Strategic Alternatives Discussion

R.R. Donnelley & Sons Company

Team SevenHeather Jiang, Bryan Koch,, Jake Mattison, Austin Pritchett, Steve Tabor

Strictly Private and Confidential

May 4, 2015

Table of Contents

I. RR Donnelley Strategic Overview

II. Industry Overview

III. Potential U.S. M&A Candidates

IV. Proposal and Strategic Rationale

V. Transaction Rationale and Summary

VI. St Ives Group Overview

VII. Financial Highlights

VIII. St Ives Business Strategy

IX. Valuation – Accretion – Comps

Appendix

A. Consolidated Pro-Forma Financials

B. Comps

1

2

Summary Financial Performance (1)

Source: Company Filings, Bloomberg

(1) Bloomberg, EBITDA is adjusted for 2012 Impairment Charge

RR Donnelley Strategic Overview

Leverage Overview (1)

2.62.4

4.34.1

3.33.5 3.7

3.43.9

3.6

1.7x 1.5x2.3x 2.1x

3.1x 2.8x

5.2x

2.8x 2.8x 3.1x

11.8x

10.2x

7.7x 7.9x

3.8x4.7x

2.4x

4.6x3.7x 3.4x

0.0

1.0

2.0

3.0

4.0

5.0

0.0x

3.0x

6.0x

9.0x

12.0x

15.0x

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Th

ou

san

ds

Total Debt Net Debt/EBITDA EBITDA to Interest Expense

$Bn

11.6

9.9 10.010.6 10.2 10.5

11.6

1.80.9 1.1 1.3 1.2 1.0 1.0

15.4%

9.4%10.9%

12.1% 12.0%

9.7%8.5%

0%

4%

8%

12%

16%

20%

0.0

3.0

6.0

9.0

12.0

15.0

2008 2009 2010 2011 2012 2013 2014

Revenue EBITDA EBITDA Margin (T12M)

$Bn

Date Target Name Value Type EV/EBITDA Status

1/27/2015 Courier Corp $293.9 Cash or Stk 8.0x Pending

2/27/2014 Multicorpora R&D Inc 5.5 Cash - Done

1/6/2014 Operations of Esselte 96.5 Cash and Stk - Done

10/24/2013 Consolidated Graphics 690.8 Cash and Stk 6.1x Done

5/22/2012 EDGAR Online Inc 36.5 Cash - Done

2/23/2010 RR Donnelley Financial 451.4 Cash 9.8x Done

5/13/2009 Quad/Graphics Canada $1,532.0 Cash and Stk - Term.

Average $443.8 8.0x

RR Donnelley (“RRD”), is the leading North American commercial

printing and information services company. However, RRD must adapt to

the changing environment by pivoting towards data analytics, content

optimization, and multi-channel marketing capabilities

EBITDA margins have steadily declined over the years and currently

stand at a multi-year low 8.5%

Given RRD’s target leverage ratio of 2.25x – 2.75x on a long term

basis, an extremely large M&A transaction would be unsuitable

However, RRD can utilize the $1.3B credit facility or utilize stock to

fund a modest transformative transaction

Our team has extensive experience with multinational transactions and

prior M&A experience in the Media, Marketing and Print space. We have

identified an ideal candidate that operates in data, content optimization,

book publishing and multi channel marketing

In 2011, this U.K. firm undertook a radical transformation to go from

commercial printing to multi-channel marketer

We believe the employees, business lines, and client connections of this

firm would be invaluable to RRD

U.K. takeover law is challenging, our U.K. takeover Managing Director

Bruce Horton-Gabell, has decades of experience

Small/Midsize M&A is a better fit

3

Key points within the industry

There has been mass movement within the media and advertising

industry towards digital

Print media and advertising expected to continue to shrink year over

year for the foreseeable future, to be replaced with digital

Big data and analytics in advertising has been growing tremendously

across the globe over the past four years and we expect that it will

continue to grow at a rapid rate

Spending on digital advertising has been growing at a steady pace as

companies are able to better understand how to target their customers

through data and analytics tools

Businesses continue to struggle with understanding and utilizing big

data. RR Donnelly is ideally positioned to capitalize on this shift from

traditional print to integrated data and marketing

Global Big Data Market SizeSpending on Digital Advertising

Allocation of Advertising Budgets

Source: eMarketer via Statistica, Wikibon via Statistica

Industry Overview

38.4% 38.3% 39.1% 38.8% 38.1%

17.1% 20.2% 22.3% 25.2% 28.2%

14.8% 13.1% 11.5% 10.2% 9.3%9.9% 9.6% 9.2% 8.8% 8.4%9.9% 9.6% 9.3% 8.9% 8.6%5.8% 5.2% 4.5% 4.0% 3.5%

