THE NEW SCOTT WERE NOT JUST A PAPER COMPANY ANYMORE

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THE NEWSCOTTWERE NOT JUSTA PAPER
COMPANYANYMORE
Worldwide Consumer Business
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Purpose
Worldwide Consumer Business
To Explain Transition from Old Scott to New Scott
From
To
Grow, Grow, Grow
Declining Volume
PROFITABLY
Global Brands, Marketed Synergistically
Fragmented Products Regional Brands
Aggressive Innovation Excellent Execution
Slow to Innovate
No Worldwide Leadership
Global World Class Leadership
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New ScottConsumer Regional Heads
Worldwide Consumer Business

• North America
• Europe
• Asia Pacific

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Strengthened OrganizationalCapability
Worldwide Consumer Business

• Hired 14 New Key Leaders
• - 150 Years of Consumer
• Packaged Goods Experience
• From World Class Companies
• - Coca Cola
• - Kimberly Clark
• - Procter Gamble

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New Scott
Worldwide Consumer Business

• Establish Global Brands
• Grow These Brands Profitably
• Grow Organizational Capability

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Presenting theNew Scott Brands
Worldwide Consumer Business
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Basic Bath Tissue
Worldwide Consumer Business
Old
New
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Premium Bath Tissue
Worldwide Consumer Business
Old
New
9
Scott, Scott Extra, Scott Ultra
Worldwide Consumer Business
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Basic Towels
Worldwide Consumer Business
Old
New
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Premium Towels
Worldwide Consumer Business
Old
New
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Wet Wipes Babies Children
Worldwide Consumer Business
Old
New
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Wet Wipes Adults
Worldwide Consumer Business
Old
New
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All Products
Worldwide Consumer Business
Old
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All Products
Worldwide Consumer Business
New
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New Scott
Worldwide Consumer Business

• New, Global Packaging
• New, Global Positionings
• New, Global Advertising
• New, Global Initiatives

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Overview
Worldwide Consumer Business

• Scott Brands Marketed in 22 Countries

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Overview
Worldwide Consumer Business

• Scott Brands Marketed in 22 Countries
• 1994 Worldwide Sales Over 2.8 Billion

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Overview
Worldwide Consumer Business

• Scott Brands Marketed in 22 Countries
• 1994 Worldwide Sales Over 2.8 Billion
• 1994 Worldwide Operating Income 388 Million
• - Restructuring
• - Cost Savings
• - Mix Improvements

T
125 Million/ 47
T
vs. 1993
Include Affiliates
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Overview
Worldwide Consumer Business

• Scott Brands Marketed in 22 Countries
• 1994 Worldwide Sales Over 2.8 Billion
• 1994 Worldwide Operating Income 388 Million
• - Restructuring
• - Cost Savings
• - Mix Improvements
• But1994 Sales 3 Lower vs. 1993.

T
125 Million/ 47
T
vs. 1993
WE MUST FIX THIS AND GROW
Include Affiliates
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Overview
Worldwide Consumer Business

• Largest Worldwide Tissue Producer
• Cost Competitive
• Proprietary Strengths
• Technology
• Brands

We Must
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Choose to LeadChoose to Innovate
Worldwide Consumer Business
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Strategic Plan
Worldwide Consumer Business
Maximize Shareholder Value
Significantly Increase Profits
Fuel Profitable Growth
Significantly Decrease Costs


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Maximize Shareholder Value
Worldwide Consumer Business


Significantly Decrease Costs
Significantly Increase Profits
Fuel Profitable Growth
Significantly Decrease Costs

• Restructuring Benefits
• 1995 Benefit 200 Million
• Goal 100 to the Bottom Line

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Maximize Shareholder Value
Worldwide Consumer Business


Significantly Decrease Costs
Significantly Increase Profits
Fuel Profitable Growth

• Additional Cost Saving
• Streamline Canada Europe
• Plant Productivity Reliability
• Worldwide Procurement Logistics
• Fiber Effectiveness

Full Year Savings Potential 100 Million
T
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New ScottContinuous Cost Reduction
Worldwide Consumer Business

• Eliminate Non-Essential Costs
• Generate New Cost Savings
• Execute Quickly

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Maximize Shareholder Value
Worldwide Consumer Business


Fuel Profitable Growth
Significantly Increase Profits
Significantly Decrease Costs
Fuel Profitable Growth

• Basic Brand Management
• Accelerated Brand Growth

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Maximize Shareholder Value
Worldwide Consumer Business


Fuel Profitable Growth
Significantly Increase Profits
Significantly Decrease Costs
Basic Brand Management

• Global Branding
• - Global Packaging Positioning
• - Global Advertising
• Group Brand Promotions

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Maximize Shareholder Value
Worldwide Consumer Business


Fuel Profitable Growth
Significantly Increase Profits
Significantly Decrease Costs
Basic Brand Management

• Fully Capitalize on All Trade Channels
• - 250 Million Incremental Sales
• Potential

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Maximize Shareholder Value
Worldwide Consumer Business


Fuel Profitable Growth
Significantly Increase Profits
Significantly Decrease Costs
Basic Brand Management

• Improve Basic Business Structure
• - National Brands National Products
• - Rationalize SKUs
• - Mix Improvements
• - 100 Capacity Utilization

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Maximize Shareholder Value
Worldwide Consumer Business


