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Dougherty & Company
Institutional Investor Conference
September 2016
Management
1
Sherry BuckVice President, Chief Financial Officer
Bill FoleyChairman and Chief Executive Officer
Kim HunterTreasurer and Vice President, Investor Relations
Material presented at this meeting includes forward-lookingstatements about Libbey Inc. These statements are subject torisks and uncertainties, including market conditions, competitive pressures, the value of the U.S. dollar and significant cost increases.
Please refer to the Company’s Form 10-K forfiscal year-end December 31, 2015, filed onFebruary 29, 2016, for further information.
Cautionary statement
2
Agenda
3
• Company Overview 4 - 10
• Strategic Focus 11 - 17
• Financial Performance 18 - 24
• Investment Highlights 25
• Appendices
� Timeline
� Definition and Reconciliation of Non-GAAP
Measures
• Global glass tableware leader: #2 in the world, #1 in the Western
Hemisphere (1)
• #1 U.S. foodservice business drives significant recurring revenue and
profitability (1)
• Established global presence with significant growth potential
• Cost structure optimization coupled with manufacturing innovation creates
significant advantage
• Strategy in place to grow revenue and expand margins
• Simplifying supply chain to improve ROIC
• Strong liquidity and credit profile provide financial flexibility
• Balanced approach to capital allocation aims to deliver 50% of free cash
flow to shareholders
Investment highlights
4(1) Management estimates
Libbey at a glance
A global tableware leader selling manufactured and sourced glass, ceramic and metal tableware. #2 global glass beverageware position, #1 in the Americas! (1)
5
Customers include some of North America’s largest foodservice distributors and most recognized retail names
$822.3 million of net sales in 2015 sold to Foodservice, Retail and B2B channels globally
Libbey sells more than 1,100,000,000 glasses annually
Our products are central to lifestyle and gift giving at home, in restaurants and in over 100 countries around the world
NYSE MKT: LBY
(1) Management estimate
Libbey competes in four product categories
6
Category Products Manufacturing
Glass Tableware
• Tumblers, stemware, mugs, bowls, floral, salt shakers, shot glasses, canisters, candleholders, handmade tableware
In-house
Other Glass Products
• Bakeware, blender jars, mixing bowls, floral, candle, and washing machine windows
In-house
Ceramic Dinnerware
• Plates, bowls, platters, cups, saucers, and other tableware accessories
Sourced
Metalware
• Knives, forks, spoons, serving utensils, serving trays, pitchers, and other metal tableware accessories
Sourced
Libbey goes to market in three key channels
• Extensive network of 500+ of the finest U.S. foodservice distributors who sell to restaurants, bars, hotels and travel and tourism venues
• #1 glass beverageware supplier and #2 dinnerware and flatware supplier in the U.S. and Canada(1)
• 90% of foodservice glass tableware sales are replacements, driving a predictable revenue stream
• ~ 60% market share in U.S. foodservice glass beverageware(1)
• Customers include marketers branding Libbey glassware with company logos and reselling to breweries, distilleries, soft drink companies, craft industries and food packing companies
• Companies using glass products for candle and floral applications, blender jars, mixing bowls and washing machine windows
Foodservice
Business-to-Business (B2B)
• Customers include leading mass merchants, department stores, upscale retailers, grocers and internet retailers
• Most recognized glass beverageware brand and North America’s #1 retail supplier of casual glass beverageware; an important driver of profitable factory utilization(2)
• ~40% market share in U.S. casual glass beverageware, branded and private label(2)
7
No single customer accounts for 10% or more of sales
(1) Management estimate(2) NPD Group Retail Tracking Service and management estimates
Retail
Established industry leadership and global presence
8
Million Total Square Feet
7Warehousing /
DCs
8Manufacturing
Facilities
6
West Chicago, IL
Toledo, OH
Shreveport, LA
