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INVESTOR PRESENTATION Third Quarter 2020

INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

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Page 1: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

INVESTOR

PRESENTATIONThird Quarter 2020

Page 2: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

2

USE OF FORWARD LOOKING STATEMENTS NON-GAAP FINANCIAL INFORMATION

This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created

by, Section 21E of the Securities Exchange Act of 1934, as amended, with respect to the business, strategy and plans

of the Company and its expectations relating to future financial condition and performance. Readers are cautioned not

to place undue reliance on these forward-looking statements and any such forward-looking statements are qualified in

their entirety by reference to the following cautionary statements. All forward-looking statements speak only as of the

date of this presentation and are based on current expectations and involve a number of assumptions, risks and

uncertainties that could cause the actual results to differ materially from such forward-looking statements. Words such

as “believes”, “anticipates”, ”estimates”, “expects”, “intends”, “aims”, “potential”, “will”, “would”, “could”, “may”,

“considered”, “likely”, and variations of these words and similar future or conditional expressions are intended to

identify forward-looking statements but are not the exclusive means of identifying such statements. Such forward-

looking statements are only predictions and involve known and unknown risks and uncertainties. The Company does

not undertake to and specifically disclaims any obligation to publicly release the results of any revisions to these

forward-looking statements that may be made to reflect future events or circumstances after the date of such

statement or to reflect the occurrence of anticipated or unanticipated events. These factors include such risks and

uncertainties detailed in the Company’s periodic public filings with the SEC, including but not limited to, those

discussed under the “Risk Factors” section in the Company’s Form 10-K for the fiscal year ended December 31, 2019

and Form 10-Q for the quarter ended June 30, 2020, and other filings with the SEC and in other investor

communications from the Company from time to time.

This document contains non-GAAP financial measures, including non-

GAAP adjusted income from operations, non-GAAP adjusted operating

margin, non-GAAP effective tax rate, non-GAAP adjusted diluted EPS

and net organic sales growth rate. The Company believes that these

non-GAAP measures, when presented in conjunction with comparable

GAAP measures, provide useful information about its operating results

and enhance the overall ability to assess the Company’s financial

performance. Internally, the company uses this non-GAAP information

as an indicator of business performance, and evaluates management’s

effectiveness with specific reference to these indicators. These

measures should be considered in addition to, not a substitute for, or

superior to, measures of financial performance prepared in accordance

with GAAP. A reconciliation of GAAP to non-GAAP financial measures

can be found in our periodic filings with the Securities and Exchange

Commission and in the investors section of our website, www.rrd.com.

SAFE HARBOR & NON-GAAP

Page 3: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

3

COMPANY REPRESENTATIVES

Dan KnottsPresident & CEO

RRD

Terry PetersonEVP, CFO

RRD

Johan NystedtSVP, Finance

RRD

Page 4: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

4

LEADING PROVIDER

OF MARKETING &

BUSINESS

COMMUNICATIONS

Page 5: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

5

RRD AT A GLANCE

Business Services80%

Marketing Solutions20%

$6.3 billion2019 Net Sales

50,000+Clients across virtually all market segments›

As of December 31, 2019

36,400Employees worldwide›

261Locations›

29Countries›

Providing integrated end-to-end customer communications services

Page 6: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

6

RRD – A MARKETING AND BUSINESS COMMUNICATIONS COMPANY

RRD MARKETING

SOLUTIONS

Empowering brands

to optimize customer

engagement with

maximum return

Insight

Interaction

Inspiration

Business

connections

Product

connections

Business

processes

CLIENT

COMPANY

CLIENT

CUSTOMERS

RRD BUSINESS

SERVICES

Enabling companies

to service and strengthen

customer relationships

with maximum efficiency

Page 7: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

7

RRD MARKETING SOLUTIONS

Data Science

Advanced AnalyticsDirect Marketing

Creative Services

Content Management

In-Store

Marketing

Digital Print and Fulfillment

Insight

Inspiration

Interaction

Empowering brands

to optimize customer

engagement with

maximum return

Audience Modeling

Loyalty Programs

Innovative offerings to help our clients optimize engagement with their customers

