CLOSE THE LOOP LTD. — Investor Presentation 2023

Aug 27, 2023

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Disclaimer

Presenters

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Agenda

01 Overview

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Joe Foster
Chief Executive Officer
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02 Financials

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Marc Lichtenstein
Chief Financial Officer
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03 Strategic Growth & Expansion

The following disclaimer applies to this presentation. You should read this disclaimer carefully before reading or making any other use of this presentation or any information contained in this presentation. By accepting this presentation, you represent and warrant that you are entitled to receive this presentation in accordance with the restrictions, and agree to be bound by the limitations, contained within it. This presentation has been prepared by Close the Loop Limited ACN 095 718 317 (“Close the Loop Group”, “Close the Loop” or the “Company”) and does not constitute or form part of, and should not be construed as, an offer, solicitation or invitation to subscribe for, underwrite or otherwise acquire, any securities of Close the Loop or any member of its group nor should it or any part of it form the basis of, or be relied on in connection with, any contract to purchase or subscribe for any securities of Close the Loop or any member of its group, nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever.

This presentation is not a prospectus, product disclosure statement or other disclosure document under Australian law (or any other law) and has not been lodged with the Australian Securities and Investments Commission (or any other regulatory body in Australia or abroad). This presentation contains summary information about Close the Loop and its related bodies corporate and their activities, which is current as at the date of this presentation. The information included in this presentation is of a general nature and does not purport to be complete nor does it contain all the information which a prospective investor should consider when making an investment decision.

Each recipient of this presentation should make its own enquiries and investigations regarding all information in this presentation including but not limited to the assumptions, uncertainties and contingencies which may affect the future operations of Close the Loop and the impact that different future outcomes may have on Close the Loop. This presentation has been prepared without taking account of any person’s investment objectives, financial situation or particular needs. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs, make their own assessment of the information and seek legal, financial, accounting and taxation advice appropriate to their jurisdiction in relation to the information and any action taken on the basis of the information.

The information included in this presentation has been provided to you solely for your information and background and is subject to updating, completion, revision and amendment and such information may change materially. Unless required by applicable law or regulation, no person (including Close the Loop) is under any obligation to update or keep current the information contained in this presentation and any opinions expressed in relation thereto are subject to change without notice. No representation or warranty, express or implied, is made as to the fairness, currency, accuracy, reasonableness or completeness of the information contained herein.

None of Close the Loop’s advisers, directors, officers, employees or agents have authorised, permitted or caused the issue, despatch or provision of this presentation nor, except to the extent referred to in this presentation, made or purported to make any statement in this presentation. Neither Close the Loop nor any other person accepts any liability and Close the Loop, its related bodies corporate and advisers their respective directors, officers and employees, to the maximum extent permitted by law, expressly disclaim all liabilities and responsibility for any loss howsoever arising, directly or indirectly, from this presentation or its contents.

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OVERVIEW

• Achieved results above

$135.9m $14.9m

• Core business continues to

• Achieved Cash conversion to

$24.3m

$38.0m

$49.5m

$252.67m

• Successfully completed

• Secured debt with tier 1 global

• Expected FY24 revenue of

INCOME STATEMENT

Proforma Revenue Cost of sales	FY23 ($m) 135.9 (88.3)	FY22 ($m) 89.2 (60.9)	FY22 / Prospectus ($m) 73.9 (45.1)	PCP Change ($m) 46.7 (27.4)	PCP Growth 52% 45%
Gross profit	47.6	28.3	28.8	19.3	68%
Operating expenditure	(25.2)	(15.9)	(16.9)	(9.3)	58%
Operating profit	22.4	12.4	11.9	10.0	81%
Other Income	1.9	1.9	0.5	0.0	-
EBITDA	24.3	14.3	12.4	10.0	70%
Depreciation & Amortisation EBIT Adjusted EBIT	(6.9) 17.4 19.0	(5.6) 8.7 9.9	(5.2) 7.2 8.4	(1.3) 8.7 9.1	23% 100% 92%

• Margin expansion with GP Margin growing by 3.3% to 35% and EBITDA margin growing 1.9% to 17.9%

• ISP/CTC acquisition providing 2 months contribution

• Business combinations amortisation to be significant in future periods

• Adjusted EBIT for FY23 excludes the impact of business combination amortisation

• Adjusted EBIT for FY22 takes into account a contribution from Oceanic Agencies and Crasti acquisitions

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BALANCE SHEET

Assets & Liabilities Assets Cash and cash equivalents Trade and other receivables	FY23 ($m) 49.5 26.1	FY22 ($m) 10.3 21.2	Change ($m) 39.2 4.9
Inventories	15.9	5.4	10.5
Other assets Total Current Assets Property, plant & equipment	5.1 96.6 20.2	3.2 40.0 6.2	1.9 56.6 14.0
Intangibles	131.3	29.9	101.4
Right of use assets	20.8	13.7	7.1
Other Total Non-Current Assets Liabilities	2.4 174.7	2.4 52.2	- 122.5
Trade and other payables	29.2	10.3	18.9
Borrowings Tax liabilities	16.1 1.6	4.7 0.1	11.4 1.5
Lease liabilities Other Total Current Liabilities Non-current borrowings Lease liabilities	3.8 3.1 53.8 71.4 19.6	2.4 3.8 21.3 4.0 13.2	1.4 (0.7) 32.5 67.4 6.4
Others	3.1	0.5	2.6
Total Non-Current Liabilities	93.5	17.7	75.8
Net Assets	124..0	53.2	70.9

• Credit facility with tier one global invest firm PGIM Private Capital to further fund inorganic growth initiatives

