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2 0 18 A N N U A L R E P O R T S U M M A R Y

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C O N T E N T S

Management report 5

Company profile 5

ROTO, THE ENTREPRENEURIAL FAMILY BUSINESS 7ROTO cultural values 7Key figures 9Review of operations 11Financial 15Financial position 17

OVERVIEW OF ACTIVITIES BY BUSINESS UNIT 23Business Unit Steel and steel processing 23Business Unit Grating technology 25Business Unit Surface treatment 27Business Unit Expanded metal 29Business Unit Zinc recycling 31

Corporate social responsibility 33Risk Management 37Human resources 39Expectations 45Report of the Supervisory Board for 2018 47

Summary consolidated f inancial statements 51 Consolidated balance sheet as at 31 December 2018 53Consolidated income statement for 2018 55Consolidated cash flow statement 2018 57Auditor's report 57

ROTO BUSINESSES 58

54

M A N A G E M E N T R E P O R T

Company profile

STRONG IN STEEL

ROTO is a group of companies whose core activities are Steel and steel processing, Grating technology, Surface treatment, Zinc recycling and Expanded metal. These core activities are housed in five independent Business Units that supply their services from branches in the Netherlands, Belgium, Poland, France, Germany, the United Kingdom and the Czech Republic and that focus primarily on the European market.

Roto B.V., the ROTO holding company, supports the Business Units strategically, operationally and financially and, where synergy benefits can be achieved, Roto B.V. encourages cooperation between the Business Units. The organisational structure is therefore clear and, partly thanks to the centralisation of activities such as financing, taxation and insurance, the Business Units can focus entirely on their core activities.

STEEL AND STEEL PROCESSING

GRATINGTECHNOLOGY

SURFACE TREATMENT

EXPANDED METAL ZINCRECYCLING

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ROTO, THE ENTREPRENEURIAL FAMILY BUSINESS

ROTO cultural values

The cultural values identified for ROTO are widely supported by management and the Supervisory Board. These cultural values are therefore inextricably linked to the ROTO mission, vision and strategy. In brief, ROTO stands for:

“ An enterprising family business

with commitment and passion where

reliability is central.

ROTO MISSIONStimulating the

sustainable use of metal as a family business.

ROTO VISIONMaintaining and promoting business activities that

focus on the sustainable use of metal.Cultural values: Entrepreneurial, innovative, family business,

reliability and honesty, commitment and passion

ROTO STRATEGYCreating conceptual benefits in the application of sustainable metals in activities

that are similar or related to current activities.

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Key f igures

(amounts x € 1,000) 2018 2017 2016 2015 2014

Net revenue 194,156 193,890 143,027 134,320 137,289 Gross revenue result 28,843 35,916 29,101 19,121 19,859 Gross margin 14.9% 18.5% 20.3% 14.2% 14.5%EBITDA 16,100 24,004 16,627 6,782 7,003 EBITDA/Net revenue 8.3% 12.4% 11.6% 5.0% 5.1%Net revenue result 10,808 18,689 11,298 1,479 1,756 Net revenue result/Net revenue 5.6% 9.6% 7.9% 1.1% 1.3%Result after tax 7,638 10,163 6,511 212 105 Result after tax/Net revenue 3.9% 5.2% 4.6% 0.2% 0.1%Group equity 71,965 68,427 55,817 47,952 49,046 Total assets 129,516 128,594 116,976 93,295 98,704 Group equity/total assets 55.6% 53.2% 47.7% 51.4% 49.7%Current receivables - current liabilities 50,096 47,210 40,710 27,854 27,704 Average number of employees (FTE) 835 811 781 801 830Investments 4,300 8,794 3,641 1,912 7,091 Quick ratio 0.82 0.97 0.99 1.34 1.01 Current ratio 2.51 2.44 2.31 2.57 2.38

Net revenue (x € 1,000) Result after tax (x € 1,000)

20142015201620172018

194,156 193,890

143,027 134,320 137,289

20142015201620172018

7,638

10,163

6,511

212 105

EBITDA/Net revenue Group equity/total assets as at 31 December

20142015201620172018

8.3%

12.4%11.6%

5.0% 5.1%

20142015201620172018

55.6% 53.2%47.7%

51.4% 49.7%

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Review of operations

The picture for the 2018 financial year was stable. The revenue of more than € 194.2 million is only 1% less than budgeted and, with a result after tax of € 7.6 million, € 0.4 million higher than budgeted, the organisation is performing robustly. With a sound solvency ratio of almost 56%, the management can provide the conditions needed to develop the family business further and prepare it for the future. The cash flow and financing position improved after the completion of a number of larger investment projects and a generally moderate investment level in 2018. The strong financial position allows for further investments which are expected to be financed from the company's own credit facilities.

