Reno De Medici Lunch Meeting - Milan 13 March 2017
Agenda RDM Features and Strategic Guidelines 1 FY2017 Financials 2 3 RDM Shares and Final Remarks 2
Where we come from 2008 REPAYMENT OF 2005 2016 150 € mn LOAN & 72.6 € mn DEMERGER OF CAPITAL Rationalization of capacity REAL ESTATE ASSETS INCREASE Capex plan focused on key-assets Internationalization of mkt presence BUSINESS ACQUISITION DISPOSAL OF NON- COMBINATION OF Deleveraging CORE ASSETS WITH CASCADES CASCADES INC . SAS 45 140 2004 2006 40 120 35 100 30 80 25 20 60 15 40 10 20 5 0 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 EBITDA ( € mn; left scale) Net Debt ( € mn; right scale) Total 2008 EBITDA was 40 € mn, of which 21.2 € mn from badwill 3 generated by the business combination.
Main achievements in 2016 CASCADES S.A.S. ACQUISITION CAPEX PROJECT AT ARNSBERG In April 2016, RDM carried out a 6.2 million euro On 30 June 2016 RDM bought from Cascades Inc. 100% of investment at Arnsberg (close to Dortmund) to rebuild Cascades sas (FBB business, i.e. cartonboard based on pulp). the Middle Layer and Post drying section The deal brings all assets from the Business Combination carried out in 2008 under one Group and Leadership , with the opportunity to offer a complete product portfolio . Assets located in La Rochette (140 km east of Lyon) Strategic location to serve customers throughout Europe Increase in production capacity thanks to: Price of 11.3 m € , net of 8.7 m € of net debt of the acquired higher process speed Company. improved efficiency Site capacity of 165,000 tons ; two board machines. lower consumption of energy and raw materials. Top 10 clients – mainly professional printers - accounting for 55% of total yearly sales . Wide range of applications (pharma, food, cosmetics, displays, publishing…). 4
New Company’s profile Integrated European scale cartonboard offer Strategic locations of assets Products based both on across Europe recycled wastepaper and Unique position of virgin virgin fiber enhance RDM cartonboard production in leading position in the South Europe European cartonboard market Marketing Size opportunities Installed capacity well Cartonboard based on pulp above 1 million tons provides access to a Revenues exceeding 550 growing market with m € valuable clients Additional EBITDA (well More effective marketing above 3 m € ) effort through a simplified branding policy 5
Where we are now Today RDM boasts: INTERNATIONAL RICH PRODUCT PORTFOLIO FOOTPRINT Cartonboard products Strong presence across Europe (3 mills in Italy, 2 in based on recycled and virgin-fiber meeting the full France and 1 Germany) range of end- users’ needs ONE COMPANY PHILOSOPHY One brand One strategy One management team The new logo reflects the new Group organization and selling proposition. 6
Strategic priorities Enhance SERVICE and PRODUCT QUALITY High-performance output contributes to overall cost competitiveness Promote the “ONE COMPANY” culture The newly-introduced mindset targets continuous improvement inside RDM, with the aim of increasing the satisfaction of all stakeholders Translate operational progress into HEALTHY FINANCIALS IT investments allow for supply chain optimization and more effective execution of orders Minimize the ENVIRONMENTAL IMPACT of cartonboard production RDM is committed to reducing carbon emissions, recycling resources and increasing operational efficiency 7
Market segmentation Packaging applications and, to a lesser extent, graphic purposes drive cartonboard production. SBB - Solid Bleached Sulphate Board (GZ/UZ) Based on virgin fiber FBB - Folding Boxboard (GC/UC); WLC - White Lined Chipboard (GD/UD) and Based on recycled fiber Triplex Board (GT/UT). European cartonboard production (2015) SBB 7% In the last few years, until H1 2016, RDM (‘000 tons) production was focused on one business segment : White Lined Chipboard, “ WLC ”. FBB SBB 498 WLC 36% Following to the acquisition of Cascades sas FBB 2,532 57% (30 June 2016), RDM is also involved in the WLC 3,990 “FBB” business. Source: Company’s elaborations on market data 8
