Avgol Industries 1953 Ltd.

Investor Presentation • Nov 9, 2022

למסמך הנגיש לחץ כאן

Financial Results

Q3/2022

Tommi Bjornman – CEO Sivan Yedidsion – CFO

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© Avgol Industries 1953 Ltd. 2022

Analyst Conference | Disclaimer

• 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 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 פעילות החברה ושל הסיכונים עימםמתמודדת החברה, יש לעיין בדיווחים המלאים של החברה לרשות לני"ע ולבורסה. 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 מלאהשל 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. 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
• המצגת כוללת מידע צופה פני עתיד, כהגדרתו בחוק ניירות ערך,של תחזיות, מטרות, הערכות ואומדנים המתייחסים לאירועים או עניינים עתידיים, אשר התממשותם אינה
• 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 ודאית ואינה בשליטתהחברה, והוא מבוסס רק על הערכתה הסובייקטיבית של החברה. 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.

© AVGOL Nonwovens 2020

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• company.

AVGOL Market

Analyst Conference I Who We Are

AVGOL is a world leader in the development, manufacturing and marketing of spunlaid nonwoven fabrics for diapers, adult incontinence products, disposable feminine hygiene products, wipes, and component materials used to produce masks, gowns and other 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 Reducing demands on Crude Oil Replacement of NW raw materials with Sustainable Alternatives Higher performance from less raw material

We aspire to:

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• 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

~800 employees in the Global commercial and technical team Our team

supply of materials to specification

Strategy

Global

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

supplying more than 30 countries.

Quality

6 production sites in Israel, USA, China, Russia and India

Committed to serve our customers with on-time, in full

Indorama Ventures LTD 65.97%

The Public +

Analyst Conference | What We Do

Provides strength and base performance

6

Spunbond Meltblown

Structure useful in filtration and wipe materials

© Avgol Industries 1953 Ltd. 2022 "SMS"

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

Technical Advancement| Biotransformation

Use of Biotransformation technology, originally sourced from Polymateria LTD in London, is being developed to achieve direct replacement into existing Spunbond, Meltblown, and SMS fabrics. Avgol is collaborating with key partners to develop new systems, applications, and products, where the end-of-life behaviors are more controllable in use or recycling without generating any formation of microplastics. New line India | we continue to focus on strategic growth in the Indian market. We recently New line Russia | due to the war in Europe, and after examining the geopolitical and commercial

Project Update

• situation, it is resolved that the Company will not continue its activities for the establishment of the Company's new line at the Company's site in Russia. We are currently evaluating several alternative locations for new line, including our existing sites as well as new geographies.
• concluded the construction and installation of the relocated manufacturing line from the plant in Barkan, and we are now focusing on commissioning the line and gradually ramp-up sales.

Analyst Conference I Quarterly Financials Highlights

Analyst Conference I Quarterly Financials Highlights
USD Mn Revenues, net	Q3'22 110	Q2'22 100	Q1'22 115	Q4'21 137	Q3'21 127
	18	13	26	25	14
Gross Profit	16.8%	13.4%	22.7%	18.1%	11.1%
	9	5	17	16	5
EBIT	7.8%	5.3%	14.7%	11.5%	3.7%
	6	5	12	6	1
Net Profit	5.0%	5.1%	10.7%	4.7%	0.8%
	16	12	23	22	12
EBITDA	14.7%	12.0%	20.3%	16.2%	9.3%
	9	14	16	20	19
EBITDA Underlying	7.9%	14.0%	13.7%	14.5%	14.7%
Net Debt/EBITDA	1.87	2.15	2.20	2.65	2.79
				© Avgol Industries 1953 Ltd. 2022

Financial Results 3Q'2022

Revenues of \$110M vs \$127M in 3Q'2021 The company managed to maintain a balanced level of SG&A expenses despite inflationary A decrease in the purchase price of raw material led to an increase in the gross profit due to the lag in our selling price update, linked to the raw material indices. This was partially offset by increasing costs and lower sales volumes. The third quarter was largely impacted by the Russian invasion of Ukraine, which led to a decrease in orders from Russian customers, as well as from the global economic slowdown across other regions, which negatively influenced sales volumes.

Gross Profit of \$18.4M vs \$14.1M in 3Q'2021

13%

SG&A expenses of \$9.0M vs \$8.9M in 3Q'2021

pressures.

Financial Results 3Q'2022

EBITDA of \$16.2M vs \$11.8M in 3Q'2021 EBITDA includes positive impact of about \$7.5M in the spread of the Polypropylene prices indices , compared to a negative impact of \$6.7M in Q3'21. 14%

Underlying EBITDA of \$8.6M vs \$18.6M in 3Q'2021

2022 is characterized by macro-economic challenges that affected our customers' sales volumes throughout the world. The global economic slowdown together with the effects of the war between Russia and the Ukraine 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. USDK

Raw Material | Polypropylene Price Index

During the current quarter and correct to the publication date of this report, the raw materials price indices are in an average downwards trend. If this trend continues, the Company expects it to have a favorable impact on its results during the fourth quarter of 2022.

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

Financial Result

3Q'2022

Net Financing expense of \$1.2M vs \$2.3M in 3Q'2021

rate. expenses, partially offset by the increase in income tax expenses.

Net Profit of \$5.5M vs \$1.1M in 3Q'2021

Operating cash flow of \$7.2M vs \$23.7M in 3Q'2021

The decrease derived mainly from the increase in the balance of trade receivables as a result of the reduction in the factoring levels executed by the Company during the period.

Analyst Conference I Balance Sheet

Analyst Conference I Balance Sheet
	As on Sep 30	As on Dec 31
	2022	2021
	K'USD	K'USD	CURRENT LIABILITIES
CURRENT ASSETS			Short-term credit and current maturities of
Cash and cash equivalents	62,209	65,941	long-term loans from banking corporations
Trade receivables	49,822	45,884	Liabilities in respect of derivatives
Other receivables and debit balances	5,506	6,068
Current tax assets	154	1,689
Derivatives	1,192	3,058
Inventories	49,722	43,409
Total Current Assets	168,605	166,049
			NON-CURRENT LIABILITIES
NON-CURRENT ASSETS
Property, plant and equipment, net	324,329	309,670
Derivatives	2,239	5,733
Deferred tax assets	330	790
Long –term Tax balances	4,997	3,882	EQUITY
Intangible assets	1,782	2,138	Equity attributable to shareholders of the
Long-term debit balances	3,312	752
Total Non-current Assets	336,989	322,965
TOTAL ASSETS	505,594	489,014

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As on Sep 30	As on Dec 31		As on Sep 30	As on Dec 31
2022	2021		2022 K'USD	2021 K'USD
K'USD	K'USD	CURRENT LIABILITIES
		Short-term credit and current maturities of	13,054	19,443
		long-term loans from banking corporations
		Liabilities in respect of derivatives	1,340	-
		Current maturities of long-term bonds	34,196	37,429
		Trade payables	32,841	38,800
		Current tax liabilities	65	1,858
		Other payables and credit balances	25,652	19,889
		Total Current Liabilities	107,148	117,419
		NON-CURRENT LIABILITIES
		long term payables	2,893	3,706
		Long-term loans from banking corporations	70,077	77,918
		Bonds Employee benefit liabilities	79,433 124	85,861 198
		Deferred tax liabilities	24,607	19,802
		Total Non-current Liabilities	177,134	187,485
		EQUITY
		Equity attributable to shareholders of the	220,932	183,646
		parent company
		Noncontrolling interests Total Equity	380 221,312	464 184,110