />
GROWTH PROFILE<br />
P.A.<br />
+ 4% to +6%<br />
+1% to +3%<br />
+3% to +5%<br />
CURRENT<br />
MARGINS<br />
Above<br />
average<br />
Average<br />
Below<br />
average<br />
MEDIUM TERM<br />
MARGINS<br />
13%<br />
to 15%<br />
• <strong>Rexam</strong> growth objectives<br />
– Sales 4-6% pa<br />
– Operating profit 6-8% pa<br />
Diversity and quality enable us to deliver consistent results over time<br />
ECONOMIC<br />
PROFILE<br />
Diversified<br />
c. 25%<br />
economically<br />
sensitive
To be the leading global<br />
plastic packaging company<br />
Our vision
• Drive product & process innovation<br />
• Leverage our scale to lead<br />
investment in cross business<br />
activities<br />
• Follow our global customers<br />
Strategy outline
Unique model - leveraging “Fourth Dimension”<br />
• Commonality of technologies and<br />
innovation<br />
• Commercial excellence<br />
• Leverage best practices<br />
• Base to internationalise our<br />
operations<br />
• Increase resin purchasing power<br />
• Shared services across divisions
Executing the strategy
• Scale<br />
OI <strong>Plastic</strong>s - recap of strategic rationale<br />
– Materially enhances the Sector - No 1 or 2 in core served markets<br />
– Opportunities to leverage scale<br />
• Growth<br />
– Maximise leadership in growth markets Healthcare and Closures<br />
– Innovative technology and sophisticated R&D leveraged across <strong>Rexam</strong><br />
– Maximise opportunity of <strong>Rexam</strong>’s international presence<br />
• Value creation<br />
– Synergy benefits £25 million per annum by <strong>20</strong>10
Optimised approach to Innovation<br />
R&D expenditure<br />
on Innovation<br />
1.5% of sales<br />
Harmonized Product Innovation Process Transformational Innovation Programme<br />
&<br />
ACADEME<br />
Technology Platform Development New Product Launches<br />
Integrated new product innovation process<br />
Environmental Senior
Internationalising our business<br />
Leveraging our global footprint
Resin<br />
• 80% of the business allows the<br />
pass through of resin cost<br />
changes to our customers<br />
• Pass through mechanisms<br />
either monthly, quarterly or as<br />
announced<br />
Dealing with our raw material costs<br />
Raw material costs by type<br />
£500m<br />
64%<br />
Resin Alu Steel Other
Typical contract<br />
term<br />
Resin pass<br />
through<br />
Custom or stock<br />
products<br />
Closures<br />
2 to 3 yrs<br />
c 70% have<br />
contracts<br />
Nearly 100%<br />
covered by pass<br />
through<br />
Both<br />
Beverage: stock<br />
Speciality: 75%<br />
stock<br />
High Barrier Food:<br />
proprietary process<br />
Contract structures and products<br />
Healthcare<br />
~5 years<br />
c 70% have<br />
contracts<br />
Pharma:70%<br />
Prescription: none<br />
Primary: 100%<br />
Both<br />
Drug Delivery: 90%<br />
custom<br />
Pumps :100%<br />
customised stock<br />
Containers: >70%<br />
stock<br />
Personal Care<br />
Successfully integrating OI <strong>Plastic</strong>s<br />
• Organisation changes completed and ‘cultural’<br />
programmes in place<br />
• SAP implemented in all ex OI <strong>Plastic</strong>s US sites<br />
• Manufacturing reorganisation<br />
– West Lafayette closure completed<br />
– Bowling Green and Rossville by year end<br />
– Closures capacity rebalanced<br />
• Synergies on track £25m by <strong>20</strong>10<br />
• Marketing and cross selling opportunities
• Clear vision to become global<br />
leader<br />
• Well defined strategy for growth<br />
• Strong focus on innovation<br />
• Global footprint to match global<br />
customers<br />
• Strong continuous improvement<br />
culture<br />
Well positioned for profitable growth<br />
<strong>Rexam</strong> <strong>Plastic</strong> <strong>Packaging</strong>
A closer look<br />
at our chosen<br />
markets
Personal Care<br />
Misha Riveros-Jacobson
* <strong>20</strong>08 Pro-forma sales<br />
Personal Care<br />
Sales* c.£500m<br />
Dispensing Systems<br />
Make Up<br />
Home & Personal<br />
Care<br />
<strong>Rexam</strong> <strong>Plastic</strong> <strong>Packaging</strong><br />