Different end-uses High-quality cosmetics Quality Printability and surface Premium cigarettes quality SBS Whiteness/brightness Confectionery Purity Pharmaceuticals Odour and taint properties Global brand cigarettes Beauty & health care Bulk FBB 1 Music sleeves Stiffness Printability Wet/frozen food (B)CTMP with odour and taint FBB 2 Retail sensitive products Bakery Hardware Software Sport/toys Price WLC Environmental image Beverages Dry food Volumes Paper goods Detergents Textile/shoes Source: Company’s elaborations on market data 9
Demand and Capacity WLC demand in Europe (mn tons) WLC capacity in Europe (mn tons) FBB demand in Europe (mn tons) FBB capacity in Europe (mn tons) 10 Source: Company’s estimates
Two key players in WLC Mayr Melnhof and RDM as a whole represent over 55% of total production capacity in WLC. The rest of competition is fragmented in terms of size. Differently from MM and RDM, minor players in the WLC market do not have a PanEuropean asset base. FY15 9M 2016 9M 2016 FY15 No. of (‘000 tons (‘000 tons Revenues Revenues mills ( € mn) ( € mn) sold) sold) 1,258* 777.5* 1,710* 1,046.7* 7 438.0 824 650** 345.9** 6 Source: MM and RDM Annual and Interim Reports. * Approximately 20% of MM Karton production is based on virgin fiber. The rest is WLC. ** RDM Group data for 9M2016 include the FBB business (Cascades sas), consolidated starting from Q32016. Q3 FBB volumes sold were 34K tons , while Revenues were 26.8 € mn . Quarterly data are unaudited. Mayr Melnhoff FY2016 earnings will be released on 21 March 2017. 11
Leading producers globally Cartonboard producers by grade WLC producers Capacity 1000 t/a Capacity 1000 t/a Source: PÖYRY, 2016 12
Leading producers in Europe Cartonboard producers by grade WLC producers Mayr-Melnhof Reno De Medici Weig Karton Smurfit Kappa Buchmann Fiskeby Board Barcelona Cartonboard KappaStar Pulp Mill Holding Paprinsa 0 500 1000 1500 Capacity 1000 t/a Capacity 1000 t/a Source: PÖYRY, 2016 13
Three European top-class assets GER, Arnsberg 220k tons LINER/GD WLC FRA, Blendecques 110k tons ITA, S. Giustina WLC 240k tons WLC ITA, Ovaro 95k tons OG-GK FRA, La Rochette 165k tons GC-FBB ITA, Villa S. Lucia 220k tons LINER WLC 14
Organizational chart 2 Operating Plants: Reno De Medici SpA - S. Giustina - Villa S. Lucia (operating holding) Sheeting & Distribution Marketing Operations RDM Arnsberg GmbH (*) RDM Magenta Srl RDM Marketing srl 100.00% 100% 100% Emmaus Pack Srl RDM. Ovaro SpA 80% 34.39% Cascades Sas RDM Blendecques Sas Pac Services SpA La Rochette 33.33% 100% 100% ZAR Srl Manucor SpA 33.33% 22.75% (*) Company owned 94% by Reno De Medici SpA and 6% by Cascades Grundstück GmbH & Co.KG. 15
Where we sell FY 2016 Revenues by geography RDM - WLC RDM - FFB BENELUX Iberian BENELUX UK Ireland Eastern Europe 3% Peninsula 3% 3% 4% 4% Overseas 4% Turkey 6% UK Ireland 5% Italy Overseas Germany Austria 36% 8% Switzerland France 7% 47% Germany Iberian Peninsula Austria 11% Switzerland 12% Eastern Europe France Italy 14% 14% 19% RDM boasts a robust position in core European countries. In FFB, La Rochette (Cascades sas) In WLC, strong geographic reach represents the only production site in leverages on a well-diversified asset Southern Europe. base. 16
1,400+ converters buying RDM products Low-risk concentration Market share of top ten converters is around 30% . First 10 RDM clients account for approx. 22.5% of tons sold. First RDM 100 clients account for 68% of tons sold. 17
Agenda RDM Features and Strategic Guidelines 1 FY2017 Financials 2 3 RDM Shares and Final Remarks 18
RDM Group P&L (thousands of Euros) Revenues from sales RDM Group data for 477,764 438,235 Other revenues and income FY2016 include the FBB 6,932 6,488 business (Cascades Change in inventories of finished goods sas), consolidated 468 (2,375) Cost of raw materials and services starting from Q32016. (373,659) (331,376) Personnel costs (76,067) (63,663) Other operating costs (5,003) (5,506) Depreciation and amortization (21,680) (22,345) Write-downs and revaluations (2,222) Financial expense (3,248) (3,597) Gains (losses) on foreign exchange 169 450 Financial income 29 20 Net financial income/(expense) (3,050) (3,127) Gains (losses) from investments 705 543 (3,030) (3,676) Taxes Profit (loss) for the period before discontinued 3,380 10,976 operations Discontinued operations (188) (1,114) Profit (loss) for the period 3,192 9,862 attributable to: Group's share of profit (loss) for the period 3,134 9,784 Minority interest in profit (loss) for the period 58 78 19
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