Com pany overview and 9 M2 0 1 0 results November 2010 1 - - PowerPoint PPT Presentation

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Com pany overview and 9 M2 0 1 0 results

November 2010

Com pany overview and 9 M2 0 1 0 results P Printed on recycled paper 2

DISCLAIMER: Certain statem ents in this presentation, including statements regarding target results and performance, are forward- looking statem ents based on current analysis and/ or assum ptions. The accuracy of such statem ents is subject to a number of risks, uncertainties and assumptions that may cause actual results to differ materially from those projected, including, but not limited to, the effect of general economic conditions, decrease in demand for the Company’s products, increase in raw material and energy costs, changes in the relative value of certain currencies, fluctuations in selling prices, adverse changes in general market and industry conditions and other factors.

Christian Dubé Chairman I gnazio Capuano Chief Executive Officer Stefano Moccagatta Chief Financial Officer Guido Vigorelli Investor Relations Officer

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Contents

 Overview  Key 9 M2 0 1 0 financial results  Market environm ent  Outlook  Appendix

Overview

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Reno De Medici in pills

 Market leadership:

 Leading Italian and second-ranked European producer of recycled carton board.

 Production capacity:

 Reno De Medici’s production capacity is spread among several mills in Italy, Spain, France and Germany.

 Product range:

 The different types of carton board that Reno De Medici produces target all packaging and graphic applications.  Reno De Medici’s products are offered through different brands to meet the customers’ requirements and to achieve a widespread presence in Italy, as well as abroad.

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Our business

* EBITDA includes non recurring revenues from asset disposals.

Source: Company data

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Pioneer of recycling and sustainable developm ent

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 Recycling and low environm ental im pact are core values for RDM  Ca 900,000 tons of recycled fibers (consumption).  Continuous reduction in energy consumption, CO2 emissions and water used per metric ton of paper.  Re-utilisation of 30-40% of generated waste.

• 9 %
• 2 2 %

Source: Company data

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Proactively adjusting asset base

1 9 9 6 1 9 9 8 2 0 0 1 2 0 0 5 2 0 0 6 2 0 0 8 2 0 0 9

 1 9 9 6 : Reno de Medici is listed on the Milan stock exchange.  1 9 9 7 : Reno de Medici and Saffa merge.  1 9 9 8 : Reno De Medici merged with Sarriò, becoming Europe's second largest producer

• f recycled cartonboard.

 1 9 9 9 : Europoligrafico, resulting from the merger of Grafiche Capretta with Bianchi Saffapack, becomes the Italy's leading converter firm.  2 0 0 1 : Acquisition of Aticarta with a paper mill in Pompei and a converting mill in Rovereto.  2 0 0 5 : Non-core assets disposal and sale of the share capital owned in Europoligrafico and Aticarta.  2 0 0 6 : Demerger of some real estate assets, through the creation and listing of RDM Realty.  2 0 0 8 : Merger by incorporation

• f

the European recycled cartonboard business

• f
• Cascades. Creation of a commercial joint-venture (Careo) for the sale of all kind of

cartonboard both from virgin and recycled fibres.  2 0 0 9 : Acquisition of a minority stake in Manucor, the leading Italian plastic film producer. Proactively adjusting asset base to reduce costs, im prove financial flexibility and redeploy capital tow ards core segm ents.

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RDM’s m arket positioning

Ranking by capacity ( tons/ thousand)

200 400 600 800 1.000 1.200 1.400 Pankaboard LEIPA Cartiera di Momo Paprinsa Mel PKarton Pulp Mill Holding Fiskeby Board Buchmann

• Int. Paper

Cascades Knauf Moritz J. Weig Holmen KappaStar Smurfit Kappa M-real Stora Enso Reno De Medici RDM pro forma Mayr-Melnhof W LC Recycled Cartonboard FBB Virgin Fiber Cartonboard

CAS 0 7

RDM 0 7 RDM POST MERGER 0 9 MM 0 9

RDM ”pro form a” represents the total production capacity should the put and call option to acquire the European FBB assets of Cascades be exercised by Cascades/ RDM, respectively. The option exercise period is 2 0 1 2 for RDM and 2 0 1 3 for Cascades.

