Slides
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2026 Interim Results
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• Executive Summary • H1 2026 Results/Cash Flow • Capital Allocation • Business Review • Packaging Distribution • Manufacturing Operations • Pitreavie • Sustainability Update • Pension Scheme • Conclusions Overview 2
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Macfarlane Group designs, manufactures & distributes protective packaging to customers across the UK/Europe to: …..reduce their working capital and administration burden …..ensure their products are cost effectively packed, stored and transported …..protect their products through the supply chain ….optimise their packaging to minimise its environmental impact European coverage with local service Breadth of product / service offer Added value customer proposition Longstanding supplier partnerships How we differentiate: Expertise and focus on protective packaging 3
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£m H1 2026 £m H1 2025 £m Change Revenue 148.9 146.6 2% Adjusted operating profit (AOP) * 9.5 9.8 (3%) Adjusted profit before tax (APBT) * 7.2 7.9 (9%) Executive Summary 4 * Before charging/crediting amortisation and deferred contingent consideration adjustments. • Profit Recovery Plan underway : • Packaging Distribution returned to organic profit growth • Manufacturing Operations revenue grew and continues to generate attractive returns • Pitreavie restored to profitability in Q2 2026 • Impact of events in the Middle East: • Significant increase to input prices and higher operating costs • Cost inflation effectively managed, maintaining service levels with minimal impact on profitability • Balance sheet remains strong, bank facilities committed to November 2028 • Pension scheme buy-in transaction complete • Dividend maintained and new share buyback programme confirmed
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Revenue and profit Balance sheet EPS and dividend Revenue ▲ 2% 9% 3% ▲ £17.9m £5.3m 9% 3.6x AOP * APBT * Bank net debt Pension surplus Adjusted diluted EPS Dividend cover *** = 0.96p Financial Summary – H1 2026 5 Dividend per share * Before charging/crediting amortisation and deferred contingent consideration adjustments ** EBITDA measured pre-IFRS 16 in line with the leverage covenant set by the bank debt providers *** Adjusted diluted earning per share divided by dividend per share ▲ 0.9x EBITDA/Net debt **
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Income Statement 6 * Amortisation and deferred contingent consideration adjustments. H1 2026 £m H1 2025 £m Revenue 148.9 146.6 Gross Profit 56.2 [37.7%] 55.4 [37.8%] Operating expenses (46.7) (45.6) Adjusted operating profit 9.5 9.8 Adjustments * (2.4) (2.8) Operating profit 7.1 7.0 Interest (2.4) (2.0) Profit before tax 4.7 5.0 Adjusted Diluted EPS 3.45p 3.78p Dividend 0.96p 0.96p Dividend cover 3.6X 3.9x
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Income Statement 7 Alternative Performance Measures £m Amortisation £m Deferred Contingent Consideration Adjustments £m Tax £m Statutory Measures £m Six months to 30 June 2026 AOP 9.5 (2.4) - - 7.1 Operating profit APBT 7.2 (2.4) (0.1) - 4.7 Profit before tax Adjusted diluted EPS 3.45p (1.56)p (0.05)p 0.38p 2.22p Diluted EPS Six months to 30 June 2025 AOP 9.8 (2.6) (0.2) - 7.0 Operating profit APBT 7.9 (2.6) (0.3) - 5.0 Profit before tax Adjusted diluted EPS 3.78p (1.65)p (0.21)p 0.40p 2.32p Diluted EPS
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Cash Flow 8 H1 2026 £m H1 2025 £m EBIT 7.1 7.0 DA 9.2 9.0 EBITDA 16.3 16.0 Working Capital (2.2) 1.4 Interest (2.5) (2.1) Tax (1.3) (3.2) Pension administration costs/past service cost 0.1 0.1 Other movements (0.1) 0.2 Net cash inflow from operating activities 10.3 12.4 Acquisitions * - (15.1) Net capital expenditure (1.8) (1.3) Lease obligations (5.1) (4.7) Purchase of own shares (1.0) (0.2) Dividend (4.2) (4.3) Net cash flows from investing/financing activities (12.1) (25.6) Movement in net bank debt (1.8) (13.2) * Including bank borrowings inherited of £4.4m
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Based on business performance and appropriate dividend cover Return surplus cash to shareholders Based on investment returns and within a disciplined multiple to EBITDA range Capital Allocation Management of investment in capital expenditure to support organic growth Sustainable and progressive dividend Earnings enhancing acquisitions Capital expenditure prioritised (i) essential/ replacement (ii) by investment returns Through share buybacks or enhanced dividends 1 2 3 3 Priorities Approach Allocation c.£3.5m to £5.0m per annum Maintain current dividend levels (c.£5.7m per annum) until cover is restored to >2.5x * Expect to complete £4m buyback end Q3 2026 (H2 2026: £0.9m) Commence new £6m buyback programme in October 2026 No immediate plans, until valuation improves and profit recovery programme more advanced. 9 * (Adjusted Diluted EPS/(Interim + Final Dividend)
