CLOSE THE LOOP LTD. — Investor Presentation 2024

Aug 25, 2024

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FY24 Results Presentation | August 2024

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Investor Presentation | 1

Disclaimer

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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Investor Presentation | 2

FY24

Results Briefing 26 August 2024

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04 Highlights

05 Financial Summary

10

Financial statements

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Outlook
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13

14 About Close the Loop

Presenters:

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Joe Foster Group CEO

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Marc Lichtenstein Group CFO

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FY24 Highlights Achieved guidance and delivered growth

TOTAL REVENUE $219m Up 59% on pcp and achieving guidance of over $200m

NPATA $26m Up 87% on pcp, amortisation of $14.7m and EPSA of 4.9c

EBITDA CASH CONVERSION 71% $45m Up 85% on pcp, achieving Strong free cash flow allows for guidance of between reinvestment and capital $44m - $46m management optionality

CASH ON HAND $41m After one off earnout payment and investment in working capital

NET DEBT 42m $4m reduction in borrowings in FY24

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Delivered successive record results

of due diligence and expectations

• Since listing management has consistently demonstrated the ability to grow revenue through the organic and inorganic deployment of capital

• ISP Tek Services (now rebranded Close the Loop Renew Solutions) has grown during the year

• FY24 guidance provided to the market with the FY23 results and upgraded with the 1H24 results to revenue above $200m and EBTIDA of between $44m and $46m, has been achieved

• Renew Solutions contribution to EBITDA has exceeded our expectations and the full and final earnout of US$5m has been paid during the year

• EPSA growth of 36% in FY24 is up from 24% EPSA growth in FY23

• Total revenue is up 59%, with the acquisition of ISP Tek Services (concluded in April 2023) delivering revenue ahead

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Total Revenue Group EBITDA Group NPATA ($m) Group EPSA (c)
250 ($m) 50 ($m) 30 6
200 219 40 45 25 26 5
5
150 30 20 4
138 15 3 4
100 20 24 14 3
10 2
50 71 10
5 1
10
6
- - - 0
FY22 FY23 FY24 FY22 FY23 FY24 FY22 FY23 FY24 FY22 FY23 FY24
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FY22 FY23 FY24
South
South
South Africa
Africa
Africa 9%
6%
9%
Europe
Europe
4% Europe
4% Australia
4%
32%
Australia
Australia
North 55% North
68% North
America America
America
19% 58%
32%
North America Australia South Africa Europe North America Australia South Africa Europe North America Australia South Africa Europe
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Revenue by Geography ($m)

Revenue Mix FY22 - FY24

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140
120
100
80
60
40
20
0
North America Australia South Africa Europe
FY22 FY23 FY24
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FY22 South FY23 FY24 South
Africa South Africa
3% Africa 5%
9%
Europe Australia Australia Europe
Australia 7% 35% Europe 18% 3%
4%
54%
North
North
North America
America
America 74%
36%
52%
North America Australia South Africa Europe North America Australia South Africa Europe North America Australia South Africa Europe
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EBITDA Mix FY22 – FY24

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EBITDA by Geography ($m)
35
30
25
20
15
10
5
0
North America Australia South Africa Europe
FY22 FY23 FY24
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Commentary

• 71% cash conversion vs. EBITDA (targeting 75%)

• $41m cash on hand, a $9m reduction on pcp impacted by: o US$5m earnout payment o Additional $22m investment in working capital associated with the growth of the business

• $4m reduction in borrowings in FY24

• Cash on hand provides optionality for reinvestment, expansion, and capital management initiatives

• The Board and Management are exploring all options to extract value for shareholders

Quick cash from operating activities ($m)

Cash Cash from operations and Cash conversion

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35
30 32
25
20
20
15
10
5 8
-
-2
(5)
FY21 FY22 FY23 FY24
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Cashflow Waterfall FY24 ($,000)

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• Earnout for previous business acquisitions

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Commentary

• Material growth in revenue

• Achieved EBITDA guidance

• Depreciation of $6.3m and business combination amortisation of $14.7m

• $9.8m interest expense and in discussions to restructure debt to reduce interest

• EBIT margin impacted by business combination amortisation

Income statement

	FY22*	FY23	FY24
	($m)	($m)	($m)
Revenue (excl other income)	89.2	135.9	213.0
Cost of Sales	60.9	88.3	132.9
Gross Profit	28.3	47.6	80.1
Opex	11.4	23.3	35.2
EBITDA	14.3	24.3	44.9
D&A	5.9	7.0	21.0
EBIT	8.4	17.3	23.9
Interest expense	0.5	2.5	9.8
Tax	(1.6)	2.6	2.9
NPAT	9.5	12.2	11.2
NPATA	10.5	13.8	25.9
Gross Profit Margin	31.7%	35.0%	37.6%
EBITDA Margin	13.6%	17.9%	21.4%
EBIT Margin	5.3%	12.8%	11.0%

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*Pro-forma figures used for FY22

