CLOSE THE LOOP LTD. — Investor Presentation 2024

Apr 10, 2024

Close the Loop Limited ABN: 91 095 718 317 43-47 Cleeland Rd Oakleigh South, Victoria 3167 AUSTRALIA

==> picture [249 x 72] intentionally omitted <==

ASX Announcement 11 April 2024

Notice of Investor Briefing

Close the Loop Limited (Close the Loop or the Company) (ASX: CLG) , the circular economy industry leader, is pleased to announce it will present at the Coffee Microcaps investor webinar.

CEO Joe Foster will present at 9 am AEST on Thursday 11 April 2024.

The format for the webinar will be a 20-minute slide presentation (appended below) providing an overview of the Company, followed by a 10-minute Q&A session.

Investors can register here to attend live: https://us02web.zoom.us/webinar/register/WN_w-aSSUzYQgC5wpfnl-NPBw

A recording of the presentation will also be made available and distributed by the Company once available.

This announcement has been authorised for release by the Board of Close the Loop Limited.

• ENDS -

For further information, please contact: Investors/Media Warrick Lace E: investors@ctlgroup.com.au P: +61: 488 335 815

About Close the Loop

With locations across the United States, Australia, South Africa and Europe, Close the Loop collects and repurposes products through takeback programs across its Resource Recovery Division; and provides sustainable packaging products through its Packaging Division, which allow for greater recoverability and recyclability. The Company’s overall premise is ‘Zero Waste to Landfill’. From recovering a wide range of electronic products, print consumables, cosmetics, plastics, paper and cartons, through to the reusing of toner and post-consumer soft plastics for an asphalt additive, the Company is a global leader in the fast-growing circular economy with a focus on global expansion and sustainability.

Further information: www.ctlgroup.com.au, www.closetheloop.com.au and www.ofpack.com.au

==> picture [131 x 15] intentionally omitted <==

ctlgroup.com.au

==> picture [278 x 292] intentionally omitted <==

INVESTOR PRESENTATION COFFEE MICROCAPS

A S X : C L G 11 April 2024

Disclaimer

Presenter

==> picture [86 x 97] intentionally omitted <==

Joe Foster Chief Executive Officer

Agenda

3 The circular economy

5 Strategic growth objectives

12

Customer case study - HP

7

Geographic breakdown

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.

THE GLOBE HAS A CIRCULARITY PROBLEM

RESOURCE RECOVERY:

• A small percentage of consumer electronics are reused

• Major OEMs have ambitious ESG targets to increase circularity in the economy

• All OEMs need to partner with providers to achieve these goals and Close the Loop is at the forefront of this global market trend

PACKAGING[1] :

• There will be more plastic than fish in the oceans by 2050

• 95% of disposable plastic value lost after its use, estimated at roughly $100 billion annually

• Health issues are clear, with scientists finding microplastics in human blood for the first time in March 2022

3

1. https://www.weforum.org/impact/accelerating-reuse-models-world-free-of-plastic-waste/

A GLOBAL CIRCULAR ECONOMY LEADER

Delivering our zero waste to landfill promise

==> picture [61 x 58] intentionally omitted <==

==> picture [58 x 55] intentionally omitted <==

==> picture [58 x 56] intentionally omitted <==

Global reverse logistics collection network

Re-manufacture over 500,000 consumer electronics per year

Process over 25 million print consumables per year

==> picture [234 x 28] intentionally omitted <==

----- Start of picture text -----

$ $
----- End of picture text -----

We collect:

• Laptops

• • PCs

• Gaming devices

• • Teleconferencing equipment

• • Desktop printers

• Commercial printers

• • Monitors

• Print cartridges

• • Soft plastics

• • Cosmetics

==> picture [58 x 55] intentionally omitted <==

What can’t be reused is recycled

$

THE HIGHER THE VOLUME, THE HIGHER THE VALUE

4

OEM: Original Equipment Manufacturer

Consumer electronics: Laptops, PCs, Printers, Monitors, Gaming accessories, Large format printers

