RESULTS PRESENTATIONfor the year ended 31 December

2017

• 2017 IN CONTEXT

• FINANCIAL REVIEW

• OPERATING REVIEW

• FINANCIAL PEFORMANCE

• OUTLOOK

3

2017 in context

The most challenging year

Persistent subdued consumer confidence and demand

Record high recovered paper costs

Supply shortage of virgin PET raw material during peak production period

Drought in the Eastern Cape and Western Cape

Mpact Polymers targets not yet realised

Good progress on strategic investments such as

Felixton mill rebuild, Jumbo bin expansion, new closure lines, corrugators

(PE and Brakpan)

Awarded contracts for continued supply of preforms and closures as well as

distribution of containerboard

Product innovation – Gold Pack and Fta Flexographic awards

Mpact Foundation Trust – 22 bursaries awarded

R950 million debt successfully re-financed

• 2017 IN CONTEXT

• FINANCIAL REVIEW

• OPERATING REVIEW

• FINANCIAL PEFORMANCE

• OUTLOOK

5

3,983 4,414 4,688 4,833

4,634 5,134

5,411 5,287

0

2,000

4,000

6,000

8,000

10,000

12,000

2014 2015 2016 2017

R m

illio

n

HY1 HY2

8 6179 548

10 099 10 120

270342 322

169

481

567

462

288

8.7%9.5%

7.8%

4.5%

0

200

400

600

800

1,000

2014 2015 2016 2017

R m

illio

n

HY1 HY2 margin

751

909

784

457

Revenue in line with prior year

External sales volumes were

unchanged

Domestic volumes down 4.3%

offset by increased exports

Subdued demand – consumer

spending and drought

Underlying operating profit down to R457m

Higher recovered paper costs

Felixton mill planned shut R30m (non-

recurring)

Virgin PET resin shortage

Underlying earnings of 166.3 cents per

share

Gearing at 34.8% (December 2016: 33.6%)

ROCE of 7.7% (December 2016: 14.2%)

Total dividend of 55 cps

Group revenue

Underlying operating profit

Financial review

• 2017 IN CONTEXT

• FINANCIAL REVIEW

• OPERATING REVIEW

• FINANCIAL PEFORMANCE

• OUTLOOK

7

2,923 3,280 3,463 3,720

3,371 3,780 3,962 4,025

0

2,000

4,000

6,000

8,000

10,000

2014 2015 2016 2017

R m

illio

n

HY1 HY2

281 315 292177

430488

372

266

11.3% 11.4%

8.9%

5.7%

0

200

400

600

800

1,000

2014 2015 2016 2017

R m

illio

n

HY1 HY2 margin

711

803

664

443

Revenue up 4.3% to R7.7bn

Sales volumes in line with prior year

Lower domestic volumes of 4.1%

offset by increased exports

Average prices adversely affected by sales

mix

Drought affecting fruit packaging volumes

Underlying operating profit down to R443m

Higher recovered paper costs

Supply demand imbalance

Change in Chinese import regulation

Benchmark prices peaked mid-year

Felixton mill planned shut R30m (non-

recurring)

Demand for Felixton mill products encouraging

77% 86%

6 2947 060

7 4257 745

Segment revenue

Underlying operating profit

Paper business

Revenue Operating profit

8

2 3442 533

2 7522 455

Segment revenue

Underlying operating profit

1,070 1,148 1,265 1,157

1,274 1,385

1,487 1,298

0

500

1,000

1,500

2,000

2,500

3,000

2014 2015 2016 2017

R m

illio

n

HY1 HY2

44

8770

27

88

112

98

43

5.6%

7.9%

6.1%

2.8%

0

50

100

150

200

250

2014 2015 2016 2017

R m

illio

n

HY1 HY2 margin

Revenue down 10.8% to R2.5bn

Plastics converting volumes down 6.9%

Zimbabwe closure in prior year and

virgin PET resin shortage

Lower average price, adverse sales mix

Underlying operating profit down to R70m

Plastics converting of R142m offset by loss in

Mpact Polymers

Subdued demand and increased

competition in trays and films

Lower sales volumes

Mpact Polymers loss decreased by R14m

23% 14%

132

199

168

70

Plastics business

Revenue Operating profit

Notes:

