Middle East Paper Co. · TADAWUL:1202
Middle East Paper — 9M 2022 Earnings Presentation
42 slides from Middle East Paper's earnings presentation, 2023
Slide 1: Investor Presentation 9M FY22
Investor Presentation 9M FYee
Slide 2: Disclaimer
DISCLAIMER MEP9CO This presentation is prepared by MEPCO and contains basic information about Company activity as of the latest published results. The information is presented in summary rather than detailed form. This information, including any forward-looking statements, should not be taken as bas
Slide 3: Outline
@i 3) OS) Oy, OS) OUTLINE MEPCO as a Group MEPCO's Growth Pillars MEPCO's Stock Performance Peer Benchmarking Appendix OS) MEPCO’s Strategy as | a Group Economic and Market Drivers MEPCO's Financial Performance MEPCO's ESG Performance
Slide 4: MEPCO as a Group
(0) MEPCO as a Group A "e
Slide 5: MEPCO Group President Statement
MEPYCO MEPCO Group President Statement 99 During the past 20 years, MEPCO has achieved so much growth and development both internally and externally, on an operational and SP Gue SiC level. We are so proud to take the lead in the MENA region in the manufacturing of recycled container boards. We cont
Slide 6: MEPCO as a group
MEPCO as a group MEPCO Middle East Paper company was established in 2000 for the purpose to manufacture containerboard and industrial paper from recycled fiber pulp The largest paper manufacturers in the Middle East and Africa More than 20 years of International partnership Global presence across SO
Slide 7: Product Lines
MEP. CO PRODUCT LINES Products CATEGORY PRODUCT DESCRIPTION END USE MEPLINER Outer & inner layers of a carton box - Consumer good packaging MEPFLUTE sormuscting medium layer of a carton - Industrial goods ° OX 8 MEPRCHEM Corrugating medium layer of a carton - Carton boxes for logistics 5 box, chemic
Slide 8: MEPCO's Strategy as a Group
OE MEPCO's Strategy as a Group
Slide 9: MEPCO's Strategy Pillars
ya MEPCO's Strategy Pillars OVERALL To be the leading integrated paper & STRATEGIC packaging player in the Middle East, which OBJECTIVE provides profitable growth for shareholders MEPCO will achieve growth by expanding into GROWTH other paper segments, growing our privileged TRAJECTORY _, position i
Slide 10: Developing Business & Marketing Strategy
MEP9CO Developing Business & Marketing Strategy HIGHER PENETRATION IN EXISTING MARKETS FOR EACH SEGEMENT Adopting agile marketing strategy in alignment with operational development to increase the products delivered to segments where demand is increasing locally and regionally DEVELOPING BETTER BUSI
Slide 11: Developing Business Strategy: Waste Management
WEEyCO Developing Business Strategy Waste Management | Increase the recovery rate obtained of Municipal solid waste MSW and increase tonnage of dry recyclables through expanding and enhancing current WASCO's held contracts with municipalities @i Extend same approach to other | Prepare developing inc
Slide 12: Risk Mitigation against current global challenges
Risk Mitigation against current global challenges for FY 2022 Logistic challenges against higher shipping cost mitigation Maintaining MEPCO's exports levels while developing local and regional market share Marketing Agility with Targeting Strategy while developing and penetrating existing markets ME
Slide 13: MEPCO's Growth Pillars
MEPCO's Growth Pillars \ Opening new doors to a prosperous future _
Slide 14: Growth Outlook: JUTHOR
MEPYCO Growth Outlook: JUTHOR 77 JUTHOR Factory: Installed _@- Technolo Location: Test Run: 25% 4¢9 Products: Y Capacity : Aol Applied: a & 2 ig Np) Horizontal SO0,©©O Ton State oftheart Industrialvalley 102023, Estimated gross - Facial tissues expansion in tissue machinery inking Abdullah followed
