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MZ Investor Presentation

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Husky buys division of Moldflow (temperature controls) June. Onex buys Husky. September. Century Extrusion buys China's Nanjing Ruiya Polymer (extruders) ... – PowerPoint PPT presentation

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Title: MZ Investor Presentation


1
Investor Presentation
April, 2008
Helping the Worlds Leading Companies … Make the
Worlds Favorite Products
2
Forward-looking Statements
… see recent 10-K for risks and uncertainties

Any forward-looking statements made at this
meeting by their nature involve risks and
uncertainties that could significantly impact
operations, markets, products and expected
results. For further information, please refer
to the Cautionary Statement included in our most
recent Form 10-K on file with the Securities and
Exchange Commission.
3
Milacron A World Leader in…
PLASTICS PROCESSING
85 of revenues Broadest line
supplier of equipment, supplies and services
All 3 major processing methods injection,
blow molding, extrusion Machinery sales 1
in North America 4 in Europe Mold
technologies 1 in North America
INDUSTRIAL FLUIDS
15 of revenues Water-based and oil-based
coolants, lubricant and
process cleaners Used in metal cutting and
metal forming Water-based fluids 1 in
North America 2 in Europe
Plastics Machinery
Industrial Fluids
Plastics Parts Services
Mold Technologies
4
Diverse Customer Base
… with strong global presence
2007 Orders 826 Million
Other
Medical
Packaging
Electrical / Electronic
50
Custom Molders
United States
13
Asia ROW
Industrial
30
7
Europe
Automotive
Consumer Goods
Canada Mexico
Appliances
Building Materials
5
Strong Global Brands
… 125-year-old reputation for quality and
reliability
Worldwide Name Recognition
6
Who We Are… What We Do
… Milacron behind products you see and use
every day
Slogan Helping the Worlds Leading Companies
…Make the Worlds Favorite Products
materials
consumer
electronics
industrial
medical
automotive
packaging
48
Value Proposition Technology and Service
7
Market Macro Overview
Helping the Worlds Leading Companies … Make the
Worlds Favorite Products
8
Plastics The Material of Choice
… the conversion of materials continues unabated
Indexed By Weight
Plastics
CAGR 1970-2007 Steel 2.2 Aluminum 3.8
Plastics 6.0
Aluminum
Steel
Source Society of the Plastics Industry and
Milacron Inc.
9
Plastics Continued Growth in the U.S.
… despite off-shore migrations
Indexed 2002 100
Source U.S. Federal Reserve Board
10
Plastics Projected World Consumption
… Asia fastest growing, but Europe/Americas still
large markets
per capita demand in kg
4.2
3.6
6.2
1980 2005 2010
1980 2005 2010
Western Europe
North America
1990 2006 2015
Asia ex. Japan
Source BASF, VKE 2008
11
Growth in Plastics Automotive
Average Kg / Car
4 CAGR
Source APME, Bayer Research, Rhodia Polyamide
12
Growth in Plastics Packaging
13
Growth in Plastics Building Materials
In billions of lbs.
9.3 CAGR
Source Freedonia Group, Composite Plastic
Lumber Study, February 2006
14
Growth in Plastics Health Care
In billions
9.2 CAGR
Source Freedonia Group, Reed Life Sciences
15
Plastics Machinery Markets
… plastics processing equipment and systems
Estimated Global Market - 16 Billion
40 Injection Molding
60 Asia
20 Other
20 Europe
20 Extrusion
20 Blow Molding
15 North America
5 ROW
Projected Annual Growth Rate 3.5 to 19
Billion in 2009
Sources Fredonia, Milacron
16
Mold Technologies Markets
… products and supplies for injection mold makers
Estimated Global Market - 2.7 Billion
25 Components
25 Americas
35 Mold Bases
25 Europe
25 Hot Runners
50 Asia
10 Supplies
5 Controls
Average Annual Growth Rate 2.5 to 3
Source Milacron Inc.
17
Metalworking Fluids Markets
… most end-markets have GDP growth rates
Estimated Global Market - 2.4 Billion
20 Semi-Synthetic
37 Asia
20 Soluble Oil
30 Europe
15 Synthetic
45 Straight Oil
32 Americas
5 ROW
Average Annual Growth Rate 2.5 to 3
Sources Frost Sullivan Milacron Inc.
18
Cyclicality of the Machinery Market
… extended boom cycle followed by extended bust
In millions
Tech bubble, Y2K build up.
9/11/2001. War in Middle East.
Oil prices soar. US Big 3 auto woes. New
housing bust.
Worldwide resin shortage.
Steepest decline, longest trough.
Source The Society of the Plastics Industry
19
Current Impact of Used Equipment
… glut of used machines depresses new machine
sales
12/12 Rate-of-Change in Units
UCC Used Machinery
v. SPI Reported Shipments
UCC Used Machinery (through 08/07)
SPI Reported Shipments (through 12/07)
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
2006 2007
Source SPI EDA UCC Filings
20
Plastics Machinery Industry News
… a flurry of activity H2 2007 and into 2008
2007
2008
21
Operating Results Strategy
Helping the Worlds Leading Companies … Make the
Worlds Favorite Products
22
A Slow Recovery
… stalled in 2007 by declines in North America
In millions
23
Operating Cash Flow
… coping with a very challenging environment
In millions
Reported - excludes restructuring charges and
change of ownership costs Adjusted - excludes
restructuring and refinancing expenses,
Sarbanes- Oxley costs, U.S. defined pension plan
expense and self-insurance underwriting losses.
See reconciliation table in appendix.
24
Milacrons Growth Strategy
… sustainable profitability through long-term
growth
PROFITABLE GROWTH
TACTICS Cost Reductions Lean Initiatives Global
Sourcing
REVENUE
RETURN ON INVESTMENT
25
Aftermarket Growth
…better margins and faster growth potential
Milacron Machinery Aftermarket Sales
2007 Sales 808 Million
In millions
5 CAGR
25 Aftermarket
42 Machinery
Mold Tech 18
15 Fluids
26
Growth in Emerging Markets
…investment in expanded distribution paying off
Milacron Sales to Emerging Markets
187
14 CAGR
147
137
129
109
97
27
New Injection Molding Systems
Innovative Solutions
…advanced technologies make our customers more
productive
  • All-electric injection molding for major
    energy savings and clean-room
    production
  • Multi-material injection molding
    capabilities
  • In-mold labeling and assembly

