Highcon Systems Ltd.

Investor Presentation • Nov 28, 2023

Investing in Highcon

November 2023

Highcon עדימ יטפשמ

תגצמ וז לש ןוקייה תוכרעמ מ"עב ,)"הרבחה"( הכרענ םשל תיצמת תוחונו ,דבלב הניאו תדעוימ ףילחהל תא ךרוצה םיחווידב המסרפש הרבחה רוביצל .

תגצמב וז הרבחה הללכ עדימ" הפוצ ינפ ,"דיתע ותרדגהכ קוחב תוריינ ,ךרע ח"כשתה .1968- עדימה רומאכ ללוכ ןיב ,רתיה ,תונווכ ,תויזחת ,תורטמ תוכרעה םינדמואו עדימו ,רחא תוברל ךרדב לש םיפרג ,תואלבטו םיסחייתמה וא םיעגונ הרבחל וא םימרוגל םירחא וא םיעוריאל םיניינעו ,םיידיתע םיכמתסמה ןיב רתיה לע תוכרעה תלהנה ,הרבחה ןויסינ ,רבעה םינותנ עגונב הבצמל יחכונה לש ,הרבחה ,היקסע ימוחת התוליעפ תודבועו םינותנו ורקאמ םיילכלכ םירחאו םיעודיה הרבחל ןוכנ דעומל תנכה תגצמ ,וז תוברל םינותנ םימוסרפו רשא ורסמנ וא ומסרופ לע ידי םיפוג תויושיו ,תונוש הרבחהו הניא תיארחא ,םתונוכנל םקויד וא םתומלש לש עדימה םינותנהו ,םירומאה תדימו םתושממתה הניא תיאדו הניאו התטילשב לש הרבחה .

ףסונב ןיוצי ,יכ עדימ הפוצ ינפ דיתע ,הז ,ועבטמ וניה יתלב יאדוו ףופכו ינוכיסל יא - ,תושממתה ןיב רתיה בקע ימרוג ןוכיסה םינייפאמה תא תוליעפ הצובקה טרופמכ יחווידב ,הרבחה ןכו תויוחתפתההמ הביבסב תיללכה םימרוגמו םיינוציח םיעיפשמה לע תוליעפ הרבחה . םיטרפל םיפסונ ואר רומאה ימרוגב ןוכיסה חודב יתפוקתה לש הרבחה תנשל .2022

,ךכיפל רהבומ ,שגדומו יכ היתואצות היגשיהו לעופב לש הרבחה ןכו ןפוא שומימ הידעי לש הרבחה דיתעב םייושע תויהל םינוש תיתוהמ עדימהמ הפוצ ינפ דיתע אבומה תגצמב וז . םאתהב ,רומאל תוינכות הרבחה תוראותמה תגצמב וז תולולע אלש שממתהל ללכ וא אלש שממתהל ןפואב וב הכירעמ ,הרבחה הרבחהו הניא תבייחתמ ןכדעל וא תונשל ,םינותנ תויזחת וא תוכרעה וללכנש ,הב לע תנמ ופקשיש םיעוריא וא תוביסנ ולוחיש רחאל םוסרפ תגצמ וז .

תגצמה הניא הווהמ הנמזה השיכרל לש תוריינ ךרע לש הרבחה וא הנמזה תלבקל תועצה השיכרל ,רומאכ עדימהו לולכה תגצמב גצומ תורטמל תוחונ ,דבלב וניא הווהמ סיסב תלבקל תוטלחה ,העקשה ,ץועי ,הצלמה תווח תעד וא העצה רשאב תויאדכל העקשה וא הלועפ יהשלכ תוריינב ךרעה לש ,הרבחה וניאו ףילחמ תא לוקיש ,תעדה הקידב תיאמצע ץועייו ישיא . הרבחה אל אשית תוירחאב םיקזנל םידספהו םהשלכ םילולעה םרגיהל האצותכ שומישהמ עדימב תגצמב וז .

Support Highcon in scaling to cross the chasm Why Highcon is a good investment proposition

• Proven business model, undervalued company, seeking scale

àUpside opportunity (*)

• Growth Opportunity 1: Folding Carton
  • Timing: drupa 2024 unique industry milestone and inflection point in 4-yearly innovation and buying cycle
  • 2023 wins momentum

(At the last drupa, Highcon took >\$40M in orders and LOIs)

àRevenue growth upside

• Growth Opportunity 2: Corrugated

Recently announced BHS Corrugated partnership – with worldleading supplier of essential corrugating equipment

àRevenue growth upside

(*) June 2023 Financial reports included "Going Concern"

The world's pioneer in digital finishing solutions, transforming the packaging and display industries

2009	2020
Founded	TASE IPO
\$>100M	79
Invested in R&D	IP Patents (issued & pending)
80	80(*)
Employees	Installed Systems Worldwide

