Full-Year 2 0 1 3 Results Full Year 2 0 1 3 Results 10 April 2014 - - PDF document

Full-Year 2 0 1 3 Results Full Year 2 0 1 3 Results

10 April 2014

Contents

1

Introduction & Outlook

• 1. Introduction & Outlook
• 2. FY 2013 Financial Statements

0 3 a c a State e ts

• 3. Review of Antalis and Arjowiggins
• 4. Corporate Social Responsibility
• 5. Q&A

Appendix: Key financial data by business

2

Full-Year 2013 Results

Som m aire

1. Introduction 2 Résultat et Bilan Consolidés

Présentation P P i t

1 . I ntroduction & Outlook

2. Résultat et Bilan Consolidés 3. Activité des Filiales

Pow erPoint

1 . I ntroduction & Outlook

4. Stratégie et Perspectives

Pascal Lebard – Chairman and Chief Executive Officer Pascal Lebard – Chairman and Chief Executive Officer

Full-Year 2013 Results

Steady m arket deterioration since 2 0 0 8

The printing & writing paper market, Arjowiggins’ main market segment in volume, has been deteriorating steadily since 2008

• The printing & writing market has been structurally

declining (internet, digital media)

• Volume drop ca. 8% per annum in Europe since

2008 2008

• The economic crisis has accelerated the decline in

volumes and leads to a deterioration of our product mix and margins in the fine paper segment.

• Raw material prices (pulp chemicals energy) remain
• Raw material prices (pulp, chemicals, energy) remain

high, thereby pressuring margins

• Overcapacities on the market (15-20%) are causing

strong pressures on selling prices

0%

• 4%

90 90 89 CAGR 08-12

Paper consumption in CEPI region 1 [2004 - 2012 ; mT]

The pace of volume decline has accelerated in 2013

• Decline in volumes sharper than expected by the

various market operators

36 35 36 37 37 34 37 36 35 32 31 32 32 33 28 29 26 24 11 11 11 10 10 9 9 8 8 77 81 86 81 90 90 89 87 88

• 7%
• 8%
• 1%

Expected decline of 2% to 5% per annum in printing & writing paper volumes

7 7 7 7 7 7 7 6 7 2012 4 2011 4 2010 3 2009 3 2008 3 2007 4 2006 4 2005 3 2004 3 Newsprint Packaging & Wrapping Hygiene paper Industrial & special papers Print & Office

• 2%

+5%

Source:CEPI 1) CEPI countries: Austria, Belgium, Czech Rep., Finland, France, Germany, Hungary, Italy, Norway, Poland, Portugal, Slovakia, Spain, Sweden, Switzerland, Netherlands, United Kingdom

4

Full-Year 2013 Results

Accelerated m arket deterioration in printing & w riting paper m arket in 2 0 1 3 w riting paper m arket in 2 0 1 3

Economic environment bearing down on demand in printing & writing papers segment in Europe segment in Europe

• Volume drop in distribution (- 9%) and production (- 8%) in first half-year
• Continuing volume decline (- 7%) in second half-year in greater proportion

g ( ) y g than expected by the various market operators

• Strong pressure on selling prices
• Unfavourable trend of product mix in fine papers segment
• Unfavourable trend of product mix in fine papers segment

Good resilience of Specialties business (Arjowiggins) and of Packaging and p ( j gg ) g g Visual Communication segments (Antalis) P i f t i l d h i l i i t hi h l l Prices of raw materials, energy and chemicals remaining at high levels

5

Full-Year 2013 Results

Key m ilestones of the Group’s strategy

Consolidation of Map into Antalis

2 0 0 9 2 0 0 8 2 0 1 0 2 0 1 2 2 0 1 1 2 0 1 3 Antalis RACE 2012 Program Roll-Out Packaging & Visual com. acquisitions Xerox DNA Initiative Strategic Plan roll-out and cost-cutting measures driven by fall in demand

€

Arjowiggins’ Green Paper strategy and development of Specialty activities

Xerox

• Greater Autonomy of

Branches, Corporate downsizing

• Restructuring of

Carbonless

• Arjowiggins: Capacity cuts
• Antalis: cost reduction plans

stepped-up

• Closures – Witcel (1 machine
• Argentina), Rives (France)
• Shorter working time

arrangements, etc. €180m cost savings

• ver 2 years

(2009 vs. 2007)

• Closures - Dalum

(Denmark) Witcel (Argentina), Ivybridge (UK)

• Appleton US

restructuring & cash protection plan

Divestment of non strategic assets & contribution to market consolidation process

• Promotional

Products

• Office Supplies
• Decor / Abrasive
• Moulin du Roy
• B. Dumas
• Decor Paper Asia
• Carbonless
• AWA Ltd (exit Fox

River envir. Claim)

• Antonin

Rodet

• Casting
• US Coated exit

6

Full-Year 2013 Results

2 0 1 3 Highlights

Antalis A i iti f X ’ W t E ffi di t ib ti b i

• Acquisition of Xerox’s Western European office paper distribution business
• Transaction will boost earnings as from 2014

Arjowiggins

• Cost-cutting programme rolled out in US Coated in Q4 and sale process

launched

• Appleton Coated reclassified as discontinued operation
• Sale of the casting paper commercial business to Favini

E l i l t l t i d b A j i i C ti P

• Exclusive long-term supply agreement signed by Arjowiggins Creative Papers

for a minimum 5-year term

• Closure of Ivybridge plant in the UK

7

Full-Year 2013 Results

Decline in operating perform ance

Sales down 7.7% to €3,326 million N ti i t f d li i l f i ti d iti

• Negative impact of decline in volumes for printing and writing papers, pressure
• n selling prices and deterioration in product mix

EBITDA came in at €117 million, reflecting the sharp drop in volumes for printing papers and pressure on selling prices; EBITDA margin held firm at 3.5% p p p g p ; g