“Result after tax € 7.6 million, higher

than budgeted.

ROTO B.V. supports the Business Units in maintaining focus on their strategy and, where necessary, on adequately clarifying the mission, vision and strategy of each Business Unit. Where does the Business Unit add value for its customers and how can this position be maintained and actually strengthened? On the basis of an operational culture with a strong drive, profits can be made by paying more attention to strategic and tactical decision-making. That is why the ROTO teams have launched a coaching program that concentrates on the cultural values of Roto B.V.: entrepreneurship, leadership, daring, reliability, commitment and passion.

Focus on KPIs

ROASUSTAINABILITY INNOVATION DIGITISATION HR

The Roto B.V. management is moving further ahead to establish strong profiles for each Business Unit. Based on its position as an investment company, Roto B.V. will continue on the course set by providing more direction in line with the KPI’s adopted. In addition to financial targets, Roto B.V. also focuses on sustainability, innovation, digitisation and HR, to raise the profile of the Business Units. This policy will be developed into actions in 2019 and beyond, both group-wide and specific to each Business Unit.

Price developments in steel and zinc are determinant factors in the markets where the ROTO Business Units operate. After the financial year 2017, in which the development of the zinc price made a very positive contribution to the result, prices in 2018, with both positive and negative peaks, had on balance a more neutral effect on the result, after tax of € 7.6 million (2017: € 10.2 million). Each Business Unit made a positive contribution to the result achieved. The consolidated result after tax, which was, in part, positively affected by some non-recurring income, was € 0.4 million higher than budgeted.

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“ Effect of steel and zinc prices on

group result neutral in 2018.

The zinc price continued to rise in the first quarter of 2018. After the end of March, it fell sharply, becoming more stable from July 2018 onwards (despite fluctuations that were still noticeable). The development of the zinc price has a direct inverse effect on the figures of the Business Units Surface treatment and Zinc recycling. On the one hand, the downward trend in zinc prices has an impact on the cost of sales as a result of the lower purchase price for zinc; on the other hand, sales are affected by the zinc price. The zinc price on the London Metal Exchange is monitored closely and, unless there are unusual fluctuations in the price, there is a fixed purchasing strategy.

Average price per tonne of zinc in 2018

2000

2500

3000

3500

4000

JAN FEB MAR APR MAY JUNE JULY AUG SEPT OCT NOV DEC

The steel price rose slightly during the whole of 2018, followed by a slight fall in December. In 2018 the international market continues to be dominated once again by import quotas and whether or not import measures will remain in place in 2019. Global production capacity and import measures have a direct impact on steel prices. A slight increase in the price of steel pushes up costs for the Business Units Steel and steel processing, Grating technology and Expanded metal. In general, these higher cost prices are also reflected in higher sales prices.

Bandwidth of steel price for EU import Plate (8-40mm) in € (source: Metal Bulletin)

500

600

700

800Highest price

Lowest price

JAN FEB MAR APR MAY JUNE JULY AUG SEPT OCT NOV DEC

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In 2018, additional improvements were made to the sales price policy and the monitoring of margins, resulting in a positive contribution to the development of the operating result. The expansion of the production site of the Business Unit Grating technology in Poland has been completed and work is now under way to improve efficiency. Completion of the investment project of the Business Unit Steel and steel processing is expected in 2019.

Financial

Revenue for 2018 was € 194.2 million, 0.1% more than in 2017 (€ 193.9 million), with revenue increasing for all the Business Units with the exception of the Zinc Recycling Business Unit. The lower revenue of the Business Unit Zinc recyclingis attributable to the direct effect of the lower zinc price. Revenue increased strongly again in the Business Unit Expanded metalby comparison with the previous year, mainly due to strong growth in the architecture market segment.

Revenue development 2014 - 2018

STEEL EN STEEL PROCESSING

GRATING TECHNOLOGY

SURFACE TREATMENT

EXPANDED METAL

ZINC RECYCLING20142015201620172018

Revenue also increased in the Business Unit Steel and steel processing, with volumes developing positively, particularly as a result of the sales of shipbuilding packages. The Business Unit Surface treatment is benefiting from economic developments with higher production volumes and an increase in revenue.

The gross margin for 2018 was 14.9%, 3.6 percentage points lower than in 2017. The decline in margins can be largely explained by the falling zinc price at the Business Unit Zinc recycling, but the margins were also smaller at the Business Units Grating technology and Steel and steel processing. The improvements in capacity and efficiency are not yet apparent, while the increase in steel prices does result directly in a higher cost price. The question of passing on price increases to clients continues to be the focus of management's attention. Gross margins increased in the Business Units Surface treatment and Expanded metal, in part as a consequence of a good strategic focus.