Source: Company data

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A pan European player

Geographical breakdow n of sales 9 M2 0 1 0 Operating European production plants

Source: Company data

W ell balanced sales portfolio and proxim ity to production sites

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State of the art production plants

Magenta Production capacity 130 ,000 tons I SO 9 001 , FSC Ovaro Production capacity 110 ,000 tons I SO 900 1 , I SO 1400 1 , FSC Villa Santa Lucia Production capacity 210 ,000 tons I SO 9 001 , I SO 1400 1 , FSC Santa Giustina Production capacity 195 ,000 tons I SO 9 001 , I SO 1400 1 , FSC Alm azan Production capacity 35,0 0 0 tons I SO 9 001 , FSC Blendecques Production capacity 105,000 tons I SO 9001 , I SO 1 400 1 , OHSAS 1 800 1 , QSE, HACCP, FSC Arnsberg Production capacity 210,000 tons I SO 9 001 , I SO 1400 1 , EMAS, FSC

Key 9 M2 0 1 0 financial results

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9 M2 0 1 0 key results: back to net profit

Eur 0 0 0 s 9 M2 0 1 0 9 M2 0 0 9

Revenues 366 .780 318 .571 EBI TDA* 28.0 1 4 24.5 2 5 EBI T 8.49 4 4.12 9 Net result* * 1.58 9 ( 3.400 ) FCF* * * 20.9 0 1 ( 3.994 ) Net Financial Position ( cash) / debt as of 3 0.09 109 .940 132 .519 Tonnes sold ( 000 s) 701 634

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 Market demand improving, but still weaker than pre-crisis:  8% increase in Europe.  Pick up of demand from the middle East/ Far East.  Improved efficiency in

• perations

due to the higher production level.  The ‘spread’ (difference between sales prices and raw materials prices) has recovered substantially since Q2.  Due to the above effects, the com pany’s results and profitability have been im proving steadily and m arked a significant grow th YoY.  Positive and higher FCF* * * and improving Net Financial Position due to:  Higher net result.  Lower net invested capital.

* Includes margin from non recurring revenues from asset disposals. * * Before minorities’ interest. * * * NFP change in the nine-month period (31.12 - 30.09).

Source: Company data

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Quarterly trend: KPI s im provem ent

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REVENUES ( € ML) NET FI NANCI AL DEBT ( € ML)

 The quarterly trend shows improving revenues (Q3 vs Q2 was affected by seasonality), and it is expected to continue in Q4.  Net debt reduction mainly due to reduction of net invested capital.  Reduction in the cost of debt due to declining interest rates.  FCF* generation ( € 2 0 .9 m illion) in 9M2010,

• f which €7.6 million in 3Q2010, due to net

invested capital dynamics (Working Capital and Capex).  Capex

• f

€11.4 million in 9M2010 vs €12.3 million in 9M2009: reduction mainly due to timing effects.

* NFP change

1 0 8 .4 1 0 5 .7 1 0 4 .5 1 0 9 .5 1 1 5 .1 1 2 6 .5 1 2 5 .2 2 0 4 0 6 0 8 0 1 0 0 1 2 0 1 4 0 1 Q0 9 2 Q0 9 3 Q0 9 4 Q0 9 1 Q1 0 2 Q1 0 3 Q1 0 1 3 0 .2 1 3 5 .6 1 3 2 .5 1 3 0 .8 1 2 5 .2 1 1 7 .5 1 0 9 .9 1 0 0 1 2 0 1 4 0 1 Q0 9 2 Q0 9 3 Q0 9 4 Q0 9 1 Q1 0 2 Q1 0 3 Q1 0

Source: Company data

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Spread trend

RDM Group selling prices and raw m aterial cost indexes ( € / ton)

Source: Company data

150,00 175,00 200,00 225,00 250,00 450,00 500,00 550,00 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010

RAW MATERI ALS I NDEX €/ TON SELLI NG PRI CES €/ TON SELLING PRICES INDEX ( €/TON) RAW MATERIAL INDEX €/TON

EBI TDA 8 .6 M€ EBI TDA 9 .3 M€ EBI TDA 6 .5 M€ EBI TDA 6 .5 M€ EBI TDA 7 .1 M€ EBI TDA 1 0 .9 M€ EBI TDA 9 .9 M€

KT 226,1 KT 240,2 KT 234,4 KT227,8 KT 214,8

KT 213,2

KT208,5

TONS SOLD

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EBI TDA Bridge

EBI TDA YoY W ATERFALL ( € 0 0 0 s)

Source: Company data

Market environm ent

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Key trends

Key sector highlights: W LC dem and steadily increasing since Q4 2 0 0 9 . Raw m aterials prices have peaked, but further increases are still possible. Gradual transfer of raw m aterials’ prices increases on final products’ prices. Capacity reduction in the industry ongoing.