Slide 15: PM5 Project
MEP}CO PMS Recently announced major advancement towards the delivery of the Group’s growth strategy INVESTMENT COST: SAR 1.5 Bn Further announcement to be made on technology selection, j financing structure and location by the end of Q1/2023 15
Slide 16: Economic and Market Drivers
(jal Economic and Market Drivers
Slide 17: Macro Economic Dynamics
MEP CO Macro Economic Dynamics KSA Economical growth ECONOMIC INDICATORS “QUARTER Q4 2022" & N LOCATION GDPGROWTH MANUFACTURING KSA GDP % N RATE (%) PMI 8.00% \ BaraR 5.10% ! 02 Sa 4.00% 2.00% 0.00% -2.00% =©.4 A77A6) -4.00% -6.00% “890% 0.8 50.8 ~10.00% 1% 54) RISI Pulp and Paper , Fast markets pri
Slide 18: Market Dynamics
Market Dynamics Market Demand Growth for Container boards in MENA ,K tons BO% in KSA MEPCO's Market Share in recycled container board. Container board consumption in MENA is around 4.5 million tons and it increases annually by 3% Government and consumers R are preferring recycled Z products Most pap
Slide 19: International Prices
International Prices Benchmarking with international prices for testliner 2 and OCC international price *, USD/ton 1000 S13) 623 187 Le POL LO & PL PP OO UD BD BD gb gb DB FEF wt < Roy — Average Testliner 2 benchmark Intl price RISI Pulp and Paper , Fast markets price reports sf a wot fous Roy & i w
Slide 20: MEPCO's Stock Performance
MEPCO's Stock Performance
Slide 21: MEPCO's Stock Performance
MEPCO's Stock Performance TRADING NAME: MEPCO SECTOR: Materials INDUSTRY GROUP: Materials Main Market ISIN CODE : SA13QOSOIP16 STOCK EXCHANGE MARKET: Tadawul , Saudi Exchange PAID IN CAPITAL: SAR 667 M NUMBER OF ORDINARY SHARES : 67 M PAR VALUE : 10 SAR PERCENTAGE OF FOREIGN OWNERSHIP : 7.22 % (as o
Slide 22: MEPCO's Stock Performance and Peers Performance
MEP CO MEPCO’s Stock Performance and Peers Performance MEPCO Stock Performance ,Smurfit Kappa ,Lee & Man , International Paper & Nine Dragon Paper, SAR © | MEPCO Q3 FY 22 ,P/E6.9 ‘. 70 = —MEPCO —Smurtfit Kappa 59 Lee § Man — International Paper | INTERNATIONAL PAPER =, Se Q3 FY 22 P/E5.6 40 | LEE &
Slide 23: Market Indicators
Market Indicators P/E 119.17 oe zee 229 f- 9.99 = Stock Price MM eps oa 19,3 44 49 2, i ee 2017. 2018 2019 2020 2021 9M2022 2017, 2018 2019 2020 2021 9M _1m/BO2R2 MEP CO mmm Cash Dividend — Dividend Payout 5% 50% 0% 0% 13% Price to earning and net income , SARM In 2019 MEPCO was challenged by Europe
Slide 24: MEPCO's Financial Performance
OE MEPCO's Financial Performance
Slide 25: Overview Profitability
Overview Profitability Revenues and Cost of goods sold , Mn SAR mRevenues mCOGS 834 m7 725 691 585 598 581 | | 549 | 2017 2018 2019 2020 1,057 ih 663 20el 955 530 9M 2022 MEP. CO ~ continued such SiUTHiERhY in : a0 7 In 2021 Sales revenues hit SAR 1 Bin as the increase in international selling price
Slide 26: Profitability Key Financial Indicators
ak) Profitability Key Financial Indicators GROSS PROFIT & GROSS PROFIT MARGIN , sarm SEGMENTAL REVENUES , sarm fil HB Manufacturing Mil Trading Elimination 1057 — Gross Profit Margin 500 = 950 Gross Profit 834 400 394 771 725 300 236 710 200 100 2017 2018 2019 2020 20e21 9M 2022 2017 2018 2019 2020
Slide 27: Operational Efficiency
Operational Efficiency TOTAL ASSETS , TOTAL LIABILITIES , SHARE HOLDERS, sarm =Total Assets =Total Liablities Shareholder's Equity fe) S 18: EE 8.27 722 1 1.506 017 887 983 795 1179 9M 2022 RETURN ON CAPITAL EMPLOYED, x Bag, 16.9% 11.1% 16.5% 8.6% 2017 2018 2019 2020 20e1 9M 2022 =—eROCE ROCE has in
Slide 28: Investment Efficiency
MEP CO Investment Efficiency (= Cash flow from operations & EV/SALES,SARM % 2,65 2,07 2,41 3,52 PE 86,00) | 2017 2018 2019 2020 2021 9M 2017 2018 2019 2020 2021 3M 2017, 2018 2019 2020 2021 9M 2022 2022 2022 —@ROE —™ROA —Debt to Equity -e-ROIC EV/Sales [ll Cash flow from operations Return on assets
