Presentation Transcript

1. xpedx MeetingMarch 18, 2009

2. Meeting Agenda Current Environment and 2009 Outlook discussion Review of xpedx “agenda” Outline NPI key strategic imperatives Introduce SPOT xpedx and Neenah Paper strategic alignment Are we meeting your needs? Summary
3. UFS Category Overview The UFS category has dropped 15% since 2007 and is anticipated to continue to contract over the next four years % Change 000 Tons Source: RISI – US Total Printing and Writing Paper Summary – Table 2, published 3/11/09
4. Suppliers have decreased dramatically;WTC brands need further consolidation 2009 300,000 Tons 9 WTC Manufacturers 150 + Brands 1999 620,000 Tons 18 WTC Manufacturers 175 + Brands WTC category has decreased by approximately 50% WTC mills have decreased by approximately 50% WTC brands have decreased by approximately 15%
5. “Change invites Change” When you come to a fork in the road, Take it!Yogi Berra Historic Approach Supplier Centric Future Approach Category Centric Take a total CATEGORY view of product and brands performance. Remove product duplication and complexity; making the entire supply chain more efficient Purchase brands and reduce suppliers in an attempt to “gain volume that will fill assets” Ask Customers to support them all
6. xpedx AgendaHow can NP help with xpedx’s key focus areas? … Improve Profitability Meaningful growth incentive program Minimize margin compression Support reciprocal selling opportunities – i.e., sell packaging and supplies to our mills; soCAL - RDC opportunity Minimize Working Capital Productive inventory – flexible exchange / return policy Improve operational execution – pallet build, 3PL, Classic Crest® service guarantee Build long term competitive advantage Limited distribution – market exclusives on select brands Ease of doing business One price across xpedx Timely resolution to claims Management touch points Electronic data exchange (EDI/EFT) Strategic Growth Plans– how are you helping us grow our business?
7. Neenah PaperStrategic Imperatives Improve the profitability of the merchant’s product portfolio while incenting category consolidation Enhance working capital efficiency and supply chain performance Change the conversation from total supplier YOY sales to building power brands & improving category performance
8. Improve the profitability of the merchant’s product portfolio
9. 2009 Merchant IncentiveInvesting in Category Consolidation
10. Enhance working capital efficiency and supply chain performance
11. From market overviews to category management, SPOT continues to evolve Chapter 1 Chapter 2 Chapter 3 Customer vs. Market Trends Customer share vs. Market Fair Share Analysis – Market Specific SKU Specific Stock Guidance Distribution Tracking Inventory Turns Management New Item Launch Tracking by Market Derived Market Share SKU Rationalization Velocity measurement on marketing programs or new items launched Price or marketing program velocity and volume impacts Competitive Insights
12. Providing Category Management Tools SPOT (Strategic Planning & Optimization Tool) Share of Shipments Opportunity SKUs show additional sales potential of $1,760,000 annually MARKET MERCHANT “Above Share Target” – Protect and Grow MARKET MERCHANT Opportunity – Adjust Stocking Strategy MARKET MERCHANT
13. Holistic Supply Chain POV (6+6=3 )Opportunity to enhance working capital efficiency and supply chain performance. Combined Supply Chain Merchants Sales = 300,000 tons Inventory Investment = 50,000 tons Inventory Turns = 6 Sales = 300,000 tons Inventory Investment = (50,000 + 50,000) = 100,00 tons Inventory Turns = 3 Mills Sales = 300,000 tons Inventory Investment = 50,000 tons Inventory Turns = 6
14. Optimization of Supply Chain Merchant Supplier Supply Chain + = Current State Depth  Depth  Depth  Breadth  Breadth  Breadth  + = Depth  Optimized Depth  Depth  Breadth  Breadth  Breadth  Through supply chain alignment and creative inventory solutions, overall supply chain efficiency can be improved