Gross revenue result (x € 1,000) 2014 - 2018

20142015201620172018

28,843

35,916

29,101

19,121 19,859

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Investments of € 4,3 million were made in 2018 (2017: € 8,8 million). Apart from the final investment installments for the expansion of the production facility in Poland, mainly replacement investments were made at all locations. In 2018, Staco Gratings UK moved from a temporarily leased building to its own business premises in a business centre. Rotocoat's property in Hoogeveen, which was no longer in use, was sold in mid-2018.

Investments (x € 1,000) 2014 - 2018

20142015201620172018

4,300

8,794

3,641

1,912

7,091

Financial position

Group solvency stated as a percentage of total assets rose from 53.2% at year-end 2017 to 55.6% at the end of the 2018 financial year. The rise is attributable to the increase in group equity associated with the result for the financial year and also to the annual repayment of the long-term loans from the positive cash flow. On balance, the provisions and current liabilities were virtually unchanged.

The increase in working capital of € 2.9 million (2017: € 6.5 million) was caused by the balance of the increased stock value and a lower balance of outstanding receivables. The higher stock value is primarily attributable to the higher raw material prices (zinc and steel). The lower amount for accounts receivable is due to the robust ROTO accounts receivable policy and the market conditions in which debtors pay sooner. The increase in the working capital was financed from the funds released in connection with the positive result and the associated positive cash flow.

Current assets -/- current liabilities as at 31 December (x € 1,000)

20142015201620172018

50,09647,210

40,710

27,854 27,704

1918

The quick ratio, cash and cash equivalents plus receivables in relation to current liabilities was 0.82 at the end of the financial year (year-end 2017: 0.97). The quick ratio fell because the decrease in receivables is not proportionally visible in the current liabilities, which were more or less unchanged on balance. The purchase price for raw materials in particular (partly reflected in the increased stocks) meant that short-term liabilities actually increased slightly.

Quick ratio as at 31 December Current ratio as at 31 December

2014201520162017201820142015201620172018

0.820.97 0.99

1.34

1.01

2.51 2.442.31

2.572.38

On the other hand, the current ratio (including stocks) increased slightly to 2.51 (year-end 2017: 2.44). The share of the available resources accounted for by the stocks is higher than the resources released from the outstanding receivables, and so the ratio has increased. This increase in the working capital was not financed with short-term borrowed capital but by the strengthening of shareholders' equity through the increase in the result. The change in current liabilities is limited and it therefore has little effect on either ratio.

“ The increase in working capital has

been financed from our own resources.

The positive cash flow from operations in 2018 was € 12.8 million (2017: € 1.8 million positive). This increase over 2017 is attributable to the fall in receivables, leading to a positive effect of € 13.0 million in total. On the other hand, the cash flow from operations in the result was almost € 8.0 million lower as a result of the lower operating result. Interest received includes incidental income in the form of compensation for excess interest paid in the past. The compensation received by one of our subsidiaries in 2018 related to an interest rate derivative covered by the Uniforme Herstelkader.

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Cash flows (x € 1,000)

-12,000-9,000-6,000-3,000

03,0006,0009,000

12,00015,000 INCREASE / (DECREASE)

LIQUID ASSETS

CASH FLOW FROM FINANCING ACTIVITIES

CASH FLOW FROM INVESTING ACTIVITIES

CASH FLOW FROM OPERATIONAL ACTIVITIES

20142015201620172018

At € 2.9 million, the cash flow from investing activities was relatively low (2017: € 8.6 million), mainly due to the relatively low level of investment in the 2018 financial year. On the other hand, the cash flow from financing activities was, at € 9.3 million, € 8.2 million higher than in 2017. This increase is primarily (€ 4.4 million) attributable to short-term bank debt, which rose sharply in 2017 and then declined in 2018 because of the positive cash flow. On balance, the total cash flow rose by € 0.2 million against the background of a negative cash flow of € 7.4 million in 2017 due to investments in, among other things, tangible fixed assets and working capital.

The financial position and the operating cash flow are adequate to continue the activities without additional financing. Roto B.V. complies amply with the agreements made with the credit institution.

Expansion of the Staco Polska factory

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OVERVIEW OF THE ACTIVITIES BY BUSINESS UNIT

STEEL AND STEEL PROCESSING YOU BUILD WE SUPPLY

The Business Unit Steel and steel processing has everything under one roof: a large stock of sheet steel, profiles and bulb flats in a range of qualities, dimensions and thicknesses, specialist cutting capacities (autogenous, plasma and laser), technical steel processing such as the application of fusion edges, reducing and shaping of steel and their own steel coating line. This makes it possible to supply complete shipbuilding kits.

