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Annual results

Your future packaging today. Annual results. Year ended 29 February 2008. AGENDA. Introduction. Financial Analysis. Divisional Analysis. Plastic Packaging Market Outlook. Summary. Introduction. Introduction. RESULTS: KEY INFLUENCING FACTORS. Avg. oil price :. Avg. LDPE price:.

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Annual results

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  1. Your future packaging today Annual results Year ended 29 February 2008

  2. AGENDA Introduction Financial Analysis Divisional Analysis Plastic Packaging Market Outlook Summary Introduction

  3. Introduction

  4. RESULTS: KEY INFLUENCING FACTORS Avg. oil price: Avg. LDPE price: 1. Raw material input prices Rand per Ton Rand F2007 F2008 Feb2001 Feb2002 Feb 2003 Feb 2004 Feb 2005 Feb 2006 Feb 2007 Feb2008 Source: Econometrix & Sasol Introduction

  5. RESULTS: KEY INFLUENCING FACTORS 2. Market conditions • Substantial reduction in consumer demand growth • Despite these conditions Astrapak grew market share % Change 8 6 4 Total Household Consumption 2 Household Non-durable Consumption F2008 0 2004 2005 2006 2007 2008 Source: Econometrix Introduction

  6. RESULTS: KEY INFLUENCING FACTORS 3. Expansionary capex Total capex of R263m, of which R230m was expansionary & new projects driven by customer requirements • Large impact on debt • Timing unfortunate given the slowing economy in H2 F2008 • H2 F2008 saw some benefit in revenue but not a lot of profit benefit yet • F2009 will see more profit benefit Introduction

  7. RESULTS SUMMARY Introduction

  8. Financial Analysis

  9. ABRIDGED INCOME STATEMENT Rm 2008 2007 % Restated Change Revenue 2 821 2 223 27 Financial Analysis

  10. ABRIDGED INCOME STATEMENT Rm 2008 2007 % Restated Change Revenue 2 821 2 223 27 EBITDA 349 343 2 Profit from operations 230 228 1 • Margin decline from 10.3 to 8.1%: • Inability to fully recover polymer price increases • Effect of rising fuel costs on distribution overheads • Labour cost increases above inflation • Impact of slower H2 sales on overhead recoveries • Overheads up 22% (higher sales & new projects) Financial Analysis

  11. ABRIDGED INCOME STATEMENT Rm 2008 2007 % Restated Change Revenue 2 821 2 223 27 EBITDA 349 343 2 Profit from operations 230 228 1 Net interest paid 75 48 55 • Interest rate up 200 bps • Net debt up mainly due to: 2008 2007 • Acquisitions 62 158 • Redemption of debentures 58 - • Capex & new projects 263 160 • Share buy-backs 26 91 • Working capital 66 93 Financial Analysis

  12. ABRIDGED INCOME STATEMENT Rm 2008 2007 % Restated Change Revenue 2 821 2 223 27 EBITDA 349 343 2 Profit from operations 230 228 1 Net interest paid 75 48 55 PBT 155 180 -14 Taxation 43 47 -8 • Effective rate: • 2008 28.0% • 2007 26.3% Sustainable rate = 28.0% Financial Analysis

  13. ABRIDGED INCOME STATEMENT • +R2m debenture interest added back • -R3m asset impairment reversal • -R6m profit on disposal of assets Rm 2008 2007 % Restated Change Revenue 2 821 2 223 27 EBITDA 349 343 2 Profit from operations 230 228 1 Net interest paid 75 48 55 PBT 155 180 -14 Taxation 43 47 -8 Profit for the period 111 133 -16 Attributable to minorities 8 10 -23 Attributable to pref. shareholders 16 5 252 Attributable to ord. shareholders 88 118 -26 Headline income 81 127 -36 Interest on R150mpref. shares for full period Financial Analysis

  14. ABRIDGED INCOME STATEMENT Rm 2008 2007 % 1H 2008 2H 2008 Restated Change Revenue 2 821 2 223 27 1 367 1 454 EBITDA 349 343 2 186 163 Profit from operations 230 228 1 132 98 Net interest paid 75 48 55 31 44 PBT 155 180 -14 102 53 Taxation 43 47 -8 24 19 Profit for the period 111 133 -16 78 33 Attributable to minorities 8 10 -23 4 3 Attributable to pref. shareholders 16 5 252 8 8 Attributable to ord. shareholders 88 118 -26 67 21 Headline income 81 127 -36 66 15 HEPS (cents) 69.0 106.3 -35 56.3 12.7 Fully diluted HEPS (cents) 65.7 99.4 -34 53.1 12.6 • 2.1m share buybacks = 0.6 cps positive impact on HEPS • Dividend: 14.5c (cover maintained at 4.8x); medium-term objective: 3x (paid once p.a.) • H2 much weaker than normal Financial Analysis

