COSMO FIRST LIMITED

rs,

SE/2022-23/FEB/06 February 15, 2023 The Manager (Listing) BSE Limited Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai-400 001 Scrip Code: 508814 The Manager (Listing) National Stock Exchange o

64%

y label films Unique Proposition ❑ Uniquely positioned with good mix of specialty/semi specialty (64% volume FY’22) and commodity films. ❑ Globally among top four players in BOPP ❑World’s largest s

2.5Lakh

reen energy at plants, waste reduction, water treatment etc ❑ Social: Education to 20k+ students, 2.5Lakh lives touched in the fight against COVID-19 ❑ Governance: Strong Independent board with 66% of

66%

.5Lakh lives touched in the fight against COVID-19 ❑ Governance: Strong Independent board with 66% of Independent Directors Strong Financials ❑ Continuous growth and profitability Strong R&D Focu

80%

ipeline. Company Overview - Our Businesses Speciality films focused business with target to sell 80% volume of value add speciality films by FY24 (FY22 64% speciality/semi speciality volume) Three

25%

is D2C, Digital First Omni Channel platform for Pets (Petcare is high growth Industry growing at 25% CAGR) Company Overview - Key Milestones ►Established in 1981, Cosmo Films Ltd.is the pioneer of

12%

dalone Consolidated Standalone Consolidated Standalone Consolidated INR Crores 625 75 12% 40 36 106 Net Sales EBITDA EBITDA % PBT PAT EPS* * EPS is calculated on the TTM basis after adjust

16%

ue in June'22. Management Commentary ❑ Q3, FY23 results were also adversely impacted by: • 725 117 16% 93 69 122 730 86 12% 49 46 119 778 124 16% 97 73 141 739 132 18% 111 79 106 771 161 21% 138 104

18%

versely impacted by: • 725 117 16% 93 69 122 730 86 12% 49 46 119 778 124 16% 97 73 141 739 132 18% 111 79 106 771 161 21% 138 104 135 one time inventory loss in Raw materials and Finished Goods (b

21%

725 117 16% 93 69 122 730 86 12% 49 46 119 778 124 16% 97 73 141 739 132 18% 111 79 106 771 161 21% 138 104 135 one time inventory loss in Raw materials and Finished Goods (both in India and subsidi

20%

s) in coming quarters. ❑ The Company’s financials remain strong with annualized ROCE and ROE at 20% and 25% respectively and net debt to EBITDA of less than one times. December 2022 Quarter - Perf

Rs 15

its strong presence in speciality films segment. ❑BOPP Films margins have been running at close to Rs 15/- per kg during Dec 2022Q vs Rs 42/- per kg during Dec 21Q and Rs 20 per kg during Sept 2022 quarte

“▪ We expect FY23 to close between Rs 160-170 crores with positive EBITDA.”

“FY24 will be year of scale-up for speciality chemicals.”

“▪ ▪ Speciality & Semi Speciality Growth and Margins ❑ Expanding Speciality & Semi-Speciality films portfolio (high margin category) (FY22 64% volume; 19% CAGR over last 3 years).”

“❑ Target 80%+ volume from Speciality & Semi Speciality segment by 2024.”

“❑ A Company with diversified businesses with target 20% CAGR topline growth in next 3 years coupled with commensurate return growth ❑ Potential high Growth Engines include Speciality Films, Speciality Chemicals and a digital first, D2C Petcare business ❑ Speciality Films: ✓ Expanding Speciality portfolio (64% Volume; 18% annual growth in last 3 years).”

“Expansion expected in next one year ✓ Speciality Textile Chemicals – scale up in coming years ✓ Complimentary Adhesive business for Packaging, Lamination and Labels – under commissioning ✓ Target 25%+ ROCE business ❑ Petcare: ✓ Untapped Industry growing @ 25%+ ✓ D2C Digital first Omni-channel presence in Products & Services ✓ Plans to launch about 15 experience centers during FY23 and enhance to 150 experience centers in next a couple of years.”

“✓ Plan to demerge Petcare vertical into separate company in medium term.”

“Capex Project 1 2 3 BOPP Line (World’s Largest Line) CPP Films Line (World’s Largest Line) Value add assets for Specialized BOPET line Total”

“of experience centers during FY23 and enhance online business) What Investors may Expect ?”

“❑ Petcare: Build and demerge the business vertical in medium term to drive shareholders valuation ❑ Going forward B2B segment (speciality films, packaging films, specialized BOPET line, speciality chemicals) and B2C segments (D2C Pet Care and selective Speciality chemicals) will drive growth.”

