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Crown Van Gelder N.V. Velsen

Crown Van Gelder N.V. Velsen. Half year figures 2006. Presentation 28 July 2006. Agenda 28 July 2006. Opening Highlights HY1/06 Key figures Production and sales volume CVG P&L, Balance Sheet, Cash Flow New Business Development CVG (NBD) Results and outlook European paper companies

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Crown Van Gelder N.V. Velsen

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  1. Crown Van Gelder N.V. Velsen Half year figures 2006 Presentation 28 July 2006

  2. Agenda 28 July 2006 • Opening • Highlights HY1/06 • Key figures • Production and sales volume CVG • P&L, Balance Sheet, Cash Flow • New Business Development CVG (NBD) • Results and outlook European paper companies • Development of European capacities • Assumptions and outlook CVG for HY2/06 • Questions

  3. Highlights HY1/06 • Net result EUR 0.9 million, down 80% on 2005 • Sales volume decrease of 4.3% to 101,300 ton • Production volume +1.2% to 103,500 ton • Net profit hit by cost pushes on raw materials and energy • Selling price increases insufficient to offset higher input costs, due to overcapacity • Strong emphasis on cost reductions and investment level • NBD volumes develop in line with expectations

  4. Key figures 2001-2006

  5. Production and Sales Volume CVG Geographical spread 10% 14% Outside Europe Netherlands 6% Other EU 20% France 15% Belgium/Luxembourg 22% 13% Germany United Kingdom

  6. Orderintake Cepifine Woodfree Uncoated

  7. WF Uncoated Mill Stocks and Deliveries

  8. WF Uncoated Order Stocks and Deliveries

  9. NBSK Price Development Voorwaarden: termijncontracten CIF West-Europese havens Bron: FOEX/PIX-index

  10. Hardwood Price Development Voorwaarden: termijncontracten CIF West-Europese havens Bron: FOEX/PIX-index

  11. Consolidated Profit and Loss Account (EUR x 1.000) (unaudited)

  12. Result Analysis 2006 vs. 2005

  13. Result analysis 2006 vs 2005

  14. Consolidated Balance Sheet (before profit appropriation) (EUR x 1.000) (unaudited)

  15. Cash Flow Statement (EUR x 1.000) (unaudited)

  16. New Business Development

  17. NBD

  18. Future of Direct Mail 1/2 • Direct mail remains a growth sector of marketing expenditure, leading to continued strong demand for direct mail print • Expenditure by advertisers on direct mail in Western Europe will increase by 18.9% between 2004 and 2009 to € 40 billion • Digital print for direct mail will be the fastest-growing process between 2004 and 2009 from € 5,6 billion up to € 16,8 billion • Advertisers will continue to increase their spend on direct mail (next sheet). The major threat to budgets comes from the rise of digital marketing, especially because of its low cost base and immediacy • The rise in use of digital print for direct mail will fuel increased demand for paper types that can be machined using this process • Uncoated woodfree will experience the strongest increase, followed by coated mechanical and woodfree grades

  19. Future of Direct Mail 2/2 Source: Pira International Ltd.

  20. Results and outlook European paper companies

  21. StoraEnso HY-results • Net profit of EUR 267 mln (HY1/05: EUR 51 mln/due to strike) • Operating profit Fine Paper division EUR 99 mln (HY1/05: EUR 35 mln) • Sales volume Fine Paper (1.9 mln ton) +10% over last year • Strong recovery ROOC Fine Paper from 2.4% to 7.4% in 2006 • Slight paper price increase in 2006 in WFU, stable in coated segment

  22. UPM-Kymmene HY-results • Net profit decreased from EUR 227 mln HY1/05 to loss of EUR 4 mln in HY1/06 • Non-recurring items EUR -148 mln (HY1/05: gain of EUR 101 mln) • Operating profit Fine and Speciality Papers EUR 14 mln (HY1/05: EUR 29 mln) • Sales volume 1,765 mln ton (HY1/05: 1,404 mln ton) • Selling prices -2% lower than same period of 2005 • Operating profit excluding non-recurring items 3.9% / net sales (HY1/05: 2.8%)

  23. M-Real HY-results • Net result of HY1/06 EUR -100 mln (HY1/05: EUR -45 mln) • Non-recurring items EUR -54 mln (HY1/05: EUR 66 mln) • Operating profit Office Paper division EUR -13 mln (HY1/05: EUR -5 mln) • Sales volume down by -5.6% to 517 kton (HY1/05: 538 kton) • Selling prices up by 2.3% • ROCE Office Paper division, excl. non-recurring -0.7% (HY1/05: 0.9%)

  24. Outlook • StoraEnso Board: “Good market demand for fine paper is anticipated in the third quarter. The general price outlook is stable. Price increases have been announced in Europe for uncoated fine paper and in North-America for coated fine paper reels.” • UPM-Kymmene Board: “Demand for papers in second half of this year is predicted to continue to be good. Average paper prices are forecast to be somewhat higher than last year.”

  25. Outlook • M-Real Board: “In third quarter the demand for the main products is expected to improve to some extend….. • M-Real has announced price increases for all its main paper grades and they will enter into force as of the beginning of September. Despite the result improving measures in progress, the year-end result before taxes will remain negative.”

  26. ROCE Comparison CVG and Peer Group

  27. PM4 overhaul for label paper production PM8 overhaul: increase release base PM1/ - 95K tonnes Stora Enso Oulo Stora Enso Veitsuluoto IP International paper (- 45.000 t WFU) IP Svetogorsk M-Real (- 120.000 t WFU / - 240 employees) Stora Enso Varkaus M-Real Husum UPM Jamsankoski M-Real Kangas Stora Enso (-370.000 tonnes / - 2.500 employees) UPM Tervasaari M-Real Wifsta Warf Ahlstrom UPM (-700.000 tonnes / - 2.500 employees) UPM Voikkaa Sold to financial investor UPM Kymi SE Grycksbo Mondi/Neusiedler (-200.000 tonnes) Klippan Sappi (need to savings of € 175 mio p/a / - 100 empl.) Closed down / bankrupt Mondi Syktyvhar Possible mill and PM closures overig IP Taite A. Wiggins Closed down Stora Enso Nymolla Under review IP Kwidzyn SE Uetersen UPM Nordland CVG Rebuild Arctic Kostryn M-Real UK Paper Drewsen SE BPF Sappi Nash Sappi Maastricht Closed down M-Real Zanders Reorganisation (Stockstadt) M-Real Alizey M-Real PWA Reorganisation SE Corbehem Mondi Ruzomberok M-Real PSM Kohler IP Maresquel Due to be closed down, however still ‘alive’ MondiYbbstal/Kematen MondiSzolnok PM3 / PM4 – 250K tonnes Ziegler Mondi Dunaujvaros Closed down Ahlstrom Sibille Cham Tenero Sold Goricane Pap. de Cran IP Saillat Pont de Claix Tenero Zicunaga Receivership Will be closed down Start-up new 500K tpa WFU PM planned 2H08 Soporcel Sold to Trierenberg

  28. Outlook Nordea Source: Nordea

  29. Outlook Deutsche Bank

  30. Assumptions and outlook for 2006 • Assumptions • Further cost pushes from raw materials not unlikely • Selling price increases from Q4 onwards • Further capacity reduction 2006/2007 • Outlook • Production and sales volumes around 210,000 ton • Outlook net result 2006 yet uncertain

  31. Meeting 28 July 2006 Questions

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