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£m H1 2026 H1 2025 Revenue 111.7 110.4 Gross margin 40.2 [36.0%] 39.3 [35.6%] Operating expenses 35.1 34.5 Adjusted operating profit 5.1 4.8 Adjusted operating profit margin 4.6% 4.3% Net Promoter Score 59 61 Packaging Distribution 10 • Increase in revenue versus H1 2026 • Improved new business revenue of £5.1m; 38% increase on H1 2025 • Successfully recovering higher input costs • Stable gross margin despite inflationary impact of events in the Middle East • Operating expenses controlled despite: • Inflation in labour costs driven by: • Increase in National Insurance, • Redundancy costs, • 1 April 2026 pay award • Higher logistics costs primarily related to increased fuel prices • Efficiency programmes reducing headcount – 700 vs 744 • Improved adjusted operating profit margin to 4.6%
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H1 2019 H2 2019 H1 2020 H2 2020 H1 2021 H1 2021 H1 2022 H2 2022 H1 2023 H2 2023 H1 2024 H2 2024 H1 2025 H2 2025 H1 2026 Paper £505 £459 £440 £435 £526 £666 £760 £786 £598 £540 £532 £597 £581 £578 £600 GP% 30.0% 32.1% 32.2% 32.7% 32.7% 32.2% 32.3% 32.0% 34.2% 37.3% 37.9% 36.4% 35.6% 34.9% 36.0% Oper. Exp, % 24.0% 23.2% 26.4% 22.6% 24.5% 23.9% 25.1% 23.9% 26.6% 27.7% 29.5% 27.2% 31.2% 29.4% 31.4% Oper. Profit % 6.0% 8.9% 5.8% 10.1% 8.2% 8.3% 7.2% 8.1% 7.6% 9.6% 8.4% 9.2% 4.4% 5.5% 4.6% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% £0 £100 £200 £300 £400 £500 £600 £700 £800 £900 Packaging Distribution – Margin Evolution 11 Covid Period Inflation Period
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Packaging Distribution Operating expenses 12 H1 2026 H1 2025 £m % of Revenue £m % of Revenue Employee costs (excl National Insurance) 18.4 16.5% 17.8 16.0% National Insurance 2.0 1.8% 1.7 1.6% Property (incl. IFRS 16 adjustments) 5.5 5.0% 6.2 5.6% Transport (excluding employee costs) 3.7 3.3% 3.5 3.2% IT 1.5 1.3% 1.5 1.4% Other 4.0 3.5% 3.8 3.4% Total operating expenses 35.1 31.4% 34.5 31.2%
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13Packaging Distribution Profit Recovery Plan KPI H1 Progress Medium Term Target Commentary Organic Growth 1.2% 2.0%-3.0% • Sales focus on more resilient and higher margin industrial markets • New Strategic Account Sales Programme • Realise benefits from relaunched web-based solutions offering • Leverage benefit of key differentiators – Innovation Labs and Packaging Optimiser Gross Margin 36.0% 34.0%-36.0% • Continue to effectively manage the incremental input costs arising from events in the Middle East • Strengthen our key supplier relationships, both nationally and locally. • Improve pricing disciplines in local/core customer segments Operating Cost % 31.4% 27.0%-29.0% • Ensure flow through benefits of H1 2026 cost reduction actions • RDC Best Practice Programmes to improve returns of RDCs below 5% ROS • Achieve benefits from information technology investments • Business simplification to ensure focus on added value activities Operating Margin 4.6% 7.5%+
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• £1.4m increase in revenue • Stronger demand from existing customers in defence, aerospace and electronics sectors • Slight decline in gross margin due to delay in recovery of rising input costs • Higher operating expenses due to increases in National Insurance, National Minimum Wage and logistics costs • Adjusted operating profit unchanged vs H1 2025 and adjusted operating margins remain strong £m H1 2026 H1 2025 Revenue * 28.0 26.7 Gross margin 12.1 [43.2%] 11.8 [44.2%] Operating expenses 7.6 7.3 Adjusted operating profit 4.5 4.5 Adjusted operating profit margin 16.0% 16.9% Sales to Distribution (as % of revenue) 9% 10% Manufacturing Operations, excluding Pitreavie 14 * Including inter-divisional sales to Distribution
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• Return to adjusted operating profit in Q2 2026 • Adjusted H1 operating loss due to restricted operating capacity • Loss minimised by good retention of customers, partnership with Packaging Distribution and support of supply partners • £1.2m investment in new equipment installed and commissioned during Q1 2026 • No progress to report on investigation into the tragic incident in October 2025 and no provision made at this stage. Manufacturing Operations- Pitreavie 15 * Including inter-divisional sales to Distribution £m H1 2026 H1 2025 Revenue * 12.6 12.5 Gross margin 3.9 [30.7%] 4.3 [34.3%] Operating expenses 4.0 3.8 Adjusted operating profit (0.1) 0.5 Adjusted operating profit margin (0.8%) 3.6%