0%

20%

40%

60%

80%

100%

2010 2011 2012 2013 2014

TV Digital Newspapers Magazines

Madio Directories Outdoor

104.6121.5

146.4

170.5

0

40

80

120

160

200

2012 2013 2014 2015

2.8 4.4 6.210.14.5

7.3

12.5

18.4

0

6

12

18

24

30

2011 2012 2013 2014

Services Other

$Bn

7.3

11.7

18.7

28.5

$Bn

4 Source: Bloomberg, Capital IQ

(1) LTM Gross and EBITDA Margins are latest FY for SIV

Potential U.S. M&A Candidates

Financial Data LTM Operating Statistics (1) Trading MultipleTotal

Enterprise

Value

Equity

Value

LTM Total

Revenue

LTM Net

Debt

Gross

Margin

EBITDA

Margin

EBIT

Margin

NI

Margin

TEV/Total

Revenues

LTM

TEV/

EBITDA

LTM

NTM TEV/Fwd

Total Revenue

Paycom Software 1,865.6 1,863.8 150.9 1.8 83.6% 14.6% 10.4% 3.7% 12.4x 84.9x 9.4x

Zendesk, Inc. 1,758.3 1,873.8 127.0 115.5 63.8% -46.9% -52.1% -53.0% 13.8x NM 9.3x

Box, Inc. 1,752.1 2,040.6 216.4 -288.6 78.2% -64.9% -76.7% -77.7% 8.1x NM 6.1x

Marketo, Inc. 1,153.7 1,251.0 163.7 -99.1 65.7% -31.9% -37.9% -36.6% 7.0x NM 5.1x

HubSpot, Inc. 1,138.2 1,261.7 115.9 -123.5 68.0% -40.4% -41.9% -41.6% 9.8x NM 7.0x

Constant Contact 706.1 885.2 343.2 -179.1 72.7% 11.8% 6.7% 4.9% 2.1x 18.9x 1.8x

Q2 Holdings, Inc. 676.3 764.6 79.1 -88.4 41.8% -18.9% -24.1% -24.8% 8.5x NM 6.4x

OPOWER, Inc. 384.4 509.0 128.4 -124.6 65.6% -29.7% -31.8% -32.5% 3.0x NM 2.6x

SciQuest, Inc. 312.6 440.0 102.5 -127.3 68.6% 4.6% -1.2% -0.4% 3.1x 60.7x 2.8x

Five9, Inc. 238.8 269.4 103.1 -30.6 47.0% -28.2% -34.5% -36.6% 2.3x NM 1.9x

Amber Road, Inc. 191.3 229.0 64.8 -37.8 57.6% -35.2% -39.8% -42.7% 3.0x NM 2.4x

Mean 925.2 1,035.2 145.0 -110.2 64.7% -24.1% -29.3% -30.6% 6.7x 54.9x 5.0x

Median 706.1 885.2 127.0 -115.5 65.0% -29.7% -34.5% -36.6% 7.0x 60.7x 5.1x

St Ives plc (LSE:SIV) 416.1 341.6 511.4 65.1 31% 15% 8.0% 1.3% 0.8x 5.2x 0.7x

Takeaway…Valuations are at an Extreme in the U.S.

Despite it’s focus on data analytics, Paycom Software’s business line concentrates on cloud-based human capital management (HCM) software

solutions, with minimum extension in either printing or marketing segments, posing challenges in integration and realizing synergies

HubSpot, Inc. provides a cloud-based inbound marketing and sales software platform for businesses globally, which fits into RRD’s transforming

strategy; when compared to SIV, acquiring HubSpot has several shortcomings:

– Acquiring HubSpot would require significant capital raising, either diluting current shareholder value or significantly increasing RRD leverage

– Extensive integration is required post-acquisition to improve HubSpot’s operation, postponing synergy realization

– 11% of FY2014 revenue was from outside of U.S., from Australia and Ireland only; lack of diversified geographic footprints and posts

challenge in integrating on a global platform

Constant Contact provides online marketing tools that are designed for small organizations worldwide which excludes printing or medical industries,

posing challenges to transferring industry knowledge

SciQuest’s cloud-based business solution focuses on internal optimization, such as spending management and contract lifecycle management, with no

business operation in marketing segment

In general, U.S. candidates demonstrate less favorable operating statistics and higher trading multiples, less favorable compared to SIV

