PRO-PAC PACKAGING LIMITED — Investor Presentation 2018

Apr 17, 2018

Investor Presentation Sale of Advent shares

April 2018

==> picture [780 x 38] intentionally omitted <==

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.

Page 2

• Advent is offering to sell 59.6m PPG shares to new and existing investors ( Sale Shares ) at $0.38 per share

• Bennamon Pty Ltd ( Bennamon ) is offering to purchase a minimum of 23.1m Sale Shares and any shares not taken up by other investors at $0.38 per share

• The Sale Shares are to be released from voluntary escrow by agreement between PPG and Advent

• Advent’s remaining 15% holding in PPG will remain subject to escrow on the same terms

• Bennamon is currently a 38.8% shareholder in PPG. The maximum shareholding and voting power which Bennamon may have (in the event it acquired all of the Sale Shares) would be approximately 49.1%.

• The PPG Board believes the transfer of a portion of Advent’s holding to new and existing investors is in the best interests of shareholders

Page 3

• Integration synergies for FY19 are ahead of schedule and will underpin a solid FY19 performance

• PPG calendar year underlying annualised pro forma CY18 EBITDA remains on track for $38m

• Core agricultural trading conditions remain challenging. In addition a hold up in the installation of new equipment has led to timing delays in realising some forecast labour and efficiency savings

==> picture [115 x 33] intentionally omitted <==

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

1.
PPG Group EBITDA
(millions)
----- End of picture text -----

==> picture [344 x 170] intentionally omitted <==

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

$40.0
$35.0 $38.0
$34.0
$30.0
$30.3 -$35.0
$25.0 $28.0
$20.0
$15.0
$10.0
$5.0
$0.0
FY16A FY17A FY18F 2. CY18F 2.
----- End of picture text -----

==> picture [188 x 20] intentionally omitted <==

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

1 PPG & IPG combined EBITDA
2Annualised Pro-forma EBITDA, including synergies
----- End of picture text -----

• As a result, PPG is forecasting underlying annualised pro forma FY18 EBITDA of between $34-$35m

• Following its recent strategic review the PPG Board remains positive on the medium and long term outlook for the Company

Page 4

• Bell Potter will arrange a bookbuild of Advent’s Sale Shares in PPG at $0.38 per share

• Bennamon is offering to purchase a minimum of 23.1m Sale Shares and any shares not taken up by other investors at $0.38 per share

	Event	Date/Time (AEST)
	Bookbuild opens	2 May 2018
	Close of Bookbuild	3 May 2018, 4.30pm
	Release of shares from voluntary escrow	3 May 2018
	Trade date	3 May 2018
	Settlement date	7 May 2018

Timetable is indicative only and PPG reserves the right to amend the dates in this presentation at its discretion and without notice, subject to the ASX Listing Rules and Corporations Act

The early release of the Sale Shares from voluntary escrow means Advent may, in accordance with Listing Rule 3.10A, trade those shares on or after 3 May 2018. In compliance with ASX Listing Rule 3.10A, these transactions will take place on 3 May 2018, 10 trading days following this announcement.

Page 5

PRO-PAC AN INDUSTRY LEADER

Page 6

• The merger between IPG and PPG was completed on 6 November, 2017

Distribution

• The two businesses now operating under a single management structure, realisation of synergies is well underway

• PPG now an industry-leading integrated manufacturer and distributor of industrial & flexible and rigid packaging products, with substantial scope to become a market leader in flexible packaging

• 22 sites across Australia, 16 distribution centers and 6 manufacturing plants

• 10,000+ customers, 800+ staff with annual sales of circa A$450 million

Manufacturing

==> picture [290 x 141] intentionally omitted <==

Page 7

PPG’s strategy is to become market leader in the high growth industrial & flexible packaging segment

• A diversified distribution company, providing innovative, industrial, flexible and rigid packaging solutions for a group of blue chip clients and a broad range of SME

• Services FMCG, industrial and logistics markets, amongst others through the provision of primary and secondary packaging solutions

• Pro-Pac has distribution facilities in Sydney, Melbourne, Brisbane, Adelaide & Perth supplemented by 6 manufacturing sites

• Over 24 years operating history

PPG GROUP PRODUCT MIX

• Australia’s largest specialist manufacturer and distributor of flexibles, film, wrap and associated products

• Services both agricultural and industrial markets focusing on Australia’s leading FMCG, food, retail customers

• Established in 1982: 34+ years operating experience

• Manufacturing facilities in Melbourne, Sydney and Perth in Australia, and Auckland NZ with growing export capability

Page 8

Pro-Pac is a leading player in the $2.2 billion Flexible Packaging segment

==> picture [545 x 136] intentionally omitted <==

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

Australian Packaging
A$20-22 billion [1]
Flexible Packaging
Fibre Packaging Metal Packaging Other Packaging
~$2.2 billion [1]
----- End of picture text -----

• The Combined Group will be a segment leader across primary, secondary and tertiary packaging solutions

• Demand outlook for flexibles is attractive (~4% long term growth)

• Trend towards engineered films as substitutes for alternative forms of secondary packaging

• Productivity benefits for manufacturing clients

• Consumer shift towards convenience packaging

• Online sales driving need for more packaging

• Flexible packaging extending food products shelf life and freshness

• The Combined Group will be a leading distributor & manufacturer of other packaging and industrial products

• Customers value suppliers in this segment for their ability to provide a total solution for all their packaging requirements

• Products in the sector include:

• Washroom materials

• Tape & Strapping

• Cartons & Void fill

• PPE

• Packaging machinery (including pallet wrapping)

• Rigid packaging - bottles, jars, containers, caps & fasteners

• IBISWorld and PPG management estimates

Page 9

• PPG’s future growth will largely be driven by the flexibles market:

• Demand expected to grow 47% over next 10 years (CAGR 4%)[1] . Underpinned by favourable consumer trends:

• Shift towards convenience packaging particularly (eg. pre-sliced carrots in bags)

• Move towards unitisation to reduce product wastage

• Move towards shrink wrap as a substitute for crates and boxes (eg; beer & dairy markets)

• Modified atmosphere packaging helps teduce food wastage and increase product lifespan in supply chain (ie: fresh produce)

• If you move it you must secure it! (eg: pallet wrapping, stretch hoods etc)

• Improve brand awareness (eg: printed bags, shrink wrap, etc)

==> picture [326 x 375] intentionally omitted <==

1. IBISWorld and PPG management estimates

Page 10

Post merger, PPG is a vertically integrated industry leader in industrial & flexible packaging

Strong platform for growth		Target resilient sectors		Extended capability; greater efficiency		Market consolidation
• Flexible & Industrial packaging markets • World-class manufacturing and proven product innovation capability • Opportunities for geographic expansion		• Key market sectors include horticultural, agricultural, protein, industrial & beverage • Requirement for local onshore processing • Favourable consumer trends - increased unitisation, convenience packaging, online, product quality		• Combination of PPG’s distribution and IPG’s manufacturing delivers a highly efficient and seamless packaging system • Complimentary blue-chip customer base • Significant cost synergies and cross selling opportunities		• Opportunity to drive consolidation and establish leadership position • Bolt-on acquisition opportunities, strong M&A pipeline • Building a unique competitive advantage

Page 11

==> picture [765 x 429] intentionally omitted <==

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

PPG Shareholder value creation
----- End of picture text -----

Page 12

Thank You

Pro-Pac Packaging (Aust) Pty Ltd Building 1, 147-151 Newton Road Wetherill Park, NSW, 2164

T: (02) 8781 0500 F: (02) 8781 0599 www.ppgaust.com.au

Page 13