Green Earth Group NV — Earnings Release 2014

Mar 31, 2015

Press Release Annual Report 2014

• Major shareholders Roto Smeets Group announce bid on Roto Smeets Group B.V.
• Operating profit before exceptional items in 2014 slightly negative
• Second half year as expected, but backlog first half year not overtaken
• Result mainly affected by exceptional items
• Debt position further reduced
• ABN AMRO Bank and ING Bank extend credit facilities

Received bid

Roto Smeets Group (RSG NV) yesterday received a bid from a group of six major shareholders on the shares of its subsidiary Roto Smeets Group BV (RSG B.V.). The six major shareholders jointly hold 86.72% of the shares in RSG NV and are all shareholders with a stake of more than 3% RSG NV. RSG BV is the holding company of all the activities of the Group. Besides RSG BV, RSG NV has no other activities. The Management Board and Supervisory Board of RSG NV have taken note of the bid and decided to schedule the bid for the AGM on 13 May. For more information on this offer we refer to the separate press release that is published on the website of the company.

2014

2014 got off to a particularly disappointing and difficult start. Shortly after we had announced a fundamental reorganisation at the end of 2013, involving a 12% reduction in the workforce, we were confronted in the first quarter of 2014 with an unusually steep fall in volumes in the magazine market and hence overcapacity at our production sites. Additional measures and a return to contraction rates more typical of the long-term trend meant that the second half of the year was more in line with expectations.

However, we were unable to make up the ground lost in the first half of the year and consequently recorded a disappointing result overall. To ensure that our cost structure remained in line with market developments, we took further direct action in the second half of the year by dramatically reducing capacity at the Weert site, with the loss of approximaly 120 jobs. The farewell of the division RS GrafiServices, as announced on 11 February, will make 85 employees redundant.

Joost de Haas "In recent years RSG demonstrated that it has a tight rein on its cost structure and can adapt successfully to market conditions. However, the rate of market decline and pricing developments will always be unpredictable. The measures RSG implemented at the end of 2013 were substantial and dramatic, yet it soon became apparent that they were not sufficient to absorb the contraction in the market. Therefore, RSG was forced to take further action quickly in 2014. The termination of the activities of the Roto Smeets GrafiServices division and a further reduction in capacity at Roto Smeets Weert have brought the capacity closer into line with the market and have renewed the Group's focus on the markets in which it is strongly positioned".

Result

The 2014 net income figure (€ -16.2 million) was impacted particularly by a provision for the reorganisations (€ 5.5 million) announced in December and a writedown of deferred tax assets (€ 9.2 million). Without these exceptional items, net income would have amounted to € -2.8

million. Partly as a result of the developments in the magazine segment, the revenues from operating activities declined to € 265.1 million (2013: € 291.6 million). The added value amounted to € 133.6 million due to lower selling prices (2013: € 150.9 million). Personnel costs fell 9% as a result of the reorganisations. The average number of employees, based on FTEs, decreased from 1,516 in 2013 to 1,368 in 2014.

EBITDA after reorganisation costs decreased to € 7.7 million (2013: € 14.6 million). Operating income (EBIT) in 2014 amounted to € -6.0 million (2013: € -0.1 million).

In € million		2014			2013
	Before exceptional	Exceptional		Before exceptional	Exceptional
	items	items	Total	items	items	Total
Revenue	265.1		265.1	291.6		291.6
Value added	133.6		133.6	150.9		150.9
EBITDA	11.5	- 3.8	7.7	17.2	-2.6	14.6
EBIT	-0.6	-5.4	-5.9	3.9	-4.0	-0.1
Net Result	- 2.8	- 13.4	- 16.2	0.7	-4.8	-4.1

Financing and covenants

An agreement was signed with ABN AMRO Bank on 13 March 2015 extending the overdraft facility to 31 December 2017. The loan agreement with ING Bank has been extended to 31 March 2016. On 16 March 2015 the bear ownership of the land and buildings of the former Roto Smeets Utrecht printing plant was sold. The proceeds will be used to repay € 3.5 million of the loan from ING Bank.

Despite the lower cash flow RSG has been able in 2014 to continue to reduce the debt. At yearend 2014, the interest-bearing debt amounted to € 54.1 million versus € 58.9 million at December 31, 2013.

Outlook

RSG is nevertheless optimistic about its direction of travel. Our market position is growing ever stronger and all divisions are offering their customers higher added-value concepts. The trust that the banks express in the form of multi-annual financing agreements reflects the faith they have in RSG. In the past few years (despite declining results) we have been able to maintain our cash flow through careful cash management and a cautious approach to investments. The organisation has demonstrated its resilience and innovative capability.

Annual Report 2014

For more information, we refer to the Annual Report 2014. The 2014 Annual Report will be presented to the shareholders at the Annual General Meeting (AGM) for approval. The AGM this year will be held on Wednesday 13 May at 15:00 at the company's offices in Deventer.The annual report and the call for the AGM can be found on the website of the group www.rotosmeetsgroup.com.