5

Why This U.K. Company

Source: Company filings, Capital IQ

Proposal and Strategic Rationale

Strong market position fortified by

diversified product & service portfolios, but

margin remains flat in low growth industry

Steady cash generation from printing

business can be used to fund acquisitions

with higher growth and margin

Pursuing goal of 2.25x- 2.75x Leverage

due to low margins and high sensitivity to

macro economic environment

Relationships with Fortune 500 provide

access to knowledge and data which can

be utilized in data analytics and marketing

services, capturing the fast growing digital

advertising and big data market

U.K. based printing company successfully

entered marketing consultancy in 2011

Completed extensive restructuring activity

by divesting low margin printing divisions

and focused on becoming an integrated

communication company

Possess data marketing solution and

consultancy platforms and teams; and

provide a full cycle of marketing service; all

can be scaled up

Management successfully integrated

acquired businesses to deliver

collaboratively with established platform

both domestically and internationally

Without significantly raising leverage or

extending printing capacity, acquiring

SIV provides RRD with:

A successful business

transformation model that is

applicable to the RRD U.S. and global

business

An established full marketing service

platform that is readily restructurable

and scalable

An experienced management,

marketing and consulting team

Further fortified position in

commercial printing segment

Overlap in client base and SIV’s historical growth through acquisition

minimizes post-acquisition integration

Suitable candidates in U.S. are overvalued or require RRD to raise

significant amount of debt to fund a potential acquisition, SIV is a

manageable mid-sized acquisition target

Given its strong position in commercial printing in U.S., the international

market provides more space for growth and diversification; meanwhile, U.K.

market echoes with U.S. enough so the industry experience can be easily

transferred

Favorable tax treatment due to U.K. 21% rate. Should management wish

headquarters and non-fixed assets can move to the U.K. in a tax inversion

The current USD/GBP exchange rate provides for a favorable cross border

M&A environment

St Ives’ $419m in 2015E Marketing Sales will be valued at 3-6X: adding greater than $1bn in value to RRD

0.45

0.55

0.65

0.75

0.85

0.95

Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15

USD/EURO USD/GBP

UD $ / European Currency FX Rates

Equity Value (30% Premium) $447.4m

Enterprise Value: $519.3m

FY15E Revenue: $531.5m

FY15E EBITDA: $67.6m

FD Shares: 129.4M

EV/ 2015E Revenue: 0.7x

EV/ 2015E EBITDA: 4.9x

$387

$535

$304

$465

$450

$405

$250 $300 $350 $400 $450 $500 $550 $600 $650

TV/LTM Sales

TV/LTM EBITDA

EV/2015E Sales

EV/LTM EBITDA

EV/2015E EBITDA

DCF

6

Deal Headlines

Transaction Multiples

LTM Stock Performance

Transaction Rationale and Summary

Deal Value: $519.3m

Deal Announced: 5/15/15

Nature of Bid: Friendly

Premium: 30%

Price Per Share: $3.46

Consideration:

100% Stock Floating Exchange Ratio

0.1855 exchange ratio at Announce

Accretion 5.9% FY15 5.0% FY16

Estimated Synergies: $25m cost synergies

With a lack of suitably valued U.S. targets operating in data, ecommerce and

direct marketing, SIV provides RRD the opportunity to enter into a fast

growing and premium margin business. Wall Street currently places extreme

value on business operating in the marketing and big data space

With $419m in 2015E sales derived from data and marketing, Wall Street

will place a value of 3x - 6x sales on this line of business

With access to a deeper pool of capital, the SIV business units can

meaningfully accelerate top line revenue growth, this translates to a new

growth story to show analyst

EU markets have traded down based on EU debt and currency concerns,

now is an ideal time to diversify internationally and get in at the bottom of the

cycle

The U.S. Dollar is currently strong vs. the GBP, making this an even more

attractive time to pursue M&A in Europe

British tax law prescribes an effective tax rate of 21%, far below the U.S.