Page 8: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

8

RRD BUSINESS SERVICES

Commercial PrintBusiness

Forms

Packaging Labels

Supply Chain

ManagementLogistics

Customer

Communications

Business Process

OutsourcingBusiness

Processes

Business

Connections

Product

Connections

Enabling companies

to service customers

and strengthen

relationships with

maximum efficiency

Comprehensive capabilities to help our clients service, inform and transact with their customers

Page 9: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

9

EXTENSIVE AND DIVERSE CLIENT BASE

“Our thanks to RRD for not only making the programs run as intended, but for helping {us} come up with solutions to potential production challenges based on our unique requirements.”

- Top Ten Banking Institution

“Our communications are the confirmation of our promises to our customers and we have to get them right. We have been very good at managing our communications with our customers, but we are expanding our partnership with RR Donnelley to make us even better.”

- Top Financial Services Firm

“We want to work with the leader in the industry to stay on the forefront of this rapidly changing and complex environment.Communications are critical to our success and

RRD can help us with amore holistic approach to how we manage the full

spectrum of our communications efforts.”

- Top Healthcare Firm

“I have been in the Contract Management/Strategic Sourcing arena for manyyears. You are definitely in the top 1% of vendors with whom I’ve engaged. You are responsive, professional, thorough, and a delight to work with.”

- Top Retail Firm

50,000+Global

Clients

94%Fortune 100

86%Fortune 500

74%Fortune 1000

With our differentiated multichannel offerings and comprehensive portfolio of capabilities,

RRD serves clients from Main Street to the Fortune100

Page 10: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

10

15%

85%

LIMITED CLIENT CONCENTRATION ACROSS BROAD RANGE OF INDUSTRIES

Estimated Revenue by Industry (2019) Revenue Concentration – Top 10 Clients (2019)

Financial

Retail

Services

Manufacturing –

Consumer Goods

Healthcare

Manufacturing –

Other

Publishing

Other

Top 10

Other

Note: Based on data covering $5.7bn out of $6.3bn in total 2019 sales.

Consumer

Technology

Company15%

14%

13%

11%

11%

8%

4%

24%

Page 11: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

11

RRD STRATEGIC PRIORITIES REMAIN THE SAME

Drive Revenue

Strengthen Core

Improve

Financial Flexibility

• Realigned capacity to reflect changes in client volumes

• Executed aggressive actions to reduce cost structure, including $47.7

million reduction in adjusted SG&A expense in the quarter

• Captured new sales opportunities as a result of the pandemic

• Introduced new products and services to meet the evolving needs of clients

• Completed three debt exchanges, repaid the 2020 Senior Notes and

repurchased additional debt due in 2021 during the quarter

• Aggregated maturities for Senior Notes and Debentures due in 2020 to 2024

now total $394 million, down $628 million from the beginning of the year

• Sold Logistics Courier business and three U.S. facilities year to date

Strengthen Core• Realigned capacity to reflect changes in client volumes

• Executed aggressive actions to reduce cost structure, including $47.7

million reduction in adjusted SG&A expense in the quarter

Drive Revenue• Captured new sales opportunities as a result of the pandemic

• Introduced new products and services to meet the evolving needs of clients

Firmly on our strategic path to advance RRD as a leading provider of marketing and business communications

Page 12: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

12

WINNING THROUGH

INTEGRATED

SOLUTIONS

Page 13: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

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BUILDING FOR THE FUTURE BY INTEGRATING PRINT AND DIGITAL

Comprehensive portfolio of print and

marketing products and services

Leading provider of integrated solutions

to broad and diverse set of clients

Potential to further drive client spend

across entire RRD portfolio by

enhancing digital and data capabilities

Opportunities to extend scale in existing

capabilities and “in source” additional

work

OBSERVATIONS

RRD

ADDRESSABLE

PRINT MARKET

$112B(1)

DIGITAL

EXECUTION

DATA

ANALYTICS

Integrated print &

digital solutions

(1) Per 2017 Bain analysis.