Sales* c.£1.2m<br />
Closures<br />
Sales* c.£400m<br />
Beverage<br />
Specialty<br />
High Barrier Food<br />
<strong>Rexam</strong> <strong>Plastic</strong> <strong>Packaging</strong><br />
Healthcare<br />
Sales* c.£300m<br />
Pharma Devices<br />
Primary <strong>Packaging</strong><br />
Prescription
* <strong>20</strong>08 Pro-forma sales<br />
A global business set to expand into emerging markets<br />
North America<br />
Personal Care sales* by region<br />
Emerging<br />
Markets<br />
Europe
Serving global brands
Our core competencies<br />
• Manufacturing excellence<br />
– Precision Moulding<br />
– Customised technologies for different product segments<br />
– Decoration and surface treatment expertise<br />
• Innovation - Broad and Deep<br />
– Dedicated innovation centres<br />
– 16% of sales come from NPD and growing<br />
• Global presence<br />
– Global footprint and sale & customer support<br />
• Full range of products<br />
– One-stop supplier<br />
• Proven track record & recognition as high quality and<br />
reliable partner
Pursue a focused profitable growth strategy<br />
Strategic objectives<br />
• Innovation: at least one new product per year<br />
• Internationalization: Mexico, Poland, LatAm, Russia<br />
• Leverage our scale to adopt value pricing and increase our<br />
commercial capabilities<br />
• Asia: finalise the restructuring in China to build a business that<br />
is focused on the domestic as well as the export market<br />
• Operational Excellence: continuous improvement across<br />
plants and businesses<br />
Vision: To be a leader in every market we choose
Make Up<br />
Home & Personal<br />
Care<br />
A wide range of products<br />
<strong>20</strong>08 Sales pro-forma<br />
Dispensing<br />
Systems
Foam pumps<br />
Lotion pumps<br />
Fine mist<br />
Samplers<br />
1. <strong>20</strong>07 Pira and <strong>Rexam</strong> estimates<br />
Products<br />
Global Dispensing Systems Market 1<br />
Aptar<br />
17%<br />
Others<br />
A pump for every application and for every brand<br />
Dispensing Systems<br />
<strong>Rexam</strong> #2<br />
Calmar<br />
• Total package (bottle & dispensing system)<br />
• Leader in foam pumps<br />
• High end/quality image<br />
• Lotion growing
Eyes<br />
Products Global Make Up Market 1<br />
Face Lips<br />
1. <strong>20</strong>07 Pira and <strong>Rexam</strong> estimates<br />
Alcan<br />
Others<br />
• Leader in lipstick<br />
Major player in fragmented market<br />
14%<br />
Make Up<br />
<strong>Rexam</strong> #2<br />
Yoshino<br />
• Manufacturing in all key regions<br />
(Asia, Europe and North America)<br />
• Highly customized but with select<br />
standard features
1. <strong>20</strong>07 Pira and <strong>Rexam</strong> estimates<br />
Products US HPC Market 1<br />
Custom moulding with integrated assembly<br />
Home & Personal Care<br />
Plastek<br />
Others<br />
38%<br />
<strong>Rexam</strong> #1<br />
Nypro<br />
• Shoot & Ship and inline assembly<br />
• Custom and stock items<br />
• Leader in Anti-perspirant & Deodorant<br />
• High technology – stack molds, high<br />
cavitation
Industry dynamics and growth opportunities<br />
• Continued growth in emerging markets<br />
• Portability: “On-the-go” trend creates new opportunities in<br />
Dispensing Systems and Make up<br />
• Demographics: increasing consumer segmentation (seniors, kids,<br />
men) with different packaging needs<br />
• Globalization: customers want the same product in all regions<br />
with global support<br />
• Demand for a full-service and one-stop supplier<br />
• Ongoing demand for customization<br />
Fuel for growth
REXAM SEGMENTS GROWTH PROFILE<br />
Dispensing Systems<br />
HPC<br />
+4% to +6%<br />
0% to +2%<br />
Growth prospects<br />
TYPICAL REXAM<br />
MARGINS*<br />
Above average<br />
Make Up +3% to +5%<br />
Below average<br />
Below average<br />
Total Personal Care +3% to +5%<br />
Below average<br />
Innovation is key to our success<br />
Benefitting from scale & global presence in a competitive market<br />
