Investor Meeting

June 21, 2007
Today’s Schedule


    Time                   Topic                       Speaker

    11:00 - 11:30am        Registration...
Safe Harbor Statement


Use of Forward-Looking Statements
This presentation contains quot;forward-looking statementsquot; ...
Non-GAAP Financial Information


The company believes that certain non-GAAP measures, when presented in conjunction with c...
Agenda


One RR Donnelley


Industry Dynamics & RR Donnelley Strategy


Financial Review


Q&A




       June 21, 2007
5
Building RR Donnelley to Succeed




                                       May 2003
                                     ...
Product and Related Services Opportunity


       PREPARE                         PRODUCE                       DELIVER
  ...
The World’s Premier Print and Related Services Company

      Strategic        Operational     Financial
      Serve > 90%...
Simplified Branding


    Rebrand Moore Wallace and certain other trade names as
    RR Donnelley

    Effective Q3 2007, ...
Deep Customer Relationships


                 Blue Chip Customer
                                                        ...
Plenty of Opportunity to Expand Relationships

 We offer 15 core products and services
 150 customers purchase 7 or more p...
A Simple Story

                          Largest player in a highly fragmented market
       Scale              Different...
Agenda


One RR Donnelley


Industry Dynamics & RR Donnelley Strategy


Financial Review


Q&A




       June 21, 2007
13
Trends Shaping Industry


                             Pricing pressure
 Consolidation
 (Printers, Suppliers
             ...
Consolidating Industry*




*Sample representation – estimated total of 39,088 printing facilities in the United States at...
Consolidating Supplier Base

                 Paper Suppliers            Ink Suppliers
 1980




                 Stora/En...
Consolidation Runs Across Business Spectrum



     Media Companies
     Retailers
     Catalogers
     Magazine & Book Pu...
Private Equity Impact on Customer Consolidations


Evercore & TH Lee                        JP Morgan Partners          Wa...
Change in Ownership has Driven Change in Buying
Dynamics


                From…                                  To…

Fra...
The Evolution of Print Relationships
  Customer Relationships




                                                        ...
The Evolution of RR Donnelley’s Strategy


                       Put “World Class” team together
 Management
            ...
The RR Donnelley Strategy – Profitable Growth


 Targeted sales strategy
     • Winners/consolidators in their space
     ...
The RR Donnelley Strategy – A Disciplined Approach


Key Elements


  Market / platform versus business unit approach

  W...
One RR Donnelley (Illustrative)



                                  Sales and Marketing

                                ...
The RR Donnelley Strategy - Driving Profitable Growth


     Sales growth targets
     Platform optimization
      • Asset...
Platform Optimization - Asset Utilization


  Off peak (1H) growth has exceeded peak (2H) growth by over $100 million from...
Platform Optimization – Productivity Focus


  Leverage RR Donnelley scale
      • Supply chain
      • Shared services
  ...
Organic Investment


Capacity investment
     • 50+ presses and binding lines installed
     • Assortment of standardized ...
The RR Donnelley Strategy – A Living Process



                                Keys to Success
        Sales Growth Targe...
RR Donnelley - An Unmatched Portfolio

                                                                            Labels ...
RR Donnelley International Presence




     June 21, 2007
31
New Customers and Expansion of Relationships

Since February 2004, the contract value of our largest new business
wins and...
RRD Existing Global Customers




     June 21, 2007
33
RR Donnelley is Differentiated to Drive Growth


 Comprehensive global printing & print-related services platform
  • Reac...
Agenda


One RR Donnelley


Industry Dynamics & RR Donnelley Strategy


Financial Review


Q&A




       June 21, 2007
35
Strong Sales Growth


                                                       Proforma Revenue Growth*
                    ...
EBITDA Growth has Exceeded Sales Growth


                         CAGR = 31%                                             ...
2006 Profitability and Cost Detail


                100%
 % of Revenue




                 0%
                          ...
Material and Commodities


     Paper
      • Primarily contractual pass-through
      • Relationships vary among:
       ...
Historically, D&A has exceeded Capital Expenditures

Capital expenditure as a % of Revenue is expected to decrease in 2008...
Strong Non-GAAP Earnings per Share Growth

                                                        Non-GAAP EPS           ...
Business Generates Substantial Cash Flow


                                     Cash Flow from Continuing Ops (CFFCO)
    ...
Debt Maturity Profile

Weighted average interest rate of ~5.50% on existing long-term debt
  • Most outstanding debt at fi...
Multiple Avenues to Value Creation