Monterrey, Mexico
Laredo, TX
Marinha Grande, Portugal
Leerdam, Netherlands Langfang,
China
Manufacturing / Warehousing / Distribution CentersWarehousing / Distribution Centers
Headquarters
2015 Net Sales by Segment
U.S.& Canada
75%
Latin America
20%
EMEA1%
Other 4%
U.S. & Canada
61%
Other 4%
Latin America
20%
EMEA15%
2015 Net EBIT by Segment (1)
(1) Represents percentage of segment EBIT only
• The U.S. foodservice market is large and dining out remains popular in consumer surveys
• Consumer confidence is strong and discretionary income is rising
• Foodservice market leader recognized for excellence by leading foodservice distributors:
• Strong foodservice network and in-house salesforce sell to both established restaurants and new entrants throughout the country
• Steady pace of innovation and critical profitability of beveragewarelead to lower price sensitivity; price increases in 42 of last 46 years
• Exceptional depth and breadth of product line and sizeable installed tableware base provide significant advantage
9
Foodservice channel: positioned for continued strength
• U.S. casual glass beverageware leader; market share at ~40% is more than twice the next competitor (1)
• Libbey goes to market with highly recognized brands
• Libbey is the favorite U.S. glass beverageware brand and has the strongest unaided brand recognition(1)
• Established relationships with major retailers provide a platform to launch innovative products
10
Retail channel: improving competitive positioning
(1) NPD Group Retail Tracking Service, NPD survey and management estimates, includes branded and private label
11
Libbey has three key strategic focus areas:
Growth through Innovation
Customer Focus
Business Simplification
1.
2.
3.
12
Growth through innovation1
• Focus on product innovation to drive growth and margin expansion
• Grow around core foodservice business and in retail and B2B
� Drive organic growth and expand into adjacent categories
- Foodservice: underpenetrated categories, adjacent venues
- Retail: adjacent categories; good, better, best offerings
� Improve marketing insight and new product development for competitive advantage
- Trend insight advice and on-trend foodservice and consumer offerings
- Differentiated offerings to meet current consumer needs and preferences
- Expanded footprint in underserved and emerging categories
• We are in early stages of developing an e-commerce strategy
A full line of stemware, tumblers and specialty drinkware for retail and foodservice channels
13
A reinvention of a classic shape
Subtle design
Harmony and balance
Gentle contours and thick sham
Modern luxury
Extraordinary angles
Free-flowing movement
Dramatic height
Libbey’s finest glassware: “elevates the everyday into art”
Retail Foodservice
1
Artisan Bakeware
14
• Artisan bakeware designed for
retail channel
• New Libbey-designed stoneware
using sourced manufacturing
� Reactive blue glaze literally
makes every piece unique
� Four essential shapes
cover most baking needs
• Artisan stoneware that’s
dishwasher, oven and
microwave safe
Libbey makes oven to table beautiful
1
Three new “trend-right” dinnerware collections in foodservice
15
Connecting toTrends & Insights
DRIFTWOODDRIFTWOODDRIFTWOODDRIFTWOOD
PEBBLEBROOKPEBBLEBROOKPEBBLEBROOKPEBBLEBROOK
Fresh shapes, finishes,
color variations, patterns
1
16
Customer Focus2• Improving customer focus and responsiveness
� Seeking customer feedback and consistent engagement
- Enhancing “top to top” customer relationships
- Increasing time in front of customers to better understand current and future needs in order to develop customer specific strategies
� Adapting operating practices to meet customer needs
- Re-engineered sales compensation system
- New CRM system
- Sales opportunity pipeline measurement tool
- More responsive back-office practices
• Multiple cost reduction initiatives in recent years to remove non-value-added complexity
• Currently simplifying supply chain to improve ROIC
• Product portfolio optimization:
� Discontinued underperforming SKUs (20% of global product portfolio)
� Improved product lifecycle management processes
� Improved sales force focus and reduced costs
