Zep Inc. Investor Presentation

Zep Inc.
Investor Presentation
August 2014

Safe Harbor
This presentation and our commentary contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Specifically, forward-looking statements include, but are not limited to, statements relating to our future economic performance, business prospects,
revenue, income, and financial condition; and statements preceded by, followed by, or that include the words "expects," "believes," "intends," "will,"
"anticipates," and similar terms that relate to future events, performance, or our results. Examples of forward-looking statements in this presentation
and our commentary include but are not limited to: statements regarding the economic environment and the impact this environment has had or could
have on our current and/or future financial results; statements regarding our expectations about the receipt of insurance proceeds; statements regarding
our ability to minimize the disruption that our associates, customers and business partners will experience as a result of the fire at our aerosol plant;
statements regarding the timing of the resumption of production at our aerosol plant and our return to full production capacity for our aerosol products;
statements and related estimates concerning the exhaustion of our aerosol inventory and the amount of our aerosol volume that could be at risk; the
statement that we intend to re-establish our own aerosol manufacturing capacity in the future; statements regarding future revenue and operating
income reductions resulting from the fire at our aerosol facility; and statements regarding our capital structure following our expected refinancing.
Our forward-looking statements are subject to certain risks and uncertainties that could cause actual results, expectations, or outcomes to differ
materially from our historical experience as well as management's present expectations or projections. These risks and uncertainties include, but are not
limited to:
 impact of the fire on financial results;
 economic conditions in general;
 the cost or availability of raw materials;
 competition;
 our ability to realize anticipated benefits from strategic planning and restructuring initiatives and the timing of the benefits of such actions;
 market demand;
 our ability to maintain our customer relationships; and
 litigation and other contingent liabilities, such as environmental matters.
A variety of other risks and uncertainties could cause our actual results to differ materially from the anticipated results or other expectations expressed
in our forward-looking statements. A number of those risks are discussed in Part I, "Item 1A. Risk Factors" of our Annual Report on Form 10-K for the
fiscal year ended August 31, 2013 and in Part II, “Item 1A Risk Factors” of our Quarterly Report on Form 10-Q for the fiscal quarter ended May 31, 2014.
We believe the forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are
based on current expectations. Further, forward-looking statements speak only as of the date they are made, and we undertake no obligation to update
publicly any of them in light of new information or future events.
2© 2014 Zep Inc. - All rights reserved.

• Zep Inc. sells a wide-variety of highly-effective,
consumable packaged chemicals that help
professionals maintain, clean & protect their assets,
facilities and environment.
• We market our products primarily to customers in the
Transportation, Industrial/MRO and
Jan/San & Institutional markets.
• Our multi-channel sales capability is valued by our
customers and enhanced by an integrated supply chain
and shared services structure, providing an additional
competitive advantage.
Zep Inc. Value Proposition

• Largest selection of
high-efficacy formulas
bundled with
application expertise
• Pro-focused line of
jan/san & plumbing
products for retail
• Broad product line
of specific use
chemicals for
distribution
Pro-Focused High Efficacy Formulas for Any Application
• Pro and DIY
auto care
products for
retail
• Finest house
of brands in
Do-it-for-me
auto care

Transportation $4.8B 38%
Industrial / MRO $2.7B 22%
& Other
Jan / San $10.6B 40%
& Institutional
$18B North American Market Opportunity
Target Strategic Markets Drivers
• GDP
• Employment
• Trends in Acceptable
Practices
• GDP
• New Vehicle Sales
• Miles Driven
• Average Vehicle Age
• Weather
• GDP
• Industrial Production
• Manufacturing
Employment
Examples
% Zep
Sales
Vehicle Maint. Wash
& Polish, Parts
Cleaners, Degreasers,
Lubricants, Fleet
Wash…
Lubricants,
Penetrants, Greases,
Parts Washers, Food
Processing
Cleaners/Sanitizers,
Metal Working…
Air, hand & floor care,
Cleaners, Degreasers,
Carpet Care, Sanitizers
Disinfectants, Laundry
Dispensing Systems…
60%+ of Revenues from Transportation & Industrial/MRO

U.S. New
Vehicle
Sales
Vehicle
Age
10
12
14
16
18
8
9
10
11
12
U.S.NewVehicleSales(MM)
VehicleAge(years)Favorable Industry Trends
© 2014 Zep Inc. - All rights reserved. 6
Transportation
U.S. Vehicle Sales & Vehicle Age
Industrial/MRO
GDP & Industrial Production
U.S. GDP
Seasonally
Adj.
Industrial
Production
86
89
92
95
98
101
$13.5
$14.0
$14.5
$15.0
$15.5
$16.0
SeasonallyAdj.U.S.
IndustrialProduction(Index)
U.S.GDP(Trillions)

