EX-99.2 3 dex992.htm 2007 H. B. FULLER INSTITUTIONAL INVESTOR DAY PRESENTATION SLIDES 2007 H. B. Fuller Institutional Investor Day presentation slides
2007 Institutional Investor Day
Leveraging A Solid Foundation
St. Paul, Minnesota 
October 3, 2007
120 Years
Exhibit 99.2

Slide 2
Institutional Investor Day 2007
120 Years
Board of Directors
•
Juliana
Chugg
Senior Vice President, General Mills, and
President of its Pillsbury USA division
Director since 2007
•
Knut Kleedehn
Former President and Senior Country
Representative, Bayer AG   
Director since 2001   
•
J. Michael
Losh
Former Chairman,
Metaldyne
Corporation
Director since 2001
•
Richard L.
Marcantonio
Chairman and Chief Executive Officer,     
G&K Services, Inc.
Director since 2004       
•
Lee R.
Mitau
Non-Executive Chairman, H.B. Fuller
Company
Executive Vice President and General
Counsel, U.S. Bancorp
Director since 1996
•
Alfredo L.
Rovira
Managing Partner,
Brons
& Salas
Director since 2003
•
John C. van
Roden, Jr.       
Former Executive Vice President and Chief
Financial Officer, Glatfelter, Inc.
Director since 2003
•
R. William Van
Sant
President and Chief Executive Officer, Paladin
Brands
Director since 2001       
•
Michele Volpi
President and Chief Executive Officer, H.B.
Fuller Company
Director since 2006

Slide 3
Institutional Investor Day 2007
120 Years
Executive Committee
Michele Volpi
President & CEO
Jim McCreary
VP, Interim CFO
Fabrizio Corradini
VP,
CSO
Monica
Moretti
VP,
CMO
Ann
Parriott
VP, Human Resources
Kevin Gilligan
VP, Asia Pacific
Jan Muller
VP, Europe
Jay Scripter
VP, North America
Ramon
Tico
VP, Latin America
Tim Keenan
VP, General Counsel

2007 Investor Day
Leveraging A Solid Foundation
St. Paul, Minnesota 
October 3, 2007
120 Years

Slide 5
Institutional Investor Day 2007
120 Years
Safe Harbor
•
Certain matters discussed today may include 'forward looking
statements' as that term is defined under the Private Securities
Litigation Reform Act of 1995.  Since such statements reflect our
current expectations, actual results may differ as they are subject to
the kinds of risks that are enumerated in the Company’s Securities and
Exchange Commission (SEC) filings. 
•
The Company disclaims any obligation to subsequently revise any
forward-looking statements to reflect actual events or circumstances
after the date of such statements.

Slide 6
Institutional Investor Day 2007
120 Years
Regulation G
•
During today’s meeting we will be discussing certain non-GAAP
financial measures, specifically, operating income and EBITDA.
Management believes that a discussion of these measures is useful to
investors because it assists in understanding the operating
performance of the Company and its operating segments.  The non-
GAAP information discussed may not be consistent with the
methodologies used by other companies.  All non-GAAP information is
reconciled with reported GAAP results on the last page of this
presentation.
•
For more information, please refer to our recent press release,
quarterly reports on form 10Q, and annual report on form 10K filed
with the Securities and Exchange Commission; all of which are
available on our website at www.hbfuller.com
under the “Investor
Relations”
section.