* When compared to the average of total <strong>Plastic</strong> <strong>Packaging</strong> margins for <strong>Rexam</strong>
Consumer Trends<br />
• "On-the-go" consumption<br />
•Convenience<br />
• "Need" for excitement<br />
• Diverse, flavor varieties<br />
(no longer loyal to 1 brand)<br />
• Minority growth fuels diversity<br />
Innovation: Consumer insights driving developments<br />
<strong>Packaging</strong> Requirements<br />
•Convenient<br />
• Easy to hold<br />
• Good looking<br />
• Ready mixed<br />
• Innovation, new<br />
products<br />
• Able to build brands<br />
and categories<br />
Award winning!!
Consumer Trends<br />
• “Need for excitement<br />
• Diverse, flavor varieties<br />
(no longer loyal to 1 brand)<br />
Innovation: Consumer insights driving developments<br />
<strong>Packaging</strong> Requirements<br />
• Easy to hold<br />
• Good looking<br />
• Innovation, new<br />
products<br />
• Able to build brands<br />
and categories<br />
Award winning!!
Commercial strategy<br />
• <strong>Rexam</strong> PC is pursuing a premium pricing strategy, based on<br />
innovations with added value<br />
• Market pricing in terms of ‘think global – act local’. Global<br />
customers are seeking for global pricing, but different<br />
(regional) market circumstances impact local pricing<br />
• Build on customer relationships. Global thinking with local<br />
support and strong project management skills are essential<br />
• Strong focus on high end players which offer the most growth<br />
opportunities<br />
<strong>Rexam</strong> can manufacture the total package locally
Strengths & opportunities<br />
Strengths<br />
• Market leader: #1 or #2 in all chosen markets<br />
• Customer centric: manufacturing and assembly globally aligned with<br />
key customers<br />
• Innovation focus : strong product development culture and reputation<br />
• Manufacturing excellence: Lean manufacturing<br />
Opportunities<br />
• Asia restructure - China for China<br />
– Optimise manufacturing<br />
– Open domestic market as source of revenue<br />
• Internationalisation<br />
– Leverage other businesses to penetrate into emerging markets<br />
<strong>Rexam</strong> Personal Care: good growth prospects for the future
Closures<br />
David Beckmann
* <strong>20</strong>08 Pro-forma sales<br />
Personal Care<br />
Sales* c.£500m<br />
Dispensing Systems<br />
Make Up<br />
Home & Personal<br />
Care<br />
<strong>Rexam</strong> <strong>Plastic</strong> <strong>Packaging</strong><br />
Sales* c.£1.2m<br />
Closures<br />
Sales* c.£400m<br />
Beverage<br />
Specialty<br />
High Barrier Food<br />
<strong>Rexam</strong> <strong>Plastic</strong> <strong>Packaging</strong><br />
Healthcare<br />
Sales* c.£300m<br />
Pharma Devices<br />
Primary <strong>Packaging</strong><br />
Prescription
* <strong>20</strong>08 Pro-forma sales<br />
A regional business poised for international growth<br />
North America<br />
90%<br />
Closure sales* by region<br />
Europe<br />
3%<br />
Emerging Markets<br />
7%
* <strong>20</strong>08 Pro-forma sales<br />
We have a diverse portfolio of products<br />
Specialty<br />
Closures<br />
Sales* by product segment<br />
Food Containers<br />
Beverage Closures
Our customers are global brands
Our core competencies in Closures<br />
• Manufacturing excellence<br />
– Leader in thermo plastic & thermo set compression moulds<br />
– Highest speed and lowest cost<br />
• Robust track record in new product development<br />
– c. 25% of sales from NPD<br />
– Layers of proprietary technology<br />
– Speed to market<br />
• Strong customer relationships<br />
– Unmatched quality and service<br />
– Sales and marketing capability<br />
– Market expertise<br />
A high quality Closures business
• Leverage sector capabilities<br />
Strategic objectives<br />
– Globalize the division, leveraging customers and sector sites<br />
– Cost reduction/lean<br />
– Technology<br />
– Lean manufacturing<br />
• Drive volume growth<br />
– Customer driven new product innovation<br />
– Commercial excellence<br />
To become the world’s leading proprietary closures and high-value packaging<br />
systems business.