                                                              • Topline growth in line...
Balanced Capital Deployment


 Very strong balance sheet and cash position


 Strong investment grade credit ratings
     ...
Long-term Targets


   Revenue growth* in line with GDP
       • Acquisitions drive additional topline

   Productivity sa...
Financial Strength

                                                                             US$ in millions
         ...
The RR Donnelley Opportunity


                           Industry leadership
 Stable, Diversified
                       ...
Agenda


One RR Donnelley


Industry Dynamics & RR Donnelley Strategy


Financial Review


Q&A




       June 21, 2007
49
Investor Meeting

June 21, 2007
Upcoming SlideShare
Loading in …5
×

R.R.donnelley InvestorDay_06/21/2007

871 views

Published on

Published in: Economy & Finance, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
871
On SlideShare
0
From Embeds
0
Number of Embeds
3
Actions
Shares
0
Downloads
8
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

R.R.donnelley InvestorDay_06/21/2007

  1. 1. Investor Meeting June 21, 2007
  2. 2. Today’s Schedule Time Topic Speaker 11:00 - 11:30am Registration & Display of RR Donnelley Offerings 11:30 - 11:45am Welcome and Introduction Dan Leib 11:45 - 12:00pm One RR Donnelley Tom Quinlan 12:00 - 1:00pm Industry Dynamics & John Paloian RR Donnelley Strategy Dan Knotts 1:00 - 1:30pm Financial Review Dan Leib Tom Quinlan Q&A June 21, 2007 2
  3. 3. Safe Harbor Statement Use of Forward-Looking Statements This presentation contains quot;forward-looking statementsquot; as defined in the U.S. Private Securities Litigation Reform Act of 1995. 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. The company does not undertake to and specifically declines 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. The factors that could cause material differences in the expected results of RR Donnelley include, without limitation, the following: the successful execution and integration of acquisitions and the performance of the company's businesses following acquisitions; the ability to implement comprehensive plans for the execution of cross-selling, cost containment, asset rationalization and other key strategies; competitive pressures in all markets in which the company operates; factors that affect customer demand, including changes in postal rates and postal regulations, changes in the capital markets, changes in advertising markets, the rate of migration from paper-based forms to digital format, customers' budgetary constraints and customers' changes in short-range and long-range plans; shortages or changes in availability, or increases in costs of, key materials (such as ink, paper and fuel); and other risks and uncertainties described in RR Donnelley's periodic filings with the Securities and Exchange Commission (SEC). Readers are strongly encouraged to read the full cautionary statements contained in RR Donnelley's filings with the SEC. RR Donnelley disclaims any obligation to update or revise any forward-looking statements. June 21, 2007 3
  4. 4. Non-GAAP Financial Information The company believes that certain non-GAAP measures, when presented in conjunction with comparable GAAP measures, are useful because that information is an appropriate measure for evaluating the company’s operating 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 net earnings to non-GAAP net earnings and further descriptions are presented in the tables attached to our Earnings Releases, which are available in the investors section of our website, rrdonnelley.com. Also available in the investors section of our website, rrdonnelley.com, is a description of additional non-GAAP financial measures referred to in this presentation. Twelve Months Ended December 31, In $ millions, except EPS 2003 2004 2005 2006 Income from Income from Income from Income from Cont. Ops EPS Cont. Ops EPS Cont. Ops EPS Cont. Ops EPS $292.7 $1.54 $459.2 $0.88 $450.4 $0.63 $750.7 $1.83 GAAP results Adjustments Restructuring and impairments - net 12.5 0.07 107.4 0.31 419.8 1.83 206.1 0.79 Integration charges - - 80.8 0.23 8.3 0.02 - - Income Tax adjustment - (0.44) - (0.16) - - - (0.11) Net (income) from Discontinued Operations - 0.13 - 0.39 - (0.19) - 0.01 Cumulative effect of change in accounting principle - - - 0.03 - - - - Other non-GAAP adjustments - 0.01 - (0.03) - - - 0.03 Total Adjustment 12.5 (0.23) 188.2 0.77 428.1 1.66 206.1 0.72 305.2 $1.31 647.4 $1.65 878.5 $2.29 956.8 $2.55 Non-GAAP results Depreciation and amortization 270.3 385.5 425.0 463.3 $575.5 $1,032.9 $1,303.5 $1,420.1 EBITDA (non-GAAP) June 21, 2007 4