Fuel Profitable Growth
Significantly Increase Profits
Significantly Decrease Costs
Accelerated Brand Growth New Product Development
Range of Consumer Needs
Brand
Positioning
Technology
Value
Base
Meet Basic Needs
Traditional
Extra
Traditional
Mainstream
Meet Basic Needs with One Superior Attribute
Ultra
Proprietary
Premium
Meet the Most Demanding Needs
Specialty
Ultra Plus
Proprietary

• Meet Special Needs
• Added Value Ingredients
• Niche Product Formats

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Maximize Shareholder Value
Worldwide Consumer Business


Fuel Profitable Growth
Significantly Increase Profits
Significantly Decrease Costs
New Worldwide Initiative Cottonelle
Current Competition
Soft -Charmin Squeezably Soft -Northern
Quilted Softness -Angel Soft Cushiony
Soft -Cottonelle Cottony Soft
Irritation Allergies Odor Dry vs. Wet
Consumers Have Unmet Needs
Advanced Personal Hygiene
New Cottonelle Brand Positioning
Product Execution
Hypoallergenic Baking Soda Dry Moist
Current 6 Potential 10-12
U.S. Market Share
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Consumers Have Unmet Needs
Worldwide Consumer Business

• 39 Have Concerns with Inks, Dyes,
• Sensitive Skin
• 39 Have Concerns with Odor Control
• 55 of Bath Tissue Users Supplement Dry
• Tissue Cleaning

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Maximize Shareholder Value
Worldwide Consumer Business


Fuel Profitable Growth
Significantly Increase Profits
Significantly Decrease Costs
New Worldwide Initiative Cottonelle
Current Competition
Soft -Charmin Squeezably Soft -Northern
Quilted Softness -Angel Soft Cushiony
Soft -Cottonelle Cottony Soft
Irritation Allergies Odor Dry vs. Wet
Consumers Have Unmet Needs
Advanced Personal Hygiene
New Cottonelle Brand Positioning
Product Execution
Hypoallergenic Baking Soda Dry Moist
Current 6 Potential 10-12
U.S. Market Share
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Adult Moist WipesNew Incremental Business
Worldwide Consumer Business

• Current U.S. Category 80 Million
• gt50 of Consumers Use Additional
• Cleaning Methods
• gt40 of Consumers Convert when Sampled
• If 20 of U.S. Homes Convert, Category
• Size Would Increase to 500 Million
• Worldwide Multi-Billion Dollar Opportunity

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Maximize Shareholder Value
Worldwide Consumer Business


Fuel Profitable Growth
Significantly Increase Profits
Significantly Decrease Costs
New Worldwide Initiative Viva Ultra
Current Competition
Speed of Absorbency Only Absorbent Capacity
Only

• COMBINATION
• Speed of Absorbency
• Absorbent Capacity
• Wet Strength

T
Consumers Have Unmet Needs
Like Cloth
New Viva Ultra Brand Positioning
Cloth-like Performance at a Fraction of the
Cost
Product Execution
Ultra (Kitchen) Scrub Cloths (Portable Box)
Current 6 Potential 8-10
U.S. Market Share
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Maximize Shareholder Value
Worldwide Consumer Business


Fuel Profitable Growth
Significantly Increase Profits
Significantly Decrease Costs
New Worldwide Initiative Scott Clean
Current Competition
Speed of Absorbency Only Absorbent Capacity
Only

• COMBINATION
• Absorb Spills
• Clean Surfaces

Consumers Have Unmet Needs
New Scott Clean Brand Positioning
The Paper Towel That Leaves Surfaces Truly
Clean Because Its Thirsty FiberWeve Doesnt
Leave Lint as it Absorbs
Product Execution
Single Roll Double Roll Triple Roll Extra Big
Sheets Choose-A-Size
Current 10 Potential 14-17
U.S. Market Share
38
Consumers Have Unmet Needs
Worldwide Consumer Business
Most Common Frequent Uses of Paper Towels
No Lint Towel Required
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Maximize Shareholder Value
Worldwide Consumer Business


Fuel Profitable Growth
Significantly Increase Profits
Significantly Decrease Costs
Key Initiatives Implementation Plan
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Maximize Shareholder Value
Worldwide Consumer Business


Fuel Profitable Growth
Significantly Increase Profits
Significantly Decrease Costs
Beginning a Revolution in Brand Growth

• Breakthrough Products
• Highly Distinctive and Proprietary Positionings
• World Class Advertising
• Global Execution
• Key Initiatives Full Year World Impact on Sales

700-800 Million
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Maximize Shareholder Value
Worldwide Consumer Business


Fuel Profitable Growth
Significantly Increase Profits
Significantly Decrease Costs
Accelerated Brand Growth

• Adapt Proven Away-From-Home Innovations
• - Wipes
• - Cleaning Systems
• - Dispensing Systems

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SummaryKey Strategic Imperatives
Worldwide Consumer Business

• Profitize 100 of Restructuring Savings
• Offset Pulp and Other Inflation
• - Additional Cost Savings
• - Mix Improvements
• - Pricing
• Drive Volume Growth Profit Margin
• - Sales Growth 10/Year Minimum
• - Operating Margin 20 Minimum

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• Restructuring Cost
• Reduction

PROFIT

• Basic Brand Management

PROFIT

• Incremental Sales from
• Initiatives

PROFIT