Green Earth Group NV — Interim / Quarterly Report 2014

May 14, 2014

PRESS RELEASE

Business update first quarter 2014

• • Market declines faster than expected in first quarter
• • Reorganisation of the new divisional structure is on schedule
• • Interest-bearing debts have further decreased

MARKET DEVELOPMENT

The general state of the market segments in which Roto Smeets Group (RSG) is active remains unchanged. The growing number of bankruptcies within the graphic industry is having little effect on the overcapacity. In the first quarter, turnover lagged behind expectations in the Publishing Services division in particular as a result of a stronger decline in magazine circulations than in previous years. The turnover in the market for the Commercial Print division was at the same level as the first quarter of 2013. The initial signs that the Dutch economy is recovering have not yet become apparent in the market segments that MediaPartners Group and Roto Smeets GrafiServices are focused on.

Joost de Haas, CEO: "In the first quarter, we have seen across the full breadth of the organisation that the tentative economic recovery in our markets has not yet translated into a stabilisation of the volumes. In fact, the magazine market has actually declined much quicker than ever before. These market developments lend further support to our belief that Roto Smeets Group must focus on reinforcing its position in the chain and offering added value in more areas. We have made great strides in improving our productivity and efficiency, but these will not be sufficient for the long term. The 'Faster, Better, Higher' project that we launched almost two years ago is now generating over €10 million in cost savings each year. This is enabling us to keep pace with the fall in market prices, but it is not enough. We not only have to be faster and better, but we must also aim even higher: to offer our customers more value and make a greater contribution to the entire chain. To that end, we are developing initiatives – often together with customers – that improve client competitiveness. The Senefelder Misset 'Contentstripper' and the MediaPartners video platform are two very good examples of such initiatives."

FINANCIAL POSITION

The financial position of RSG remains unchanged with respect to the situation described in the annual report for 2013. In view of the limited financial opportunities and the disappointing results in the first quarter, RSG is taking a cautious approach to investment projects. As previously indicated, RSG has arranged a continuation of the existing credit facilities with ABN

AMRO and ING Bank. The factoring agreement with ABN AMRO Commercial Finance has been extended for a period of two years based on the same collateral and adjusted ratios. The current-account credit facility from ABN AMRO Bank runs indefinitely. The credit facility from ING Bank has been extended for the period of one year, based on the existing terms. The interest-bearing debt position has been further reduced since 31 December 2013.

NOTES ON IMPORTANT EVENTS

Divisions

At the end of the first quarter, RSG's Central Works Council responded positively to the decision to reorganise the group's existing divisional structure. This will not have an impact on the MediaPartners Group and Roto Smeets GrafiServices divisions. The reason behind this reorganisation is the necessity to strengthen our focus on the magazines ('publishing') and retail and catalogues ('commercial print') segments. In the new structure, the current offset companies Roto Smeets Weert, Senefelder Misset and the business units of Senefelder Misset – PSH Media Sales, Xmedia Solutions, Hoogte80 and NextGen Publishers – will form the Publishing Services division. Roto Smeets Deventer, Roto Smeets Etten, De Wit Binders, Antok and the international sales organisation will form the Commercial Print division. Each brand will remain active under its current name.

The Central Works Council has responded positively to the appointment of the divisional directors. On 7 April, Frans Boelens, previously plant manager at Roto Smeets Weert, and Ronald van Rossum, CEO of Senefelder Misset, were named as director of the Commercial Print and Publishing Services divisions, respectively.

Commercial Print division

The Commercial Print division is focusing on an effective pricing policy on the one hand, and on developing the ability to set itself apart within the retail segment on the other. Here, the emphasis will be on upscaling, increasing productivity and further cost-cutting in order to strengthen the position in the market. Magazines which are printed most efficiently in rotogravure due to their size will continue to be produced at the current rotogravure plants.

Compared with most of its foreign competitors, Roto Smeets offers the benefit of shorter lead times and lower transport costs. It is partly thanks to this that Roto Smeets has succeeded in winning a substantial printing contract from Maxeda, comprising materials for Praxis, V&D, Formido and De Bijenkorf. Furthermore, contracts have recently been extended for several years for the rotogravure printing of ANWB's Kampioen, Albert Heijn's Allerhande and Dag Allemaal from the Persgroep.

Due to the unpredictability of the market, the decision relating to the relocation of De Wit Binders in 2015 has been changed. Initially, the intention was to divide the activities between Roto Smeets Deventer and Roto Smeets Weert. It has now been decided to move two binding lines to Roto Smeets Deventer and to house the remaining adhesive binding activities at Senefelder Misset.

As a result of the declining market in Hungary, Antok is going through a reorganisation process which will result in the loss of a number of jobs. The capacity is being realigned with the market volume.

Publishing Services division

The Publishing Services division is focusing on creating more leverage from its position on the Dutch magazine market by offering new services within the current business chain: moving upstream by enriching content and downstream towards distribution. Looking for further growth, the newly structured division will target (western) Germany and (northern) France.