  15. BALANCE SHEETNET INTEREST BEARING DEBT R m 2008 2007Restated Cash resources 57 127 Long term interest-bearing debt (377) (159) Short term interest-bearing debt (242) (256) Net interest-bearing debt (562) (288) Net debt : equity ratio 68% 34% Financial Analysis

  16. BALANCE SHEETGEARING Rm % Net interest - bearing debt (Rm) 700 120 103% 68% D:E ratio 600 100 562 500 80 57% 400 34% 60 300 31% 288 40 200 18% 255 190 20 100 152 122 0 0 2003 2004 F2005 F2006 F2007 2008 • R274m increase in debt mostly due to higher capex & new projects, but also debenture redemption and working capital requirements • Target gearing: 30-40% Financial Analysis

  17. Flexibles Films 15% 20% Industrial 2% Rigids 63% BALANCE SHEETNON-CURRENT ASSETS Rm 2008 2007 % Restated Change Non-current assets 1 152 928 24 Includes: • Acquisitions: (R24m) • Ultrapak (Apr 2007) • Plusnet (Aug 2007) • Spuntech (Nov 2007) Capital Expenditure: (R263m) Financial Analysis

  18. BALANCE SHEETNET WORKING CAPITAL Rm 2008 2007 % Restated Change Inventories 372 313 19 Debtors (Trade & other) 524 422 24 Creditors (Trade & other) 490 392 25 Net working capital 406 343 18 Financial Analysis

  19. BALANCE SHEETNET WORKING CAPITAL - DAYS Days Days Net days 42.2 34.7 34.0 56.2 52.6 Target 35 days • Sound progress on working capital actions instituted in H1 2008 • Intense focus will result in further improvements in F2009 Financial Analysis

  20. ABRIDGED BALANCE SHEET Rm 2008 2007 % Restated Change Non-current assets 1 151 929 24 Current assets 953 862 11 Total assets 2 105 1 790 18 Shareholders funds 683 698 Preference share capital 143 143 Minorities’ interest 36 31 Non-current liabilities 504 258 95 Current liabilities 739 660 12 Total equity and liabilities 2 105 1 790 18 Financial Analysis

  21. CASH FLOW ANALYSIS Year to Feb 2008 R million Year to Feb 2007 - 122 - 288 Opening net debt Feb 342 Cash from operations 325 - Working capital - 66 93 - 91 Interest and tax - 102 Dividend / distribution - 38 - 50 Capex & new projects - 159 - 262 Acquisitions (net of cash acquired) - 183 -47 Proceeds on disposal 12 5 Share buy back -26 - 91 Debenture redemption -58 Pref share issue 143 -562 - 288 Closing net debt Financial Analysis

  22. Divisional Analysis

  23. FLEXIBLES: HISTORIC PERFORMANCE Rm % 600 14 13.1 552 12 500 469 10 400 7.2 8 300 325 6 4.0 200 4 100 2 42 34 22 0 0 F2006 F2007 F2008 Turnover Operating profit Operating margin Divisional Analysis

  24. FLEXIBLES: F2008 PERFORMANCE Revenue Op Margin (%) Operating Profit • Turnover growth 18% = acquisitive 7% + organic 11% • Astraflex fraud resulted in • Unnecessary investment in machinery • Astrapak depressing market prices (no increase): • Negative effect of transferred volumes on other Flexibles companies • Action taken: prices increased, capacity reallocation, management changes • Alex White performed poorly • Saflite, Knilam, Tamperpak & Astra Repro did well Flexibles Divisional Analysis

  25. FILMS: HISTORIC PERFORMANCE Rm % 1200 9 8 7.3 1108 7.8 1000 7 868 800 6 810 4.7 5 600 4 400 3 2 200 52 1 63 63 0 0 F2006 F2007 F2008 Turnover Operating profit Operating margin Divisional Analysis

  26. FILMS: F2008 PERFORMANCE Revenue Op Margin (%) Operating Profit • Turnover growth 28% = acquisitive 11% + organic 17% • Positive PBIT performances from Barrier Films & CityPack, but other companies disappointing • Very difficult trading – markets under pressure • Benefit from Ultrapak acquisition • Bakery and dairy packaging • ERP showed improvement at year end • Sasol project still not running • Depreciation & interest costs carried without compensatory turnover Films Divisional Analysis