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Commentary

• Investment in working capital o Trade and other receivable increase

• o Inventory growth o Decrease in trade and other payables

• Reduction in borrowings

• Growth in intangibles and deferred tax liability

Balance Sheet

	FY22	FY23	FY24
	($m)	($m)	($m)
Assets
Cash and equivalents	10.3	49.5	40.6
Trade and other receivables	21.1	26.1	36.1
Inventories	5.4	15.9	20.0
Other	3.2	5.1	3.1
Total current assets	40.0	96.7	99.8
Property, plant, and equipment	6.2	20.2	26.4
Right-of-use assets	13.7	20.8	23.8
Intangibles	29.9	131.3	142.8
Other	2.4	2.4	4.2
Total non-current assets	52.2	174.7	197.2
Liabilities
Trade and other payables	10.3	29.2	20.9
Borrowings	4.7	16.1	14.3
Lease liabilities	2.4	3.8	3.8
Income tax	0.1	1.6	0.5
Other	3.8	3.1	6.0
Total current liabilities	21.3	53.8	45.5
Borrowings	4.0	71.4	69.0
Lease liabilities	13.2	19.6	21.6
Deferred tax liability	0.3	1.4	19.2
Other	0.2	1.1	0.2
Total non-current liabilities	17.7	93.5	110.0
Net assets	53.2	124.1	141.5

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Debt commentary

• US$38.8m senior secured term loan, undrawn facilities of US$7.5m revolver and US$5.0m deferred drawdown provided by Pricoa Private Capital

• All loans mature in 4QCY29 and are variable interest rate (base plus margin)

• Low termination fees for early exit apply

• Have commenced discussions to restructure debt at lower rates following these results

• Variable interest rate expected to decrease substantially in next 45 days

• All debt facility covenants met throughout the period

Cash flow statement

	FY22	FY23	FY24
	($m)	($m)	($m)
Receipts From Customers	74.7	127.2	205.2
Payments To Suppliers	(76.5)	(106.8)	(173.3)
Gross Operating Cash flow	(1.8)	20.4	31.9
Other Revenue	0.8	4.4	5.9
Net Interest	(0.7)	(2.1)	(8.2)
Tax	(1.4)	0.0	(7.9)
Net Operating Cash Flow	(3.1)	22.7	21.7
Net Investing Cash Flow	(4.0)	(86.0)	(19.6)
Net Financing Cash Flow	11.2	103.1	(11.3)

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ORGANIC GROWTH ORGANIC GROWTH

GROWING HP CERTIFIED INCREASING ENGAGEMENT REFURBISHED RELATIONSHIP WITH TIER-1 PACKAGING GLOABLLY – PRODUCT AND CUSTOMERS IN SOUTH AFRICA GEOGRAPHICAL EXPANSION AND AUSTRALIA

FY25 OUTLOOK Revenue and EBITDA drivers

EFFICIENCIES AND SCALE WITH OPENING OF MEXICALI AND MIDDLE-EAST FACILITIES

MULTI VENDOR TAKE BACK PROGRAM IN EUROPE AND PRINTER REFUBISHMENT EXPANSION

ACQUISITION OF FEEDSTOCK FROM OTHER OEMS AND ITAD REDUCING CUSTOMER CONCENTRATION

THE REUSE OF SOFT PLASTIC WASTE IS A CRITICAL INITIATIVE FOR THE COMPANY AND THE COMMUNITY

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Locations

Legend

• Resource Recovery

• Packaging

• IT Refurbishment

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Current locations Future locations

Ecosystem of clients, partners and providers

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Ecosystem of clients, partners and providers

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Australia

• Australian Packaging Covenant

• Targeting 100% of packaging nationwide to be reusable, recyclable, or compostable by 2025

• Recycling and Waste Reduction Bill

• Bans the export of waste glass, plastics, tyres, and paper

Europe

• Right to Repair Directive

• Aims to extend product lifecycles by making repairs easier and more cost effective

• Packaging and Packaging Waste Directive

• 65% of all plastic packaging to be recycled or compostable by 2025 and 70% by 2030

• Waste Electrical and Electronic Equipment Directive

Macro and Regulatory Tailwinds

HP Sustainable Impact

• HP Device Life Extension Service

• 75% circularity for products and packaging by 2030

• Recycle 1.2mt of hardware and supplies by 2025 (from 2016)

• Use 30% postconsumer recycled content plastic across personal systems and print

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Company Snapshot

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EPSA CLG
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4.9c
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ASX Code

Major Shareholders

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|||
|---|---|
|Foster Packaging|12.23%|
|Omniverse|11.3%|
|Wilson Asset Management|9.48%|
|ASLDH|8.48%|
|Greencape Capital|6.32%|

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Staff
>380
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Operations: >380 North America Australia Segments Europe 2 South Africa

Core Activities: Collect & Create

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531.8m
Shares on issue
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$168m
Market cap
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41m
$83m
FY24 Cash FY24 Debt
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12-month relative share price performance vs. small ords

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Investor Presentation | 18

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Investor enquiries: Warrick Lace 0488 335 815 investors@closetheloop.com.au

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Investor Presentation | 19