Slide 29: Peer Benchmarking
Peek Benchmarking
Slide 30: Industrial Production Capacity among peers
Industrial Production Capacity among peers Industrial Production Capacity for Paper manufacturing companies 100 5 90 + 80 + 70 + 60 4 50 4 40 4 64 SK 30 4 ee 20 | 4,9 pss 05 Market Cap (SR B) 9.2 WR L&M @ MENA US EU @ AP PEERS DSS: WR: international Smurfit DS Smith Westrock Paper Kappa b ND: Lee an
Slide 31: Peers Benchmark Profitability Q3 FY22
MEP CO Peers Benchmark Profitability Q3 FY22 14.4 oo 93.1 As oo 76.2 ° As 48.6 ---~ ar FS 4S 21 __. afl 4067 C8 -W. gg --a-n--=---- == == === oe 54---- 85 q08 Sl g oo co 2 MEP IP SK DSS. WR LEM ND MEP iP SK DSS. WR L8M ND ROIC, x DIVIDEND YIELD , x 149 101 oo Sl 70 ° 5.5 51 o y ! —— 87 -__ 19.2 ~~~
Slide 32: MEPCO's ESG Performance
MEPCO's ESG Performance
Slide 33: MEPCO's ESG performance
MEP CO MEPCO's ESG performance Performance on key ESG issues | i... | social | Govertance Sector Average - COMPANY; Middle East Paper Company - ISIN; SA13QOS501P16 - RATING DATE: February 2022 - SECTOR: Containers & Packaging - COUNTRY: Saudi Arabia - SECTOR ORGANIZATION: 5 - ESG SCORE: 49/100 - RAN
Slide 34: MEPCO's SDG Targets
MEP CO MEPCO's SDG Targets Responsible QO consumption JZ and production & Affordable and _ clean energy > ’ Climate action Industry, innovation And infrastructure No poverty Quality education Gender equality Number of females in the Board directors and committees have risen to include 2 members of h
Slide 35: Slide 35
Slide 36: History of Years of Excellence
History of 20 Years of Excellence Over the 20 years MEPCO has managed to EPCO Best Recycle company award 218) WASCO Best Recycle company award 2022 MEP CO MIDDLE EAST NZ 7 ((, WASTES \y CYCLIN ) AUWATAS S Increase installed production capacity to 500,000 ton. . Backward integration through WASCO . M
Slide 37: Product Line Evolution & Production Volume
Product Line Evolution & Production Volume ©. 2010 ) 2oo2) 2OO4 2006 2OO7 MEPCO Production Production line New production | MEPCORE New production Was founded capacity PML PM1 upgrade line PM2 introduction Wess, 60,000 ton installed installed capaci offering two capacity to capacity 180,000 ton grad
Slide 38: MEPCO's Awards
MEPCO's AWARDS PULP AND PAPER INTERNATIONAL AWARDS (PPI AWARDS): - Water Efficiency Award 2013 - Mill Manager of the Year Award 2015 KING KHALID FOUNDATION AND SAUDI ARABIAN GENERAL INVESTMENT AUTHORITY: ) BestProductand Sustainability Local Sustainability Service Innovation Award 2015 Supplier Awar
Slide 39: MEPCO's Certifications & Accreditations
MEP CO MEPCO's Certifications & Accreditations In 2021 MEPCO hit its 5 millionth ton of recycled paper in aggregate Forest Stewardship Council- Chain of Custody for MEPCO's six products MEPLINER, MEPLUTE, MEPCORE, MEPCHEM, MEPDUAL (FSC Recycled) and MEPWHITE & MEPKRAFT (FSC Mix/FSC Recycled) Food Co
Slide 40: Corporate Governance
Corporate Governance Best Cor judi Arabia Awarded by Capital Finance International (CFI) Corporate Governance Center Board of Directors consist of 8 members; 50% of whom are independent members led by Chairman Mr.Mussab Sulaiman Alt-Muhaidib. He has an extensive experience in Strategies and Business
Slide 41: MEPCO's Executives
MEPCO's Executives Eng. Sami Al-safran Group President -Over 30 years in the Paper industry and others. -Held leadership position for over 20 years in MEPCO and others. -Bachelor of Industrial Chernistry in 1992. Vice President -Joined as Vice President from 20e1. over 20 years of experience, held v
Slide 42: Middle East Paper Company Contact
Middle East Paper Company Contact
Middle East Paper Company (MEPCO) — 9M 2022 Earnings Presentation on 6ix