• Positive impact of reduction in overheads resulting from plant closures at

Arjowiggins in 2012 and late 2013 and the restructuring of logistics operations at Antalis Recurring operating income down 15.2% to €49 million

• including in 2013 gains of €12 million arising on changes to pension plans

Net loss of €301 million Net loss of €301 million

• including €295 million in net non-recurring expenses, consisting mainly of asset

impairment (€262 million) and restructuring costs incurred in 2013 (€48 million)

At the AGM, the Board will recommend not paying any dividend for 2013

8

Full-Year 2013 Results

Outlook

Continuing structural slowdown in printing & writing paper demand in Europe

• Expected volume decline of 2% to 5% per annum in Europe in the mid term in
• Expected volume decline of 2% to 5% per annum in Europe in the mid term, in

line with the trends registered in Q1 2014 Continued integration of Xerox and good resilience of Packaging and Visual g g g g Communication segments (Antalis) and of most specialties businesses (Arjowiggins) Necessity to speed up the transformation plan of Arjowiggins and refocus on specialty segments where it is market leader, in order to restore its margins and end its cash burn

An in-depth restructuring project of the Arjowiggins printing and writing paper activities was presented today to our relevant work councils

9

Full-Year 2013 Results

Group restructuring plan

The group’s industrial and financial plan enables it to pursue its long term development by repositioning it on promising segments and strengthening its financial structure

• Refocusing on speciality segments

Strategic & industrial pillar

• Credit facility restructuring from €400m

down to €120m

Financial pillar

Sustainability

Outcome Arjowiggins

with leadership positions

• Exit from loss-making businesses and

simplification of industrial footprint

• Back to positive cash flow generation

down to €120m

• Maturity extension of reinstated debt

until end 2020

• Rescheduling of repayments and

lighter covenants Sustainability secured by a refocused business and a stronger balance sheet

Antalis

• Continued acquisition plan in high

growth segments and geographic

• Debt maturity extended to end 2018
• Significantly improved financial

flexibility (maturities, covenants and Continued growth potential and

Antalis

growth segments and geographic areas acquisition baskets)

• Partial refinancing through a factoring

programme (€200m out of €520m) diversified sources

• f financing

Sequana

• €64m rights issue
• Reduction of credit facilities from €26m

down to €10m Lighter financial structure

10

Full-Year 2013 Results

Restructuring project - AW Creative Papers

Change the operational model to restore a favourable competitive position

Change of economic model to capture market shares and bolster the leadership

• Simplifying the product range
• Increasing the size of production runs
• Targeted sales and marketing organisation to capture market shares in emerging countries

Targeted sales and marketing organisation to capture market shares in emerging countries and promising sectors like labelling, luxury packaging or specialty papers

• Improving the efficiency of the production equipment and bolstering its competitiveness

Production concentrated in a limited number of sites Production concentrated in a limited number of sites

• Launch of a disposal process for the Charavines mill (France)
• Active search for a buyer, or closure of the site if no buyer can be found
• Ultimately, transfer of production from Charavines to Stoneywood (UK)
• Capital investment to increase the production capacity and technical capability of the site
• Capital investment to increase the production capacity and technical capability of the site
• Refocusing the Gelida mill (Spain) on the book binding market
• Gradual and partial transfer of fine paper volumes to Stoneywood
• Optimising industrial facilities in the Tracing paper business
• One shift less at Chartham (UK) and transfer of volumes to Quzhou (China)

178 jobs affected by the reorganisation project

11

Full-Year 2013 Results

Restructuring project - AW Graphic

Bolstering the leadership in the recycled paper market and reduced exposure to standard coated paper Production concentrated in a limited number of sites in France

• Launch of a disposal process for the Wizernes mill (France)
• Active search for a buyer, or closure of the site if no buyer can be found
• Ultimately, transfer of production from Wizernes to Bessé mill
• Selective focus on the most profitable clients and countries in standard coated paper

Selective focus on the most profitable clients and countries in standard coated paper Boosted leadership of Arjowiggins Graphic in recycled graphic papers

• Building of a de-inking plant (€30m) at Bessé mill (France), expected to be operational

i id 2016 t k th it lf li t i l d l in mid-2016, to make the site self-reliant in recycled pulp

• Greenfield: recycled pulp production for Arjowiggins Group and external clients

307 jobs affected by the reorganisation project 30 jobs a ected by t e eo ga sat o p oject

12

Full-Year 2013 Results

Exit from US Coated

The Group has initiated a disposal process for the US Coated division following a substantial savings programme conducted in Q4 2013

• Only non-integrated virgin pulp player, facing tough competition due to overcapacities in the

standard coated paper market

• Sharp deterioration of financial results
• Key figures 2013

S l €246

• Sales: €246m
• EBITDA: (€4.2m)
• Workforce: 592
• Substantial cost savings programme conducted in Q4 2013
• Performance still under pressure due to the steady deterioration of the market environment

13

Full-Year 2013 Results

AW : revenue split pre- and post-restructuring

The restructuring of Arjowiggins’ printing & writing activities will enable it to reduce its exposure to standard coated paper and to focus on specialty segments where it is a market leader is a market leader

• The share of commodity segments (standard coated) will go down from around 30% in 2013

(including US Coated) to around 5% pro forma

• AW’s exposure to the printing & writing segment will go down from nearly 60% to around 40%

AW: Revenue breakdown pre- and post-restructuring AW: % of sales in standard coated AW: % of sales in printing & writing

• AW s exposure to the printing & writing segment will go down from nearly 60% to around 40%

60% 80% 100% 60% 80% 100%

p g g

57%

11% 5% 19%

0% 20% 40% 60%

11% 5% 19% 27% 37%

0% 20% 40% 60%

Green and Recycled (Graphic), Fine, Tracing, Binding (AWCP)