Slide 7
Institutional Investor Day 2007
120 Years
Objectives
•
Background: Where we came from
•
Situation Analysis: Where we are today
•
Vision: Where we are going, what we will
accomplish
•
Detail our strategy to continue to generate
shareholder value for the long term
•
Review our new long-term goals
•
Answer any questions you may have

Slide 8
Institutional Investor Day 2007
120 Years
Agenda
•
Michele Volpi, President and Chief Executive Officer
H.B. Fuller: Past, present, and future
•
Fabrizio Corradini, Chief Strategy Officer
Platforms for organic growth
Strategic approach to M&A
•
Monica
Moretti, Chief Marketing Officer
The role of innovation: New products and key platforms
How we will accelerate new business development
•
Jim McCreary, Interim Chief Financial Officer
Financial position
Key metrics, aligned with
TSR
•
Michele Volpi, President and Chief Executive Officer
New long-term goals
•
Questions and Answers Session

2007 Investor Day
Past, Present, and Future
Michele Volpi
President and Chief Executive Officer
120 Years

Slide 10
Institutional Investor Day 2007
120 Years
Formerly A Manufacturing Model
Distributors
Raw
material
providers
Polymerization
Compounder
Converters
End-product
manufacturers
OEMs
H.B. Fuller’s core position
H.B. Fuller’s end-customers
Other industry players
H.B. Fuller’s customers
Provides raw
materials
used
in adhesive
production
Combines raw
materials
into
polymers
Manufactures
polymers into
adhesives
Formulator/
Seller
Sells adhesives
finished goods
Manufacturers
complementary
products

Slide 11
Institutional Investor Day 2007
120 Years
3.0%
3.2%
3.6%
3.8%
3.7%
3.6%
3.2%
2.6%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
Q1 03
Q2 03
Q3 03
Q4 03
Q1 04
Q2 04
Q3 04
Q4 04
4.8%
4.8%
5.0%
5.2%
5.0%
5.2%
4.7%
4.4%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
5.5%
6.0%
Q1 03
Q2 03
Q3 03
Q4 03
Q1 04
Q2 04
Q3 04
Q4 04
22.7%
22.8%
22.7%
22.3%
22.2%
22.0%
22.4%
22.0%
18.0%
19.0%
20.0%
21.0%
22.0%
23.0%
Q1 03
Q2 03
Q3 03
Q4 03
Q1 04
Q2 04
Q3 04
Q4 04
27.5%
27.6%
27.7%
27.5%
27.3%
27.2%
27.1%
26.4%
25.0%
25.5%
26.0%
26.5%
27.0%
27.5%
28.0%
Q1 03
Q2 03
Q3 03
Q4 03
Q1 04
Q2 04
Q3 04
Q4 04
Preamble: Turnaround Required
TTM GROSS MARGIN
TTM SG&A EXPENSE
TTM OPERATING MARGIN*
TTM RETURN ON ASSETS
LACK OF PROFITABLE GROWTH
HIGH COST STRUCTURE
POOR PROFITABILITY PROFILE
LIMITED BALANCE SHEET FOCUS
*
Operating
margin
is
a
non-GAAP
financial
measure
defined
as
gross
profit
less
SG&A
expense,
divided
by
net
revenue;
reconciliations
are
provided
on
slide
56

Slide 12
Institutional Investor Day 2007
120 Years
(25%)
(20%)
(15%)
(10%)
(5%)
0%
5%
10%
15%
20%
25%
30%
35%
40%
S&P 500
HB FULLER
TSR
Pre-Turnaround
Below Market Returns

Slide 13
Institutional Investor Day 2007
120 Years
Turnaround, The First Chapter
Chapter 1
Turnaround
Chapter 2
Improved pricing discipline
Addressed cost structure
Established Lean Six Sigma
Started repositioning of
product  lines and business
portfolio
Started addressing capital
structure
Improved drive and
accountability of Net
Working Capital
New leadership and
organization introduced
Chapter 3
2005
2006
2007
2008
2009
2010
2011
2012+
Transformational Journey Just Started

