Avgol Industries 1953 Ltd. — Investor Presentation 2023

Nov 8, 2023

Financial Results Financial Results

Q3/2023

Sivan Yedidsion – CFO Sivan Yedidsion –CEO David Peretz –CFO

Q1/2023

למסמך נגיש

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

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 or component materials in various non-hygiene products.

Our products are based on polyolefin resins, specifically those in the Polypropylene (PP) family.

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 | 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

Who We Are | Pushing Technology Bounds

Polypropylene (PP) Thermoplastic "addition polymer" made from the combination of propylene monomers and used in a variety of applications, such as packaging for consumer products, plastic parts for various industries, and textiles

6

TECHNOLOGY

Spunbond One continuous process in which fibers are spun and then directly dispersed into a web by deflectors or with air stream. This technology leads to faster belt speeds and cheaper costs

"SMS" Fabrics comprised of one or more Spunbond beams and one or more Meltblown beams in a combination which improves barrier, absorbency, and structural

Meltblown High-velocity air blows molten thermoplastic resin from an extruder die tip onto a conveyor to create random laid nonwoven fabric, a structure useful for filtration and wipes performance Hygiene Baby Care

MARKETS

Hygiene Adult Incontinence Hygiene Feminine Care Other Medical

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 Reicofil 5 machine will expand the company's existing production capacity by 20K MT 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

Financial Results Q3-2023

Analyst Conference I Quarterly Financial Highlights

USD Mn	Q3'23	Q2'23	Q1'23	Q4'22	Q3'22
Revenues, net	80.0	78.3	80.0	102.5	109.8
Gross Profit	13.6	10.9	11.9	19.1	18.4
	16.9%	13.9%	14.8%	18.6%	16.8%
EBIT	7.1	3.4	4.0	9.7	8.6
	8.8%	4.4%	5.0%	9.5%	7.8%
	3.5	1.5	0.8	4.7	5.5
Net Profit	4.3%	2.0%	1.0%	4.6%	5.0%
	13.5	10.3	10.5	17.6	16.2
EBITDA	16.8%	13.1%	13.1%	17.1%	14.7%
EBITDA Underlying	9.6	12.0	10.0	9.4	8.6
	11.9%	15.3%	12.5%	9.2%	7.9%
Net Debt/EBITDA	2.50	2.29	2.20	1.82	1.87

9 © Avgol Industries 1953 Ltd. 2022

Raw Material | Polypropylene Index

During the third quarter of 2023 and according to the publication date of this report, there is a moderate upward trend in the raw materials price indices. The Company expects this to have a moderate negative impact on its results during the fourth quarter of 2023.

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 Results

Results	Q3'23	Key highlights
Revenues	\$80M vs \$110M in Q3'2022	• Decrease in polypropylene prices, to which our sales prices are linked. • A decrease of 4.4% in sales volumes .
Gross Profit	\$13.5M vs \$18.4M in Q3'2022	The Gross Profit in Q3'23 includes a positive impact of about \$3.9M in lag • effect, compared to a positive impact of \$7.5M in Q3'22. • The gross profit was impacted mainly by lower sales volumes and subsequent efficiency rates resulted from lower asset utilization
SG&A expenses	\$6.5M vs \$9.0M in Q3'2022	Driven by significant decrease in logistic rates around the globe and diligent • control of fixed costs.

\$27

Financial Results

Results	Q3'23	Key highlights
EBITDA	\$13.5M vs \$16.2M in Q3'2022	EBITDA includes a positive impact of about \$3.9M in lag, compared to a • positive impact of \$7.5M in Q3'22.
Underlying EBITDA	\$9.6M vs \$8.6M in Q3'2022	Mainly due to global decrease in logistics rates ; improved RM purchase • conditions across the board, partially offset lower efficiency rates
Net Financing, Expense	\$2.3M vs \$1.2M in Q3'2022	The increase is a result of a ~\$1.7M decrease in FOREX income • The global increase in interest rates had a moderate impact on the company's • financing expenses due to fixed interest rates on its debt

Financial Results

Results	Q3'23	Key highlights
Net Profit	\$3.5M vs \$5.5M in Q3'2022	Mainly influenced by the decrease in the operating profit and • an increase in net financing expense , partially offset by lower income tax expenses.
Operating Cash Flow	\$5.1M vs \$7.2M in Q3'2022	Mainly influenced by decrease in profits. •
Net Working Capital	\$49M vs \$64M in Q3'2022	Mainly as a result of decrease in the balances of trade • receivable and Inventory value partially offset by trade payables.
Leverage Ratio	2.5 vs 1.8 in Q4'2022	Net debt / EBITDA •

Analyst Conference I Balance Sheet

	As on Sep 30	As on Dec 31
	2023	2022
	K'USD	K'USD
CURRENT ASSETS
Cash and cash equivalents	45,340	61,511
Trade receivables	33,709	47,719
Other receivables and debit balances	4,087	3,913
Current tax assets	797	64
Derivatives	159	1,267
Inventories	35,679	29,918
Total Current Assets	119,771	144,392
NON-CURRENT ASSETS
Property, plant and equipment, net	296,578	306,275
Right of use asset	4,836	3,802
Derivatives	149	1,212
Deferred tax assets	2,000	489
Long –term Tax balances	3,695	4,346
Intangible assets	2,162	1,910
Long-term debit balances	3,941	3,255
Total Non-current Assets	313,361	321,289
TOTAL ASSETS	433,132	465,681

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	As on Sep 30	As on Dec 31
	2023	2022
	K'USD	K'USD
CURRENT LIABILITIES
Short-term credit and current maturities of	11,696	13,017
long-term loans from banking corporations
Nonbank short-term credit	26,653	27,671
Liabilities in respect of derivatives	544	22
Current maturities of long-term bonds	32,541	34,382
Trade payables	23,790	23,450
Current tax liabilities	22	1,288
Other payables and credit balances	20,234	21,856
Total Current Liabilities	115,480	121,686
NON-CURRENT LIABILITIES
long term payables	2,086	2,679
Long-term loans from banking corporations	58,380	66,217
Bonds	43,422	45,244
Employee benefit liabilities	155	161
Deferred tax liabilities	17,925	19,844
Total Non-current Liabilities	121,968	134,145
EQUITY
Equity attributable to shareholders of the parent company	195,369	209,484
Noncontrolling interests	315	366
Total Equity	195,684	209,850
Total LIABILITIES AND EQUITY	433,132	465,681

© Avgol Industries 1953 Ltd. 2022

SAY HELLO!

Avgol is proud to support our clients with outstanding technical service and support

To find out more about how Avgol can support your baby care diaper range developments, please visit avgol.com or contact us at: avgolinfo@avgol.com

We Aspire to Create Nonwoven Innovations to Enhance the Quality of Life

Avgol Industries 1953 Ltd.

9 Shimshon St. Lexus House, 7th floor, Petah Tikva, 4952707 Israel