THE NEWSCOTTWERE NOT JUSTA PAPER COMPANYANYMOREWorldwide Consumer Business

PurposeWorldwide Consumer BusinessTo Explain Transition from Old Scott to New ScottFrom:To:Declining VolumeGrow, Grow, GrowPROFITABLYFragmented Products& Regional BrandsGlobal Brands, MarketedSynergisticallySlow to InnovateAggressive Innovation &Excellent ExecutionNo WorldwideLeadershipGlobal World ClassLeadership

New ScottConsumer Regional HeadsWorldwide Consumer Business North America Europe Asia & Pacific

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

New ScottWorldwide Consumer Business Establish Global Brands Grow These Brands Profitably Grow Organizational Capability

Presenting theNew Scott BrandsWorldwide Consumer Business

Basic Bath TissueWorldwide Consumer BusinessOldNew

Premium Bath TissueWorldwide Consumer BusinessOldNew

Scott, Scott Extra, Scott UltraWorldwide Consumer Business

Basic TowelsWorldwide Consumer BusinessOldNew

Premium TowelsWorldwide Consumer BusinessOldNew

Wet Wipes Babies & ChildrenWorldwide Consumer BusinessOldNew

Wet Wipes AdultsWorldwide Consumer BusinessOldNew

All ProductsWorldwide Consumer BusinessOld

All ProductsWorldwide Consumer BusinessNew

New ScottWorldwide Consumer Business New, Global Packaging New, Global Positionings New, Global Advertising New, Global Initiatives

OverviewWorldwide Consumer Business Scott Brands Marketed in 22 Countries

OverviewWorldwide Consumer Business Scott Brands Marketed in 22 Countries 1994 Worldwide Sales: Over $2.8 Billion

OverviewWorldwide 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+$125 Million/+47%vs. 1993Include AffiliatesTT

OverviewWorldwide 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.+$125 Million/+47%vs. 1993Include AffiliatesTTWE MUST FIX THIS AND GROW

OverviewWorldwide Consumer Business Largest Worldwide Tissue Producer Cost Competitive Proprietary StrengthsTechnology BrandsWe Must

Choose to LeadChoose to InnovateWorldwide Consumer Business

Strategic PlanWorldwide Consumer Business=+SignificantlyDecreaseCostsMaximize Shareholder ValueSignificantlyIncreaseProfitsFuelProfitableGrowth

Maximize Shareholder ValueWorldwide Consumer BusinessSignificantly Decrease CostsSignificantlyIncreaseProfits=+ Restructuring Benefits1995 Benefit: $200 Million Goal: 100% to the Bottom LineSignificantlyDecreaseCostsFuelProfitableGrowth

Maximize Shareholder ValueWorldwide Consumer BusinessSignificantlyIncreaseProfits=+ Additional Cost SavingStreamline Canada & Europe Plant Productivity & Reliability Worldwide Procurement & Logistics Fiber EffectivenessSignificantlyDecreaseCostsFuelProfitableGrowthTFull YearSavingsPotential:$100 Million

New Scott:Continuous Cost ReductionWorldwide Consumer Business Eliminate Non-Essential Costs Generate New Cost Savings Execute Quickly

Maximize Shareholder ValueWorldwide Consumer BusinessSignificantlyIncreaseProfits=+SignificantlyDecreaseCostsFuelProfitableGrowthFuel Profitable Growth Basic Brand Management Accelerated Brand Growth

Maximize Shareholder ValueWorldwide Consumer BusinessSignificantlyIncreaseProfits=+SignificantlyDecreaseCostsFuelProfitableGrowthBasic Brand Management Global Branding- Global Packaging & Positioning- Global Advertising Group Brand Promotions

Maximize Shareholder ValueWorldwide Consumer BusinessSignificantlyIncreaseProfits=+SignificantlyDecreaseCostsFuelProfitableGrowthBasic Brand Management Fully Capitalize on All Trade Channels- $250+ Million Incremental SalesPotential

Maximize Shareholder ValueWorldwide Consumer BusinessSignificantlyIncreaseProfits=+SignificantlyDecreaseCostsFuelProfitableGrowthBasic Brand Management Improve Basic Business Structure- National Brands & National Products- Rationalize SKUs- Mix Improvements- 100% Capacity Utilization

Maximize Shareholder ValueWorldwide Consumer BusinessSignificantlyIncreaseProfits=+SignificantlyDecreaseCostsFuelProfitableGrowthAccelerated Brand Growth & New Product DevelopmentRange of Consumer NeedsValueBrandPositioningTechnologyBaseMeet Basic NeedsTraditionalMainstreamExtraMeet Basic Needs withOne Superior AttributeTraditionalPremiumUltraProprietaryMeet the Most Demanding NeedsMeet Special Needs Added Value Ingredients Niche Product FormatsSpecialtyUltra PlusProprietary