Consumer Trends<br />
•On-the-go<br />
•Convenience<br />
• Health/Diet/Nutrition<br />
• Sustainability<br />
• Aging Population<br />
Innovation driving profitable growth<br />
Closures’ Products<br />
• Dispensing Closures for portability, convenience<br />
and activity<br />
• Retort and aseptic compatible products for<br />
improved flavour & nutrition<br />
• Barrier Closures preserve nutritional benefits and<br />
flavour profiles<br />
• Short height, lighter weight Beverage Closures use<br />
less material and are lower cost<br />
• Senior Friendly products have improved grip<br />
ability & designs for easy opening packaging
Products<br />
Beverage Closures<br />
US Beverage Closures Market 1<br />
<strong>Rexam</strong><br />
CSI (Alcoa)<br />
26%<br />
<strong>Rexam</strong> #1<br />
International growth initiatives . . . Unmatched quality and service<br />
1. <strong>20</strong>07 Pira and <strong>Rexam</strong> estimates<br />
GCS<br />
Others<br />
•Compression moulding leadership<br />
•Tamper evident/sealing technologies<br />
•Developmental leader for major<br />
beverage brands
Products<br />
Specialty Closures 1<br />
US Specialty Closures Market 2<br />
<strong>Rexam</strong><br />
Seaquist<br />
14%<br />
Excellent customer relationships . . . Innovative products<br />
<strong>Rexam</strong> #1<br />
Berry<br />
Others<br />
• Convenience and safety drive the market<br />
• Child resistant/dispensing technologies key<br />
• Compression, injection & assembly<br />
• Diverse customer base served through<br />
direct and indirect channels<br />
1. Specialty market defined closures for food, home, automotive, chemical products amongst other specialty lines of products<br />
2. <strong>20</strong>07 Pira and <strong>Rexam</strong> estimates
Products<br />
Food Containers<br />
US Food Container Market 1<br />
<strong>Rexam</strong><br />
Spartech<br />
50%<br />
Untapped global possibilities . . . Complete packaging system<br />
<strong>Rexam</strong> #1<br />
Silgan<br />
Others<br />
• Key Drivers - portion control, recyclability,<br />
fresh and healthy<br />
• Market to emerge over next 5 to 10 years in<br />
Asia, Europe and Latam<br />
• Strong customer partnerships<br />
• Proprietary process
REXAM SEGMENTS GROWTH PROFILE<br />
Beverage<br />
Food Containers<br />
+2% to +4%<br />
+7% to +10%<br />
Growth prospects<br />
TYPICAL REXAM<br />
MARGINS*<br />
Average<br />
Specialty 0% to +2%<br />
Average<br />
Above average<br />
Total Closures +2% to +3%<br />
Average<br />
Benefitting from our size in a highly competitive market<br />
* When compared to the average of total <strong>Plastic</strong> <strong>Packaging</strong> margins for <strong>Rexam</strong>
Strengths<br />
• Leader in process and product IP<br />
Strengths & opportunities<br />
• Long standing relationships with global customers<br />
• Continuous cost improvement culture<br />
• Reorganized commercial function to drive global growth<br />
Opportunities<br />
• Leveraging <strong>Rexam</strong> <strong>Plastic</strong>s Lean expertise and global footprint<br />
• New consumer applications<br />
• Emerging markets<br />
<strong>Rexam</strong> Closures: confident in our growth prospects
Healthcare<br />
Marc Hämel
* <strong>20</strong>08 Pro-forma sales<br />
Personal Care<br />
Sales* c.£500m<br />
Dispensing Systems<br />
Make Up<br />
Home & Personal<br />
Care<br />
<strong>Rexam</strong> <strong>Plastic</strong> <strong>Packaging</strong><br />
Sales* c.£1.2m<br />
Closures<br />
Sales* c.£400m<br />
Beverage<br />
Specialty<br />
High Barrier Food<br />
