Avgol Industries 1953 Ltd.

Investor Presentation • Feb 28, 2023

למסמך הנגיש לחץ כאן

Financial Results

Q4/2022

Tommi Bjornman – CEO Sivan Yedidsion – CFO

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© Avgol Industries 1953 Ltd. 2022

Analyst Conference | Disclaimer

• מצגת זו הוכנה ע"י חברת אבגול תעשיות 1953 בע"מ )להלן "החברה"(. המידע הכלול במצגת וכל מידע אחר שיימסר במהלך הצגת המצגת )להלן "המידע"( אינו מהווה בסיס לקבלת החלטת השקעה, ואינו מהווה המלצה או חוות דעת, וכן לא מהווה תחליף לשיקול דעת של משקיע פוטנציאלי. המידע ניתן לצורך הנוחות בהצגת הנתונים והחברה אינה חייבת להמשיך לתת את הנתונים ו/או לעדכנם. האמור במצגת בכל הקשור לניתוח הפעילות של החברה הינו תמצית בלבד, ועל מנת לקבל תמונה מלאה של פעילות החברה ושל הסיכונים עימם מתמודדת החברה, יש לעיין בדיווחים המלאים של החברה לרשות לני"ע ולבורסה.
• המצגת כוללת מידע צופה פני עתיד, כהגדרתו בחוק ניירות ערך, של תחזיות, מטרות, הערכות ואומדנים המתייחסים לאירועים או עניינים עתידיים, אשר התממשותם אינה ודאית ואינה בשליטת החברה, והוא מבוסס רק על הערכתה הסובייקטיבית של החברה.
• התממשותו ו/או אי התממשותו של המידע הצופה פני עתיד תושפע מגורמים אשר לא ניתן להעריכם מראש והם אינם מצויים בשליטת החברה ולפיכך על אף שהחברה מאמינה שציפיותיה, כמוצג במצגת, הינן סבירות, הרי שאין כל וודאות כי תוצאותיה בפועל של החברה בעתיד תהיינה בהתאם לציפיות אלה והן עשויות להיות שונות מאלו שהוצגו במידע צופה פני עתיד.
• This information is forward-looking information, which is based on the information known by the Company at the time of this report is being published. This information might not materialize or might materialize in a way that differs from that anticipated, inter alia, if a material change in trend occurs, or due to other parameters that affect the Company's manufacturing costs or the Company's selling prices.
• This presentation is based on the Company financial reports.

© AVGOL Nonwovens 2020

• There is no data in this presentation that isn't presented in the public financial reports.
• If there is any discrepancy between this presentation and the data in the financial report that was issued to the Israeli SEC and the TASE, the valid data is the one which appears in the formal reports.
• This presentation is provided for information and as a matter of record only. It does not constitute an offer to sell or a solicitation of an offer to buy or sell securities or other financial instruments in any jurisdiction or any advice or recommendation with respect to such securities or other financial instruments of the company.

AVGOL Market

Hygiene Other

Analyst Conference I Who We Are

AVGOL is a world leader in the development, manufacturing and marketing of nonwoven fabrics for diapers, adult incontinence products, disposable feminine hygiene products, disposable medical products, wipes, fabrics used to produce masks, gowns and additional medical products.

The Company also manufactures nonwoven fabrics used as raw material in various non-hygiene products.

Analyst Conference | Who we are

Covering Baby diapers , Feminine Care, Adult Incontinence, PPE and medical

Mainly Polypropylene Spunmelt / Meltblown Biodegradable NW

We aspire to:

• Grow and strengthen our position by expanding production capacity to meet the continuous growth in the hygiene market
• Bring innovative nonwoven products that will bring better solutions to regional trends and preferences
• Be the definitive leader in the commercialization of nonwoven spunlaid materials that have reduced impact on the environment

Analyst Conference | Who We Are

Our Vision: We Aspire to Create Nonwoven Innovations to Enhance Quality of Life

Our team

~800 employees in the Global commercial and technical team

Global

6 production sites in Israel, USA, China, Russia and India supplying more than 30 countries.

Quality

Committed to serve our customers with on-time, in full supply of materials to specification

Strategy

Global leader in the Nonwovens industry, with broad application and end-use touch points

The Public 34.03%

Analyst Conference | What We Do

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Spunbond Meltblown

Provides strength and base performance Structure useful in filtration and wipe materials

Combination of one or more Spunbond beams and one or more Meltblown beams

© Avgol Industries 1953 Ltd. 2022

USA Expansion | Project Update

In December 2022, the company's Board of Directors decided to establish a new production line in our North Carolina, USA facility, as an alternative to the originally planned expansion in Russia.

The addition of this new Reicofill 5 machine will expand the company's existing production capacity by 20KMT annually, offering better efficiency and more advanced products to serve the growing North American market.

Total planned investment : USD 90 million

Commissioning planned during Q4/2024

Excellence Award From P&G | News

In 2022, the company was awarded the prestigious Supplier Excellence Award by Procter & Gamble, a leading global brand. The award was in recognition of Avgol's significant service performance as a supplier to the P&G Baby Care Business Unit, over the last fiscal year.

