Kafrit Industries (1993) Ltd. — Investor Presentation 2022

Sep 1, 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

01 ABOUT KAFRIT GROUP

KAFRIT GROUP IS A LEADING PRODUCER OF MASTERBATCHES AND COMPOUNDS FOR THE PLASTICS INDUSTRY

Working together for the future of plastics.

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

Our new challenging Strategy for the next 5 years

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

Must Win Battles	Marketing and Service	Colors	Business Units	Business Development & Innovation
Mission	Be the Best-in-Class Service and Solution Provider	Become a Multi-Local Player in Colors Segment	Improve Profitability and Strengthen Market position	Form & Execute Strategic Alliances generating significant added value
Our People and Structure	Build a Group Leadership Team, Leverage Knowhow and Synergies

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

Milestones

Around the World

Legal Group Structure

Kafrit Group Leadership Team

02 PORTFOLIO

The Members of Kafrit Group

BOPE

158 Employees	136 Employees	109 Employees	22 Employees	33 Employees	28 Employees
25,300 MT Capacity	26,300 MT Capacity	26,200 MT Capacity	13,200 MT Capacity	22,900 MT Capacity	4,300 MT Capacity
Business Areas	Business Areas	Business Areas	Business Areas	Business Areas	Business Areas
Agriculture	BOPP Films	PEX Compounds for	PEX Compounds for	PE Films	Colors
PE Films	PE Films	Pipes	Pipes
Flame Retardants	PP Films	BOPP Films

BOPP Films

Colors

Polycarbonate

Pipes

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

CONSTAB AND CONPEEL COMPOUNDS

ANTIMONY FREE / REDUCED ANTIMONY FR SOLUTIONS ECOCELL AGRICULTURAL FILM

ANTIOXIDANTS

ADDING VALUE TO FIBERS AND NONWOVENS

Functionality

ACID SCAVENGERS ANTIBLOCKING AGENTS ANTIFOGGING AGENTS ANTISLIP AGENTS ANTISTATICS CAVITATING AGENTS CLEANING COMPOUNDS COLOUR CONCENTRATES FILLERS FLAME RETARDANTS FOAMING AGENTS HYDROCARBON RESINS

MATT COMPOUNDS METAL DEACTIVATORS NUCLEATING AGENTS OPTICAL BRIGHTENERS PEEL COMPOUNDS PHARMACOPOEIA MB PROCESSING AIDS SLIP AGENTS SYNTHETIC PAPER COMPOUNDS THERMOSTABILISERS UV ABSORBERS UV STABILIZERS

Well Diversified Portfolio

(*) H1/2022 NIS Value Sales

Among our Customers – None of them > 5%

H1 -2022 Highlights

Safety Performance Striving for continuous improvement

Recordable Incident Rate

Sales (MNIS)

Operating Profit (MNIS)

EBITDA (MNIS)

The Company continues to deliver strong results under a volatile business environment

• Revenues growth driven by the selling Prices increase to compensate Raw Materials and electricity inflation
• Succeeded to cope with significant Raw Materials crisis, prices, availability, delays, increasing Inventory to minimize the risk towards our customers
• Lack of Labor in almost all geographies after Covid-19 – the "Big Resignation"
• Transportation crisis maritime, ports delays, lack of drivers, price increase and availability

Coping with Serious Supply chain issues

	M-ILS		Change
	2022	2021	2021
Sales	44	44	(1
(Tone)	215	690	1%)
Volume	,	,
Sales	4	491	12
	555	9	9%
Materials	385	335	9%
	3	2	14
Manufacture	69	58	17
&	1	6	7%
Labor
COST	454	393	15
OF	3	9	4%
SALES
GROSS PROFIT	101 1	98 1	3 0%
	18 2%	19 9%
Sale	36	31	2%
&	6	0	18
Marketing
General	22	20	11
&	7	5	1%
Admin
Profit	41	46	(10
	7	7	6%)
Operating	5% 7	9 5%
EBITDA	3	60	(5
	57	7	5%)
	10 3%	12 3%

EBITDA decline was driven by an increase in Electricity, Transportation and Labor costs and small Volume decrease, with negative impact of Foreign Currencies (MNIS)

Debt growth – driven by Inventory increase to cope with challenges in the Supply chain, and seasonality

The Company delivered strong value and margin growth in Q2 with a decrease in the bottom line

• Top Line Growth Driven by: Rising selling prices to compensate for the continued rise in raw material prices, and rising electricity and transportation costs
• The company was able to maintain the trading margin, which increased the gross profit
• The increase in manufacture expenses is mainly driven by the increase in global electricity prices
• The increase in Sales and Marketing expenses and General & Admin originated by the significant increase in transportation costs and the acquisition of the company in Sweden.
• The war between Ukraine and Russia had a non-significant impact on our sales

Coping with Serious Supply chain issues

	M-ILS	Change
	2022	2021	2021
Volume	22	22	(1
Sales	391	755	6%)
(Tone)	,	,
Sales	291	263	10
	4	5	6%
Materials	206	180	14
	6	9	2%
Manufacture	34	29	17
&	8	7	0%
Labor
COST	241	210	6%
OF	3	6	14
SALES
GROSS PROFIT	50 0	52 8	(5 3%)
	2% 17	1% 20
Sale	19	16	19
&	8	6	7%
Marketing
General	11	10	8
&	8	9	3%
Admin
Profit	18	25	(27
	4	4	4%)
Operating	6 3%	9 6%
EBITDA	26	32	(19
	3	7	8%)
	0% 9	4% 12

Sales (MNIS)

Operating profit (MNIS)

EBITDA (MNIS)

Dividend distribution (M-ILS)

Q2 2019 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