Flyshooter under construction

“ Challenging investment in capacity:

man and machine.

Looking backRevenue at the Business Unit Steel and steel processing was higher than in 2017. There were a relatively large number of staffing changes with a negative effect on operations, leading to the results falling short of expectations and a decrease in the gross margin of 2.1 percentage points. The desired increase in capacity has not yet been achieved because the supplier of the cassette cutting machine has failed to fulfil its obligations. Until this problem is solved, the operating processes will continue to be affected. Despite this, the integration of the Business Unit Steel and steel processing is continuing to take shape, leading to better internal cooperation backed up by the new management in 2019.

Looking aheadThe Dutch shipbuilding sector is moving ahead but there are a limited number of players and so it remains fragile. A sound conservative approach is therefore advisable. Steel prices have been increasing slightly. No clear trend has yet been apparent in 2019 due to ongoing overcapacity, particularly in the Asian market, and increased iron ore prices due to a dam failure in Brazil. Import duties, whether imposed or not, disrupt the international market. Consequently, many parties are operating cautiously.

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GRATINGTECHNOLOGY CREATE AND INSPIRE

The Business Unit Grating technology produces grating applications based on client-specific requirements. Product options are almost unlimited, which means that there are numerous applications in traditional construction as well as in architecture for façade cladding, sun blinds and partition walls. The products include floor gratings, perforated treads, louvre and balcony fencing, expanded metal, Artdeck® and JettyDeck.

“ A bold strategic market approach.

Looking backRevenue in 2018 was up on 2017 but gross margin fell by 3.6 percentage points, partly due to the increase in the purchase price of steel. Given the recovering economy and the centralisation of production capacity, it was expected that the Business Unit Grating technology would have been able to take more advantage of positive economic developments.

Looking aheadThe market where the Business Unit Grating technology operates is characterised by sharp price competition for the standard product. This calls for an unambiguous, more strategic market approach but the local markets each have their own areas requiring attention. For the 2019 financial year, the management expects to improve the ERP programme and achieve further improvements in efficiency.

Patented Staco JettyDeck: more info on jettydeck.nl

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SURFACE TREATMENT ROTOCOATING RELIABLE AND FA ST

The Business Unit Surface treatment specialises in the hot-dip galvanising of steel and the application of protective powder coatings to galvanised steel, steel, aluminium and stainless steel. The combination of hot-dip galvanising and powder coating provides the most durable protection against the corrosion of steel and also ensures that the material looks good. The Business Unit Surface treatment can hot-dip galvanise and powder coat large, wide and heavy materials. Small steel components are hot-dip galvanised in the centrifuge galvanising plant.

Looking backThe effects of the strategic positioning and the streamlining of the operating processes are apparent in the Business Unit Surface treatment. The internal and logistical processes have been further coordinated and are contributing to more efficient business operations. This meant that the organisation was able to take advantage of ongoing economic growth and make better use of the capacity of the production sites. Revenue in 2018 was higher than in the previous financial year. The gross margin increased by more than 2 percentage points, with the falling zinc price contributing to the lower cost price.

Looking aheadThe challenges for the Business Unit Surface treatment relate mainly to HR. The most important HR themes are the ageing workforce, the sustainable employability of employees so that they can continue to work healthily and with pleasure, absenteeism and safety. In line with these themes, the Business Unit's management has focused on innovation with the aim of making working conditions less demanding, preferably through the use of automated tools.

SUSTAINABLE EMPLOYABILITY

ABSENTEEISM SAFETY

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EXPANDED METAL EXPERT IN EXPANDING YOUR SOLUTIONS

Expanded metal can be used in a wide range of applications from architecture to industry. The basic principle is to add value through a unique product and a unique application. In architecture in particular, expanded metal has ideal application possibilities that can provide not only aesthetic but also sustainable solutions.

“ Strategic focus on architecture

for additional colour.

Looking back2018 was a good year for the Business Unit Expanded metal. The strategic repositioning of Métal Déployé with a focus on architecture is beginning to bear fruit. With revenue growth and an increase in gross margin of 0.8 percentage points, the result exceeded the challenging budget. The order book was well filled against a background of considerable market potential. The awareness of expanded metal and its artistic application is on the rise and it is supported by the opportunity to introduce architects to the product in the Métal Déployé showroom in Paris.

Showroom for expanded metal in Paris

Looking aheadIt is important to be able to guarantee quality and reliable deliveries. Métal Déployé is seen as a reliable partner for challenging façade projects, particularly in France. The strengthening of the management team in 2018 has proved beneficial, mainly in operational terms. The focus for 2019 will be on high-quality products, with standard products preferably being sold through the webshop.

