PAPER-BASED SOLUTIONS FOR NICHE MARKETS WORLDWIDE

Transcription

1 PAPER-BASED SOLUTIONS FOR NICHE MARKETS WORLDWIDE Henry C. Newell President and Chief Executive Officer Sherri L. Lemmer Senior Vice President and Chief Financial Officer UBS Securities Paper and Forest Products Conference September 13, 2012

2 Forward Looking Statements The matters discussed in this presentation concerning the company s future performance or anticipated financial results are forward-looking statements and are made pursuant to the safe harbor provisions of the Securities Reform Act of Such statements involve risks and uncertainties which may cause results to differ materially from those set forth in these statements. Among other things, these risks and uncertainties include the strength of the economy and demand for paper products, increases in raw material and energy prices, manufacturing problems at company facilities, and other risks and assumptions described under Information Concerning Forward-Looking Statements in Item 7 and in Item 1A of the company s Form 10-K for the year ended December 31, The company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events. Non-GAAP Financial Measures This presentation refers to certain non-u.s. GAAP financial measures. A reconciliation of those numbers to U.S. GAAP financial measures is provided on the Company's website at: 2

3 Company Profile Founded in 1899 Provider of paper-based brands and solutions for Tissue and Technical Specialty markets Mosinee, Wisconsin Middletown, Ohio Corporate Headquarters Tissue Mosinee, Wisconsin Harrodsburg, Kentucky Technical Tissue Brainerd, Minnesota Rhinelander, Wisconsin Technical Technical Five manufacturing facilities in four states $850 million in revenues* 2,000 employees * Continuing Operations 3

4 Vision, Purpose and Goals Vision We will be the leading provider of paper based, environmentally sensitive brands and solutions to the markets we serve, driven by our business model of collaborative innovation Purpose A sustainable enterprise that delivers long-term attractive returns Strategic Goals (Five Year): 4-5% Revenue Growth (CAGR) +15% Return on Capital Employed Earn the Right to Accelerate Growth and Investment 4

5 Operating Strategies Focus on Strategic Markets Drive growth through Strategic Innovation Deploy Integrated Value Delivery System(s) aligned to strategic customers Build a Strategic Operations Platform to support market growth Instill Sustainable Business Practices 5

6 Management Team Henry C. Newell (54) President & CEO January 2012 Sherri L. Lemmer (45) Senior Vice President and Chief Financial Officer May 2012 Matthew L. Urmanski (39) Senior Vice President, Tissue March 2012 Michael W. Nelson (45) Senior Vice President, Paper March 2011 Patrick J. Medvecz (49) Senior Vice President, Operations March

7 We Operate in Two Business Segments Tissue 41% Washroom solutions for away-from-home Towel and Tissue markets % of consolidated LTM sales* Paper Paper-based solutions designed for technical requirements of global Food, Coated & Liner and Industrial & Tape markets 59% % of consolidated LTM sales* * Continuing operations for LTM ended June 30,

8 Tissue Operations Aligned to Support Growth Harrodsburg, Kentucky Converting Tissue Capacity Expansion Middletown, Ohio Paper Harrodsburg, Kentucky Brainerd, Minnesota Mosinee, Wisconsin Rhinelander, Wisconsin 8

9 Our Markets (Tons) World Paper & Board Demand Specialty ~25MM Tape & Industrial 24% ~400MM Packaging 50% Coated & Liner 5% Specialty Our Market 7% Segments Tissue 8% Food 5% Tissue ~28MM Printing & Writing 27% Away-from-Home 23% Newsprint 8% At Home 77% North America 9% Sources: AWA, RISI, and Company 9