Slide 14
Institutional Investor Day 2007
120 Years
2.9%
3.3%
4.0%
5.1%
5.9%
5.1%
5.7%
5.5%
6.3%
6.9%
7.2%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07
4.3%
4.1%
4.8%
5.5%
6.4%
7.2%
7.8%
7.8%
8.3%
8.7%
9.1%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07
21.8%
21.5%
20.9%20.9%
20.6%
20.6%
20.3%
20.7%
20.4%
20.1%
19.9%
18.0%
19.0%
20.0%
21.0%
22.0%
23.0%
Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07
26.1%
25.6%
25.7%
26.4%
27.0%
27.9%
28.1%
28.5%
28.7%
28.7%
29.0%
24.0%
25.0%
26.0%
27.0%
28.0%
29.0%
30.0%
Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07
Results of Actions
TTM GROSS MARGIN
TTM SG&A EXPENSE
TTM OPERATING MARGIN*
TTM RETURN ON ASSETS
Up ~300 bps
Down ~200 bps
Up ~500 bps
Up ~450 bps
*
Operating
margin
is
a
non-GAAP
financial
measure
defined
as
gross
profit
less
SG&A
expense,
divided
by
net
revenue;
reconciliations
are
provided
on
slide
56

Slide 15
Institutional Investor Day 2007
120 Years
TSR
Post Turnaround
Above Market Returns
(20%)
0%
20%
40%
60%
80%
100%
120%
140%
S&P 500
HB FULLER

Slide 16
Institutional Investor Day 2007
120 Years
Leveraging a Solid Foundation
Foundation Strengths
Leverage Factors
•
Balance sheet
Investment grade credit rating
Underlevered
•
Scalable organization
•
Capacity utilization
•
Customer relationships
•
Distribution channels
•
Empowered and talented associates
•
Enhanced profitability profile
•
Robust processes developed through
Lean Six Sigma methodology
Pricing
Productivity
•
Value-added/Differentiated products
and services and brands
•
Global footprint
•
Technology portfolio
The Stage is Set For Growth

Slide 17
Institutional Investor Day 2007
120 Years
Chapters 2 & 3…The Next Leg
Chapter 1
Turnaround
Chapter 2
Grow the Core
Improved pricing discipline
Addressed cost structure
Established Lean Six Sigma
Started repositioning of
product  lines and business
portfolio
Started addressing capital
structure
Improved drive and
accountability of Net
Working Capital
New leadership and
organization introduced
Invest to Grow
Chapter 3
Expansion
2005
2006
2007
2008
2009
2010
2011
2012+
Transformational Journey Accelerates
LSS
focus on growth
Customer intimacy
Innovation
Resource key programs
Talent enhancement
Geographic expansion
M&A and divestitures
Talent acquisition
Partnerships

Slide 18
Institutional Investor Day 2007
120 Years
Integrated Solutions Partner
Distributors
Raw
material
providers
Polymerization
Compounder
Converters
End-product
manufacturers
OEMs
H.B. Fuller’s position
H.B. Fuller’s end-customers
Other industry players
H.B. Fuller’s partners
Provides raw
materials
used
in adhesive
production
Combines raw
materials
into
polymers
Manufactures
polymers into
adhesives
Formulator/
Seller/
Marketer
Specifies, sells,
markets adhesives
finished goods
Manufacturers
complementary
products

Slide 19
Institutional Investor Day 2007
120 Years
Market & Technology Focus
Efforts Around Specialty Products and Applications
Fast-Moving
Consumer Goods
Textiles
Hygiene
Packaging
Construction
Flooring
Perf.
Wood
RHM
HM
HM
Cement,
WB, RHM
RHM
OEM and Strategic Account Focus
OEMs and Distributors
Insulating
Glass
RHM,
Sealants
End Market
Technology*
Customer
* HM = Hot Melt, RHM = Reactive Hot Melt, WB = Water Based

Slide 20
Institutional Investor Day 2007
120 Years
•
Faster GDP growth
areas
•
Leverage local strengths
and capabilities
•
Capturing
manufacturing migration
•
Emerging consumer
class
Faster Growth Areas... Key Component of Growth
India
Eastern
Europe
Rationale
Middle East
& Africa
Go To Market Models
China
•
Acquisitions
•
Joint ventures
•
Greenfield
•
SG&A investments
•
Additional
CAPEX
Brazil &
Mexico
Geographic Expansion

