Green Earth Group NV — Interim / Quarterly Report 2010

Feb 18, 2011

Consolidated interim profit and loss account

(amounts x € 1.000)	9m 2010	9m 2009	index
Total revenue	258,226	304,177	85
Cost of raw materials and consumables	-110,192	-140,378	78
Cost of work contracted out and other external costs	-22,861	-21,992	104
Value-added	125,173	141,807	88
Personnel expenses	-82,075	-94,393	87
Depreciation tangible fixed assets	-20,987	-23,253	90
Exceptional impairments	-16,356	450
Other operating costs	-32,170	-38,193	84
Reorganisation costs	-	-18,896
Operating result	-26,415	-32,478	81
Financing income	221	108	205
Financing costs	-3,454	-3,490	99
Result before taxation	-29,648	-35,860	83
Income tax	5,916	9,113	65
Result after taxation	-23,732	-26,747	89
Attributed to:
Shareholders Roto Smeets Group NV	-23,732	-26,640	89
Minority shares	-	-107	0
	-23,732	-26,747	89
Key Figures
Average number of outstanding ordinary shares	3,290,275	3,290,275
Attributed to shareholders Roto Smeets Group NV:
Results per share (€)	-7.21	-8.13
Value added in % of revenue	48.5	46.6

CONSOLIDATED BALANCE SHEET

(amounts x € 1.000)	30/9/10	31/12/09
ASSETS
Fixed assets
Tangible fixed assets	147,318	166,634
Associated companies / joint ventures	–	–
Other financial fixed assets	11,321	5,951
	158,639	172,585
Current assets
Stocks	7,019	9,070
Trade receivables	44,062	62,362
Other receivables / prepayments Cash and cash equivalents	10,505	7,388
	966	1,220
Assets classified as held for sale	62,552 4,418	80,040 9,243
	66,970	89,283
Total assets	225,609	261,868
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
Retained earnings	50,265	73,997
Other reserves	-1,364	-600
	78,185	102,681
Long-term liabilities
Provisions Interest-bearing loans:	9,964	12,268
Lease obligations
	23,724 33,688	23,471 35,739
Current liabilities
Trade and other liabilities	46,463	59,562
Finance companies	37,796	22,934
Interest bearing loans	17,663	19,171
Income tax payable	3,464	2,980
Financial derivatives	1,487	587
Provisions	6,863	18,214
	113,736	123,448
Total liabilities	147,424	159,187
Total equity and liabilities	225,609	261,868

Consolidated statement of comprehensive income

(amounts x € 1.000)	9 m 2010	9 m 2009
Result after tax	-23,732	-26,747
Value changes forward currency contracts	-1,036	-523
Result from participations	8	189
Income tax relating to components of other comprehensive income	264	133
Unrealised results after taxes	-764	-201
Total realised and unrealised results after taxes	-24,496	-26,948

Consolidated overview of changes in equity

(amounts x € 1.000)	issued capital	share premium	retained earnings	other reserves	total	minority interests	total equity
Equity as per 1 January 2010	16,451	12,833	73,997	-600	102,681	-	102,681
Result after taxes Unrealised results after taxes Total realised and unrealised results after			-23,732	-764	-23,732 -764	-	-23,732 -764
taxes	-	-	-23,732	-764	-24,496	-	-24,496
	-	-	-23,732	-764	-24,496	-	-24,496
Equity as per 30 June 2010	16,451	12,833	50,265	-1,364	78,185	-	78,185

			retained			minority
(amounts x € 1.000)	issued capital	share premium	earnings	other reserves	total	interests	total equity
Equity as per 1 January 2009	16,451	12,833	101,314	-426	130,172	247	130,419
Result after taxes			-26,640		-26,640	-107	-26,747
Unrealised results after taxes Total realised and unrealised results after				-219	-219	18	-201
taxes results after taxes	-	-	-26,640	-219	-26,858	-89	-26,948
	-	-	-26,640	-219	-26,858	-89	-26,948
Equity as per 30 June 2009	16,451	12,833	74,674	-645	103,314	158	103,471

Condensed consolidated interim statement of cash flow summary

(amounts x € 1.000)	9 m 2010	9 m 2009
Net result after taxation	-23,732	-26,747
Depreciation and exceptional impairments	37,343	22,803
Profit on sale of assets held for sale	-	-48
Other non-cash items	-401	-85
Changes
Stock	2,050	4,800
Trade receivables	18,300	14,788
Other receivables / prepayments	-3,118	1,873
Trade and other payables	-11,770	24,712
Deferred taxation	-6,180	-7,305
Provisions	-13,968	-7,600
Cash flow from operating activities	-1,476	27,191
Investments in tangible fixed assets	-14,040	-18,744
Divestments in tangible fixed assets	841	212
Result on sale of assets held for sale	-	1,724
Change other financial fixed assets	809	465
Cash flow from investing activities	-12,390	-16,343
Withdrawal interest-bearing loans	6,500	-
Repayments interest-bearing loans	-7,756	-7,144
Finance companies	14,862	-4,575
Cash flow from financing activities	13,606	-11,719
Net cash flow	-260	-871
Effect of changes in exchange rate	6	194
Cash and cash equivalents at 1 January	1,220	1,558
Cash and cash equivalents at 30 June	966	881

