PLG Viewpoint Engagement Survey 2010

Background The PLG Viewpoint Engagement Survey was introduced in June 2008 It is an important temperature check in assessing the engagement levels of the PLG and measuring the extent to which the Values have been embedded Gathers feedback across 10 topics – Contribution & Recognition, PaperlinX Values, Behaviours, Culture, Leadership, Communication, Development, Rewards, Satisfaction and Business Strategy Originally planned to be performed on an annual basis, however no survey for 2009 due to a need to focus on business priorities. Survey re-launched in September 2010 So why focus on engagement? o Engagement is highly correlated to key business measures, including productivity and retention, customer satisfaction, total shareholder return (TSR), and sales growth o Employees who are most committed perform 20% better and are 87% less likely to leave o Organisations that have improved their engagement level have realised corresponding improvements in their business success measures o Links to alignment and understanding of business strategy

Viewpoint Results Response rate = 78% Strengths (75% or above favourability) o Behaviours 88% favourability o Culture 86% favourability o Contribution and Recognition 81% favourability o Business Strategy 83% favourability o Rewards 75% favourability Opportunities (less than 75% favourability) o Leadership 71% favourability o Development 69% favourability o Communication 66% favourability o Satisfaction 62% favourability o Values 62% favourability

Viewpoint Results Themes of open/ verbatim comments: o Need increased strategic leadership to combat decline in paper industry - can no longer afford to blame external factors o Must identify new markets and growth opportunities o Increase sense of urgency re change and critical business issues - we are not responding fast enough o Turn up the pressure on accountability and poor business results o Must do a better job of managing costs in the business o Need to increase our performance management abilities to deal with poor performers

Viewpoint Actions Action Plans 2008 Too many! About 19 globally plus Regional actions Global actions identified included: o Developing and implementing change and project management framework to assist leaders o Remeasuring LSI 360s for the PLG o Conducting local management Values workshops For obvious business reasons we did not progress many of the actions However did make progress in areas such as: – Embedding the Values in HR processes – Implementing change and communication frameworks (particularly PPXE)

Viewpoint 2010 The survey comprised: o 70 statements separated into 10 topics - same as 2008 for trending purposes o 4 open questions (the previous survey only included one open question) o 3 demographic questions Respondents asked whether they strongly agree, agree, mixed, disagree or strongly disagree with the statement The survey was administered and analysed by Snap Surveys, a UK Survey Software company The survey was open from the 15 th September to 28 th September 2010

Viewpoint 2010 – How to view the results A statement is classified as favourable if the respondent either agreed or strongly agreed to the statement If a topic is over 75% favourability it is listed as a strength. An opportunity is below 75% favourability. A notable change is a statement that is +5% points or -5% points different from the favourability score for 2008

Viewpoint 2010 – Executive Summary Marginal reduction against 2008 results but should be viewed as incredibly positive given the business environment of the last 2 years Overall favourability across the PLG of 73% against 74% in 2008 Strong results overall for Culture, Business Strategy, Behaviours and Contribution & Recognition Some opportunities in Communication, Development and Rewards (as is likely to have been expected) – however these results are not poor Significant opportunities and improvement required for Values and Satisfaction as both have been consistently low for 2008 and 2010

Viewpoint 2010 – Executive Summary The results suggest there is a disconnect between the individual and PaperlinX – I vs PaperlinX – for example: o I perform well but question if PaperlinX will be successful o I communicate to my team but question whether PaperlinX shares ideas well and communicates sufficiently o I put in above and beyond what is required and as such believe we are under too much pressure with a limited work-life balance o I care about my team but question PaperlinXs commitment to caring for its people

Viewpoint 2010 – Executive Summary Areas for focus for 2011 from the results appear to be: o Improve communication and knowledge sharing across the Groups o Seek ways to better embed and embody the PaperlinX Values amongst the PLG o Improved employment brand of PaperlinX and the PLG o Stronger leadership in the areas of change management and delivery of strategic plans

Viewpoint 2010 – Executive Summary Notable reductions in overall favourability for Europe and ANZA o Attributed to worsening scores across the board particularly Values, Development and Satisfaction o Most notable across Europe Divisional Office which saw reductions across most of the topics – notable exception was culture which remained high Improvement for Group Offices overall favourability o Culture, Business Strategy, Rewards, Contribution & Recognition and Communication all improved from 2008 o Development and Values dropped but not enough to reduce favourability below 2008 levels North America remains the most engaged region but overall favourability did drop from 2008

