Silgan Holdings (NASDAQGS: SLGN)

1. Silgan Holdings(NASDAQGS: SLGN) Victor Murthi Vignesh Murali Wei Yan Date Presented: April 27 2010

2. Screening Process

3. Presenting – Silgan Holdings Inc. (NASDAQ: SLGN) • 23 year old company headquartered in Stamford, CT. Market Cap $ 2.3 Billion • One of the top manufacturers and sellers of metal and plastic consumer goods packaging products. 2009 revenues : approx. $ 3 billion • 3 business segments • Metal and Aluminum Food Containers (63%) ( largest in US) • Closures ( Lids and Caps ) (20%) • Plastic Containers (17%) Link Business OneSource

4. Industry • Containers and Packaging Industry (NAICS: 332431) • Non-cyclical industry due to diverse use for products • Expected to grow 1-2% each year until 2013 (Datamonitor) • Plastic packaging expected to grow 3-5% • Low barriers to entry, buyer is medium high and yet substitute products are low Global Metal, Glass & Plastic Packaging Report. Rep. no. 01992105. Datamonitor, Mar. 2010. Web. 21 Apr. 2010. <http://globalbb.onesource.com/Web/Reports/ReportMainIndustry.aspx?SicCodeID=220532&Report=ALLMARKETRESEARCHREPOR TS&Process=IP&Type=GetReport&FileFormat=PDF&ReportID=62266&FileName=0199-2105-2009.pdf>

5. Industry Trends • Highly competitive despite slow growth • Rising costs: High price of raw materials and production reducing margins • Niche markets: Customized packaging for diverse clientele • Medical goods packaging expected to grow 5% each year(Datamonitor) Global Metal, Glass & Plastic Packaging Report. Rep. no. 01992105. Datamonitor, Mar. 2010. Web. 21 Apr. 2010. <http://globalbb.onesource.com/Web/Reports/ReportMainIndustry.aspx?SicCodeID=220532&Report=ALLMARKETRESEARCHREPOR TS&Process=IP&Type=GetReport&FileFormat=PDF&ReportID=62266&FileName=0199-2105-2009.pdf>

6. SWOT

7. Macroeconomic Factors • Prices of raw materials Increase in demand for biodegradable plastic as well as aluminum/ copper have driven up prices and pressured margins • Derived Demand Demand depends on demand for other products such as food and beverages, medical supplies and chemicals. Demand for these products are projected to increase in the near-term future • Emerging Markets As industrial activity in developing economies picks up, so does demand for goods to store and transport raw materials and finished goods.

8. Competitor Analysis

9. Competitor Analysis Greif, Inc: • A global producer of industrial packaging products. • The Company operates in three business segment: Industrial Packaging; Paper Packing: and Land Management. • In July 2009, the company completed the acquisition of Ennis Containers, Inc.

10. Competitor Analysis Sonoco Products Company, Inc: Provides industrial and consumer packaging products, and packaging services in North and South America, Europe, Australia, and Asia. The Company operates in four segments: Consumer Packaging, Tubes and Cores/Paper, Packaging Services

11. Competitor Analysis Bemis Company, Inc: • Manufactures and sells flexible packaging products and pressure sensitive materials in the United States, Canada, Mexico, South America, Europe, and Asia. • The company operates in two segments, Flexible Packaging and Pressure Sensitive Materials.

12. Competitor Analysis Temple-Inland, Inc: • Manufactures and sells corrugated packaging and building products primarily in the United States and Mexico. • The Corrugated Packaging segment serves customers operating in the food, beverage, paper, glass containers, chemical, appliance, and plastics industries. • Temple-Inland’s Building Products segment offers various products, including lumber, gypsum wallboard, particleboard, medium density fiberboard, and fiberboard.

13. Ratio analysis

14. Ratio analysis

15. Relative Valuation Price Range : $32.42 – $91.04

16. DuPont Analysis

17. DCF Valuation - Revenue • Metal Food container • “Cash cow”, growing at 5-year CAGR of 3.5% • Count for 66% of revenue, organic growth is mature but it able to past on raw material cost to customers • Projected to grow at 5-year CAGR of 3.5% • Closure • Grow through acquisition, with CAGR of 17.18% • Organic grow is around 12%, projected to be decreasing to 8% over 5 years period. • Plastic container • Organic growth is around 5 – 6%. Projected to be stable in 6% range.

18. DCF Valuation – Income Statements • Cost of goods sold • Around 87% in the past but decrease to 85% due to increase in “manufacturing efficiency”, projected to fluctuate from 85% to 86% • SG&A • Around 4.5% in the past but increase to 5.25% due to currency translation impact, projected to be around 5% • Interest expense • Interest coverage ratio is 4.23 in 2005 but increase to 6 in 2009 due to higher leverage for acquisition. Projected to increase from 6 due to debt repayment • Income tax expense • Income tax is projected around 35%

19. DCF Valuation – Balance Sheets • Account receivable • Receivable turnover is around 15 – 16, projected to be stable • Inventory • Inventory turnover is around 6 – 7, projected to be 6.7 • Net capital investment • Positive number, meaning they have to spend more for Capex in the future, projected to be -0.5% of revenue

20. DCF Valuation - WACC

21. DCF Valuation - FCFF

22. 5 Year Stock Price

23. Management Assessment • Founded in 1987 by current Co-Chairmen of the Board: Phil Silver and Greg Horrigan. • Grow through organic growth and acquisitions, able to increase overall share of the U.S. metal food container market from approximately 10% in 1987 to approximately half of the market in 2009 • Communicative in explaining operating result.

24. Ownership Composition

25. Portfolio Correlation

26. Recommendation • Stable “value” company with clean balance sheet and strong cash flow. • Good management experienced in both improving organic growth and acquisition growth • Low correlation with other holdings, stock price has been increasing six fold in the past 5 years. • Suggestion: watch list.