31% 5% 42%

2013A 2013PF Couché standard US Couché standard Europe 2013A 2013PF Spécialités I&E Couché standard US Couché standard Europe

Note: 2013 data not adjusted for the treatment of US Coated business under IFRS 5 Estimated pro forma data including reduced exposure to standard coated in Europe and exit from US Coated, but excluding expected developments in continuing activities (e g volume growth in recycled pulp and papers)

14

continuing activities (e.g. ,volume growth in recycled pulp and papers)

Full-Year 2013 Results

Financial restructuring plan: objectives

The financial restructuring plan, expected to materialise in Q3 2014, aims at ensuring the sustainability of the group’s refocusing and operational restructuring measures. It bl A j i i t f d it iti i d t t i bl fi i l It enables Arjowiggins to fund its repositioning and restore a sustainable financial structure while providing Antalis with further resources to fund its strategic development

• Restoring a balanced and sustainable financial structure: agreement in principle between Sequana

and its banks representing 93% of its financial debt setting out the terms and conditions for the restructuring of all of its credit facilities

• Funding of Arjowiggins (via Sequana’s €64m rights issue)
• Substantial reduction in the credit facility of Arjowiggins (from €400m down to €120m) and

those of Sequana (from €26m down to €10m)

• Diversification of Antalis’ sources of financing through the implementation of a factoring
• Diversification of Antalis’ sources of financing through the implementation of a factoring

programme

• Extended debt maturities (2018 for Antalis and 2020 for Arjowiggins) and lighter covenants

S ffi i t li idit t th G ’ ti

• Sufficient liquidity to run the Group’s operations
• Possibility for the Group, with a refocused and profitable scope of activities, to durably focus on its

clients and operations and for Antalis to pursue its targeted acquisition strategy

15 15

Full-Year 2013 Results

Key term s of the financial restructuring plan

• Restructuring of €400m credit facility
• €125m conversion into ORNANEs (net share settled bonds convertible

i t h d/ h bl f i ti h ) i i

Arjowiggins

into new shares and/or exchangeable for existing shares) giving access to Sequana’s share capital

• €100m reinstated gross debt (tranches A and B)
• €20m reimbursement through asset disposal(s)

€155 d b i ff

• €155m debt write-off
• Reduction in overdraft facilities from €50m to €30m

Antalis

• Restructuring of €520m credit facility
• Refinancing of €200m through setup of a factoring programme
• Amend and extend of remaining €320m
• €64m rights offering
• Restructuring of €26m credit facilities

Sequana

• Restructuring of €26m credit facilities
• Repayment of €10m (of which €3m at closing)
• €7m conversion into ORAs providing access to Sequana’s share capital
• €9m debt write-off

16 16

Full-Year 2013 Results

AW financial restructuring: overview

Substantial restructuring of AW’s credit facility, reduced by €280m

Pre-restructuring Post-restructuring Comments Pre restructuring

Overdraft €50m

Post restructuring

• €50m overdraft reduced to €30m
• Write-off on credit facility: €155m
• ORNANE: €125m

Comments 1

Overdraft €30m

Overdraft reduction €20m

Write-off on credit facility €155m

• Issued to creditors by conversion of existing debt
• Maturing in December 2020
• Option for Arjowiggins to redeem in cash and/or

Sequana shares giving access to 30% of Sequana’s share capital (fully diluted)

Credit facility €400m ORNANE €125

Sequana s share capital (fully diluted)

• Reimbursement: €20m
• Repayment in cash via proceeds from disposal
• f certain assets
• Short-term (March 2015)

1 2

€400m ORNANE €125m

Reimbursement €20m

( )

• Potential balance converted into asset-backed

financial debt

• Reinstated debt: €100m
• Tranche A: €60m amortizable, maturity 2020

T h B €40 ti bl t it 2020 1 2 3

Reinstated debt €100m

• Tranche B: €40m amortizable, maturity 2020

(converted into ORAs in case of financial under- performance) 3 17 17

Full-Year 2013 Results

AW financial restructuring: a sharply im proved m aturity profile m aturity profile

Facility reduced from €400m down to €120m with significantly extended maturity profile (€50m overdraft reduced to €30m)

€400m

Credit facility

Pre- restructuring

(principal amounts)

400M€

2014 2015 2016 2017 2018 2019 2020

Tranche A

Post- restructuring

€20m €15m €15m €20m €40m

Tranche B Reimbursement through disposal(s)

€20m

g

(principal amounts)

2014 2015 2016 2017 2018 2019 2020

10M€ €10m €20m €10m €10m €5m €10m €5m €10m €15m €15m €20m €20m 18 18

Full-Year 2013 Results

Antalis financial restructuring: overview

Restructuring of the €520m Antalis credit facility with a partial refinancing through a factoring programme (€200m) and an extended amortization schedule i i t (€320 )

• n remaining payments (€320m)

Factoring (€200m)

• €200m refinanced through the setup of a factoring programme
• Implementation before end 2014

(€200m)

• Implementation before end 2014
• Amend and Extend of €320m reinstated debt

Amend & Extend (€320m)

• Tranche A: €70m
• Amortization in 3 instalments: €5m in December 2014, €5m in

December 2015 and the balance in December 2018

• Tranche B: €120m
• Maturing December 2018
• Tranche C: €130m (swinglines)
• Maturing December 2018

Acquisition strategy

• Comforted external growth strategy thanks to increased acquisition

baskets over 2014-2018

19 19

Full-Year 2013 Results

Antalis financial restructuring: a sharply im proved m aturity profile m aturity profile

Credit facility

Diversification of funding and maturity profile extended to 2018

Pre-

€490m

restructuring

(principal amounts)