  5. 5. Agenda One RR Donnelley Industry Dynamics & RR Donnelley Strategy Financial Review Q&A June 21, 2007 5
  6. 6. Building RR Donnelley to Succeed May 2003 February 2004 Divestitures Acquisitions(1) June 2005 October 2004 Package Logistics July 2005 Sept 2005 Poligrafia December 2005 April 2006 January 2007 May 2007 Note: (1) In addition, RRD completed the acquisition of Ad-Plex Rhodes Charlestown facility in August, 2005, Spencer Press in November, 2005, CMCS in December, 2005 and Canadian Bank Note in October, 2006 June 21, 2007 6
  7. 7. Product and Related Services Opportunity PREPARE PRODUCE DELIVER Print Logistics Premedia Services Broadest Product Portfolio Print Distribution Studio Photography Catalogs Fulfillment and Color Services Magazines Kitting Page Layout & Processing Retail Inserts Expedited Services Facilities Management Directories Ad Management Books Digital Asset Management Commercial Offshore Service Offering Direct Mail Statements Financial Forms Labels BPO Gravure, Offset and Digital Capabilities 2006: $374 Billion Print Market Worldwide, $172 Billion in the U.S. June 21, 2007 7
  8. 8. The World’s Premier Print and Related Services Company Strategic Operational Financial Serve > 90% Recurring Over 40,000 of the Revenue Customers Fortune 500 Over 600 Low Cost Brand locations in Provider Strength 35+ countries Platform Product Financial Flexibility Line Flexibility Breadth Scale Delivers on Distinct Service Advantages Promises Offering June 21, 2007 8
  9. 9. Simplified Branding Rebrand Moore Wallace and certain other trade names as RR Donnelley Effective Q3 2007, we will realign the management and reporting structure Simplifies client and internal interactions Results in an approximately $315 million non-cash impairment charge June 21, 2007 9
  10. 10. Deep Customer Relationships Blue Chip Customer Total of 40,000 Customers Relationships 125 customers with revenue > $10 million (1) 950 customers with revenue > $1 million (1) Serve over 90% of Fortune 500 and have approximately 15% of their print spend • Opportunity to continue to grow our Fortune 500 Relationships 10 And many others… (1) Includes only revenue generated in North America June 21, 2007 10
  11. 11. Plenty of Opportunity to Expand Relationships We offer 15 core products and services 150 customers purchase 7 or more products/services Multi-offering purchasers 66 70 60 # of Customers 50 38 40 27 30 20 10 6 10 5 0 7 8 9 10 11 12+ # of products/services purchased from RR Donnelley (1) Includes only products/services provided in North America June 21, 2007 11
  12. 12. A Simple Story Largest player in a highly fragmented market Scale Differentiating front-end and logistics capabilities Cost advantage driven by platform flexibility and economies in procurement, production and distribution Blue chip customer relationships; single source provider opportunities Breadth & Broadest offering of industry leading products and services Depth Industry experienced executive and senior management teams Growth rate has been greater than the broader print market; largest opportunity is with existing clients Financial Success in managing, acquiring and integrating acquisitions in a challenging price environment Financial discipline and operational focus on productivity Strong cash flow generation The Way Operational / productivity focus Forward Continue M&A activities and/or return cash to shareholders Integration of Banta, Perry Judd’s and Von Hoffmann proceeding well June 21, 2007 12
  13. 13. Agenda One RR Donnelley Industry Dynamics & RR Donnelley Strategy Financial Review Q&A June 21, 2007 13