Page 14: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

14

RRD VALUE PROPOSITION

Data Analytics

Postage & Mailing

Logistics/Freight

Warehousing & Fulfillment

Campaign Management

Multichannel Output

Design Consultation

Print Production

Specification Management

Vendor Management

Premedia Services

Translation

Creative Design

Photography

List Management

Brand Management

Sales

Ops

Stores

HR Mktg

Data Analytics

Postage & Mailing

Logistics/Freight

Warehousing & Fulfillment

Campaign Management

Multichannel Output

Design Consultation

Print Production

Specification Management

Vendor Management

Premedia Services

Translation

Creative Design

Photography

List Management

Brand Management

Comprehensive solutions to reduce complexity, drive efficiency, and enhance effectiveness

Page 15: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

15

EXPANDING SCOPE OF CLIENT ENGAGEMENTS

Value to clients

Nu

mb

er

of p

rovid

ers

Few

Many

Low High

• Fragmented print procurement

• Focus on print costs

• In-house print/document management

• Simple transactional relationships

Bid & buy processes

Total cost of ownership focus

• Integrated communications offering with workflow

tools and content management capabilities

• Desire to drive multichannel communications

effectiveness

• Centrally managed, consolidated print procurement

• Focus on document management costs, ROI-based decisions

• Outsourcing non-core processes

• Complex contractual relationships

Bundled offerings

Desire for more integrated solutions

RRD has the differentiated ability to support the expanding needs of our clients

Page 16: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

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$1,383$1,572

$2,266

$4,919

1 Year 2 Years 3 Years 4+ Years

Average Revenue Per Clients ($ in Thousands) – Top 1,000 Clients, Ex. Logistics (2019)

2.31 5.08 Memo: Revenue-

Weighted Avg. # of

Products

LEVERAGING PORTFOLIO TO CAPTURE GREATER SHARE OF CLIENT SPEND

Client Tenure -Top 1,000 by 2019 Sales (ex. Logistics)

Memo: # of Clients

17 41 113 829

Page 17: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

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$6

$28

$72

$194

1 Year 2 Years 3 Years 4+ Years

Average Revenue Per Clients ($ in Thousands) – All Clients, Ex. Logistics (2019)

1.42 4.83Memo: Revenue-

Weighted Avg. # of

Products

Opportunity to expand relationship with new clients

(17,621 clients, or 44% of all clients (ex. logistics)

MEANINGFUL OPPORTUNITY TO FURTHER EXPAND CLIENT RELATIONSHIPS

Memo: # of Clients

9,252 3,616 4,753 22,566

Client Tenure - All (ex. Logistics)

