A strong start for the six months ended 30 September 2016

Presented by

Paul Fineman CEO,

Anthony Lawrinson CFO &

Gideon Schlessinger CEO Americas

November 2016

2

Introduction

designs, innovates, manufactures and sources the following core product categories

Celebrations – 74% of revenue

Stationery & creative play – 17% of revenue

Gifting – 9% of revenue

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• Strong offering created for specific customer channels – we provide a good, better, best approach and are proud to serve the best retailers around the globe with a complete end‑to‑end service from design to distribution

• Geographic diversity – with sales to over 80 countries, we combine global scale with local expertise and combat competitive market conditions

• Customer relationships – we have over 8,500 customers, and are proud to have traded with many of them for over 20 years

• Cash generation – we have a philosophy that “it’s not profit till it’s cash.”

• Design and innovation – we design with creative flair and imagination, striving to exceed our customers’ expectations

• A broad portfolio of generic, licensed and customer bespoke brands, across design‑led product categories

• Low cost manufacturing and sourcing

• Award winning service – we do whatever it takes to ensure total customer satisfaction

• Compliant with the demanding standards of the world’s leading retailers and licensors, we source and manufacture our products responsibly

How we make money

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Established in 1979 and

floated on AIM in 1995

Over 38% of products sold are in Everyday categories

In excess of 8,500 customers

Balanced business with 37% of products sold

under our generic and licensed brands

Present in over 185,000 retail outlets in more than 80 countries

Key facts – first 6 months 2016/17

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Operational and commercial highlights

• Record Group sales of £146m (up 21.5%) includes highest volumes ever of gift packaging and greetings related products sold, including over 60 million gift bags

• Underlying gross margin up 3.0 percentage points (from 18.2% to 21.2%) underpinned by the full year effect of manufacturing efficiencies and product innovation

• Strengthened management team in USA delivers 36% growth in operating profit(a) and completes the acquisition of the Lang Companies

• Sales and operational initiatives drives operating profit(a) growth of 54% in Australia, and 25% in Europe

• UK & Asia – sales 4% lower at £55.1m, but operating profit increased by 4% despite FX transaction impact

• Non‑UK revenues by customer destination are now 75% of Group sales

(a) Operating profit growth in local currency before exceptional items, LTIP charges and management charges.

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Results

Design is at the heart of all we do

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Financial highlights

Sales (£million)

+22%on H1 2015

Underlying diluted EPS(b) (pence)

+50%on H1 2015

Profit before tax(a) (£million)

+57%on H1 2015

Net debt improvement (£million)

2%reduction on

H1 2015

(a) Profit before tax is stated before exceptional items and LTIP charges.

(b) Underlying fully diluted EPS is stated before exceptional items and Long Term Incentive Plan (LTIP) charges.

H1 2013

H1 2014

H1 2015

H1 2016

113.6119.8

111.9

145.5

H1 2013

H1 2014

H1 2015

H1 2016

3.7

5.2

4.0

8.2

H1 2013

H1 2014

H1 2015

H1 2016

3.9

6.4

4.8

9.6

H1 2013

H1 2014

H1 2015

H1 2016

84.8

78.0

89.9

76.4

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Half year to Half year to 30 September 30 September 2016 2015 Growth £m £m %

Sales 145.5 119.8 22

Gross profit 30.8 21.9 41

21.2% 18.2%

Overheads (21.6) (15.7) 40

14.9% 13.1%

Other income 0.1 0.3

Operating profit 9.3 6.5 43

Finance costs (1.1) (1.3)

Profit before tax, exceptional items and LTIP 8.2 5.2 57

LTIP (0.9) (0.3)

Exceptional items 0.6 —

Profit before tax 7.9 4.9 80

EBITDA (pre exceptional items and LTIP) 11.4 8.6 33

£m %

HY to 30 September 2015 119.8 —Organic 7.3 5.6Impact of Lang 8.5 7.1Effect of FX on translation 9.9 8.8HY to 30 September 2016 145.5 21.5