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SUSTAINABLE EXCELLENCE IN ZINC METAL REC YCLING

The Business Unit Zinc recycling recycles zinc ashes, zinc scrap and other materials containing zinc from and for the zinc processing industry. The recycled zinc is reused in hot-dip galvanising, brass production, zinc smelting and the production of zinc oxide, zinc powders and zinc chemicals.

Looking backAlthough the lower financial result of the Business Unit Zinc recycling by comparison with 2017 was affected to a major extent by the fall in the zinc price, this Business Unit performed well. In 2018, after a further increase initially in the first quarter, the zinc price fell by about 30%. That fall has a direct effect on Rezinal's revenue and cost price. Revenue fell and the gross margin was almost halved. This is not a surprising development because the margin was expected to fall after the excessive year 2017.

Average price per tonne of zinc in 2018

2000

2500

3000

3500

4000

JAN FEB MAR APR MAY JUNE JULY AUG SEPT OCT NOV DEC

“ The zinc price is key in both the

buying and selling markets.

Looking aheadOperationally, Rezinal had a good year despite the decline in the supplies of raw materials. When zinc prices fall, old zinc in particular is held back by the scrap trade as it waits for market prices to rise. The challenge for Rezinal is to purchase raw materials at the right time while ensuring that there are no production stoppages. Taking the zinc price and the economic stocks position into account, Rezinal uses strategic hedge contracts to partially cover the risk of price fluctuations.

ZINCRECYCLING

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Corporate social responsibility

Corporate Social Responsibility (CSR) is a central theme at ROTO and it is becoming increasingly important in day-to-day operational decisions. Not only for the applications of the ROTO products and services but also in the way the organisation makes operational choices.

Several ROTO companies already have the Metaalunie CSR certificate. CSR does not end with obtaining the certificate: a sustainable result depends on every business decision striking a proper balance between people, the environment and company interests.

“ The theme of sustainability is now

an indispensable part of day-to-day

operations.

ROTO products and services that contribute to the CSR philosophy: y Cradle-to-cradle gratings that are fully recyclable. y Enduring protection of steel from corrosion with hot-dip galvanising and the Duplex system (galvanising followed by powder coating), cutting maintenance costs.

y Replacement of a galvanised product with steel and zinc being recovered and reused. y Recycling of zinc from zinc ashes and zinc scrap into reusable zinc. This leads to a reduction in waste flows and lower energy and water consumption than in the production of primary zinc from ore.

y Use of expanded metal in façade cladding for better climate control in buildings to produce energy savings.

The most sustainable solution is explicitly considered for every investment. For example, lights have been replaced with LED lighting and diesel forklift trucks by electric models. ROTO uses green electricity and is looking at options for installing solar panels. Sustainability is also taken into account explicitly when replacing cars: the use of diesel cars is discouraged and, where possible, people are encouraged to opt for electric vehicles.

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ROTO also closely monitors the national move towards phasing out the use of natural gas. This is an important consideration in the energy-intensive galvanising process. Every measure to save energy is important and it may be reflected directly in a reduction of the cost price. ROTO has put innovation higher on the agenda and is investigating, among other things, the option of using robots effectively. The production process is now inconceivable without robots: their use for repetitive and/or demanding physical work can relieve the burden on our colleagues. The use of tools to further reduce that burden contributes to the objective of sustainable employment.

ROTO is also continuing its efforts to preserve the environment in terms of working without paper. The digital newsletters and ROTOtaal, and the digital processing of invoices (incoming and outgoing) will continue unabated. On the forklift trucks, tablets are used to guide work digitally and the electronic waybill is used in order to work without paper as much as possible.

In 2018 ROTO teamed up with the Opkikker Foundation to contribute to a Super Opkikker Day dedicated to giving a boost to children with chronic illnesses and their families. ROTO has also made donations to various institutions on the basis of their passionate social commitment. ROTO also supported a number of more local initiatives, for example by participating in the NLdoet campaign.

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Risk management

ROTO uses derivative financial instruments to hedge its exchange, zinc price, steel price and interest rate risks.

CASH FLOWCURRENCY PRICE INTEREST RATE CREDIT

Exchange riskROTO operates mainly in the European Union. Future foreign currency transactions are partly hedged on the basis of a risk analysis. This involves using forward exchange contracts.

Zinc and steel price riskROTO is exposed to a price risk associated with the zinc and steel stocks. The price risks for the zinc stocks are partly covered with hedging contracts. The price risk for part of the steel stocks is covered with sales contracts that have already been concluded.

“ The ROTO risk policy can be

characterised as risk-averse.

Interest rate riskROTO is exposed to an interest rate risk associated with the interest-bearing loans and current debt. The interest rate risks on long-term debt are partly hedged through interest rate swaps.