Page 18: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

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INDUSTRY

DYNAMICS

Page 19: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

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RRD COMPETITIVE LANDSCAPE

Products

Marketing Solutions Business Services

Services

Agencies

Local Printers

Direct

Marketing

In-store

Marketing &

Displays

Print

Print

Labels

Forms

Customer

Statements

Packaging

Local Printers

Regional Dealers

Logistics

Sourcing

BPO

Supply Chain China ODM’s

Data Analytics

and Insights

Creative

Services

Content

Management

Email Services Pierre

Digital Marketing

Agencies

Internal Creative

Groups

Various Ad

Agencies

MYS

Page 20: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

20

COVID-19

UPDATE

Page 21: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

21

• Protecting the health and safety of our employees, clients, partners and

suppliers

COVID-19 OPERATING PRIORITIES

RRD's COVID-19 Operating Plan | Key Focus Areas

Protecting

the Health and

Safety of

Our Employees

Maintaining

Operational

Continuity

Managing

Business

Performance

Page 22: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

22

PROTECTING EMPLOYEE HEALTH AND SAFETY

Actions to

Protect

Employee

Safety

Flexible Working

Policies

International and

Domestic Travel

Restrictions

Physical

Distancing

Cross-Functional

COVID-19 Task Force

Personal Protective

Equipment

Hygiene Best

Practices

Case

Management

Page 23: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

23

29Countries

250+Facilities

35,000+Employees

50,000+Clients

• Realigning capacity and tightly

managing costs to reflect

changes in client volumes

• Leveraging extensive

capabilities to capture new client

opportunities in challenging

business environment

• Aligning with supply chain

partners to prevent operational

and delivery disruptions

MAINTAINING OPERATIONAL CONTINUITY

Leveraging our global footprint to honor our more than 150-year legacy of meeting client commitments

KEY AREAS

OF FOCUS

Page 24: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

24

• Taking proactive actions to maintain financial flexibility during uncertain times

MANAGING BUSINESS PERFORMANCE

Closing production

facilities

Shifting production

among facilities to

lower costs

Suspending 2020

merit increases at

all levels of Company

Executing employee

furlough program

Delaying capital

projects and reducing

discretionary spend

Increasing borrowings

under credit facility

Suspending

quarterly dividend

Accelerating cost

reduction initiatives

Key Business

Actions

Page 25: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

25

FINANCIAL

OVERVIEW

Page 26: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

26

FINANCIAL TRENDS

Non-GAAP Adjusted EPS1

-$0.06 -$0.03

$0.31

$0.44

$0.33

-$0.09

Q1 Q2 Q3 Q4 Q1 Q2

$36.4$39.2

$77.0

$93.8

$55.1

$25.1

Q1 Q2 Q3 Q4 Q1 Q2

Non-GAAP Adjusted Income from

Operations1 ($ In millions)

$267.7

$243.8 $246.4

2017 2018 2019

$1.20

$0.70 $0.66

2017 2018 2019

Annual

Quarterly

(1) A reconciliation of GAAP to non-GAAP financial measures can be found in our periodic filings with the SEC and in the investors section of our website, www.rrd.com.

Organic Sales Growth Rates1

-1.3%

0.0%

1.1%

-2.3%

2016 2017 2018 2019

2019 2020 2019 2020

-3.3% -2.5%-0.4%

-3.0%-1.3%

-17.1%

Q1 Q2 Q3 Q4 Q1 Q2

2019 2020

Page 27: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

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YEAR TO DATE JUNE 2020 OPERATING PERFORMANCE

($ In millions) Q2 2020 YTD Q2 2019 YTD

Better/(Worse)Organic Sales

Change(1)

$ %

Net Sales $2,571.7 $3,030.6 ($458.9) (15.1%) (9.1%)

Business Services $2,033.9 $2,467.5 ($433.6) (17.6%) (10.3%)

Marketing Solutions $537.8 $563.1 ($25.3) (4.5%) (4.5%)

Adjusted Income from Operations(1)$80.2 $75.6 $4.6 6.1%

Business Services $77.0 $97.2 ($20.2) (20.8%)

Marketing Solutions $25.8 $15.2 $10.6 69.7%

Corporate ($22.6) ($36.8) $14.2 (38.6%)

Adjusted Operating Margins(1)3.1% 2.5% 60 bps

Business Services 3.8% 3.9% (10 bps)

Marketing Solutions 4.8% 2.7% 210 bps

(1) A reconciliation of GAAP to non-GAAP financial measures can be found in our periodic filings with the SEC and in the investors section of our website, www.rrd.com.