<strong>Rexam</strong> <strong>Plastic</strong> <strong>Packaging</strong><br />
Healthcare<br />
Sales* c.£300m<br />
Pharma Devices<br />
Primary <strong>Packaging</strong><br />
Prescription
* <strong>20</strong>08 Pro-forma sales<br />
Manufacturing facilities<br />
Europe<br />
A global business<br />
Sales* by region<br />
Emerging<br />
Markets<br />
North<br />
America
With global customers
• Focus on high growth, high margin segments<br />
Strategic objectives<br />
• Be a market driven organisation focusing on patients’<br />
needs and anticipating regulatory trends<br />
• Develop unique technical and product innovation<br />
capabilities<br />
• Develop a first class, global manufacturing network<br />
• Internationalise the business by expanding in Asia and<br />
emerging markets<br />
Vision: We aim to be the global leader in providing drug delivery solutions
* <strong>20</strong>08 Pro-forma sales<br />
Prescription<br />
<strong>Packaging</strong><br />
Primary<br />
<strong>Packaging</strong><br />
A diverse portfolio of products<br />
Sales* by segment<br />
Pharma<br />
Devices
Pharma Devices<br />
Drug Delivery Devices<br />
Pharmaceutical Pumps<br />
Profitable growth engine for Healthcare<br />
Pharma Devices<br />
<strong>Rexam</strong> Strengths<br />
• Blue-chip customer base<br />
• Strong experience in inhalation and<br />
injectables markets<br />
• Project management expertise<br />
• Strong “pharma” culture & regulatory<br />
expertise<br />
• Global manufacturing footprint<br />
• Clean room & GMP compliant<br />
processes
1. <strong>20</strong>07 Pira and <strong>Rexam</strong> estimates<br />
Building a leading Pharma Devices business<br />
Global Market for<br />
Drug Delivery Devices1 11%<br />
<strong>Rexam</strong> #2<br />
<strong>Rexam</strong><br />
Ypsomed<br />
Gerresheimer<br />
Others<br />
Global Market for<br />
Pharmaceutical Pumps 1<br />
7%<br />
<strong>Rexam</strong> #2<br />
<strong>Rexam</strong><br />
Aptar<br />
Yoshino<br />
Others
Primary <strong>Packaging</strong><br />
Primary <strong>Packaging</strong><br />
<strong>Rexam</strong> Strengths<br />
• Market leader with strong reputation<br />
• Strong leadership position in<br />
Ophthalmics market<br />
• Large range of standard products<br />
• Only global supplier with manufacturing<br />
in North America, Europe and India<br />
• Patented process improvements to<br />
reduce cost<br />
• GMP & regulatory expertise<br />
<strong>Rexam</strong> is a strong global market leader
Global Market for<br />
Primary <strong>Packaging</strong><br />
23%<br />
<strong>Rexam</strong><br />
Berry<br />
Alcan<br />
Others<br />
<strong>Rexam</strong> #1<br />
Primary <strong>Packaging</strong><br />
• US market is the largest<br />
due to prevalence of bottle<br />
instead of blister packs<br />
• <strong>Rexam</strong> is the global leader<br />
and the only contender with<br />
positions in North America,<br />
Europe and Asia
Prescription <strong>Packaging</strong><br />
Strong business model<br />
Prescription <strong>Packaging</strong><br />
North American Market for<br />
Prescription <strong>Packaging</strong><br />
63%<br />
<strong>Rexam</strong> #1<br />
<strong>Rexam</strong><br />
Berry<br />
TriState<br />
Others<br />
<strong>Rexam</strong> Strengths<br />
• Complete product lines for retail outlets, chains &<br />
mass merchandisers, mail order, independents<br />
and food stores<br />
• Direct sales & through wholesalers<br />
• 100% stock product lines<br />
• Automation friendly product design<br />
• Superior quality & US wide service
REXAM SEGMENTS GROWTH PROFILE<br />
Pharma Devices<br />