Credit riskROTO has no significant credit risks. The creditworthiness test is conducted on the basis of limit applications lodged with the credit insurer and on the basis of experience and internal assessments.

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A periodical assessment is made of whether the insurance policies are still a good match for the nature and scope of the activities. In addition, a strict debtor policy is in place for outstanding accounts receivable, with credit risks being hedged through credit insurance. The risk mitigated by the insurance is therefore often limited to the deductible.

Liquidity and cash flow riskUnder its current credit facility, ROTO has enough credit to finance its operating and financing activities. Liquidity forecasts are drawn up to manage the short-term financing position. When necessary, scenario analyses are implemented.

The risk-averse approach and the hedging of the risks mentioned above have ensured that the impact on ROTO of undesirable changes in commodity and exchange markets was limited in 2018. The continuation of this policy will ensure that ROTO is adequately protected against this type of risk, insofar as that can be foreseen at present.

Human Resources

The average number of ROTO employees has increased in recent years. In 2018, ROTO had an average of 835 FTEs (2017: 811 FTEs). With the exception of the Business Unit Zinc recycling, the number of employees in each Business Unit rose in response to the increase in business activities. At the end of the financial year, the workforce consisted of 844 FTEs (2017: 822 FTEs). The increase in the number of employees was seen both in the Netherlands and in the other European countries where ROTO is active. If the nature and size of the activities remain unchanged, the number of employees will not rise or fall structurally in 2019 because the expected organic growth can be met using the current capacity.

Demographic FTEs profile

> 50 YEARS

30 - 50 YEARS

< 30 YEARS

Age structureown staff

WOMEN

MEN

Ratio men / women

EducationThe management development process initiated in 2017 continued in 2018 and focused on the development of the management teams for the Business Units and the individual operating units. A distinction was made between sales activities and operating activities. After a joint kick-off, coaching was organised for each management team and there were opportunities for personal coaching at individual level. Encouraging training and development of employees will continue to be on the agenda in 2019, and e-learning application developed in 2018 for production staff will also be rolled out.

“ Personal development is and remains

important.

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ROTO Idea BoxThe innovation prize for the best idea in 2018 was recently awarded to a colleague from Métal Déployé. Innovative ideas are financially rewarded on the basis of the arrangements in place. In 2019, innovation will be brought to the attention of the management of the Business Units once again, and plans in this area will be encouraged and strengthened.

Tut Tut!

“ Good ideas are rewarded.

AbsenteeismAt ROTO's production companies based in the Netherlands, the ambition of an absenteeism rate of less than 4.0% proved to be too ambitious for the time being. The weighted average absenteeism rate for ROTO was 5.6% (2017: 6.1%). It should be pointed out here that the rules on absenteeism vary from country to country. There are also differences between countries in terms of social legislation and therefore, on the duration of the employer's obligation to continue to pay wages.

The absenteeism policy continues to be implemented strictly, with a focus at an early stage on the reintegration and employment options for the employee in the longer term. The current regulations in the Netherlands do not provide enough openings and, unfortunately, they even seem to be counterproductive in many cases in terms of tackling the problem adequately. In other countries where ROTO is active, it has emerged that stricter rules and agreements in this area do have an effect. The target for absenteeism remains 4.0% and the ROTO companies based in the Netherlands are facing a particular challenge.

Safety indexIn 2018, there was an explicit focus on safety through targeted actions on the shop floor. Each accident or near-miss was used to further tighten up the procedures, and risk review and evaluation. The target for the safety index in 2018 was 12. At the end of 2018, the ROTO index was 27 (2017: 17). This was attributable to 38 accidents in total, many of which were less serious.

TALK ABOUT IT

LMRA Laatste Minuut Risico Analyse

1

Kijk om je heen:

zijn er gevaren?

2

Denk goed na over de

risico’s.

?3

Beoordeel de risico’s.

Beheers de risico’s:

neem maatregelen.

4

6

Alles veilig?

Start (hervat) je werk.

Risico’s aanwezig?

Stop direct met werken.

5

STOP

TAKE NO RISKS GOOD HOUSEKEEPINGROOM TO WORK

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The higher score for the safety index can be explained in part by better and stricter registration and measurement than in the past. Nevertheless, reducing the safety index continues to be a high priority. The innovative applications will focus specifically on improving the working conditions by using tools. The use of tools and the 'tone at the top' of the line managers, with support from the management, are crucial to meeting the safety objectives for 2019. Despite the fact that the accidents in 2018 were less serious than in the past, the number of lost-time incidents was still too high. There is an unremitting focus on achieving a safety index of 0.