10 Markets We Serve SECTOR TISSUE FOOD TAPE & INDUSTRIAL COATED & LINER Solutions Washroom Solutions Food Packaging & Processing Solutions Engineered Solutions Pressure Sensitive Solutions End Use Markets Educational Institutions Office Buildings Lodging Healthcare Food Service Towel Products Tissue Products Dispensing Systems Greaseproof Applications Microwavable Applications Baking Papers Product Categories Consumer Packaging Bakeries Food Processors Food Service Consumer Packaging Construction Automotive Manufacturing Healthcare Crepe Tape Base Coating & Laminating Base Abrasive & Specialty Saturating Base Interleavers Technical Specialties Consumer Packaging Alternative Energy Aerospace Medical Hygiene Silicone Coated Papers High Performance Release Liners Supercalendared Kraft Specialty Glassines 10

11 Wausau Paper Revenue 2012 Expected $0.9B 2011 $1.0B Tissue 31% Print 33% 5-Year $1.1B Food 16% Tape & Industrial 19% Coated & Liner 16% Food 15% Tissue 41% Tape & Industrial 18% Tissue 52% Coated & Liner 15% Transition 8% Executing Growth Strategy (Post Print) 11

12 Significant Actions in Capital Investments $27MM Brainerd Investment (Tape) $220MM Tissue Expansion Discontinued Operations Print & Color Sale Brokaw Site Shutdown and Sale Financing Sale of Timberlands Favorable Financing Construct 12

13 Tissue 13

14 North American Away-From-Home Tissue (Tons) Demand Wausau Paper 2.5MM.2MM Education 10% Education 27% Lodging / Other 23% Food Service 40% Sources: AF&PA, RISI, and Company Office Buildings 12% Lodging / Other 26% Office Buildings 36% Healthcare 15% Food Service 3% Healthcare 8% 14

15 Tissue - Overview Annual sales $343MM (LTM*) 8% share of North American AFH market Consistently achieving above-market growth and margins Broad line of towel, tissue, soap and dispensing systems Sold exclusively through distribution Major $220MM investment underway: Expand premium offering Raise product quality Reduce cost to manufacture * LTM ended June 30,

16 Tissue Expansion $220MM Highly flexible manufacturing asset (conventional tissue, premium towel & tissue) Premium attributes equivalent to TAD (virgin) Fiber flexibility 100% recycled fiber or virgin Strong competitive cost position 75,000 TPY 16

17 Enhanced Products Full spectrum of quality possible (recycled & virgin) Improved mid-grade Dubl-Nature New to world - premium 100% recycled fiber products First Green Seal eligible premium products 17

18 Paper 18

19 Paper Segment FOOD INDUSTRIAL & TAPE COATED & LINER Markets Markets Markets Bakery & Restaurant Building & Construction Aerospace Composite Food Processing Automotive & Electronics Alternative Energy Consumer Packaging Diversified Manufacturing Electronics & Consumer 90% of Sales Customer Specific 800 Unique Grades 19

20 Worldwide Technical Specialty (Tons) Food Tape & Industrial Coated & Liner 1.2MM 6.1MM 1.3MM Specialized Commodity 65% Technical Specialty 35% Specialized Commodity 66% Technical Specialty 52% Technical Specialty 34% Coated 16% Specialized Commodity 32% Our Markets: 8.7MM Specialty Focus: 3.7MM Wausau Capacity: 0.3MM Today s Specialty is Often Tomorrow s Specialized Commodity Sources: AWA and Company 20

21 Paper Overview Annual Sales $500MM (LTM*) Growing Technical Specialty Expanding Margins Despite Elevated Input Costs 2011 Strongest Technical Specialty Profit in 13 Years Exited Print & Color * LTM ended June 30,

22 Brainerd Machine Rebuild $27MM rebuild completed Q Supports global customer growth Lowest cost crepe tape asset in the world across full spectrum of quality 22

23 WHY WAUSAU? Investment Thesis 23

24 Investment Thesis Wausau: Grow at Target Margins 4-5% Revenue Growth (CAGR) 15% Return on Capital Employed (ROCE) Paper: Earn the Right to Grow (ROCE Improvement) Stable Revenue 7-8% Operating Margins within 36 months 16% ROCE Tissue: Investing $220MM (High ROCE Business) +6% Case Growth (CAGR) 13-15% Operating Margins 20-25% ROCE ROCE: Return on Capital Employed (pretax) 24

