v Commerci rcial l Filtra tratio tion and Consu sumer r - - PowerPoint PPT Presentation

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Pap aper Gift t Cards rds & Packa ckagin ing Filtra tratio tion Digita ital l Transfe sfer Media ia Backin ckings s (Tape & Abra rasive sives) s) Commerci rcial l and Consu sumer r Fine Papers rs High End Spir irits its Labels ls Premium ium Packa ckagin ing Other r Perfo rform rmance ce Mate teri rials ls (Labels, ls, Coate ted Cove vers, s, etc…) 2

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

 Focused on filtration, premium packaging and performance materials  Prioritize organic growth and supplement with value-adding acquisitions  Expand our geographic presence and share in transportation filtration  Build off our global base in performance backings  Leverage our strong market position in premium fine papers  Disciplined capital deployment to maintain double-digit ROIC  An attractive dividend as part of a meaningful return to shareholders

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Five-Yr shareholder return of 29%/year > 2 times the Russell 2000

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• No. American transportation

filtration capacity to provide end of curve sales of $80 million

• Continued double digit premium

packaging growth supported by added laminating capabilities

• Digital transfer media acquisition

providing a leading position in this growing global market

• Escalated pulp prices being

countered by selling price actions

• U.S. regulatory change driving 10-

20% increase in freight. Actions underway to address

• Appleton capacity underutilized

during ramp up; expected to turn profitable in early 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%

• Growth consumed European capacity;

world class US asset started up in 2017

• Common global customers and competitors
• Five-year ramp up to $80 mm EOC sales

supports historic growth rate

• Asia an exciting 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 digital

transfer, labels, 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 $529

12% 13% 14% 11% 11%

14% 14%

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

2014 2015 2016 2017 LTM Q118

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 > 8%/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 $452

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 Q118

Net Sales Adjusted EBIT % 16

• strong growth in fragmented packaging market and

in digital and wide format categories with recent investments in capabilities

• potential for small, consolidating acquisitions
• Recently announced sale of office products mill and

portfolio optimization

• mid-teen EBIT margins with brand equity that

supports pricing through input cost cycles

• efficient cost position and high ROIC
• substantial cash generation

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 $4.34 2014 2015 2016 2017 LTM Q118

Adjusted E.P.S.

 Five-year growth driven by share gains, new products, price/mix improvement and acquisitions  2017-18 results reflect 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 $1,004

11% 12% 13% 11% 10%

2014 2015 2016 2017 LTM Q118

Net Sales Adjusted EBIT %

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*U.S. Filtration start-up

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

Q118

WACC ~ 7-9%

Profitable growth Continual focus on asset efficiency and footprint optimization Disciplined organic capital spending Value-adding acquisitions (and divestitures) Component of compensation metrics

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*2017 U.S. filtration start-up

175 175 175 175 175 53 54 46 80 95

1.8x 1.6x 1.4x 1.8x 1.9x

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 Q118

Bonds S-T Debt

$229 $228 $221 $255

 Strong cash generation keeping Debt/EBITDA below targeted range

• f 2 to 3x (even with organic capital

investments and acquisitions)  $175 mm bond due in 2021; 5.25% rate and Ba3/BB rating  Short-term debt primarily from existing ABL (sized at $200 million)  Capital structure and credit availability provides significant flexibility to act on opportunities

Debt ($ millions) 21

Debt/ EBITDA

$270

• Priority on highest returning

investments Organic initiatives Value-adding M&A

• Committed to cash returns via

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

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

with acquisitions

• Favorable cash tax position with prior

period R&D tax credits, US tax changes to provide $3-5 mm/yr benefit

• Well-funded pension plan
• Efficient asset base; capital spend 3-5%
• f sales; maintenance spend < $20 mm

$1.02 $1.20 $1.32 $1.48 $1.64

2014 2015 2016 2017 2018 Dividends per share 22 $95 $111 $116 $100 $86

20 40 60 80 100 120 140

2014 2015 2016 2017 LTM Q118 Cash From Operations

*includes U.S. filtration start-up

• 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

• Focused on growing, profitable and

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

• Active and disciplined process with

dedicated resources. Ideas come from robust network of sources

• 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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Effective process leading to demonstrated record of value-adding deal execution and integration and a continued pipeline of targets

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

• Leading positions in defensible and profitable

core categories generating cash and double digit Return on Capital

• Catalysts to enhance organic growth

 Transp. Filtration geographic share gains  Adjacent technical product markets  Premium packaging expansion

• Financial strength and flexibility to act on

additional attractive opportunities

• Track record of value-adding capital deployment

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Fine Paper & Packaging Technical Products

Neenah Today

Premium Packaging & Fine Paper Technical Products

Neenah Future

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Continuing Operations $ millions

2014 2015 2016 2017 LTM Q118

GAAP Operating Income $ 86.6 $ 101.4 $ 114.1 $ 104.3 $ 101.4 Acquisition/Integration/Restructuring Costs 2.3 6.5 7.0 1.3 1.3 Pension/Insurance Settlement/Other 3.7 0.8 (2.6) (1.8) Adjusted Operating Income $ 92.6 $ 107.9 $ 121.9 $ 103.0 $ 100.9 Depreciation & Amortization 25.0 27.5 30.1 32.1 33.7

• Amort. Equity-Based Compensation

6.0 6.5 5.8 6.4 5.8 Adjusted EBITDA $ 123.6 $ 141.9 $ 157.8 $ 141.5 $ 140.4 Earnings (Loss) per Share $ 3.99 $ 3.53 $ 4.26 $ 4.68 $ 4.60 Acquisition/Integration/Restructuring Costs 0.08 0.24 0.25 0.06 0.06 Prior Period R&D Tax Credits (1.00) (0.07) Tax Adjustment for Indefinite Reinvestment (0.24) (0.19) TCJA and Other Tax Adjustments (0.08) (0.08) Pension/Insurance Settlement/Other 0.14 0.03 (0.10) (0.06) Adjusted Earnings per Share $ 3.21 $ 3.70 $ 4.54 $ 4.32 $ 4.33

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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