John ODonnell - President and Chief Executive Officer Bonnie Lind - - PowerPoint PPT Presentation

• John O’Donnell - President and Chief Executive Officer
• Bonnie Lind - Senior Vice President, Chief Financial

Officer and Treasurer

• Bill McCarthy - Vice President, Financial Analysis and

Investor Relations

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Image-oriented FINE PAPER & PACKAGING

~$1 billion sales

Performance-based TECHNICAL PRODUCTS

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Enhancing strong leadership positions in high value, core categories Investing capital-efficiently in defensible and growing niche markets Maintaining a strong financial position and providing consistent, attractive returns with a growing dividend

Stock Price

12/12–10/31 NP R2000

+ 134% + 281%

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Filtration 45%

~ $500 million net sales

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Performance Materials 55%

• Global offering and expanding footprint
• Joint development relationships
• Technical support and service

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• High value specialty markets
• Long customer qualifications- strong barrier
• Media a key performance driver

Strong Customer Relationships & Support Leading Positions in Defensible Growing Markets Broad Technical Abilities

• Multiple technologies and chemistries
• Proprietary formulations & strong “dark” IP
• Leading performance and innovation

Backings (55%)

• Sizeable global category primarily

media used in tapes and abrasives

• Focused on performance niches

requiring downstream applications

• Markets generally growing with

global GDP

Specialties (45%)

• Smaller, specialized markets including

labels, security, medical packaging, décor, and others

• Utilize saturating and coating to

impart unique characteristics

• Markets generally growing at GDP+

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Transportation Media (75%)

• Global market growing ~4%,

80% of sales in aftermarket

• Neenah organic growth 8%/yr
• More demanding engine needs

requiring higher performing filters

Other Filtration Media (25%)

• Expanding in other fast-growing markets

including water, industrial, and beverage

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35 55 75 95 115 135

'03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Net Sales

Organic CAGR 8%

Long Runway for Future Growth

• After gaining lead share in Europe,

now investing to grow share in US

• Asia remains a future opportunity

Asia NAFTA Europe RoW

Other Neenah H&V Ahlstrom

Global Transportation Filtration Market/Shares

~ US $1 billion

$429 $470

11% 12% 13% 13% 14%

5% 9% 13% 17%

$114 $164 $214 $264 $314 $364 $414 $464 $514

2012 2013 2014 2015 LTM 2016

Net Sales Adjusted EBIT %

Growing top line

• growth market participation
• share gains through performance

characteristics

• investments in organic and

acquired growth

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$336 $353 $404

Expanding margins

• scale and cost efficiencies
• mix enhancements, helped by

faster growing filtration products

• R&D investments where valued by

market

~ $450 million net sales

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Graphic Imaging 78% Premium Packaging 15% Specialty Board 7%

Leading, well- known brands

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Supply Chain Innovation Manufacturing Capabilities

• Brand equity helps pull demand
• Ability to recoup changes in input costs
• Highly-utilized purpose built assets providing

leading cost position and technology to accommodate market driven changes

• Highest quality products with a variety of

colors and textures

• Prototyping capabilities allowing for faster

commercialization

• Able to meet short lead times with
• utstanding service

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Consolidated niche market (<1%

• f UFS), premium textured and

colored papers End uses include high-end commercial printing, marketing collateral and retail products Traditional market pressured by electronic substitution Neenah the clear leader in both commercial and retail channels

Neenah 65% Mohawk Fine Papers 25% Others 10% Commercial Channel ~$500 million Neenah 55% Others 45% Retail Channel ~$150 million

Premium Fine Paper Market by Channel/Market Share

~ $650 mm

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Award Winning Products

• Custom beater-dyed Neenah Folding Board

eliminates white edges while saving on printing costs

• Rigid board eliminates need for cellophane

window, saving on costs while increasing consumer interaction with the brand

• Green options allow customers to customize

their environmental footprint

Attractive Market Opportunity

• Targeted premium niche <1% of global

market and growing 3-5% annually

• Fragmented with no clear market leader
• FiberMark acquisition significantly expanded
• ur presence and capabilities
• Utilizing our traditional asset base

Beauty 49% Alcohol 29% Retail/ Other 22%

$450 million Target Market

Growth in packaging to offset secular pressures on traditional business

Highly Fragmented

$402 $428 $436 $443 $453

14% 14% 14% 15% 15%

2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0% 22.0% 24.0% 26.0% 28.0% 30.0% 32.0% 34.0% 36.0% 38.0% 40.0%

350 358 366 374 382 390 398 406 414 422 430 438 446 454 462 470 478 486 494

2012 2013 2014 2015 LTM 2016

Net Sales Adjusted EBIT % 14

Strong financial results

• Stable mid-teen EBIT margins
• Capital efficient, substantial

cash generation

• Brand equity supports pricing

Countering top-line pressures

• Consolidating acquisitions
• Packaging growth
• Share gains and price optimization