Zep Inc. Life Cycle
Complexity Reduction Will Drive Cash Flow
2007-2008 2009-2010 2010-2013 2014-2015 2015-2016
• Amrep
• Waterbury
• Niagara
• Washtronics
• Hale Group
• Mykal
• Ecolab Vehicle Care
• Focus on strategic end-markets
• Product line & customer
rationalization
• Supply chain
• Facilities
• Logistics
• Align sales & support functions
Spin
Improve
Business
Acquire
Platforms
Complexity
Reduction
Drive
Organic
Growth

8
Growing Sales, Profitably
© 2014 Zep Inc. - All rights reserved.
$501.0
$568.5
$646.0 $653.5
$689.6
$0
$100
$200
$300
$400
$500
$600
$700
$800
FY09 FY10 FY11 FY12 FY13
($ Millions)
Strong Revenue Growth
8.3% CAGR
EBITDA Growth 22% CAGR
EBITDA Margin 70 bps per year
$23.8
$33.9
$47.5
$53.7 $52.0
$0
$10
$20
$30
$40
$50
$60
EBITDA Margin:4.7% 6.0% 7.3% 8.2% 7.5%
Effect of
acquisitions*
Effect of
acquisitions*
($ Millions)
We estimate acquisitions since 2009 accounted for approximately
1/3 revenues and 1/2 of EBITDA during fiscal 2013
* Revenue and EBITDA excluding the effect of acquisitions based on company estimates.

Growing EPS and ROIC
$0.52
$0.95 $0.97 $0.98
$0.91
Fully diluted Earnings per Share, as adjusted
8.0%
9.3% 9.6%
8.8%
6.1%
Return on Invested Capital (ROIC) is calculated as after tax
operating profit divided by Invested Capital.
Adj. EPS Growth 15% CAGR
ROIC Impacted by
Acquisitions

Strong/Consistent Cash Flow Generation
1) 2011 Free Cash Flow includes $0.9 million proceeds from the sale of property, plant, and equipment
2) Free Cash Flow is defined as Net Cash Provided by Operating Activities less Capital Expenditures plus Proceeds from Sale of Property Plant and Equipment.
10
$ Millions
• $118 million in cumulative free cash
flow during the past five years
Strong FCF Important
Characteristic of Zep Model
Capex $7.5 $9.8 $8.9
• Fund normal operations
• Fund dividend
• Pay down long-term debt
Use-of-Cash Strategies
Noteworthy FCF
Generation While
Investing in Strategic
Growth Initiatives
$22.9 $24.2
$29.0
$4.3
$38.0
$0
$5
$10
$15
$20
$25
$30
$35
$40
$18.4
SAP
Capital
spend and
increased
working
capital
$12.1

3.76x 3.60x 3.59x
4.00x
3Q FY13 2Q FY14 3Q FY14 Covenant
$236.7
$213.4
$208.5
3Q FY13 2Q FY14 3Q FY14
1.90x 1.72x 1.67x
1.20x
3Q FY13 2Q FY14 3Q FY14 Covenant
Fixed
Charge
Coverage
Ratio*
Debt to
EBITDA*
Net Debt
Position
($MM)
Covenants
Debt Position
 Net debt decreased by
$4.9MM during quarter
 Credit facility matures
in July 2015
 Expect to refinance in
4Q FY14
* As defined by Zep Inc.’s Credit Facility
$28.2MM Reduction in Net Debt in Last 12 Months

Zep is a Solid Investment
• Focused on growing strategic end-markets with favorable
demographics
• Developing a robust sales pipeline for 2014 and beyond
• Revenue growth produces 25-30% operating leverage
• Business produces consistent cash flow (4-6% Sales)
• Restructuring activities delivering results with $9 million of
savings expected in fiscal 2014
Considerable Upside Margin Opportunities

Near-Term and Long-Term Expectations

Revenue Expectations
 Fundamentals of the business are sound & economy is stable
 Focused on Transportation & Industrial/MRO w/favorable demographics
 Adapting to the channel shift in Jan/San
 3rd Qtr. Organic growth more than offset impact of continuing
complexity reduction – trend continuing Q4 to date
 Expect fire-related disruption but magnitude is difficult to
predict
 Continue to bring capacity on-line, with plan to have greater capacity
than prior to the incident, housed in multiple locations
Lost Aerosol Sales Could Exceed Core Growth for the Next 2-3
Quarters with Sales Flat to Down Somewhat

Near-Term Focus
 Fiscal fourth quarter-to-date sales have grown mid-single
digits
 Expect difficulty serving some customers in the future
 Implementation of Business Continuity Plan
 Recovery from the fire
 Minimize customer disruption
 Regain production capacity as quickly as possible
 Result in more capacity at more locations
Encouraged by Recent Top-Line Success

