Kafrit Industries (1993) Ltd. — Investor Presentation 2022

Nov 30, 2022

WELCOME TO KAFRIT GROUP

COMPANY PRESENTATION

Disclaimer

This presentation does not constitute an offering to purchase or sell securities of Kafrit Group Ltd. (the "Company") or an offer for the receipt of such offerings.

The presentation's sole purpose is to provide information. The information contained in the presentation and any other information provided during the presentation (the "Information") does not constitute a basis for investment decisions and does not comprise a recommendation, an opinion or a substitute for the investor's sole discretion. The Information provided in the presentation

concerning the analysis of the Company's activity is only an extract, and in order to receive a complete picture of the Company's activity and the risks it faces, one should review the Company's reports to the Israel Securities Authority and the Tel Aviv Stock Exchange.

The Company is not liable, and will not be held liable, for any damage and/or loss that may be caused as a result of use of the Information.

The presentation may contain forward-looking statements as defined in the Israeli Securities Law, 5728-1968. All forward-looking statements in this presentation are made based on the Company's current expectations evaluations and forecasts, and actual results may differ materially from those anticipated, in whole or in part, as a result of different factors including, but not limited to, changes in market conditions and in the competitive and business environment, regulatory changes, currency fluctuations or the occurrence of one or more of the Company's risk factors. In addition, forward-looking forecasts and evaluations are based on information in the Company's possession while preparing the presentation.

The Company does not undertake any obligation to update forward-looking forecasts and evaluations made herein to reflect events and/or circumstances that may occur after this presentation was prepared.

Our Place in the Supply Chain

Kafrit Group

Masterbatches and Compounds engineered for the future of plastics

Our purpose is to unite talent and technology to drive the future of plastics, together.

Working together for the future of plastics.

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Enhance our strong Business Portfolio while Increasing Profitability driven by a significant Transformation from a Production-based Company to a Customer-Centric Company, focused on Added Value Service

Strategic Pillars	Higher Profitability in Business Units		Drive the future, together
	Customer Experience	Operational Excellence	Product Technology	Focus in Colors	Develop our Talent
Mission	Be the Best-in-Class Service and Solution Provider	Excel in every step of the Supply chain	Develop innovative products and integrate new technologies that enable a better future	Become a Multi-Local Player in Colors and enter complementary segments	Foster a culture of collaboration inside and outside
Action	• Design & implement strong customer experience model • Innovative Pricing system based on Technology • Automation in handling materials • Embrace data analytics in Operations • Unlock Raw Material Group's opportunity		• Strategic alliances for breakthrough innovation • Improve Portfolio mix towards innovative solutions • Product Innovation to help our customers become more eco-friendly	• Acquisitions & PMI • Transfer & leverage of knowledge	• Upskill our people • Implement the Sustainability Agenda • Promote communities (internally and externally)
Key Enabler	Data Technology, Digital Transformation

Kafrit Sustainability Strategy for 2030

Our Sustainability aspirations are that our People, Products' design and our aligned Actions, together with our Stakeholders – will make a Better World.

Areas of Action	Operating Sustainably	Living Sustainably	Innovating Sustainably	Business Developing Sustainably
Mission	We continuously limit the negative impact our operations have on the environment	We work to ensure that our people are safe and act according to our values	We help our Customers to become more eco friendly through Product Innovation	We Balance our Portfolio through Relevant Business Development and Strategic Alliances
Report Sustainably			We measure our actions, setting long and short-term goals striving to achieve results and Report them

Including Delta Kunststoffe acquired in Oct 2022

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Milestones

Around the World

Working together for the future of plastics.

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Legal Group Structure

DELTA KUNSTSTOFFE AG -GERMANY-

Leadership Team

02 PORTFOLIO

The Members of Kafrit Group

Capacity

The Members of Kafrit Group

Masterbatches and Compounds for different applications

Conductive Compounds

Business Areas

Colors

Applications

INJECTION MOLDING / BLOW MOLDING

POLYCARBONATE AND PMMA SHEETS

POLYETHYLENE PACKAGING POLYPROPYLENE CAST AND CALENDER FILMS

HALOGEN FREE SOLUTIONS FOR SHEETS AND PIPES

BLOWING AGENTS

OPTIMIZING BOPP FILM PRODUCTION

CONPEEL COMPOUNDS ANTIOXIDANTS ANTIMONY FREE / REDUCED ANTIMONY FR SOLUTIONS ECOCELL AGRICULTURAL FILM

ADDING VALUE TO FIBERS AND NONWOVENS

Working together for the future of plastics.