A sample of brand owners with packages or displays made on Highcon

(*) 20 units are multi-units at 8 customers

Global

Israel HQ, US, Europe

\$16B+

Addressable Market

~\$100M

Cumulative Revenues

How Highcon makes a difference

Highcon's digital die cutting supports brands with mega-trends

Creative Designs Business Agility React quickly to opportunities and changes

Sustainability Die elimination, corrugated lightweighting

Zero Inventories Improve cash, eliminate obsolescence

SKU Proliferation More products, smaller batches

Industry Transformation

Highcon's disruptive solutions are part of Packaging Transformation

• Transforming enormous, traditional industries is a huge opportunity , not without challenges
• All the more so, when the industry is capital-intensive with long

depreciation cycles, e.g.	Smurfit Kappa LON:SKG	Graphic Packaging NYSE: GPK
	Revenue: ₤10.93B Gross M&E : ₤7.251B Net M&E: ₤2.983B Net M&E/Revenue ₤0.27	Revenue: \$9.44B Net M&E: \$7.332B Net M&E/Revenue \$0.78
	DS Smith LON:SMDS	WestRock NYSE:WRK
M&E = Machinery & Equipment Net M&E = Depreciated value	Revenue: ₤8.22B Gross M&E: ₤5.194B	Revenue: \$20.31B
Data sources: Most recent corporate annual reports	Net M&E: ₤3.634B Net M&E/Revenue ₤0.44	Net M&E: \$16.59B Net M&E/Revenue \$0.82

It's not transformation for transformation's sake! Why transformation matters

• Transformation isn't simply a change in process but is a release from constraints leading to new opportunities

• Timeline digital revolution enables faster delivery of new jobs, including elimination of die lead time
• Cost elimination of mechanical die removes significant cost for new jobs

• MOQ can be reduced/eliminated due to the removal of the die cost
• Design the inherent analog die cutting limitations inhibit design freedom

The Highcon Opportunity

Enormous market, expected to keep growing in years ahead

* Highcon management estimates

** The delay in NextGen means that the timeline for this opportunity is beyond 2036

High margin, driven by growing # of Jobs (Price Per Job) Proven business model: Recurring revenue

Customer Jobs - Q1-Q3

Source: Highcon BI system

• "It was very much reacting quickly to our customers' needs. It was absolutely the right decision to make for us and it's a key machine now in our offering." JP Wheater - Linney
  -
• "We buy a machine to create revenue. We've been quite successful in creating a new, a new Folding Carton business within our business. We couldn't go for the type of market we're going for without

the flexibility of Highcon." Mal McGowan – McGowans

Proven business model: Repeat Customers

20 units (25% of IB) total are installed at 8 customers

3 systems in less than 18 months

"Had we known how well it would all come together and how quickly, I think we would have made this decision at least a year ago. So, the main learning is I wish we had made the decision a year earlier" -- Richard Brown, CEO – The BoxMaker

4 systems in less than 24 months

"With the constant increase in e-commerce, customers want to be able to decide the shape, size, color and quantity of the items they need... That is how we started using the Highcon Euclid IIIC machine for corrugated. As our business grew, we realized the potential of extending the digital finishing revolution would allow us to expand the range of products for other categories we are able to offer our customers." --Chase Cairncross, COO – Digital Room

2 systems in less than 24 months

Dec 2022 – Sold a second 'Highcon Beam 2C' system within 12 months >\$4M to Pratt Industries, one of the largest Corrugators in North America which operates multiple sites… Potential for multiple additional systems.

3 systems in less than 24 months

March 2023 – Sold a third system - 'Highcon Beam 2' - which marks the first system into Europe. Potential for multiple additional systems across geographies.

HIGHCON CONFIDENTIAL

10

Recent Events (October 2023)

• Partnership announcement with BHS Corrugated (>\$1B company / world leader)
• Investment commitment from shareholders and strategic partners of \$2.5M
• Bank restructuring of debt total \$3.3M
• POs for 2xBeam 2C (\$4M) including \$2.2M downpayment already received
• Next Gen project on temporary holdup
• Deep cut in cost base deliver \$6-7 million annual burn rate reduction

Outcome of the above is:

• Total 12-month cash saving of: \$16-17M
• Reaching cash breakeven in 2024 become highly probable!

\$2.5M committed participation in round

From key investors, strategic partner and strategic supplier

• Long-term investors

• Strategic Partner

• Strategic supplier

Support Highcon in scaling to cross the chasm Why Highcon is a good investment proposition

• Proven business model, undervalued company, seeking scale

àUpside opportunity (*)

• Growth Opportunity 1: Folding Carton
  • Timing: drupa 2024 unique industry milestone and inflection point in 4-yearly innovation and buying cycle
  • 2023 wins momentum

(At the last drupa, Highcon took >\$40M in orders and LOIs)

àRevenue growth upside

• Growth Opportunity 2: Corrugated

Recently announced BHS Corrugated partnership – with worldleading supplier of essential corrugating equipment

àRevenue growth upside

(*) June 2023 Financial reports included "Going Concern"

Thank You