Fiscal 2015 Considerations
Revenue
 Have now anniversaried complexity reduction activities
from fiscal Q3 2013
 $3.5-$5.0MM comparative headwind ending
Costs
 Gross margins in fiscal 2015 expected to be 46-48%
 Potential upward pressure on oil affects a portion of raw
materials
 Selling, distribution and administrative expenses
expected to be ~16-18% of sales
 Expect lower revenue will also lower variable costs
 Uncertainty with respect to freight
 Expect $2MM of costs associated with GHS compliance

Long-Term Financial Objectives
1. $1 billion in revenue within 5 years
2. Target of 50 bps annualized EBITDA margin improvement
3. 11-13% annualized EPS improvement
4. Return on Invested Capital (ROIC) in excess of cost of
capital

Conclusion
 #1 Priority is our Business Continuity Effort
 Continue successful strategies of:
1. Focusing on key end-markets like Transportation & Industrial/MRO
2. Continuing investments in North American Sales and Service
specialization
3. Following Jan/San channel shift to expand availability of products
4. Continuing complexity reduction in our supply chain & products

20
3rd Quarter Revenue Growth
0.6%
2.1%
4.7%
1.5%
2.6%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
Achieving Organic Sales Pipeline Success

Mass
Jan/San
3rd Quarter Revenue Highlights
Food Processing
Oil & Gas
Zep Vehicle Care
Hardware, Farm & Ag
Auto/OEM
Auto/Aftermarket
Industrial/MRO
Home Improvement
Increase Stable Decrease
Solid Top Line Execution
Produced Sales Gworth and EBITDA Margin Expansion

3rd Quarter Financial Highlights
Q3 Growth
Adj. EBITDA(1) $19.3MM 13.6%
Adj. EBITDA Margin(1) 10.3% 110bps
Adjusted EPS(1) $0.30 20.0%
Adj. Cash EPS(2) $0.39 14.7%
(1) Excludes effects of acquisition and integration costs, provision for loan loss, fire related charges, restructuring charges,
California legal matter, legal settlement and contingent consideration adjustment. Adjusted EPS adjustments are the same
as Adjusted EBITDA adjustments and presented net of tax.
(2) Adjusted diluted earnings per share excluding effects of amortization.
Improvement Opportunities
• Price/Cost Relationship
• Freight Expense
Management
• European Restructuring
Activities
Solid Top Line Execution Produced Sales & Earnings Growth

$17.0
$19.3
$1.1 $1.0
$1.0
$0.4 $0.6
$3.0
$10.0
$12.0
$14.0
$16.0
$18.0
$20.0
($millions)
23
3rd Quarter ‘14 EBITDA & Adjusted EBITDA
( )
( )
( )

24
3rd Quarter ‘14 EPS & Adjusted EPS
$0.25
$0.30
$0.03 $0.03
$0.03
$0.01 $0.01
$0.08
$0.00
$0.05
$0.10
$0.15
$0.20
$0.25
$0.30
$0.35
( )
( )
( )
2014 2013
Diluted EPS $0.09 $0.28
Adjustments $0.21 ($0.03)
Adjusted
Diluted EPS $0.30 $0.25
Three Months Ended
May 31,
20% Increase in Adjusted Diluted Earnings Per Share

$0.30
$0.39$0.09
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
Adjusted Diluted Cash Earnings Per Share
14.7% Increase in Adjusted Diluted Cash Earnings Per Share

Two Components Status
1.Realign & right-size headcount Complete
2.Supply chain changes
 Rationalization of distribution facilities in U.S. Consolidated
4 Dist. Centers
 Implementation of new TMS Behind Schedule
 Consolidate selected operations in Europe Behind Schedule
Restructuring Update
On-Track to Achieve $9.0MM Savings in Fiscal 2014
Reinvested $3.5MM

Insurance Coverage
 Casualty & business interruption $1.0MM deductible
 Damage to facility
 Increased costs to produce
 Profit on lost revenue
 General liability $1.5MM deductible
 Damage to 3rd parties
 Received $5MM in June as a pre-payment against the claim
 Expect to file claims quarterly and a mismatch between
spending and insurance settlements
 Final resolution of claim not expected for at least a year

 Business interruption insurance will cover lost profit on lost
sales
 Coverage period:
 Based on when existing aerosol facility should return to normal
operation
 Benefit from extended coverage for an additional 365 days
 Quarterly financial impact:
 Potential to reduce reported profits for several quarters
 Once claim is approved, realize income for lost profits
Effect of Lost Revenue

 Higher manufacturing costs during the recovery period
 Presented net of insurance proceeds
 Expect higher manufacturing costs and general costs to be
offset by insurance recoveries in the same period
 Coverage period:
 Based on when existing aerosol facility should return to normal
operation
Effect of Higher Costs
Incident–Related Costs Should Have Little or No Net Effect
on the Gross Margin or S, D & A Expense Lines