Sales growth

Acquisition of Lang £m

Cash: cost associated with the acquisition and restructuring of Lang (0.5)Non cash: gain on bargain purchase 1.1 0.6

Exceptional items

Summary of half year results

£m % of sales

HY to 30 September 2015 (15.7) 13.1Organic(a) (2.4) 1.0Impact of Lang (2.3) 0.9Effect of FX on translation (1.2) (0.1)HY to 30 September 2016 (21.6) 14.9

Overheads

(a) Includes transactional FX impact of £1.3m

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Diluted EPS (Pre‑exceptionals and LTIP) Tax rates

Earnings

“Expected” rate 28.5%

Design Group “Underlying” rate

24%

33%

50%

H12013 UK

H12015 USA

H12014 Asia*

H12016

Continental Europe* Australia

9.6

23%

4.8

10

9

8

7

6

5

4

3

2

1

0

40

35

30

25

20

15

10

5

0

3.9

%

Earnings per share, dividend and tax

35.1

* Blended average rate.

EPS

(pen

ce) 6.4

• Diluted EPS post exceptional items and LTIP up 58% to 9.5p

• Average growth in diluted EPS 35% over 3 years

• H1 flattered by timing of acquisition and associated equity issue but still well ahead of expectations

• Dividend outlook raised to 4p (1.75p interim)

• Unrecognised tax assets (tax value) circa £0.4m

• “Expected” rate will increase as US profits grow with “underlying” rate trending towards this in coming years

• Tax assets in UK and USA will mitigate cash tax in very near term but are being used more quickly due to growth

20.0

23.9 24.2

30.0

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Cash flow

2016 2015 £m £m

EBITDA before LTIP costs 11.4 8.5Increase in debtors (78.7) (64.6)Increase in stock (22.9) (20.7)Increase in creditors, provisions and accruals 36.3 32.2Exceptional items (acquisition and restructuring re Lang) (0.3) —Cash generated from operations (54.2) (44.6)Net capital expenditure (2.9) (1.6)Business acquired (Lang) (2.7) —Tax paid (0.5) (0.8)Interest paid (1.1) (1.2)Proceeds from issue of share capital 5.1 — Dividends paid to non‑controlling interest (in respect of Artwrap) (0.3) —Equity dividend paid to Design Group shareholders (1.0) (0.6)Other movements (principally FX) 1.3 0.2Movement in net debt (58.9) (48.6)Opening net debt (17.5) (29.4)Closing net debt (76.4) (78.0)

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Balance sheet 2016

Freehold property

Fixed assets of £33.5m include freehold land and buildings with a net book value of £9.9m. This includes the Hirwaun site that may become available for sale in the future, NBV £1.5 million, estimated market value £3.7 to £3.9 million. IG UK has granted a 5‑year call option to a power company to purchase part of the Hirwaun site for £2.4m in consideration for premiums totalling £0.5m.

Working capital growth 30 Sep 30 Sep 2015 Organic Lang 2016

Net working capital 82.7 5.9 7.1 95.7% increase 7.1% 8.6% 15.7%Organic sales in the period July through September increased by 13% (excluding Lang), with the corresponding working capital increasing by significantly less at 7.1%.

As at As at 30 September 30 September 2016 2015 £m £m

Intangibles 33.7 31.6Fixed assets 33.5 28.1Stock 74.4 66.1Assets held for resale — 1.3Trade and other receivables 105.9 86.3Net debt (76.4) (78.0)Trade and other payables (84.6) (69.7)Deferred income and provisions (2.4) (2.6)Taxation 0.8 1.6Net assets 85.4 64.7Attributable to shareholders 81.5 61.8

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Outperformance remains our goalO

ur le

vers

Considered investment opportunities

Underlying 20% of sales or higher

Gross margin

Focus: USA and Australia

8% of sales or higher in each region

PBIT

Targets set in all businesses

Improving the ROCE in each of our businesses

Our

obj

ectiv

es

Through organic growth enhanced by acquisitions

Double digit CAGR for underlying EPS

A year ahead of schedule

Average leverage < 2.5x no later than 2017/18

2016/17 interim 1.75p Full year expectation 4p

Trend upwards no less than 3x covered

Underlying EPS growth Average leverage Dividend policy

Return on capital employed

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So what can go wrong?