28
New Blow Molding Systems
…industry first introduced in 2007 all-electric
blow molding
  • All-electric blow molding system for
    energy savings and greater
    precision/repeatability
  • Clean blow technology to help extend
    shelf life
  • Multi-layer blow molding for durability
    and lower cost
  • Blow molding systems for case-less
    plastic milk jugs stackable and
    waste-eliminating

29
New Extrusion Systems
Innovative Solutions
…wood-fiber composites are made of sawdust and
recycled plastic
  • Leading twin-screw extrusion technology
    to process PVC and wood- flour
    composites
  • Advanced systems to extrude PVC pipe,
    window and door profiles, vinyl siding, etc.
  • Single-screw extruders for many markets
    such as sheet, profile and pipe
  • Replacement barrels and screws for all
    makes of extruders

30
New Mold Technologies Products
…mold runner systems for new products and
applications
  • First cold deck runner system in U.S. for
    liquid silicone rubber molding, a
    market with current double-digit growth
  • Hot runner systems customized for crate
    and container molding
  • Hot runners for molding PLA (polylactic
    acid), a starch-based, renewable,
    biodegradable polymer

31
New Industrial Fluids
Innovative Solutions
…environmentally friendly bio-stable fluids and
high-performance fluids
In thousands
2006
2007
In thousands
2007
32
Financials
Helping the Worlds Leading Companies … Make the
Worlds Favorite Products
33
Four Reporting Segments
  • Machinery Technologies Europe
  • Sales 181 M
  • EBIT 3.3 M
  • Injection molding, blow molding and extrusion
  • Mold Technologies Global
  • Sales 148 M
  • EBIT 1.9 M
  • Mold bases, hot-runner systems, mold parts,
    MRO supplies

Consolidated 2007 Sales 808 Million
Machinery Technologies - North America
22
18
  • Industrial Fluids Global
  • Sales 124 M
  • EBIT 16.6 M
  • Metalworking fluids, solvents and process
    cleaners

