v Filtra tratio tion Comme mmerci rcial l and Consum sumer - - PowerPoint PPT Presentation

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Paper Gift t Cards rds & Packa ckagin ing Filtra tratio tion Digita ital l Transfe sfer Media ia Backi ckings s (Tap ape e & Abra rasive sives) s) Comme mmerci rcial l and Consum sumer r Fine Papers rs High End Spir irits its Labels ls Premi mium m Pack ckagin ing Other r Perfo rform rmance ce Mate teri rials ls (Labels, ls, Coa

• ate

ted Cove vers, s, etc…) 2

Enhance leading positions in core categories Accelerate growth rate through efficient investments in growing and defensible markets Maintain a strong financial position and provide shareholders with attractive returns

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• Recent investment in filtration

capacity to provide end of curve sales of $80 million

• Double-digit premium packaging

growth supported by added laminating capabilities

• Digital transfer media acquisition

providing synergies and leading position in growing global market

• Continued pulp cost increases being

countered by selling price actions

• U.S. regulatory change driving

higher freight costs, especially in Fine Paper. Actions underway to address

• New filtration capacity underutilized

during ramp up; expected to turn profitable in 2019

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Strong customer relationships with long qualification periods Leading Positions in Defensible Niche Markets Broad Range of Technical Abilities

• Innovative offerings from a global footprint
• Long-term joint development relationships
• Strong technical support and service
• High value, growing specialty markets
• Long customer qualifications - strong barrier
• Our media is a key performance driver,

but a small part of product cost

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

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35 55 75 95 115 135

'03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 16 17

Europe NAFTA Asia RoW

Other Neenah H&V Ahlstrom

• Consolidated global market growing ~4%,

with tight global capacity

• Products include air, fuel, oil and cabin air

filters for cars and trucks, with >80% of sales to after-market

• More demanding engines requiring higher

performing filters

• Present in fast-growing markets including

water, industrial, and beverage filters

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Net Sales

Organic CAGR 7%

• Capacity in European base consumed, new

world class asset in U.S. started up in 2017

• Global customers support expansion and

looking for added choice in No. America

• Five-year ramp up to $80 mm EOC sales will

support historic growth rate

• Asia represents a future opportunity

Global Transp. Filtration Market/Shares ~ US $1 billion

• Sizeable global category with media

primarily used in tapes and abrasives

• Markets generally grow with GDP
• Focused on performance niches requiring

downstream applications, opportunity to gain share overseas

• Smaller, specialty markets include labels,

digital transfer, security, décor, and others

• Markets generally growing at GDP+
• Saturating and coating know-how used to

impart unique characteristics

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• Based in the Netherlands, Coldenhove is a leading

producer of dye sublimation media used for digital image transfer for clothing, sportswear, and other materials

• Complementary technologies and geographies

that expand our digital transfer platform and customer base

• Combined with our existing business, provides

Neenah leadership in fast-growing ~$200 million digital transfer market

Neenah 28% Others 72%

Digital Transfer Market ~$200 million

• Immediately accretive, with added sales of

$45 mm and EBITDA of $6 mm

• Purchase price of $45 million equivalent to

pre-synergy EBITDA multiple of 7.5x

• Synergies (purchasing, sales, manufacturing,

new products) to further grow returns

$404 $429 $466 $502 $552

12% 13% 14% 11% 11%

14% 14%

$114 $164 $214 $264 $314 $364 $414 $464 $514 $564

2014 2015 2016 2017 LTM Q218

Net Sales Adjusted EBIT % Excluding U.S. Filtration start-up

• present in growth markets
• gaining share through performance,

innovation and geographic expansion

• investing organically and through M&A

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• mix enhancement, led by profitable and

faster growing filtration products

• cost efficiencies and scale
• R&D investments driving new or improved

products valued by customers

• 2017 reflects temporary impact of US

filtration start-up 5 Yr CAGR > 9%/yr

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Leading Brands

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Go To Market Innovation Best in Class Manufacturing Capabilities

• Creating image and leading brand equity pulls demand
• Demonstrated pricing ability to recoup input costs over time
• Unique purpose-built assets able to provide fast, flexible and

low cost offerings at highest quality

• Specialty coating, saturation, colors and textures allow creation
• f a unique and customized breadth of portfolio
• Design and rapid prototyping, provides customers a more

holistic solution and create barriers for competitors

• Able to replicate short lead times with outstanding service

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• Consolidated $650 million niche market of

premium textured and colored papers

• Neenah is the clear market leader in both

commercial and consumer channels

• Uses include high-end commercial print

applications, marketing collateral and well-known brands at retail

• Market is pressured by electronic substitution

Neenah 63%

Mohawk Fine Papers 19% Others 18%

Market Size ~$650 million

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• Premium niche market growing 3-5% annually,

