北美包装行业(荷兰银行0712)

NorthAmericaUnitedStatesPackaging6December2007HYPackaging&Containers4Q07PackagingPreviewand2008OutlookDeutscheBankSecuritiesInc.Allpricesarethosecurrentattheendoftheprevioustradingsessionunlessotherwiseindicated.PricesaresourcedfromlocalexchangesviaReuters,Bloombergandothervendors.DataissourcedfromDeutscheBankandsubjectcompanies.DeutscheBankdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Thus,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.Independent,third-partyresearch(IR)oncertaincompaniescoveredbyDBSI'sresearchisavailabletocustomersofDBSIintheUnitedStatesatnocost.CustomerscanaccessthisIRat(+1)[e-mail]Analyst(+1)[e-mail]searchHighYieldWithfewexceptionsthefirstninemonthsof2007havebeenstrongformostofthepackagingcompanieswiththestand-outsbeingthecan-makersandtheloneglassmakerinourcoverage.Ingeneral,weexpectthemomentumforyear-over-yearimprovementtocontinuebutwithslowergrowthratesinthequarter(seeTable2forprojections).Resinprices,wherewenormallyseesomeseasonalreliefduringthistimeofyear,havenotsubsidedbutinfacthavesky-rocketedinrecentweeksduetosoaringcrudeoilmarketsandarelativelystrongexportmarket.Weexpect2008tobeginlikeweexpect2007toend:difficultinflationaryenvironmentcoupledwithasluggishdomesticmarketandrobustemergingmarketgrowth.DeutscheBank’srealU.S.GDPgrowthforecastfor2008is2.1%,andweprojectaslowdowninboththeEurolandandUKeconomieswithforecastrealGDPgrowthof1.7%and1.8%,respectively.Growthrateexpectationsintheemergingmarketsaresignificantlyhigher,yieldingaforecastworldgrowthrateofahealthy4.6%in2008.Companiesreviewedinthisreport:AEPIndustriesAlerisInternationalBallCorpBerryPlasticsBWAYCaraustarIndustriesConstarInternationalCrownHoldingsGrahamPackagingGraphicPackagingGreifO-IPackagingDynamicsPlastipakPortolaPackagingSilganSmurfit-StoneSoloCupWiseMetals6December2007HYPackaging&ContainersPage2DeutscheBankSecuritiesInc.TableofContents4Q07Previewand2008Outlook..............................................................................................3MarketOverview......................................................................................................................5CompanySummaries:.............................................................................................................14Appendix128CompanySpreads...................................................................................................................316December2007HYPackaging&ContainersDeutscheBankSecuritiesInc.Page34Q07Previewand2008OutlookComparing2007to2006Thefirstninemonthsoflastyearweredifficultformostpackagingcompaniesastheycontinuedtostrugglewithvolatileresinmarkets,historicallyhighenergyandtransportationcostsandinadequatecontractstopassthroughnon-resin-relatedcosts.Theyearbeganaswecameoutofoneoftheworsthurricaneseasonsinmemory,whichroiledtheenergyandresinmarkets.Earlyintheyear,plasticpackagingcompaniesfoundthemselvesstilluncertainwhethertheywouldhaveenoughresintosupplycustomersandwerelookingatrecordnaturalgasprices.Somewerecautiousandstartedtobuildupinventoryofhigher-costresinandtohedgenaturalgasonthefearofevenhigherfutureprices.In2Q06companiesbegantoseeresinpricesshowsomereliefandthestartofamorestablenaturalgasenvironment.Thefirsthalfof2007beganwiththemajorityofpackagingcompaniesabletofocusonthenormalastheendof2006experiencedabenignhurricaneseason.Thepackagingcompaniescontinuedtodiscusschangingcontractstructurestoincludebetterinflationarycostpass-throughtocustomers.Somewerealsosimplytryingtoraisepricesorimplementsurchargesontransportationandenergycosts,inanattempttopassonthesurchargestheythemselveswerebeingchargedsuccessfullybysuppliers.Resinpricesbegantorecoverandincrease,evenasdomesticdemandwasnotevidentbutthechemicalcompaniesfoundanaccommodatingexportmarketfueledbyhighoilprices,andstrongglobaldemandforresins,combinedwithaweakeningUSdollarmakingdomesticpricesattractive.Thestrongexportmarketenabledchemicalcompaniestomaintainhighresinprices,andinsomecases,suchaspolystyrene,reachrecordlevels(moreonthisbelow).Withfewexceptionsthefirstninemonthsof2007havebeenstrongformostofthepackagingcompanieswiththestand-outsbeingthecan-makersandtheloneglassmakerinourcoverage(seeTable1).Asyoucanseebythetableattheendofthisreport,themajorityofthecompanieslistedexperiencedEBITDAimprovementaswellascreditstatisticimprovementinthefirstninemonthsof2007.Duringthethirdquarterof2007(3Q07)wecontinuedtoseeimprovementyear-over-yearinmostcases,butataslowerpacethaninthefirsthalf.ThemostnotablefirmstoimprovebothEBITDAandcreditstats(excludingcompaniesthatmadeanacquisitionbetweenthetimeperiods)wereBall,Crown,Graham,Graphic,Gre