WORLD’S LARGEST CONDOM MANUFACTURER

INVEST MALAYSIA 2014

THE CONDOM INDUSTRY

ABOUT KAREX

COMPETITIVE ADVANTAGES

FINANCIAL HIGHLIGHTS

FUTURE PLANS

Table of Contents

1

THE CONDOM INDUSTRY

Main Uses of Condoms

Main Uses

of Condoms

Prevention of

Sexually

Transmitted

Infections

Prevention of

HIV/AIDS Family Planning

• Claimed more than 30

million lives so far.

• Every year,

approximately 2.7

million people are

newly infected with

HIV/AIDS.

• Every day, around

5,000 people are dying

from HIV/AIDS.

• Second most common

cause of death among

20-24 years old

worldwide.

• 220 million women in

the developing

countries cannot get

reliable access to

contraception

• Resulting in over 75

million unintended

pregnancies every

year

• By preventing

pregnancies and

unsafe abortions, over

100,000 women’s lives

can be saved each

year.

• Every day, 1 million people get infected with

a sexually transmitted infection.

• In US alone, more than 19 million STI cases

occur every year, with almost half occurring

among young people between 14-24 years

old

3

Global Condom Market

4

48% Institutional Buyers

• Consist of Governments,

NGOs, multilateral and

bilateral organisation.

• Condoms are provided either

free or at subsidised prices.

52% Commercial Buyers

• Comprises original brand

manufacturers and brand

owners which sell condoms to

consumers.

Source : Infobusiness Research

22.8 Billion pieces

sold in 2012

Huge Potential for Condom Usage Rates

5

In 2012, there were only 3.3 condoms for every person per year. There is ample room for growth as condom

usage rates increase further.

Global demand for condoms is expected to grow at 7.5% CAGR and reach 30.4 billion pieces in 2016.

Source : Infobusiness Research

Forecasted Growth in Condom

DemandGlobal Condom Demand

Shortage of Condoms

6

Available 15m

Need 35m

UNFPA/PSI Joint Studies on the Total Market for Male Condoms in Six African Countries (Nov 2013)

Available 100m

Need 125m

Available 11m

Need 18m

Available 14m

Need 33m

Available 31m

Need 35m

Available 480m

Need 850m

Shortage of 445 million condoms from Six African countries alone

Estimated Condoms Required in Africa

7

Mali

Swaziland

Botswana

Uganda

Lesotho

South Africa

1.1 BILLION

CONDOMS#

Whole Africa

10%

Total population - 108 million

Total Population – 1.0 billion

NEED

# Source : UNFPA/PSI Joint Study

ABOUT KAREX

Company Snapshot

9

Equity Information @ 30/05/2014

Shares Outstanding 405 million

Share Price RM 3.16

Market Cap RM 1.3 billion

Listing Board Main Market

Listing Date 6 November 2013

Net Asset Analysis @ 31/03/2014

Net Assets RM 211.6 million

Net Assets/Share RM 0.52

Net Gearing Net Cash

Major Shareholders @ 30/05/2014

Goh Family 63.31%

Condom Lubricating

Jelly

Probe

Cover

Catheter

Product Range

Hat Yai, Thailand

Port Klang, Malaysia

Pontian, Malaysia

Total

production

capacity of 4

billion pieces

of condoms

per annum

Manufacturing Facilities

Principal Operating Markets

10

Manufacture for some of the world’s famous condom brands.

Tender to institutional buyers to manufacture condoms for NGOs

and government agencies.

Manufacture condoms under own brands, Carex and INNO.

Distributed in UAE, South Africa, India, Nigeria and Bangladesh.

Commercial Market, 53%*

Tender Market, 43%* Own Brand Manufacturing Market, 4%*

Top 3 in Brazil Top 5 in USA No 1 in Australia

No. 2 in US# Based on 9M FYE2014

53%*

43%*4%*

COMPETITIVE ADVANTAGES

World Largest

12

Source : Infobusiness Research (Independent Market Researcher)

No. Name of Company Location Estimated Annual

Manufacturing

Capacity (pieces)

1 Karex Malaysia & Thailand 4.0 billion

2 Thai Nippon Rubber Industry Co.Ltd Thailand 2.0 billion

3 TTK-LIG Ltd India 1.5 billion - 2.0 billion

4 HLL Lifecare Ltd. India 1.6 billion

5 Suretex Ltd. (part of Ansell Ltd) Thailand 1.2 billion

6 Qingdao London Durex Co Ltd. (Part of Reckitt Benkiser PLC) China 1.0 billion

7 Guilin Latex Factory China 0.95 billion

8 Unidus Corp. (South Korean company) China and Korea 0.92 billion

9 Guangzhou Guangxiang Enterprises Group Co.Ltd. Doubleon Latex Factory China 0.75 billion

10 Pleasure Latex Products Sdn Bhd Malaysia 0.70 billion

Total 14.1 billion

Estimated annual manufacturing capacities of other condom manufacturers

With production capacity of 4 billion, Karex is the world’s largest condom manufacturer

Economies of Scale

13

Enjoy lower average cost per unit

Ability to deliver large tenders in a short period of time

Flexibility to offer various types of condoms

Licensed to Export to >110 Countries

14

Condoms are a highly-regulated medical device

Karex has the necessary licenses, certifications and accreditations to export to >110 countries across

Africa, Asia, America and Europe

Every region has its own regulatory bodies to

monitor and approve medical device standards

KEY LICENSES AND ACCREDITATIONS

ISO 9001:2000 US FDA 510k

ISO 13485:2003 NF Mark (France)

ISO 17025:2006 CCC mark (China)

CE Mark (Europe) BSI Kitemark (UK)

SABS Mark (South Africa) CMDCAS (Canada)

Wide global geographical coverage – attractive to

commercial customers

o With these key licenses, Karex is readily able to

supply to different geographical regions all across the

world and provide its customers with flexibility to

enter new markets.

o This gives Karex a competitive advantage over other

players.

o In addition, this creates a high barrier of entry for new

entrants into the condom manufacturing industry.

