PRO-PAC PACKAGING LIMITED — Interim / Quarterly Report 2021

Feb 24, 2021

Pro-Pac Packaging Limited Half-year Results 2021

Tim Welsh CEO & Managing Director Iona MacPherson CFO 25 February 2021

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Pro-Pac Packaging Limited: Half-Year Results

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Important Information

This Presentation contains the summary information about the current activities of Pro-Pac Packaging Limited and its controlled entities (Pro-Pac Packaging or the Group). It should be read in conjunction with the Group’s other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange (ASX), including the Interim Financial Report for the half-year ended 31 December 2020 and associated Media Release released today, which are available at www.asx.com.au.

No member of Pro-Pac Packaging gives any warranties in relation to the statements or information contained in this Presentation. The information contained in this Presentation is of a general nature and has been prepared by the Group in good faith and with due care but no representation or warranty, express or implied, is provided in relation to the accuracy or completeness of the information.

This Presentation is for information purposes only and is not a prospectus, product disclosure statement or other disclosure or offering document under Australian or any other law. This Presentation does not constitute an offer, invitation or recommendation to subscribe for or purchase any security and neither this Presentation nor anything contained in it shall form the basis of any contract or commitment.

This Presentation is not a recommendation to acquire Pro-Pac Packaging shares. The information provided in this Presentation is not financial product advice and has been prepared without taking into account any recipient’s investment objectives, financial circumstances or particular needs, and should not be considered to be comprehensive or to comprise all the information which a recipient may require in order to make an investment decision regarding Pro-Pac Packaging’s shares.

Neither Pro-Pac Packaging nor any other person warrants or guarantees the future performance of ProPac Packaging shares nor any return on any investment made in Pro-Pac Packaging shares. This Presentation may contain certain forward-looking statements. The words ‘anticipate’, ‘believe’, ‘expect’, ‘project’, ‘forecast’, ‘estimate’, ‘likely’, ‘intend’, ‘should’, ‘could’, ‘may’, ‘target’, ‘plan’ and other similar expressions are intended to identify forward-looking statements. Indications of, and guidance on, financial position and performance are also forward-looking statements.

Any forecasts or other forward-looking statements contained in this Presentation are subject to known and unknown risks and uncertainties and may involve significant elements of subjective judgement and assumptions as to future events which may or may not be correct. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of the Group and they may cause actual results to differ materially from those expressed or implied in such statements. There can be no assurance that actual outcomes will not differ materially from these statements. You are cautioned not to place undue reliance on forward-looking statements. Except as required by law or regulation (including the ASX Listing Rules), Pro-Pac Packaging undertakes no obligation to update these forward-looking statements. Past performance information given in this Presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance. All dollar values are in Australian dollars (A$) unless otherwise stated.

Non-IFRS Financial Information

This presentation uses Non-IFRS financial information including capital expenditure, PBT, PBT margin, gearing, net debt, operating cash flow, operating cash flow conversion and working capital. This information represents Non-IFRS measures used by the Group, the investment community and Pro-Pac Packaging’s Australian peers with similar business portfolios. Pro-Pac Packaging discloses these measures where it better reflects what the company considers to be the underlying performance of the Group.

Certain Non-IFRS financial information has not been subject to review by the Group's external auditor; however, reconciliations have been provided to balances contained in the interim financial report.

Pro-Pac Packaging Limited: Half-Year Results

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About Pro-Pac Packaging

Pro-Pac Packaging is an innovative Flexibles, Industrial and Rigid packaging company with a diversified distribution and manufacturing network throughout Australia and New Zealand

• Flexibles Industrial

• • Manufacturing and distribution of bespoke flexible • Manufactures, sources and distributes high packaging solutions tailored for the industrial, performance packaging and combines this with food and beverage, health and agriculture sectors personalised service from its national footprint throughout Australia and New Zealand

• Pro-Pac Packaging's key focus is to deliver

• • Products include stretch and shrink wrap, innovative solutions to the manufacturing and agricultural silage packaging, fresh produce bags, industrial industries barrier and lidding films, industrial protective films • A sourcing partner to global supermarkets and complementary machinery

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• High value added laminated films and pouches for the FMCG market

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Rigid

• A solutions oriented bottle and closures business that focusses on partnering with small to medium sized customers seeking technical and business support with tailored, personalised product and supply chain services

• National distribution network and comprehensive product range offers agile and superior service to our customers

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Pro-Pac Packaging Limited: Half-Year Results