Safety index

10

15

20

25

30

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Ongoing Lineair

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Expectations

Despite the fact that there is always room for improvement, 2018 turned out to be a good year. The Roto B.V. management would therefore like to thank all ROTO employees who have contributed their dedication and commitment.

The early months of the new year justify our confidence that the challenging 2019 budget can be met on condition that there are no extreme fluctuations in the prices of zinc and/or steel.

“ We look forward to the future of the

family business with confidence.

Tom van Lindert and Ger de Kwaasteniet

Although economic development in Europe is levelling off, the ROTO companies will still benefit in 2019 because the ROTO companies generally operate at the end of the construction cycle. The in-house production of expanded metal no longer fits in with ROTO's strategy. Therefore, steps were taken to sell Métal Déployé, which is a part of the Business Unit Expanded metal, in 2018. Completion of the sale is expected in 2019 and the strategic repositioning of Métal Déployé will ensure a healthy future for the company.

The 2019 financial year will be dominated by the development of new initiatives. The investment process at the Business Unit Steel and steel processing and an investment plan for the Business Unit Surface treatment for extending the range of services will be completed in 2019. The Business Units Zinc recycling and Grating technology are investing in replacements and in the expansion of production capacity. ROTO expects to be able to finance investments in 2019 from the available credit facility and the existing cash flow.

After the completion of the management development programme, ROTO will continue to address the strategic challenges faced by the Business Units by using the dashboards with central themes.

The cultural values as formulated by ROTO continue to be an important anchor for the organisation. ROTO aims to be recognised as an enterprising family business with commitment and passion where reliability is central. Drawing on these cultural values, ROTO's goal is to establish a distinctive profile and deliver ongoing added value for its stakeholders.

Uitgeest, 21 March 2019

Roto B.V. ManagementGer de Kwaasteniet, chief financial officerTom van Lindert, chief financial officer

4746

Report of the Supervisory Board on 2018

There has been no change in the membership of the Supervisory Board. Tom de Boer is a shareholder as well as a member of the Supervisory Board. The other three members of the Supervisory Board are independent. In addition, a trainee also attended the regular meetings in 2018. Her input in the meetings was found to be valuable.

In the regular meetings, the quarterly reports were adopted as a basis for discussions of matters such as operations, risk management, IT management, investment plans, sustainability, the auditor's management letter and innovation.

In addition to the four regular meetings of the Supervisory Board, a number of additional meetings were organised specifically to discuss potential acquisitions and the strategic focus of Roto B.V. and its Business Units. These extra meetings, which were also attended by the Roto B.V. management, were a valuable addition to the regular meetings.

“ Supervision means more than just

watching from the sidelines.

Rik van Thiel (Chairman of the Supervisory Board), Tom de Boer, Lucien Perizonius and Coert Zachariasse

2018 was dominated by the repositioning of Roto B.V. in relation to its Business Units. The Roto B.V. management, in consultation with the Supervisory Board and the management of the ROTO Business Units, has identified a number of cultural values that reflect the DNA of each ROTO company.

Core themes were identified in these cultural values that sometimes apply to each ROTO Business Unit and that are sometimes put forward specifically by the individual Business Units. Dashboards are used to follow up the action points and state scores for each Business Unit.

The management teams of the ROTO Business Units have also initiated a coaching programme with a central focus on entrepreneurship and strategy within the framework of the ROTO cultural values. Strengthening the management teams allows the Roto B.V. management to increase the distance from its Business Units and adopt a more coaching and facilitating role.

As usual, the Supervisory Board evaluated the performance of the Roto B.V. management and noted that the management continued to perform well in 2018. The Supervisory Board also organised a separate meeting to evaluate its own performance. This self-assessment showed that the membership and expertise of the Supervisory Board is adequate for the continued performance of its critical supervisory role. However, the Supervisory Board is striving for a more balanced ratio of men to women and this issue will have to be addressed again at the time of the next appointment or re-appointment.

4948

The working relationships in the Supervisory Board are harmonious and there are transparent and trusting communications with the Roto B.V. management on the basis of a critical, constructive approach. In 2019, the Supervisory Board will focus more on the strategic development of the various Business Units, particularly now given the numerous developments at international level.

The Supervisory Board notes that ROTO has been able to benefit from the economic developments thanks to the efforts of many motivated employees and that it was able to strengthen its position again in 2018. The Supervisory Board expects ROTO to benefit once again from the forecast economic growth in 2019. The prospects for ROTO are good and the Supervisory Board expects the result for 2019 to be strong again.