€30m

2014 2015 2016 2017 2018

€510m

Credit facility

Post- restructuring

(principal amounts)

€200m

Factoring (principal amounts)

€310m €5m

2014 2015 2016 2017 2018

€5m 20 20

Full-Year 2013 Results

€ 6 4 m rights offering ( Sequana)

€64m rights issue (with preferential subscription rights)

• The financial restructuring will be complemented by a €64 million rights issue (inclusive of share

issuance premium) Th f S ’ j h h ld (B if E SA d th Alli ) h itt d

• Three of Sequana’s major shareholders (Bpifrance, Exor SA and the Allianz group) have committed

to taking up €48 million of the offering, in proportion to their respective shares in Sequana’s capital, and they have underwritten the remainder of the issue

• Sequana will contribute the entire net proceeds of the capital increase to Arjowiggins

21 21

Full-Year 2013 Results

Financial restructuring allow s a decrease in Sequana’s debt of approxim ately € 3 0 0 m Sequana s debt of approxim ately € 3 0 0 m

Financing Lines Financing Lines Pre-Financial Post-Financial In €uro millions Restructuring Restructuring Credit Facility 400 100 Disposal Proceeds Notes 20 Arjowiggins Reimbursement through asset disposal(s) Overdrafts 50 30 Credit Facility 520 320 F t i 200 A t li Factoring 200 Overdrafts 8 8 Antalis Credit facilities and overdrafts 26 10 Holding Total 1 004 688 Reduction in Financial Debt (316) Reduction in Financial Debt (excluding Overdraft) (296) Group

22 22

Full-Year 2013 Results

Group now repositioned and durably strengthened strategically and financially strategically and financially

Arjowiggins Antalis Strategic / Industrial

• Refocusing on specialty activities
• Strengthened leadership in recycled graphic

papers and high potential creative papers

• Streamlined industrial footprint
• Continued growth through acquisitions in

growing segments and geographic areas Financing

• Reduced debt through write-offs and

conversions into quasi-equity

• Set up of factoring programme
• Extended maturities and rescheduled

Financing

• Extended maturities and rescheduled

repayments

• Lighter covenants
• Extended maturities and rescheduled

repayments

• Lighter covenants

Conclusions

• Refocused activity, cash generative again
• Adequate financial structure
• Preserved resources to support growth
• Diversification of financing sources

A refocused group enjoying a robust balance sheet, competitive industrial and distribution setup and the means to take part in market consolidation

23

Full-Year 2013 Results

Next steps

• 10 April 2014:
• Announcement of the industrial and financial restructuring plan
• June 2014:

June 2014:

• Sequana’s shareholders meeting
• Q3 2014:
• Sequana’s half-year 2014 results release
• Signing of the final agreements relating to the financial restructuring
• Launch and implementation of the rights offering
• Launch and implementation of the rights offering

24 24

Full-Year 2013 Results

Som m aire

1. Introduction 2 Résultat et Bilan Consolidés

Présentation P P i t

2 . FY 2 0 1 3 Financial Statem ents

2. Résultat et Bilan Consolidés 3. Activité des Filiales

Pow erPoint

2 . FY 2 0 1 3 Financial Statem ents

4. Stratégie et Perspectives

Xavier Roy-Contancin – Chief Financial Officer Xavier Roy-Contancin – Chief Financial Officer

25 25

Full-Year 2013 Results

Consolidated incom e statem ent

€ millions

2013 Change(*) 2013/2012 2012 (1) Sales 3,326 3,603

• 7.7%

EBITDA 117 133

• 11.6%

down 5.4% at constant exchange rates EBITDA margin (%) 3.5% 3.7%

• 0.2 points

Recurring operating income 49** 58

• 15.2%

Operating margin (%) 1.5% 1.6%

• 0.1 points

exchange rates Non-recurring items (295) (93) Net financial expense (52) (51) Income tax 7 (1) Net income (loss) from discontinued operations (8) (36) Associates & non-controlling interests (2)

• Net income (loss) attributable to owners

(301) (123)

• Associates & non controlling interests

(2)

(*) Percentage and margin changes are based on figures rounded out to one decimal place ( ) Percentage and margin changes are based on figures rounded out to one decimal place. (**) Including gains of € 12 million arising on changes to pension plans. (1) The data shown above for 2012 has been restated to reflect the reclassification of Arjowiggins’ US Coated business in discontinued

• perations and the first-time application of the revised IAS 19 in 2013.

26 26

Full-Year 2013 Results

Breakdow n by business

€ millions

2013 Change * 2013/2012 2012 (1) Sales – Antalis Sales – Arjowiggins Eliminations & holding company 2,528 1,039 (241)

• 6.2%
• 11.2%
• 2,695

1,170 (262) Consolidated net sales 3,326 EBITDA – Antalis EBITDA – Arjowiggins 70 56

• 7.7%
• 16.1%
• 11.1%

3,603 83 63 EBITDA – holding company & other (9) Consolidated EBITDA 117

• 11.6%

(13) 133 Recurring operating income – Antalis Recurring operating income – Arjowiggins Recurring operating loss – holding co. & other 44 15 (10) Résultat op. courant consolidé 137 Consolidated recurring operating income 49**

• 15.6%
• 24.6%
• 128
• 15 2%

52 20 (14) 58 p Consolidated recurring operating income 49

• 15.2%

58

(*) Percentage and margin changes are based on figures rounded out to one decimal place. (**) Including gains of € 12 million arising on changes to pension plans. (1) The data shown above for 2012 has been restated to reflect the reclassification of Arjowiggins’ US Coated business in discontinued

• perations and the first-time application of the revised IAS 19 in 2013.