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Dem and evolution

EUROPEAN W LC MARKET DEMAND EVOLUTI ON ( ORDER I NFLOW )

The European boxboard industry, after a difficult 2 0 0 9 , is now up to a sharp rebound in 2 0 1 0 .

Source: CEPI Cartonboard and Company data

20.000 30.000 40.000 50.000 60.000 70.000 80.000 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 tons weeks

2008 2009 2010

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Overcapacity reduction ongoing

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PLANTS CLOSURE I N EUROPE: 6 1 5 ,0 0 0 TONS LESS CAPACI TY SO FAR Holland Die Endracht: 1 3 0 ,0 0 0 tons Spain Rio Verde: 4 5 ,0 0 0 tons Spain Rom ani: 3 0 ,0 0 0 tons Bulgaria* Nikopol: 8 0 ,0 0 0 tons Spain Papelera del Centro: 3 0 ,0 0 0 tons France* * Blendeques: 6 0 ,0 0 0 tons I taly* * Marzabotto: 9 0 ,0 0 0 tons Sw itzerland* Deissw il: 1 5 0 ,0 0 0 tons

* MM plants * * RDM plants

2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0

Source: Company data

Outlook

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Outlook

I N THE CURRENT ENVI RONMENT ONLY THE BEST PERFORMI NG MACHI NES W I LL CREATE VALUE

3 5 % 5 3 % 1 2 % Board Machines > 2 0 0 k tons

RDM M.M Weig

• No. BM: 1
• No. BM: 3
• No. BM: 3

1 1 % 8 9 % Board Machines < 2 0 0 K tons

RDM Others

• No. BM: 2 0
• No. BM: 4

Num ber of board m achines producing

• ver 2 0 0 ,0 0 0

tons and respective production capacity. Num ber of board m achines producing under 2 0 0 ,0 0 0 tons and respective production capacity.

Source: Company data

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PRODUCERS CONVERTERS END-USERS Recycled Fibers Virgin Fibers Flexible

GROW I NG PACKAGI NG VALUE CHAI N

La Rochette Djupafors

Outlook

Grow ing opportunity to im prove products portfolio, better serving end-users.

Source: Company data

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Key investm ent highlights

Leading m arket position “Green” and environm entally friendly I m proved results and FCF focus Moving tow ards packaging solutions provider Strengthened balance sheet Option to expand in FBB m arket Stable and consum er oriented m arket exposure

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• RDM has alw ays put the environm ental com m itm ent at the forefront of its

corporate strategy. RDM’s industrial process is based on recycling, w hich enables to optim ize the use of resources.

Environm ental com m itm ent

• For the m anufacture of recycled products, the w astepaper and raw

m aterials are carefully selected, in order to guarantee the best quality for the finished product.

All natural sourcing

• The production, in itself, is eco- responsible because fibers are used in a

continuous cycle. Recycled fibers are re-used m any tim es throughout the production process.

Core activity is 1 0 0 % sustainable

• RDM focuses its efforts on efficient m anagem ent of energy consum ption, in
• rder to achieve the best practices in the industry.

Saving energy is a day-to-day issue

• Over the past several years, RDM has significantly reduced the

consum ption of w ater, w hich has been decreased three-fold in the past decade.

Respectful use of w ater

• The desire for continuous im provem ent has led RDM to w ork on state-of-

the-art technological solutions.

I nnovation in technology, a key perform ance

• RDM sources from the nearest area around its m ills ( w ithin a 1 0 0 to 2 0 0

km radius) and delivers at the nearest custom ers' converting sites.