1. Plastics converting is defined as the Plastics business excluding Mpact Polymers.

• 2017 IN CONTEXT

• FINANCIAL REVIEW

• OPERATING REVIEW

• FINANCIAL PEFORMANCE

• OUTLOOK

10

Revenue

Underlying operating profit

Underlying EPS

Total dividend

ROCE

Gearing %

0.2%

1.2

R10.1 billion

R457 million

166 cents per share

55 cents per share

7.7%

34.8%

Financial summary

41.8%

34.2%

42.1%

6.5

11

Notes:

1. Paper business raw materials include purchased paper, wood, pulp, bagasse and recovered paper.

2. Plastic raw materials include styrene, PET, HDPE, PVC, polypropylene and post consumer PET bottles

3. Other variable costs include chemicals, packaging costs and stock movements.

Source: RISI – PPI Asia, Old Corrugated Containers (OCC), CNF China US$,

converted to ZAR

80

100

120

140

160

180

Dec-15 Dec-16 Dec-17

Ind

ex

(De

ce

mb

er

201

5 =

100

)

ZAR US$

Benchmark recovered paper

prices (OCC)

Variable costs

2,8242,918

3,178

552 603644

1,2411,323

1,162

755788

827511

649663

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2015 2016 2017

R m

illio

n

Paper business raw materials EnergyPlastic raw materials Selling & distribution costsOther

5 883

6 474

+3.1%

Source: Mpact

3

2

5.0%

12.2%

6.8%

8.9%

2.2%

1

80

90

100

110

120

130

Dec-15 Dec-16 Dec-17

Ind

ex(Z

AR

)(D

ecem

ber

2015 =

100)

P1 P2 P3 P4

Benchmark polymer prices

Higher recovered paper cost

Lower plastic raw material cost

Volumes down 6.8%

Customer moving to hard-tolling arrangement

6 281

12

1,465 1,581 1,625

881964 1,017

410

488547

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2015 2016 2017

Depreciation and amortisation

Maintenance and net operating expenses

Personnel costs

Fixed costs

12.2%

5.6%

2.7%

+5.2%

2 756

3 0333 189 Fixed cost, excluding depreciation and

amortisation up 3.8%

Personnel cost on a continuing basis

increased by 4.0%

Lower performance bonus provision

Reduced overtime worked

Cost capitalised to the Felixton mill

upgrade project

Depreciation up 12.2%

Completed capital projects

R m

illio

n

13

R million 2016 2017 change HY1

2016

HY2

2016

HY1

2017

HY2

2017

Underlying operating profit 784 457 (41.8%) 322 462 169 288

Net finance costs (191) (203) (6.1%) (91) (100) (100) (103)

Earnings from equity accounted

investees, profit on disposals and other

fair value gains24 20 (17.0%) 6 18 5 15

Underlying profit before tax 617 274 (55.6%) 237 380 74 200

Tax (charge)/credit before special items (191) 21 (>100%) (82) (109) (22) 43

Non-controlling interests (6) (12) >100% 3 (9) 6 (18)

Underlying earnings 420 283 (33.3%) 158 262 58 225

Special items, net of tax (30) (7) 76.7% 0 (30) 0 (7)

Reported earnings for the year 390 276 (29.6%) 158 232 58 218

Underlying earnings per share (cps) 252.7 166.3 (34.2%) 95.2 157.5 34.3 132.0

Financial review

14

1,303

1,592

2,001

2,244

500

1,000

1,500

2,000

2,500

2014 2015 2016 2017

R m

illio

n

Net debt

1. Return on Capital Employed (ROCE) is based on underlying operating profit plus share of equity accounted investees’ net earnings divided by average capital

employed before impairments.