  14. 14. Trends Shaping Industry Pricing pressure Consolidation (Printers, Suppliers Large / diversified printers are better positioned to be successful & Customers) Private equity presence changing buying dynamics Total System Printers who are able to offer lowest total print / document Cost Focus management cost and higher ROI are advantaged Shift toward variable (customized), higher value-add print Customer Relationship IT / data management capabilities increasingly important Management to customers Trends generally continuing at same pace Electronic Impact differs by print sector: results in new products / services Substitution Positive and negative implications Regulatory Changes Printers’ ability to offer compliance assurance / secure environment increasingly important June 21, 2007 14
  15. 15. Consolidating Industry* *Sample representation – estimated total of 39,088 printing facilities in the United States at the end of 2006 (PIA/GATF, April 3, 2007). Source: RR Donnelley management estimates June 21, 2007 15
  16. 16. Consolidating Supplier Base Paper Suppliers Ink Suppliers 1980 Stora/Enso Dai Nippon/Sun INX/Acme + Midland Bowater/Avenor Domtar/Weyerhaeuser Flint/NAPIC + Continental BASF Graphics Abitibi/Bowater + Alper Ink Group Mead/Westvaco + SICPA UPM/Kymmene + Day IP/Champion Flint acquired by XSYS European Georgia Pacific/Ft. James 2007 Source: RR Donnelley management estimates June 21, 2007 16
  17. 17. Consolidation Runs Across Business Spectrum Media Companies Retailers Catalogers Magazine & Book Publishers Pharmaceuticals Automotive Bank/Financial Institutions Food Industry June 21, 2007 17
  18. 18. Private Equity Impact on Customer Consolidations Evercore & TH Lee JP Morgan Partners Wasserstein Publishing Holdings 1999 Evercore acquires AMI American Lawyer Retail 1999 AMI acquires Globe 1-800-Flowers.com The Deal LLC 2003 AMI acquires Weider Cabela’s Real Estate Media 2003 AMI recapitalized by Evercore/THL Cornerstone Brands New York Magazine Crosstown Traders Primedia B to B Vitamin Shoppe Industries Hanley Wood (20% share with JPM) Penton Publishing Golden Gate Capital Appleseed’s Ascend Media Norm Thompson Hanley Wood Haband Bear Stearns Express TransAmerican Auto Parts Eddie Bauer Playcore Inc. Sun Capital Draper’s & Damon’s Mervyn’s NY & Co Outfitters Shopko Harlem Furniture Newport News Lillian Vernon Everything But Water Spiegel Eddie Bauer Francesca’s Balducci’s Stuart Weitzman June 21, 2007 18
  19. 19. Change in Ownership has Driven Change in Buying Dynamics From… To… Fragmented print procurement Consolidated print procurement, across different functions / centrally managed divisions / geographies Focus on lowest print cost Focus on lowest total document management costs and also on achieving highest ROI Outsourcing non-core processes In-house print / document management including print / document process management Transactional relationships Contractual relationship June 21, 2007 19
  20. 20. The Evolution of Print Relationships Customer Relationships Client’s focus on print supply chain, not just print Total Cost of Process/Procurement Function RRD reaches across total value chain Outsourced print and Value-Added Services Ability to bring scale 100% of Core Product(s) • Procurement • Distribution • Production Multiple Product Relationships Leverage the relationship • 100% Positions Single Product • Trust in place Relationships • Vested Interest 1864 2007+ 2000 2006 Time Source: Derived from InfoTrends/Cap Ventures June 21, 2007 20
  21. 21. The Evolution of RR Donnelley’s Strategy Put “World Class” team together Management Built support infrastructure • Admin/Finance/Ops Developed and implemented new strategy Investment Built, through organic investments and acquisitions, flexible full-service platform Focused on continual productivity improvements Operational Absorbed equipment installs Absorbed and integrated acquisitions Asserted disciplines/metrics (cost compression culture) June 21, 2007 21
  22. 22. The RR Donnelley Strategy – Profitable Growth Targeted sales strategy • Winners/consolidators in their space • Contractual opportunities – opening the window • 100% positions Disciplined investment approach • Organic investment • Targeted acquisitions Trade-off with capital expenditures Productivity and waste reduction Building a Global Platform for Global Customer Needs June 21, 2007 22
  23. 23. The RR Donnelley Strategy – A Disciplined Approach Key Elements Market / platform versus business unit approach Window of opportunity - prioritization Standardized capital investment approach Flexibility to adapt to evolving customer needs June 21, 2007 23