Page 28: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

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YEAR TO DATE JUNE 2020 NET SALES PERFORMANCE (AS REPORTED)($ In millions)

Marketing SolutionsBusiness Services(1) Consolidated(1)

YTD 2020 YOY Change

CommercialPrint(2)

$638.9 (23.6%)

Logistics(2)

$350.4 (14.5%)

Packaging $265.5 (12.1%)

Labels(2)

$235.3 (2.0%)

Statements(2)

$228.8 (19.2%)

Supply Chain Management $134.6 (11.8%)

Forms(2)

$101.0 (16.9%)

Business Process Outsourcing(2)

$79.4 (35.1%)

Total - Reported(1)

$2,033.9 (17.6%)

Total - Organic(3)

(10.3%)

YTD 2020 YOY Change

Direct Marketing $290.8 1.9%

Digital Print & Fulfillment $198.2 (11.8%)

Digital & Creative Solutions $48.8 (7.8%)

Total - Reported $537.8 (4.5%)

Total - Organic(3)

(4.5%)

YTD 2020 YOY Change

US(2)

$1,989.5 (10.3%)

Asia $352.6 (17.3%)

Europe(2)

$112.4 (53.3%)

Other $117.2 (19.0%)

Total - Reported(1)

$2,571.7 (15.1%)

Total - Organic(3)

(9.1%)

By Products and ServicesBy Products and Services By Geography

(1) Individual products, services and geographical categories YOY change are as reported and do not reflect the impact of business dispositions and FX.

(2) Products and service categories negatively impacted for business dispositions and/or significant closures (Commercial Print, Logistics, Statements, Labels, Forms and BPO).

(3) A reconciliation of GAAP to non-GAAP financial measures can be found in our periodic filings with the SEC and in the investors section of our website, www.rrd.com..

31%

17% 13%

12%

11%

7% 5%

4% Commercial Print

Logistics

Packaging

Labels

Statements

Supply Chain Mgmt

Forms

BPO

54%

37%

9%

Direct Marketing

Digital Print & Fulfillment

Digital & Creative

77%

14%

4% 5%

US

Asia

Europe

Other

$2,033.9$537.8 $2,571.7

Page 29: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

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BALANCE SHEET AND CASH FLOW – DEBT PAYDOWN TOP PRIORITY

$274.3$220.5

$144.7$190.8

$450.7

$341.9

Q1 Q2 Q3 Q4 Q1 Q2

(1)

Cash & Cash Equivalents Total Debt

-$130.0

$12.9 $29.3

$227.1

-$79.6

$35.4

Q1 Q2 Q3 Q4 Q1 Q2

Operating Cash Flow Capital Expenditures

$37.4 $39.0

$31.0 $31.4

$17.7 $20.4

Q1 Q2 Q3 Q4 Q1 Q2

$2,171.8 $2,121.4 $2,029.1$1,818.4

$2,168.4$2,035.9

Q1 Q2 Q3 Q4 Q1 Q2

Total Debt

(1) During Q1 2020, RRD increased its cash balances and total debt through borrowings under the revolving credit facility as a proactive measure in response to COVID-19 to preserve financial flexibility

2019 2020

2019 2020

2019 2020

2019 2020

(1)

Page 30: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

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CURRENT DEBT MATURITY PROFILE(1)

($ In millions)

Recent exchanges, repurchases and repayments have reduced 2020 to 2024 Senior Notes and Debenture balances by $628 million

(1) Reflects outstanding principal balance

$66$167

$60

$140

$291 $298$158

$69

$42

$758$545

$0

$200

$400

$600

$800

$1,000

2020 2021 2022 2023 2024 2027 2029 2031

Debt Maturities - December 31, 2019

$94

$56$108 $75 $62

$245 $104

$318

$54

$410

$390

$542

$0

$200

$400

$600

$800

$1,000

2020 2021 2022 2023 2024 2027 2029 2031

Debt Maturities - June 30, 2020

7.625% Notes due June 15, 2020 7.875% Notes due March 15, 2021 8.875% Debentures due April 15, 2021

7.000% Notes due February 15, 2022 6.500% Notes due November 15, 2023 6.000% Notes due April 1, 2024