18.1%18.9%

14.2%

7.7%

5%

10%

15%

20%

2014 2015 2016 2017

RO

CE

%

Return on Capital Employed (ROCE)

ROCE and net debt1

ROCE of 7.7% (December 2016: 14.2%)

Investments in new capital projects

and weaker trading

Net debt increased to R2.2bn

Investments in capital projects offset

by

Improvement in trade working

capital

Gearing at 34.8% (December 2016:

33.6%)

15

1,420 1,660

1,851 1,719

16.5%17.4%

18.3%

17.0%

0

500

1,000

1,500

2,000

2,500

2014 2015 2016 2017

Trade working capital % of revenue

Lower finished goods stock at the

Paper mills

Increased purchases at favourable

terms

R m

illio

nTrade working capital

16

(2 001)

1,031

(856)

(232)(114)

(47) (25)

(2 244)-2,500

-2,000

-1,500

-1,000

-500

0

500

1,000

1,500

Net debt atDecember

2016

Cashgenerated

fromoperations

after workingcapital

Capitalexpenditure

Interest paid Income taxpaid

Dividend paidto equityholders

Other items Net debt atDecember

2017

R m

illio

nMovement in net debt

17

Net finance cost higher by

6.1%

Borrowing cost capitalised

on the Felixton mill project

of R27.5m

Excluding borrowing cost,

net finance cost increased

by 14.3%

Average net debt up 17.9%

Successfully completed the

re-financing of R950m

R million 2016 2017 change

Net debt - close 2 001 2 244 12.1%

Net debt - average 1 964 2 316 17.9%

Net finance costs 191 203 6.1%

Gearing % 33.6% 34.8% 1.2

Interest cover (underlying EBIT)

(times)4.1 2.3

Net debt to EBITDA (times) 1.6 2.2

1,450

1,010

456

0

400

800

1200

1600

Between 2 -3years

Between 4 -5years

Between 6 -7years

R m

illio

n

Maturity profile of committed facilities

1. Includes Standard Bank & RMB, KZN Growth Fund and IDC

committed facilities.

Net finance cost and net debt

18

Effective tax rate negative, primarily due to:

Tax benefits received from S12I incentives

Felixton mill upgrade project (R114m) and other qualifying assets (R8m)

Deferred tax on certain tax losses not recognised in Mpact Polymers

R million 2016 2017 change

Taxation charge/(credit) 183 (26) (>100%)

Effective tax rate 31.5% (10.1%) (>100%)

Tax paid 142 114 19.7%

Taxation

19

400

280

179

2015 2016 2017

Paper business Plastics business

R m

illio

n

501

531

569

2015 2016 2017

R m

illio

nCapital expenditure cash flows

1. Excludes Corporate capital expenditure of R100 million which comprise spends related mainly to the purchase of Land and Buildings.

1

20

30 3015

8065

40

0

20

40

60

80

100

120

2015 2016 2017

Cents

per

share

Interim Final

Dividends

110

95

55

Scrip distribution with an option to receive a cash dividend

Salient dates for the 2017 Final Scrip Distribution and Cash Dividend alternative

Last day to trade to be eligible for the Scrip Distribution and Cash Dividend alternative Monday, 26 March 2018

Shares commence trading “ex” the Scrip Distribution and Cash Dividend alternative Tuesday, 27 March 2018

Record date in respect of Scrip Distribution and Cash Dividend alternative Thursday, 29 March 2018

Scrip Distribution certificates posted and Cash Dividend payments Tuesday, 3 April 2018

• 2017 IN CONTEXT

• FINANCIAL REVIEW

• OPERATING REVIEW

• FINANCIAL PEFORMANCE

• OUTLOOK

22

Encouraged by improved consumer and business confidence

Possibly tempered by factors such as drought, higher VAT rate, sugar tax and

increased competition

Capital investments expected to contribute to future earnings

Improvement in Mpact Polymers albeit at a slower rate than initially planned

Planning to reach Felixton design capacity by year-end

Lower recovered paper prices

Focus on earnings growth initiatives and project optimisation

Outlook