Rr Donnelley
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THE NEW RR DONNELLEY: More than $8 billion in annualized revenues* from a diversified mix of print and print-related services. 1 MAGAZINE/CATALOG/RETAIL 20% 2 BOOK 8% 3 TELECOM 6% 4 COMMERCIAL PRINT 8% 5 FORMS 10% 6 LABELS 5% 7 OFFICE SUPPLIES 4% 8 WAREHOUSE MANAGEMENT TECHNOLOGIES 3% 9 INTERNATIONAL 8% 10 LOGISTICS 11% 11 OUTSOURCING/PRINT FULFILLMENT 6% 12 FINANCIAL SERVICES 5% 13 DIRECT MAIL 6% 13 12 1 1 1 0 2 1 RR DONNELLEY: A POWERFUL PRINT PLATFORM 9 3 8 4 7 6 5 *Included in the annualized revenues of Moore Wallace are the historical results of Wallace Computer Services, Inc., from January 1, 2003 through May 15, 2003 (the date of Moore’s merger with Wallace). RR DONNELLEY – CREATING VALUE FOR OUR SHAREHOLDERS, CUSTOMERS AND EMPLOYEES On February 27, 2004, RR Donnelley and Moore Wallace combined to form the world’s premier full-service printing company. The new RR Donnelley has the depth and breadth to meet the print and print-related needs of any company of any size. From commercial print to outsourced print-related services, RR Donnelley is changing the role of print in every marketplace it serves. Our ability to improve operational efficiency and increase effectiveness makes us a valued partner in the publishing, retail, health care, advertising, technology, financial services and many other industries. Customers in markets around the world rely on RR Donnelley for a comprehensive range of online tools, variable printing services and market-specific solutions. CONTENTS 02 TO OUR SHAREHOLDERS 05 OUR CAPABILITIES 06 BOARD OF DIRECTORS 08 ADDITIONAL INFORMATION 1 TO OUR SHAREHOLDERS Fellow Shareholders, Welcome to the new RR Donnelley. RR Donnelley and Moore Wallace have combined to form the world’s premier full-service printing and communication services company. RR Donnelley is now the largest printer in North America, and we have strong positions in Europe, Latin America and Asia. RR Donnelley designs, manages and produces words and images, and brings them to life on paper and in digital form, the world over. In recent years, RR Donnelley has focused on continuously improving its world-class commercial print resources, complemented by growth businesses that serve our customers’ broad communication needs. The RR Donnelley – Moore Wallace combination is a giant leap forward in pursuit of that plan. The result is a global powerhouse capable of meeting the print and print-related needs of virtually any organization across North America and much of the world. 2 “The RR Donnelley – Moore Wallace combination is about value creation.” Creating value Among the priorities we will For customers, we create value by: For our shareholders, customers address in the near term are... ˚ Becoming part of their and employees, the RR Donnelley ˚ Cost actions: We will reduce communication value chain – Moore Wallace combination is costs by at least $100 million and managing it for them so about value creation. during the next 12 to 24 they can focus on their core months by eliminating competencies. For shareholders, we create duplicative infrastructure ˚ Using print as a strategic asset value by executing a proven costs, aggressively obtaining that enables communication business strategy built around procurement savings, and and facilitates commerce rigorous planning and discipline, rationalizing and optimizing between our customers and by relentlessly controlling costs, our asset base. their customers. and by carefully evaluating the ˚ Cross selling: We will go to ˚ Leveraging our unmatched metrics associated with everyday market with a full suite of product and service mix to decisions – from capital products and services. We are help achieve the supplier expenditures to new account uniquely positioned to manage reduction and consolidation acquisition. We also create value our customers’ entire print goals that are core to strategic by unlocking our tremendous supply chain, and we will sourcing strategies. potential to increase the product equip our sales organization RR Donnelley is the one and service mix we provide to with the training and tools to organization that can produce the new RR Donnelley’s premier do so. everything from the catalogs customer base. ˚ Acquisitions/divestitures: We our customers use to attract continually will evaluate our orders, to the labels they use RR Donnelley will also create businesses in order to acquire on the boxes that fulfill the value by tapping our employees’ needed capabilities, and to orders, to the invoice forms creative power. During the time assure that we are the leanest, that they use to collect leading up to this combination, most consistently excellent payment for the orders. our talented employees have provider of print and print- already demonstrated that they related products and services can work to integrate two large in the world. We will also take organizations, without taking advantage of opportunities their eyes off of their day jobs. to expand our product and We will draw on proven experi- service portfolio by adding ence to make the integration businesses that mesh with our transparent to customers. financial discipline and inte- grated print solutions strategy. 