• Consistent, profitable growth
• High Return on Capital/Return on Equity
• Flexible and prudent capital structure
• Attractive shareholder returns

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 Double digit earnings growth  High Return on Capital  Increased cash returns to shareholders  Low debt and a strong balance sheet  Market-beating shareholder returns

Return to Shareholders $75mm Value-Adding Organic Capital $100mm Acquisitions $225mm

Our businesses generate substantial cash flows…

Five-year cash generation ~$450 million

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…that we’ve deployed to result in:

$2.63 $2.87 $3.21 $3.70 $4.34

2012 2013 2014 2015 LTM 2016

Adjusted E.P.S.

• Five-year growth reflecting share gains,

new products, price/mix improvement and acquisitions

• Margin improvement through focus on

market-back pricing, cost control and efficiencies, and mix shift to higher value products

9% 17% 19%

Sales

• Adj. EBIT
• Adj. E.P.S

% Annual Growth 2011- 2015 17

$738 $782 $840 $888 $951 10% 11% 11% 12% 13%

500 550 600 650 700 750 800 850 900 950 1000

2012 2013 2014 2015 LTM 2016 Net Sales Adjusted EBIT %

11% 12% 13% 12% 13% 2012 2013 2014 2015 LTM 2016

WACC ~ 8-10%

Delivering attractive ROIC through:  Profitable growth  Focus on asset efficiency  Disciplined organic capital spending  Good returning projects  Value-adding acquisitions (and divestitures)

Primary measure to evaluate investment decisions and judge business performance - and a key compensation plan measure

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$180 $207 $228 $229 $211 1.6 1.7 1.8 1.6 1.3

• 0.2

0.3 0.8 1.3 1.8 2.3 2.8 3.3 3.8

50 100 150 200 250

Dec 12 Dec 13 Dec 14 Dec 15 Sept 16

$ millions

Dec 2014 Dec 2015 Sep 2016

Bonds (5.25% due 2021)

$ 175 $ 175 $ 175

Global ABL (Libor + 125)

49 51 33

Other

10 8 7

Gross Debt *

$ 234 $ 234 $215

Cash

$ 73 $ 4 $ 7

• Debt/EBITDA well below targeted range of 2 to 3x
• Bonds with debt rating of Ba3/BB and low coupon rate
• Global ABL sized at $200 million; significant borrowing capacity

Debt ($ millions)

Debt/ EBITDA

19 * Excludes net credit of ~$5 mm for debt issuance costs

Pro Forma Cash Flow

($ millions)

EBITDA $ 155 - $170 Interest Expense (10) Other (tax, wkg cap, pension, etc.) (25 - 30) Cash From Operations $ 115 – 135 Total Capital Spend (3-5% sales) (30 - 50) Free Cash Flow $ 65 – 105

Cash Deployment

• Priority on highest

returning investments

 Organic initiatives  Value-adding M&A

• Committed to cash

returns via attractive and growing dividend

• Authorized $25 mm

stock repurchase plan

Cash Generation

• Strong business cash

flows, compounded with acquisitions

• Efficient asset base;

maintenance cap-ex < $15 mm/year

• Significant US R&D

tax credits; well- funded pension plan

$0.48 $0.70 $1.02 $1.20 $1.32

0.2 0.4 0.6 0.8 1 1.2 1.4

2012 2013 2014 2015 2016

Dividends per share 20

* excludes one-time costs for acquisition accounting and other items

$66 $84 $95 $111 $129

20 40 60 80 100 120 140

2012 2013 2014 2015 LTM 2016

Cash From Operations

*

• All incentive plans are tied

to performance achievement

• Management required to

hold a multiple of salary in stock (CEO = 6x)

• Incentive split:
• 50% cash, based on growth in

business profit/EBITDA

• 50% equity-based (options

and performance shares)

Performance-based and aligned with shareholders

21 Return on Capital Improvement Total Shareholder Return (vs. Russell 2000 index) Revenue Growth

Performance Share Metrics

• Active and disciplined process with

dedicated resources

• Targeting growing, profitable and

defensible niche technical products markets

• Strategic fit and linkage to deliver

synergies

• Targets generally sized between

$50 and $250 million of sales

• Demonstrated track record in execution

and integration to capture value Strategic Growth Touch points

Geographies Technologies Products/ End Markets Customers

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• Leading positions in defensible and

profitable core categories

• Catalysts to enhance organic growth
• Financial strength and flexibility, with

double-digit Return on Capital

• Clear track record of value-adding

capital deployment

 Transportation Filtration geographic expansion  Premium packaging capabilities  Adjacent technical product markets