Segment information

The following summary shows the segment information in the 3 quarters of 2010

(amounts x € 1.000)	Print Productions	Marketing Communications	eliminations	total
Revenue Intersegment revenue	245,830 -	12,396 -	- -	258,226 -
Total revenue	245,830	12,396	-	258,226
Segment net results	-24,560	828	-	-23,732
Assets and liabilities Segment assets Assets classified as held for sale Unallocated assets Total assets	203,202	4,677	-243	207,636 4,418 13,555 225,609
Segment liabilities Unallocated liabilities Total liabilities	88,525	1,399	-243	89,681 57,743 147,424
Other segment information Capital expenditure tangible fixed assets Depreciation tangible fixed assets	13,978 `	62		14,040
(incl. Exceptional impairments)	37,278	65		37,343

The following summary shows the segment information in the 3 quarters of 2009

(amounts x € 1.000)	Print	Marketing	eliminations	total
	Productions	Communications
Revenue	291,859	12,318	-	304,177
Intersegment revenue Total revenue	- 291,859	- 12,318	- -	- 304,177
Segment net results	-27,421	674	-	-26,747
Assets and liabilities Segment assets Assets classified as held for sale Unallocated assets Total assets	241,833	4,503	-243	246,093 9,243 4,739 260,075
Segment liabilities Unallocated liabilities Total liabilities	100,779	-123	-243	100,413 57,104 157,517
Other segment information Capital expenditure tangible fixed assets Depreciation tangible fixed assets	18,699	45		18,744
(incl. Exceptional impairments)	22,701	102		22,803

E xplanatory not e s to the cons olidat e d thi rd quart er fig ur e s

Valua ti o n basis

The
consolidated
third
quarter
figures
have
been
drafted
in
accordance
with
the
basis
applied
in
the
consolidated annual
account
of
31
December
2009,
with
the
exception
of
the
new
standards
and
interpretations.

Financing

With
ABNAmro
lease
on
12
July
2010
a
financial
lease
agreement
to
finance
the
72‐page
press

of
Roto
Smeets
Weert. The
principal
amount
is

€
6.5
million
with
a
repayment
schedule
based
on
annuity
with
a
term
of
96
months.
Solvency requirement>
30%.

On
August
18
the
final
agreement
was
signed
with
ING
Bankwith
a
facility
of
€
12.5
million:
€
9.75
million
will
be
used
to the
existing
facility
of
ING
Investment
Management
to
pay
back,
the
remainder
will
be
available
to
finance
working capital.
The
facility
must
be
repaid
according
to
agreement
by
March
31,
2011
and
by
31
March
2012
with
€
0.75
million per
redemption.
The
remaining
€11
million
as
at
March
31,
2013.
Once
this
agreement
is
implemented,
Roto
Smeets Group
will
have
talks
with
ING.
The
property
of
RS
Utrecht,
the
RSGS
Eindhoven
and
Utrecht
premises
and
the
building in
Heerhugowaard
are
associated
with
this
loan.

Related party transactions

Apart
from
participations
with
managerial
control,
the
Management
Board
and
Supervisory
Board
can
be
classified
as parties
associated
to
Roto
Smeets
Group
NV.
In
the
reporting
period
there
were
no
transactions
between
the Management
Board,
Supervisory
Board
and
Roto
Smeets
BV
other
than
those
arising
from
their
labour
contracts.

Extraordinary items

Impairme nt

At
each
reporting
date,
Roto
Smeets
Group
assesses
whether
there
are
indications
that
an
asset
has
suffered
an exceptional
impairment.
If
there
is
such
an
indication,
Roto
Smeets
must
make
an
estimate
of
the
realizable
value
of the
asset.

At
the
end
of
the
third
quarter
2010,
the
book
value
of
the
net
assets
exceeded
the
market
capitalization
of
Roto Smeets
Group.
As
a
result,
the
company
has
concluded
that
there
are
indications
that
assets
might
have
suffered
an exceptional
impairment.

In
accordance
with
IFRS,
Roto
Smeets
Group
at
the
end
of
the
third
quarter
2010
carried
out
an
impairment
test
on
the basis
of
the
indications,
for
the
separate
cash
flow
generating
units
Print
Productions
Nederland,
Print
Productions Europe
(Antok)
and
Marketing
Communications.

The
realizable
value
of
the
cash
flow
generating
units
was
determined
on
the
basis
of
value
in
use,
being
the
cash
value of
the
future
cash
flows
attributable
to
the
units.
The
discount
factor
used
for
the
determination
of
the
value
in
use
is 9,0%.
For
the
cash
flow
generating
units
Print
Production
Nederland
and
Print
Productions
Europe
the
book
value
at
the end
of
the
third
quarter
exceeded
the
realizable
value.
Therefore,
at
the
end
of
the
third
quarter
there
is
an
exceptional impairment
of
assets
or
combination
of
assets
for
both
units.
The
exceptional
impairment
Print
Productions
Nederland is
€
11.8
million
and
Print
Productions
Europe
(Antok)
€
4.5
million.
Moreover,
the
tax
claim,
as
a
result
of
deductible losses
Print
Productions
Europe
(Antok),
is
impaired.
This
impairment
of
€
0.5
million
was
charged
to
the
income statement.

