Reno De Medici Paris European Midcap Event 27 June 2018 Agenda 1 Overview 2 RDM Features and Strategic Guidelines 3 Delivering on Strategy 4 RDM Shares and Final Remarks 2 Some numbers… 2017 net Milan and Madrid revenues of Stock Exchange €569 million 1,487 Annual capacity of employees 1,050,000 tons (2017YE) 6 mills Commercial 2 sheeting network in 70 centers Countries 3 A PanEuropean asset base Three assets with capacity well above 200k tons/p.a. Ovaro mill focused on high-margin specialties. WLC White Lined Chipboard FBB Folding Boxboard GER, Arnsberg 220k tons LINER/GD WLC FRA, Blendecques ITA, S.Giustina 110k tons 240k tons WLC WLC ITA, Ovaro 95k tons OG-GK RDM La Rochette FRA, La Rochette (FBB business) 165k tons ITA, Villa S.Lucia included in the P&L GC-FBB 220k tons LINER WLC consolidation perimeter of RDM starting from H2 2016. 4 Our virtuous circle Consumers Recycled paper collectors Carton board producers Distributors Converters End users 5 With our cartonboard… Our cartonboard is used to produce a huge quantity of product we use every day. Any examples? 6 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 demand (2016) SBS 8 % In the last few years, until H1 2016, RDM production was focused on one business FBB segment: White Lined Chipboard, “WLC”. WLC 32 % 52 % Following to the acquisition of La Rochette mill (30 June 2016), RDM is also involved in the “FBB” business. CUK 7 % Source: Company’s elaborations on market data 7 Different end-uses High-quality cosmetics Premium cigarettes Printability and surface quality Confectionery Quality SBS Whiteness/brightness Pharmaceuticals Purity Odour and taint properties Global brand cigarettes Beauty & health care Bulk Music sleeves FBB 1 Stiffness Wet/frozen food Printability (B)CTMP with odour and taint Retail FBB 2 sensitive products Bakery Hardware Software Sport/toys Price Beverages WLC Environmental image Dry food Paper goods Detergents Textile/shoes Volumes Source: Company’s elaborations on market data 8 Business drivers Overall economic trend E-commerce Brand recognition Plastic Cartonboard substitutions demand Care for planet Changes in lifestyles 9 Chinese PFR import trends China is the world’s biggest consumer and is dependent on US (45.5%) and EU (29.4%) flows Announced new Chinese regulation about imports of unsorted waste paper (mostly mixed paper) Drop of PFR import React to the new standard Finished products Increase in virgin pulp export opportunities 10 Cardboard layers Coating Starch, calcium, carbonte, latex Under top layer Middle layer Top layer Brown grades (mainly White grades mixed paper and OCC) groundwood Back White or brown grades 11 Fibers Brown Recycled Fibers (€ per ton) White Recycled Fibers (€ per ton) 180 450 160 400 140 350 120 300 100 80 250 60 200 40 150 20 100 0 50 Mixed OCC Bleached Softwood Pulp (€ per ton) At the end of March, 2018 1050 prices for recycled paper had 1000 reached levels defined as 950 900 minimum. 850 800 750 The long period of pulp prices 700 increase continues. 650 12 Energy Natural gas (€/MWh) 29 27 25 23 21 19 17 15 Gas Italy Gas France Coal price in Germany (€/ton) 140 130 The trends are basically 120 dependent to the 110 improved macroeconomic 100 scenario 90 80 70 13 Selling prices (€ per ton) Recycled Board Italy (WLC – GDII) Recycled Board Italy (WLC – GDIII) 680 680 630 630 580 580 530 530 480 480 430 Jul-15 Jul-17 Jan-15 Jan-17 Jan-18 Jun-16 Oct-15 Apr-16 Feb-16 Sep-16 Sep-17 Dec-15 Nov-16 Nov-17 Mar-15 Mar-17 Mar-18 May-15 May-17 May-18 Bottom of price range Top of price range Bottom of price range Top of price range Virgin Board Italy (FBB -GCII) Virgin Board France (FBB - GCII) 1150 1250 1100 1200 1150 1050 1100 1000 1050 950 1000 950 900 900 850 850 800 800 Bottom of price range Top of price range Bottom of price range Top of price range 14 Agenda 1 Overview 2 RDM Features and Strategic Guidelines 3 Delivering on Strategy 4 RDM Shares and Final Remarks 15 Vision Partner of Choice 16 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 maximizing the satisfaction of all our 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 17 Strategy at work RDM leverages on clear strengths to deliver strategy: MULTICOUNTRY BROAD OFFER PanEuropean asset base Cartonboard portfolio and sales network based on recycled, virgin fibres and specialties, meeting the full range of customer needs SIZE GROWING BUSINESS Strong position on the Presence