• Furnace consolidations and technology upgrades in EMEA and Latin America
� Reduces capital commitments for future furnace rebuilds
� Lowers operating costs
• Reviewing opportunities to further optimize global network
17
Business simplification3
18
Invest in the
business
Maintain financial strength
and flexibility
Return capital to investors
• Support/accelerate the organic growth of our business
• Selectively consider acquisitions
• Develop or invest in technologies and manufacturing capabilities
• Target to return ~50% of free cash flow to shareholders for period 2015 - 2017
- Over 50% distributed in 2015: $25MM
• Re-initiated common dividend at annual $0.44/share in 2015
- 5% dividend increase for 2016 to $0.46/share
• Share repurchase authorization increased to 1.5 million shares in 2015
- Over 558K shares repurchased since December 2014 totaling ~$18.3MM; targeting full utilization of authorization by end of 2017
• Debt Net of Cash to Adjusted EBITDA ratio(1) range of 2.5x – 3.0x
• Ability to flex up or down
• Plan to reduce debt in 2016 to target range; made $10MM total optional prepayments in 1st Half of 2016
(1) See Appendix: Definition and reconciliation of non-GAAP measures for details regarding calculation of Adjusted EBITDA and the ratio net debt/Adjusted EBITDA
Balanced approach to capital allocation
• Flexible capital structure
- $440MM senior secured Term Loan B matures 2021
� LIBOR plus 300 bps (currently 3.75%)
� No financial covenants
� $150MM accordion option
- $100MM ABL facility matures 2019
� LIBOR plus 150-200 bps; maturity 2019
• Improved interest coverage
- Significant borrowing rate reductions
- $220MM of Term Loan B swapped to achieve ~50% floating rate exposure
• Significant deleveraging despite investments to strengthen the business
- Fully funded U.S. pension in 2012, lowering annual cash contributions
- ~$9MM estimated global cash contribution in 2016, approximately all to non-U.S. plan
19
6.4
4.3
3.2 3.0 3.0 2.73.1 3.3
2008 2009 2010 2011 2012 2013 2014 2015
1.2 1.4 2.6 2.6
3.5 4.2
5.4 6.3
2008 2009 2010 2011 2012 2013 2014 2015
Adjusted EBITDA(1) / Interest Expense
Debt Net of Cash / Adjusted EBITDA(1)
(1) See Appendix: Definition and reconciliation of non-GAAP measures for details regarding calculation of Adjusted EBITDA and the ratio net debt/Adjusted EBITDA
Capital structure and leverage policy provide financial flexibility
Market leadership and business model drive predictable revenue stream and cash flow
(1) See Appendix: Definition and reconciliation of non-GAAP measures for details regarding calculation of Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Operating Cash Flow
20
Historical Cumulative
Adjusted Operating Cash flow (1)
(MM)
$(1)
$105
$176 $233
$358
$432
$558 $624
2008 2009 2010 2011 2012 2013 2014 2015
$810
$749 $800 $817 $825 $819
$852 $822
$85 $90 $116 $113 $132 $135 $123 $116
2008 2009 2010 2011 2012 2013 2014 2015
Net Sales Adjusted EBITDA
10.5%
12.0%
14.5%13.8%
16.0% 16.5%
14.5% 14.1%
Adjusted EBITDA Margin
Net Sales, Adjusted EBITDA and Margin (1)
(MM)
• Strong cash generation and liquidity
- $46 MM cash on hand at 6/30/16
- $93 MM ABL availability at 6/30/16
• Seasonal working capital needs
- Average $30-$35 MM peak to trough swing
in quarter-end working capital each year (1)
• Capital expenditures on average about equal to depreciation
- ~$30 MM growth investment for new glass
manufacturing technology over 2014-2015
• Flexibility to selectively pursue M&A opportunities
• No significant long-term debt due until Term Loan B in 2021
21
$122$136
$113
$142 $140
2011 2012 2013 2014 2015
Total of Cash and ABL Availability(MM)
Cash ABL Availability
0
10
20
30
40
50
60
2011 2012 2013 2014 2015
Capital Expenditures, Depreciation & Amortization
Capital Expenditures Depreciation & Amortization
$ M
illi
on
s
(1) Working capital is defined as net accounts receivable plus net inventories less accounts payable as also noted in Appendix: Definition and reconciliation of non-GAAP measures
Significant liquidity resources and moderate near-term funding obligations
Recent performance and outlook
22
1st Half Highlights
• Net sales
