PRO-PAC PACKAGING LIMITED — Investor Presentation 2014

Apr 8, 2014

Pro-Pac Packaging Limited

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Disclaimer
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Some of the statements in this presentation constitute “forward-looking statements” that do not directly or exclusively relate to historical facts. These forward-looking statements reflect Pro-Pac Packaging Limited’s current intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors, many of which are outside Pro-Pac Packaging Limited’s control.

Important factors that could cause actual results to differ materially from the expectations expressed or implied in the forward-looking statements include known and unknown risks.

Because actual results could differ materially from Pro-Pac Packaging Limited’s current intentions, plans, expectations, assumptions and beliefs about the future, you are urged to view all forward-looking statements contained in this presentation with caution.

This management presentation may not be copied or otherwise reproduced.

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Agenda
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• PPG Overview and Highlights

• Highlights of H1 2014

• Strategy Update

• Revenue Growth

• Cost Reduction Strategies

 Focus and Outlook

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Overview
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• Leading manufacturer and supplier of packaging solutions products and services

• Established 1987

• Listed on ASX April 2005

• Business is divisionalised across business Silo’s

• National distribution and manufacture

• 10,000+ diverse customers

• 500+ staff

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• Significant acquisition activity completed and integrated into an expanded infrastructure

• Board further strengthened with the recent appointment of Ahmed Fahour

• PPG scale now more significant as a circa $250M revenue company

• Revenues streams now much better focused in sustainable and more value adding technical products

• Cost reduction strategies in progress

• Stronger second tier management now in place

• Large highly motivated sales force in place

• PPG now well positioned to make the next quantum leap.

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FY14 – H1 Financial Performance
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(In millions)	FY14 – H1	FY13 – H1
Revenues	111.9	85.2
EBITDA	8.3	6.5
Profit after tax	4.2	3.3
Earnings per share - basic (cps)	1.98	1.59
Dividends per share (cps)	1.0	1.0

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Highlights
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Revenue over past 5 years

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200
180
160
140
120
100 H1
80 FY
60
40
20
0
FY10 FY11 FY12 FY13 FY14
$ million
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EBITDA
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14
12
10
8
H1
6 FY
4
2
0
FY10 FY11 FY12 FY13 FY14
$ million
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Dec 2013 Balance Sheet
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(In millions)
Cash and cash equivalents	3.1
Trade receivables	39.6
Inventories	31.5
Total Assets	165.0
Trade payables	19.7
Trade finance	2.4
Interest bearing debt	25.7
Total Liabilities	65.3
Shareholder Equity	99.7
Net interest bearing debt to net debt plus equity	20.1%

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Revenue
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• Total revenue grew 31%

• Organic revenue grew 10% despite tough trading conditions

• Organic revenue growth derived from

• New customer wins

• Cross selling

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Margin and Expenses
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• Some margin erosion resulting from a lower AUD exchange rate and higher resin input prices

• Competitive landscape causing timing delays in passing on price increases

• Relative to sales, expenses reduced by 7% as savings from cost reduction programs start to take effect

• Back office offshoring reducing costs

• Supply chain efficiencies being improved

• Achieving the benefits of greater critical mass

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FY14 Focus and Outlook
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• Increased business development and organic growth with a strong focus on the agricultural, food manufacturing and food processing industries

• More recession proof and based around staples

• Food processing and agricultural sectors viewed as a growth market

• Primary packaging – “sticky” customers

• Recurring, repetitive revenues

• More specialised and less ME2

• Continuing to evaluate company transforming and synergistic acquisitions

• Extracting the upside from recent acquisitions

• Strong pipeline of new business opportunities

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Core Industy Sectors
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			Core Industry Sectors	Core Industry Sectors	Core Industry Sectors	Core Industry Sectors	Core Industry Sectors	Core Industry Sectors	Core Industry Sectors
		General Industrial & Manufacturing	Transport, Warehousing & Distribution	FMCG	Food Processing & Packaging	Food Service	Cleaning & Janitorial	Health & Aged Care	Source and Sell
Product Categories	Industrial & Protective Packaging				
	Safety & PPE							
	Washroom & Janitorial							
	Industry Specific								
	Flexible Films							
	Rigid Containers & Closures					
	Cartons & Paper Products					
	Disposable Food Packaging						
	Machinery & Service				

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Product Silos
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Rigid Containers
and Closures
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Bottles
Jars
Caps and closures
Cubes
Jerry cans
Sprays and triggers
Pails and crates
Vials
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Industrial
and Protective
Packaging
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Tapes
Bubble
Strapping and tools
Void fill
Strapping
Plastic sheets
Warehouse
consumables
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Safety and PPE
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Gloves
Head, ear and face
protection
Hi-Visibility clothing
Disposable
protective apparel
Signage
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Food Packaging
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Flow wrap
Containers
Food trays
Punnets
Foil products
Disposable food
paper products
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Machinery and
Service
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Stretch wrap
machinery
Carton sealers
Strapping machines
Hooding machines
Shrink tunnels
Banding machines
Servicing
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Product Silos
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Washroom and
Janitorial
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Paper towels
Toilet & facial tissue
Facial tissues
Soaps and
dispensers
Cleaning chemicals
Bin liners
Mops, buckets and
cleaning accessories
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Industry
Specific
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Body bags
Boning knives and
meat trade tools
Syringes
Knives
Chain mesh gloves
Lashing and twine
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Flexible Films
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Poly bags
Stretch wrap
Plastic sheets
Pouches and rewind
Barrier films
Shrink bags
Top and bottom web
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Cartons and
Paper Products
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Cartons and mailers
Parts boxes
Printers cartons
Litho laminated
Folding cartons
Edge protectors
Paper food
packaging
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Source and Sell
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Kitchenware
Food storage
containers
Retail lines
Machinery
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The Pro-Pac Packaging Group
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