Polyram Plastic Industries Ltd. — Investor Presentation 2024

Mar 11, 2024

Company Presentation

March 2024

Disclaimer

• This presentation was prepared by Polyram Plastic Industries Ltd. (hereinafter: the "Company" and/or "Polyram") as a general presentation about the Company and is not intended to replace the immediate reports (hereinafter: "Polyram's Reports") prior to making a decision regarding investment in Polyram's securities.
• need to review Polyram's full reports to the Securities Authority and the Tel Aviv Stock Exchange. Including, inter alia, Polyram's reports including the Polyram's report for 2022, 2023 and ▪ The information contained in the presentation does not constitute advice, recommendation, or opinion regarding investment and does not constitute an offer to invest and/or purchase securities of Polyram (and in particular does not constitute an "offer to the public" or "sale to the public" of any kind) and does not replace the independent examination and personal advice according to the unique needs of each investor. Such an offer shall be made only in accordance with the provisions of the law, after obtaining the necessary permits from the Securities Authority and the stock exchange. ▪ The presentation includes data on international markets, including growth volumes, penetration rates, sales, statistics, etc. It should be emphasized that this data is based on public data and ▪ The forward-looking information is solely aimed at the date to which it relates and is uncertain, unpredictable, and affected by factors beyond the control of Polyram, each of which, or a
• This presentation includes a summary of the issues described in the context in which they are discussed and not the full information available to Polyram in relation to these issues and does not include the full results and financial information of Polyram and the notes to them, and/or Polyram's business plans and/or Polyram's risk factors.
• Polyram's assessments and does not constitute any facts and/or representations.
• This presentation may include forward-looking information as defined in the Securities Law, 1968 (hereinafter: "forward-looking information"), including forecasts, and subjective assessments by Polyram's management as of the date of publication of the presentation, which although Polyram believes are reasonable, which are inherently uncertain, estimates and information regarding future events.
• combination thereof and the realization of which risk factors characterize Polyram's activities, may materially impair results. The activities of Polyram cause the actual results to be materially different from the forward-looking information.
• Except as an undertaking to disclose information as required by the securities laws applicable to Polyram. Polyram does not undertake to update or change any information contained in this presentation in order to reflect events and/or circumstances that will apply after the date of its preparation. It is clarified that Polyram's plans and strategy included in this presentation are correct as of the date of their publication and may and will change in accordance with the decisions of the Company's Board of Directors from time to time.
• Polyram's assessments regarding Polyram's objectives are based, inter alia, on Polyram's assessments regarding trends in the Company's business in particular and trends in the market in which Polyram operates in general, as well as Polyram's management assessments regarding potential and market trends in Israel and international markets as of this report. These assessments may not materialize and/or materialize significantly differently from Polyram's assessments, inter alia, as a result of factors external to Polyram and which are not under control, including, inter alia, changes in the economic situation in Israel and abroad.
• To the extent that there is a conflict between what is stated in this presentation and what is stated in the Company's reports required by law, what is stated in the Company's reports will prevail.

Polyram – Overview

Polyram is a global solution provider, manufacturer and marketer of advanced functional raw materials for the plastic industry worldwide

Confidential

Three operating divisions: • Bondyram • Engineering Plastics (EP) • Polytron		Established in 1986
1,400 products	Financial Data (ILS in millions)
Sophisticated		2023	2022	Q4.2023	Q4.2022
manufacturing processes	Revenues	1,001	1,104	231	238
Tailor Made solutions	Net Income	85	104	16	14
Over 950 customers	EBITDA	153	166	38	28
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Management

23Years

The Plastic Industry - Value Chain

CEO Highlights

Since the start of the war, the company has continued to operate fully in Israel and around the world without any difficulties in production or transportation of products, thanks to the company's structure and distribution, and this is reflected in the results.

The company expects to exercise the option to purchase the remaining 49% of shares of the US marketing company in the second half of 2024.

The company presented a strong cash flow from operating activities of NIS 270 million in 2023, and NIS 78 million in the fourth quarter of the year.

The fourth quarter was stronger than both the fourth quarters of the past two years.

We continued to reduce the company's debt by more than half to only NIS 132 million, compared to NIS 305 million at the beginning of the year. The debt-to-EBITDA ratio is less than 1.

The board of directors has decided to pay a dividend of NIS 10 million, bringing the total dividends paid for 2023 to NIS 58 million.

The slowdown in the local market continued in the fourth quarter, but the company retained all of its customers.