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16Pitreavie Profit Recovery Plan KPI H1 Progress Medium Term Target Commentary Corrugate Throughput (per annum) 79k per day 100k per day • Installation of new corrugate equipment in Q1 2026 increases capacity of the corrugate operation in the current shift system Revenue Growth 2.2% 5.0% • Target new corrugate and protective packaging business with industrial, energy and food manufacturing customers across Scotand • Continue to maintain high retention of existing customers through manufacturing flexibility and high-quality service • Increase sales of in-house produced corrugate to end customers of the Distribution business in Scotland and the North of England. • Grow the temperature-controlled packaging business through the Macfarlane national distribution network Gross Margin 30.7% 35.0% • End of outsourcing of corrugate manufacturing in Q2 2026 will increase the gross margin in H2 2026 to c33%+ • Improved efficiency from the investment in the new corrugate manufacturing equipment • Revised customer profitability model • Development of supply partnerships and sourcing with the wider Macfarlane Group Operating (Loss)/Profit £(0.1)m £2.0m+
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Reducing our Impact • 36% reduction in absolute carbon emissions since 2019 • 10 fully electric commercial vehicles • 95%+ of electricity sourced from renewables • New solar panels array installed at Polyformes • Driving carbon efficiencies through the latest fleet innovation Supporting our Customers • 270 YTD customer engagements with our Innovation Labs • 6 sustainability events hosted with over 200 customers • Supporting customers on new EU environmental regulations (PPWR) • Retained a rolling customer Net Promoter Score of 60 Our Colleagues & the Community • Progressed Health and Safety improvement programme • Maintained our corporate volunteer day and charity fundraising match scheme • Developed management compliance refresher programme • Maintained progress on gender pay gaps Doing Business the Right Way • Retained London Stock Exchange Green Economy Mark • Ranked in the top 15% of businesses globally by EcoVadis • Achieved CDP climate change management level (B) • Cyber Essentials Plus accreditation 17
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Plastic Packaging Tax (April 2022) Extended Producer Responsibility (January 2025) Digital Markets, Competition and Consumers Act (January 2025) International Sustainability Reporting Standards (2027) UK Carbon Border Adjustment (2027) EU Corporate Sustainability Reporting Directive (2029) EU Packaging and Packaging Waste Regulations (August 2026) EU Empowering Consumers Directive (September 2026) EU Deforestation Regulations (December 2026) Existing Regulation New Regulation within 2026 Future Regulation 2027 and beyond UK and EU Sustainability Regulatory Environment 18
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• Buy-in transaction executed on 29 June 2026 fully funded from pension scheme assets. • As a result, all financial and demographic risks fully insured, excluding post buy-in adjustments. • Target within two years; • to complete post buy-in data reconciliations and adjustments. • to have the option to proceed to buy-out and winding up the scheme. • Anticipated any surplus or deficit at buy-out will be no more than £1 million. Pension Scheme – Buy-in Completed 19 £m H1 2026 H1 2025 2025 Opening surplus 6.0 9.6 9.6 Administration costs/interest income - 0.2 0.3 Past service cost adjustment - - (1.9) Change in actuarial assumptions (Discount rate unchanged at 5.95% (H1 2025 0.45%: 2025 0.50%) 2.6 0.3 (0.9) Investment returns (3.3) (0.9) (1.1) Closing surplus 5.3 9.2 6.0 Investments (£m) H1 2026 H1 2025 2025 Multi-asset Diversified Fund - 2.4 - Securitised Credit Funds - 16.6 16.2 Multi-asset Credit Funds - 10.3 3.0 Liability-driven Investments - 32.6 37.2 Insured Assets (post buy-in) 52.0 - - Cash 5.5 1.0 5.8 Total investments 57.5 62.9 62.2 Liabilities (£m) Total liabilities 52.2 53.7 56.2
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Conclusions Market Conditions - weak UK economy, impact of Middle East and increasing Environmental Regulation H1 Progress: • Middle East impact largely being offset • Packaging Distribution performance improvement • Pitreavie Q2 return to profitability • Manufacturing Operations performance stable Profit Recovery Actions: • Focus sales development in industrial markets • Reduce cost base through targeted cost savings • Increase ROS in lower performing RDCs through Best Practice Programme • Improve input pricing with refined sourcing programme • Recover Pitreavie performance following the restoration of corrugate production capacity Capital Allocation : maintain dividends and new share buyback programme Continue net debt level at c. 1.0x EBITDA 20