Analyst Conference I Quarterly Financials Highlights

USD Mn	Q4'22	Q3'22	Q2'22	Q1'22	Q4'21
Revenues, net	103	110	100	115	137
Gross Profit	19	18	13	26	25
	18.6%	16.8%	13.4%	22.5%	18.1%
EBIT	9.7	9	5	17	16
	9.5%	7.8%	5.3%	14.7%	11.5%
Net Profit	5	6	5	12	6
	4.6%	5.0%	5.1%	10.5%	4.7%
EBITDA	18	16	12	23	22
	17.1%	14.7%	12.0%	20.1%	16.2%
EBITDA Underlying	9	9	14	16	20
	9.2%	7.9%	14.4%	13.5%	14.5%
Net Debt/EBITDA	1.82	1.87	2.15	2.22	2.65

4Q'2022

Revenues of \$102.5M vs \$136.6M in 4Q'2021

The fourth quarter was largely impacted by the decline in polypropylene prices to which our sales prices are linked to, together with lower sales volumes, largely affected by the Russian invasion of Ukraine, as well as the global economic slowdown across other regions.

Gross Profit of \$19.0M vs \$24.7M in 4Q'2021

The Gross Profit in Q4'22 includes a positive impact of about \$8.1M in lag effect, compared to a positive impact of \$2.4M in Q4'21.

The gross profit was impacted mainly by lower sales volumes and increasing energy cost, together with the realization of relatively high-cost inventory, along the decline in raw material prices during the period.

SG&A expenses of \$8.1M vs \$8.8M in 4Q'2021

Despite inflationary pressures, operating costs remained stable, together with a gradual decrease in logistics costs.

4Q'2022

EBITDA of \$17.6M vs \$22.2M in 4Q'2021

EBITDA includes a positive impact of about \$8.2M in the spread of the Polypropylene price indices , compared to a negative impact of \$2.4M in Q4'21.

Underlying EBITDA of \$9.4M vs \$19.8M in 4Q'2021

2022 is characterized by macro-economic challenges affecting our customers' sales volumes throughout the world. The global economic slowdown together with the impact of the Russia-Ukraine war resulted in a decline in sales quantities and profitability.

The underlying EBITDA is the EBITDA after neutralizing the effects of the changes in the raw materials price indices during the period, which derive both from the change in the purchase prices of the raw materials and from the update of the selling prices, which are updated quarterly as a result of the changes in the indices.

Raw Material | Polypropylene Price Index

During Q4'22 raw materials price indices continued the downward trend. If continues, the Company expects this trend to have a positive impact on its results in the first quarter of 2023.

- North America ---East Asia –– West Europe

This information is forward-looking information, which is based on the information known by the Company at the time this report is being published. This information might not materialize or might materialize in a way that differs from that anticipated, inter alia, if a material change in trend occurs, or due to other parameters that affect the Company's manufacturing costs or the Company's selling prices

4Q'2022

Net Financing expense of \$3.3M vs \$5.6M in 4Q'2021

Net finance expense in Q4.22 included \$0.7M exchange rate differential expense, mainly related to the un-hedged portion of Bond C.

In Q4'21 we successfully refinanced \$50M at a fixed interest rate, which together with our fixed interest bonds, protected us from the increases in interest rates.

Net Profit of \$4.7M vs \$6.4M in 4Q'2021

Mainly affected by the decrease in the operating profit, partially offset by the decrease in income tax expenses., capping net profits of \$27.5 for the entire year.

Operating cash flow of \$21.7M vs \$8.0M in 4Q'2021

The increase derived due to meticulous control over working capital level, primarily reducing Inventory levels.

Analyst Conference I Balance Sheet

	As on Dec 31	As on Dec 31
	2022	2021
	K'USD	K'USD
CURRENT ASSETS
Cash and cash equivalents	61,511	65,941
Deposits	-	-
Trade receivables	47,719	45,884
Other receivables and debit balances	3,913	6,068
Current tax assets	64	1,689
Derivatives	1,267	3,058
Inventories	29,918	43,409
Total Current Assets	144,392	166,049
NON-CURRENT ASSETS
Property, plant and equipment, net	310,077	309,670
Derivatives	1,212	5,733
Deferred tax assets	489	790
Long –term Tax balances	4,346	3,882
Intangible assets	1,910	2,138
Long-term debit balances	3,255	752
Total Non-current Assets	321,289	322,965
TOTAL ASSETS	465,681	489,014

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	As on Dec 31	As on Dec 31
	2022 K'USD	2021 K'USD
CURRENT LIABILITIES
Short-term credit and current maturities of	13,017	19,443
long-term loans from banking corporations
Nonbank short-term credit	27,671	-
Liabilities in respect of derivatives	22	-
Current maturities of long-term bonds	34,382	37,429
Trade payables	23,450	38,800
Current tax liabilities	1,288	1,858
Other payables and credit balances	21,856	19,889
Total Current Liabilities	121,687	117,419
NON-CURRENT LIABILITIES
long term payables	2,679	3,706
Long-term loans from banking corporations	66,217	77,918
Bonds	45,244	85,861
Employee benefit liabilities	161	198
Deferred tax liabilities	19,844	19,802
Total Non-current Liabilities	134,145	187,485
EQUITY
Equity attributable to shareholders of the parent company	209,484	183,646
Noncontrolling interests	366	464
Total Equity	209,850	184,110
Total LIABILITIES AND EQUITY	465,681	489,014

© Avgol Industries 1953 Ltd. 2022