Federal rate, RRD can conduct operations through the UK to reduce tax

expense

SIV Valuation Range

Tra

ns

acti

on

Tra

din

gD

CF

$548

$500

$557

$450

$635

$487

SIV EV: $519.3m

Headquarters

Founding

IPO

Employees

Customers

Geographic Mix

Product Offering

One Tudor Street, London

1964 as a Print Business

SIV 1985 on the LSE

2,943

Recently added Johnson & Johnson and HSBC

Burberry, BT, Google, Lloyds, Unilever, Coca-

Cola, Lexus, Chanel, Lego, Levi, Calvin Klein

Over 25% of Marketing revenue is derived from

outside U.K., firm continues to focus

increasingly on international organic growth and

acquisitions

Strategic Marketing – Provides Data for “data

driven direct marketing”

Digital services for ecommerce, online search

and digital marketing

Consulting services provide consumer insight

and market research for retail, consumer and

healthcare markets

Marketing Activation – Provides Marketing

print services for point of sale retail

communications

Print Management and high impact visual

communications.

Field Marketing provides clients with services to

raise customer awareness in store and drive

sales

Books – Market leader in Monochrome

production, multi year agreement with Penguin

Random House

7

Summary Financial Performance (1)

Source: Company Website and 2015 Interim Report

(1) Bloomberg

(2) CapIQ

St Ives Group Overview

52 Week Trading Overview (2)

70

80

90

100

110

120

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

St Ives MSCI Europe Index

88

95

$m Except Per Share

2012 2013 2014 2015E 2016E 2017E

Sales 520.6 496.1 538.5 581.6 631.0 684.7

% Growth 9.8% -4.7% 8.5% 8.0% 8.5% 8.5%

EBITDA 59.0 72.9 79.7 85.5 94.0 103.4

% Margin 11.3% 14.7% 14.8% 14.7% 14.9% 15.1%

CAPEX 9.7 9.2 16.8 11.6 12.6 13.7

% Sales 1.9% 1.9% 3.1% 2.0% 2.0% 2.0%

Share Price 2.66$ FY15E

Fully Dil Shares (m) 129.4 Revenue 581.6 0.7x

Equity Value 344.2 EBITDA 85.5 4.9x

Plus: Debt 92.6 FY16E

Less: Cash -20.8 Revenue 631.0 0.7x

Fully Diluted EV $416.1 EBITDA 94.0 4.4x

Projection Period

55.850.8

59.0

72.9

79.7 80.485.5

94.0

0.0

20.0

40.0

60.0

80.0

100.0

2010 2011 2012 2013 2014 LTM 2015E 2016E

27%

22%

26%28% 28% 29%

31%

15%

8%

12%11%

11%15% 15%

0%

10%

20%

30%

40%

2008 2009 2010 2011 2012 2013 2014

Gross Margin

EBITDA Margin

8

Historical Revenues

St Ives Group (“SIV”), is an international marketing services group.

Together, the Group’s businesses serve leading brands internationally,

with offices in the UK, North America, China and Singapore

Industries of focus include retail & consumer products, healthcare &

pharmaceutical, financial services, media, technology, automotive and

charity

Since 2011, SIV has focused on shifting from a pure play printing

company to a data and marketing services group

The shift in strategy has resulted in a 11.1% EBITDA CAGR over the

last 4 years

Management has successfully grown the business over the past five

years by pursuing a combination of organic growth and bolt on

acquisitions. Each acquired business seeks to complement and not

compete with existing SIV business units

Recent acquisitions have included:

May 2015 - The Hive Group (Healthcare Consulting, $31.7m)

March 2015 - Solstice Consulting LLC (Mobile solutions $37.4m)

Revenue Mix

$m

Historical Margins

Historical EBITDA

Source: Research, St Ives 2014 Annual Report and Bloomberg

Financial Highlights

Strategic Marketing

Segment 29%10%

10%

9%

48%

2%

21%Data

Digital

Consulting

Marketing Print

Field Marketing

Books

St Ives Business Strategy Overview

9

Shanghai office for Incite, the consumer and market research

consultancy

Approach is based on cross-thinking

Acquire complementary,

ambitious and growing Strategic Marketing

Businesses

The St Ives Strategy

Is Centered Around Three Key Priorities…

SIV’s successful implementation of the strategy outlined below can be applied by RR

Donnelley (“RRD”) to successfully expand into direct marketing and data services

SIV is already expanding to the United States, RRD can leverage existing U.S. relationships to

drive growth even further

Existing management team and all employees of SIV will prove valuable in transitioning RRD

to a premier data driven international marketing services group

International

Marketing Services

Group made up of

individual market

leading businesses

Greater than 25% of Marketing Revenue from

Outside the UK

Internationalism AcquisitionsCollaboration

Over 90% of our clients work with more than one business across the group

Group Businesses:

Operate as

Individual Brands

Complement One

Another

Foster a Common

Culture

Provides investment

and U.S. Leadership

to accelerate growth

Supports

Collaboration

2015 Interim

Revenue

% Group

Revenue

Data

Digital

Consulting

Marketing Print

Field Marketing

Books

Mark

eti

ng

Acti

vati

on

Str

ate

gic

Mark

eti

ng

$25.2m 10%

$27.0m 10%

$24.3m 9%

$125.6m 48%

$7.2m 2%

$54.8m 21%

Source: St Ives 2014 Annual Report and Bloomberg

We anticipate $90m is total synergies arising from the transaction

$25m in cost synergies

$65m in revenue synergies

This transaction will extend the product suite for R.R. Donnelly into the

faster growing sectors of consulting, digital marketing and data driven

marketing

• The additional products will enable R.R. Donnelly to capitalize their

existing strong relationships within large U.S. corporate clients

• The marketing segment within St Ives is growing at over 12% annually

• St Ives management has experience in turning around a printing firm

• St. Ives has a proven track record of acquiring companies in the

growing arena of digital marketing products

10

St Ives has made the transition RRD is attempting

Combined Product Mix The St Ives Capabilities that RRD can invest in

Cost and Revenue Synergies

Source: Research, St Ives 2014 Annual Report and Bloomberg

Synergies

St Ives has spent the last 6 years reinventing itself from a sleeping

printing company to an integrated communication firm.