Neenah growing at double-digit pace



Products include spirit & wine labels, premium folding board, luxury box wrap, and others

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Targeting beauty, alcohol and retail categories; largest opportunity in beauty products

 Paper (gift) cards growing as “green” alternative to

• plastic. Recent investment to accelerate growth.
• Shares Fine Paper asset base and high quality

texture/color capabilities that provide customers preferred products unique to their brands

• Neenah Design Center helping customers visualize

final products more quickly and accelerate time to commercialization

Beauty 49% Alcohol 29% Retail/ Other 22%

$450 million addressable market

$436 $443 $452 $455 $453

14% 16% 16% 15% 13%

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%

390 398 406 414 422 430 438 446 454 462 470 478 486 494

2014 2015 2016 2017 LTM Q218

Net Sales Adjusted EBIT % 15

• top line outperforming market with double-digit

premium packaging growth, gains in digital and wide format categories and other initiatives

• potential for small, consolidating acquisitions
• expected mid-teen EBIT margins with brand equity

that supports pricing through input cost cycles

• recent headwinds from input cost/freight increases
• planned sale of office products mill and other
• ptimization efforts to increase efficiencies
• substantial cash generation for redeployment
• high return on capital

5 Yr CAGR > 1%/yr

 Consistent, profitable growth  Return on Capital Focused  Flexible and prudent capital structure  Attractive shareholder returns

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Double digit earnings growth High Return on Capital Increasing cash returns to shareholders Strong balance sheet Market-beating shareholder returns

Return to Shareholders $140mm Value-Adding Organic Capital $150mm Acquisitions $250mm

Our businesses provide substantial cash flows that we’ve deployed in a balanced manner to result in:

Five-year cash deployment

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$3.21 $3.70 $4.54 $4.32 $4.29 2014 2015 2016 2017 LTM Q218

Adjusted E.P.S.

 Five-year growth driven by share gains, new products, price/mix improvement and acquisitions  2017-18 results reflect short term impact of U.S. filtration start-up

6% 6% 10%

Sales

• Adj. EBIT
• Adj. E.P.S

% Annual Growth 2012- 2017

$840 $888 $942 $980 $1,027

11% 12% 13% 11% 10%

2014 2015 2016 2017 LTM Q218

Net Sales Adjusted EBIT %

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13% 12% 13% 10% 11% 2014 2015 2016 2017 LTM

Q218

WACC ~ 7-9%

Profitable growth to leverage asset base Disciplined organic capital spending Continual focus on asset efficiency and footprint optimization Value-adding acquisitions (and divestitures of non-returning assets)

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175 175 175 175 175 53 54 46 80 79

1.8x 1.6x 1.4x 1.8x 1.8x

0.5 1 1.5 2 2.5 3 3.5 50 100 150 200 250 300

Dec 14 Dec 15 Dec 16 Dec 17 LTM Q218

Bonds S-T Debt

$229 $228 $221 $255

 Capital structure provides significant flexibility to act on future opportunities

• $175 mm bond due in 2021;

5.25% rate and Ba3/BB rating

• Short-term debt primarily from

existing ABL (sized at $200 million,

current draw only $69 million)

 Strong cash generation has kept Debt/EBITDA below targeted range of 2 to 3x (even with organic capital investments and acquisitions)  Willing to go up to 4x Debt/EBITDA for right opportunity  Limited overseas cash; no repatriation concerns

Debt ($ millions) 20

Debt/ EBITDA

$254

• Priority on highest returning investments

 Organic initiatives  Value-adding M&A

• Committed to direct cash returns via an

attractive dividend. Five-year dividend compound growth rate of ~20%/yr

• Authorized $25 mm stock buyback plan
• Strong business cash flows, compounded

with acquisitions. Recent results include filtration start up.