8.250% Notes due July 1, 2027 6.625% Debentures due April 15, 2029 8.500% Notes due April 15, 2029

8.820% Debentures due April 15, 2031 ABL Revolving Credit Facility ($800 mill ion) - Drawn ABL Revolving Credi t Facility ($800 mill ion) - Undrawn

Term Loan B due January 15, 2024 (annual payments of $5.5 million)

~ ~ ~

~ ~ ~

Page 31: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

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CUMULATIVE EFFORTS TO IMPROVE BALANCE SHEET FLEXIBILITY

Total liquidity of $460 million as of June 30, 2020

• Planned sale of Shenzhen, China

printing facility for approximately $250

million in 2022; $98.2 million in deposits

collected through June 30, 2020

• Since January 2017, sold ten facilities

totaling approximately $30 million,

including three facilities sold in 2020 for

$3.3 million

• Sold investment in LSC in 2017 for

$121.4 million

• Completed non-cash debt to equity

exchange of investment in DFS in

2017 for $111.6 million

• Sold other investments in 2017 and

2018 for approximately $13 million

Sale of Properties &

InvestmentsBusiness Dispositions

• Sold Logistics Courier business in

March 2020 for $9.7 million

• Exited Chile operations in February

2020

• Sold GDS business in October 2019

for $53.7 million

• Sold R&D business in May

2019 for $11.6 million

• Sold Print Logistics business in July

2018 for $43.9 million

• Operating cash flow improved $72.9

million from prior year for the six

months ended June 30, 2020; capital

expenditures decreased $38.3 million

from prior year for the same period

• Reduced annual interest expense $48.1

million from 2016 to 2019; further

reductions expected in 2020; executed

interest rate swaps to lock in favorable

rates on term loan

• Improved working capital

• Expect to repatriate approximately $50

million of international cash in 2020

• Total repatriation in 2019 was

$327 million

Cash Flow

Page 32: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

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APPENDIX

Page 33: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

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FULL YEAR 2019 OPERATING PERFORMANCE

($ In millions) FY 2019 FY 2018Better/(Worse)

Organic Sales

Change1

$ %

Net Sales $6,276.2 $6,800.2 ($524.0) (7.7%) (2.3%)

Business Services $4,995.7 $5,619.1 ($623.4) (11.1%) (4.6%)

Marketing Solutions $1,280.5 $1,181.1 $99.4 8.4% 8.4%

Adjusted Income from Operations1 $246.4 $243.8 $2.6 1.1%

Business Services $254.0 $264.4 ($10.4) (3.9%)

Marketing Solutions $68.6 $58.5 $10.1 17.3%

Corporate ($76.2) ($79.1) $2.9 3.7%

Adjusted Operating Margins1 3.9% 3.6% 34 bps

Business Services 5.1% 4.7% 40 bps

Marketing Solutions 5.4% 5.0% 40 bps

Interest Expense $150.6 $168.3 $17.7 10.5%

Adjusted earnings per share1 $0.66 $0.70 ($0.04) (5.7%)

(1) A reconciliation of GAAP to non-GAAP financial measures can be found in our periodic filings with the SEC and in the investors section of our website, www.rrd.com.

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34

FULL YEAR 2019 NET SALES PERFORMANCE (AS REPORTED)($ In millions)

Marketing SolutionsBusiness Services(1) Consolidated(1)

FY 2019 YOY Change

CommercialPrint $1,694.5 (12.5%)

Logistics $814.6 (26.6%)

Packaging $668.5 (0.5%)

Statements $545.4 (6.6%)

Labels $497.4 3.3%

Supply Chain Management $298.7 (6.9%)

Forms $244.3 (8.7%)

Business Process Outsourcing $232.3 (6.4%)

Total - Reported(1)

$4,995.7 (11.1%)

Total - Organic(2)

(4.6%)

FY 2019 YOY Change

Direct Marketing $676.7 16.4%

Digital Print & Fulfillment $492.1 3.7%

Digital & Creative Solutions $111.7 (10.7%)

Total - Reported $1,280.5 8.4%

Total - Organic(2)

8.4%

FY 2019 YOY Change

US $4,654.9 (6.7%)

Asia $907.8 (6.3%)

Europe $435.2 (10.4%)

Other $278.3 (21.7%)

Total - Reported(1)

$6,276.2 (7.7%)

Total - Organic(2)

(2.3%)

By Products and ServicesBy Products and Services By Geography

(1) Individual products, services and geographical categories YOY change are as reported and do not reflect the impact of business dispositions and FX.