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1H21 Results & Highlights

1H21 has seen management drive considerable improvement in key operating & financial metrics, with investment to deliver further improvement and future growth

Zero Harm Journey

TRIFR at 10.3 down 29% (Jun 20: 14.5)

LTIFR at 7.4 (Jun-20: 6.9)

Group wide focus on health and safety built on best practice systems, experienced and committed leadership ✓

Transformation Projects on Track

Group wide focus to streamline our operations and lower cost of goods and services delivered

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● Chester Hill transition
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• ERP implementation

✓

Underlying Profit Growth PBT* of $11.7m up 33.4% (1H20: $8.8m)

Improved PBT margin* at 5.0% up 150 bps (1H20: 3.5%) driven by operational efficiencies, portfolio improvements and lower cost of debt ✓

Balance Sheet Health Low gearing* at 1.6x before AASB 16 (Jun-20: 1.4x)

Net debt* of $54.2m (Jun-20: $46.1m) before AASB 16, with $8.3m in capital expenditure & $3.2m dividends paid ✓

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Statutory Profit Stable PBT Performance (A$m)
Profit after tax $6.2m 30% PBT CAGR (pre-AASB 16)
$15.0
(1H20: $6.4m)
$13.1
$2.8m (1H20: nil) spend on $11.7$1.4
budgeted significant items incl. $12.0 $10.6
Chester Hill facility transition, $9.3
Kewdale fire costs, and $9.0 $1.8$8.8
restructuring
✓
$5.9
$6.0
$3.0
Continuation of Dividends
0.25 cents per share $0.0
(FY20: 0.40 cents) 1H18 1H19 1H20 1H21
Fully franked Compound Annual Growth Rate in PBT (pre-AASB 16) of 30% since 1H18
PBT Pre-AASB 16
✓ PBT Post-AASB 16
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Continuation of Dividends 0.25 cents per share (FY20: 0.40 cents) Fully franked

* Non-IFRS measure as defined in the Appendices (page 20), post-AASB 16

Pro-Pac Packaging Limited: Half-Year Results

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A Zero Harm Focus

TRIFR at 10.3 reduced by 29%

Targeting Zero Harm

Driving a culture of safety through leadership, systems, education and compliance

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Management Systems

Health, Safety & Environment Team Continued investment in HSE capability

Best Practice Health & Safety Management system deployed

Our leadership is committed to building a disciplined safety culture that protects our people and sustainably enhances operational performance

FY20 COVID-19 Impacts

• Strict protocols continue to protect the safety, health & wellbeing of our people in Australia, New Zealand and Malaysia, whilst ensuring continuity of operations to support our customers in the supply of essential products and services

• Rigorous protocols of our COVID Safe Plan embedded within on-site teams, including social distancing, hygiene, sanitation, separation of teams working on site and restricted access to visiting third parties

• Global shipping delays causing supply chain disruptions

• Demand variability for products in the food, beverage, grocery, personal care, health and household segments has eased in 1H21

• Nimble, domestic manufacturing capability in Australia and New Zealand continued to ensure security of supply to customers

• Minimal bad debt write-offs, with continued improvement in the aging of amounts due for collection

• No Government JobKeeper assistance or rent relief received

LTIFR increased to 7.4 (June 2020: 6.9) and remains a key focus for Pro-PacLTIFR at 7.4 (Jun 20: 6.9)

Pro-Pac Packaging Limited: Half-Year Results

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Financial Results Summary

Continual improvement in profitability delivered (before significant items), planned increase in working capital

Post AASB-16 A$ million 1H21 1H20 Change	Post AASB-16 A$ million 1H21 1H20 Change	Post AASB-16 A$ million 1H21 1H20 Change	Post AASB-16 A$ million 1H21 1H20 Change	Pre AASB-16	Pre AASB-16	Pre AASB-16
	1H21	1H20	Change	1H21	1H20	Change
Statutory results: Revenue Profit after tax	234.4 6.2	251.0 6.4	(16.6) (0.2)	234.4 7.2 251.0 7.6 (16.6) (0.4)
Operating results: PBT _PBT Margin_	11.7 5.0%	8.8 3.5%	2.9 1.5%	13.1 5.6% 10.6 4.2% 2.6 1.4%
Post AASB-16 A$ million DEC-20 JUN-20 **Change **				Pre AASB-16
	DEC-20	JUN-20	**Change **	DEC-20	JUN-20	Change
Balance sheet: Working capital Net debt Gearing*	91.6 110.7 2.4x	82.3 103.8 2.2x	9.3 6.9 0.2x	91.6 54.2 1.6x 82.3 46.1 1.4x 9.3 8.1 0.2x

