Avgol. A leading global manufacturer of nonwoven fabrics

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1 Avgol A leading global manufacturer of nonwoven fabrics

2 Milestones in Avgol s Growth 1953 Company founded (producing industrial gases) 1988 Began production of Spunbond Nonwovens Mid-2001 Bought Mocksville (North Carolina) plant from Unifi 2004 Started joint venture (with a local partner) in China in Hubei Province (one line, 50% ownership) Jan 2007 Listed on the Israeli Stock Exchange (Tel Aviv 100) Nov 2008 Started greenfield production plant in Russia Increased holdings in JV china to 83% 1

3 An Extremely Focused Strategy A single target market the Diaper market A single technology Spunmelt A single raw material PP A single technology vendor Reicofil A Pioneering company, with a strategy of Global Presence, Cost Leadership and Technology Superiority Deployed globally, both in developed and developing markets The benefit to our global customers - we develop once, deploy in multiple locations simultaneously and uniformly 2

4 Our Mission To be the Vendor of Choice Today Highest Quality Uncompromising Reliability High level of Flexibility Competitiveness Tomorrow Identify & Develop the Next Generations of Solutions & Products that will allow our customers to lead their markets 3

5 Strong Leadership Board of Directors Management team 4

6 Global Footprint Avgol Around the World USA Market: North America Capacity 45,000 ton 3 Lines + 1 new line in % Israel Market: EMEA Capacity 31,000 ton 6 Lines 100% Russia Market: East Europe Capacity 11,000 ton 1 Line 80% China Market: Asia Capacity 24,000 ton 2 Lines + 1 new line in 2012 Global company with capacity of 111,000 tons in 12 production lines, located in 4 sites and employs 560 employees around the world In 2012, 2 new lines will start operating, adding 30,000 tons 5

7 Global Capacity Footprint

8 Production Assets Profile #14 CHINA - Jul 12 Reico 3 Hygiene 165 SSMMXS 15,000 #13 NC USA - Apr '12 Reico 3 Hygiene 165 SSMXS 15,000 #12 CHINA- Jun 10 Reico 3 Hygiene 165 SSMMXS 15,000 #11 RUSSIA - Mar 08 Reico 3 Hygiene & Industrial 126 SMMS 11,000 #10 CHINA - Jan 05 Reico 3 Hygiene & Industrial 126 SMXS 8,000 #9 NC USA - Oct 05 Reico 3 Hygiene 165 SSMMMS 15,000 #8 NC USA - Oct 04 Reico 3 Hygiene 165 SSMMXS 15,000 #7 NC USA - Jun 01 Reico 3 Hygiene 165 SSMMS 15,000 #6 Israel 03 Perfojet Hygiene & Consumer 82 Hydro Entanglement 6,000 #5 Israel 99 Reico 3 Hygiene 165 SMMS 11,000 #4 Israel 97 Reico 3 Hygiene 161 SMS 8,000 #3 Israel 93 Reico 3 Hygiene 157 SS 7,000 #2 Israel 91 Reico 2 Ind & Ag & Hygiene 122 S 3,000 #1 Israel 88 Reico 2 Industrial & Ag 122 S 3,000 7

9 M$ Sales (M$) Continued Growth, 16.7% CAGR Top 5 customers 2011 ~ 76% of sales (PG 40%, KC 24%) 8

10 Financials EBITDA 30 Net Income * (*) not including 4.5 M$ one-time expenses (Fiberweb) Assets

11 Financial Highlights 10 (*) Calculated based on the LTM results (Last Twelve Months)

12 EBITDA & Net Income Trends (*) not including 4.5 M$ one-time expenses (Fiberweb) 11

13 Financial Highlights USD ' Revenue EBIT % 13.8% 12.8% 12.5% EBITDA % 19.9% 18.7% 17.9% Net Income % 7.4% 7.6% 7.5% Net Debt Net Debt/EBITDA 2.84x 2.58x 2.62x Total Assets Net Debt/Assets 0.58x 0.39x 0.41x Capital Employed ROCE* 13.7% 13.5% 13.9% Sales/CE ratio 0.99x 1.05x 1.11x % Equity 32.9% 31.5% 34.0% (*) Return on Capital Employed Dividend Payout 57.7% 47.6% 48.6% 12

14 Key Highlights Continued year over year growth during Source: Company Financial Reports 2011 Compared to 2010: 18.8% growth in Revenues to M$. 14.6% growth in Gross Profit to 69.0 M$. 16.2% growth in EBIT to 41.3 M$. 13% growth in EBITDA to 58.9 M$. 17.6% growth in Net Profit to 24.7 M$.

15 Revenue Breakdown Avgol increasing its sales in China by 94% compared to % 94% 70% Source: Company Financial Reports 14

16 Cost of Goods Sold (COGS) The rise in Polypropylene prices during the beginning of 2011, increased the materials portion from the total COGS expenses in 2011 compared to Source: Company Financial Reports

17 Quarterly Profit Development 16 Source: Company Financial Reports

18 Cash Flow FY USD Million Current Operations Net Income Depreciation/Amortization Other non-cf income/expenes Change in Working Capital Net CF from Current Operations Investments Activities CAPEX Purchase of Intangible assets Other Net CF from Investments Activities Financing Activities Increase (decrease) in ST Bank Loans Repayment of LT Bank Loans & Bonds Receipt of LT Bank Loans & Bonds Purchase of Minority Intrests Dividend Paid Net CF from Financing Activities Increase in Cash & Cash equivalents Closing Balance Source: Company Financial Reports ST = Short Term; LT = Long Term

19 Hygiene Market Highlights The hygiene industry is one of the most stable, non-cyclical industries in the global economy. Baby diaper penetration globally is at 23% (2010)!! Great opportunity for growth. NA, EU, Japan ~ 100%. LatAm ~ 65%, China ~ 20%, India ~ 3%, Africa ~1% Aging population in developed world is creating growth also in mature markets. In some countries fabric demand for Adults > Baby diapers. Altogether the market is growing at ~4% / year. China, Russia, LA growing faster 2010 market size - ~1,200,000 MT. Avgol - ~8.5% in 2010, ~10% in global customers represent ~75% Market Share 18

20 Our Strengths Courage and Pioneering Spirit Global Presence Customer Focus Technology Mastery & Innovation Able to Genetically Reproduce Our Model, Products and Service Globally, Even in Tough Geographies 19

21 Thank you