Logistics is a key value

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RDM: a green com pany for a green Christm as

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http: / / collectionreno.renodemedici.it/ eu/ it/

RDM: a green com pany for a green Christm as

Appendix

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Profit & Loss

* Includes margin from revenues deriving from other activities (including non recurring revenues from asset disposals) * * 9M2010 financial charges include 0.657 mln of gains in from foreign exchange differences

* * * Before minorities’ interest Source: Company data

( Eur/ m illion) 9 M2 0 1 0 9 M2 0 0 9 Var% Revenues from sales 3 6 6 .8 3 1 8 .6 1 5 % EBI TDA* 2 8 .0 2 4 .5 1 4 % % EBITDA margin 7.6% 7.7% Depreciation, amortisation and write downs (19.5) (20.4) ( 4 % ) EBI T 8 .5 4 .1 1 0 6 % % EBIT margin 2.3% 1.2% Financial charges * * (5.5) (6.4) (14% ) EBT 3 .1 ( 2 .3 ) n.m Taxation (1.5) (1.1) 36% Result for the period * * * 1 .6 ( 3 .4 ) n.m . Tons sold (tons/ thousands) 7 0 1 6 3 4 1 0 %

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Balance Sheet

Source: Company data

( Eur/ m illion) Sept 3 0 , 2 0 1 0 Dec 3 1 , 2 0 0 9 Stock 80.3 74.3 Trade receivables 121.6 110.4 Trade payables (124.5) (102.7) Total w orking capital 7 7 .4 8 2 .0 Other assets - current 4.4 4.6 Other liabilities - current (19.7) (14.9) Non-current assets 263.3 271.3 Non-current liabilities (32.8) (32.8) Employees' leaving indemnity (26.8) (24.6) Net capital invested 2 6 5 .8 2 8 5 .6 Net financial position (109.9) (130.8) Net Equity 155.9 154.8 Total sources 2 6 5 .8 2 8 5 .6

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Net Financial Position

Source: Company data

( Eur/ m illion) Sept 3 0 , 2 0 1 0 June 3 0 , 2 0 1 0 Dec 3 1 , 2 0 0 9 Cash and cash equivalents and Short term financial receivables (4.1) (2.3) (2.1) Short-term financial payables 50.8 56.8 68.3 Valuation of current portion of derivatives 0.9 0.9 1.1 Short-term financial position 4 7 .6 5 5 .4 6 7 .3 Long term financial payables 60.7 60.6 62.7 Valuation of current portion of derivatives 1.6 1.5 0.8 Net financial position ( cash) / debt 1 0 9 .9 1 1 7 .5 1 3 0 .8

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Shareholders

* Shareholders’ Agreem ent

Note: In August 2010 Industria e Innovazione SpA signed a put&call agreement with Cascades in relation to its stake in RDM.

(1) In liquidation

Source: Company data

Cascades Sas 3 6 .9 2 % * I ndustria e I nnovazione SpA 9 .0 7 % * Caisse de Depot et Placem ent du Quebec 5 .4 2 % * Exeufis SpA ( 1) 5 .5 1 % * Bonati Fabio 2 .5 4 % Managem ent 0 .1 6 % Market 4 0 .3 9 %

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Corporate Governance

Sergio Pivato Chairman Giovanni Maria Conti Standing auditor Carlo Tavormina Standing auditor BOARD OF STATUTORY AUDI TORS I NDEPENDENT AUDI TORS PricewaterhouseCoopers S.p.A Christian Dubé Chairman Giuseppe Garofano Deputy Chairman Ignazio Capuano Managing Director Riccardo Ciardullo Director Sergio Garribba Director Robert Hall Director Laurent Lemaire Director Vincenzo Nicastro Director Carlo Peretti Director Emanuele Rossini Director BOARD OF DI RECTORS

Source: Company data Note: On November 8, 2010, Reno De Medici’s Board of Directors, given that no candidatures were presented, has not appointed a new Director, following the resignation of Mr. Leo occurred on August 4, 2010.

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Group’s structure

Source: Company data

Reno De Medici S.p.A.

Production plans

I talian Mills RDM Arnsberg RDM Blendecques RDM I berica Manucor

Sales organizations Careo S.r.l

Careo Spain Careo Hungary Careo UK Careo Poland Careo Russia Careo Germ any Careo

• Czech. Rep

Careo France

Sheeting and distribution centres

RDM UK Em m aus Pack C.A.M. Pac Services Tissue Core

1 0 0 % 5 1 % 1 0 0 % 1 0 0 % 1 0 0 % 1 0 0 % 2 2 .7 5 % 7 0 % 5 1 % 3 3 % 1 0 0 %

For m ore inform ation: w w w .renodem edici.it

investor.relations@renodem edici.it ir@im agebuilding.it