Viewpoint 2010 – Response Rates Response rate of 88% - an improvement from 78% in 2008 RegionTotal ResponsesPLG Members% Responses Australia, New Zealand & Asia232496% Europe combined % North America586885% Group Office16 100% TOTAL % AgeTotal Responses% Under 3584% % % 56 and over2614% TOTAL183100% Length of Service Total Responses% 0-2 years2011% 3-7 years5128% 8-10 years2514% plus 11 years8748% TOTAL183100%

Viewpoint 2010 – Results By Topic Topics Change % +/- Contribution & Recognition 80%81%-1% PaperlinX Values59%62%-3% Behaviours83%88%-5% Culture88%86%+2% Leadership68%71%-3% Communication68%66%+2% Development66%69%-3% Rewards70%75%-5% Satisfaction59%62%-3% Business Strategy83% 0% OVERALL73%74%-1%

Viewpoint 2010 – Results By Topic Strengths ( 75%): Culture 88% favourability - improvement from 86% in 2008 Behaviours 83% favourability – however down from 88% in 2008 Business Strategy 83% favourability –same as 2008 Contribution & Recognition 80% favourability – slight decrease from 81% in 2008 Opportunities (<75%): Satisfaction 59% favourability - decrease from 62% in 2008 PaperlinX Values 59% favourability - decrease from 62% in 2008 Development 66% favourability - decrease from 69% in 2008 Leadership 68% favourability - decrease from 71% in 2008 Communication 68% favourability – however an improvement from 66% in 2008 Rewards 70% favourability – decrease from 75% in 2008

Viewpoint Most Favourable statements Statement % Change +/ - I care about my team members and recognise their performance 99.5%99.0%-0.5% I always try to do more than is actually required 97.3%96.3%+1.0% I try to keep abreast of current developments in my area of expertise 97.2%94.7%+2.5% I am held accountable for my performance94.6%93.7%+0.9% I effectively communicate relevant information to my team 93.4%92.6%+0.8% I feel comfortable taking managed risks92.9%93.7%-0.8% I feel I am performing well within my role91.3%91%+0.3% I feel motivated to work for my business group 90.2%86.3%+3.9% I understand where my role fits in the business 90.2%93.1%-2.9% I believe that my role adds significant value to the execution of our business group 90.1%87.9%+2.2%

Viewpoint 2010 –10 Least Favourable statements Statement % Change +/ - PaperlinX shares ideas well across the organisation32.8%35.3%-2.5% I am not under too much work pressure41.0%44.7%-3.7% PaperlinX acknowledges and rewards excellent performance 44.8%60%-15.2% I feel we have a human, energised and fun workplace45.4%45.8%-0.4% I think PaperlinX is doing a good job of retaining its most talented people 46.4%52.6%-6.2% I am able to strike a good balance between home and work life 46.4%49.5%-3.1% I feel that my career aspirations are being actively managed and that PaperlinX will be able to satisfy my ambitions 47.5%45.8%-1.7% Our leaders implement and manage change effectively48.1%48.9%-0.8% Knowledge and information sharing is common practice among members of the Leadership Group 48.1%36.8%+11.3% I believe our leaders are effective at inspiring and motivating 49.2%52.6%-3.4%

Notable Improvements (+5%) 2010 vs Statement % Change +/ - Knowledge and information sharing is common practice among members of the Leadership Group 48.1%36.8%+11.3% My manager briefs me on important business issues and developments 83.6%73.1%+10.5% I believe that my business group has a positive workplace culture which helps to drive success 78.1%68.4%+9.7% I am encouraged to learn from my mistakes and successes 85.3%77.3%+8.0% I feel my boss cares about me and recognises my contributions 77.6%71.6%+6.0% I believe our business group's strategy will contribute to improving profitability 81.4%75.8%+5.6% I gain fulfillment from my job and my accomplishments 89.6%84.2%+5.4%

10 Notable Reductions (-5%) 2010 vs Statement % Change +/ - PaperlinX demonstrates care and concern for employees 64.5%80.0%-15.5% PaperlinX rewards excellent performance44.8%60.0%--15.2% I believe the training I have received has supported my development 64.5%79.0%-14.5% I am proud to tell others that I am part of PaperlinX73.2%86.3%-13.7% I believe PaperlinX is focussed on our future sustainability 74.8%86.3%-11.5% PaperlinX is concerned about my wellbeing64.5%75.2%-10.7% I feel we really care about our people51.4%61.5%-10.1% I believe that my remuneration is fair in relation to my responsibilities 56.3%65.3%-9.0% I understand and apply the PaperlinX Core Operating Principles 88.0%96.4%-8.4% PaperlinX actively supports my continuing professional development 53.0%60.5%-7.5%