- Continued foodservice strength, up 4.4% in constant currency (1)
- Foodservice growth offset by B2B channel sales
- Adjusted EBITDA margin (1)
- Favorably impacted by price/mix, lower input costs and SG&A; partially offset by currency and lower
manufacturing activity
(1) See Appendix: Definition and reconciliation of non-GAAP measures for details regarding calculation of Adjusted EBITDA and Adjusted EBITDA Margin; definition of constant currency
Currency Impact vs. PY
$401
$391
$54
$62
$-
$50
$100
$150
$200
$250
$300
$350
$400
$450
2015 2016YTD Net Sales
YTD Adjusted EBITDA
13.5%
15.9%
0%
5%
10%
15%
20%
25%
Adjusted EBITDA Margin
1st Half Net Sales, Adjusted EBITDA and Margin (1)
Mil
lio
ns
$401
$66
2016 Full-Year Earnings Outlook
• Net sales 1% to 2% below prior year on a
reported basis
• Adjusted SG&A(1) in the low 15% range
• Adjusted EBITDA(1) margin of ~14%
Tailwinds
• Net sales growth
• Natural Gas
Headwinds
• Production activity
• Benefit costs (variable compensation)
• Currency impacts
Long-term financial goals
23
Financial Metric Long-term Goal
Revenue growthSustainable growth –
5% CAGR
Adjusted EBITDA margin(1) 17%
Debt Net of Cash to Adjusted EBITDA(1) 2.5 to 3.0x
ROIC(1) 12% to 14%
TSR Top quartile
(1) See Appendix: Definition and reconciliation of non-GAAP measures for details regarding calculation of Adjusted EBITDA and Adjusted EBITDA Margin; definition of ROIC
Market Firm Net Sales 2015A Rev. Split '16E Margin FV / EBITDA P / E Net Debt /
Company Cap Value 2016E 2017E N.A. Europe ROW EBITDA EBIT 2016E 2017E 2016E 2017E LTM EBITDA
New ell Brands Inc $25,595 $38,399 $13,568 $16,423 70% -- 30% 18.7% 15.8% 15.2x 12.5x 18.6x 17.4x 6.2x
Tupperw are Brands Corporation3,312 4,078 2,251 2,325 26 26 48 17.8 14.9 10.2 9.7 15.2 14.1 3.0
Helen of Troy Limited 2,515 3,107 1,581 1,633 84 12 4 14.7 11.2 13.4 12.7 14.5 13.6 2.7
Lifetime Brands, Inc. 194 289 585 603 79 14 8 -- -- -- -- 13.0 10.4 2.6
Mean $7,904 $11,468 $4,496 $5,246 64% 18% 22% 17.0% 14.0% 12.9x 11.6x 15.3x 13.9x 3.6x
Median 2,913 3,592 1,916 1,979 74 14 19 17.8 14.9 13.4 12.5 14.9 13.8 2.8
Libbey Inc. $387 $777 $809 $828 61% 15% 25% 14.1% 7.6% 6.8x 6.3x 14.0x 10.4x 3.0x
Trading at a significant discount to peers
24
Note: Forward metrics based on consensus Wall Street estimates (FactSet). Market data as of August 31, 2016. Balance sheet data as of Q2 2016.(1) Based on pro forma LTM EBITDA of $2.0bn.(2) Revenue split based on fiscal year ended February 29, 2016.
($ in millions)
(2)
(1)
• Global glass tableware leader: #2 in the world, #1 in the Western
Hemisphere (1)
• #1 U.S. foodservice business drives significant recurring revenue and
profitability (1)
• Established global presence with significant growth potential
• Cost structure optimization coupled with manufacturing innovation creates
significant advantage
• Strategy in place to grow revenue and expand margins
• Simplifying supply chain to improve ROIC
• Strong liquidity and credit profile provide financial flexibility
• Balanced approach to capital allocation aims to deliver 50% of free cash
flow to shareholders
Investment highlights
25(1) Management estimates
Appendix
We have expanded globally and have a strong portfolio of brands
Jun 2006: Obtains remaining 51% stake in Crisa,
expanding presence to Monterrey,
Mexico
Jan 2005: Acquires Crisal, a glassware manufacturer based
in Portugal
1800s 1990
Jul 2013: Celebrates 125th Anniversary in
Toledo
2002 2006 20112008 20122000
Dec 2002: Acquires Royal Leerdam, expanding
glassware operations to Europe
May 2012: Refinancing
amended $100MM ABL facility
and issuance of $450MM 6.875% Senior Secured
Notes
Apr 2007: Opens Langfang, China
facility
Aug 1997:Acquires World Tableware and
49% of Crisa
2014
Apr 2014: Refinancing,
including amended $100MM ABL
Facility and new $440MM Term Loan B senior secured credit
facility
1818: Libbey founded as New England Glass Company in East Cambridge, MA
sJun 1993:
Libbey becomes a public company
1892:The company
changes its name to The Libbey
Glass Company
Oct 1995: Acquires
Syracuse China
Aug 2011: Bill Foley becomes Chairman of the
Board
2015
Jan 2015:Announce Own the Moment strategy.
