Acquisition of Latasa presentation October 2003

Acquisition of Latasa
31 October 2003

Acquisition of Latasa
• Acquisition of Latasa, Brazil’s No1
beverage can maker, for US$462m
– Agreement to purchase 89% from main
shareholders
– 11% subject to tender offer
• Strong position in developing market

EV Multiples on LTM 2003 (1)
• Enterprise value US$462m(2)
• EBITA multiple 6.1x
• EBITDA multiple 4.5x
• Sales multiple 1.2x
(1) 12 months to 30.06.2003 based on UK GAAP
(2) Excludes minority discount and transaction costs
The Deal

• Latasa + Rexam = No.1 in Brazil
• Clear leading position in South
America
The Deal

• Good cash flows US$70-80m/year
• Cash pay back 5-6 years
The Deal

• Earnings enhancing Year 1
• Beats WACC* Year 1
*Adjusted to reflect Brazilian risk
The Deal

Ball
15%
CCK
15%
Rexam
18%
Metalic
4%
2002E
Brazilian Market = 10.6bn cans
Source: Latasa, Rexam
Latasa
48%
Who is Latasa?
• No 1 in beverage cans in
Brazil, Argentina and Chile
• 5.6 bn cans/year
• Sales in 2002 US$404 m
• Good EBITA margins

Source: Latasa, Rexam
CC&S
25%
Argentina
Latasa
75%
Imports
2%
Who is Latasa?
Chile
Latasa
98% 98
2002E 2002
Market = 0.3bn units Market = 0.3bn units

Latasa (Manaus) –
Cans/Ends proposed
Latasa (Brasília) - Cans
Latasa (Jacareí) - Cans
Latasa (Viamao) - Cans
Source: Latasa, Rexam
Latasa (Recife) -
Cans/Ends
Rexam (Extrema) -cans cans
Latasa (Sta. Cruz) - Cans
Who is Latasa?
• Well located, modern
production technology
– 5 plants in Brazil
– 1 plant in Argentina
– 1 plant in Chile
• Well invested
– Limited expansion investment
required

• Experienced
management
• Highly committed
work force
• Good cultural fit
Who is Latasa?

• Supplies 73% of AmBev’s
beverage cans (Brazil’s largest
brewer)
• Serves global customers
Coca-Cola
• Focused on beer
75% of sales
Source: Latasa, Rexam estimates
Strong Customer Relationships

The Brazilian Market
• 5 th largest country in world
with 175m population
• 3 rd largest can market c10bn
units
• Beverage can consumption
60 per capita pa (versus
360 in US and 76 in
W Europe)

Filled cans (m)
12000
10000
8000
6000
4000
2000
0
Source: Radar, Rexam
Rapid Growth in the 1990’s
CAGR 11% pa
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Can Consumption in Brazil

Brazilian Market and Political Environment
• Recent developments
•Political uncertainty surrounding 2002
presidential elections
•Economic slowdown
•FX impact leading to substitution of cans

4
3
2
1
0
Brazilian Real/US$ (month end rates)
Exchange Rate Trend
Jan-99 Jan-00 Jan-01 Jan-02 Jan-03
Source: Interbank rates, oanda.com

• More political stability post
Lula’s election
• Macro economic outlook
improving
• Prospect of more stable
currency
• Beer and CSD consumption
growth expected at 3% pa
• Beverage can growth
expected to be 5% pa
More Positive Outlook in Brazil

• Can is preferred pack for
supermarkets
– beer in cans delivers lowest
price per litre
• Can is the low cost
solution for single serve
CSD
Cans in Brazil

Transactions in Brazil
• Functional currency US$,
as for Rexam’s existing
Brazilian beverage can
business
• Contracts with customers
and suppliers US$-linked

Source: Rexam
Others
1%
Kaiser
25%
AmBev
3%
Coca-Cola
71%
Rexam Brazil’s Customers
Rexam Brazil Profile
• Extrema plant opened 1996
• Success story
• No. 2 in Brazil
• Focused on CSD
72% of sales
• Largest customer
Coca-Cola