27 27 27

Full-Year 2013 Results

Breakdow n of non-recurring item s

2013

€ millions, year ended 31 December Antalis: €(38)m Arjowiggins: €(7)m

(48) (262) Restructuring costs Impairment of assets and of goodwill

Arjowiggins: €(239)m Antalis: €(23)m

(295) Non-recurring items 15 Other non-recurring items

28 28

Full-Year 2013 Results

Consolidated statem ent of financial position

31 Dec 31 Dec

€ millions

31 Dec. 2013 Goodwill Property, plant & equipment and intangible assets 31 Dec. 2012 634 417 438 321 p y, p q p g Other fixed assets Operating WCR Other current assets (liabilities) 116 348 (134) 117 265 (129)

Impact of asset impairment charges

Assets (liabilities) held for sale Total assets Shareholders’ equity 16 1,397 654 20 321 1,031 Non-controlling interests Provisions Net debt T t l it d li biliti

• 205

538 1 397

• 173

537 1 031 Total equity and liabilities 1,397 1,031

29 29

Full-Year 2013 Results

Breakdow n of provisions

2013 2012

€ millions, at 31 December

2013 Pension provisions Restructuring provisions 105 33 2012 142 24

IAS 19 impact (pensions)

Other risk and contingency provisions 35 Total 173 39 205

30 30

Full-Year 2013 Results

Change in net debt

€ millions

2013 Consolidated net debt at 1 January 2012 (1) (538) (609) y EBITDA Change in WCR of businesses CAPEX Asset disposals

Antalis: €93m Arjowiggins: €(16)m

133 38 (53) 3 117 74 (50) 12 ( ) ( ) Asset disposals Net finance costs Income tax expense

Antalis: €(23)m Arjowiggins: €(23)m

3 (49) (19) (58) 12 (52) (12) (49) Restructuring costs Disposals/acquisitions Share capital increase (58) (47) 146 (49) 5

Sale of casting business & acquisition of Xerox’s

• ffice paper distribution

Share capital increase Cash flow from discontinued operations Currency impact Other items 146 (3) (4)

• (14)

(8)

business

Other items Consolidated net debt at 31 December (609) (16) (22) (537) (538)

(1) The data shown above for 2012 has been restated to reflect the reclassification of Arjowiggins’ US Coated business in discontinued operations.

31 31

Full-Year 2013 Results

Consolidated debt

Net debt totalled €537 million versus €538 million at 31 December 2012

• Antalis:

€199 million Antalis: €199 million

• Arjowiggins: €325 million

Financial ratios (covenants) at 31 December 2013

• Antalis
• Net debt/EBITDA

= 2.62 (< 3.25)

• Rec. op. inc./net finance costs =

2.65 (≥ 2.35)

• Gearing (net debt/equity)

= 0.92 (≤ 1.1)

• Arjowiggins
• Net debt/EBITDA

= 5.78 (< 6.00)

• EBITDA/net finance costs

= 5.98 (≥ 3.0) EBITDA/net finance costs 5.98 ( 3.0)

32 32

Full-Year 2013 Results

Som m aire

1. Introduction 2 Résultat et Bilan Consolidés

Présentation P P i t

3 . Review of Antalis & Arjow iggins

2. Résultat et Bilan Consolidés 3. Activité des Filiales

Pow erPoint

3 . Review of Antalis & Arjow iggins

4. Stratégie et Perspectives

33 33

Full-Year 2013 Results

Business review

Hervé Poncin – Chief Operating Officer of Antalis

34 34

Full-Year 2013 Results

Results prove resilient in a deteriorated m arket m arket

Tough market conditions

• Decline in volumes for printing & writing papers in Europe and pressure on selling prices
• Non-paper markets fared better
• Non-paper markets fared better

Sales came in at €2,528 million (down 6.2%), due primarily to the sharp drop in printing paper volumes

• Packaging and Visual Communications businesses delivered solid performances
• Packaging and Visual Communications businesses delivered solid performances
• Xerox office paper business contributed €40 million to sales for the last two months
• f the year

Resilient operating performance Resilient operating performance

• EBITDA fell 16.1% to €70 million, from €83 million in 2012; EBITDA margin down

0.3 points to 2.8%

• Adverse impact of lower volumes, partly offset by an improved product mix and

ili t lli i f th t k b i resilient selling prices for the stock business

• Overheads reduced, particularly in logistics
• Recurring operating income down 15.6% to €44 million, including gains of €5 million

arising on changes to pension plans g g p p Debt slashed by €46 million thanks to good operating cash flow generation and efficient management of WCR

35

Full-Year 2013 Results

2 0 1 3 Highlights

Positions strengthened in the office paper segment

• Acquisition of Xerox’s Western European office paper and digital print media business

Acquisition of Xerox s Western European office paper and digital print media business

• Around €280 million in annual sales

280 000 t f

• 280,000 tons of paper
• Operating in 16 countries
• Almost 20% of the office paper market in Europe
• Exclusive license to market and distribute Xerox-branded paper in this region
• Business consolidated in early November

36

Full-Year 2013 Results

2 0 1 3 Highlights

Deployment of “Deliver the New Antalis” (DNA)

• Harness the full potential of the tools developed for RACE 2012 in particular

Harness the full potential of the tools developed for RACE 2012, in particular

• Packaging and Visual Communications: representing 32% of Antalis gross

margin in 2013 vs. 29% in 2012

• e-commerce: share of total sales increased by 3 points to 22%, thanks to the

d l f h l f i 2 i deployment of the new platform in 27 countries

• Roll-out of the service offer backed by a new-look service catalogue
• Employee training stepped up with a new online skills and performance

management platform management platform

Implementation of program to improve stock turn while maintaining service excellence

• 10% improvement in stock turn

Continued cost-cutting efforts

• Optimisation of logistics network in Europe particularly Germany and Austria
• Optimisation of logistics network in Europe, particularly Germany and Austria
• Closure of envelopes plant in Spain

37

Full-Year 2013 Results

Key incom e statem ent item s

S1 2010

€ millions, year ended 31 December

S l 2 528 S1 2010 pro forma de gestion S1 2010 pro forma IFRS 2013

Change 2013/2012

2 695 2012 (1) Sales EBITDA EBITDA margin (%) 2,528 70 2.8%

down 3.8% at constant exchange rates

2,695 83 3.1%

• 6.2%
• 16.1%

Recurring operating income Operating margin (%) Capital employed 52 1.9% 604 44* 1.7% 476

• 15.6%

Capital employed ROCE

(*) Including gains of € 5 million arising on changes to pension plans. (1) The data shown above for 2012 has been restated to reflect the first time application of the revised IAS 19 in 2013

604 8.6% 476 9.2%

(1) The data shown above for 2012 has been restated to reflect the first-time application of the revised IAS 19 in 2013.

