Albaad Massuot Yitzhak Ltd. — Investor Presentation 2024

Mar 12, 2024

March 2024

Financial Results Overview 2023

1

FORWARD LOOKING STATEMENT

Legal disclaimer Important notice

This presentation (the "Presentation") is for informational purposes only and does not constitute or form any part of any offer for sale or subscription of, or solicitation of, any offer to buy or subscribe for any shares of Albaad Massuot Yitzhak LTD. (the "Company") or any of its affiliated entities.

This presentation contains partial information from the public reports of the Company under the Israeli Securities Law 5728-1968 (the "Securities Law"), which can be accessed on the Israeli Securities Authority's website, www.magna.isa.gov.il. A review of this presentation is not a substitute for a review of the detailed reports of the Company under the Securities Law and is not meant to replace or qualify them; rather, the presentation is prepared merely for the convenience of the reader, with the understanding that the detailed reports are being reviewed simultaneously.

Everything stated in this Presentation with respect to an analysis of the Company's business is merely a summary and any forwardlooking statements involve risks and uncertainties. These statements include descriptions regarding the intent, belief or current expectations of the Company. Such forward-looking statements are not guarantees of future results, performance or achievements and are based on current expectations, estimations, and assumptions, involve certain risks and uncertainties which are difficult to predict and are not guarantees of future performance. Therefore, actual future results, performances or achievements of the Company may differ materially from what is or may be expressed or implied in this presentation due to a variety of factors, many of which are beyond the Company's control, including, without limitation, certain risk factors contained in the Company's reports. The Company disclaims any obligation or commitment to update these forward-looking statements to reflect new information, future events or developments or changes in expectations, estimates, projections and assumptions or otherwise.

ALBAAD'S 2023 FINANCIAL TURNAROUND

Albaad faced the challenge of achieving financial stability within the banking system with this as our primary objective, we not only met but exceeded our goals

By Q3.2023, we had demonstrated covenant compliance without the need for waivers

a significant achievement that was originally planned for later in 2024 year. by Q4.2023, we achieved further improvement

Cash flow was exceptionally strong, reaching a peak of 233m NIS from operating activity

This enables the company to fund its ongoing investment plan, including:

• An investment in Dimona of 86m NIS
• A second payment of 32m NIS for the acquisition of Optimal Care
• A reduction of gross debt by 56m NIS & net debt by 48m NIS

YEAR 2023 COMPANY MAIN HIGHLIGHTS CONCLUDING 2023 WITH

• SALES INCREASE OF 18% TO 1.7B NIS
• GROSS PROFIT MARGIN improved to 20%
• EBIT* INCREASE OF 83M NIS TO 94M NIS
• EBITDA** INCREASE OF 85M NIS TO 182M NIS
• NET PROFIT** INCREASE OF 76M NIS TO 41M NIS
• OPERATING Cash Flow 233M NIS
• NET DEBT DECREASE OF 48M NIS

* EBIT before others ** EBITDA & Net profit from continued operation

SALES & EBITDA* TRENDS 2021-2023

QUARTERLY BASIS (000 NIS)

NET DEBT TO EBITDA* TRENDS 2021-2023

QUARTERLY BASIS (000 NIS)

HIGHLIGHTS

Year 2023 Results VS. Last year (000 NIS)

			Year 23	Year 22	Var	Var %
Sales +18% Sales in original currency +6%		Sales	1 710 479 , ,	1 453 877 , ,	256 602 ,	17 6%
		EBIT	93 038 ,	(11 228) ,	104 266 ,
+83M Operating Profit +104 M including others		EBIT (Before Others)	94 510 ,	11 853 ,	82 657 ,	697 4%
		EBITDA (Continued operation)	182 461 ,	97 296 ,	85 165 ,	87 5%
+88%	EBITDA	EBITDA	182 270 ,	1 292 ,	180 979 ,
	+85 M continued operation +181 M inc. discontinued operation	Net Profit (Continued operation)	41 219 ,	(35 123) ,	76 342 ,
+175M Net Profit		Profit Net	31 001 ,	(143 956) ,	174 957 ,
	From negative to positive	CF Operating activities -	233 229 ,	18 568 ,	214 661 ,

