One51 Plc One51 Management focused on creating shareholder value

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1 1 Darren McKinley, CFA Dylan Simmonds darren.mckinley@merrion-capital.com Bloomberg: MSTK One51 Plc 12 gs th September 2017 Ireland Industrial One51 Management focused on creating shareholder value One51 management are both focused and determined to create shareholder value, having focused on selling off non-core assets including its environmental services divisions more recently. Management have redeployed capital into organic and bolt on opportunities the plastics division, that generates a higher return on capital. Over the last 24 months, One51 has purchased both Macro Plastics ($150m) and Encore ($35m), with $10m of equity participation from Canadian funds CPDQ and FSTQ in the Macro Plastics deal. Macro has added a third product line marketed toward the agricultural and automotive market. Management have also been investing c. 30m annually in organic capital expenditure in addition to the commissioning of new facilities in Cork. The results of this improved capital allocation are witnessed in higher EBITDA margin, an uplift in shareholders return on equity and we believe, recognition from investors that One51 has a strategic focus on its injection-moulding plastic division. We value One51 at 8x 2018 EV/EBITDA. Our price target is Rating Buy Market Cap 309m Target Price 2.32 YTD abs perf +39% 12 mth abs perf (%) +22% 52 week high/low 1.35/ 1.97 Interim reporting date: Current price 1.95 One51 Plc March 2018 One51 non-core assets sales to lead to a re-rating of share price Alan Walsh, One51 s CEO, has been consistent in his business strategy of selling down noncore assets such as their stake in IFG group, Irish Continental Group, Irish Pride bakeries, Greenore Port, NTR and its recycling and environmental service division. Historically, the company has been viewed as a holding company which tend to trade at a discount to underlying asset value due to the complexity of the structure and lack of cash flow generation. As management now redeploy capital toward higher return assets, One51 is likely to attract a broader range of retail and institutional investors. Focus of investments has been towards the injection-moulding plastic division In 2014, One51 Plc bought Straight Plc for a 16.2m (c.5.5 x EV/EBITDA post synergies) which complemented its One Plastics division. In 2014, the One Plastics division generated 122m in revenue, up from 99m in Post the 2015 acquisition of a 67% stake in IPL Inc for 200m, One51 s plastic division generated 331m in FY16 relative to group revenue of 434m in IPL Inc was acquired on c.1.1x revenue and 8x EBITDA pre any group level synergies. The group recently acquired North American based Encore and Macro Plastics, at a c.1.4x sales multiple. If we apply a similar multiple to One51, an enterprise value of 630m is achievable, implying a target price closer to Near term catalysts to keep momentum behind the share price The recent sale IIU s stake to CDPQ is hugely significant in our view. It brings a shareholder who is supportive of an IPO which can trigger the purchase of the outstanding 33% of IPL Inc that One51 currently does not own. Recent acquisitions, organic growth and a further investment in IPL Inc all provide visibility on EBITDA growth. An EGM maybe called in the next few months to agree a price for the balance of IPL which will pave the way for an IPO of One51 in H One51 continues to trade at a discount despite its superior growth outlook One51 trades on c.13.6x 2017 net income and 7.4x EV/EBITDA relative to an expected growth rate of 30-50% over the next 3 years. We recommend buying shares ahead of any potential IPO as we see value in the company relative to other listed peers. Year ended Dec 16A 17E 18E Revenue ( m) Adj EBITDA ( m) Adj EPS ( c) Netdebt/EBITDA Dividend Yield 0% 0% 0% Source: Company data, Merrion estimates

2 2 Source: One51 Investor presentation

3 3 One51 Operation Summary One51 is a leading rigid plastics manufacturer for the packaging, environmental containers and industrial products sectors operating from multiple production facilities in Ireland, the UK, North America and China. The Group now has three main business 1) IPL The original acquisition of IPL by the Group in July 2015, followed by the recent acquisition of Encore, have provided One51 with a strong platform for future growth across North America. IPL is a leading North American manufacturer of injected moulded plastic products. The business offers a wide range of new products, especially in food packaging and bulk containers. The business is well diversified from a geographical, product offering and customer base perspective which has resulted in significant growth over the last couple of years. Management hope to replicate the same efficiencies and margin profile in their European business within IPL by reducing headcount per machine and investing in more efficient technology. 2) OnePlastic Group OnePlastic Group (OPG) supplies a range of containers to the agricultural and decorative coatings industries, and also manufactures bespoke products for multinational companies serving the nutrition, pharmaceutical and computer storage sectors OPG is the largest wheeled bin and recycling container producer in the UK Its manufacturing plant in China supports the Irish operation by producing bespoke products for the computer storage sector In addition, the Group manufactures a range of other high-volume items, including construction products, school chairs and trays for a number of blue-chip clients. 3) Macro Macro is the newest business acquired by One51, through its subsidiary in IPL. Macro is one of the largest manufacturers of rigid plastic bulk bins worldwide and is a market leader in providing value added rigid plastic bulk packaging solutions to the agricultural and automotive sector Valuation Table Market Cap P/E EV/Sales EBIT Margin Asset Turnover Ratio Net Debt/EBITDA 3 Year average growth rate 2018 EPS Growth 2018 ROE One51 309,000, % % 13.4% 16.0% RPC Group 3,895,947, % % 10.9% 14.3% Berry Group 7,431,496, % % 19.9% 76.9% Bemis 4,347,719, % % -11.7% 16.4%

4 4 Source: One51 Investor presentation

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6 Merrion Capital Group Heritage House 23 St Stephens Green Dublin 2 Ireland Researchen McKinley Darren McKinley: Darren.McKinley@merrion-capital.com Dylan Simmonds: Dylan.Simmonds@merrion-capital.com Alan McQuaid: Alan.McQuaid@merrion-capital.com David Holohan: David.Holohan@merrion-capital.com Traders Simon Tuthill: Simon.Tuthill@merrion-capital.com Wayne McMahon: Wayne.McMahon@merrion-capital.com Private Client Account Managers Ken Costello: Ken.Costello@merrion-capital.com David Gorman : David.Gorman@merrion-capital.com Angus McDonnell: Angus.McDonnell@merrion-capital.com Gareth Walsh: Gareth.Walsh@merrion-capital.com David Wilson : David.Wilson@merrion-capital.com Gary McCarthy: Gary.mccarthy@merrion-capital.com David Flynn: David.Flynn@merrion-capital.com Pramit Ghose: Pramit.Ghose@merrion-capital.com Pensions Switch: Institutional Trading Desk: Private Clients: Fax: Website: info@merrion-capital.com Bloomberg: MSTK MSTK <GO> Jean Masterson: Jean.masterson@merrion-capital.com Caroline McQuaid@ Caroline.McQuaid@merrion-capital.com Settlement Patricia Lawlor : Patricia.Lawlor@merrion-capital.com Elaine Halpin: Elaine.Halpin@merrion-capital.com Davide Possenti: Davide.Possenti@merrion-capital.com Cork : Marie Morton : Marie.Morton@merrion-capital.com Client Services Mary Ellen Holmes : Mary.Ellen.Holmes@merrion-capital.com Amy Kennedy : Amy.Kennedy@merrion-capital.com Private Client Dealing Desk Phone: Fax: Cork Office: ` Institutional Trading Desk Phone: Fax: research@merrion-capital.com