  27. RIGIDS: HISTORIC PERFORMANCE Rm % Divisional Analysis

  28. RIGIDS: F2008 PERFORMANCE Revenue Op Margin (%) Operating Profit • High turnover growth 30% = acquisitive 8% + organic 22% • Benefit from large expansionary capex (R163m) • PBIT growth 18% reflects margins under pressure • Good performance from Cinqpet, Euromatic, Hilfort & Plastop • Positive first full year contributions from Plastech & Plastform • Dairy companies still under pressure Rigids Divisional Analysis

  29. INDUSTRIAL: HISTORIC PERFORMANCE Rm % Divisional Analysis

  30. INDUSTRIAL: F2008 PERFORMANCE Revenue Op Margin (%) Operating Profit • Turnover growth 45% = acquisitive 35% + organic 10% • New division • Similar manufacturing processes; growth markets • Unlikely to become a major division • ITT: manufactures paper cores for packaging & textile industry • Opened new JHB plant in Aug 2007 • Volumes under pressure at SANS • Plusnet / Geotex: Shade netting & polymer construction reinforcements • R11m capex budgeted for netting business • High level of construction & mining activity bodes well for future growth Industrial Divisional Analysis

  31. Plastic Packaging Market Outlook Raw material input costs

  32. RAW MATERIAL INPUT COSTS • H1 F2009 polymer prices likely to remain high • However, new polymer capacity internationally will improve supply balance and should contribute to lower prices from ± Nov 2008 • Reduce dependency on oil price: Natural Gas is a cheaper raw material and potentially reduces Polymer’s dependency on oil • Most new polymer capacity coming on stream worldwide in the next 2 years is based on Natural Gas Plastic Packaging Market Outlook

  33. Plastic Packaging Market Outlook Raw material input costs Consumer Demand

  34. MARKETS SUPPLIED BY ASTRAPAK (Rm) Industry 2008 2007 576 394 348 312 216 204 152 145 136 127 87 124 2 821 456 317 301 163 220 108 139 129 51 92 129 115 2 223 Food Personal care Beverage Retailers Industrial Dairy Packaging Petrochemical Bakery Agriculture Confectionery Other 0 100 200 300 400 500 600 R 000’s

  35. CONSUMER DEMAND % Change 10 Total Household Consumption Household Non-durable Consumption 8 6 4 2 F2008 F2009 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: Econometrix - April 2008 Plastic Packaging Market Outlook

  36. MARKET PROSPECTS: MAJOR CUSTOMERS The board does not expect the very good results of the first half to be maintained for the full year. Although the food sector doe not feel the effects of an economic downturn as immediately or acutely as some other sectors, it is not immune to it. The outlook for the local economy is bound to worsen further as the effects of the present energy crisis are felt more widely. Quote from H1 Dec 2007 results “ Oil prices are at record high levels and, together with the significant international increases in commodity food prices, will give rise to pressure on pricing& margins Quote from H1 Dec 2007 results “ “ ” Plastic Packaging Market Outlook

  37. Summary

  38. Short Term Outlook (6 months) External factors: • Effects of rising: • interest rate environment • higher fuel prices • rising food inflation could continue to constrain growth in consumer spending in H1 F2009 • Oil price continues to exert upward pressure on polymer prices in the short term and, therefore, downward pressure on margins Summary

  39. Short Term Outlook (6 months) Internal actions: • Positive contribution from recent acquisitions • Cessation of acquisitive activity • Contribution from last year’s expansionary capex • Reduced capex spend this year • Sharp focus on working capital • Turnaround in Flexibles companies • Recovery price increases • Management & machine rationalisation • Substantial improvement anticipated from Films • ERP making good progress • Pacon replaced previously lost sales • Penpak: new management and bigger market share • Implementation of succession plan Summary

  40. Despite the short term hurdles, Astrapak’s medium term future looks good: Improved stability in polymer prices Better demand/supply balance in world polymer market Strong underlying demand Consumer demand set to recover from calendar 2009, particularly in 2010 Resumption of emerging market demand growth and growth in value-added purchases Competitive advantages Continued product substitution from other packaging materialsto plastics Successful product innovation will win Astrapak more market share – 16 Gold Pack awards in 2007 Medium Term Outlook (1 - 2 years) Summary

  41. Your future packaging today

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