Within the Publishing Services division, a number of major contracts have been extended and new ones have been signed, such as with TMG (Telegraaf MediaGroep) which entails a multiyear agreement for the production of Vrouw and Privé.

From a cost-saving perspective and to increase efficiency, Senefelder Misset decided to relocate the PSH Media Sales business unit from Arnhem to Doetinchem. Hoogte 80 is moving from Arnhem to the office premises where MediaPartners Group is based. Hoogte 80 will remain independent and continue to operate under its own name, but it will make use of the MediaPartners Group's support services. Hoogte 80 primarily serves non-profit organisations and healthcare institutions, and hence complements MediaPartners Group's activities.

During the annual Senefelder Misset Seminar, the business unit X-Media Solutions launched the new 'Contentstripper' platform. This new service enables users to 'strip' a supplied PDF file to convert it into medium-neutral content suitable for various online distribution channels. The SenefelderDirect.nl webshop was launched at the same event. The new webshop enables customers to place printing orders quickly and easily online.

MediaPartners Group

Headed up by the new CEO Richard de Booij, MediaPartners Group (MPG) will be realigned with market needs so that MPG can maintain its leading position in this rapidly changing market. MPG customers are increasingly keen to use online and video-based communication alongside their print activities. Thanks to the number of video productions it makes for Allerhande, MPG ranks as one of the top production houses in The Netherlands. The company will focus on further expanding and broadening this position. MPG also sees opportunities for taking a central approach to introducing and marketing data-management and CRM solutions. A broader service offering of this kind will enable MPG to offer customers not only a multimedia vision but also an integrated approach to the production aspects.

Roto Smeets GrafiServices

Roto Smeets GrafiServices (RSGS) has faced a strong decline in demand and increasing price pressure in the first quarter. Despite a large number of graphic companies having vanished from the market, the capacity has still not decreased sufficiently and the price level remains worryingly low. The roll-out of the new ERP/MIS system, which was completed in the first quarter, is enabling RSGS to work more efficiently, and this in turn strengthens its competitive position. Therefore, RSGS is even better equipped to position itself as a full-service supplier within the segments it serves.

Organisation

In addition to the reorganisation of the divisions, last year saw the announcement of indirect efficiency measures and changes to the working structures in a number of companies, resulting in the loss of a total of 170 jobs in the Deventer, Etten-Leur, Weert and Doetinchem facilities. This reorganisation is progressing according to plan.

In the first quarter of 2014, the 'Panta Rhei' project has started to bear fruit. The main aim of this project is to increase the flexibility with which employees can be deployed and hence to better adapt staffing levels to the workload. Thanks to the use of a central personnel planner, supported by a personnel planning system, it is now possible to plan work schedules in such a way that the staffing level moves in line with peaks and troughs in production. This is saving significant costs regarding the use of temporary staff and is resulting in a more efficient deployment of permanent staff.

The implementation of 'Technique', the new ERP/MIS system at RSGS, and the simultaneous adjustment of the system in line with other RSG applications is as good as complete. Hence, the system is now ready for accelerated roll-out within the other divisions. The Publishing Services division will switch to the new system at the end of this summer, with the final part – the Commercial Print division – following immediately after.

OUTLOOK

In terms of the expectations expressed in the recently published annual report, the world has not changed dramatically, apart from the fact that the magazine market has declined quicker than ever before. As indicated, it will be necessary for us to keep pace with the rate of market decline in the years ahead through astute cost cuts, careful financial management and optimal capacity utilisation.

But that does not go far enough. The new divisional structure has created a clearer market focus, and better equips the individual companies to respond to customer needs faster and more effectively within their markets. In turn, this will strengthen the position of the division in the relevant chain.

Especially in the past two years, we have shown that we are innovative and have enough inhouse expertise to rise to the competitive challenge. Hence, we are in a position to increasingly turn our defensive strategy into an offensive one.

Deventer, 14 May 2014

Roto Smeets Group NV Board of Directors

For more information: Joost de Haas, CEO +31 570 69 49 01

Important financial dates 2014

Half-year figures 21 August 2014 Business update 4th quarter 6 November 2014

This in an interim report under article 5:25e of the Financial Supervision Act.

About Roto Smeets Group

Roto Smeets Group NV is listed on NYSE Euronext, Amsterdam, and is one of the leading graphic media companies in Western Europe. Roto Smeets Group is a specialist in the realisation of printed and multimedia communications by companies that are subdivided into two business lines: Print Productions – aimed at the efficient manufacture of fullservice graphic and related services – and Marketing Communications – aimed at the production of content-rich media and resources on the basis of a sound communication strategy.

Hunneperkade 4, 7418 BT Deventer, +31 570 69 49 00, info@rotosmeetsgroup.com, www.rotosmeetsgroup.com