DELIVERING OUR STRATEGIC GROWTH OBJECTIVES

ISP Tek Services has delivered:

==> picture [64 x 64] intentionally omitted <==

1. Repositioned Close the Loop as a circular economy leader in the US, the world’s largest market

==> picture [53 x 53] intentionally omitted <==

1. Delivered revenue and EBITDA growth in 1H’24 ahead of our expectations

==> picture [53 x 53] intentionally omitted <==

1. Provided access to the world’s largest OEMs with deep and broad partnership discussions taking place

==> picture [79 x 78] intentionally omitted <==

1. Opened significant expansion opportunities in new geographies, with an initial focus on Australia and Europe

==> picture [49 x 50] intentionally omitted <==

==> picture [58 x 58] intentionally omitted <==

==> picture [65 x 66] intentionally omitted <==

==> picture [58 x 58] intentionally omitted <==

The business (excluding ISP Tek Services) has delivered:

1. Produced strong free cash flow

Invested into Resource Recovery plant and equipment for future growth (ITAD[1] , TonerPlas)

2. Launched pan-European multi-vendor collection programme

Maintained EBITDA margins from Packaging despite a challenging macro environment

ISP Tek Services has delivered ahead of expectations and is presenting the Company with strategic global growth opportunities as per acquisition rationale

5

ITAD: IT Asset Disposition

DELIVERING STRONG FINANCIAL METRICS (1H’24)

$106.2m $22.7m $13.3m REVENUE[1] EBITDA NPATA Exceeding FY24 guidance of $200m Upgrading FY24 guidance to $44m to Adds back intangible amortisation

Upgrading FY24 guidance to $44m to Adds back intangible amortisation $46m of $8.3m, a non-cash, business combination adjustment $17.2m $26.2m NET CUSTOMER NET DEBT[3] RECEIPTS[2] Reduced $11.8m since 30 June 2023

Adds back intangible amortisation of $8.3m, a non-cash, business combination adjustment

$55.7m CASH

Reduced $11.8m since 30 June 2023

Up 12.6% since 30 June 2023

76% cash conversion in 1H’24

1. Revenue plus other income 2. Receipts from customers less payment to suppliers 3. Borrowings less cash at bank

CLG acquired ISP Tek Service in 1H’23, 1H’24 is the first reporting period that includes the full impact of ISP Tek Services, Alliance Paper and Plastic Recycling

6

REVENUE BREAKDOWN

REVENUE BY GEOGRAPHY (1H’24)

4%[6%] 31% Australia USA Europe South Africa 59%

7

USA

REVENUE BY GEOGRAPHY 1H’24

EXISTING BUSINESS:

• Predominantly Resource Recovery business with 30-day customer returns of consumer electronics

• Multiple OEM relationships across print consumables

• Three-year revenue sharing contract with HP Inc

• Plastic recycling

31%

6%

==> picture [27 x 15] intentionally omitted <==

----- Start of picture text -----

4%
----- End of picture text -----

59% ($63m)

USA

NEAR TO MEDIUM TERM GROWTH OPPORTUNITIES:

• Work with OEMs deeper into the consumer electronic product lifecycle refurbishing 1, 2 and 3-year-old products

• Expand and cross sell existing OEM relationships from print consumables to consumer electronics

• Add new and existing OEM product lines

• Grow plastic recycling volumes

8

AUSTRALIA

REVENUE BY GEOGRAPHY (1H’24)

4% 6%

EXISTING BUSINESS:

• Predominantly packaging businesses

• • Work with all print consumables OEMs

• • Soft plastic processing plant with 5,000tpa processing capacity

NEAR TO MEDIUM TERM GROWTH OPPORTUNITIES:

59%

31% ($33m)

Australia

• Leveraging existing OEM relationships to expand into IT Asset Disposition (ITAD) sector

