Exhibit 99.1
Abundant Opportunities Growth May 2017 Fuel
Forward-looking Statements The information in this presentation and statements made during this presentation may contain certain forward-looking statements within the meaning of federal securities laws. These statements reflect management’s expectations regarding future events and operating performance. Risk Factors These forward-looking statements involve a number of risks and uncertainties. A list of the factors that could cause actual results to differ materially from those expressed in, or underlying, any forward-looking statements can be found in the Company’s filings with the Securities and Exchange Commission, such as its annual and quarterly reports. The Company disclaims any obligation to revise or update such statements to reflect the occurrence of events after the date of this presentation. Non-GAAP Financial Measures This presentation refers to non-U.S. GAAP financial information. A reconciliation of non-U.S. GAAP to U.S. GAAP financial measures is available on the company’s website at KapStonepaper.com under Investors. Forward-Looking Statements 2
2008 MWV’s Kraft Paper Division 2013 Longview Fibre Five Major Acquisitions Purchase Price $1.025 B 6.1 Xs TTM Adj. EBITDA Purchase Price $466 MM 5.8 Xs TTM Adj. EBITDA Since 2007 2007 IP’s Kraft Paper Division Purchase Price $204 MM 3.3 Xs TTM Adj. EBITDA 2011 US Corrugated Inc. 2015 Victory Packaging Purchase Price $332 MM 6.4 Xs TTM Adj. EBITDA Purchase Price $615 MM* 6.1 Xs TTM Adj. EBITDA *$515 MM After $100 MM Tax Benefit 3
Containerboard 5th largest producer in North America Leader in development of Ultra Performance grades Full product family includes recycled, high compression and kraft liner and medium Unbleached Kraft Paper Largest producer in North America Extensible, multiwall, bag, converting and industrial grades Kraft Paper Specialty DURASORB® and Kraftpak® Leader in niche markets in decorative laminates and specialty folding carton packaging 4 Location Capacity (Tons) Products Charleston, SC 975,000 UPL, Containerboard, Specialties Roanoke Rapids, NC 460,000 UPL, Containerboard, Cowpens, SC 255,000 Recycled Linerboard, Recycled Medium Longview, WA 1,300,000 UPL, Containerboard, Kraft Paper, Specialties Total 2,990,000 Overview of Mills
Nation-wide footprint of 22 corrugated converting facilities Purchases over 50% of KapStone mill’s containerboard production Fully-dedicated customer service and technical teams Full product capabilities including industrial and multi-color retail packaging in multiple flute and paper combinations from mini boxes to jumbo bulk bins Consultative approach to packaging design 5 Overview of Converting
Footprint + + + + + + ++ + .. CORPORATE HEADQUARTERS <• + KAPSTONE PACKAGING PLANTS • PAPER MILLS + ·:· VICTORY PACKAGING DISTRIBUTION CENTERS LUMBER MILL 6 + + ++ + + + + KapStone's Integrated
Facilities: 65 distribution locations across North America Offerings: We are Architects of Packaging Solutions. We provide everything about the delivery, design, fulfillment, inventory, kitting, ordering, payment, receiving, storage and use of packaging. Packaging Solutions Engineering and Design Fulfillment Logistics Equipment and Automation Sources approximately 1/3 of its corrugated boxes from KapStone’s converting facilities 7 Victory Packaging
$1,451 $1,906 Voluntary debt prepayments since Source operations $738 Available revolver of $457 million $102 $120 No bank maturities until 1Q19 $8 8 $ in Millions Source & Use of Funds Since Inception (Inception – March 31, 2017) Generated ~$1.9 billion of cash from operations since inception Victory acquisition in June 2015 total $169 million Returned $182 million to shareholdersUse with dividends$2,725 Invested $738 million in CAPEX for our$2,976 At March 31, 2017: Net debt was $1.523 billion Bank net debt to EBITDA was 3.99 times Average weighted interest rate was 2.6%$182 Maintain ability to grow Disciplined Capital Allocation