Re-initiate dividend and share
repurchases
Jan 2016: Bill Foley
becomes CEO and Chairman of
the Board
2016
Definition and reconciliation of non-GAAP measures
Definition and reconciliation of non-GAAP measures
2015 2014 2013 2012 2011 2010 2009 2008
Adjusted EBITDA (1)
116.1$ 123.4$ 135.3$ 132.1$ 112.8$ 115.8$ 90.1$ 85.2$
Debt (2)
431.0 437.9 402.4 454.2 390.1 436.6 512.0 543.5
Plus: Unamortized discount, finance fees and warrants (2)
5.8 7.0 9.5 12.3 11.6 16.9 5.0 11.4
Less: Carrying value in excess of principal on PIK notes - - - - - - 70.2 -
Less: Carrying value adjustment on debt related to the Interest
Rate Agreement - - (1.3) 0.4 4.1 3.3 - -
Gross Debt 436.9 444.9 413.2 466.1 397.6 450.2 446.8 554.9
Cash 49.0 60.0 42.2 67.2 58.3 76.3 55.1 13.3
Debt net of cash 387.9$ 384.9$ 371.0$ 398.9$ 339.3$ 373.9$ 391.7$ 541.6$
Debt net of cash to Adjusted EBITDA Ratio 3.3 3.1 2.7 3.0 3.0 3.2 4.3 6.4
Interest expense 18.5$ 22.9$ 32.0$ 37.7$ 43.4$ 45.2$ 66.7$ 69.7$
Adjusted EBITDA to Interest Expense Ratio 6.3 5.4 4.2 3.5 2.6 2.6 1.4 1.2
Reconciliation of Adjusted EBITDA to Debt net of cash to Adjusted EBITDA Ratio and Adjusted EBITDA to Interest Expense Ratio(Dollars in millions)
(1) - See prior page for calculation and reconciliation to net income.
(2) - All years reflect retrospective adoption of ASU 2015-03 and 2015-15, which presents debt issuance costs of senior debt as a reduction to the liability.
Definitions – Other Non-GAAP Measures
Working capital is defined as net accounts receivable plus inventory less accounts payable
Return on invested capital (ROIC) is defined as after tax income from operations (using a 30% tax rate), adjusted for special items, over ending working capital plus net book value of property, plant and equipment
Constant currency references regarding net sales reflect a simple mathematical translation of local currency results using the comparable prior period’s currency conversion rate. Constant currency references regarding EBIT, EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin comprise a simple mathematical translation of local currency results using the comparable prior period’s currency conversion rate plus the transactional impact of change sin exchange rates from revenues, expenses and assets and liabilities that are denominated in a currency other than the functional currency.
Free cash flow is defined as net cash provided by operating activities plus net cash provided by (used in) investing activities
Adjusted Operating Cash Flow is defined as net cash provided by operating activities plus 2012 pension contribution (to fully fund our target obligations under ERISA), plus call premiums on senior notes and/or floating rate notes, plus debt issuance costs.
2016 Adjusted SG&A is defined as selling, general and administrative expenses adjusted to exclude the impact of executive terminations and other non-recurring charges, if any, for the fiscal year ending December 31, 2016.
NYSE MKT: LBY
Kimberly Hunter
Treasurer and VP, Investor Relations
419-325-2612
email: [email protected]
Alpha IR Group
Chris Hodges & Sam Gibbons
312-445-2870
email: [email protected]
Additional Information
visit our website: www.libbey.com