Deventer, 31 March 2015

For more information:

Joost de Haas, CEO Tel.: +31 570 69 49 01

AGM press conference on May 13

Following the AGM on May 13, the usual press conference will take place. Editors can sign up for this via emily.knegtel@rotosmeets.com.

Profile

Roto Smeets Group NV is listed on Euronext Amsterdam and is one of the leading graphics printing companies in Western Europe. Roto Smeets Group consists of four divisions specialising in multimedia communications. Each division is specialised in one part of the communication chain (from creation to distribution), which results in the services connecting to each other seamlessly from beginning to end. More information is available at www.rotosmeetsgroup.nl under Brands and Services.

In the event of any difference of interpretation, the Dutch original of this English translation shall apply throughout this press release.

Annexes: 2014 full-year figures

Consolidated profit and loss account

	Before
	exceptional	Exceptional
(amounts x € ,.000)	items	items	2014
Total revenue	265,140	-	265,140
Cost of raw materials and consumables	-107,393	-	-107,393
Cost of subcontracted work and other external costs	-24,122	-	-24,122
Value-added	133,625	-	133,625
Other revenue	962	-	962
	134,587	-	134,587
Personnel expenses	-91,756	-5,491	-97,247
Depreciation intangible fixed assets	-283	-	-283
Depreciation tangible fixed assets	-11,852	-	-11,852
Exceptional impairments	0	-268	-268
Unrealised revaluation of investment properties	0	-1,300	-1,300
Other operating costs	-31,298	1,683	-29,615
Operating result	-602	-5,376	-5,978
Financing income	1	-	1
Financing costs	-2,854	-257	-3,111
Result before taxation	-3,455	-5,633	-9,088
Income tax	672	-7,779	-7,107
Result after taxation	-2,783	-13,412	-16,195
Attributed to: Shareholders Roto Smeets Group NV			-16,195
Key Figures Average number of outstanding ordinary shares			3,290,275
Attributed to shareholders Roto Smeets Group NV: Ordinary and diluted earnings per share (€)			-4.92
Value-added in % of revenue			50.4%

Consolidated profit and loss account

	Before
	exceptional items	Exceptional items	2013
(amounts x € 1,000)
Total revenue	291,601	-	291,601
Cost of raw materials and consumables	-112,410	-	-112,410
Cost of subcontracted work and other external costs	-28,289	-	-28,289
Value-added	150,902	-	150,902
Other revenue	893	-	893
	151,795	-	151,795
Personnel expenses	-99,539	-2,619	-102,158
Depreciation intangible fixed assets	-250	-	-250
Depreciation tangible fixed assets	-13,014	-	-13,014
Exceptional impairments	0	-664	-664
Unrealised revaluation of investment properties	0	-725	-725
Other operating costs	-35,062	-23	-35,085
Operating result	3,930	-4,031	-101
Financing income	169	-	169
Financing costs	-2,867	-	-2,867
Result before taxation	1,232	-4,031	-2,799
Income tax	-557	-744	-1,301
Result after taxation	675	-4,775	-4,100
Attributed to: Shareholders Roto Smeets Group NV			-4,100
Key Figures Average number of outstanding ordinary shares			3,290,275
Attributed to shareholders Roto Smeets Group NV: Ordinary and diluted earnings per share (€)			-1.25
Value-added in % of revenue			51.7%

CONSOLIDATED BALANCE SHEET

ASSETS Fixed assets Intangible fixed assets 1,599 1,882 Tangible fixed assets 68,286 76,655 Investment properties 10,270 11,570 Associated companies / joint ventures - - Deferred tax assets 4,357 11,384 Other financial fixed assets 11 10 84,523 101,501 Current assets Stocks 4,994 5,690 Trade receivables 37,039 41,733 Other receivables / prepayments 6,280 8,486 Cash and cash equivalents 740 435 49,053 56,344 Total assets 133,576 157,845 EQUITY AND LIABILITIES Equity attributed to equity holders of Roto Smeets Group NV Issued share capital 16,451 16,451 Share premium 12,833 12,833 Revaluation reserve 2,189 3,164 Retained earnings 2,738 17,958 Other reserves -1,938 -1,571 Total equity 32,273 48,835 Long-term liabilities Provisions 3,743 3,386 Interest-bearing loans: Loans - - Lease obligations 6,171 9,270 9,914 12,656 Current liabilities Trade and other liabilities 35,538 39,268 Finance companies 37,982 36,646 Interest bearing loans 9,908 12,969 Income tax payable 4,545 5,338 Financial derivatives 1,489 963 Provisions 1,927 1,170 91,389 96,354	(amounts x € 1,000)	31/12/14	31/12/13
Total liabilities 101,303 109,010
Total equity and liabilities 133,576 157,845

