Two primary business segments: Performance-based TECHNICAL PRODUCTS - - PowerPoint PPT Presentation

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Two primary business segments:

• Performance-based TECHNICAL PRODUCTS
• Image-oriented FINE PAPER & PACKAGING

~$1 billion sales Technical Products Fine Paper & Pkg

Sales in more than 80 countries Global manufacturing base:

U.S. (12 sites) , Germany (2 sites), U.K. and India (small JV)

Increasing our sustainable growth rate in a capital efficient manner as we diversify portfolio away from paper

Enhance leading positions in high value, core categories

 Expanding our geographic presence in transportation filtration  Building our global base in performance backings  Leveraging our strong position in premium fine papers

Invest in growing and defensible niche markets

 Focus on filtration, premium packaging and performance materials  Prioritize organic growth; supplement with value-adding M&A  Employ multiple technologies with nonwovens, glass and coatings

Deliver consistent, attractive returns

 Disciplined capital deployment and double-digit Return on Capital  Strong financial position with catalysts to continue growing  Return to shareholders including an attractive dividend

2010 – 2015

NP R2000 Avg Peers + 33% + 31% + 217%

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Filtration 45%

Performance Materials 55%

Filtration

Specialties Backings High-performance filtration media for transportation, water and other markets

Includes label security papers, decorative coverings, and others Saturated and coated backings for specialty abrasives and tapes

~ $500 million net sales

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Performance Materials

Preferred service, strong technical support and development relationships with lead customers, many of whom are global

• Innovation partner for new products, flexibility to meet capacity

needs and exceed competitive service offerings

Our ability to combine multiple technologies to meet ever more demanding filter media performance needs

• Wet laid natural, glass & synthetic fibers, resin/polymer toolbox,

solvent saturation, meltblown, lamination, cutting, calendaring

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A platform in markets where media carries a high value due to performance differentiation and significant cost of failure

• Limited competitive alternatives, long qualification, high cost of

entry/switching

Customer Relationships & Support Positioning in Growing Niche Markets Technical Abilities

Transportation Media (75%)

• Global market growing ~4%/year with

sales split: 20% OEMs/ 80% aftermarket

• Filter needs continuing to become more

demanding (fuel, oil, engine & cabin air)

• Neenah growing twice the market with

share gains due to superior performance, innovation and increased mix of higher value products

Other Filtration Media (25%)

• Neenah filtration sales in markets

including water, industrial and beverage

• Attractively growing markets to support
• rganic initiatives and potential M&A
• Products employ multiple technologies,

including cellulose and synthetic wet laid nonwovens, glass and melt blown

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

Net Sales

Organic CAGR 8% 8.0% 5.9% 10.3% 4.7% 7.1%

• Est. Market Growth

2014-2019

Source: BCC Research Neenah markets

Asia NAFTA Europe RoW

Other Neenah H&V Ahlstrom

Global Transportation Filtration Market Sizes and Shares

Global Market ~ US $1 billion

• After building leading position in Europe,

international expansion provides an attractive growth path

• Current operations based in Germany;

existing capacity consumed in 2016

• US first priority. Historical entry constraint

expired; capital-efficient repurposing of Fine Paper asset to start up in Q1 2017

• In US, customers desire choice and support
• ur entry as common competitors currently

hold 95% share

• Disciplined expansion providing attractive
• returns. Projected to consume capacity in

4-5 years

Source: company estimates

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Leading market positions, with flexibility to support customer needs with tailored products on short notice using our global footprint

Service and Customer Relationships Product Design & Performance

Know-how and ability to combine multiple “ingredients” to create proprietary formulations that deliver the best durability, conformability, printability

• Mfg. Capabilities

and Utilization

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Flexibility and wide breadth of capabilities to support customers and help efficiently utilize capacity utilization & realize economies of scale

Backings (55%)

• Sizeable global category primarily

comprised of media used in production of tapes and abrasives

• Focused on performance niches

requiring downstream applications

• Markets generally growing with

global GDP

Specialties (45%)