Automated Marketing

Management Tools

CRM Consulting

Consumer Insight Consulting

Data Capture, Cleansing,

Management and Analysis

Full Service Digital Marketing

Strategic and Creative Services

Campaign Design and Build

Ecommerce Consulting

Online Marketing

Marketing Campaign

Management

Media Sales

Strategic Branding and

Marketing Strategy

Consumer Insights

Retail & Consumer Markets

Consultancy

Healthcare strategic consulting

Field and Sales Marketing

POS and Exhibition

We now have a profitable cash-generative Print Services

business, and a substantial Marketing Services proposition

which has been successfully expanded and strengthened

through acquisition over the past year.“

"Our Strategy since 2009 has been to restructure our print

business while repositioning the group so that it can take

advantage of new growth markets within the services markets

within the marketing services sector“

-Richard Stidwell

St Ives Chairman

Field Marketing

Consulting Services

Digital Marketing

Data Marketing Combined

Logistics $1,160 $1,160

Financial 1044 1044

Sourcing 232 232

Creative & Marketing 232 148 380

Marketing Printing 580 245 825

Trad. Printing 3270 3270

Office Products 580 580

Labels 464 464

Statement Printing 348 348

Forms 232 232

Books 841 103 943.5

Directories 144 144

Total $9,127 $496 $9,623

Accretion / Dilution30% Premium to Last Close

11

140

160

180

200

220

240

May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

Target Price Current Offer Price 52W High

52W Average 20d Average 20 Day VWAP

Offer Premium

EPS $1.00 $1.25 $1.56 $1.87 $2.25 $2.70

15.4% -31.6% -15.6% 4.4% 24.4% 48.4% 77.2%

19.2% -31.9% -15.9% 4.1% 24.1% 48.1% 76.9%

24.0% -32.2% -16.2% 3.8% 23.8% 47.8% 76.6%

30.0% -32.6% -16.6% 3.4% 23.4% 47.4% 76.2%

36.0% -33.0% -17.0% 3.0% 23.0% 47.0% 75.8%

43.2% -33.4% -17.4% 2.6% 22.6% 46.6% 75.4%

51.8% -34.0% -18.0% 2.0% 22.0% 46.0% 74.8%

EPS $1.00 $1.25 $1.56 $1.87 $2.25 $2.70

15.4% -31.3% -15.4% 4.6% 24.6% 48.6% 77.3%

19.2% -31.6% -15.6% 4.4% 24.4% 48.3% 77.1%

24.0% -31.8% -15.9% 4.1% 24.1% 48.1% 76.8%

30.0% -32.2% -16.2% 3.8% 23.7% 47.7% 76.5%

36.0% -32.6% -16.6% 3.4% 23.4% 47.4% 76.1%

43.2% -33.0% -17.0% 3.0% 23.0% 46.9% 75.7%

51.8% -33.5% -17.5% 2.5% 22.4% 46.4% 75.2%

Pre

miu

m P

rem

ium

EPS $1.00 $1.25 $1.56 $1.87 $2.25 $2.70

15.4% -31.6% -15.6% 4.4% 24.4% 48.4% 77.2%

19.2% -31.9% -15.9% 4.1% 24.1% 48.1% 76.9%

24.0% -32.2% -16.2% 3.8% 23.8% 47.8% 76.6%

30.0% -32.6% -16.6% 3.4% 23.4% 47.4% 76.2%

36.0% -33.0% -17.0% 3.0% 23.0% 47.0% 75.8%

43.2% -33.4% -17.4% 2.6% 22.6% 46.6% 75.4%

51.8% -34.0% -18.0% 2.0% 22.0% 46.0% 74.8%

EPS $1.00 $1.25 $1.56 $1.87 $2.25 $2.70

15.4% -31.3% -15.4% 4.6% 24.6% 48.6% 77.3%

19.2% -31.6% -15.6% 4.4% 24.4% 48.3% 77.1%

24.0% -31.8% -15.9% 4.1% 24.1% 48.1% 76.8%

30.0% -32.2% -16.2% 3.8% 23.7% 47.7% 76.5%

36.0% -32.6% -16.6% 3.4% 23.4% 47.4% 76.1%

43.2% -33.0% -17.0% 3.0% 23.0% 46.9% 75.7%

51.8% -33.5% -17.5% 2.5% 22.4% 46.4% 75.2%

Pre

miu

m P

rem

ium

Sensitivity Impact to Combined EPS – 2016 (100% Cash)

Sensitivity Impact to Combined EPS – 2015 (100% Cash) Accretion Dilution (100% Stock)

16% premium over

52W VWAP

EV/EBITDA

Diluted EPS

CY 2015E [US$] +5.9% 1.65

P/E to Achieve Share Price

Add'l Synergies to break even

CY 2016E [US$] +5.0% 1.80

P/E to Achieve Share Price

Add'l Synergies to break even

(Net Debt/TTM EBITDA) -0.3x 2.9x

Aquirer

416.0 6,888.7

1.56

Target

Target@ Deal Price Target

Equity Value (in M USD) 447.4

PE - Multiple

129.4m 201.8m

$2.66 $18.62

344.2 3,757.5

Diluted Shares 129.4m

9.1x 11.9x

10.4x

-23.7

Aquirer

0.29

Enterprise Value (in M USD) 519.3

Price [USD] $3.45

Pro Forma Acquirer

Accretion

8.5x 10.8x

11.5x

-25.2

0.31 1.73

CY 2015E 8.8x 4.9x 5.7x

-0.2x 3.1x

Assumes a 7.32% cost of cash based on RRD WACC

-25%

0%

25%

50%

75%

100%

Elanders AB-BSHS

Communis PLC F.E. Bording A/S RR DONNELLEY& SONS CO

ST. IVES PLC De La Rue PLC Quad Graphics Inc Dai NipponPrinting LTD

GrafenIi PLC

Trading Statistics of Selected Companies

12

$7,306.1 $6,899.5

$2,480.2

$1,051.1$323.4 $268.5 $233.0 $65.4 $11.1

-

1,500

3,000

4,500

6,000

7,500

Dai NipponPrinting LTD

RR DONNELLEY& SONS CO

Quad GraphicsInc

De La Rue PLC ST. IVES PLC Elanders AB-BSHS

Communis PLC F.E. Bording A/S GrafenIi PLC

$1,140.0$989.9

$477.7

$168.8$80.4 $48.2 $41.3 $9.3 $4.3

0

250

500

750

1000

1250

Dai NipponPrinting LTD

RR DONNELLEY& SONS CO

Quad Graphics Inc De La Rue PLC ST. IVES PLC Elanders AB-BSHS

Communis PLC F.E. Bording A/S GrafenIi PLC

7.5x 7.1x6.3x

5.7x 5.5x 5.3x 4.9x 4.8x

2.7x

0.0x

2.0x

4.0x

6.0x

8.0x

De La Rue PLC Dai NipponPrinting LTD

F.E. Bording A/S RR DONNELLEY& SONS CO

ST. IVES PLC Elanders AB-BSHS

Communis PLC Quad Graphics Inc GrafenIi PLC

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Source: Bloomberg

(1) 5.5x multiple is high based on low EBITDA estimates per 3rd party equity research

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Graphics Data , Marketing Oriented Commercial / Industrial Print Oriented Other

(1)