Annual Adj. EBITDA & Adj. EPS Reconciliation
30
Annual (Years Ended August 31) 2009 2010 2011 2012 2013
Net income 9.3$ 13.5$ 17.4$ 21.9$ 15.2$
Interest expense 1.7 2.0 6.6 5.5 9.0
Provision for income taxes 5.9 8.2 9.3 11.9 7.9
Depreciation & amortization 7.0 10.3 14.2 14.3 19.9
EBITDA (unaudited) 23.8$ 33.9$ 47.5$ 53.7$ 52.0$

Quarterly Adj. EBITDA & Adj. EPS Reconciliation
31
Quarterly (unaudited)
(millions) Q1 Q2 Q3 Q1 Q2 Q3
Net income 3.5$ 2.8$ 6.3$ 3.1$ (0.7)$ 2.2$
Interest expense 1.2 2.3 3.0 2.3 3.4 2.5
Provision for income taxes 2.0 1.3 3.4 1.7 (0.3) 1.4
Depreciation & amortization 3.6 5.5 5.4 5.5 5.5 5.5
EBITDA (unaudited) 10.4$ 11.8$ 18.0$ 12.7$ 8.0$ 11.6$
Acquisition and integrations costs 1.2$ 1.6$ 0.1$ 0.6$ 0.4$ 0.1$
Provision for loan loss -$ -$ -$ -$ -$ 5.7$
Fire related charges, net -$ -$ -$ -$ -$ 1.1$
Restructuring charges -$ -$ -$ -$ -$ 0.1$
Legal 0.4$ 0.2$ (1.0)$ 0.8$ 2.8$ 0.8$
Other -$ (1.3)$ * -$ -$
Adjusted EBITDA (unaudited) 12.0$ 12.4$ 17.0$ 14.1$ 11.2$ 19.3$
Quarterly (unaudited)
Q1 Q2 Q3 Q1 Q2 Q3
Diluted earnings (loss) per share 0.16$ 0.12$ 0.28$ 0.14$ (0.03)$ 0.09$
Acquisition and integration costs, net of tax 0.03$ 0.05$ -$ 0.01$ 0.01$
Provision for loan loss, net of tax -$ -$ -$ -$ -$ 0.15$
Fire related charges, net of tax -$ -$ -$ -$ -$ 0.03$
Restructuring, net of tax -$ -$ -$ -$ -$ -$
Legal, net of tax 0.01$ 0.01$ (0.03)$ 0.02$ 0.11$ 0.03$
Other, net of tax -$ (0.04)$ -$ -$ -$
Adjusted Diluted Earnings Per Share 0.20$ 0.14$ 0.25$ 0.17$ 0.09$ 0.30$
* Lancaster building writedown.
20142013
2013 2014

Zep Inc. Non-GAAP Disclosure
© 2014 Zep Inc. - All rights reserved. 32
• This presentation contains a supplemental table of adjusted operating results, which includes non-GAAP financial information such as EBITDA, adjusted
EBITDA, adjusted earnings per share, free cash flow and free cash flow per share. This non-GAAP financial information is provided to enhance the user's
overall understanding of our financial performance. Specifically, management believes that EBITDA, adjusted EBITDA, adjusted earnings per share and free
cash flow may provide additional information with respect to our performance or ability to meet our future debt service obligations, capital expenditures and
working capital requirements. Free cash flow per share is provided to facilitate the comparison of our financial results to other companies on a per share basis.
This non-GAAP financial information should be considered in addition to, and not as a substitute for, or superior to, results prepared in accordance with GAAP.
Moreover, this non-GAAP information may not be comparable to EBITDA, adjusted EBITDA, adjusted earnings per share, free cash flow or free cash flow per
share reported by other companies because the items that affect net earnings that we exclude when calculating EBITDA, adjusted EBITDA and adjusted
earnings per share or because items that we add to reported net cash provided by operating activities in computing free cash flow and free cash flow per
share may differ from the items taken into consideration by other companies. The non-GAAP financial information included in this earnings release has been
reconciled to the nearest GAAP measure in the tables at the end of this presentation
• Our management uses EBITDA and other non-GAAP financial information:
– as measurements of operating performance because they assist us in comparing our operating performance on a consistent basis as they remove the
impact of certain non-cash items as well as items not directly resulting from our core operations;
– to evaluate the effectiveness of our operational strategies; and
– to evaluate our capacity to fund capital expenditures and expand our business.
EBITDA and the ratios derived from these measures as calculated by us are not necessarily comparable to similarly titled measures used by other companies.
In addition, these measures: (a) do not represent net income or cash flows from operating activities as defined by GAAP; (b) are not necessarily indicative of
cash available to fund our cash flow needs; and (c) should not be considered in isolation of, as alternatives to, or more meaningful measures than operating
profit, net income, cash provided by operating activities, or our other financial information as determined under GAAP.

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