The Rexam Extrema Plant was recently named “The Best Company to Work for in
Brazil” by a nationally renowned business magazine, “Exame”

A Great Fit
• Rexam and Latasa No. 1 in Brazil
• Opportunity to improve production
logistics and balance supply and
demand
• Complementary customer base
• Extends Rexam’s geographic reach
• Good synergy potential

• Rexam estimates up to US$20m
of synergies within three years
• Main areas of opportunity :
– SG&A costs
– R&D expense
– Metal purchasing
– Logistics and production
planning
Good Synergy Potential

Anti-trust
• Acquisition not conditional
on anti-trust clearance
– Formal filing with Brazilian
authorities post completion
– Full integration on clearance

Reinforces Rexam’s position
in beverage cans
• No 1 in Europe
• Will be
– No 1 in South America
– No 2 in the Americas
– No 1 globally
Strategic Fit with Rexam

Enterprise Value
US$m
Acquisition of Latasa * 355
Net borrowings at 30.6.03 107
Enterprise value 462
* 89% for main shareholders, tender offer for 11% minority; excludes minority discount
and transaction costs

Financial Summary for Latasa
UK GAAP (US$m) 2000 2001 2002 H102 H103
Net Sales 402 440 404 179 158
• Historically, H2 exceeds H1
– Summer and holiday period
• Beverage can market affected by:
– General economic slowdown
– Reduced can penetration due to strong US$
– Price decline to internationally comparable levels

Financial Summary for Latasa
UK GAAP (US$m) 2000 2001 2002 H102 H103
Net Sales 402 440 404 179 158
EBITDA 107 118 108 45 39
EBITA 84 96 85 34 25
EBITA Margin (%) 21 22 21 19 16
• EBITA margin change due to:
– Lower capacity utilisation
– Plant start up costs
– Pricing of beverage cans

Financial Summary for Latasa
UK GAAP (US$m) 2000 2001 2002 H102 H103
Net Sales 402 440 404 179 158
EBITDA 107 118 108 45 39
EBITA 84 96 85 34 25
EBITA Margin (%) 21 22 21 19 16
Net Borrowings 212 151 157 153 107
• Continued to generate strong cash flows
– Reduction in net borrowings
– High capex in 2001-2002 dramatically declined in 2003
– Dividend payouts started in 2000

• In first year, ROIC exceeds Rexam’s
normal WACC adjusted to reflect
Brazilian risk
Value Creation
• Acquisition expected to be earnings
enhancing in first year (before goodwill
amortisation)

Financing Ratios Improve
Proforma
Rexam Rexam+Latasa
EBITA/Interest 4.1x 4.2x
Net Debt/EBITDA 2.9x 2.7x
1. Rexam EBITA, EBITDA and interest 12 months to 30.06.2003 based on published results
and net debt as at 30.06. 2003.
2. Latasa EBITA, EBITDA and interest 12 months to 30.06.2003 based on UK GAAP results
and net debt as at 30.06. 2003 set out in Prospectus.
3. Net debt and interest adjusted for the acquisition of Latasa shares and the proceeds of
equity finance.

Tax and Fiscal Incentives
• Standard Brazilian corporation tax rate 34%
• State granted fiscal incentives lead to an
effective corporation tax rate at < 20% in the
medium term

• Second half of the year encouraging
• Underlying profit before tax* on track
Trading Statement
– at least £260m for year ending 31 December 2003
• Exceptional charges £154m
– Disposals £106m
• Includes reversal of goodwill previously eliminated
against reserves £159m
– Restructuring announced or approved £48m
• Cash element £4m
* Before retirement benefits net finance cost, goodwill amortisation and exceptional items

Rexam
One Vision
will be the leading consumer packaging
group in each of its chosen market
segments

Large enough
One Vision
• to provide excellent service to our customers
• to be a major customer to our suppliers

Leading means not necessarily
in size, but in
• service
• innovation
• efficiency
• quality for our customers
One Vision