Three Verticals

1

Film Business

1

Notes

1

Films Business

1

Other Businesses

1

Three Verticals

❑Masterbatch (From FY22) ❑Textile Chemicals (From FY22) ❑Adhesive (From H2, FY23) Zigly is D2C, Digital First Omni Channel platform for Pets (Petcare is high growth Industry growing at 25% CAGR) Company Overview - Key Milestones ►Established in 1981, Cosmo Films Ltd.is the pioneer of BOPP Films Industry in India; ►It gradually scaled up the operations accompanied by couple of acquisitions ►3rd and 4th extrusion coating line; ►1st coating line; ►Gas based electricity generation unit ►2012: 2nd coating line ►2013: 9th BOPP line ►2014: 3rd coating line 2012-14 ►2010: 2nd metallizer line ►2011: Korea plant 2010-11 ►2016: CPP line-1 ►2017: 10th BOPP line ►Petcare ►Speciality Chemicals 2022 2016-17 2023 ►Re-branded to Cosmo First Limited ►Specialized BOPET Line 2021 2018-20 ►2018: CPP line-2 ►2020: 6th coating line Masterbatch Line-1 2015 ►4th and 5th coating line; 3rd metallizer line; Upgradation of US plant ►1996: 3rd BOPP line ►2001: 4th BOPP line ►Acquired Gujarat Propack Ltd 2006 1996-0

Film Business

❑During the quarter, BOPP and BOPET industry faced excess supply caused due to bunching of new production lines and on the other hand demand disruptions in overseas markets. The contribution margin dropped below the sustainable levels and impacted everyone in the industry. The Company mitigated the impact on the back of its strong presence in speciality films segment. ❑BOPP Films margins have been running at close to Rs 15/- per kg during Dec 2022Q vs Rs 42/- per kg during Dec 21Q and Rs 20 per kg during Sept 2022 quarter. This is much lower than average historical margins (in range of Rs 25 per kg). ❑The BOPET line which was commissioned towards the end of last quarter continued to focus on perfecting recipes, processes and quality parameters for various speciality and value-added films in line with the Company’s entry strategy in polyester films. ❑The near-term outlook for commodity films is expected to be challenging however the Company will continue to expand on specialty films gro

Notes

1) Specialty sales during Q3, FY23 was impacted in export market primarily due to temporary supply chain issues and geo-political crisis 2) Margins denote per/kg contribution for respective films categories. STRATEGIC PERSPECTIVE Why Cosmo First ? ❑ A Company with diversified businesses with target 20% CAGR topline growth in next 3 years coupled with commensurate return growth ❑ Potential high Growth Engines include Speciality Films, Speciality Chemicals and a digital first, D2C Petcare business ❑ Speciality Films: ✓ Expanding Speciality portfolio (64% Volume; 18% annual growth in last 3 years). Target 80%+ Volume from Speciality by 2024 end ✓ Targeting High Growth (70% capacity increase in 3 years) – Specialized BOPET Line (Q3, FY23), CPP Line by FY’25, BOPP Line by H1’FY26 ✓ R&D & Sustainability focus (30+ highly qualified polymer/chemical scientists; Further expanding) ✓ Four current patents & another fifteen are in pipeline ✓ 20% growth targeted from BOPET line (from H2’FY23) ✓ 20%

Films Business

S.No. Capex Project 1 2 3 BOPP Line (World’s Largest Line) CPP Films Line (World’s Largest Line) Value add assets for Specialized BOPET line Total

Other Businesses

Estimated Capex (INR Crs) 350 140 100 590 Annual Capacity (MT) 67,000 25,000 Estimated Commercial Production by H1’FY 2026 H1’FY 2025 Beginning of FY2024 ❑ Specialized Chemicals (scaling up planned during FY23 for capex done in FY22) – Estimated INR 60 Cr Capex in next 3 years. ❑ D2C Pet Care businesses (15 nos. of experience centers during FY23 and enhance online business) What Investors may Expect ? ❑ Flexible Packaging Business: Transformation into primarily Speciality films company with late teens ROCE ❑ Speciality Chemicals: 10% -15% revenue with 25%+ ROCE in about 5 years. ❑ Petcare: Build and demerge the business vertical in medium term to drive shareholders valuation ❑ Going forward B2B segment (speciality films, packaging films, specialized BOPET line, speciality chemicals) and B2C segments (D2C Pet Care and selective Speciality chemicals) will drive growth. ❑ ESG & Corporate Governance – ESG Initiatives & highest standard for corporate governance in place. CareEdge Research i