RBS - Changes to our forecast and valuation Despite management’s...

RBS -

Changes to our forecast and valuation

Despite management’s positive outlook, we prefer to take a conservative approach to our
forecasts and have revised our forecasts to include a slower ramp-up of print volumes in key
contracts and also substantially increased our debtor days. As a result our DCF-based valuation
has decreased substantially. We have also revised our valuation methodology to be 100% DCF-
based where it was previously equally weighted between DCF, PE compco and EV/EBITDA
valuations. As a result our valuation has fallen from A$1.09 to A$0.79. We retain our 35%
discount to valuation and set our target price at A$0.52 (previously A$0.71).