Avgol

June 2011

The global Hygiene NW fabric leader

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AVGOL Nonwovens

General

This presentation is based on the Company financial reports.

There is no data in this presentation that isn’t presented in the public financial reports.

If there is any discrepancy between this presentation and the data in the financial report that was issued to the Israeli SEC and the TASE, the valid data is the one which appears in the formal reports.

This presentation is provided for information and as a matter of record only. It does not constitute an offer to sell or a solicitation of an offer to buy or sell securities or other financial instruments in any jurisdiction or any advice or recommendation with respect to such securities or other financial instruments of the company.

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A

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--------------------------- AVGOL Nonwovens

Agenda

• Who We Are

• Market Highlights

• The Competition

• Growth Engines

• Financial Highlights

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AVGOL Nonwovens

Our Vision & strategic path

Vision:

To be the first and leading truly global and focused

SM hygiene manufacturer.

5 year ambition:

~$600 mm sales, ~100 mm EBIT

13.5% global market share

8 locations worldwide, including China, India, Russia, LatAm + NA, EU.

Strategy:

Getting to a global superior position ASAP.

Offering an unparalleled differentiated product and service portfolio

together with a better cost structure.

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An Extremely Focused Strategy

• A single target market – hygiene (Diapers & FemCare) (with extremely minor deviations).

• A single technology – Spunmelt

• A single principal raw material – PP

• A single technology vendor – Reicofil

Spunmelt is the most efficient and fastest growing NW technology, with no substitute

in sight.

Hygiene is the consumer of 65% of the Spunmelt technology

Avgol is one of 2 -3 truly global vendors to its industry.

deployed both in developed and developing markets

The benefit to our global customers - we develop once,

deploy in multiple locations simultaneously and uniformly

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AVGOL Nonwovens

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$64.2 Billion market globally

Fem hygiene

$23.1 Bn

36%

Adult

incontinence

$8.8 Bn

14%

Diapers &

training pants

$32.4 Bn

50%

Source: John R.Starr (February 2011)

• Single digit growth in demand expected ~4%

Asia-Pacific

$9.0 bn

14%

South & Central

America

$6.2 bn

10%

Middle East

$2.8 bn

4%

Undeveloped

markets

$17.8 bn

28%

North America

$14.2 bn

22%

Western Europe

$14.2 bn

22%

Hygiene market (2009, end user values)

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Market Highlights

• The hygiene industry is one of the most stable, non-cyclical industries in the

global economy.

“there is no way back”

• 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 these mature

markets. In some countries fabric demand for Adults > Baby diapers.

• Altogether the market is growing at ~5% / year. China, Russia, LA growing faster

• 2010 market size - ~1,200,000 MT, growing by ~60,000 MT/yr.

Avgol - ~8.5% in 2010, ~10% in 2013.

Source: J. Starr Global 2011 Outlook for Hygiene absorbent products

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y Di

B.ilftiilo:ns of

Units

11:,0

) 1(lif]l1

40

.20

= "' ~-..

r ar • g

BABYDIAPER AND 1TRAININ 1G PANT 2010 1 1\-'.Jall'ket ~otJf"ntial and Peueb·atiou by Regio 1n

Gro ba.l Peuemratio,n = 2 3 % ,

I WI Comsn.rup1tion ~ Potential

&"7/1; #' '<S ~·

ti., ~:

AVGOL Nonwovens

Baby Diapers Market Highlights

Source: J. Starr Global 2011 Outlook for Hygiene absorbent products

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$16,000

$14,000

$12,000

Sl 0,000

S8,000

S6,000

S4,000

$2,000

r

India

• 19 I t

GDP PER CAPITA IN DEVELOPING MARKETS

(Purchasing Power Pa1ity Basis -2011 Forecasts)

China Indonesia Brazil Philippines i\Ie:i:ico Russia Tur key

Soun:e: Econonist Intelligence Unit

10.0%

8.0%

6.0%

4.0%

2.0%

0.0%

GDPGROWIHRATESIN LARGEST DEVELOPING MARKETS

(2011 Forecasts of GDP Growth Rates)

India China Ind onesia Brazil Philippines ;\fr dc o Russia Turkey

Source: The Economist

AVGOL Nonwovens

Market Highlights

• Customer income levels determine the affordability of disposable diapers and

drive market penetration (begin to accelerate between $3,000-$5,000 per capita

purchase parity income).

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Source: The Economist

n

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Growth Engines

• Global baby diapers penetration rate = 23%

• Chinese & Indian markets – primary growth drivers

Secondary drivers – Russia, LA, Indonesia, Philippines.

• Adult incontinence products present significant growth potential in the mature

markets (6.9% CAGR 2010 to 2015).

• Considerable scope for further market development – Medical, protective apparel.

