Probiotec Limited announced that it has agreed terms with a major Australian developer for a circa 30,000 sqm facility in Kemps Creek, NSW. Once operational, this site will house the majority of Probiotec's current NSW pharmaceutical and FMCG packing businesses and deliver material financial and operational benefits to the Company. HIGHLIGHTS: Project expected to deliver cost savings of $3m to $5m per annum from 1 January 2025; New facility to deliver increased capacity, capabilities and efficiency; Low Project Cost with the developer responsible for the build and majority of specialised fit-out.

Payback of circa 2 years from commencement of facility operation STRATEGIC RATIONALE: Since the start of FY18, Probiotec has completed five acquisitions in NSW. Following this acquisitive period, Probiotec has been undertaking an extensive process to identify a new large-scale facility in NSW to consolidate its footprint in the state. The board and senior management team sees this as a highly accretive opportunity via this consolidation of its NSW footprint.

The site consolidation is expected to: significantly reduce overhead expenses; remove duplication of products; simplify logistics to deliver shorter turnaround times for customers; improve coordination & efficiency of consolidated IT systems; support the opportunity to cross-sell services across the enlarged platform; increase capacity to meet increasing customer demands & any future acquisitions. FINANCIAL & OPERATIONAL IMPACT: The Agreement to Lease provides for a 15 year term plus two consecutive 5 year extension options (at Probiotec's discretion). Probiotec expects to transfer the majority of its current operations into the new site gradually before becoming fully operational from January 2025.

Once fully operational, the site consolidation is expected to deliver cost savings of $3 million to $5 million per year. Prior to this, the Company anticipates total cash outlays of $7 million - ­ $10 million as a result of the capital and operating expenditure required to prepare the site for consolidation. In the event that extraordinary growth in packing demand is attained over the next 12 to 18 months, the Group has the flexibility to retain some or all of the Multipack-LJM site in Eastern Creek.