1H21 Review (post AASB 16)

• Revenue of $234.4m (down 6.6% on pcp) due to:

• targeted and successful focus on shifting business mix towards higher margin products, partially offset by new business and combined with rise and fall resin input price reductions and the divestment and exit of noncore businesses

• Profit after tax is $6.2m (down $0.2m on pcp) due to:

• $2.0m of significant items after tax (1H20: nil) for budgeted costs predominantly relating to the Chester Hill project, additional operating costs associated with the Kewdale fire and restructuring costs

• Increased PBT* to $11.7m (up $2.9m on pcp) due to:

• PBT margin* expansion of 150 bps from improved business mix, the completion of several operational initiatives to streamline costs, increased corporate costs and a decrease in finance costs

• Net debt* of $54.2m before AASB 16 (up $8.1m on pcp) following capital investment of $8.3m, payment of a final dividend of $3.2m and an increase in working capital of $9.3m

• Interim dividend declared of 0.25 cents per share fully franked

* Non-IFRS measure as defined in the Appendices (page 20)

Pro-Pac Packaging Limited: Half-Year Results

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Disciplined Cash Flow Management

A disciplined focus on cash flow management continues

Cash Management

1H21 Review (post AASB 16)

A$ millions	1H21	1H20	Change
Operating cash flow* 16.5 17.3 (0.8)
Capital expenditure* (8.3) (0.7) (7.6)
Free cash flow* 8.2 16.6 (8.4)
Operating cash flow conversion* 65.1% 69.3% (420) Bps

Embedded cash management discipline delivered:

• 65.1% operating cash flow conversion (1H20: 69.3%) influenced by the increases in working capital required to proactively manage the COVID-19 supply chain challenges and the implementation of major projects

• Disciplined focus on planned capital expenditure* relating to plant and equipment ($6.3m) and ERP software ($2.0m)

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Operating Cash Flow Conversion (%)
100.0
69.3
65.1
56.0
52.2
50.0 38.0
- 56%
37% 1H19 1H20 1H21
Pre-AASB 16
Post-AASB 16
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• Seasonal cash cycle driven by the Agriculture sector in Australia and New Zealand positively skews operating cash flow conversion* to second half

Key Priorities

• Continuous improvements in cash flow management and disciplines

• Disciplined capital investment focused on superior ROI projects, supported by well managed delivery and governance oversight

* Non-IFRS measure as defined in the Appendices (page 20), post-AASB 16

Pro-Pac Packaging Limited: Half-Year Results

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Improving the Balance Sheet

Our capital management priorities are to maintain a strong balance sheet, and provide financial flexibility for growth and shareholder returns

Balance Sheet

1H21 Review

Strong balance sheet:

• Total facilities of $100m ($90m senior debt and $10m overdraft) enabling capacity to fund growth

• Working capital* increase of $9.3m in part required to proactively manage the COVID-19 disruption to supply chain and the implementation of major projects

• Net debt increased by $8.1m, with $8.3m capital expenditure in 1H21 and payment of final dividend of $3.2m

• Low gearing* maintained at 1.6x

• All banking covenants comfortably met

Key Priorities

Further working capital improvement opportunities to be pursued in inventory and payables

Balance Sheet
A$ millions	DEC-20	JUN-20	Change
Working capital* 91.6 82.3 9.3
Net debt* 54.2 46.1 8.1
Net debt* (post-AASB 16) 110.7 103.8 6.9
Gearing* 1.6x 1.4x 0.2x
Gearing* (post-AASB 16) 2.4x 2.2x 0.2x

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Working capital (A$m)
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$110.0
$102.1
$98.4
$90.0
$91.6
$82.3
$70.0
$102.1m
$98.4m
$50.0
JUN-19 DEC-19 JUN-20 DEC-20
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* Non-IFRS measure as defined in the Appendices (page 20)

Pro-Pac Packaging Limited: Half-Year Results

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Flexibles Packaging

Manufacturing and distribution of bespoke flexible packaging solutions tailored for the industrial, food and beverage, health and agriculture sectors throughout Australia and New Zealand

1H21 Review (post AASB 16)

• The Flexibles business has performed strongly compared to pcp with:

