Worldwide Consumer Business “THE NEW SCOTT WE’RE NOT JUST A PAPER COMPANY ANYMORE”

Worldwide Consumer Business Purpose To Explain Transition from Old Scott to New Scott From:To: Declining Volume Grow, Grow, Grow PROFITABLY Fragmented Products & Regional Brands Global Brands, Marketed Synergistically Slow to Innovate Aggressive Innovation & Excellent Execution No Worldwide Leadership Global World Class Leadership

Worldwide Consumer Business New Scott Consumer Regional Heads  North America  Europe  Asia & Pacific

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

Worldwide Consumer Business New Scott  Establish Global Brands  Grow These Brands Profitably  Grow Organizational Capability

Worldwide Consumer Business Presenting the New Scott Brands

Worldwide Consumer Business Basic Bath Tissue OldNew

Worldwide Consumer Business Premium Bath Tissue OldNew

Worldwide Consumer Business Scott, Scott Extra, Scott Ultra

Worldwide Consumer Business Basic Towels OldNew

Worldwide Consumer Business Premium Towels OldNew

Worldwide Consumer Business Wet Wipes – Babies & Children OldNew

Worldwide Consumer Business Wet Wipes – Adults OldNew

Worldwide Consumer Business All Products Old

Worldwide Consumer Business All Products New

Worldwide Consumer Business New Scott  New, Global Packaging  New, Global Positionings  New, Global Advertising  New, Global Initiatives

Worldwide Consumer Business Overview  Scott Brands Marketed in 22 Countries

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

Worldwide Consumer Business Overview  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 Include Affiliates  

Worldwide Consumer Business Overview  Scott Brands Marketed in 22 Countries  1994 Worldwide Sales: Over $2.8 Billion  1994 Worldwide Operating Income: $388 Million - Restructuring - Cost Savings - Mix Improvements  But…1994 Sales 3% Lower vs $125 Million/ +47% vs Include Affiliates   WE MUST FIX THIS AND GROW

Worldwide Consumer Business Overview  Largest Worldwide Tissue Producer  Cost Competitive  Proprietary Strengths -Technology - Brands We Must…

Worldwide Consumer Business Choose to Lead Choose to Innovate

Worldwide Consumer Business Strategic Plan = + SignificantlyDecreaseCosts Maximize Shareholder Value SignificantlyIncreaseProfits FuelProfitableGrowth

Worldwide Consumer Business Maximize Shareholder Value Significantly Decrease Costs SignificantlyIncreaseProfits = +  Restructuring Benefits Benefit: $200 Million - Goal: 100% to the Bottom Line SignificantlyDecreaseCosts FuelProfitableGrowth

Worldwide Consumer Business Maximize Shareholder Value SignificantlyIncreaseProfits = +  Additional Cost Saving -Streamline Canada & Europe - Plant Productivity & Reliability - Worldwide Procurement & Logistics - Fiber Effectiveness SignificantlyDecreaseCosts FuelProfitableGrowth  Full Year SavingsPotential: $100 Million

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

Worldwide Consumer Business Maximize Shareholder Value SignificantlyIncreaseProfits = + SignificantlyDecreaseCosts FuelProfitableGrowth Fuel Profitable Growth  Basic Brand Management  Accelerated Brand Growth

Worldwide Consumer Business Maximize Shareholder Value SignificantlyIncreaseProfits = + SignificantlyDecreaseCosts FuelProfitableGrowth Basic Brand Management  Global Branding - Global Packaging & Positioning - Global Advertising  Group Brand Promotions

Worldwide Consumer Business Maximize Shareholder Value SignificantlyIncreaseProfits = + SignificantlyDecreaseCosts FuelProfitableGrowth Basic Brand Management  Fully Capitalize on All Trade Channels - $250+ Million Incremental Sales Potential

Worldwide Consumer Business Maximize Shareholder Value SignificantlyIncreaseProfits = + SignificantlyDecreaseCosts FuelProfitableGrowth Basic Brand Management  Improve Basic Business Structure - National Brands & National Products - Rationalize SKUs - Mix Improvements - 100% Capacity Utilization

Worldwide Consumer Business Maximize Shareholder Value SignificantlyIncreaseProfits =+ SignificantlyDecreaseCosts FuelProfitableGrowth Accelerated Brand Growth & New Product Development Range of Consumer Needs Value BrandPositioningTechnology Base Meet Basic Needs Traditional Mainstream Extra Meet Basic Needs with One Superior Attribute Traditional Premium UltraProprietary Meet the Most Demanding Needs Meet Special Needs - Added Value Ingredients - Niche Product Formats Specialty Ultra Plus Proprietary