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Our complete range of innovative, reliable, and economical products

ACID SCAVENGERS ANTIBLOCKING AGENTS ANTIFOGGING AGENTS ANTIMICROBIAL AGENTS ANTISLIP AGENTS ANTISTATICS ANTIOXIDANTS BARRIER MB CAVITATING AGENTS CLEANING COMPOUNDS CONDUCTIVE COLOR CONCENTRATES

CROSS-LINK ELECTRET MB FILLERS FLAME RETARDANTS FOAMING AGENTS HEAT STABILIZER INFRARED ABSORBER LIGHT STABILIZERS LUBRICANTS MATT COMPOUNDS METAL DEACTIVATORS MODIFIER MASTERBATCH NUCLEATING AGENTS ODOR CONTROL OPTICAL BRIGHTENERS PEEL COMPOUNDS PHARMACOPOEIA MB PROCESSING AIDS PURGE AGENTS RELEASE AGENTS SLIP AGENTS SYNTHETIC PAPER COMPOUNDS THERMOSTABILIZERS UV ABSORBERS / UV STABILIZERS WHITE CONCENTRATES

A well diversified portfolio

(*) Q3 YTD 2022 NIS Value Sales

Among our customers – None of our them > 5%

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Q3 YTD 2022 Highlights

Working together for the future of plastics. 21

Safety Performance Striving for continuous improvement

OSHA = #LTA / 200KHours

Sales (MNIS)

Operating Profit (MNIS)

EBITDA (MNIS)

The YTD results were affected by soft third quarter results

	M ILS -		Change
	2022	2021	2021
Volume Sales (Tone)	63 435 ,	66 891 ,	(5 2%)
Sales	801 7	759 6	5% 5
COST OF SALES	656 3	610 8	7 4%
GROSS PROFIT	145 5	148 8	(2 2%)
	18 1%	19 6%
Sale & Marketing	55 5	48 7	14 0%
General & Admin	33 7	31 3	7 9%
Other expensses	2 4	0 0
Operating Profit	53 8	68 8	(21 8%)
	6 7%	9 1%
EBITDA	79 8	90 4	(11 7%)
	10 0%	11 9%

Consolidated P&L – Q3 YTD 2022 vs. 2021 The decrease in quantity affected the bottom line

• Revenues growth driven by the selling Prices increase to compensate Raw Materials inflation, mainly in the first half of the year
• The company succeeded to cope with significant Raw Materials crisis, prices, availability, delays, increasing Inventory to minimize the risk towards our customers
• The soft result of the third quarter affected the YTD bottom line
• The increase in expenses is largely due to the increase in energy expenses, the increase in transportation expenses and Forex
• Other expenses include the one-off expenses of Delta acquisition
• The war between Ukraine and Russia had limited impact on our sales

EBITDA decline was driven by Volume decrease, energy and freight costs and Forex

Debt growth – Acquisition of Delta Kunststoffe

Revenue decreased due to a decrease in demand in the entire industry, driving a decrease in the bottom line

Consolidated P&L – Q3 2022 vs 2021

	ILS M -		Change
	2022	2021	2021
Volume Sales (Tone)	19 277 ,	22 202 ,	(13 2%)
Sales	246 3	267 6	(8 0%)
COST OF SALES	201 9	216 9	(6 9%)
GROSS PROFIT	44 4	50 7	(12 4%)
	18 0%	18 9%
Sale & Marketing	18 9	17 8	5% 6
General & Admin	11 0	10 8	1 8%
Other expensses	2 4	0 0
Operating Profit	12 1	22 1	(45 5%)
	9% 4	3% 8
EBITDA	22 5	29 7	(24 3%)
	9 1%	11 1%

The decrease in quantity drove a decrease in EBITDA

• Top Line decline derived from decrease in demand due to inflation and decrease in customer's RM inventories
• The drop in demand encompassed the entire industry and did not escape the company either
• The company was able to maintain the trading margin
• Other expenses include the one-of expenses of Delta acquisition

Sales (MNIS)

Operating profit (MNIS)

EBITDA (MNIS)

Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022

Dividend distribution (MNIS)

Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 *Q3 2022 – As approved in BOD (31/08/2022)

Working together for the future of plastics.