Slide 21
Institutional Investor Day 2007
120 Years
Previous Long-Term Metrics
GOAL
Revenue Growth
[Including Acquisitions]
10%
•
Acquisitions an unpredictable factor
•
Foreign exchange translation source of noise
Gross Margin
30%
•
Appropriate for driving turnaround and
repositioning
•
Volume insensitive
SG&A Expense
18%
•
Limits flexibility in investing for growth
Operating Margin*
12%
•
Includes non-cash expenses
Net Working Capital
14%
•
Not addressing total asset base
METRIC
CURRENT PERSPECTIVE
Need To Introduce Specific Timeline And
ROI
Guidelines
*
Operating margin is a non-GAAP financial measure defined as gross profit less SG&A expense, divided by net revenue

Slide 22
Institutional Investor Day 2007
120 Years
•
Turnaround, reshaping company foundation
•
Differentiated approach to value chain front end
focus
•
Balanced market focus and portfolio
•
Investments in geographic expansion
•
Innovation and value selling
•
Strategic M&A to complement organic growth
Forward Path Summary
Turnaround Leading to Transformation

2007 Investor Day
Strategy Office: Charting and executing
on profitable, sustainable growth
Fabrizio Corradini
Vice President, Chief Strategy Officer
120 Years

Slide 24
Institutional Investor Day 2007
120 Years
Key Platforms for Growth
Strategy
Innovation
Goals and objectives
Key Commercial
Processes
Values & culture
Enabling systems, processes  and structure

Slide 25
Institutional Investor Day 2007
120 Years
Strategy
•
Taking a longer outlook –
5 year
view –
invest in the business
•
Areas of focus:
Customer intimacy: value-added solutions
Innovation
Complete geographical footprint in key growth areas
•
Investment areas
Innovation
Human capital
Systems
Processes
Strategy
Innovation
Goals and objectives
Key Commercial
Processes
Values & culture
Enabling systems, processes  and structure

Slide 26
Institutional Investor Day 2007
120 Years
Strategy
Innovation
Goals and objectives
Key Commercial
Processes
Values & culture
Enabling systems, processes  and structure
Innovation –
Three Areas of Focus
•
Better use of what exists:
Rationalizing/Leveraging product
portfolio
Exploiting/Completing IP portfolio
Translating best practices
Localizing
•
Optimizing customer-driven innovation process
•
Invention (internal and external): spotting and
seizing future opportunities, targeted around
four core platforms (more later…)

Slide 27
Institutional Investor Day 2007
120 Years
LSS
Resources Shift To Growth
•
Global process improvement
program to launch in October
2007
•
Thorough review of the
company’s commercial processes
•
Strengthen LSS
program: more robust global
standards, decentralization of efficiency efforts
•
Global focus maintained on pricing and
continued deployment of CRM tools
(Salesforce.com)
Strategy
Innovation
Goals and objectives
Key Commercial
Processes
Values & culture
Enabling systems, processes  and structure

Slide 28
Institutional Investor Day 2007
120 Years
Performance Management
•
Establishment of a set
of “balanced”
KPIs
•
Unify/align and lengthen horizon
•
Monitoring of execution and
action taken on variance
•
Goals and objectives cascaded down to
individual level and tied to compensation plan
Strategy
Innovation
Goals and objectives
Key Commercial
Processes
Values & culture
Enabling systems, processes  and structure

Slide 29
Institutional Investor Day 2007
120 Years
Building A Growth Culture
•
Environment that rewards
performance
•
Accountability
•
Planning and project discipline as “way-of-life”
•
Innovation
•
Focus on the customer
Strategy
Innovation
Goals and objectives
Key Commercial
Processes
Values & culture
Enabling systems, processes  and structure