15
  • Machinery Technologies North America
  • Sales 367 M
  • EBIT 10.8 M
  • Injection molding, blow molding and extrusion

45
Segment EBIT excludes restructuring
charges and change of ownership costs.
34
Bridge 2006 to 2007
In millions
In millions
Excludes restructuring and refinancing costs,
as well as expenses associated with change in
ownership of preferred stock.
35
Capitalization as of December 31, 2007
In millions
36
Free Cash Flow
… conserving cash is a top priority
In millions
(1) Excludes restructuring costs and expenses
related to change in ownership of preferred
stock. (2) See quarterly earnings releases for
details.
37
Liquidity
… maintaining good flexibility
In millions
38
Capital Spending
… reducing our investment requirements
From Continuing Operations
In millions
39
Appendix
Helping the Worlds Leading Companies … Make the
Worlds Favorite Products
40
2008 First Quarter Guidance
… last updated February 25, 2008
See next slide for footnotes and explanations.
41
2008 First Quarter Guidance - Notes
… last updated February 25, 2008
Note The preceding amounts are approximate
working estimates, around which an even wider
range of numbers could be used for financial
modeling purposes. These estimates, by their
nature, involve a great number of risks and
uncertainties. Actual results may differ as these
risks and uncertainties could significantly
impact the company's markets, products, and
operations. For further information please refer
to the Cautionary Statement included in Item 2 of
the company's most recent Form 10-Q on file with
the Securities and Exchange Commission.
Footnotes 1. Sales in quarter ended March 31,
2008 increased approximately 8 million over the
same periods a year ago due to the strengthening
of the euro. 2. Loss after tax includes 0.6
million of non-cash expense related to the U.S
defined benefit plan in quarter ended March 31,
2008. 3. Per share amounts include accruals for
preferred dividends and effect of beneficial
conversion feature. 5. Primary working
capital inventory receivables - trade
payables - advance billings.
Assumptions Assumes quarter ended December 31,
2007 foreign exchange rates (e.g., USD/EUR
1.4384) and no further acquisitions or
divestitures.
42
Five-Year Financial Summary
Excludes restructuring and refinancing charges,
and the writedown of goodwill and deferred tax
assets.
43
Milacron Cost Reductions
…essentially completed on budget and on schedule
  • Consolidation
  • Actions Mold technologies closing and/or
    selling multiple manufacturing facilities in
    Europe and North America to
    focus on value-added, proprietary or strategic
    production
  • Injection molding machinery closed certain
    sales offices and reduced
    employment levels in Europe
    and North America to lower fixed cost structure
  • Charges Approximately 31 million, of which
    13 million in cash
  • Benefits Up to 27 million in annualized
    savings 5 million in 2006,
    12 million incrementally in 2007, and 8 million
    incrementally in 2008.

44
Borrowing Capacity
… credit facility provides operational flexibility
In millions
2006 2007
Net of letters of credit and block
45
Major Debt Terms
  • 225 M Senior Secured 11½ Notes due May 2011
  • First priority lien/pledge on
  • Property, equipment, fixed assets and certain
    intangibles
  • 100 capital stock of all domestic subsidiaries
  • 65 capital stock of certain non-U.S.
    subsidiaries
  • Second priority lien on ABL-secured assets
  • Standard high yield covenants
  • Guarantees substantially all wholly owned
    domestic and Canadian subsidiaries and Milacron
    Capital Holdings B.V. on a senior basis
  • 105 M ABL due December 2011 General Electric
    Capital Corporation
  • Borrowing base 85 eligible AR 35
    approximately eligible inventory
  • Libor 150-250 bps or Index 50-150 bps
  • First priority lien on AR, inventory and other
    current assets
  • Second priority lien on bond-secured assets
  • No performance covenants as long as minimum
    availability maintained
  • Guarantees substantially all wholly owned
    domestic and Canadian subsidiaries
  • 27 M ABL due March 2013 Lloyds TSB Group
  • Asset-secured loans sale of receivables program
  • Euribor 175-200 bps
  • Covenants fixed charge ratio 11 in Europe

46
Reconciliation EBITDA to Net Loss
47
Thank You!
Helping the Worlds Leading Companies … Make the
Worlds Favorite Products
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