9 Higher integration Victory opportunities Improved production at container plants Acquisitions, joint ventures, and greenfield container plant construction Market momentum for our products Very strong industry operating rates Low inventory levels Growing box demand Higher pricing Improved product mix oIncreased domestic sales of containerboard and kraft paper Capitalizing on strength of new management team Productivity Capture efficiencies oOne KapStone Workforce engagement Ratified two major union contracts oLongview – 10 years oCharleston – 8 years Opportunities
Strong Growth Record $384 CAGR of 24% h $165 $50 *Adjusted to exclude alternative fuel mixture credits, non-cash stock compensation, acquisition, strike costs, start up and other costs, and dunnage bag business sold in March 2009 10 $s in Millions Analysts’ Consensus Analysts’ Consensus Well positioned in a thriving industry to deliver significant improvement in results Significant opportunities to deliver meaningful growth FY Net Sales $3,281 $2,789 $2,301 $1,748 $1,217 $906 $782 $626 $492 $224 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 $456 $404 FY Adj. EBITDA*$333 $183 $95 $78 $27 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Appendix 11
Key Assumptions for 2017 12 Partial realization of Q1 2017 price increase benefits versus Q1 should be: Domestic containerboard and corrugated: Q2 - $8 million (Annualized - $95 million) Export: Q2 - $2 million (Annualized - $13 million) Kraft paper: Q2 - $4 million (Annualized - $13 million) Kraftpak: Q2 - $1 million (Annualized - $4 million) Improved mix due to higher box production and stronger domestic demand: Q2 - $2 million Higher planned maintenance outages – Q2 2017 $11 million higher than Q1 Q2 costs incurred from Charleston boiler incident estimated to be $4 to $5 million including expenses and fixed cost impact associated with lost paper production of 5,500 tons Average fiber costs for Q2 should be flat with Q1 New wood yards at Charleston and Roanoke Rapids starting in late Q2 2017 Restoration of certain salaried benefits curtailed in 2016 Q2 2017 versus Q1 2017 - $2 million Full year 2017 - $20 million One extra mill production day in Q2 Elimination of non-recurring Q1 costs - $3 million Typically, Q2 and Q3 is seasonally strongest quarters for Victory CAPEX:Q2 2017 - $30 million, Full year 2017 - $136 million No pension plan funding required Higher interest expense Effective income tax rate of 34 percent. Cash income tax rate of 40 percent
Quarterly Key Performance Indicators 13 (1)Containerboard includes all domestic and export sales of linerboard and medium (2)Specialty paper includes Kraft paper, Durasorb, Kraftpak and roll pulp Sales and Production Average Mill Revenue per Ton $648$617$625 1Q 174Q 161Q 16 Tons Produced (000) 678685690 1Q 174Q 161Q 16 Mill External Shipments (000) 474504482 1Q 174Q 161Q 16 Paper and Packaging Product Mix (000 Tons) Containerboard and Corrugated Products(1) 435465 Specialty Paper(2) 264259258 1Q 174Q 161Q 16 1Q 174Q 161Q 16
1,857 (1) Containerboard includes all domestic and export sales of linerboard and medium (2) Specialty paper includes Kraft paper, Durasorb, Kraftpak and roll pulp 14 Sales and Production Average Mill Revenue per Ton $667$684 201620152014 Tons Produced (000) 2,7442,6792,715 201620152014 Mill External Shipments (000) 1,9351,936 201620152014 Paper and Packaging Product Mix (000 Tons) Containerboard and Corrugated Products(1) 1,7961,7141,765 Specialty Paper(2) 1,0241,0181,031 201620152014 201620152014 Annual Key Performance Indicators
17 Previous 2016 initiatives announced should provide approximately 85,000 tons of additional integration by mid 2018 Our previously stated goal of integrating an additional 100,000 to 150,000 tons on an annualized basis by mid 2018 will be achieved with these initiatives 15 Annual Volume - Tons Integration from Recent Strategic Investments 115 60 48325 85 2019 Outlook Over 2013 Base Pre 2016 Integration Strategy