The company estimates that demand in 2024 will grow compared to 2023, and we see a growth vector in the local market.

Growth engines of Polyram

Recycling, innovation, and sustainability are the core values of the firm. The company develops sophisticated recycled raw materials to lead the industry in the coming years through its recycling plants in UK, Germany, and Israel.

Polyram has established its presence in the American market by producing thermoplastic compound products in the USA and building a distribution system.

The company aims to develop synergies in the German market, the most industrialized country in Europe, by distributing Polyram products to MCT customers.

Expanding the market for elastomer products, particularly thermoplastic rubber produced at MCT, throughout Europe using its subsidiaries and the local market.

Intending to penetrate the field of electric vehicles and charging stations by developing advanced materials for new applications.

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Innovation-Recycling-Sustainability

Polyram's field of material recycling is regarded as one of the company's primary growth engines

Development and marketing of recycled materials Polyram UK specializes in recycled materials.

Entering to recycling market through the acquisition of MCT materials: (1) Polyolefins with minerals and glass fibers (2) Thermoplastic rubber (elastomers). Dedicated production lines-to meet the increasing demand

in the field of recycling, dedicated production lines have been established at a factory in UK and a factory in Israel.

Entering into new projects in the automotive industry-

In a bid to improve the sustainability of their operations, more automotive manufacturers are making use of recycled material in vehicle interiors.

Progress in the ESG indicators, environment, Social and Corporate Governance, while building and managing an environmental policy.

Global Footprint

Strong and Consistent Growth

Diversification and risk reduction

End Markets Product Lines

*Divided into 3 product divisions 13

Diversification and risk reduction

total revenue

covered by full credit insurance

Product Lines

Maximum annual production capacity ~ 151,850Tons

Current Utilization~53%

In order to meet the anticipated demand in the upcoming years,

there was an significant investment during 2021-2023 to increase production capacity and operational efficiency.

During the year 2023, Two new production lines started operating increase of approximately 7,000 tons of production capacity.

The company has ordered an additional production line for the Polytron division at the US plant, expected to be operational at the end of 2024. In order to meet the demand for the new project.

Bondyram

17

Tie Layers

Products and Applications Construction Food Packaging Tie

Pharma and

Main customers

17

Confidential

Growth Engines and Growth potential

Tie Layers

Successful penetration to 3 major customers in the US Food packaging industry

Developing new market segments such as the transportation of liquids for infrastructure and construction activities

Expanding marketing and sales channels to increase market share in selected territories such as China, India and Southeast Asia.

5 large key suppliers supply 80% of the total global market of Tie Layers

Coupling Agents and Impact Modifiers

- Coupling Agents –solutions to couple between different polymers and glass-fibers special functionalities

Growth Engines and Growth potential

Coupling Agents and Impact Modifiers

Polyram is a global leader in these product lines Development of innovative products through the R&D department for unique applications

Total global market is estimated at ~\$500 million and still growing

After five year development process, Polyram launched an innovative Impact Modifier for the US market

20

Engineering Plastics

• Polyram develops tailor-made solutions and raw materials for plasticbased applications ▪ We provide customers with special functional raw materials with unique characteristics such as fire resistance, flexibility, UV resistance, and more ▪ Q1/2023 - Establishment of the first EP production line in the US ▪ Entering the world of thermoplastic rubber by Purchasing MCT plant in
• Entering the world of recycling engineering materials at the Israeli site, for us and our customers
• Germany
• We have appointed a new manager for the European market for the thermoplastic rubber.

Automotive Irrigation Other

Editorial credit:

Teddy

Leung

/

Shutterstock.com

Main customers

Key Growth Engines

Geographic expansion – New geographical markets, fast-growing markets such as South East Asia, and traditional markets such as Germany, North America, and more Development of innovative products - advanced materials with unique properties

Realization of acquisitions and mergers strategy of manufacturers of engineering thermoplastic compounds in Europe and the USA.

Penetrating the carbon fiber market in the field of engineering thermoplastic composites

Penetrating the plastic recycling market through the Company and its UK subsidiary

Global supplier for the European and American markets and supplying from Israel to the local market and the rest of the world

Polyram MCT

Belongs to Engineering Plastics Product Line and includes 2 sectors:

• Polyolefins with minerals and glass fibers
• Thermoplastic rubber (elastomer)

The acquisition of MCT is in correlation with Polyram's strategy for expansion in the European market and production in Europe

• Production and distribution in Europe- allows obtaining large projects of polyolefins and Bulk supplies.
• Penetration into the German market by the company's distribution system with Polyram's products.
• Penetration into the thermoplastic rubber market through the European subsidiaries and Polyram Israel.