Maximize Shareholder ValueWorldwide Consumer BusinessSignificantlyIncreaseProfits=+SignificantlyDecreaseCostsFuelProfitableGrowthNew Worldwide Initiative: CottonelleCurrent Competition:Consumers Have Unmet Needs:Irritation & AllergiesOdorDry vs. WetNew Cottonelle BrandPositioning:Advanced Personal HygieneProduct Execution:HypoallergenicBaking SodaDry & MoistSoft-Charmin: Squeezably Soft-Northern: Quilted Softness-Angel Soft: Cushiony Soft-Cottonelle: Cottony SoftCurrent: 6% Potential: 10-12%U.S. & Market Share

Consumers Have Unmet NeedsWorldwide 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

Maximize Shareholder ValueWorldwide Consumer BusinessSignificantlyIncreaseProfits=+SignificantlyDecreaseCostsFuelProfitableGrowthNew Worldwide Initiative: CottonelleCurrent Competition:Consumers Have Unmet Needs:Irritation & AllergiesOdorDry vs. WetNew Cottonelle BrandPositioning:Advanced Personal HygieneProduct Execution:HypoallergenicBaking SodaDry & MoistSoft-Charmin: Squeezably Soft-Northern: Quilted Softness-Angel Soft: Cushiony Soft-Cottonelle: Cottony SoftCurrent: 6% Potential: 10-12%U.S. & Market Share

Adult Moist Wipes:New Incremental BusinessWorldwide Consumer Business Current U.S. Category $80 Million >50% of Consumers Use AdditionalCleaning Methods >40% of Consumers Convert when Sampled If 20% of U.S. Homes Convert, Category Size Would Increase to $500+ Million Worldwide: Multi-Billion Dollar Opportunity

Maximize Shareholder ValueWorldwide Consumer BusinessSignificantlyIncreaseProfits=+SignificantlyDecreaseCostsFuelProfitableGrowthNew Worldwide Initiative: Viva UltraCurrent Competition:Consumers Have Unmet Needs:COMBINATIONSpeed of AbsorbencyAbsorbent CapacityWet StrengthNew Viva Ultra BrandPositioning:Cloth-like Performance at aFraction of the CostProduct Execution:Ultra (Kitchen)Scrub Cloths (Portable Box)Speed of Absorbency OnlyAbsorbent Capacity OnlyCurrent: 6% Potential: 8-10%U.S. & Market ShareLike ClothT

Maximize Shareholder ValueWorldwide Consumer BusinessSignificantlyIncreaseProfits=+SignificantlyDecreaseCostsFuelProfitableGrowthNew Worldwide Initiative: Scott CleanCurrent Competition:Consumers Have Unmet Needs:COMBINATIONAbsorb SpillsClean SurfacesNew Scott Clean BrandPositioning:The Paper Towel That Leaves Surfaces Truly Clean Because Its Thirsty FiberWeve Doesnt Leave Lint as it AbsorbsProduct Execution:Single RollDouble RollTriple RollExtra Big SheetsChoose-A-SizeSpeed of Absorbency OnlyAbsorbent Capacity OnlyCurrent: 10% Potential: 14-17%U.S. & Market Share

Consumers Have Unmet NeedsWorldwide Consumer BusinessMost Common Frequent Uses of Paper TowelsNo Lint TowelRequired

Maximize Shareholder ValueWorldwide Consumer BusinessSignificantlyIncreaseProfits=+SignificantlyDecreaseCostsFuelProfitableGrowthKey Initiatives Implementation Plan

RegionInitiativesI Q 95II Q 95III Q 95IV Q 95North AmericaCottonelle APHViva UltraScott CleanFresh LineEuropeCottonelle APHScott Extra/UltraScott CleanFresh LinePacificCottonelle APHScott Extra/UltraScott CleanFresh Line

Maximize Shareholder ValueWorldwide Consumer BusinessSignificantlyIncreaseProfits=+SignificantlyDecreaseCostsFuelProfitableGrowthBeginning 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

Maximize Shareholder ValueWorldwide Consumer BusinessSignificantlyIncreaseProfits=+SignificantlyDecreaseCostsFuelProfitableGrowthAccelerated Brand Growth Adapt Proven Away-From-Home Innovations:- Wipes- Cleaning Systems- Dispensing Systems

SummaryKey Strategic ImperativesWorldwide Consumer BusinessProfitize 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

PROFITPROFITPROFITRestructuring & Cost ReductionBasic Brand ManagementIncremental Sales fromInitiatives