Alcan Investor Workshop
Business Environment & Competitive Position
Effect of Cost Pressures since 2002
Unprecedented rise in raw material prices significantly squeezed industry margins
NA Flexibles Industry - 2001-2005
Global Packaging Companies - 2001-2005
Source: Harris Nesbitt, May 2006
Bemis, Sealed Air, Winpak, Huhtamaki, Amcor, Alcan Packaging
LLDPE Europe/NA Index 2001-100
Gross Margin %
Average TTM Gross Margin vs. Resin Pricing
Flexible Packaging Companies
26%
25%
24%
23%
22%
21%
20%
2001
3Q01
2Q02
3Q02
2003
ITTM Gross Margin
3Q03
2004
3Q04
200 por acos aco
3Q05
LLDPELPDE
$1.00
$0.90
$0.80
$0.70
$0.60
$0.50
$0.40
$0.30
Resin Price ($ per lb)
EBITDA Margin %
EBITDA % Sales
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
+
Hr
2001
.
2002
ALCAN
+
2003 2004 2005
▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬
180
160
140
120
100
80
60
40
20
0
➤ Average EBITDA margin decline of 3.7% from the peak of 2002, and 2.2% from the more average
years of 2001 & 2003
LLDPE Price Index (2001=100)
Weakening economic conditions, especially in Europe, have also been a significant factor contributing
to declining margins over the period 2002-2005
©2006 ALCAN INC.
Slide 7View entire presentation