• Build effective relationships with key suppliers in China

• Increasing local monitoring and management

• Investing in systems and people

• Extended insurance cover for certain risks (not insolvency)

• Some risks but currently stable

• Succession planning is high on Board agenda

• Investing in new breadth and depth

• Effective incentive and retention strategy

• Bad debts historically run at <0.1% of sales

• Strong blue chip focus

• Rigorous processes to monitor and manage credit risk

• Global visibility

• Sufficient balance sheet strength to withstand shock

• Resilient product categories

• Strength at value end of market

• Global portfolio

• Strong balance sheet and supportive stakeholders

• Recent movements have favoured the Design Group

• Strong portfolio effect mitigates

• Translation effect is part of our profile

• Local currency debt funds local profit streams

Supply chain

Economic downturn

Customer failure

FX movements

Leadership changesIssue

Response

Current status – our view

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Looking forward

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Growth – Taking the right steps to growth

Organic growth Inorganic growth

ProductsNew products to existing customers

ie partyware, stickers

ChannelsIncrease number of channels for existing products through retail and online opportunities ie regional

drugstores and grocery stores in the US

Product and categoriesNew categories suited to broad design capability

meeting changing trends and tastes ie design themed Gifting, retail collateral – eg bags for

retail consumption not for re‑sale

M&A• Entering new closely related categories• Adding recognised brands to our group

• Leveraging scale• Consolidating the market place

Partnership and joint venture channelsAn alternative and flexible way to fast tracking

progress to niche channels and categories

Underpinned by innovationNew and patented formats ie bags

with integrated tissue

Underpinned by synergies and an entrepreneurial approach

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Positive momentumHaving established a reputation over 25 years of excellence in design and service across our customer base supplying celebrations‑based product categories, we have gained very positive momentum across all facets of our commercial and operational activities.

• Annual growth FY16 – Organic 15%

• Half‑year growth FY17 – Organic 21% and including acquisition 41%

PeopleSince April 2015, under the leadership of CEO Gideon Schlessinger, our Leadership Team has been strengthened with key appointments in Operations, Finance, HR and Sourcing to support and bolster an experienced and capable team of sales, business development and design leaders.

Gideon SchlessingerCEO

Eric NarvaezDirector of

Supply Chain

Jimmy ZengDirector of Strategic Sourcing Resources

Gwen LiuCFO

Deme ChristianDirector of

Human Resources

Kashi SehgalDirector of Strategic

Initiatives

An overview of Americas

IG USA – organic growth

PBIT

Sales

H1 result:Sales: $67mPBIT: $4.5m

FY2013‑14

FY2015‑16

FY2014‑15

$m

$100

$80

$60

$40

$20

$0

$7

$5

$3

$1

$0

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Revenue – Product categoriesGift wrap – grow our 27% market share

Fuelled by:• Industry‑leading design

• Leveraging Group‑wide manufacturing efficiencies and expertise

Gift bags – continue to grow our single largest category through:• Innovation

• Highly competitive sourcing (including from Design Group’s own factory in China)

Stationery and Creative Play – a relatively embryonic category in the USA ($5m) now rapidly growing with the establishment of licensed and generic brands.

Gift Calendars – having grown our estimated market share to 23% since acquiring Lang in July 2016 we are well positioned to be a consolidator in this profitable category

Revenue growth: Americas

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Revenue – Customers and channelsOrganic growth – Underpinned through expanding market share across core categories

(in the last two years, we have grown share in 18 out of our top 20 customers)

Neighbouring markets – Sales across the Americas – to Canada, and Latin America

New Channels – including regional drugstores and supermarkets (recent ‘wins’ include H.E.B. and Ahold.)