38 38 38 38

Full-Year 2013 Results

EBI TDA trends

1

83

80 90

17 11 1 70

70 80

(34) (9)

50 60 30 40 10 20 2012 EBITDA Variable costs Inflation Bad debts 2013 EBITDA Margin/Mix/ Volumes Scope of consolidation Overheads

39 39

Full-Year 2013 Results

Key cash flow item s

€ millions, year ended 31 December

2013 2012 EBITDA 70 Change in WCR CAPEX 93 (17) 83 18 (19) CAPEX Disposals of fixed assets (17) 1 Operating cash flow 147 (19) 1 83 Net debt 199 245

Debt reduced by €46 million

40 40

Full-Year 2013 Results

Breakdow n of sales and EBI TDA

2013 sales by region 2013 EBITDA by region 2013 sales by business

Eastern Europe Rest of the World Western Europe (excl France & UK) Print Office 18% 17% World 10% (excl. France & UK) 41% UK Print 65% Rest of the UK 22% World 18%

• Vis. Com

6% Packaging 11%

Packaging & Western Europe 65% Eastern Europe 14% France 13% Packaging &

• Vis. Com

17%

41 41

Full-Year 2013 Results

Business review

Pascal Lebard – Chief Executive Officer

42 42

Full-Year 2013 Results

Decline in operating perform ance

Sales down 11.2% to €1,039 million

• Marked drop in volumes for printing and writing papers

Marked drop in volumes for printing and writing papers

• Specialty businesses held firm

EBITDA down 11.1% to €56 million versus €63 million in 2012

• Adverse impact of the sharp fall in printing and writing paper volumes, the fine paper

product mix and pressure on selling prices

• Positive impact of reduced overhead costs resulting from the closure of Dalum and

Wit l l t i 2012 d I b id i l t 2013 Witcel plants in 2012 and Ivybridge in late 2013

• Input costs (pulp, chemical products, energy) remain high, though lower than in 2012

Recurring operating income at €15 million versus €20 million in 2012 Recurring operating income at €15 million versus €20 million in 2012

• Including gains of €7 million in 2013 arising on pension plans

43

Full-Year 2013 Results

Key incom e statem ent item s

€ millions, year ended 31 December 2013 2012 (2) Change 2013/2012 Sales 1,039 EBITDA 56 63

• 11.1%

EBITDA margin (%) 5 4% 5 4%

• 11.2%

down 9.7% at constant exchange rates

1,170

EBITDA margin (%) 5.4% 5.4% Recurring operating income 15 (1) 20

• 24.6%

Operating margin (%) 1.5% 1.7% Capital employed 235 357 ROCE 6.6% 5.7%

(1) Including gains of € 7 million arising on changes to pension plans. (1) Including gains of € 7 million arising on changes to pension plans. (2) The data shown above for 2012 has been restated to reflect the reclassification of Arjowiggins’ US Coated business in discontinued

• perations and the first-time application of the revised IAS 19 in 2013.

44 44

Full-Year 2013 Results

EBI TDA trends

38

63

70

56

38

63

(7)

50 60 40

8 7

20 30

(53)

10 EBITDA 2012 Volumes Prices & Mix Pulp, raw materials & energy Overheads Inflation & forex impact EBITDA 2013

45 45

Full-Year 2013 Results

Key cash flow item s

2013

€ millions, year ended 31 December

2012 EBITDA Change in WCR C

63 20 (16) 56

CAPEX Disposals Operating cash flow

(32) 1 53 (33) 11 18

Net debt

275 325

46 46

Full-Year 2013 Results

Breakdow n of sales and EBI TDA

Rest of the World 14% Asia Graphic 6% Creative

2013 sales by region 2013 sales by division 2013 EBITDA by division

14% USA 5% Asia 19% 6%

Coated 29% Green

Papers 22% Graphic 49% Creative Papers 35% France 18% Europe

Specialty 33% Green 38%

UK 10% p (excl. France and UK) 34% Security 29% Security 59%

47 47

Full-Year 2013 Results

Results by division

• Ongoing decline in volumes of

Graphic

Sales (€ millions) EBITDA (€ millions)

graphic coated papers amid strong pressure on selling prices

• Resilient demand for recycled papers

in most countries, as well as for recycled pulp and in speciality

510 569

Sales (€ millions) EBITDA (€ millions)

• 10.5%

y y businesses

• Positive impact of lower overhead

costs thanks to the closure of Dalum (Denmark)

2013 4 14 2013 2012 2012

NA

Creative Papers

Sales (€ millions)

• Further decline in volumes for fine

papers and adverse impact of product

EBITDA (€ millions)

224 237 21

mix (shift to mid-range papers)

• Good performance from speciality

businesses (tracing and casting paper, and bookbinding)

• Sale of the casting paper commercial
• 5.7%

2013 19 2013 2012 2012

Sale of the casting paper commercial business to Favini and signature of a long-term supply agreement for a minimum five-year term