Slide 30
Institutional Investor Day 2007
120 Years
Leaner, Better Performing Structure
•
More fluid organization, rid of
internal “silos”
•
Process > Function
•
Corporate functions driven by
clear value-added accountabilities
•
Right local/global balance
•
Upgrading and aligning the role of IT
Strategy
Innovation
Goals and objectives
Key Commercial
Processes
Values & culture
Enabling systems, processes  and structure

Slide 31
Institutional Investor Day 2007
120 Years
M&A: Disciplined, Proactive Approach
•
Learned from past high/low-lights
•
Strategy-driven, proactive sourcing
•
Process discipline: origination to integration
•
Financial discipline: pricing/ROI
hurdles
Targeting short-term accretion
Timeline for accretion to EPS and contribution to
ROI
metrics (<3yrs)
Differentiate between small “bolt-ons”
from larger
deals
•
Continuously scanning opportunities

Slide 32
Institutional Investor Day 2007
120 Years
Strategic “Lenses”
For External Growth
Builds on our strengths
•
Surface technology
•
Assembly & dispensing
•
Innovation/performance
•
Differentiation
•
Customer intimacy
•
Global distribution
•
Local sales/tech support
•
Global manufacturing
•
Organic growth
•
EBITDA
margin
•
ROI metric
•
EPS share
Parameters
Tests for Businesses
Coherent with our
management focus
Leverages assets
(tangible and intangible)
Contributes to meeting
our financial targets

Slide 33
Institutional Investor Day 2007
120 Years
Types of Transactions Envisioned
Scale plays
Geographical
expansion
“Bolt-on”
acquisitions
Source of Value
•
Limited options –
be creative
(club deals, carve-outs…)
•
Small targets –
easier to
integrate –
after careful due
diligence
•
Scale: Market coverage and
investment capacity
•
Cost synergies
Description
•
Growth through HBF
technology, processes and
international customers
•
Acquire product/technology
and/or customer base
•
Extension within core business
•
Small targets –
easier to integrate
•
Seamless
commercial/technical
integration
•
High commercial synergies,
cost out.

2007 Investor Day
New Product Introduction
Monica
Moretti
Vice President, Chief Marketing Officer
120 Years

Slide 35
Institutional Investor Day 2007
120 Years
Marketing & Technology
R&D
Marketing
Global Accounts
•
Material science
•
Modeling and testing
•
Application science
•
Field market development
•
Industry management
•
Product portfolio management
•
Brand management
•
Customer intimacy
•
Long-term growth

Slide 36
Institutional Investor Day 2007
120 Years
•
The challenges of our customers are our own
inspiration…beyond bonding
Broaden the scope to total value delivered
Strengthen collaboration through value chain
Open innovation
•
It’s all about our customers
Intense pre-work to get to know customers’
needs at
all levels
Leverage Lean Six Sigma tools
Be the partner for the future…globally and locally
Focus On The Customer

Slide 37
Institutional Investor Day 2007
120 Years
•
Fast-moving consumer goods and construction focus
•
High level of intimacy with strategic accounts
•
Diligent stage-gate approach to drive development &
market investigation
•
Disciplined use of Lean Six Sigma tools
New Products Evolution
0%
5%
10%
15%
20%
25%
2003
2004
2005
2006
YTD
2007
13.2%
14.4%
17.8%
17.4%
21.0%
NEW PRODUCT SALES/TOTAL SALES
•
Q3 2007: 21.5% NPS
•
Higher margin
•
Innovative content
•
Strong pipeline
•
Target: 25%+

Slide 38
Institutional Investor Day 2007
120 Years
Green
•
Consumer Health
•
Care for the
environment
Performance
To Fit
•
Optimize/Enhanced
adhesion
•
Lower application
temperature
Multi
Functionality
•
Beyond adhesion
Value-Added
Technologies
•
Process and supply
chain optimization
Performance
New Products Platforms

