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

Com pany overview and 9 M2 0 1 0 results November 2010 1

Christian Dubé Chairman I gnazio Capuano Chief Executive Officer Stefano Moccagatta Chief Financial Officer Guido Vigorelli Investor Relations Officer DISCLAIMER: C ertain 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. Com pany overview and 9 M2 0 1 0 results P Printed on recycled paper 2

Contents  Overview  Key 9 M2 0 1 0 financial results  Market environm ent  Outlook  Appendix Com pany overview and 9 M2 0 1 0 results P Printed on recycled paper 3

Overview

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, Our France and Germany. business  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. * EBITDA includes non recurring revenues from asset disposals. Com pany overview and 9 M2 0 1 0 results P Printed on recycled paper Source: Company data 5

Pioneer of recycling and sustainable developm ent  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. -2 2 % -9 % Com pany overview and 9 M2 0 1 0 results P Printed on recycled paper Source: Company data 6

Proactively adjusting asset base  1 9 9 6 : Reno de Medici is listed on the Milan stock exchange. 1 9 9 6  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 1 9 9 8 of 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  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 2 0 0 5 and Aticarta.  2 0 0 6 : Demerger of some real estate assets, through the creation and listing of RDM 2 0 0 6 Realty .  2 0 0 8 : Merger by incorporation of the European recycled cartonboard business of 2 0 0 8 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  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. Com pany overview and 9 M2 0 1 0 results P Printed on recycled paper 7

RDM’s m arket positioning Ranking by capacity ( tons/ thousand) Mayr-Melnhof RDM pro forma Reno De Medici Stora Enso M-real Smurfit Kappa RDM MM 0 9 KappaStar POST Holmen MERGER Moritz J. Weig 0 9 Knauf Cascades Int. Paper Buchmann Fiskeby Board Pulp Mill Holding PKarton CAS 0 7 RDM 0 7 Mel Paprinsa Cartiera di Momo LEIPA Pankaboard 0 200 400 600 800 1.000 1.200 1.400 W LC Recycled Cartonboard FBB Virgin Fiber Cartonboard 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. Com pany overview and 9 M2 0 1 0 results P Printed on recycled paper Source: Company data 8

A pan European player Geographical breakdow n of sales 9 M2 0 1 0 Operating European production plants W ell balanced sales portfolio and proxim ity to production sites Com pany overview and 9 M2 0 1 0 results P Printed on recycled paper Source: Company data 9

State of the art production plants 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 Villa Santa Lucia Production capacity 210 ,000 tons I SO 9 001 , I SO 1400 1 , FSC Blendecques Production capacity 105,000 tons I SO 9001 , I SO 1 400 1 , OHSAS 1 800 1 , QSE, HACCP, FSC Ovaro Production capacity 110 ,000 tons I SO 900 1 , I SO 1400 1 , FSC Arnsberg Production capacity 210,000 tons I SO 9 001 , I SO 1400 1 , EMAS, FSC Magenta Production capacity 130 ,000 tons I SO 9 001 , FSC Com pany overview and 9 M2 0 1 0 results P Printed on recycled paper 10

Key 9 M2 0 1 0 financial results

9 M2 0 1 0 key results: back to net profit  Market demand improving, but still weaker than Eur 0 0 0 s 9 M2 0 1 0 9 M2 0 0 9 pre-crisis: Revenues 366 .780 318 .571  8% increase in Europe. EBI TDA* 28.0 1 4 24.5 2 5  Pick up of demand from the middle East/ Far East. EBI T 8.49 4 4.12 9  Improved efficiency in operations due to the Net result* * 1.58 9 ( 3.400 ) higher production level. FCF* * * 20.9 0 1 ( 3.994 )  The ‘spread’ (difference between sales prices and raw materials prices) has recovered substantially since Q2. Net Financial Position ( cash) / 109 .940 132 .519  Due to the above effects, the com pany’s debt as of 3 0.09 results and profitability have been im proving steadily and m arked a significant grow th YoY. Tonnes sold ( 000 s) 701 634  Positive and higher FCF* * * and improving Net Financial Position due to: * Includes margin from non recurring revenues from asset disposals.  Higher net result. * * Before minorities’ interest.  Lower net invested capital. * * * NFP change in the nine-month period (31.12 - 30.09). Com pany overview and 9 M2 0 1 0 results P Printed on recycled paper Source: Company data 12

Quarterly trend: KPI s im provem ent REVENUES ( € ML) 1 4 0 1 2 6 .5 1 2 5 .2  The quarterly trend shows improving revenues 1 1 5 .1 1 2 0 1 0 9 .5 1 0 8 .4 (Q3 vs Q2 was affected by seasonality), and it is 1 0 5 .7 1 0 4 .5 expected to continue in Q4. 1 0 0  Net debt reduction mainly due to reduction of 8 0 net invested capital. 6 0  Reduction in the cost of debt due to declining 4 0 interest rates. 2 0  FCF* generation ( € 2 0 .9 m illion) in 9M2010, 0 of which €7.6 million in 3Q2010, due to net 1 Q0 9 2 Q0 9 3 Q0 9 4 Q0 9 1 Q1 0 2 Q1 0 3 Q1 0 invested capital dynamics (Working Capital and NET FI NANCI AL DEBT ( € ML) Capex).  Capex of €11.4 million in 9M2010 vs €12.3 1 4 0 1 3 5 .6 million in 9M2009: reduction mainly due to 1 3 2 .5 1 3 0 .8 1 3 0 .2 timing effects. 1 2 5 .2 1 1 7 .5 1 2 0 1 0 9 .9 1 0 0 * NFP change 1 Q0 9 2 Q0 9 3 Q0 9 4 Q0 9 1 Q1 0 2 Q1 0 3 Q1 0 Com pany overview and 9 M2 0 1 0 results P Printed on recycled paper Source: Company data 13

Spread trend RDM Group selling prices and raw m aterial cost indexes ( € / ton) SELLI NG PRI CES RAW MATERI ALS €/ TON I NDEX €/ TON 250,00 EBI TDA 9 .9 M€ 550,00 225,00 EBI TDA 1 0 .9 M€ 200,00 EBI TDA 500,00 7 .1 M€ EBI TDA EBI TDA 8 .6 M€ EBI TDA EBI TDA 6 .5 M€ 9 .3 M€ 175,00 6 .5 M€ 450,00 150,00 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 KT 208,5 KT 213,2 KT 214,8 KT 226,1 TONS SOLD KT 227,8 KT 234,4 KT 240,2 SELLING PRICES INDEX ( €/TON) RAW MATERIAL INDEX €/TON Com pany overview and 9 M2 0 1 0 results P Printed on recycled paper Source: Company data 14

EBI TDA Bridge EBI TDA YoY W ATERFALL ( € 0 0 0 s) Com pany overview and 9 M2 0 1 0 results P Printed on recycled paper Source: Company data 15

Market environm ent

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. Com pany overview and 9 M2 0 1 0 results P Printed on recycled paper 17

Dem and evolution EUROPEAN W LC MARKET DEMAND EVOLUTI ON ( ORDER I NFLOW ) 80.000 70.000 60.000 tons 50.000 40.000 30.000 20.000 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 weeks 2008 2009 2010 The European boxboard industry, after a difficult 2 0 0 9 , is now up to a sharp rebound in 2 0 1 0 . Com pany overview and 9 M2 0 1 0 results P Printed on recycled paper Source: CEPI Cartonboard and Company data 18