Consolidated overview of realised and unrealised results

(amounts x €1,000)	2014	2013
Result after tax	-16,195	-4,100
Unrealised results
Value changes forward currency contracts	-324	894
Foreign currency translation of foreign subsidairies	-124	-59
Revaluation investment properties	-	-
Taxation on results through equity	81	-224
Unrealised results after taxes	-367	611
Total realised and unrealised results after taxes	-16,562	-3,489
Attributed to:
Shareholders Roto Smeets Group NV	-16,562	-3,489

Consolidated overview of changes in equity

(amounts x € 1,000)	issued capital	share premium	revaluation reserve	retained earnings	other reserves	total
Balance as at January 1, 2014	16,451	12,833	3,164	17,958	-1,571	48,835
Result after taxes Unrealised results after taxes			-975 -	-15,220	-367	-16,195 -367
Total realised and unrealised results after taxes	-	-	-975	-15,220	-367	-16,562
Balance as at December 31, 2014	16,451	12,833	2,189	2,738	-1,938	32,273

(amounts x € 1,000)	issued capital	share premium	revaluation reserve	retained earnings	other reserves	total
Balance as at January 1, 2013	16,451	12,833	3,708	21,514	-2,182	52,324
Result after taxes Unrealised results after taxes			(544) -	-3,556	611	-4,100 611
Total realised and unrealised results after taxes	-	-	(544)	-3,556	611	-3,489
Balance as at December 31, 2013	16,451	12,833	3,164	17,958	-1,571	48,835

Consolidated cash flow statement

(amounts x € 1,000)	2014	2013
Cash flow from operating activities
Net result	-16,195	-4,100
Depreciation and exceptional impairments	12,403	13,928
Profit on sale of tangible fixed assets	-	-20
(Deferred) taxation	7,108	2,126
Other non-cash items	3,411	3,224
Changes in
Stock	696	128
Trade receivables	4,426	7,047
Other receivables / prepayments	2,207	1,444
Trade and other payables	-4,595	-5,580
Provisions	-848	-698
Cash flow from operating activities	8,613	17,499
Cash flow from investing activities
Investments in tangible fixed assets	-3,497	-7,246
Divestments in tangible fixed assets	16	143
Investments in intangible fixed assets	-	-33
Net cash inflow acquisition vdbj_	-	-
Repayments on loans	-1	1
	-3,482	-7,135
Cash flow from financing activities
Withdrawn risk-bearing loans	388	0
Repayments risk-bearing loans	-6,548	-8,752
Finance companies	1,336	-1,804
	-4,824	-10,556
Effect of changes in exchange rates	-2	-1
Net change in cash and cash equivalents	305	-193
Cash and cash equivalents at beginning of year	435	628
Cash and cash equivalents at end of year	740	435

Segment information

The following summary shows the segment information of 2014

(amounts x € 1.000)	Commercial Print	Publishing Services	Roto Smeets Grafiservices	Marketing Communications	Unallocated	eliminations	total
Revenue Intersegment revenue Total revenue	110,898 3,347 114,245	118,673 7,436 126,109	16,446 4,920 21,366	19,123 - 19,123	- - -	- -15,703 -15,703	265,140 - 265,140
Net results	-1,390	-2,878	-528	-244	-11,155	-	-16,195
Assets and liabilities Intangible fixed assets Tangible fixed assets Other assets Investment properties Total assets	37,903 25,672	23,104 14,851	6,139 4,960	1,154 256 4,427	445 884 3,511	- - -	1,599 68,286 53,421 10,270 133,576
Liabilities	27,709	9,387	2,998	3,882	57,327	-	101,303
Other segment information Investments in fixed assets Depreciation including exceptional impairments	1,656 5,086	1,485 6,505	36 75	66 374	254 363	- -	3,497 12,403

The following summary shows the segment information of 2013

(amounts x € 1.000)	Commercial Print	Publishing Services	Roto Smeets Grafiservices	Marketing Communications	Unallocated	eliminations	total
Revenue	125,301	127,968	17,744	20,588	-	-	291,601
Intersegment revenue	3,892	8,220	4,990	-	-	-17,102	-
Total revenue	129,193	136,188	22,734	20,588	-	-17,102	291,601
Net results	-1,591	-526	149	492	-2,624	-	-4,100
Assets and liabilities
Intangible fixed assets				1,355	527	-	1,882
Tangible fixed assets	42,802	26,290	6,211	394	958	-	76,655
Other assets	34,359	15,662	6,023	5,010	6,684	-	67,738
Investment properties							11,570
Total assets							157,845
Liabilities	40,599	16,061	4,007	4,266	44,077	-	109,010
Other segment information
Investments in fixed assets	877	5,937	71	200	194	-	7,279
Depreciation including exceptional impairments	5,961	6,194	447	388	938	-	13,928