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AVGOL Nonwovens

Thank You

10

·North __ _

Amenca

Non wovens

OL Nonwovens

13

11

העולם –אבגול ברחבי פריסה

80%100%100%

גלובלית כ , חברה של יצור כושר ב 112-עם טון יצור12- אלף קווי

ב כ , אתרים 4- הפרוסים העולם 560- ומעסיקה ברחבי עובדיםנוספים 2012-ב * קוים שני לפעול של – יחלו טון 30תוספת אלף

ב"ארהאמריקה : שוק צפון

ייצור טון45,000: כושרייצור 3:קווי

ב נוסף ייצור 2012-קו

ישראלוהמזה : שוק ת"אירופה

ייצור טון 33,000:כושרייצור 6:קווי

רוסיהאירופה : שוק מזרח

ייצור טון 10,000: כושריצור 1:קווי

סין אסיה :שוק

ייצור טון 24,000: כושרייצור 2:קווי

100% 100% 80%100%

)1953( "

AVGOL AMERICA INC. AVGOL RUS LLCHUBEI GOLD

DRAGON LTD. "

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Fi

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AVGOL Nonwovens

Financial Highlights

FY

USD Million 2010 2011 % 2010

Revenue, Net 63.8 82.8 30% 277.5

Gross Profit 13.1 18.1 38% 60.2 20.6% 21.9% 21.7%

EBIT 7.4 10.9 47% 35.5 11.6% 13.2% 12.8%

EBITDA 11.0 15.2 38% 52.1 17.3% 18.3% 18.8%

Net Profit* 3.6 7.1 97% 21.0

5.6% 8.6% 7.6%

31/03/10 31/03/11 % 31/12/10

Total Assets 304.2 363.3 19% 346.4

Net Debt 125.8 137.7 9% 134.0

% Net Debt/Total Assets 41.4% 37.9% 38.7%

Net Debt/EBITDA** 2.85 2.27 2.57

Q1

* Company’s Net Profit before allocation to minority. ** Annualized EBITDA

Source: Company Financial Reports for Q1/2011 and FY/2010 12

0

20,500

18,500

16,500

14,500

g 12,500

5! 10,500 =>

8,500

6,500

4,500

2,500 00 0 0 N n Cf

Pr D I

. . -

Gross Profit & Ope 1rating · Profit development

• Gross • Operating

00 00 00 O'l O'l O'l m 0 0 0 0 0 0 0 0 0 n n 0 0 0 0 0 0 0 0 0 N N N N N N N N N

a m ~ n 8 m q- n a Cl Ci Cf Cf Ci Cf

Nonwovens • ~~=:, ·

0 0 n n n n 0 0 0 N N N m 'q' n Cf Ci Cf

AVGOL Nonwovens

Profit Development

Source: Company Financial Reports FY 2008, FY 2009, FY2010 & Q1 2011

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Nonwovens •

tot a I assets - Net deb t ~ Net deb t to EBITDA

160 4 .0 4 00

350 140 3 .5

300 120 3.0

250 100 2 .5 ~

200 Q 80 2 .0 II) ::,

150 60 1.5

100 40 1.0

so 20 0 .5

0 0 0 .0

Q4 2008 Q4 2009 Ql 2010 Q2 2010 Q3 2010 Q4 2010 Ql 2011 Q4 2008 Q4 2009 Ql 2010 Q2 2010 Q3 2010 Q4 2010 Ql 2011

EBITDA* - Net debt -&- Net deb t to Assets

160 45 .0% 60

140

so 40.0 % 120

4 0 100 35.0 % ~

30 Q 80 II) ::,

30.0 % 60 20

40 25.0 %

10 20

0 0 20 .0%

Q4 2008 Q4 2009 Ql 2010 Q2 2010 Q3 2010 Q4 2010 Ql 2011 Q4 2008 Q4 2009 Ql 2010 Q2 2010 Q3 2 0 10 Q4 2010 Ql 20 11

AVGOL Nonwovens

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AVGO ·North ____ _

Amenca

.J

Non wovens It

,OL ,wovens

• 1953: Company founded.

• 1988: Began production of Non-wovens.

Milestones in Avgol’s Growth–אבגול

• 2001: MBO, with 72% of company shares purchased from founders.

• Mid-2001: Bought Mocksville (North Carolina) plant from Unifi.

• 2004: Second US production line installed (Sep 2004)

• 2004: Started joint venture (with a local partner) in China in Hubei Province (one line 50% ownership).

• 2005: 3rd US production line started (Oct 2005)

• Aug 2006: Israel Petrochemical acquired 20% of Company (today 26%)

• Nov 2006: Avgol starts setup of Greenfield production line in Russia (production begun in 2008)

• Jan 2007: The company is listed on the Israeli Stock Exchange (Tel – Aviv 100)

• 2009-2010: Increasing holdings in JV china to 80%

• June 2010: Second China production line installed

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