in the packaging European market business, sector in which making RDM the partner organic growth can be of choice for key brands healthy as returns on and multinational investment prove to be high corporations 18 2018 top priorities ONE-COMPANY CULTURE INTEGRATED SUPPLY CHAIN Spread the new culture across RDM Enhance service and product quality Benchmark internal/external activities Optimize volume allocation through Foster best-practice sharing and customer segmentation synergies Develop Integrated Business Planning HEALTH & SAFETY NEW ERP SYSTEM Target “Zero Accident” vision Close prototype phase Promote well-being mindset Go-live in Italian mills Encourage improvements in working environment 19 Agenda 1 Overview 2 RDM Features and Strategic Guidelines 3 Delivering on Strategy 4 RDM Shares and Final Remarks 20 Q1 2018 achievements Increasing margins in a favorable market conditions STABLE ORDER INTEGRATION AND CAPEX BACKLOG BENEFITS RAW MATERIAL PRICES DROP Better mgmt of controllable costs Efficient operational performance Improved Sales and Operational planning SPREADS RDM ACTION Keeping selling price Focus on core geographies Higher customers selectivity Better product positioning Demand trend helped, but in-house levers put into play were crucial 21 3-month 2018 highlights (% changes: 3M 2018 vs. 3M 2017) 157.6 € mn 18.1 € mn 12.8 € mn Net Revenues EBITDA EBIT from Sales +5.5% +98.6% 3.5x 12.8 € mn 0.19 12.6% Net Profit Gearing* ROCE** 5.1x 0.21x @ 2017YE 9.9% @ 2017YE *Gearing: Debt/(Debt+Equity) **ROCE: Last 12-month EBIT/Capital Employed Adjusted (for Equity Investments & LT Liabilities) 22 Revenues by geography Non-UE Non-UE Countries Countries 13.0% 12.4% Italy Italy 30.8% 31.6% 3M 2017 3M 2018 149.5 € mn 157.6 € mn 268k tons 268k tons UE Countries (excluding UE Countries Italy) (excluding 56.0% Italy) 56.2% Revenue growth by 5.5% due to the increase in the average sales prices and PAC Service consolidation that contributed to the result with 5.6 € mn of revenues (before intercompany eliminations). 23 EBITDA and EBIT EBITDA (€ mn) The WLC EBITDA change (+98.6%) reflects the following drivers: 20.0 18.0 + Revenues increase (+5.5%) led by selling 16.0 price increase and geographical mix +98.6% 14.0 improvement; 12.0 + Lower prices for recycled fibers; 10.0 18.1 _ Higher cost of pulp; 8.0 6.0 _ Slight increase in cost of energy. 4.0 9.1 2.0 Moreover, 1Q 2017 EBITDA reflected an 0.0 extraordinary item: 1.1 € mn 3M 2017 3M 2018 restructuring costs for the reorganization of the sales team. EBIT (€ mn) 14.0 PAC Service contributed to the result with 12.0 0.6 € mn of EBITDA (before intercompany +253.5% eliminations). 10.0 8.0 6.0 12.8 EBIT increase (+253.5%) resulted in 4.0 being even stronger than EBITDA increase (+98.6%), due to the D&A 2.0 3.6 reduction (-2.8%, up to 5.4 € mn from 0.0 5.5 € mn in 1Q 2017). 3M 2017 3M 2018 24 Investing to improve efficiency Capex (€ mn) 25 Typically, over the last ten years, 19.7 20.7 20 18.3 RDM investments have been mainly concentrated in upgrading 15 13.0 one plant at a time. 10 Instead in 2017, Capex were focused on three mills: 5 • Santa Giustina – steam turbine; 0 FY 2014 FY 2015 FY 2016 FY 2017 • Blendecques – shoepress section; Cumulated capex of 179.3 million euro over the 2008- • La Rochette – power plant 2017 period, i.e. 17.9 million euro on average per year. (1st step). 3-month Capex (€ mn) 7 5.7 6 In Q1 2018 the main capex 5 project was focused on the new sheeter at PAC Service. 4 3 2.5 2 1 0 3M 2017 3M 2018 25 Low gearing ratio Net Financial Debt and Gearing (€ mn) Operational net cash-flow positive by 60 0.28 7.9 € mn and was partially reduced by 0.24 (5.3 € mn): 50 0.21 0.21 0.23 0.20 0.19 40 0.18 ▪ Payment of the final balance of an 30 0.13 investment put in place in previous 52.0 44.1 years (2.3 € mn); 42.7 42.0 44.1 41.5 20 0.08 ▪ Consolidation of PAC Service (3.0 € 10 0.03 mn). 0 -0.02 31 March 2017 30 June 2017 30 Sept 2017 31 Dec. 2017 31 March 2018 Debt Debt/(Debt+Equity) 26 Investment pipeline PAC Service Sheeter Villa Santa Lucia Winder machine Santa Giustina Pope reel La Rochette 2nd step power plant Arnsberg New Headbox New ERP Health & Safety projects Jan Mar Aug Dec 27 M&A: acquisition project of BC Based in Spain (Barcelona), the company is involved in the production of Cartonboard from both recycled (WLC) and virgin fibres (FBB), serving the packaging industry in Spain and abroad.