  24. 24. One RR Donnelley (Illustrative) Sales and Marketing Directory Book Magazine Healthcare Financial Retail Publisher Publisher Publisher Internal Process (Pricing, Production Planning) One Global Platform PREPARE PRODUCE DELIVER Gravure Offset Bindery Sheetfed Digital June 21, 2007 24
  25. 25. The RR Donnelley Strategy - Driving Profitable Growth Sales growth targets Platform optimization • Asset utilization • Productivity focus Organic investment • Expand and upgrade base platform • Equipment balance Acquisitions • Targeted for customers, equipment, capacity, capabilities, people • Disciplined analysis June 21, 2007 25
  26. 26. Platform Optimization - Asset Utilization Off peak (1H) growth has exceeded peak (2H) growth by over $100 million from 2004 to 2006 % of Revenue Growth (2004 – 2006)* 36% 64% 1st Half 2nd Half * 2004-06 growth in most historically seasonal offerings (magazines, catalogs, retail inserts, books and directories) June 21, 2007 26
  27. 27. Platform Optimization – Productivity Focus Leverage RR Donnelley scale • Supply chain • Shared services • One platform Targeted investment • Quality and service • Waste, throughput and cost takeout June 21, 2007 27
  28. 28. Organic Investment Capacity investment • 50+ presses and binding lines installed • Assortment of standardized asset types to optimize platform • Overall increase in capacity utilization Capability investment • Targeted to meet market and customer requirements • Standardization to drive flexibility Productivity / Compliance / Maintenance investment • Relentless approach to cost takeout and waste reduction • Safety focused • Infrastructure requirements June 21, 2007 28
  29. 29. The RR Donnelley Strategy – A Living Process Keys to Success Sales Growth Targets Industry and market knowledge Sales planning Platform Optimization Leveraging scale as one platform Investment prioritization Organic Investment Acquisitions June 21, 2007 29
  30. 30. RR Donnelley - An Unmatched Portfolio Labels & Direct Mail eCommerce Tools Label Systems Retail Inserts Books Forms Premedia Financial Magazines Directories Services Services 2006: $374 Billion Market Worldwide, $172 Billion in the U.S. Logistics/Fulfillment Statements Services In-Box & BPO & Document Commercial Global Turnkey Management Printing Catalogs Solutions June 21, 2007 30
  31. 31. RR Donnelley International Presence June 21, 2007 31
  32. 32. New Customers and Expansion of Relationships Since February 2004, the contract value of our largest new business wins and renewals… Totals over $6.5 billion June 21, 2007 32
  33. 33. RRD Existing Global Customers June 21, 2007 33
  34. 34. RR Donnelley is Differentiated to Drive Growth Comprehensive global printing & print-related services platform • Reaches across total value chain • Allows for maximum cost compression Global outsourcing / procurement capability Scale associated with leveraged buying • Materials • Logistics Leveraging long-term customer relationships/contracts • 100% positions in place • Trust is already earned • “Vested interest” Financial strength and stability June 21, 2007 34
  35. 35. Agenda One RR Donnelley Industry Dynamics & RR Donnelley Strategy Financial Review Q&A June 21, 2007 35
  36. 36. Strong Sales Growth Proforma Revenue Growth* 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 1Q05 2Q05 3Q05 4Q05 FY05 1Q06 2Q06 3Q06 4Q06 FY06 1Q07 3.4% 3.3% 4.2% 1.8% 3.2% 5.6% 2.6% 2.0% 2.5% 3.3% 1.3% GDP 5.4% 4.8% 6.1% 4.1% 5.5% 6.5% 6.8% 3.3% 1.9% 4.7% 3.6% RRD NA NA NA NA 3.0% NA NA NA NA 2.0% NA Global Industry *Proforma for acquisitions as presented in quarterly earnings releases; growth rate stated as if the acquisition took place at the beginning of the period in which it occurred (and the comparable prior year period). Not adjusted for Fx and paper prices. GDP is expressed in real terms. Industry growth from Datamonitor. June 21, 2007 36
  37. 37. EBITDA Growth has Exceeded Sales Growth CAGR = 31% CAGR = 35% 9,317 1,600 10,000 1,420 8,430 1,304 8,000 7,156 1,200 1,033 EBITDA ($mm) Revenue ($mm) 6,000 800 4,183 576 4,000 400 2,000 0 0 2003 2004 2005 2006 2003 2004 2005 2006 June 21, 2007 37
  38. 38. 2006 Profitability and Cost Detail 100% % of Revenue 0% Revenue Cost of Sales SG&A D&A Earnings from Cont. Ops Materials Labor Other Semi-variable Fixed D&A June 21, 2007 38