We Build Our Own Machines

15

Dipping Machine Foiling MachineElectronic Testing Machine

Machine Development

Capability to design, develop and re-engineer and customize machines

Dipping, electronic testing and foiling machines are developed in-house

Strong In-House R&D Capabilities

16

New Condom Colours, Flavours & Textures

Glow in the dark

Duo and tri-coloured

Tattoo Metallic

(gold, silver)

Super-studdedWorld Cup -

Brazilian Flag

FINANCIAL HIGHLIGHTS

Financial Track Record

18

FYE 30 June FY 2010

(RM m)

FY 2011

(RM m)

FY 2012

(RM m)

FY 2013

(RM m)

9M 2014

(RM m)

Revenue 157.4 181.8 188.8 231.4 222.2

Profit from operations 20.8 9.6 17.0 38.5 41.5

Profit before tax 19.7 7.7 14.5 36.1 40.8

Profit after tax 16.5 7.0 12.0 29.0 33.0

Profit from operations margin 13.2% 5.3% 9.0% 16.6% 18.7%

Profit before tax margin 12.5% 4.2% 7.7% 15.6% 18.4%

Profit after tax margin 10.5% 3.8% 6.4% 12.5% 14.9%

9M2014 vs 9M2013

19

9 MONTHS ENDED Variance

31.03.2014

(RM m)

31.03.2013

(RM m)

Revenue 222.2 168.4 32.0%

Profit from operations 41.5 26.8 54.9%

Profit before tax 40.8 25.0 63.2%

Profit after tax 33.0 20.0 65.0%

Profit from operations margin 18.7% 16.0%

Profit before tax margin 18.4% 14.8%

Profit after tax margin 14.9% 11.9%

Utilization Rate

20

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

Comfortable utilization rate is 70-75%

Average (2010-2012) 2013 9M2014

80.9%

76.9% 77.0%

Revenue Breakdown

21

Condoms, 93%

Catheters, 4%

Probe Cover and Lubricating Jelly,

4%

Revenue Breakdown by Product

Asia, 39%

Africa, 34%

America, 18%

Europe, 9%

Revenue Breakdown by Geographical Region

# Based on 9M FYE 2014

Cost Structure Breakdown

22

Direct Material, 67%

Labour, 18%

Utilities, 7%

Depreciation, 3%

*Others, 6%

Breakdown of Cost of Goods Sold

*Others include levy, workers welfare and upkeep of factory.

# Based on FYE 2013

Cost Structure Breakdown

23

Latex, 43%

Foil, 19%

Innerbox, 9%

Silicone Oil, 7%

*Others, 22%

Breakdown of Direct Material

*Others include ammonia, corn starch, magnesium carbonate, silicone emulsion, flavouring and colour pigments

# Based on FYE 2013

FUTURE PLANS

Expansion of Production Capacity

25

Schedule of expansion By April 2015

(billion pieces)

By April 2016

(billion pieces)

Installed capacity 5.0 6 .0

No Plant Location

At IPO

Installed Capacity

(billion pieces)

At 30 May 2014

Installed Capacity

(billion pieces)

Enlarged Capacity

(billion pieces)

1 Pontian, Johor 2.0 2.0 4.0

2 Klang, Selangor 0.3 0.8 0.8

3 Hat Yai, Thailand 0.7 1.2 1.2

Group Total 3.0 4.0 6.0

Artist Impression of New Plant

26

Aerial View Front View

Canteen Office Building

27

Green Building Index (GBI)

A Green building focuses on increasing the efficiency of resource use – energy, water, and materials – while reducing

building impact on human health and the environment during the building’s lifecycle, through better siting, design,

construction, operation, maintenance, and removal.

LEED is a set of rating systems for the design,

construction, operation, and maintenance of green

buildings, homes and neighbourhoods.

Developed by the U.S. Green Building

Council (USGBC), LEED is intended to help

building owners and operators be environmentally

responsible and use resources efficiently.

Leadership in Energy and Environmental Design (LEED)

Environmental Sensitive Alternative Major

Tender Customers

Green Building

Support For Companies Who Go Green

28

“Wal-Mart said supplier participation in its effort to reduce greenhouse gas emissions would not be mandatory. But

the giant retailer — with sales of more than $400 billion last year — made it clear that it was interested in doing

business only with suppliers that share its goals.”

UN Informal Interagency Task Team for Sustainable Procurement in the Health Sector (the IIATT-SPHS) wants

to shape best practices for reducing carbon footprints and integrating environmental criteria in procurement practices.

Furthermore, it wants to collaborate with external partners in order to apply lists of hazardous chemicals and potential

substitutions by incorporating environmental criteria into technical products specifications for suppliers.

Note : (the IIATT-SPHS) convenes five UN agencies – UNICEF,UNDP,UNOPS,UNFPA and WHO

THANK YOU