Taghleef Industries Holdco Ltd.

Overview Key strengths Key risks Fourth-largest biaxially oriented polypropylene (BOPP) producer globally, with about 4% market share, S&P Global Ratings-adjusted EBITDA of $120 million in 2023, and a diversified geographic footprint across six continents. Highly fragmented, commoditized, and competitive BOPP film industry. High share of resilient food packaging end markets and a pass-through model. Narrow product focus with exposure to a single packaging substrate. Long-dated maturity profile with most debt maturing in 2026, albeit with exposure to floating interest rates. S&P Global Ratings-adjusted EBITDA margins at about 10.8% in 2023, which is relatively low compared with global peers. following weaker-than-expected financial performance in 2023. Taghleef?s revenue in 2023 declined by 20.3% to $1.1 billion due to an over 15% drop

...We expect Taghleef's operating environment to normalize in 2024 following weaker-than- expected financial performance in 2023. Taghleef's revenue in 2023 declined by 20.3% to $1.1 billion due to an over 15% drop in selling prices, reflecting declining resin prices that the company passes through to its customers, as well as softer demand, partly due to destocking, resulting in a 2% volume contraction. Taghleef maintained healthy utilization rate above 80% despite somewhat lower volumes, including an 8% drop in higher-priced specialty products and 1% decline in value-added products. A high proportion of the company's contracts (over 50% of total sales volumes in 2023), have raw material pass-through clauses, which we consider as a key factor to sustain margin stability for Taghleef's cyclical business. Over the past few years, as resin prices were increasing, Taghleef has been able to even improve its margin. However, in a declining raw material price environment, amid persistent inflation...

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