Slide 39
Institutional Investor Day 2007
120 Years
Innovation in Action
Platform(s):
Performance to fit and Value-Added
Technologies
Challenge:
Bottles used to package common
products like detergent, cooking oil, etc.
require costly flame pre-treatment for
label application
Product:
LiquiLoc
®
Solution:
A unique adhesive technology that
eliminates the need for flame treatment
through superior adhesion to the
untreated surface

Slide 40
Institutional Investor Day 2007
120 Years
Innovation in Action
Platform(s):
Value Added Technologies
Challenge:
Water-based and
UF
adhesives used in
manufacturing involve lengthy and costly
drying times
Product:
Rapidex
®
product line for lean panel
Solution:
LEAN panel program enables customers
to modify their processes and increase
capacity, decrease cycle time, decrease
waste and energy by using reactive
hot melt adhesive technology

Slide 41
Institutional Investor Day 2007
120 Years
Innovation in Action
Platform(s):
Multi-Functionality
Challenge:
Packaging customers need to bind
multiple units together during
production, then unbundle
them later
in the supply chain
Customers using tapes for years to
pair soft drinks for easer internal
conveying; process leading to
damage packaging when the
products separated by the retailers
Product:
SmartGrip™
Solution:
A temporary adhesive that creates a
strong bond for a limited period of
time, then cleanly releases –
a new
patent-pending technology

Slide 42
Institutional Investor Day 2007
120 Years
Platform(s):
Multi-functionality and Performance to
Fit
Challenge:
Create a next-generation grout that
eases tile ceramic tile installation –
especially for the do-it-yourselfer
Product:
TEC ™
AccuColor
Easy ™
Ready-to-
Use Grout
Solution:
Delivers unmatched stain resistance,
highly durable, color true, mold and
mildew resistant, only
RTU
that can be
used in intermittent wet areas such as
showers, can be
applied over existing
grout for touch-ups, two patents for its
unique technology
Innovation in Action

Slide 43
Institutional Investor Day 2007
120 Years
Running a Different Race
•
Focused now on market-driven products and
solutions -
“Outside in”
•
Empowering the regions to better “read”
and
address the market
•
Solid, focused new products process in place
•
Driving Lean Six Sigma discipline
•
Solid pipeline to drive profitable growth

2007 Investor Day
Financial Strength Enabling Growth
Jim McCreary
Vice President, Interim Chief Financial Officer
120 Years

Slide 45
Institutional Investor Day 2007
120 Years
•
Strong financial position
Strong free cash flow
Commitment to investment grade credit rating
Unlevered
balance sheet
•
Capital allocation
Growth
Mergers and acquisitions
Share repurchases
Strength & Flexibility

Slide 46
Institutional Investor Day 2007
120 Years
Credit Metrics*
39.9%
33.7%
47.3%
38.3%
55.1%
0%
10%
20%
30%
40%
50%
60%
2003
2004
2005
2006
TTM Q3
2007
FFO/DEBT
2.1x
2.4x
1.8x
1.8x
1.3x
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
2003
2004
2005
2006
TTM Q3
2007
DEBT/EBITDA
39.3%
39.0%
36.1%
33.9%
26.2%
0%
10%
20%
30%
40%
2003
2004
2005
2006
TTM Q3
2007
DEBT/TOTAL CAPITAL
7.7x
7.2x
10.1x
10.7x
13.4x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
2003
2004
2005
2006
TTM Q3
2007
EBITDA INTEREST COVERAGE
* Rating agency definitions

Slide 47
Institutional Investor Day 2007
120 Years
ROGI: Key New Metric Introduced
[Gross Profit
-
SG&A Expense]
*
(1 –
Tax Rate)
+
Depreciation Expense
+
Amortization Expense
-
Maintenance
CAPEX
Total Assets
(Including Goodwill)
+
Accumulated
Depreciation
-
Non-Debt
Current Liabilities
-
Cash
GROSS CASH FLOW
GROSS INVESTMENT
/