12

27

• Potential expedition of the production line.
• Acquisition based on EBITDA ratio X6

Confidential

Springs for an adjustable bed

23

Polytron

• Polytron products mainly serve the Automotive Industry
• Mercedes, BMW, and Ford are among the company's key customers
• Unique qualities of Polytron based products allow the replacement of metal components with light-weight plastic based solutions
• Providing solutions for improving mechanical properties to end products in the automotive industry
• Global automotive supplier, operating in all three major continents of the industry
• Entering the electricity cabinets market in the US
• Establishment of a third production line in the US in Q4 2024
• Winning two major projects in the USA

key features

• Each new car contains 4-6 kg of long-fiber products
• Polytron products serve additional applications in a non-significant way

Main customers

• Diverse certifications from leading OEMs and Tier1 suppliers
• Global manufacturing, supply, and service capabilities

24

Confidential

Key Growth Engines

newly established plant in the US

Geographic expansion - further penetration to the US market leveraging Maintaining the status of Polyram, as a leading supplier to the automotive industry, with global distribution channels on three continents

Polyram obtains OEMs and Tier 1 certifications which are a major barrier to market development Innovation – development of new long-fiber-based solutions to the

Strengthening the company's presence in direct marketing channels to OEM

automotive industry

Polyram is one of the top ten suppliers in the global market

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Financial Statements

P&L M-ILS

P&L M-ILS
			2023				2022
	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1	2023	2022	2021	2020
EP	123	148	145	160	140	159	183	169	576	651	511	378
Bondyram	86	78	78	85	72	88	106	83	327	349	306	206
Polytron	22	25	25	26	26	24	29	25	98	104	90	71
Sales turnover	231	251	248	271	238	271	318	277	1,001	1,104	907	655
Gross profit	51	49	50	45	38	50	61	52	195	201	201	140
Gross profit margin	22.1%	19.5%	20.2%	16.6%	16.0%	18.5%	19.1%	18.6%	19.5%	18.2%	21.1%	21.3%
R&D expenses	1	1	1	1	1	1	1	1	4	3	3	3
S&M expenses	15	13	13	13	14	11	11	9	55	46	40	35
G&A expenses	6	5	5	6	6	4	5	5	22	21	19	13
Other expenses (income),
net	-	-	-	-	-	-	-	3	-	3	-	3
Operating profit	29	30	31	25	18	34	44	34	114	129	139	86
Operating profit margin
(w/o other expenses)	12.6%	11.8%	12.3%	9.2%	7.3%	12.5%	13.7%	13.1%	11.4%	11.9%	15.4%	13.1%
Financing expenses, net	15	2	1	1	1	10	1	-	19	11	21	11
Income taxes	-2	4	4	4	2	-2	7	6	10	13	18	12
Net profit	16	24	25	20	14	26	36	28	85	104	100	63
Net profit margin	6.9%	9.6%	10.1%	7.4%	5.8%	9.6%	11.3%	10.1%	8.5%	9.4%	11.0%	9.6%
EBITDA	38	40	41	35	28	42	52	44	153	166	166	113
EBITDA margin	16.2%	15.9%	16.3%	12.7%	11.6%	15.7%	16.4%	15.7%	15.2%	15.0%	18.3%	17.3%
CAPEX	10	7	13	5	14	6	9	* 4	35	*33	21	11

Selected data from BS M-ILS

Selected data from BS M-ILS
	2023	2022
Inventory	257	372
Current maturities of borrowings and current borrowings	106	242
Borrowings from banks	75	92
Equity	623	594
	2023	2022

	2023	2022
Operating working capital	341	499
Net debt to EBITDA	0.87	1.84

Debt development M-ILS

SUMMARY

Technological leadership, customer loyalty and high quality products

Industry and geographical distribution (a variety of industries such as: irrigation and water supply, packaging and food, vehicles and automotive, using worldwide production and distribution channels)

Significant growth engines in the TL and adhesives divisions, the automotive industry and the plant in the US

Significant growth potential in all product divisions Strength and economic resilience

Entering the recycling engineering materials world, in the Israeli and UK sites

Dividend and cash flow policy in correlation with the company's growth

Powerful platform for mergers and acquisitions

Thank You