• US tax changes to provide $3-5 mm/yr

benefit; current cash tax rate < 10% as we consume prior period R&D tax credits

• Efficient asset base; capital spend 3-5%
• f sales w/maintenance spend < $20 mm

$1.02 $1.20 $1.32 $1.48 $1.64

2014 2015 2016 2017 2018 Dividends per share 21 $95 $111 $116 $100 $94

20 40 60 80 100 120 140

2014 2015 2016 2017 LTM Q218 Cash From Operations

• All employees have a

component of pay that is performance-based

• Management required to

hold a multiple of salary in stock (4-6 times)

• Majority of pay is

performance-based (CEO = 70%)

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

Performance Share Metrics

Earnings per Share

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Performance-based and aligned with shareholders

• Active and disciplined process with

dedicated resources. Ideas come from robust network of sources

• Focused on growing, profitable and

defensible niche markets, with bias to performance-based technical products

• Most targets between $50 and $250

million of sales

• Expect strategic fit to unlock synergies

Strategic Touch Points

Geographies Technologies Products/ End Markets Customers

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2014 Crane (Filtration) 2015 FiberMark (Packaging, Other) 2017 Hazen (Packaging) 2017 Coldenhove (Perf. Materials) 2013 Southworth (Fine Paper)

Ongoing track record of value-adding acquisitions

• Leading positions in defensible and profitable

core categories generating growth and cash for redeployment

• Important catalysts to enhance organic growth

 Filtration geographic share gains  Adjacent technical product markets  Premium packaging

• Financial strength and flexibility to act on

additional attractive opportunities

• Track record of value-adding capital deployment

and double-digit ROIC

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Fine Paper & Packaging Technical Products

Neenah Today

Premium Packaging & Fine Paper Technical Products

Neenah Future

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100 150 212 219 299 318 132 135 122 157 167 Neenah vs Russell 2000

NP RUJ

$28 $43 $60 $62 $85 $91

15 25 35 45 55 65 75 85 95

Neenah Stock Price (Year End) 26

Top 10 Shareholders Shares 6/30/18 BlackRock Institutional Trust Company 2,201,633 Wells Capital Mgmt 1,071,752 The Vanguard Group 992,959 Wellington Mgmt Company 924,302 Macquarie Investment Mgmt 827,972 Dimensional Fund Advisors 737,050 Aberdeen Asset Mgmt 731,379 Daruma Capital Mgmt 492,972 State Street Global Advisors 484,932 Fidelity Mgmt & Research Company 401,525 $1.7 $2.3 $3.0 $3.5 $5.0 $4.5 $4.9

$2.6 $2.6 $4.1 $4.8 $6.5 $6.4 $6.6

$5.0 $3.3 $5.3 $6.6 $8.4 $8.5 $7.3 2012 2013 2014 2015 2016 2017 2018 NP Trading Liquidity $/day millions 27

Continuing Operations $ millions

2014 2015 2016 2017 LTM Q218

GAAP Operating Income $ 86.6 $ 101.4 $ 114.1 $ 104.3 $67.9 Impairment loss 32.0 Acquisition/Integration/Restructuring Costs 2.3 6.5 7.0 1.3 1.6 Pension/Insurance Settlement/Other 3.7 0.8 (2.6) (0.8) Adjusted Operating Income $ 92.6 $ 107.9 $ 121.9 $ 103.0 $ 100.7 Depreciation & Amortization 25.0 27.5 30.1 32.1 34.6

• Amort. Equity-Based Compensation

6.0 6.5 5.8 6.4 6.0 Adjusted EBITDA $ 123.6 $ 141.9 $ 157.8 $ 141.5 $ 141.3 Earnings (Loss) per Share $ 3.99 $ 3.53 $ 4.26 $ 4.68 $ 2.86 Impairment loss 1.41 Acquisition/Integration/Restructuring Costs 0.08 0.24 0.25 0.06 0.07 Prior Period R&D Tax Credits (1.00) (0.07) Tax Adjustment for Indefinite Reinvestment (0.24) 0.05 TCJA and Other Tax Adjustments (0.08) (0.08) Pension/Insurance Settlement/Other 0.14 0.03 (0.10) (0.02) Adjusted Earnings per Share $ 3.21 $ 3.70 $ 4.54 $ 4.32 $ 4.29

Results for 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

• f $6.5 million. Results for the year ended December 31, 2016, include integration and restructuring costs of $7.0 million and a pension plan settlement

charge of $0.8 million. Results for the year ended December 31, 2017, include integration and restructuring costs of $1.3 million, a pension plan settlement charge of $0.6 million and Insurance Settlement of ($3.2)

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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 of 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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Visit Our Website: www.neenah.com Email: investors@neenah.com Bill McCarthy

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

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