Slide 48
Institutional Investor Day 2007
120 Years
ROGI Calculation (TTM Q3 2007)
Q4 2006
Q1 2007
Q2 2007
Q3 2007
TTM Q3
2007
Net Revenue
395.6
351.8
373.5
367.9
1,488.8
Less: Cost of Good Sold
283.2
249.5
265.4
259.3
1,057.3
Gross Profit
112.5
102.3
108.1
108.6
431.5
Less: SG&A Expense
81.9
73.6
70.9
69.2
295.7
Operating Income
30.5
28.7
37.2
39.4
135.8
Operating Income
30.5
28.7
37.2
39.4
135.8
Less: Taxes At Assumed 29% Rate
8.9
8.3
10.8
11.4
39.4
Plus: Depreciation Expense
10.0
9.3
9.3
9.7
38.4
Plus: Amortization Expense
3.1
4.9
3.1
3.0
14.0
Less: Maintenance CAPEX (Assumed 50% of Dep
Exp)
5.0
4.7
4.7
4.8
19.2
Gross Cash Flow
29.7
29.9
34.2
35.8
129.6
Total Assets
1,401.5
Plus: Accumulated Depreciation
545.1
Less: Non-debt Current Liabilities
262.6
Less: Cash
219.2
Gross Investment
1,464.9
Gross Cash Flow
129.6
Divided by: Gross Investment
1,464.9
Return on Gross Investment
8.9%

Slide 49
Institutional Investor Day 2007
120 Years
•
Shareholders
Highly correlated to
TSR
Measure of cash return on gross cash investment
True measure of return on investment
•
Business Reasons for
ROGI
Better way to internally measure performance
Less susceptible to gaming, focused on the long term
•
Increasing
ROGI
Profitable organic growth
Leveraging fixed asset base
Eliminating non-productive assets
Why Is
ROGI
Relevant?

Slide 50
Institutional Investor Day 2007
120 Years
ROGI
History
5.9%
5.9%
7.3%
7.5%
8.9%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
2003
2004
2005
2006
TTM Q3 2007

Slide 51
Institutional Investor Day 2007
120 Years
•
Strong financial position
•
Able and willing to invest for growth
•
Prudent and balanced approach to capital
allocation
•
Committed to investment grade credit rating
•
Focused on return on gross investment and
driving long-term shareholder value creation
Financial Summary

2007 Investor Day
New Long Term Goals
Michele Volpi
President and Chief Executive Officer
120 Years

Slide 53
Institutional Investor Day 2007
120 Years
Growing At Higher Profitability Profile
•
Organic Growth
Goal: 3 –
5% CAGR
Eliminates noise from acquisitions and
foreign currency translation
•
Diluted Earnings Per Share Growth
Goal: 10 –
15% CAGR
Commitment to consistent EPS growth
Clear Timeline For Sustainable Growth
•
EBITDA Margin*
Goal: 14 –
16 %
“Cash”
operating margin
More supportive of growth
•
Return on Gross Investment (ROGI)
Goal: 10 –
12%
Includes goodwill, important to M&A
discipline
Strongly correlated to TSR
GROWTH METRICS
2008 -
2012
PROFITABILITY METRICS
2012
*
EBITDA
is
a
non-GAAP
financial
measure
defined
as
gross
profit
less
SG&A
expense
plus
depreciation
expense
plus
amortization
expense,
divided
by
net
revenue

Slide 54
Institutional Investor Day 2007
120 Years
Recap
•
Proud of our past, energized and confident in
the future and well positioned for growth
•
Ready, willing, and able to invest for growth
•
Alignment on all fronts
Leadership team and organization structure
Vision and strategy
Processes and tools
Financial metrics
•
Focused and committed to significant and
sustainable
TSR