• 8.5 %

48

Full-Year 2013 Results

Results by division

Security

• Banknote paper business proved

resilient

• Sales in the e-document and access

control solutions segments held firm

305 364

Sales (€ millions) EBITDA (€ millions)

g

• Positive impact of cost savings

thanks to the closure of Witcel (Argentina) in 2012 and Ivybridge (UK) in 2013

33 28

• 16.0%

+ 19.0%

2013 2012 2013 2012

49

Full-Year 2013 Results

Som m aire

1. Introduction 2 Résultat et Bilan Consolidés

Présentation P P i t

4 . Corporate Social Responsibility

2. Résultat et Bilan Consolidés 3. Activité des Filiales

Pow erPoint

4 . Corporate Social Responsibility

4. Stratégie et Perspectives

Pascal Lebard – Chairman and Chief Executive Officer Pascal Lebard – Chairman and Chief Executive Officer

50

Full-Year 2013 Results

Corporate Social Responsibility ( CSR) at Sequana

Sequana identified three priorities in 2013 as part of its overall CSR strategy

Natural resources Governance Human relations Product offering CSR policy: network & Forests - traceability Health and safety Responsible products

1 3 6 8

reporting traceability products

2 4 7

Energy Business ethics Skills and diversity

5

Water

51

Full-Year 2013 Results

Progress in 2 0 1 3

Traceability of supplies

• Context: ever-stricter regulations on product traceability and increasing insistence
• n traceability from customers
• Aim: to guarantee full product traceability – right back to the forest

g p y g

• Roll-out of a platform for Antalis suppliers (over 150 suppliers already

integrated)

 Ensure that products supplied are compliant with regulations  Ensure that products supplied are compliant with regulations  Products are traced back to tree type and geographic origin  Value chain managed more effectively using a risk assessment tool

• Antalis is pioneering the drive for traceability in the paper sector
• Antalis is pioneering the drive for traceability in the paper sector

52

Full-Year 2013 Results

Progress in 2 0 1 3

Employee safety

• Improved performance but the target remains “zero accidents”

21,3 19,8 28,6 22,9 24,8 25 30 35

Frequency indicator:

• no. of lost-time accidents

per 1,000 employees

19,8 21,5 12,8 14,4 13,7 19,5 15,9 12,2 5 10 15 20 Ind Freq AW Ind Freq Ant

• Mixed situation



Antalis constant impro ement emplo ee safet concerns deepl embedded in

5 2008 2009 2010 2011 2012 2013



Antalis: constant improvement - employee safety concerns deeply embedded in day-to-day operations



Arjowiggins: performance unchanged since 2011, need to step up actions

• Prevention and training initiatives are essential for Sequana

g q

• 5,972 employees were trained on occupational health and safety issues in 2013
• Constructive dialogue with employee representative bodies to improve working conditions
• 20 local health and safety agreements signed

53

Full-Year 2013 Results

Progress in 2 0 1 3

Eco-responsible offer

Sequana intends to become the undisputed leader in the market for eco-friendly papers Sequana intends to become the undisputed leader in the market for eco friendly papers

• There is no industry-wide definition of eco-responsible paper
• For the Group, an eco-responsible product takes account of the main impacts of paper

throughout its lifecycle

• Objective criteria based on international standards that provide customers with an
• Objective criteria based on international standards that provide customers with an

easy-to-use assessment grid

Raw materials stages Fiber’s origin Eco-responsIble 100% recycled or 50% Recycled mini with FSC

• r PEFC certification

Non certified Certified ISO 14 001 Manufacturing stage EU Ecolabel certified fiber Non certified manufacturing stage

54

Full-Year 2013 Results

Progress in 2 0 1 3

• Based on the Group’s definition

 91% of eco-responsible products  97% of eco-responsible products  72% of products distributed are eco-responsible products

• Sequana intends to promote this definition throughout the industry and the EU

(via the European Commission) A t li ’ “G St S t ” k ti l i t i t

• Antalis’ “Green Star System” marketing plan aims to raise customer awareness
• f eco-responsible products and strengthen Antalis’ role as a pioneer in this field

55

Full-Year 2013 Results

Som m aire

1. Introduction 2 Résultat et Bilan Consolidés

Présentation P P i t

5 . Q&A

2. Résultat et Bilan Consolidés 3. Activité des Filiales

Pow erPoint

5 . Q&A

4. Stratégie et Perspectives

Pascal Lebard – Chairman and Chief Executive Officer of Sequana Xavier Roy-Contancin – Chief Financial Officer Xavier Roy-Contancin – Chief Financial Officer Hervé Poncin – Chief Operating Officer of Antalis

56 56

Full-Year 2013 Results

Som m aire

1. Introduction 2 Résultat et Bilan Consolidés

Présentation P P i t

w w w .sequana.com

2. Résultat et Bilan Consolidés 3. Activité des Filiales

Pow erPoint

w w w .sequana.com

4. Stratégie et Perspectives  +33 1 58 04 22 80  contact@sequana.com

@ q 57 57

Full-Year 2013 Results

Som m aire

1. Introduction 2 Résultat et Bilan Consolidés

Présentation P P i t

Appendix – Key financial data

2. Résultat et Bilan Consolidés 3. Activité des Filiales

Pow erPoint

Appendix Key financial data

4. Stratégie et Perspectives

58 58

Full-Year 2013 Results

Antalis

Europe 2013 sales by region

€ millions

Sales – Europe Sales – Rest of the World 2,265 263

• 5.6%
• 10 5%

2013 2,401 294 2012 Change 2013/ 2012

y g

Eastern Europe 15% UK 25%

Sales Rest of the World 263 10.5% Sales – Antalis 2,528

• 6.2%

EBITDA – Europe 58

• 13.7%

294 2,695 67

Western Europe (excl. France & UK) 45% France 15%

EBITDA – Rest of the World 12

• 25.2%

EBITDA – Antalis 70

• 16.1%

R i i E 35 17 1% 16 83 42

Rest of the World 2013 sales by region

South

Recurring op. inc. – Europe Recurring op. inc. – Rest of the World 35 9

• 17.1%
• 37.9%

Recurring operating income – Antalis 44 (1)

• 22.5%

42 14 56 (2)

South Africa 33% South America 42% Asia 25%

(1) Including gains of € 5 million arising on changes to pension plans. (2) Data not restated to reflect the retrospective application of the revised IAS 19, not reallocated by region.