Assets held for sale

The
real
estate
in
Heerhugowaard
has
been
classified
for
some
years
as
'held
for
sale'.
This
is
the
result
of
facts
and conditions
outside
the
control
of
Roto
Smeets
Group.
Because
it
is
not
expected
that
the
property
in
Heerhugowaard will
be
sold
within
12
months,
according
to
IFSR
5
it
is
impossible
to
classify
these
assets
as
'held
for
sale'.
In
the
third quarter
figures
the
real
estate
in
Heerhugowaard
therefore
is
classified
under
tangible
fixed
assets.

De ferred tax asset

The
financial
fixed
assets
include
an
item
of
€
11.1
million
for
corporate
taxation
to
be
adjusted
in
future.
The
forward loss
compensation
of
€
46.1
million
has
been
adjusted
for
temporary
differences
stemming
from
the
valuation
of
fixed assets,
stocks
and
differences
related
fiscal
valuation
of
provisions,
particularly
for
the
early
retirement
scheme. The
forward
loss
compensation
can
be
set
off
against
future
fiscal
profits
until
2019
at
the
latest.

Re organi za ti o n p r ovisi o n

In
May
2009
Roto
Smeets
Group
announced
a
restructuring
programme,
partly
to
compensate
in
the
short
term
for
the effects
of
overcapacity,
worsened
by
the
economic
crisis,
and
partly
to
support
an
improvement
in
profitability
over
the longer
term.
In
the
group
as
a
whole,
approximately
450
jobs
(about
20%
of
the
workforce)
disappeared
in
2009
and 2010.

Events after the reporting period

John
Caris,
Chairman
of
the
Board
of
Directors,
early
retired
(VUT)
at
January
1.
The
Supervisory
Board
has
found
its Chairman,
Mr.
R.A.J.

Huyzer,
prepared
to
fill
the
post
of
CEO
for
the
time
being.
During
this
period
Mr.
Huyzer
will
not sit
on
the
Supervisory
Board.
Another
member
of
the
Supervisory
Board,
Mr.
R.
Blom,
will
Chair
the
Board
for
the
time being.

From
the
bankruptcy
of
the
Thieme
Groep
an
8‐color
Komori
sheetfed
press
has
become
available.
Furthermore the
negotiations
with
Komori
about
the
delivery
of
a
new
10‐color
sheetfed
press
have
been
successfully.
These
two presses
will
replace
two
4‐color
sheetfed
presses
and
a
5‐color
sheetfed
press.
ING
Lease
will
provide
for
financing using
a
lease
of
€
0.8
million
with
a
maturity
of
5
years
and
a
final
payment
of
20%,
interest
5.65%,
and
a
lease
of
€
1.75 million
with
a
maturity
of
7
years
with
a
final
payment
of
15%,
interest
6.11%.
There
are
also three folding machines taken from the
bankruptcy.
The total investment amounts
to €
0.24 million financed through a financial
lease from GE Artesia with a maturity of 3.5
years and an interest
rate of 5.9%

Veronica
Uitgeverij
BV
and
Roto
Smeets
Group
NV
have
extended
the
printing
contract
for
Veronica
Magazine
until 2013.
It
concerns
a
multi‐million‐Euro
contract.
The
exact
amounts
are
not
being
disclosed.
With
this
new
agreement both
parties
express
their

contentment
with
the
current
cooperation
and
their
mutual
intention
to
intensify

their relationship.
The
printing
and
finishing
contract
involves
the
manufacture
of
the
interior
in
gravure,

the
web
offset production
of
the
cover
and
the
finishing
of
the
magazine.
In
addition,
Roto
Smeets
takes
care
of
the
preparation
for the
distribution
of
both
the
subscription
issues
and
single
copy
sales.
The
production
of
Veronica
Magazine
is
provided by
the
gravure
location
of
Roto
Smeets
in
Deventer.

Social
partners
in
the
printing
and
publishing
industry
have
submitted
a
request
to
the
Ministry
of
Social
Affairs
and Employment
for
a
subsidy
from
the
European
Globalization
Funds.
This
fund
supports
initiatives
to
help
dismissed employees
to
find
other
employment
as
soon
as
possible.
In
respect
of
the
request
a
covenant
has
been
drawn
up between
petitioners
and
the
Ministry
of
Social
Affairs.
The
request
has
been
approved
by
the
European
Commission
in December
2010.The
amount
of
the
grant
receivable
depends
on
the
actual
eligible
costs.
The
maximum
subsidy
is
€
1.4 million.

In
the
event
of
any
difference
of
interpretation,
the
Dutch
original
of
this
English
translation
shall
apply