Pro-Forma Financial Statements

Comps

Appendix

13

A. Consolidated Balance Sheet

14

Standalone

SIV LN Equity RRD US Equity Adjustments Pro Forma

2015:S1 2014:Q4 + - 2014:Q4

Cash and Cash Equivalents 18.1 527.9 - 546.0

Short-Term Investments - - -

Accounts Receivable 115.3 2,033.8 2,149.1

Inventories 8.7 586.2 594.9

Prepaids and Other Current Assets 0.0 225.4 225.4

Total Current Assets 142.1 3,373.3 3,515.4

Property, Plant and Equipment, net 71.7 1,515.5 - 1,587.2

Long-Term Investment & Long-Term Receivables - - -

Goodwill 186.5 1,706.6 534.2 -186.5 2,240.8

Other Intangible Assets 58.7 423.7 - 482.4

Other Assets 0.6 620.2 620.8

Deferred Financing Fees - -

Total Assets 459.6 7,639.3 8,446.6

Accounts Payable 107.4 1,296.6 1,404.0

Short-Term borrowings 0.0 203.4 203.4

Other Current Liabilities 111.9 867.3 979.2

Total Current Liabilities 219.4 2,367.3 2,586.7

Revolver 446.8 446.8

Long-Term Borrowings - 3,429.1 3,429.1

Other Long-Term Liabilities 56.5 1,222.5 1,279.0

Total Liabilities 275.8 7,018.9 7,741.5

Total preferred equity - - -

Noncontrolling Interest - 26.6 26.6

Shareholders' Equity 99.1 3,365.2 - -99.1 3,365.2

Retained earnings & Other Equity 84.7 -2,771.4 -2,686.7

Total Shareholders' Equity 183.7 620.4 705.1

Total Liabilities and Equity 459.6 7,639.3 8,446.6

Source: Bloomberg

A. Consolidated Condensed Income Statement

15

LTM CY 2015E CY 2016E

SIV RRD Combined SIV RRD Combined SIV RRD Combined

Sales 552.6 11,603.4 12,156.0 532.6 11,725.8 12,258.3 542.8 11,911.8 12,454.6

% growth NA NA NA -3.6% 1.1% 0.8% 1.9% 1.6% 1.6%

COGS 369.3 9,052.8 9,422.1 - 2,579.7 - - 2,626.5 -

% sales 66.8% 78.0% 77.5% - 22.0% - - 22.1% -

Gross Profit 183.3 2,550.6 2,733.9 - 9,146.1 - - 9,285.2 -

% margin 33.2% 22.0% 22.5% - 78.0% - - 78.0% -

EBITDA 80.4 989.9 1,070.3 63.2 1,204.3 1,267.5 69.8 1,222.0 1,291.8

EBITDA Unadjusted 80.4 989.9 63.2 1,204.3 69.8 1,222.0

- - -

% margin 14.5% 8.5% 8.8% 11.9% 10.3% 10.3% 12.9% 10.3% 10.4%

EBIT 55.4 515.9 571.3 51.6 737.5 789.1 54.0 759.5 813.5

% margin 10.0% 4.4% 4.7% 9.7% 6.3% 6.4% 9.9% 6.4% 6.5%

Net Income 7.6 245.1 225.8 37.6 314.8 325.6 40.4 348.7 362.2

% margin 1.4% 2.1% 1.9% 7.1% 2.7% 2.7% 7.4% 2.9% 2.9%

Source: Bloomberg

Comparable Company Selection

B. Comparable Company

16 Source: Bloomberg; FactSet; company filings

Market Valuation LTM Financial Statistics LTM Profitability Margins Growth

Gross Net Sales EBITDA

Equity Enterprise Gross Net Profit EBITDA EBIT Income Hist. Hist.

Company Ticker Value Value Sales Profit EBITDA EBIT Income (%) (%) (%) (%) 5Yr CAGR 5Yr CAGR

St Ives plc SIV $ 357.0 $ 428.8 $ 552.6 $ 183.3 $ 80.4 $ 68.1 $ 7.3 33.2% 14.5% 12.3% 1.3% 3.0% 18.7%

Quad/Graphics QUAD 1,086.9 2,480.7 4,862.4 645.4 545.0 208.6 18.3 13.3% 11.2% 4.3% 0.4% 22.1% 11.9%

Chime Communications CHW 462.1 545.4 642.8 329.6 47.1 31.4 15.6 51.3% 7.3% 4.9% 2.4% 5.3% 5.4%