Rik van Thiel, Chairman of the Supervisory Board

Roto B.V. Supervisory Board

Rik van Thiel, chairmanTom de BoerLucien PerizoniusCoert Zachariasse

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S U M M A R Y C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S

5352

ROTO B.V. UITGEEST

Consolidated balance sheet as at 31 December 2018 for profit appropriation

ASSETS (x € 1,000) 31 December 2018 31 December 2017

FIXED ASSETS

Intangible fixed assets 38 24

Tangible fixed assets 45,673 47,920

Financial fixed assets 568 683

CURRENT ASSETS

Stocks 56,094 48,332

Receivables 25,592 30,284

Cash and cash equivalents 1,551 1,351

129,516 128,594

LIABILITIES (x € 1,000) 31 December 2018 31 December 2017

GROUP EQUITY 71,965 68,427

PROVISIONS 3,610 3,529

LONG-TERM LIABILITIES 20,799 23,881

CURRENT LIABILITIES 33,142 32,757

129,516 128,594

5554

ROTO B.V. UITGEEST

Consolidated income statement for 2018

(x € 1,000) 2018 2017

Net revenue 194,156 193,890 Cost of sales 165,313 157,974

Gross revenue result 28,843 35,916

Sales expenses 763 844 General management expenses 17,272 16,383

Operating expenses 18,035 17,227

Net revenue result 10,808 18,689

Interest result 405 (526)

Result on ordinary activities before tax 11,213 18,163

Tax on result from ordinary activities (2,565) (4,850)

Income from participating interests 10 35

Result from ordinary activities after tax 8,658 13,348

Share of third parties in result (1,020) (3,185)

Result after tax 7,638 10,163

5756

ROTO B.V. UITGEEST

Consolidated cash f low statement for 2018

(x € 1,000) 2018 2017

Cash flow from operating activities 12,764 1,786

Cash flow from investment activities (2,934) (8,607)

Cash flow from financing activities (9,324) (1,161)

Net cash flow 506 (7,982)

Translation differences (306) 562

Increase / (decrease) in cash and cash equivalents 200 (7,420)

(x € 1,000) 2018 2017

Balance as at 1 January 1,351 8,771

Change 200 (7,420)

Balance as at 31 December 1,551 1,351

Auditor's report

The figures included in this annual report summary were taken from the annual reports filed with the Chamber of Commerce. For a complete picture of the 2018 financial statements, we refer to the 2018 annual report filed for Roto B.V., for which Mazars Accountants N.V. issued an unqualified auditor's report on 26 March 2019. The auditor did not perform any work on the figures included in this annual report summary.

5958

DE BOER SNIJBEDRIJF B.V. Molenstraat 28NL-1911 DA UitgeestNetherlands

deboersnijbedrijf.nl

DE BOER STAAL B.V. Molenstraat 28NL-1911 DA UitgeestNetherlands

deboerstaal.nl

DEJO METAALINDUSTRIE B.V. Ambachtsstraat 3NL-8471 AA WolvegaNetherlands

dejo.nl

MÉTAL DÉPLOYÉ SAS 2 Quai Philippe Bouhey21500 Montbard - CedexFrance

metaldeploye.com

REZINAL N.V. Dellestraat 17B-3550 Heusden-ZolderBelgium

rezinal.be

ROTO B.V. Molenstraat 28NL-1911 DA UitgeestNetherlands

rotogroep.nl

ROTOCOAT DIEREN B.V. Kanaaldijk 40NL-6956 AX Spankeren Netherlands rotocoat.nl

ROTOCOAT HEERHUGOWAARD B.V. Edisonstraat 2NL-1704 RL Heerhugowaard Netherlands

rotocoat.nl

ROTO BUSINESSES

ROTOCOAT KAMPEN B.V. Veldoven 11NL-8271 RT IJsselmuiden Netherlands

rotocoat.nl

ROTOCOAT WOLVEGA B.V. Ambachtsstraat 3NL-8471 AA Wolvega Netherlands

rotocoat.nl

STACO BELGIUM N.V. Industriepark-Noord 19B-9100 Sint-NiklaasBelgium

staco.be

STACO DEUTSCHLAND GMBH Erftstraße 19GiesenkircheD-41238 MönchengladbachGermanystaco.de

STACO GRATINGS UK LTD Suite 9 Ashford HouseSir Thomas Longley RoadRochester, Kent ME2 4FAUnited Kingdomstacogratings.co.uk

STACO HOLDING B.V. Molenweg 1NL-5953 JR ReuverNetherlands

staco.eu

STACO NEDERLAND B.V. St. Jozefweg 68NL-5953 JP ReuverNetherlands

stacoroosters.nl

STACO POLSKA SPÓŁKA Z O.O. ul.Fabryczna 8PL-32-005 NiepołomicePoland

staco.pl

60

ROTO B.V.Molenstraat 28 • NL-1911 DA UitgeestT +31 251 362 280E info@rotogroep.nlwww.rotogroep.nl