– Revenue down 11.2%; and – PBT up 9.9%. • The exit of less profitable business continued which reduced revenue. The exit from less profitable and non-core business is now complete, with revenue rebased for future growth • New business of $9.7m annualised was won in 1H21, which contributed $2.3m revenue to 1H21 and will convert progressively through 2H21 and early FY22 • Contracted rise and fall provisions relating to resin input costs resulted in a revenue drop of $0.9m but had no material impact on earnings • Revenue reduced from the divestment of the forage business ($5.1m), exit of Canadian operations ($2.7m), and a decline in global textiles demand combined with a stronger AUD reducing cotton export sales ($2.5m) • PBT and PBT margin continued to improve due to the repositioning of the portfolio and the delivery of profit improvement initiatives • A key priority for Flexibles in 2H21 and FY22 will be organic top line growth supported by: – an increasingly strong pipeline, with opportunities driven by customer and consumer demand for innovative and bespoke packaging; and – the sales restructure, completed in 1H20, which focused on key account management and new business development, driving an increased level of sales effectiveness _ Non-IFRS measure as defined in the Appendices(page 20), post-AASB 16_	A$ millions	1H21	1H20	Change

Pro-Pac Packaging Limited: Half-Year Results

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Industrial Packaging

A one stop shop for primary, secondary and tertiary packaging with deep expertise in food, beverage, agriculture, retail and health sectors

1H21 Review (post AASB 16)

• The Industrial business has performed strongly compared to pcp with: – Revenue down 7.1%; and

• PBT* up 61.1%.

• Revenues were lower than prior year but exceeded internal expectations with Industrial volumes strengthening progressively throughout 1H21 despite supply chain and sourcing disruptions due to the COVID-19 pandemic

• Consistent with our group strategy, Management refocused the product range to higher margin market sectors where we know we can win and grow

• The Cosmic Packaging business was divested at the end of 1H20, resulting in lower revenue for 1H21 ($0.9m)

• PBT margins* improved as a result of the refocusing of the product range, and from the completion of several operational initiatives to streamline costs and to support future growth

A$ millions	1H21	1H20	Change
Revenue 62.6 67.3 (7.1)%
PBT* 1.1 0.7 61.1%
PBT margin* 1.8% 1.0% 74 bps

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Revenue PBT
Contribution to Contribution to
Group in 1H21 Group in 1H21
27% 8%
1H20: 27% 1H20: 6%
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* Non-IFRS measure as defined in the Appendices (page 20), post-AASB 16

Pro-Pac Packaging Limited: Half-Year Results

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Rigid Packaging

A solution-oriented business that focusses on partnering with the small to medium customers seeking technical and business support with tailored, personalised product and supply chain services

1H21 Review (post AASB 16)

• The Rigid business has performed strongly compared to pcp with:

• Revenue up 17.1%; and

• PBT* up 19.0%.

• The COVID-19 pandemic continued to provide sales volume and margin opportunities, particularly for triggers and pumps for hand sanitiser and other cleaning and hygiene products

• Improvements in the lawn and garden space were driven by more favourable weather conditions than prior year and growth also reflected a partial recovery in the food service sector. New business conversion in specialty closures in the FMCG space also contributed to revenue and earnings growth.

A$ millions	1H21	1H20	Change
Revenue 36.1 30.8 17.1%
PBT* 3.0 2.5 19.0%
PBT margin* 8.4% 8.3% 13 bps

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Revenue PBT
Contribution to Contribution to
Group in 1H21 Group in 1H21
15% 22%
1H20: 12% 1H20: 21%
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* Non-IFRS measure as defined in the Appendices (page 20), post-AASB 16

Pro-Pac Packaging Limited: Half-Year Results

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Transformational Projects

Strategic projects initiated to optimise operational footprint, increase manufacturing capability & drive efficiency in operations

Chester Hill Transition (announced 27 May 2020)

ERP replacement project

• Manufacturing at Chester Hill is being transitioned to other manufacturing sites in Sydney, Melbourne, Adelaide and Perth to consolidate footprint

• Investment in a new 7-layer extruder (commissioned February 2021) and laminator provide new capacity and capability for growth with existing customers and expansion into new markets

• On track for estimated completion date – June 2021

• Consolidation of multiple disparate existing systems onto a single integrated ERP platform

• Microsoft Dynamics 365 selected and KPMG engaged as system implementer

• Project will deliver standardised processes across the group, improvements in efficiency, transparent and timely information to enable better decision making and reduced technology complexity

• No change to budget and annualised benefits, with circa $7m cost reduction still expected in FY22

• Capital expenditure* of $2.1m and one-off costs of $0.9m incurred in 1H21

• Reduction in corporate and operational costs expected

• Phase 1 on track for estimated completion date – March 2021

• Overall project on track for estimated completion date – June 2022

• Capital expenditure* and one-off costs still expected to be less than $8.0m, with $2.0m capitalised in 1H21