25 UBS Securities Paper and Forest Products Conference September 13, 2012 FINANCE Sherri L. Lemmer Senior Vice President and Chief Financial Officer 25

26 Financial Overview ($MM) Consolidated Net Sales $1,032 $1,056 $1,100 $1,035 Revenue Growth Tissue: $ % CAGR +3-4% (2012) +6% CAGR (5-year) Technical: +8% (2012) +$500MM Revenue (5 year) Print Exit Transition ($MM) Net sales from continuing operations, unaudited Adjusted EBITDA Tissue Expansion Technical Growth EBITDA Improvement Tissue Expansion Growth, Cost Structure & Mix Technical Growth Volume & Margin Improvement Adjusted EBITDA as originally reported Adjusted EBITDA from continuing operations See Appendix for reconciliations of Consolidated Net Sales from continuing operations and Adjusted EBITDA. 26

27 Capital Investment Funding Capital Spending ($MM) Expect $162MM 2012 Capital Spend $325MM Capacity under Existing Credit Agreements Net Long-term Debt ($MM) Capacity Secured to Fulfill Funding Obligations * Net of $33.1MM in cash & cash equivalents 27

28 Change in Net Debt ($MM) Year Ended 12/31/11 EBITDA (1) $37.9 $29.8 Capital Expenditures, Net of Grants (73.6) (77.5) Change in Receivables Change in Inventories (18.7) (19.2) (15.2) 22.1 Net Change in Debt $(15.9) $24.4 Beginning Net Debt $101.0 $125.4 Ending Net Debt $116.9 $101.0 Change in Other Assets/Liabilities Proceeds on Disposals Other (2) (1) See Appendix for reconciliation of EBITDA (2) See Appendix for details of the Other category Six Months Ended 6/30/12 28

29 Value Drivers Tissue Growth (Cases) Operating Margin Paper Growth (Technical) Operating Margin 2012 Five Year Target +3-4% 13% +6% (CAGR) 13-15% +8% (Volume) +$500MM (Revenue) Cash Focus 7-8% 29

30 Our Near-Term Outlook Tissue Expanding Margins Stable Revenue Demand Recovery Transition of Print & Color Gains through Operations Outlook - Selective Demand Improvement - Global Recovery Inconsistent Major Investment on Plan Customer Engagement in 2012 New Product Strategy: High Paper Commercialization of Brainerd Tape Investment 30

31 PAPER-BASED SOLUTIONS FOR NICHE MARKETS WORLDWIDE Henry C. Newell President and Chief Executive Officer Sherri L. Lemmer Senior Vice President and Chief Financial Officer UBS Securities Paper and Forest Products Conference September 13, 2012

32 QUESTIONS 32

33 APPENDIX 33

34 Wausau Paper Adjusted Return on Capital Employed Five-year Target + 15% Adjusted ROCE Pressure as we Start-up Tissue Machine See reconciliation of Adjusted ROCE. 34

35 Balance Sheet Highlights ($MM) 6/30/12 12/31/11 Cash & Equivalents $33.1 $26.7 Net Working Capital $58.2 $71.0 Long-Term Debt $150.0 $127.7 Shareholders Equity $204.7 $196.2 Debt/Total Capital* 42.3% 39.4% Total Borrowing Base $325 Remaining Available Borrowing Capacity $175 * The calculation of Debt/Total Capital is not intended to be used for purposes of calculating debt covenant compliance 35

36 Second Half Outlook Cautious Economic Outlook New Tissue Machine Startup Brainerd Machine Commercialization Full Year Adjusted EPS $.39-$.41 per Share

37 2012 Guidance ($MM) Continuing Operations Depreciation, Depletion and Amortization Interest Expense, net of Capitalized Interest 2012 Targets $45-$48 $2-$3 Tax Rate 37% Capital Expenditures $162 Pension: Cash Contributions Non-Cash Pension Expense $25 $19-$21 37