• Many smaller, specialized markets

including labels, security, medical packaging, décor, and others

• Similarly utilize saturating and coating

to impart unique characteristics

• Markets generally growing at GDP+

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$429 $465

10% 11% 12% 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 %

• Top-line reflects growing

markets and share gains, both due to organic initiatives and acquisitions

• Margin expansion through

higher value mix, volume-driven growth, and cost efficiencies

• Filtration a key driver, with

fastest growth and above average margins

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$336 $353 $404

Graphic Imaging Premium Packaging

Predominantly branded papers known for unique colors, textures and finishes and used for high-end commercial printing and consumer needs Image-enhancing colors and textures

• f folded cartons,

curved box wrap, bags & labels for premium products

Graphic Imaging 78% Premium Packaging 15% Filing/Office 7%

~ $500 million net sales

Filing/Office

High quality boards used for record management, classification, binder covers, and other professional applications

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Purpose-built assets to produce variety of colors and textures for specialized small orders provides leading cost position and strong barrier to entry

Strong, leading brands in high end markets

Leading brands drives demand in high-end markets where image matters and supports pricing to offset input cost inflation

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Rapid prototyping with experienced teams and state-of-the-art facilities provides customers with holistic solutions. Ability to meet quick turnaround and delivery times also a differentiator

Supply Chain Innovation Manufacturing Capabilities

Neenah 65% Mohawk Fine Papers 25% Others 10%

Market Share Commercial Channel ~$500 million

Neenah 55% Others 45%

Market Share Retail Channel ~$150 million

NA Printing & Writing $20+ bn

Uncoated Free sheet

$10 bn Premium Fine Paper

~ $650 mm

Graphic Imaging

• Niche market focused on high

quality, textured and colored papers

• End uses include premium

printing, marketing collateral and advertising, and specialty retail products

• Despite growth-challenged

market; we have grown both

• rganically and through highly

accretive consolidating M&A

• Clear leadership position in both

commercial and retail channels

• Primarily US operations and sales

13 #1 #1

Premium Packaging

• Global market, growing 3-5% annually
• Fragmented category with no clear market

leader

• Leverages strength of our high end color and

texture capabilities

• Initial targeted market of $450 million focused

in beauty (cosmetics, fragrances), alcohol (labels, packages) and retail

Global Pkg Mkt $42 bn Premium Market $2 bn (5%)

Target $450 mm (<1%)

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$450 million target market composition provides

• pportunity to grow share

from ~15% today

$402 $428 $436 $443 $457

14% 14% 14% 15% 15%

5.0% 7.0% 9.0% 11.0% 13.0% 15.0% 17.0% 19.0% 21.0% 23.0% 25.0% 27.0% 29.0% 31.0% 33.0% 35.0% 37.0% 39.0%

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 %

• Consistent, attractive mid-teen EBIT

margins, with brand equity that supports pricing to offset input costs

• Capital efficient, generating strong

cash flows and high return on capital

• Market pressures countered by

growth via premium packaging, acquisitions, share gains and new revenue streams

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• Consistent and 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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…which we have deployed to deliver:

$ millions

2011 2012 2013 2014 2015 Q2 15 Q2 16 Q2 % Net Sales

$ 626 $ 738 $ 782 $ 840 $ 888 $211 $246 16%

• Adj. EBIT1

57 77 84 93 108 28 35 27%

% ROS

9.1% 10.4% 10.7% 11.1% 12.2% 13.1% 14.3%

• Adj. E.P.S.1

$ 1.84 $ 2.63 $ 2.87 $ 3.21 $ 3.70 $0.96 $1.26 31%

(1) Excludes acquisition integration costs, prior period tax credits and other items noted in GAAP table

• 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

$1.84 $2.63 $2.87 $3.21 $3.70 $4.21

2011 2012 2013 2014 2015 LTM 2016

Adjusted E.P.S.

9% 17% 19%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0%

Sales

• Adj. EBIT
• Adj. E.P.S

% Annual Growth 2011- 2015 18

9% 11% 12% 13% 12% 13% 2011 2012 2013 2014 2015 LTM 2016

WACC ~ 8-10%

Maintaining attractive double-digit returns through:  Profitable growth/margin expansion  Management focus on asset efficiency  Disciplined organic capital spending/good returning projects  Value-adding acquisitions (and divestitures)

Primary measure to evaluate investments, judge business performance and a key metric in management compensation plans

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$183 $180 $207 $228 $229 $219

2.0x 1.6x 1.7x 1.8x 1.6x 1.4

0.8 1.3 1.8 2.3 2.8 3.3 3.8

50 100 150 200 250 300 350

Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Jun 16 $ millions

Dec 2011 Dec 2012 Dec 2013 Dec 2014 Dec 2015 Jun 2016

Bonds

5.25% (due Nov.