SALES & EBIT* BY DIVISION

Year 2023 VS. Last year (000 NIS)

		Sales				EBIT
	Year 23	Year 22	Var %	(Org ) Var %	Year 23	Year 22
Albaad Europe from % sales	572 1 300 , ,	1 079 479 , ,	20 5%	6 8%	63 043 , 4 8%	31 839 , 2 9%
Albaad IL % from sales	222 139 ,	213 344 ,	1% 4	(0 5%)	(3 827) , (1 7%)	(303) (0 1%)
Albaad Fabric IL from % sales	363 996 ,	364 094 ,	(0 0%)	(11 1%)	33 176 , 9 1%	4 344 , 1 2%
Albaad Fem IL from sales %	250 542 ,	207 509 ,	7% 20	0% 10	37 080 , 14 8%	(5 496) , (2 6%)
Intercompany	(426 770) ,	(410 549) ,			(9 235) ,	1 839 ,
HeadQuarter & Others					(25 727) ,	(20 370) ,
Total Company % from sales	1 710 479 , ,	453 1 877 , ,	6% 17	9% 5	510 94 , 5 5%	853 11 , 0 8%
Other Income/Expenses					(1 472) ,	(23 081) ,
Company Total from sales %	1 710 479 , ,	1 453 877 , ,	17 6%	5 9%	93 038 , 4% 5	(11 228) , (0 8%)

HIGHLIGHTS

Q4.2023 Results VS. Last year (000 NIS)

			Q4 2023	Q4 2022	Var	Var %
+15%	Sales Sales in original currency +1.5%	Sales	418 909 ,	364 716 ,	54 193 ,	14 9%
		EBIT	24 872 ,	(23 899) ,	48 771 ,
+34M	Operating Profit	EBIT (Before Others)	25 628 ,	(8 349) ,	33 977 ,
	+49 M including others	EBITDA (Continued operation)	48 370 ,	13 108 ,	35 262 ,	269 0%
+269%	EBITDA +35 M continued operation +62 M inc. discontinued operation	EBITDA	53 132 ,	(9 092) ,	62 224 ,
		Net Profit (Continued operation)	12 216 ,	(29 407) ,	41 623 ,
+71M	Net Profit From negative to positive	Net Profit	12 497 ,	(58 551) ,	71 048 ,
		CF Operating activities -	53 757 ,	15 734 ,	38 023 ,	241 7%

SALES & EBIT* BY DIVISION

Q4.2023 VS. Last year (000 NIS)

		Sales				EBIT
	Q4 2023	Q4 2022	Var %	(Org ) Var %	Q4 2023	Q4 2022
Albaad Europe from sales %	331 164 ,	275 246 ,	20 3%	4 4%	23 125 , 7 0%	776 0 3%
Albaad IL % from sales	44 976 ,	41 209 ,	1% 9	3% 4	(4 631) , (10 3%)	(8 258) , (20 0%)
Fabric Albaad IL from sales %	92 887 ,	91 595 ,	1 4%	(11 9%)	8 990 , 9 7%	3 209 , 3 5%
Albaad Fem IL % from sales	56 665 ,	57 988 ,	(2 3%)	(11 5%)	7 077 , 12 5%	1 920 , 3 3%
Intercompany	(106 783) ,	(101 322) ,			(1 199) ,	(608)
HeadQuarter & Others					(7 734) ,	(5 388) ,
Total Company % from sales	418 909 ,	364 716 ,	9% 14	5% 1	25 628 , 6 1%	(8 349) , (2 3%)
Other Income/Expenses					(756)	(15 550) ,
Company Total % from sales	418 909 ,	364 716 ,	14 9%	1 5%	24 872 , 5 9%	(23 899) , (6 6%)

*

BALANCE SHEET

AS OF 31.12.2023 VS. 31.12.2022 (000 NIS)