• $45m capital raise from a range of new institutional investors to strengthen balance sheet for further growth

• Net debt to EBITDA of 1.6 times, decreasing to 0.88 times in FY24

• Growth in intangibles due to ISP/CTC acquisition

• Growth in inventory and PPE due to business combinations

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CASH FLOW STATEMENT

Cash Flows Cash flows from operating activities Receipts from customers Payments to suppliers and employees	FY23 ($m) 127.2 (106.9)	FY22 ($m) 74.7 (76.6)	Change ($m) 52.5 (30.3)	•	Cash flow to EBITDA of 93% highlighting the company as a strong, cash generative business
Interest paid Income taxes refund / (paid)	(2.1) 0.1	(0.8) (1.3)	(1.3) 1.4	•	Some ISP/CTC inventory on consignment sold at
Other receipts	4.4	0.8	3.6		30 June
Net cash provided by/(used in) operating activities Cash flows from investing activities Payment for intangible assets	22.7 -	(3.2) -	25.9 -	•	Includes $0.5m working capital for acquired businesses
Purchase of property, plant and equipment	(15.7)	(0.6)	(15.1)
Purchase of subsidiary net of cash acquired Purchase of financial assets Net cash provided by/(used in) investing activities	(70.3) - (86.0)	(3.4) - (4.0)	(66.9) (82.0)	•	ISP/CTC acquisition settled on 28 April 2023 including draw of US$40 debt from PGIM Private
Cash flows from financing activities					Capital facility and $45m
Proceeds from share issue net of issue costs Proceeds from borrowings Payment of lease liability Repayment of borrowings Dividends paid Net cash provided by/(used in) financing activities	42.9 83.1 (1.8) (21.0) - 103.2	11.4 1.9 (0.5) (0.6) (1.0) 11.2	31.5 81.2 (1.3) (20.4) 1 91.9	• •	capital raise Other receipts consist of grants and insurance proceeds PPE increasing due to business combination and
Net increase/(decrease) in cash equivalents held Cash and cash equivalents at beginning o year	39.9 9.6	4.0 5.6	35.8 4.0		Somerton facility rebuild
Cash and cash equivalents at end of financial year	49.5	9.6	39.9

• ISP/CTC acquisition settled on 28 April 2023 including draw of US$40m debt from PGIM Private Capital facility and $45m capital raise

• Other receipts consist of grants and insurance proceeds • PPE increasing due to business combination and Somerton facility rebuild 6

CASH FLOW WATERFALL

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$25.0
$4.4
$22.7
$0.5
$14.8
$20.0
$0.1
-$2.1
$15.0
$10.0
$6.0
$5.0
$0.0
2H EBITDA 2H Working Capital Net Interest Paid Tax Refund Grants, Insurance
Proceeds & Other
1H Operating Cash Flow FY23 Operating Cash Flow
$m
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• EBITDA cash conversion rate of 93% for FY23

• Cash conversion rate is expected to stabilise at circa 75% in future periods

• The Group has a history of receiving government grants and will receive insurance proceeds from the 2022 Somerton fire in FY24

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6 KEY REASONS TO INVEST

Significant global infrastructure around waste collection with over 260,000 collection points worldwide providing a strong moat and ability to create and deliver new generational value-add products.

Strong balance sheet, earnings and cash flow to fund future acquisition and growth opportunities with supportive, tier one institutional credit and equity investors.

True ESG business with clear high value proposition.

Opportunity within fragmented industry with ability to unlock synergies and technological improvement through existing infrastructure for acquired businesses.

Extensive macro ESG and regulatory tailwinds driven by governments and large corporations.

Integrated and embedded with global tier 1 customers who are prioritising ESG and supply chain investment to deliver

on next generation strategic goals.

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LINEAR VS CIRCULAR

Global transition as corporates implement real action for ESG requirements

DIVISIONS

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$135.9m
REVENUE
Up 52%
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REVENUE BREAKDOWN

Revenue Category Breakdown FY23

Revenue Regional Breakdown FY23

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RSA
EU
9%
4%
Packaging Resource
AUS
45% USA
Recovery
55%
32%
55%
Revenue Category Breakdown FY24 Revenue Regional Breakdown FY24
EU
RSA
3%
5%
Packaging AUS
38% Resource 40%
Recovery USA
62% 52%
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STRATEGIC GROWTH & EXPANSION

Organic

Inorganic

• We create commercial success by doing what others don’t want to do

• Post consumer waste

• Post industrial waste

• Complex waste streams

• Highly accretive acquisition opportunities

• New technologies to be integrated into existing infrastructure

• New recycling verticals

  • i.e. Batteries & cosmetics

• TonerPlas

• Synergies to unlock in acquired businesses

• Growth in the ISP/CTC business

• New contracts and new geographies through CLG and ISP/CTC businesses

• Organic growth in tier 1 customers – expanding their recycling ambitions

• New packaging opportunities as market leader

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THE ACQUISITION OF THE ISP/CTC BUSINESS

OPPORTUNITIES AND GROWTH FOR KEY CLIENTS

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They aim to use
They aim to reduce
They aim to 30% postconsumer
their product use
eliminate 75% of recycled content
GHG emissions
single-use plastic plastic across their
intensity by 30% by
packaging by 2025, personal systems and
2025, compared
compared to 2018 print product
to 2015
portfolio by 2025
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Specialised technology recycling infrastructure to deliver their needs in an emerging market

CLG SUMMARY

Proven top-line growth, operating leverage and cash flow generation

At the forefront of a multi-generational thematic

Well capitalised for future organic and inorganic growth

Proven track record of sourcing and integrating acquisitions

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