  39. 39. Material and Commodities Paper • Primarily contractual pass-through • Relationships vary among: RR Donnelley supplied Customer directed Customer supplied Other commodities • Ink • Fuel • Natural Gas • Electricity June 21, 2007 39
  40. 40. Historically, D&A has exceeded Capital Expenditures Capital expenditure as a % of Revenue is expected to decrease in 2008 $ in Millions 700 Platform refresh Depreciation & Amortization 595 investments 600 Capex Capex as % Revenue 500 471 450-475 463 425 386 400 374 300 270 265 193 200 5.6% 4.6% 4.0% 4.0% 100 3.7% 0 2003 2004 2005 2006 2007 2008 capex expected to decrease to 3.5% to 4.0% of revenue June 21, 2007 40
  41. 41. Strong Non-GAAP Earnings per Share Growth Non-GAAP EPS Dilutive Impact of Purchasing Accounting $3.50 CAGR = 20% CAGR = 24%, adjusted for purchasing accounting amortization $3.00 $0.35 $0.23 $2.70 - 2.75 $2.50 $2.55 $0.18 $2.29 $2.00 $0.11 $1.65 $1.50 $0.00 $1.31 $1.00 $0.50 $0.00 2003 2004 2005 2006 2007 Note: Dilutive impact of Purchase Accounting amortization calculated using amortization of intangibles, tax effected at the company’s non-GAAP effective tax rate. June 21, 2007 41
  42. 42. Business Generates Substantial Cash Flow Cash Flow from Continuing Ops (CFFCO) $mm CFFCO - Capex 1,200 $972 1,000 $904 $759 800 600 $530 $501 $494 $376 400 $183 200 0 2003 2004 2005 2006 June 21, 2007 42
  43. 43. Debt Maturity Profile Weighted average interest rate of ~5.50% on existing long-term debt • Most outstanding debt at fixed rate Few near-term maturities $ in millions $1,200 969 $1,000 $800 624 598 $600 499 499 400 $400 $200 $0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016+ Interest Rate 3.75% 4.95% 5.63% 4.95% 5.50% 6.65% June 21, 2007 43
  44. 44. Multiple Avenues to Value Creation • Topline growth in line with GDP • Productivity to offset price • Cash flow and capital allocated to Cash drive value Internal Share Dividend Acquisition Debt Repay Investment Buyback • ST cash • Furthers customer • Investor • Organic Growth • Discount to management relationship preference for intrinsic value • Cost Management distribution • Strong credit • Cost synergies • Accretive use of • Maintenance metrics cash • Excess capacity June 21, 2007 44
  45. 45. Balanced Capital Deployment Very strong balance sheet and cash position Strong investment grade credit ratings • Moody’s = Baa2 • S&P = BBB+ Prioritization of cash flows • Dividend maintained at $1.04 per share/year • Internal capital to support growth/productivity • Continued M&A and/or return cash to shareholders June 21, 2007 45
  46. 46. Long-term Targets Revenue growth* in line with GDP • Acquisitions drive additional topline Productivity savings offset pricing pressure • Margin enhancement opportunities from incremental sales and acquisition integration Strong cash flow generation and credit metrics Balanced capital deployment Financial flexibility and levers to pull * Pro forma for acquisitions June 21, 2007 46
  47. 47. Financial Strength US$ in millions 5% US$ in millions R: 3 $1,420 CAG $1,304 31% AGR: C $9,317 $1,033 $8,430 $7,156 $576 $4,183 2003 2004 2005 2006 2003 2004 2005 2006 Revenue EBITDA (2) 0% US$ in millions R: 4 $1,046 % AG R: 25 C CAG $2.55 $833 $2.29 $768 $1.65 $1.31 $383 2003 2004 2005 2006 2003 2004 2005 2006 Non-GAAP EPS (2) EBITDA-Capex (1) Proforma for acquisitions as presented in quarterly earnings releases. Not adjusted for Fx and paper prices. (2) Excludes restructuring, impairment, integration charges and other one-time items. June 21, 2007 47
  48. 48. The RR Donnelley Opportunity Industry leadership Stable, Diversified Deep, scalable customer relationships Cash Generating Experienced management team Platform Economies of scale in procurement, production and distribution Platform refresh and ongoing capital investment drives platform Low-Cost flexibility Advantages Future opportunities for continued productivity Premedia & front-end Distinct Non-Price Differentiators Logistics Proven track record of producing results Strong Financial Strong liquidity and balance sheet Position Financial flexibility June 21, 2007 48
  49. 49. Agenda One RR Donnelley Industry Dynamics & RR Donnelley Strategy Financial Review Q&A June 21, 2007 49
  50. 50. Investor Meeting June 21, 2007

×