Worldwide Consumer Business Maximize Shareholder Value SignificantlyIncreaseProfits =+ SignificantlyDecreaseCosts FuelProfitableGrowth New Worldwide Initiative: Cottonelle Current Competition: Consumers Have Unmet Needs: Irritation & Allergies Odor Dry vs. Wet New Cottonelle Brand Positioning: “Advanced Personal Hygiene ” Product Execution: Hypoallergenic Baking Soda Dry & Moist Soft -Charmin: Squeezably Soft -Northern: Quilted Softness -Angel Soft: Cushiony Soft -Cottonelle: Cottony Soft Current: 6% Potential: 10-12% U.S. & Market Share

Worldwide Consumer Business Consumers Have Unmet Needs…  39% Have Concerns with Inks, Dyes, Sensitive Skin  39% Have Concerns with Odor Control  55% of Bath Tissue Users Supplement Dry Tissue Cleaning

Worldwide Consumer Business Maximize Shareholder Value SignificantlyIncreaseProfits =+ SignificantlyDecreaseCosts FuelProfitableGrowth New Worldwide Initiative: Cottonelle Current Competition: Consumers Have Unmet Needs: Irritation & Allergies Odor Dry vs. Wet New Cottonelle Brand Positioning: “Advanced Personal Hygiene ” Product Execution: Hypoallergenic Baking Soda Dry & Moist Soft -Charmin: Squeezably Soft -Northern: Quilted Softness -Angel Soft: Cushiony Soft -Cottonelle: Cottony Soft Current: 6% Potential: 10-12% U.S. & Market Share

Worldwide Consumer Business Adult Moist Wipes: New Incremental Business  Current U.S. Category $80 Million  >50% of Consumers Use Additional Cleaning 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

Worldwide Consumer Business Maximize Shareholder Value SignificantlyIncreaseProfits =+ SignificantlyDecreaseCosts FuelProfitableGrowth New Worldwide Initiative: Viva Ultra Current Competition: Consumers Have Unmet Needs: COMBINATION -Speed of Absorbency -Absorbent Capacity -Wet Strength New Viva Ultra Brand Positioning: “Cloth-like Performance at a Fraction of the Cost ” Product Execution: Ultra (Kitchen) Scrub Cloths (Portable Box) “Speed of Absorbency” Only “Absorbent Capacity” Only Current: 6% Potential: 8-10% U.S. & Market Share Like Cloth 

Worldwide Consumer Business Maximize Shareholder Value SignificantlyIncreaseProfits =+ SignificantlyDecreaseCosts FuelProfitableGrowth New Worldwide Initiative: Scott Clean Current Competition: Consumers Have Unmet Needs: COMBINATION -Absorb Spills -Clean Surfaces New Scott Clean Brand Positioning: “The Paper Towel That Leaves Surfaces Truly Clean Because Its Thirsty FiberWeve Doesn’t Leave Lint as it Absorbs ” Product Execution: Single Roll Double Roll Triple Roll Extra Big Sheets Choose-A-Size “Speed of Absorbency” Only “Absorbent Capacity” Only Current: 10% Potential: 14-17% U.S. & Market Share

Worldwide Consumer Business Consumers Have Unmet Needs… Most Common “Frequent” Uses of Paper Towels No Lint Towel Required

Worldwide Consumer Business Maximize Shareholder Value SignificantlyIncreaseProfits =+ SignificantlyDecreaseCosts FuelProfitableGrowth Key Initiatives – Implementation Plan RegionInitiatives I Q ‘95 II Q ‘95 III Q ‘95 IV Q ‘95 North America Cottonelle APH Viva Ultra Scott Clean Fresh Line Europe Cottonelle APH Scott Extra/Ultra Scott Clean Fresh Line Pacific Cottonelle APH Scott Extra/Ultra Scott Clean Fresh Line

Worldwide Consumer Business Maximize Shareholder Value SignificantlyIncreaseProfits =+ SignificantlyDecreaseCosts FuelProfitableGrowth 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: $ Million

Worldwide Consumer Business Maximize Shareholder Value SignificantlyIncreaseProfits =+ SignificantlyDecreaseCosts FuelProfitableGrowth Accelerated Brand Growth  Adapt Proven Away-From-Home Innovations: - Wipes - Cleaning Systems - Dispensing Systems

Worldwide Consumer Business Summary Key Strategic Imperatives  “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

PROFIT PROFIT PROFIT -Restructuring & Cost Reduction -Basic Brand Management -Incremental Sales from Initiatives