3 For employees, we create value Making integration a success The new RR Donnelley will be by being consistently profitable, We will measure this integration’s led by an all-star team that which nurtures an environment success by a series of financial will implement a disciplined of opportunity and reward. We metrics. But those metrics will plan which calls for: will also embrace the value of arise out of factors such as the... ˚ Integrity first diversity: diversity of workforce ˚ Speed and clarity with which ˚ Hiring the best managers and of ideas. Our recent experi- we take our enhanced platform ˚ Significantly reducing our ence in blending the strong to market overall cost structure Moore and Wallace cultures is ˚ Efficiency with which we use ˚ Selling non-core operations that employees are excited and our considerable information ˚ Leveraging our size to gain committed when it is clear that technologies to improve greater efficiencies the goal is to embrace the best workflow and productivity and ˚ Creating a cross-selling pro- of the best. There will be no to deliver value to customers gram to drive organic growth predisposition to do it the ˚ Advantage we gain in ˚ Acquiring complementary RR Donnelley way, or the Moore procurement and production. print-related assets to drive Wallace way. We will focus on top-line and bottom-line doing it the best way. RR Donnelley will not call a growth. time-out to integrate with Moore Preserving the best…adding Wallace. We will manage the We will do so with pride, and innovation and vitality integration while also working to we will do so with passion. Looking ahead, we will preserve be our customers’ favorite Thank you for the privilege of the best of RR Donnelley: its supplier and our shareholders’ leading this great company and dedication to excellence, most solid investment. for the opportunity to participate integrity, customer focus and with my talented colleagues in teamwork. To those qualities we Driving success at RR Donnelley the creation of value for all of will add a new sense of innova- These are exciting times. our constituents. tion and vitality as well as RR Donnelley is a new company proven processes and disciplines with a 139-year history. It has Yours very sincerely, that assure execution and a rich history of quality and accountability. production excellence, and an unparalleled opportunity to capture a future that builds on Mark A. Angelson that legacy. No other company Chief Executive Officer in our business has our financial March 5, 2004 capital, human resources, production capabilities and information technology. This allows us best to meet the 4 fast-changing demands of our marketplace. OUR CAPABILITIES: PREPARE, PRODUCE AND DELIVER WITH RR DONNELLEY RR Donnelley’s capabilities cover all aspects of print and print-related communications — and more! We help customers around the world prepare, produce and deliver as they communicate and conduct commerce with their customers. In everything we do, we put customer needs at the center of our efforts. In the past year, we expanded an already extensive list of capabilities in order to help our PREPARE 1 Color Services and Prepress customers be even more efficient and 2 Composition effective. 3 Content Conversion for the Web 4 Creative Services 5 Data Processing 6 Digital Asset Management 7 Digital Workflow Solutions 8 Direct Marketing Campaigns 9 Facilities Management 10 Packaging 11 Photography 33 1 32 2 12 Soft-Proofing and Collaboration 1 3 3 13 Translation Services 0 3 4 9 PRODUCE 2 5 14 Digital Printing 8 15 Financial Printing 2 6 16 Form Production 7 17 HTML Conversion 2 R P 7 18 Label Printing E R V E I 6 L P 19 Long-Run Printing A 2 E R 8 D 20 SEC EDGAR Filings E 21 Short-Run Printing 5 2 CUSTOMER 9 DELIVER 4 2 22 Compliance Management 1 23 Expedited Services 0 3 2 24 Fulfillment 1 25 International Mail and Package Delivery PR 1 2 ODUCE 2 1 26 Inventory Management 2 27 Merchandise Management Services 1 2 1 28 Outsourcing 3 0 2 1 29 Print Distribution 4 9 1 1 30 Print Systems Integration 5 8 1 1 6 7 31 Residential Package Delivery 1 32 Returns Management 33 Tracking and Measurement 5 For more information visit: www.rrdonnelley.com BOARD OF DIRECTORS Stephen M. Wolf (3) 62, Non-Executive Chairman of the Board, RR Donnelley, Chicago; Managing Partner, Alpilles, LLC, The Plains, Virginia. Director since 1995. Background: Airline industry. Directorship: Altria Group, Inc. Term ends: 2004. Mark A. Angelson (3) 53, CEO, RR Donnelley, Chicago. Director since 2001. Background: Print manufacturing, mergers and acquisitions, law.