59 59

Full-Year 2013 Results

Arjow iggins

€ millions

2013 2012 Change 2013/ 2012 Sales – Graphic Sales – Creative Papers Sales – Security 510 224 305

• 10.5%
• 5.7%
• 16%

(1)

569 237 364 Sales – Arjowiggins (1) 1,039

• 11.2%

EBITDA – Graphic EBITDA – Creative Papers EBITDA S it 4 19 33 1,170 14 21 28

• 74.5%
• 8.5%

19 0% EBITDA – Security 33 EBITDA – Arjowiggins (1) 56

• 11.1%

Recurring op. loss – Graphic (16) 28 63 (6) + 19.0% NA Recurring op. inc. – Creative Papers Recurring op. inc. – Security 8 23 (2) Recurring operating income – Arjowiggins (1) 15 (2)

• 0.6%

6 16 16 (3) + 30.7% + 45.7% (1) Excluding US Coated, reclassified in discontinued operations. (2) Including gains of € 7 million arising on changes to pension plans. (3) Data not restated to reflect the retrospective application of the revised IAS 19, not reallocated by division.

60 60

Full-Year 2013 Results

Som m aire

1. Introduction 2 Résultat and Bilan Consolidés

Présentation P P i t

Appendices: fi i l i

2. Résultat and Bilan Consolidés 3. Activité des Filiales

Pow erPoint

financial restructuring

4. Stratégie and Perspectives

61

Full-Year 2013 Results

Sum m ary of Group restructuring plan

The group’s industrial and financial plan enables it to pursue its long term development by repositioning it on promising segments and strengthening its financial structure

• Restructuring of printing & writing activities
• Creative papers: simplification of business model

Strategic and industrial pillar

• Restructuring of AW credit facility (€400m):
• Conversion of AW debt into Sequana quasi-equity

Financial pillar Arjowiggins

Creative papers: simplification of business model and sale (or, if no buyer is found, closure) of the Charavines mill

• Graphic: sale (or, if no buyer is found, closure) of

the Wizernes mill, and setup of a de-inking unit at Bessé in order to boost leadership on recycled q q q y (€125m)

• Reimbursement through asset disposal(s) (€20m)
• Maturity extension of reinstated debt (€100m)

until end 2020, rescheduling of repayments and lighter covenants Bessé in order to boost leadership on recycled segment

• Exit from the US Coated activity

lighter covenants

• Debt write-offs (€155m)
• Reduction in overdrafts from €50m to €30m

Antalis

• Continued acquisitions in high growth segments and

geographic areas (packaging, visual communication, emerging markets) in order to bolster the group’s positions

• Maturity on reinstated debt extended to end 2018;

rescheduling of repayments and lighter covenants

• Partial refinancing through the setup of a factoring

programme before end 2014 (€200m)

Sequana

• €64m rights issue
• Debt write-off (€9m)
• Debt conversion into quasi-equity (€7m)

62

Full-Year 2013 Results

Arjow iggins financial restructuring: ORNANE and Reim bursem ent through asset disposal( s) Reim bursem ent through asset disposal( s)

• “ORNANE” or “Obligations Remboursables en Numéraire et/ou en Actions Nouvelles ou

Existantes”: €125m

1

• Issued to Arjowiggins lenders by conversion of existing debt
• Maturing in December 2020
• Ultimately giving access to 30% of Sequana’s share capital on a fully diluted basis if
• Ultimately giving access to 30% of Sequana s share capital on a fully diluted basis if

redeemed in shares

• Option for the company to redeem all or part of such ORNANE in cash
• Reimbursement through asset disposal(s): €20m
• Repayment in cash with the net proceeds from the sale of certain assets

2

• Such proceeds to be shared between Arjowiggins and the creditors
• Potential shortfall to be converted into asset-backed financial debt
• Short term maturity (March 2015)
• Short term maturity (March 2015)

63 63

Full-Year 2013 Results

Arjow iggins Debt Restructuring: Reinstated Debt

• Tranche A: €60m
• Maturity: December 2020

3 A

• Interest: 2% PIK until 31 December 2016, then Euribor + 1% from 1 January 2017 on
• Amortization in 4 equal instalments of €10m on 31 December of each year from 2016 to 2019

and the balance on a fifth and final instalment on 31 December 2020

• Tranche B: €40m
• Maturity: June 2020
• Interest 2% PIK

ntil 30 J ne 2017 then E ribor + 1% from 1 J l 2017 on

3 B

• Interest: 2% PIK until 30 June 2017, then Euribor + 1% from 1 July 2017 on
• Amortization in 4 instalments: €5m in June 2017, €5m in June 2018, €10m in June 2019 and

the balance on a fourth and final instalment in June 2020 T b t d i t ORA ( i i t i f 3 0% f S ’ h it l

• To be converted into ORA (giving access to a maximum of 3.0% of Sequana’s share capital
• n a fully diluted basis in December 2020) in case of in case of financial underperformance
• Covenants

Fi t t t J 30 2017 b d t ti ti t t k l i 2016 b t

• First test on June 30, 2017 based on a covenant renegotiation to take place in 2016 between

the company and its lenders

64 64

Full-Year 2013 Results