2021)

$ 158 $ 90 $ 175 $ 175 $ 175 $ 175

Global ABL

Rate Libor +125

• 56
• 49

51 41

Other

28 36 37 10 8 8

Debt Reptd

$ 186 $ 182 $ 212 $ 234 $ 234 $224

Debt Issue Costs

(3) (3) (5) (6) (5) (5)

Debt

$ 183 $ 180 $ 207 $ 228 $ 229 $ 219

Cash

$ 13 $ 8 $ 73 $ 73 $ 4 $ 5

• Balance sheet providing financial strength and capacity for growth
• Debt/EBITDA well below targeted range of 2 to 3x
• Attractive bonds with debt rating of Ba3/BB and low coupon rate
• Global ABL sized at $200 million with added flexibility/borrowing capacity

Debt

($ millions)

Debt/ EBITDA

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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 FCF/Share $ 3.85 - $ 6.25

Cash Deployment

• Priority on highest

returning investments

 Organic initiatives  Value-adding M&A

• Committed to cash

returns via attractive and growing dividend

• Opportunistic $25 mm

stock repurchase plan

Cash Generation

• Strong business cash

flows, supplemented by acquisitions

• Efficient asset base;

maintenance cap-ex < $15 mm/year

• Significant US R&D

tax credits; well- funded pension plan

$0.44 $0.48 $0.70 $1.02 $1.20 $1.32

0.2 0.4 0.6 0.8 1 1.2 1.4

2011 2012 2013 2014 2015 2016

Dividends per share 21

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

$57 $66 $84 $95 $111 $123

20 40 60 80 100 120 140

2011 2012 2013 2014 2015 LTM 2016

Cash From Operations

*

Performance-based and aligned with shareholders

• All incentive plans are tied to performance achievement
• 50% cash, based on growth in business profit/EBITDA
• 50% equity, based (options and performance shares)

Performance shares based on:

• Management required to hold a multiple of salary in stock (CEO = 6x)

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

• Active and disciplined process with dedicated

resources

• Targeting growing, profitable niche markets

(filtration, performance materials, premium packaging, etc…) with a strategic linkage

• Most targets sized between $50 and $250 million
• f sales
• Demonstrated track record and competency in

deal execution and integration to capture value

Strategic Growth Touch points

Geographies Technologies Products/ End Markets Customers

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FiberMark Germany 2006 (TP) Fox River 2007 (FP&P) Wausau brands 2012 (FP&P) Southworth brand 2013 (FP&P) Crane Filtration 2014 (TP) FiberMark US 2015 (TP/FP)

Divested Lahnstein Oct-15 Divested Pulp Mills 1996-98

• Leading positions in defensible and

profitable core categories

• Catalysts to enhance growth
• Financial strength and double-digit

Return on Invested Capital

• Clear track record of value-adding

capital deployment

 Transportation filtration - Europe  Performance Materials  Fine Paper  Transportation Filtration geographies  Added premium packaging capabilities  Adjacent filtration markets  Strong cash flow generation  Low debt w/ financial flexibility  Double-digit growth and ROIC  Top quartile shareholder returns  Dividend tripled over last 5 years

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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 Q215 Q216

EBIT (Operating Income) $ 66.9 $ 82.6 $ 86.6 $ 101.4 $ 27.7 $ 33.9 Integration/Restructuring Costs 5.8 0.4 2.3 6.5 1.4 Other 4.1 0.7 3.7 Adjusted EBIT $ 76.8 $ 83.7 $ 92.6 $ 107.9 $ 27.7 $ 35.3 Depreciation & Amortization 24.3 25.1 25.0 27.5 6.2 7.7

• Amort. Equity-Based Compensation

4.9 4.9 6.0 6.5 1.5 1.7 Adjusted EBITDA $ 106.0 $ 113.7 $ 123.6 $ 141.9 $ 35.4 $ 44.7 Earnings (Loss) per Share $ 2.26 $ 2.91 $ 3.99 $ 3.53 $ 0.96 $ 1.21 Integration/Restructuring Costs 0.22 0.01 0.08 0.24 0.05 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 $ 0.96 $ 1.26

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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