• Developing circular contracts to take back soft plastics enabling further manufacturing expansion and sales of TonerPlas and rFlex products

9

SOUTH AFRICA

REVENUE BY GEOGRAPHY (1H’24)

EXISTING BUSINESS:

• Packaging businesses

NEAR TO MEDIUM TERM OPPORTUNITIES:

• Increase sales volumes by expanding packaging service offering

• • Expansion of the Resource Recovery business into Southern Africa

59%

4%

6% ($6m)

South Africa

31%

10

EUROPE

REVENUE BY GEOGRAPHY (1H’24)

EXISTING BUSINESS:

• Resource Recovery business

• • Multiple OEM relationships across print consumables

NEAR TO MEDIUM TERM OPPORTUNITIES:

59%

4% 6%

Europe

• Expand ISP business model across Europe

• ITAD opportunities in Europe

• • Expansion of new multi vendor print consumables program across Europe and add additional OEMs to the program

31%

11

CASE STUDY: HP

The circular economy is the highest priority for HP and its stakeholders

==> picture [720 x 370] intentionally omitted <==

12

https://www8.hp.com/h20195/v2/GetPDF.aspx/c08636600.pdf

CASE STUDY: HP

HP has set ambitious targets to achieve its circularity objectives by 2023

==> picture [852 x 310] intentionally omitted <==

13

https://www8.hp.com/h20195/v2/GetPDF.aspx/c08636600.pdf

CASE STUDY: HP

HP recognised Close the Loop’s support for its HP Certified Program at it’s global provider conference in Las Vegas last month.

New Offerings to Accelerate a Circular Economy and Extend the Life of Devices

HP is demonstrating its continued commitment to driving a circular economy with new programs that help extend the life of devices. As a result, today HP unveiled a new Device Life Extension Service enabling customers to optimize their IT investments and reduce their carbon impact by enhancing device performance and maximizing the life of their existing HP PCs. Customers simply ship their devices to HP’s trusted partners and receive them back with restored performance and enhanced functionality.

In addition, HP introduced its first Partner Certified Refurbishment program. Now commercial customers can purchase HP Partner Certified refurbished devices that have gone through a rigorous refurbishment process and have been tested extensively. HP is also expanding its PC refurbishment program to the US.

For more information on how HP is helping accelerate a circular future with today’s announcements, please visit

https://press.hp.com/us/en/blogs/2024/hp-accelerating-circular-future.html

==> picture [368 x 540] intentionally omitted <==

14

INVESTMENT PROPOSITION

The circular economy is in its infancy with only a small percentage of consumer electronics and plastics being recovered, reused or recycled

Close the Loop is positioned to lead the circular economy’s global growth being the first to market due to its deep integrations with OEMs and innovative product development

The volume of consumer electronics and plastics is set to grow with regulatory and social pressure placed on companies, with 2025 being a key milestone

15

==> picture [134 x 113] intentionally omitted <==

----- Start of picture text -----

Q&A
Contact us
investors@ctlgroup.com.au
----- End of picture text -----

16

APPENDIX

17

REVENUE[1]

$106.2m Exceeding FY24 guidance of $200m

Total Revenue ($’m)

120

==> picture [402 x 245] intentionally omitted <==

----- Start of picture text -----

100
80
60
106
40
59
20 43
34
0
21H1 22H1 23H1 24H1
1. Revenue plus other income
----- End of picture text -----

Commentary:

• First reporting period that includes the full impact of ISP Tek Services, Alliance Paper and Plastic Recycling

• Strong growth from Recovery Division driven by increased volumes and new programs

• ISP Tek Services has performed better than expected and opened opportunities in other jurisdictions, expanding refurbishment and remanufacturing opportunities across the group for consumer and commercial electronic equipment

• Packaging revenue down 14%, with DP industrial dispute in Australia and international shipping delays in the Red Sea