120 Years

Slide 56
Institutional Investor Day 2007
120 Years
Regulation G Reconciliations
SLIDE 11 - PREAMBLE: TURNAROUND REQUIRED
1000's $
Q1 2002
Q2 2002
Q3 2002
Q4 2002
Q1 2003
Q2 2003
Q3 2003
Q4 2003
Q1 2004
Q2 2004
Q3 2004
Q4 2004
Net Revenue
276,422
     
300,743
     
296,139
     
304,418
     
277,770
     
305,822
     
304,292
     
326,594
     
300,233
     
342,059
     
329,769
     
358,872
     
Less: Cost of Good Sold
205,750
     
218,305
     
216,724
     
219,991
     
199,832
     
220,920
     
221,681
     
238,084
     
219,139
     
247,939
     
241,614
     
271,450
     
Gross Profit
70,672
       
82,438
       
79,415
       
84,427
       
77,938
       
84,902
       
82,611
       
88,510
       
81,094
       
94,120
       
88,155
       
87,422
       
Less: SG&A Expense
65,464
       
67,646
       
64,109
       
68,624
       
67,831
       
69,675
       
64,544
       
68,707
       
72,172
       
74,440
       
76,112
       
69,499
       
Operating Income
5,208
         
14,792
       
15,306
       
15,803
       
10,107
       
15,226
       
18,068
       
19,803
       
8,922
         
19,680
       
12,043
       
17,923
       
TTM Net Revenue
1,179,070
  
1,184,149
  
1,192,302
  
1,214,478
  
1,236,941
  
1,273,178
  
1,298,655
  
1,330,933
  
TTM Operating Income
56,009
       
56,443
       
59,205
       
63,205
       
62,020
       
66,473
       
60,448
       
58,568
       
TTM Operating Margin
4.8%
4.8%
5.0%
5.2%
5.0%
5.2%
4.7%
4.4%
SLIDE 14 - RESULTS OF ACTIONS
1000's $
Q2 2004
Q3 2004
Q4 2004
Q1 2005
Q2 2005
Q3 2005
Q4 2005
Q1 2006
Q2 2006
Q3 2006
Q4 2006
Q1 2007
Q2 2007
Q3 2007
Net Revenue
342,059
     
329,769
     
358,872
     
334,660
     
367,718
     
340,284
     
394,412
     
333,011
     
371,807
     
371,943
     
395,630
     
351,755
     
373,515
     
367,891
     
Less: Cost of Good Sold
247,939
     
241,614
     
271,450
     
248,642
     
273,714
     
247,235
     
287,996
     
238,910
     
264,301
     
266,115
     
283,182
     
249,465
     
265,369
     
259,288
     
Gross Profit
94,120
       
88,155
       
87,422
       
86,018
       
94,004
       
93,049
       
106,416
     
94,101
       
107,506
     
105,828
     
112,448
     
102,290
     
108,146
     
108,603
     
Less: SG&A Expense
74,440
       
76,112
       
69,499
       
77,424
       
75,458
       
70,735
       
76,618
       
73,247
       
76,299
       
72,980
       
81,932
       
73,620
       
70,943
       
69,228
       
Operating Income
19,680
       
12,043
       
17,923
       
8,594
         
18,546
       
22,314
       
29,798
       
20,854
       
31,207
       
32,848
       
30,516
       
28,670
       
37,203
       
39,375
       
TTM Net Revenue
1,365,360
  
1,391,019
  
1,401,534
  
1,437,074
  
1,435,425
  
1,439,514
  
1,471,173
  
1,472,391
  
1,491,135
  
1,492,843
  
1,488,791
  
TTM Operating Income
58,240
       
57,106
       
67,377
       
79,252
       
91,512
       
104,173
     
114,707
     
115,425
     
123,241
     
129,237
     
135,764
     
TTM Operating Margin
4.3%
4.1%
4.8%
5.5%
6.4%
7.2%
7.8%
7.8%
8.3%
8.7%
9.1%