Kafrit Industries (1993) Ltd.

Investor Presentation • Mar 27, 2022

WELCOME TO KAFRIT GROUP

COMPANY PRESENTATION

Disclaimer

This presentation does not constitute an offering to purchase or sell securities of Kafrit Group Ltd. (the "Company") or an offer for the receipt of such offerings.

The presentation's sole purpose is to provide information. The information contained in the presentation and any other information provided during the presentation (the "Information") does not constitute a basis for investment decisions and does not comprise a recommendation, an opinion or a substitute for the investor's sole discretion. The Information provided in the presentation

concerning the analysis of the Company's activity is only an extract, and in order to receive a complete picture of the Company's activity and the risks it faces, one should review the Company's reports to the Israel Securities Authority and the Tel Aviv Stock Exchange.

The Company is not liable, and will not be held liable, for any damage and/or loss that may be caused as a result of use of the Information.

The presentation may contain forward-looking statements as defined in the Israeli Securities Law, 5728-1968. All forward-looking statements in this presentation are made based on the Company's current expectations evaluations and forecasts, and actual results may differ materially from those anticipated, in whole or in part, as a result of different factors including, but not limited to, changes in market conditions and in the competitive and business environment, regulatory changes, currency fluctuations or the occurrence of one or more of the Company's risk factors. In addition, forward-looking forecasts and evaluations are based on information in the Company's possession while preparing the presentation.

The Company does not undertake any obligation to update forward-looking forecasts and evaluations made herein to reflect events and/or circumstances that may occur after this presentation was prepared.

Our Place in the Supply Chain

3

We are here

01 ABOUT KAFRIT GROUP

KAFRIT GROUP IS A LEADING PRODUCER OF MASTERBATCHES AND COMPOUNDS FOR THE PLASTICS INDUSTRY

Kafrit Group Vision

To be a preferred supplier of masterbatches and compounds for the plastic industry, providing our customer globally, innovative and quality solutions suitable to their need over time

Our new challenging Strategy for the next 5 years

Enhance our strong Business Portfolio while Increasing Profitability driven by a significant Transformation from a Production-based Company to a Customer-Centric Company, focused on Added Value Service

Must Win Battles	Marketing and Service	Colors	Business Units	Business Development & Innovation
Mission	Be the Best-in-Class Service and Solution Provider	Become a Multi-Local Player in Colors Segment	Improve Profitability and Strengthen Market position	Form & Execute Strategic Alliances generating significant added value
Our People and Structure	Build a Group Leadership Team, Leverage Knowhow and Synergies

Kafrit Sustainability Strategy for 2030

Our Sustainability aspirations are that our People, Products' design and our aligned Actions, together with our Stakeholders – will make a Better World.

Areas of Action	Operating Sustainably	Living Sustainably	Innovating Sustainably	Business Developing Sustainably
Mission	We continuously limit the negative impact our operations have on the environment	We work to ensure that our people are safe and act according to our values	We help our Customers to become more eco friendly through Product Innovation	We Balance our Portfolio through Relevant Business Development and Strategic Alliances
Report Sustainably	We measure our actions, setting long and short-term goals striving to achieve results and Report them

AROUND THE WORLD

LEGAL GROUP STRUCTURE

KAFRIT GROUP LEADERSHIP TEAM

02 PORTFOLIO

THE MEMBERS OF KAFRIT GROUP

APPLICATIONS

INJECTION MOLDING / BLOW MOLDING

CONSTAB AND CONPEEL COMPOUNDS

POLYCARBONATE AND PMMA SHEETS

POLYETHYLENE PACKAGING POLYPROPYLENE CAST AND CALENDER FILMS

ANTIMONY FREE / REDUCED ANTIMONY FR SOLUTIONS ECOCELL AGRICULTURAL FILM

HALOGEN FREE SOLUTIONS FOR SHEETS AND PIPES

BLOWING AGENTS

ANTIOXIDANTS

ADDING VALUE TO FIBERS AND NONWOVENS

FUNCTIONALITY

ACID SCAVENGERS ANTIBLOCKING AGENTS ANTIFOGGING AGENTS ANTISLIP AGENTS ANTISTATICS CAVITATING AGENTS CLEANING COMPOUNDS COLOUR CONCENTRATES FILLERS FLAME RETARDANTS FOAMING AGENTS HYDROCARBON RESINS