• Macro conditions and logistics challenges have improved since year end

18

EBITDA

$22.7m

FY24 guidance upgraded to $44m to $46m

EBITDA ($’m)

25

==> picture [394 x 199] intentionally omitted <==

----- Start of picture text -----

20
15
23
10
5 9
7
5
0
21H1 22H1 23H1 24H1
----- End of picture text -----

Commentary:

• Recovery Division has performed strongly

• EBITDA as a percentage of revenue at 21%

• Packaging EBITDA has been consistent despite shipping and industrial delays with management actively reducing costs to maintain margins

• Increase in volume resulting in operational efficiencies with gross profit margin up from 33% to 36%

19

CASH CONVERSION

$17.2m

Net cash receipts from customers[1]

Commentary:

• 76% net cash[1] conversion to EBITDA

• Investment in working capital

Net cash receipts from customers ($’m)

==> picture [380 x 222] intentionally omitted <==

----- Start of picture text -----

20
18
16
14
12
10
17
8
6
4
7
2
1
0
22H1 23H1 24H1
----- End of picture text -----

• Investment in plant and equipment (TonerPlas, ITAD)

• Net debt decreases $11.8m ($26.2m)

• Repayment of borrowings $4.2m

• Finance costs $5.4m

20

1. Receipts from customers less payment to suppliers

INCOME STATEMENT

Revenue	1H’24 103.1	1H’23 58.6	Change 76%
Cost of Sales	65.8	39.4	67%
Gross Profit	37.3	19.2	94%
Operating Expenditure	17.0	10.2	67%
Other Income1	3.0	0.5	500%
EBITDA	22.7	9.5	139%
Depreciation & Amortisation	11.0	3.2	244%
Operating Profit Underlying NPBT2	12.4 15.2	6.3 5	97% 204%

21

1. Includes interest received

2. Excluding amortization of business combinations (non-cash)

BALANCE SHEET

Statement of financial position Assets Cash and cash equivalents Trade and other receivables Inventories	31 Dec 2023 $’m 55.7 29.9 19.7	30 Jun 2023 $’m 49.5 26.1 15.9
Other	3.7	5.1
Total current assets	109.0	96.6
Property, plant, and equipment	20.7	20.2
Right-of-use assets	22.8	20.8
Intangibles	146.4	131.3
Other	4.3	2.4
Total non-current assets	194.2	174.7
Liabilities
Trade and other payables	26.5	29.2
Borrowings	14.8	16.1
Lease liabilities	3.4	3.8
Income tax	4.1	1.6
Other Total current liabilities Borrowings Lease liabilities Deferred tax liability	12.7 61.5 67.1 21.0 19.7	3.1 53.8 71.4 19.6 1.4
Other	1.0	1.1
Total non-current liabilities	108.8	93.5
Net assets	132.9	124.0

31 Dec 2023 31 Dec 2022 $’m $’m

CASH FLOW

Receipts from customers Payments to suppliers and employees Cash flows from operating activities	98.3 (81.1) 17.2	64.7 (58.1) 6.6
Other revenue	1.5	0.5
Interest and other finance costs paid	(4.1)	(0.7)
Business combination costs	-	(0.3)
Income taxes paid	(2.3)	(0.1)
Net cash (used in)/from operating activities	12.3	6.0
Cash flows from investing activities
Acquisition of subsidiary	-	(2.7)
Payments for property, plant and equipment	(3.2)	(2.2)
Net cash used in investing activities	(3.2)	(4.9)
Cash flows from/(used in) financing activities
Proceeds from share issue net of issue costs	4.7	-
Net Proceeds from borrowings Repayment of borrowings Repayment of lease liabilities Net cash from/(used in) financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the financial half-year	- (4.2) (2.6) (2.1) 7.0 49.5	6.0 (2.1) (1.7) 2.2 3.3 9.7
Effects of exchange rate changes on cash and cash equivalents	(0.8)	-
Cash and cash equivalents at the end of the financial half-year	55.7	13.0