Revenue growth: Americas

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Growth through efficiency: Americas

Through investment in people and capital equipment, we continue to:• Improve operational efficiency in logistics, distribution and supply chain management• Achieve greater manufacturing efficiencies, having invested in paper conversion facilities in late 2015• Leverage purchasing strengths and product development know‑how in USA and in Asia

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5 A balanced business across geographies, seasons, brands and products

4 Focused on profit growth underpinned by a unique blend of creativity and reliability

1 Foundations in place to support growth

2 Plentiful growth opportunities, organic or M&A/JV/partnerships

3 Flexible and competitive global funding in place gives us options to support the future vision

Outlook for Design Group

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Appendix

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Strategy

To be the world’s largest and most efficient designer and manufacturer in our core category of gift packaging

To become an increasingly important and successful supplier of design‑led stationery, creative play, giftware and related products in the markets in which we operate

To nurture deep and mutually valuable relationships with our customers and suppliers across our core and associated product categories, growing our worldwide presence together

To take every opportunity to share knowledge and exploit synergies across our business units, to leverage this efficient cost base and store of excellence through local entrepreneurial management teams focused on customer service, innovation and relevant product

To improve our margins and the cash profile of our profitability by:• providing differentiated product offerings across the value, mass and upscale markets• balancing our business across geographies, seasons, brands and higher‑margin product categories

To give our people the knowledge they need, the tools and inspiration to create value for the Group and help pursue their careers and goals

Strategic themes

1 Achieve market leading position in gift packaging

2 Focus on stationery and creative play

3 Nurturing valuable relationships

4 Leveraging Group expertise

5 Balancing our business

6 Giving our people the knowledge they need

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On 11 July 2016 we announced the acquisition of

• The acquisition: • The acquisition was satisfied by a net cash consideration of $3.4m

– estimated 4x EBITDA less a working capital adjustment

• Lang’s products: • Design led giftware and gift calendars including licences such as NBA and NFL• Sells over 5.5 million calendars annually and has over 80 sports and art licences

• Lang’s customers: • US‑based national chains• In excess of 3,600 specialist gift stores• Direct to consumer sales via its own website and catalogues,

with over 100,000 active customers placing nearly 150,000 orders in the last twelve months

• Synergies: • Addressable annual synergies of over $2 million, 2019/20• Cross selling and licensing opportunities

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Who we sell to

Focus on value sector and global retailers

• Key to growing our ‘everyday’ product offering

Not dependent on any single customer

• 8% is our maximum share of Group exposure

Over 500 million units of product sold worldwide

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A market‑leading portfolio of licences

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LEVERAGING SCALE AND IP

Underpinning growth

• Solutions to optimise cost and service provided to global retailers such as Ikea, Costco, Carrefour, Walmart, Tesco etc.

• Bespoke, licensed and generic approach to provide customers with a ‘one stop shop’ solution.

• Considerable scope for growth exists in all categories and markets.

Global solutions – products and service

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Underpinning growth continued

• Our operational facilities currently utilise 250,000 sq metres of manufacturing and warehousing. On average we employ 1,900 people worldwide.

• Overall purchasing requirements, working with preferred supply partners.

• Purchasing of raw materials – worldwide benchmarking and sourcing with increased standardisation driven through common manufacturing platform.

Operational scale

LEVERAGING SCALE AND IP

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Underpinning growth continued

• Operational synergies resulting from inter‑changeable Group‑wide wrap manufacturing facility.

• Payback from high speed, highly efficient paper conversion facilities.

• Further automation – cost reducing and volume enhancing.

• Benefits, learnings and subsequent development of operational experience of new state‑of‑the‑art printing facilities.

Technology advancements and automation

LEVERAGING SCALE AND IP