Primary <strong>Packaging</strong><br />
Prescription<br />
<strong>Packaging</strong><br />
+ 6% to +8%<br />
+ 3% to +6%<br />
+ 1% to +3%<br />
Growth prospects<br />
TYPICAL REXAM<br />
MARGINS*<br />
Above average<br />
Below average<br />
Above average<br />
Total Healthcare + 4% to +6% Above average<br />
A high growth, high margin business<br />
* When compared to the average of total <strong>Plastic</strong> <strong>Packaging</strong> margins for <strong>Rexam</strong>
Healthcare / Pharma industry trends<br />
• Ageing populations in developed countries<br />
– Increased healthcare needs<br />
• Increasing healthcare costs and lack of new drugs<br />
– Growth of generics<br />
– Cost control<br />
• Healthcare spending increasing in emerging economies<br />
– India, China, Russia, Brazil…<br />
• Economically defensive segment
Healthcare packaging and device industry trends<br />
• Biotech drugs require alternative routes of deliveries<br />
– Increasing need for devices (inhalers, injectors)<br />
• Life style and environmental pathologies on the rise<br />
(diabetes, asthma, cancers) requiring chronic treatments<br />
• Compliance/Self Administration/Empowerment of<br />
Patients<br />
– Drug delivery likely to become major product differentiator<br />
• Increased regulatory requirements in developed countries<br />
– Added complexity creating strong barriers to entry
Patient Health Drivers<br />
• Patient safety<br />
• Compliance<br />
• Elimination of preservatives<br />
• Traceability & Anticounterfeiting<br />
•Convenience<br />
• Drug Efficacy through<br />
targeting<br />
Patients’ health needs driving innovation<br />
<strong>Rexam</strong> Focus<br />
• Strategy to develop<br />
more stock products<br />
• Anticipate regulatory<br />
trends<br />
• Users studies: patients &<br />
medical staff<br />
• Regional Technology<br />
Centers to foster<br />
innovation<br />
• Focus on design &<br />
ergonomics
Commercial strategy: sell on value not on price<br />
• Act as the market leader and anticipate on quality and<br />
regulatory requirements<br />
• Boost sales of development services and regulatory<br />
support to customers<br />
• Leverage global footprint and market position to<br />
identify cross selling opportunities<br />
• Use unique competitive position to further improve<br />
margins in selected segments<br />
Act as the global leader in our selected markets
Leveraging our manufacturing excellence<br />
• Unique GMP compliant clean room operations<br />
focused on serving the Healthcare industry<br />
• First class industrialisation expertise<br />
• Highly automated manufacturing facilities<br />
• Computer integrated process monitoring &<br />
quality control<br />
• Strong Lean and Continuous Improvement culture<br />
Leveraging best operational practices globally
Strengths<br />
Strengths & Opportunities<br />
• Market leader in growing segments and with blue chip customers<br />
• High barriers to entry<br />
• Long product life cycles<br />
• Track record of delivering product & process innovations<br />
Opportunities<br />
• High potential in injectables & implant markets<br />
• High growth in emerging markets<br />
• Good footprint from which to grow globally<br />
<strong>Rexam</strong> Healthcare: well positioned for the future
Leslie Van de Walle<br />
CEO
• High quality plastics business<br />
• Sound strategy<br />
• Unique business model<br />
Conclusion<br />
• Knowledgeable management team<br />
<strong>Rexam</strong> <strong>Plastic</strong>s: well positioned for the future
Q&A
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