Business update Q3 2011

- Results as expected
- Strong improvement over 2010
- Improved prices and occupancy in rotogravure
- Pressure on web offset prices unchanged

1. Q3 2011 Results
Roto Smeets Group (RSG) has achieved much better results in Q3 than in the comparable quarter of 2010. However, we have not yet been able to pass on all of the increases in the prices of our raw materials, so in percentage terms, added value remains below the growth curve.

2. Significant events in Q3, explanatory notes
2.1 The market
There have been no significant changes in the market; it remains as we described it in our first half press release.

Once again in Q3, RSG has succeeded in gaining a number of major new contracts while other contracts have been extended.

In 2012 our collaboration with A.S. Watson Group will be considerably intensified. The A.S. Watson Group is the world’s largest health & beauty retailer, known in the Benelux countries under the brands Kruidvat, Trekpleister and ICI Paris XL. Starting in February 2012, Roto Smeets is to manufacture the weekly advertising folders for retail chemist Kruidvat in the Dutch market.

As announced earlier, Q3 saw the start of our printing agreement with motoring organisation ANWB as we take over the manufacturing of their monthly magazine De Kampioen.

An agreement has been reached with Sanoma Media Netherlands to continue our work on a large number of titles, such as the magazines Libelle, Margriet and Donald Duck.

Unpredictable factors in the publishing industry include reduced advertising volumes and the introduction of new legislation banning the tacit renewal of subscriptions.

The retail business market is suffering from poor consumer confidence, while the on-line retailers are offering competition to the traditional high street store. Confidence in printed door-to-door advertising continues to remain high, however.

The Marketing Communications business unit, with MediaPartners Group as its most important component, will not be affected in 2011 by the adverse economic mood. Their activities are developing to a far higher level than in 2010.

2.2 Raw materials
Developments in Print Productions are being adversely impacted by yet further consolidation among the paper suppliers, which has had the effect of pushing prices up. One example is the recently announced takeover of Myllykoski by UPM.

The prices of other raw materials also continue to rise.

2.3 The organisation
There has been a change of directors at Antok Printers Hungary, which has improved its commercial focus. A number of new, repeat orders have been added to their portfolio.

After the Roto Smeets GrafiServices sheetfed offset plants had achieved level 3 of the Corporate Social Responsibility performance scale, RSG has acquired bronze status under the FIRA Rating System. The FIRA Rating System affords associated purchasers independent, reliable information on the sustainability performance and risks associated with the businesses in the scheme.

2.4 Improvement plans
The internal actions already announced have now been set in train, principally in the Print Productions business unit. Their effect, with the associated cost savings, will only start to make a full contribution to improving operational results after 2011.

2.5 Other events
On 1 August RSG rented out the old printing plant at Europalaan 12, Utrecht, to PostNL.
The 26,287 m2 complex, in a total area of nearly 4 hectares, has all been taken into use. This is a four-year contract with options for renewal.

The well-attended annual shareholders’ company visit this year was to MediaPartners Group in Amstelveen. Despite the scattered information in the Annual Report, the examples on show of the MediaPartners communications projects for such clients as Albert Heijn, ABN AMRO, and KLM, were an eye-opener for many shareholders.

3. Financial position
The existing financing facility remains unchanged. The financing facility with ABN AMRO, which was temporarily expanded until 15 September, has been reduced once again to the original level, as planned. The use of credit is developing as forecast.

4. Prospects
Despite good occupancy and improved prices, principally in rotogravure, RSG expects that the net result for 2011 will remain slightly negative. This, however, represents a considerable improvement over 2010.

5. Financial diary 2012:

Roto Smeets Group NV
Management Board

Deventer, 10 November 2011

For further information please contact:
R.A.J. Huyzer, interim CEO
L.M. van Gelder, Financial Director

Tel. +31 570 69 49 05

This is an interim announcement within the meaning of article 5:25e of the Financial Supervision Act [Wet op het Financieel Toezicht].

In the event of any difference of interpretation, the Dutch original of this English translation shall apply throughout this Business Update of Roto Smeets Group NV.