Still negative (<50%) for 2010 & 2008 Statement % Change +/ - I feel we have a human, energised and fun workplace 45.4%45.8%+0.4% Our leaders implement and manage change effectively 48.1%48.9%+0.9% Knowledge and information sharing is common practice among members of the Leadership Group 48.1%36.8%+11.3% PaperlinX shares ideas well across the organisation 32.8%35.3%-2.5% I feel that my career aspirations are being actively managed and that PaperlinX will be able to satisfy my ambitions 47.5%45.8%+1.7% I am able to strike a good balance between home and work life 46.4%49.5%-3.1% I am not under too much work pressure 41.0%44.7%-3.7%

Viewpoint Verbatim Comments PLG Members were asked to respond to four open questions: What do you think are the key issues facing PaperlinX? Why did you join PaperlinX? What has made you stay at PaperlinX? What would keep you at PaperlinX?

Verbatims - Key issues at PaperlinX? The most common issues that were discussed included: Industry Factors (41%) which included diversifying the business, growth, moving away from traditional paper markets, the declining market and economic conditions Accountability and Delivery (21%) around poor execution of strategies and processes, a need for changed business models/approaches, poor management, stronger communication and change management Financial Performance (18%) particularly returning the business to profit, securing cash flow and improving working capital Structure and strategy (13%) which included clarity over decision making and structure across the Group, clarity of direction, too bureaucratic with an inability to make a decision at the local level without consulting the group and the integration of Operating companies, countries and regions Retention and attraction (7%)

Verbatims - Why join PaperlinX? The most reasons for joining PaperlinX included: The Role (38%) including it being seen as a growth opportunity, challenging role, the role suited personal ambition and the individual was brought in for the skills they could bring to the role Acquisition (35%) i.e. they had not joined PaperlinX but rather an Operating Company who was acquired by PaperlinX The Company (24%) including the potential success of PaperlinX, the global nature of the business, the reputation and the size of the business and; The People (3%) good people and believing in the manager

Verbatims - Why stay at PaperlinX? The most common reasons for PLG members to stay so far included: Challenge and Growth (33%) including the continual opportunities to be challenged and advance People and Culture (33%) including the people, the individuals colleagues and managers, the culture, remuneration, support of managers and work-life balance The Business (19%) including liking the company, faith in the business, loyalty and it being a global company The Role (14%) including enjoyment in the role, variation of roles and the job is not finished No viable alternatives (3%)

Verbatims - What would keep you at PPX? The most common reasons that would keep PLG members at PaperlinX into the future included: People needs (39%) including rewards & recognition, the remuneration, strong culture, good people/management, work-life balance, change in role and job satisfaction Promotion and Career Advancement (23%) Business Success (19%) Improved delivery of the business (19%) including change in business approach, clearer strategy, improved communication, confidence in the business & change in personnel

So what does this all mean? Improving communication, leadership, embedding of the values and managing work life balance appear to be most pressing issues for attention for 2011 Change management continues to be a issue for leaders and the business Limited perceived career opportunities could pose retention problems in the long run The fun factor needs to return Disconnect between PaperlinX and the individual I perform well but question if PaperlinX will be successful I communicate to my team but question whether PaperlinX shares ideas well and communicates sufficiently I put in above and beyond what is required and as such believe we are under too much pressure with a limited work-life balance I care about our team but question PaperlinXs commitment to caring and as such feel PaperlinX is losing good people

Regional Results Dashboard TopicsANZA (%) Europe Region 1 (%) Europe Region 2 (%) Europe Divisional Office (%) North America (%) PaperlinX Group Office (%) PLG 2010 (%) PLG 2008 % Contribution & Recognition 70%81%82%67%87%72%80%81% PaperlinX Values51%63%57%37%68%51%59%62% Behaviours78%82%79%63%86%74%83%88% Culture88%82%89% 87%88% 86% Leadership70%64%67%57%74%69%68%71% Communication68%65%59%63%75%72%68%66% Development65%64%62%44%77%59%66%69% Rewards70%64%63%64%78%77%70%75% Satisfaction51%49%46% 64% 59%62% Business Strategy 83% 78%64%91%79%83% OVERALL69%70%68%59%79%71%73%74%