Elanders AB ELAN-B 157.1 266.7 532.3 115.0 44.3 27.9 13.6 21.6% 8.3% 5.2% 2.6% 17.9% 12.3%

Communisis CMS 185.9 241.8 564.8 92.5 43.7 24.7 (24.9) 16.4% 7.7% 4.4% -4.4% 12.5% 10.1%

Mean 25.6% 8.6% 4.7% 0.2% 14.5% 9.9%

Median 19.0% 8.0% 4.6% 1.4% 15.2% 11.0%

Operating Statistics Overview

B. Comparable Company Valuation

17 Source: Bloomberg; FactSet; company filings

General Return on Investment Leverage Ratios LTM Coverage Ratios

Implied Net Debt / Net Debt / EBITDA / EBIT /

Company Ticker FYE Beta ROIC ROE ROA Div. Yield EBITDA (EBITDA - CapEx) Int. Exp. Int. Exp.

St Ives plc SIV Jun-30 0.36 3.1% 3.4% 1.6% 4.1% 1.0x 1.2x 21.2x 13.5x

Quad/Graphics QUAD Dec-31 1.16 0.7% 1.5% 0.4% 5.2% 2.6x 3.4x 5.9x 2.3x

Chime Communications CHW Dec-31 1.01 3.8% 5.1% 2.5% 3.0% 1.9x 2.3x 9.1x 6.1x

Elanders AB ELAN-B Dec-31 0.88 5.9% 8.0% 2.9% 2.4% 3.0x 3.4x 8.2x 5.1x

Communisis CMS Jun-30 0.67 -8.4% -11.8% -5.2% 4.0% 1.4x 3.1x 11.0x 6.2x

Mean 0.93 0.5% 0.7% 0.2% 3.6% 2.2x 3.1x 8.5x 4.9x

Median 0.95 2.2% 3.3% 1.5% 3.5% 2.2x 3.2x 8.6x 5.6x

Current % of Enterprise Value / LTM Total Price /

Share 52-wk. Equity Enterprise LTM 2015E LTM 2015E LTM 2015E EBITDA Debt / LTM 2015E

Company Ticker Price High Value Value Sales Sales EBITDA EBITDA EBIT EBIT Margin EBITDA EPS EPS

St Ives plc SIV $ 2.64 68.8% $ 344.2 $ 416.1 0.8x 0.7x 6.3x 4.9x 9.8x 5.9x 12.4% 0.0% 44.0x 14.7x

Quad/Graphics QUAD 22.27 92.3% 1,086.9 2,480.7 0.5x 0.5x 4.6x 4.8x 11.9x 12.5x 11.2% 2.5% 58.6x 16.3x

Chime Communications CHW 4.61 71.8% 462.1 545.4 0.7x 1.6x 11.6x 8.1x 17.4x 8.9x 7.3% 2.6% 30.7x 11.8x

Elanders AB ELAN-B 5.92 85.4% 157.1 266.7 0.5x 0.5x 6.0x 5.5x 9.6x 8.1x 8.3% 8.0% 13.2x 8.5x

Communisis CMS 0.90 76.9% 185.9 241.8 0.4x 0.4x 5.5x 5.0x 9.8x 7.8x 7.7% 2.3% 12.9x 9.0x

Mean 0.5x 0.8x 6.9x 5.8x 12.2x 9.3x 8.6% 3.8% 28.8x 11.4x

Median 0.5x 0.5x 5.8x 5.3x 10.8x 8.5x 8.0% 2.5% 21.9x 10.4x

Multiples

Enterprise Value / Price /

LTM 2015E LTM 2015E LTM 2015E LTM 2015E

Sales Sales EBITDA EBITDA EBIT EBIT EPS EPS

Mean 0.5x 0.8x 6.9x 5.8x 12.2x 9.3x 28.8x 11.4x

Median 0.5x 0.5x 5.8x 5.3x 10.8x 8.5x 21.9x 10.4x

Implied Enterprise Value

Low 279.4 281.6 464.8 450.0 738.1 615.0 178.0 253.4

High 298.2 417.0 556.6 499.5 827.5 673.5 234.0 277.1

Implied Enterprise Value

EV/2015E Sales, EV/LTM EBITDA and EV/2015E

EBITDA are given extra weight in valuating SIV, given

that:

– SIV’s business transformation has radically

altered margins, the growth profile and nature

of the business

– SIV has much higher EBIT margin that

comparable companies