Pro-Pac Packaging Limited: Half-Year Results

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Supreme Packaging Acquisition

Supreme is a flexible packaging business that services markets in core verticals of food, beverage and produce

• Consistent with Pro-Pac’s strategy of growth through earnings accretive acquisitions in existing and adjacent market segments, on 31 January 2021 the company acquired the business and assets of Supreme Packaging Pty Ltd (Supreme), a flexible packaging business in Clayton, Victoria that employs 50 staff

• This acquisition comprises flexographic printing, slitting and bag making assets and services markets in core Pro-Pac verticals of food, beverage and produce. Supreme’s capability includes pre-press and design, 8 colour printing, slitting, bag making and micro perforation.

• Supreme is certified to ISO 9001

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• Purchase price of $3.2m ($0.5m in deferred consideration)

• Based on historical performance, Supreme is expected to deliver revenues of circa $10m-12m in FY22

13 Pro-Pac Packaging Limited: Full Year Results

Outlook

Pro-Pac Packaging Limited: Half-Year Results

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FY21 Outlook

Subject to macroeconomic and COVID-19 conditions remaining stable, and no major disruptions to Pro-Pac‘s supply chain, we continue to expect a full year PBT* (before significant items) above the prior year.

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* Non-IFRS measure as defined in the Appendices (page 20), post-AASB 16

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Appendices

Pro-Pac Packaging Limited: Half-Year Results

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Adopting AASB 16 Leases

AASB 16 Leases became effective for Pro-Pac Packaging on 1 July 2019, requiring operating lease arrangements to be recognised on balance sheet

The impact on the profit or loss for 1H21 is shown in the table below:

	1H21	1H21	1H21	1H20	1H20	1H20
A$ millions	Pre- AASB 16	Adopt AASB 16	Post- AASB 16	Pre- AASB 16	Adopt AASB 16	Post- AASB 16
Revenue from contracts with customers 234.4 - 234.4				251.0 - 251.0
Operating expenditure (215.5) 6.5 (209.0)				(232.9) 6.9 (226.0)
EBITDA 18.9 6.5 25.4*				18.1 6.9 25.0
Depreciation and amortisation expense (4.1) (6.1) (10.2)				(4.5) (5.6) (10.1)
EBIT 14.7 0.5 15.2*				13.6 1.3 15.0
Finance costs, net (1.6) (1.9) (3.5)				(3.0) (3.1) (6.1)
PBT 13.1 (1.4) 11.7*				10.6 (1.8) 8.8
Significant items (2.8) - (2.8)				- - -
Profit before income tax 10.3 (1.4) 8.8				10.6 (1.8) 8.8

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* Non-IFRS measure as defined in the Appendices (page 20)

Pro-Pac Packaging Limited: Half-Year Results

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Reconciliations

Reconciliation to EBIT & EBITDA

	1H21	1H21	1H21	1H20	1H20	1H20
A$ millions	Pre- AASB 16	Adopt AASB 16	Post- AASB 16	Pre- AASB 16	Adopt AASB 16	Post- AASB 16
Profit/(loss) before tax 10.3 (1.5) 8.8				10.6 (1.8) 8.8
Add: significant items 2.8 - 2.8				- - -
Add: finance costs 1.6 2.0 3.6				3.0 3.1 6.1
Less: interest income - - -				- - -
EBIT 14.7 0.5 15.2*				13.6 1.3 14.9
Add: depreciation and amortisation 4.1 6.1 10.2				4.5 5.6 10.1
EBITDA 18.9 6.5 25.4*				18.1 6.9 25.0

Reconciliation to NPAT*

Reconciliation to NPAT*
	1H21			1H20
A$ millions	Pre- AASB 16	Adopt AASB 16	Post- AASB 16	Pre- AASB 16	Adopt AASB 16	Post- AASB 16
Profit/(loss) after tax 7.2 (1.0) 6.2				7.6 (1.2) 6.4
Add: significant items 2.8 - 2.8				- - -
Less: income tax on significant items (0.8) - (0.8)				- - -
NPAT 9.2 (1.0) 8.2*				7.6 (1.2) 6.4

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* Non-IFRS measure as defined in the Appendices (page 20)