			31 12 2023	from total %	31 12 2022	from total %
		Cash and cash equivalents	19 133 ,	1%	27 186 ,	2%
19M	Cash on hand	Trade Receivables	213 956 ,	14%	254 547 ,	16%
	Inventory	328 969 ,	21%	393 313 ,	25%
	Other Current Assets	32 184 ,	2%	37 580 ,	2%
64M	Reduction of inventory	Current Total Assets	594 242 ,	38%	712 626 ,	45%
84M reduction exc. currency impact	Current Non Assets	988 361 ,	62%	883 964 ,	55%
		Total Assets	1 582 603 , ,	100%	1 596 590 , ,	100%
403M	Equity	Credit banking & institutions	392 243 ,	25%	538 805 ,	34%
	Trade Payables	222 718 ,	14%	252 518 ,	16%
		Current Total Liabilities	713 183 ,	45%	910 734 ,	57%
25% Equity from total balance sheet		Total Long-Term Liabilities	466 178 ,	29%	331 194 ,	21%
		Equity	403 242 ,	25%	354 662 ,	22%
		Total liabilities	1 582 603 , ,	100%	1 596 590 , ,	100%

INNOVATION & FUTURE GROWTH Green product line in Dimona - the next generation

• o Green hybrid production line that enables production in both paper technology and green non-woven technology
• o The Hydrofine® Products from the new hybrid line will serve both flushable MTT wipes as well as traditional baby, cosmetic and cleaning wipes
• o All Hydrofine® Products are made from 100% natural, plant based components
• o Production is expected during H2 2024
• o Approximately 146 MNIS invested up to December 2023 from total budget of about 200 MNIS

SUMMARY

Meeting & Improving Banks Initial Covenants*

o Net Liabilities to EBITDA Ratio 2.11 / Tangible Equity Ratio 26.5%

Maintaining positive performance for EBITDA Growth & Operating Cash Flow

• o Inventory reduction of 64m NIS since Dec 2022
• o Annual Operating Cash Flow of 233m NIS
• o Annual Free Cash Flow** of 124m NIS including Dimona line 2 investments

* Banks covenants are excluding intangible assets ** FCF 124 m = Operating CF 233 m + Leasing liability repayment (-30 m) – Interest (-34 m) + CAPEX (-114 m)

DIVERSE PRODUCT RANGE

Home Care

Wipes Disinfecting /All Purpose Cleaning / Windows / Floors / Furnitures / Automotive

Hygiene

Wipes Moist Toilet Paper Consumer Healthcare Adult Care

Baby Care

Wipes Based formulas: Aqua / Gel / Rich Lotion / Diaper Rash Cream / Bathing Wipes

Wipes

Cosmetics

Makeup Remover / Hydrating / Exfoliating (abrasive) / Anti-aging

Fem. Care Tampons, Wipes Tampons: Tampon with a plastic applicator Tampon without applicator Tampon with a paper applicator Intimate Wipes

ALBAAD's ADDED VALUE

Global deployment

• ✓ Avoid Supply chain disruption
• ✓ Back up plan in case of disruption in one of our facilities
• ✓ Sufficient capacity in case market needs fast growing
• ✓ Nonwoven Production Albaad produces majority of its own nonwoven consumption

Marketing

• ✓ Identify and adjust the needs of each customer
• ✓ Highly qualified team well experienced with A brands needs
• ✓ Well informed on innovative raw materials (fabrics, laminate, Chemicals), products and customers trends worldwide

R&D

• ✓ Well trained and highly educated R&D corporate's team – led by PhD.
• ✓ Focuses on innovation
• ✓ Expertise in all production chain – Fibers, Fabrics and End-Products

FURTHER STRENGTHENING & FUTURE GROWTH

Further Strengthening

• o Continue to improve Net Debt to EBITDA
• o Closing Sale & Lease Back transaction of Dimona facility
• o Proceed with Tampons division Deal

Future Growth

• o Dimona Green hybrid production line as milestone for growth in our sustainability strategy
• o Inhouse development of Spunlace based tampon potential for new market
• o Focusing on new profitable customers & Innovation products expanding Europe sales teams
• o Innovation as state of mind in products, production & processes

THANK YOU

17