MATT COMPOUNDS METAL DEACTIVATORS NUCLEATING AGENTS OPTICAL BRIGHTENERS PEEL COMPOUNDS PHARMACOPOEIA MB PROCESSING AIDS SLIP AGENTS SYNTHETIC PAPER COMPOUNDS THERMOSTABILISERS UV ABSORBERS UV STABILIZERS

WELL DIVERSIFIED PORTFOLIO

(*) 2021 NIS Value Sales

03 PERFORMANCE HIGHLIGHTS

2021 HIGHLIGHTS

85MNIS

OPERATING PROFIT

115MNIS NET DEBT INCREASE(*)

EBITDA

44MNIS

(*) Driven by financing Addvanze's acquisition and Inventory increase to cope with market situation

SAFETY PERFORMANCE STRIVING FOR CONTINUOUS IMPROVEMENT

OSHA = #LTA / 200KHours

SALES (M-ILS)

23

2017 2018 2019 2020 2021

OPERATING PROFIT (M-ILS)

EBITDA (M-ILS)

The Company delivered a strong volume and value growth driving to a record EBITDA results achieved by each Business Unit in the Group

	Consolidated P&L – 2021			Coping with Serious Supply chain issues
		M-ILS		• Top Line growth driven by
	2021	2020	2020	• Strong volume growth in China, Canada and
Volume Sales (Tone)	90,175	81,428	10.7%	Germany • Selling Prices increase to compensate Raw
Sales	1,028.4	846.7	21.5%	Materials inflation
Materials	714.1	556.9	28.2%	• Succeeded to cope with significant Raw Materials
Manufacture & Labor	121.5	115.9	4.9%	crisis, prices, availability, delays, increasing Inventory to minimize the risk towards our customers
COST OF SALES	835.6	672.8	24.2%
	192.8	173.9	10.9%	• Lack of Labor in almost all geographies after Covid 19 – the "Big Resignation"
GROSS PROFIT	18.7%	20.5%
Sale & Marketing	66.1	60.7	9.0%	• Transportation crisis – maritime, ports delays, lack of drivers, price increase and availability
General & Admin	42.9	37.4	14.9%
	85.2	75.9	12.3%
Operating Profit	8.3%	9.0%
EBITDA	115.0	102.5	12.1%
	11.2%	12.1%

• Top Line growth driven by
  • Strong volume growth in China, Canada and Germany
  • Selling Prices increase to compensate Raw Materials inflation
• Succeeded to cope with significant Raw Materials crisis, prices, availability, delays, increasing Inventory to minimize the risk towards our customers
• Lack of Labor in almost all geographies after Covid-19 – the "Big Resignation"
• Transportation crisis – maritime, ports delays, lack of drivers, price increase and availability

EBITDA growth driven by Volume across most Companies and Margin improve, with negative impact of Foreign Currencies (M – ILS)

Although a strong EBITDA result, Net Financial Debt increased due to Addvanze's acquisition and Inventory growth under the current Supply chain crisis

04 Q4/2021 PERFORMANCE

The Company delivered a strong volume and value growth driving to a significant improvement in OP and EBITDA, affected by some seasonality effects

Consolidated P&L – Q4 2021
	M-ILS	Change
	2021	2020	2020
Volume Sales (Tone)	23,229	20,953	10.9%
Sales	268.8	219.5	22.5%
Materials	192.9	147.1	31.1%
Manufacture & Labor	31.9	30.3	5.2%
COST OF SALES	224.8	177.4	26.7%
	44.0	42.1	4.6%
GROSS PROFIT	16.4%	19.2%
Sale & Marketing	17.4	15.8	10.2%
General & Admin	11.7	11.7	(0.3%)
	16.4	14.6	12.2%
Operating Profit	6.1%	6.6%
EBITDA	24.5	22.8	7.7%
	9.1%	10.4%

SALES (M-ILS)

Operating profit (M-ILS)

EBITDA(M-ILS)

Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021