Pro-Pac Packaging Limited: Half-Year Results

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Reconciliations

Reconciliation to Operating Cash Flow*

Reconciliation to Operating Cash Flow*
	1H21			1H20
A$ millions	Pre- AASB 16	Adopt AASB 16	Post- AASB 16	Pre- AASB 16	Adopt AASB 16	Post- AASB 16
Net cash flows from operating activities 4.3 4.6 8.9				7.1 3.8 11.1
Add: income tax paid 1.2 - 1.2				0.5 - 0.5
Add: significant items paid, net 3.3 - 3.3				0.2 - 0.2
Add: interest paid 1.3 1.9 3.2				2.4 3.1 5.5
Less: interest received - - -				- - -
Operating cash flow 10.1 6.5 16.5*				10.2 7.1 17.3
EBITDA 18.9 6.5 25.4				18.1 7.1 25.0
Operating cash flow conversion 52.2% 12.9% 65.1%				56.0% 13.3% 69.3%

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* Non-IFRS measure as defined in the Appendices (page 20)

Pro-Pac Packaging Limited: Half-Year Results

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Reconciliations

Reconciliation to Gearing*

Reconciliation to Gearing*
	DEC-20			JUN-20
A$ millions	Pre- AASB 16	Adopt AASB 16	Post- AASB 16	Pre- AASB 16	Adopt AASB 16	Post- AASB 16
EBITDA 33.2 13.6 46.8*				32.4 14.0 46.4
Add: unconsolidated LTM EBITDA from acquisitions - - -				- - -
LTM Adjusted EBITDA 33.2 13.6 46.8*				32.4 14.0 46.4
Bank loans 66.6 - 66.6				66.5 - 66.5
Hire purchase and finance leases 0.7 (0.7) -				1.0 (1.0) -
Lease liabilities - 57.2 57.2				- 58.7 58.7
Less: cash and cash equivalents (13.1) - (13.1)				(21.4) - (21.4)
Net debt 54.2 56.5 110.7*				46.1 57.7 103.8
Gearing 1.6 0.8 2.4*				1.4x 0.8x 2.2x

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* Non-IFRS measure as defined in the Appendices (page 20)

Pro-Pac Packaging Limited: Half-Year Results

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Reconciliations

Reconciliation of Significant Items*

	1H21	1H21	1H21	1H20	1H20	1H20
A$ millions	Pre- AASB 16	Adopt AASB 16	Post- AASB 16	Pre- AASB 16	Adopt AASB 16	Post- AASB 16
Site consolidation and exit costs 0.9 - 0.9				- - -
Acquisition and integration costs 0.4 - 0.4				1.1 - 1.1
Business interruption costs 1.4 - 1.4				1.7 - 1.7
Litigation costs 0.4 - 0.4				- - -
Reversal of provisions and other liabilities (0.2) - (0.2)				(2.8) - (2.8)
Significant items before income tax 2.8 - 2.8				- - -
Income tax (expense)/benefit (0.8) - (0.8)				- - -
Significant items after income tax 2.0 - 2.0				- - -
Payments in relation to significant items 3.3 - 3.3				3.2 - 3.2
Receipts from insurer - - -				(3.0) - (3.0)
Significant items paid, net 3.3 - 3.3				0.2 - 0.2

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* Non-IFRS measure as defined in the Appendices (page 20)

Pro-Pac Packaging Limited: Half-Year Results

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Definitions of Non-IFRS Financial Measures

Unless otherwise stated in this presentation, all metrics are disclosed post-AASB 16

1H20 means the half-year ended 31 December 2019

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1H21 means the half-year ended 31 December 2020

Adjusted EBITDA means EBITDA, plus any unconsolidated LTM EBITDA attributable to operations acquired

Capital expenditure represents payments for intangibles and property, plant and equipment less disposal proceeds EBITDA refers to profit/(loss) before finance costs and interest income, income taxes and significant items PBT refers to profit/(loss) before income taxes and significant items

PBT margin is calculated as PBT divided by revenue

Gearing is calculated as net debt divided by Adjusted EBITDA before accounting for AASB 16 Leases (unless otherwise stated) LTM means the last 12-month period

Net debt is calculated as interest-bearing liabilities, less cash and cash equivalents before accounting for AASB 16 Leases (unless otherwise stated)

NPAT refers to profit/(loss) before significant items after income taxes

Operating cash flow is defined as net cash flows from operating activities, plus income tax paid, plus interest paid (net of interest income), plus significant items paid

Operating cash flow conversion is defined as operating cash flow divided by EBITDA

ROI refers to return on investment

Working capital refers to trade and other receivables, inventories, deposits and prepayments, less trade and other payables