15. Defining Inventory Roles Our Point of View for Merchant and Supplier Merchant Role = Breadth in offering, Depth in A or Exclusive items only Provides high turns, efficient investment; has product available for majority of market requirements Relies on supplier to provide a reliable and efficient distribution solution for product line complexity (2-3 days for slow turning depth). Low velocity depth is reviewed quarterly and actions taken to ensure vitality of merchant inventory investment is maximized. Supplier Role = Depth and Breadth – maximize supply chain efficiency Have product available through stocking merchant or 3PL in every market outside of efficient distribution distance Minimize the inventory in the supply chain by minimizing market depth and keeping slower moving items in fewer distribution points. Consider consigning items or exclusive market offerings to maximize distribution expense and minimize impact to merchant inventory
16. Conversation: From total suppler YOY sales to building power brands & improving category performance
17. Uncoated Free Sheet Smooth Overview N N Price $/cwt Z M N M M Offset/Opaque =10 Mill Brands WTC = 20+ Brands N S M S S S M S M M S N Writing, Text & Cover S Neenah = N Mohawk = M Smart = S Wausau = W Monadnock = Z Domtar = D Finch = F IP = I Soprosel = P Boise = B W M Perceived Quality F F D Opaque M D I F W Offset P D I B Brand representation is illustrative. WTC category informed by customer research fielded in 2H 2008 by NPI.
18. Each category finish has clear market leading brand solutions Brand and quality perception based on custom research fielded Q3-2008
19. Continuing track record of consolidation success -reducing Brands & SKUs
20. Brand Distribution Strategy
21. Strategic Planning & Optimization Tool
22. Sales Performance Trending for Any Configuration Desired
23. NPI Share for all items
24. Custom and Instant Share View of Neenah Sales Stock Sales Make Sales
25. SPOT Light and Hot Spot highlights performance at SKU/brand level Spot Light Protect & Grow Hot Spot Opportunities
26. Providing Downloadable Detail Spreadsheets of SKU Performance
27. xpedx AgendaHow can NP help with xpedx’s key focus areas? … Improve Profitability Meaningful growth incentive program - 90% threshold; share component; *NEW consolidation incentive Minimize margin compression - incentive programs including support of Ovations; brand exclusive discussion Support reciprocal selling opportunities – i.e., sell packaging and supplies to our mills; soCAL - RDC opportunity – buying our cartons from I.P; April 09 goal for start-up RDC trial with Kirk Downey location Minimize Working Capital Productive inventory – flexible exchange / return policy - CLM’s working with sales organization; recent examples in Southeast markets of ATL and FLA. Improve operational execution – pallet build program, west coast 3PL RDC, Classic Crest® service guarantee – special pallet build with Kirk-Downey; xpedx stores recipient of our first and largest pay-out for service guarantee at start-up of program Build long term competitive advantage Limited distribution – market exclusives on select brands - 2008 reduction of distribution in FLA markets; starting dialogue with xpedx-Pacific Group/April Ease of doing business One price across xpedx – completed January 2009 Timely resolution to claims - reorganization of service department to put focus on technical and claims support department; goal for 98% - 1 day response and 99% closed within 1 week of claim. Management touch points – senior leadership group quarterly contact; focus on the regions EAST and WEST; focus on the purchasing and marketing key contact; focus on the market area Group VPs and division managers Electronic data exchange (EDI/EFT) – completed and live Strategic Growth Plans– how are you helping us grow our business? – examples: focus with national accounts team on end user business; recent training sessions for xpedx-Hayward and xpedx-SLC for packaging opportunities
28. Summary The Category is consolidated … we’ll need performance from each other to prosper. These are unique times that require we challenge our historical assumptions to drive meaningful change. Our commitment to brand and quality leadership is unwavering We’ll focus resources and solutions towards improving our mutual supply chain results … and guarantee it. We’ll have an action oriented bias that can be seen in a combination of near term activity and long term game changers Our goal is to be desired, not required. You have to succeed for us to win!

29. Thank You