23 Fine Paper & Packaging Technical Products

Neenah Today $1 billion

Fine Packaging & Paper Technical Products

Neenah Future

For more information

visit our website: www.neenah.com email: investors@neenah.com

Investor Relations

Bill McCarthy

VP, Financial Planning and Analysis & Investor Relations 3460 Preston Ridge Rd., Suite 600 Alpharetta, GA 30005 Phone: (678) 518-3278 Email: bill.mccarthy@neenah.com

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Continuing Operations $ millions

2012 2013 2014 2015 YTD15 YTD16

EBIT (Operating Income) $ 66.9 $ 82.6 $ 86.6 $ 101.4 $ 80.5 $ 92.2 Integration/Restructuring Costs 5.8 0.4 2.3 6.5 2.9 3.7 Other 4.1 0.7 3.7 Adjusted EBIT $ 76.8 $ 83.7 $ 92.6 $ 107.9 $ 83.4 $ 95.9 Depreciation & Amortization 24.3 25.1 25.0 27.5 19.7 22.9

• Amort. Equity-Based Compensation

4.9 4.9 6.0 6.5 4.5 4.4 Adjusted EBITDA $ 106.0 $ 113.7 $ 123.6 $ 141.9 $ 107.6 $123.1 Earnings (Loss) per Share $ 2.26 $ 2.91 $ 3.99 $ 3.53 $ 2.68 $ 3.30 Integration/Restructuring Costs 0.22 0.01 0.08 0.24 0.11 0.13 Prior Period R&D Tax Credits (0.08) (1.00) (0.07) Other 0.15 0.03 0.14 Adjusted Earnings per Share $ 2.63 $ 2.87 $ 3.21 $ 3.70 $ 2.79 $ 3.43

Results for year ended December 31, 2012, include integration and restructuring costs of $5.8 million, a pension settlement charge of $3.5 million and costs related to the early extinguishment of debt of $0.6 million. December 31, 2013, include integration and restructuring costs of $0.4 million, a post-retirement benefit plan settlement charge of $0.2 million and costs related to the early extinguishment of debt of $0.5 million. Results for the year ended December 31, 2014, include integration and restructuring costs of $2.3 million, a pension plan settlement charge of $3.5 million and costs related to the early extinguishment of debt of $0.2 million. Results for the year ended December 31, 2015, include integration and restructuring costs of $6.5 million.

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EBITDA, Adjusted EBITDA and Free Cash Flow as presented in these slides, are supplemental measures

• f our performance, and Net Debt, as presented in these slides, is a supplemental measure of our

financial position. In each case, these measures are not required by, or presented in accordance with, generally accepted accounting principles in the United States (‘‘GAAP’’). EBITDA, Adjusted EBITDA and Free Cash Flow are not measurements of our financial performance or financial position under GAAP and should not be considered as alternatives to net sales, net income (loss), operating income or any other performance measures derived in accordance with GAAP or as alternatives to cash flow from operating activities as a measure of our liquidity. Adjusted EBITDA consists of operating income plus depreciation, amortization and stock-based compensation expense. We also exclude acquisition-related costs, gain (loss) on sale of fixed assets, SERP settlement charge and costs related to early retirement of debt, as these amounts are not considered as part of usual business operations. Our management considers EBITDA, Adjusted EBITDA and Free Cash Flow to be measurements of performance which provide useful information to both management and investors. Because EBITDA, Adjusted EBITDA and Free Cash Flow are not calculated identically by all companies, our measurements of EBITDA, Adjusted EBITDA and Free Cash Flow may not be comparable to similarly titled measures reported by other companies. All amounts in USD unless otherwise noted. EBITDA, Adjusted EBITDA and Free Cash Flow, as presented herein, are non-GAAP financial measures as defined by SEC regulations. As required by those regulations, a reconciliation of these measures to what management believes are the most directly comparable GAAP measures is included as an appendix to this presentation.

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Statements in this presentation which are not statements of historical fact are “forward-looking statements” within the “safe harbor”' provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the information available to, and the expectations and assumptions deemed reasonable by, Neenah Paper, Inc. at the time this presentation was

• made. Although Neenah Paper believes that the assumptions underlying such statements are

reasonable, it can give no assurance that they will be attained. Factors that could cause actual results to differ materially from expectations include the risks detailed in the section “Risk Factors” in the Company’s most recent Form 10-K and SEC filings. In addition, the company may use certain figures in this presentation that include non-GAAP financial measures as defined by SEC regulations. As required by those regulations, a reconciliation

• f these measures to what management believes are the most directly comparable GAAP

measures would be included as an appendix to this presentation and posted on the company’s web site at www.neenah.com

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