Press release

Velsen, 16 May 2012 (before market opening)

CLEAR IMPROVEMENT OF RESULTS AND RETURN TO PROFITABLE OPERATIONS IN Q1 2012 CVG BENEFITING FROM LOWER PULP PRICES AND STRONG GROWTH IN NEWLY DEVELOPED PRODUCTS

Today, at the Annual General Meeting of shareholders Miklas Dronkers, CEO, will present the following trading update on recent market developments, the status of the strategic review and the outlook for 2012.

Operating review

Market developments

In the first four months of 2012, CVG has benefited from a clear recovery in the European paper market. Although the order volume in the European market for woodfree uncoated paper on reels showed a decrease of 7% compared with the same period last year, market sentiment improved substantially from the lacklustre conditions in the second half of 2011, when due to
low order intake production capacity could not be fully utilised.
CVG s order book has been strong during the last couple of months, resulting in the full utilisation of production capacity and a more selective acceptance of customer orders.
As announced at the presentation of the annual results last February, the company will focus strongly on the commercialisation of the newly developed (NBD) products in 2012. The commercialisation programme is well on course and NBD sales are expected to increase to approximately one-third of our sales volume in 2012. Thanks to the new business development programme, CVG now has a leading role in the market for specialty paper for high-speed colour inkjet printers. This was confirmed at the Drupa, the largest international trade fair for the paper and printing industry in the world, which was held in Germany during the last two weeks. The introduction of Crown Digital Silk, a special inkjet paper for the latest generation of high speed inkjet printers was well-received during the fair. Crown Digital Silk guarantees improved colour depth and excellent printing results due to a silky paper surface.

Raw material prices

Pulp is the most important raw material for CVG s papers and also the largest input cost in the papermaking process. In mid 2011, pulp prices reached record levels with the NBSK benchmark to around USD 1,020 per ton. In the second half of 2011 the pulp market gradually returned to a more balanced supply and demand situation. The NBSK pulp price came down to around USD 830 per ton in February.

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Strategic review

In 2005, CVG initiated the new business development (NBD) programme. This programme anticipated on the rapid digitisation trend in the graphical paper sector. With the NBD programme, the company has been able to better position itself for the future. In the last couple of years, CVG has developed itself to a specialty paper manufacturer with a comprehensive product portfolio.
CVG will build further on its core strengths, especially our customer orientation and flexibility of operations. The company has defined three focus areas to distinguish ourselves better among our larger competitors and to promote profitable business opportunities:
- Graphical: CVG s traditional market. CVG intends to strengthen its leading market position in papers for digital printing and aims at sales growth in paper supplies for high speed full colour inkjet printers.
- Label: the strong back-bone of the company, with CVG as one of the market leaders in
Europe. CVG aims to increase its market share and diversify further in release liners.
- Packaging: CVG aims to penetrate and diversify in specific applications within the food and non-food packaging market.
For a further acceleration of growth in more profitable markets, CVG has actively searched for cooperation with other players in the paper and packaging sector. With the right partner, CVG might be able to speed up the launch of and growth in new products, both in the company s current market as well as other market areas, such as (food) packaging.
Since September 2011, in cooperation with a corporate finance adviser a large number of market players has been approached and with several parties meetings were held to explore opportunities for cooperation. Until now the search for alternative options for the company has not materialised in tangible outcomes. This could well be attributed to the challenging financial and business climate during this period.
Good contacts with several parties have been established and might result in opportunities at a later stage. The company will give an update on the developments when serious opportunities for cooperation materialise.
In the coming period, CVG will make a further outline of its mission and goals for the period up to and including 2016. Mission 2016 will be published together with the 2012 annual results in February 2013.

Outlook 2012

The recovery in paper demand, a.o. newly developed products, and lower pulp prices have resulted in a clear improvement of results and a return to profitable operations in the first months of 2012. As from March, pulp prices have increased again and are expected to rise
further till Q3 2012. This will put a downward pressure on selling margins, but this is expected to be compensated by sales growth in new products and higher selling prices.

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The development of results in 2012 is subject to a further increase in sales of our newly developed products, the general economic outlook, paper demand, pulp and selling price developments and the development of exchange rates. All these factors are yet hard to predict. Therefore, CVG is not in the position to provide a more precise outlook for the full year 2012. But based on the developments in the first months of 2012 and the current market outlook the company expects operations for the full year 2012 to be profitable.
Crown Van Gelder will publish the 2012 half year results on 27 July 2012 (before market opening).

For more information, please contact:

Henk van der Zwaag, CFO, tel. + 31 (0)251 262 200.
Internet site: www.cvg.nl

Profile:

Based in Velsen, the Netherlands, Crown Van Gelder N.V. is a specialist paper manufacturer with around 290 staff. The company develops, produces and sells high-quality speciality products in the woodfree uncoated and single-coated paper sectors. The product portfolio includes customised solutions for self-adhesive labels and base paper grades that are coated, metallised or provided with a (polyethylene) PE coating, and paper products suited as packaging materials for use in combination with foodstuffs, and a series of speciality paper products designed to print forms, direct mail, envelopes, books, and manuals. Crown Van Gelder N.V. is listed on NYSE Euronext Amsterdam.

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