GLOBAL
WELCOME
To be the most profitable
group in our industry
One Goal

• Platform for growth
• Great opportunity to develop
the South American market
• Great opportunity to improve
Rexam’s operating margins
• Further opportunity to deliver
more value
Making Our Vision a Reality

• US$70-80m in annual cash
flow
• 5-6 year cash pay back
• Earnings enhancing
• Beats WACC
A Great Deal

Appendix

Latasa (Manaus) – Cans/Ends
proposed
Source: Latasa, Rexam
Latasa (Brasília) - Can
Ball (Jacareí) - Cans
Crown Cork (Cabreúva) ( Cabreúva) - Cans
Latasa (Viamao) - Cans
Can/End Plants in Brazil
Metalic (Fortaleza) - Cans/Ends
Crown Cork (Aracaju) - Ends
Ball (Aratu) - Ends
Rexam (Extrema) - Cans
Latasa (Sta. Cruz) - Cans
Latasa (Jacareí) - Cans
Latasa (Recife) - Cans/Ends

Source: Latasa, Rexam estimates
Buyers in Brazilian Beverage Can Market
Schincariol
4%
Kaiser/Molson
12%
Coca-Cola
23%
Others
4%
AmBev
57%

Packaged litres / Capita
500
450
400
350
300
250
200
150
100
50
0
Peru
Mexico
Brazil
Packaged Beverages vs. GDP/Capita
Russia
Chile
Venezuela
Spain
Argentina
Germany
0 10000 20000 30000
Source: World Drink Trends, Zenith International, Canadean, The World Bank, Rexam Estimates
UK
USA
GDP / Cap
(PPP$)

Volume
(bn litres)
25
20
15
10
5
0
CAGR
Brazilian Beverage Consumption - Beer/CSD
+3% pa
+1% pa
+3% pa
+2% pa
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Source: Abir/Sindicerv, Rexam estimates
Beer CSD

Volume
(bn litres)
10
9
8
7
6
5
4
3
2
1
0
CAGR
Can Penetration in Brazil - Beer
n.m. 2% pa
1% pa 1% pa
25% pa 4.5% pa
1990 1992 1994 1996 1998 2000 2002 2003 2004 2005 2006
Source: Datamark, Rexam estimates
Other Nonref glass Ref glass Cans

Volume
(bn litres)
14
12
10
8
6
4
2
0
CAGR
Can Penetration in Brazil - CSD
-5% pa -1% pa
3% pa 3% pa
0% pa 6% pa
1998 1999 2000 2001 2002 2003 2004 2005 2006
Source: Rexam estimates
Ref PET Cans
Ref glass Nonref PET

100%
Pkg
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Source: Rexam, July 2003
40%
60%
Glass 600ml
refillable
35%
65%
Glass 355ml
one way
Share of US$ Input in Pricing
59%
41%
PET 600ml
one way
65%
35%
PET 2L one
way
85%
15%
Can 350ml
weight 450g 190g 28g 54g 14g
US$
Real

Company History
1990 Reynolds build plant in Pouso Alegre introducing beverage
cans to Brazil
1997 Global competitors ANC, Ball and CCK invest
in Brazil. Latasa goes public through initial public offering of
common shares in both Brazilian and international markets
1998 Period of overcapacity begins
1999 New management arrives
2000 Reynolds acquired by Alcoa
2001 70% of Latasa recycling division sold to Tomra
2002 Investment of US$60m in new plants in
Brasilia and Viamao

Latasa Company Structure / Shareholders
ALCOA Alcoa BRADESCO Bradesco
MORGAN/
Morgan/
CHASE Chase
PUBLIC/ Public/
TREASURY Treasury
37% 40% 12% 11%
LATASA
ARGENTINA
LATASA SA
LATASA
CHILE
30%
TOMRA
LATASA
RECICLAGEM

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afforded to clients of Credit Suisse First Boston nor for providing advice in relation to the Acquisition.
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