(2) A reconciliation of GAAP to non-GAAP financial measures can be found in our periodic filings with the SEC and in the investors section of our website, www.rrd.com..

34%

16% 13%

11%

10%

6% 5%

5% Commercial Print

Logistics

Packaging

Statements

Labels

Supply Chain Mgmt

Forms

BPO

$4,995.753%

38%

9%

Direct Marketing

Digital Print & Fulfillment

Digital & Creative Solutions$1,280.5

74%

15%

7% 4%

US

Asia

Europe

Other

$6,276.2

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35

COMPREHENSIVE PORTFOLIO OF KEY PRODUCTS AND SERVICES

Comprehensive portfolio of capabilities

utilized for multichannel solutions or

single points of entry

Statements

Commercial

PrintForms LabelsPackaging

Digital

Print & Fulfillment

Direct Marketing

Logistics Supply Chain ManagementDigital & Creative Solutions

Business Process Outsourcing

Marketing Solutions Business Services

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36

RRD MARKETING SOLUTIONS – DIRECT MARKETING CLIENT EXAMPLE

Footwear Co was looking

to transform its business

and sought a partner that

could provide expertise in

targeted customer

communication strategies

Footwear Co

Data analyzed to calculate customer’s lifetime

value and identify cross-sell opportunities using

market basket analysis

Customer’s activities monitored and

personalized “we miss you” email with

special offer triggered if loyalty lapses

Email and mailing address captured

following purchase at retail store;

direct mail triggered if emails go unopened

High-value customers invited to

exclusive Footwear Co event and

encouraged to opt in to SMS and social media

• Increased marketing ROI for Footwear Co

• Dynamic customer profiles provide insight and strategic direction

• Predictive model identifies likely customer purchases and optimizes mktg spend

Results

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37

RRD BUSINESS SERVICES – BUNDLED PACKAGING/LABELS/COMMERCIAL

CLIENT EXAMPLE

Pharma Co is revolutionizing

its approach to supply chain

management and sought

a partner with expertise

in the production of highly

regulated packaging and labels

Pharmaceutical Co

RRD builds out a cGMP compliant network

of print facilities to provide just-in-time serialized

products to final assembly sites

Client experiences improvements in

overall cost of managing supply chain

Annual use data for Packaging

& Labels is captured by RRD

RRD designs and manufactures a security

label that minimizes the risk of counterfeit

product and tampering

• 100% up-time at Client Assembly Facilities

• All products standardized and compliant with government standards

• Counterfeit production reduced in the marketplace

Results

Page 38: INVESTOR PRESENTATION · 2020. 7. 29. · This presentation contains “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E

38

EXPERIENCED AND DIVERSE MANAGEMENT TEAM

Proven team with deep expertise in executive leadership, global sales and operations, customer service and technology

Years with

RRD

Years

Experience

Past

Experience

Dan Knotts Chief Executive Officer 30+ 30+

Terry Peterson Chief Financial Officer 4 30+

Ken O'Brien Chief Information Officer 25 30+

John Pecaric President, Business Services 30+ 30+

Glynn Perry EVP, Domestic Operations and Chief Supply Chain Officer 30+ 30+

Doug Ryan President, Marketing Solutions 2 26

Elif Sagsen-Ercel EVP, Chief Strategy Officer 2 20

Deborah Steiner General Counsel 7 19