UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

For the month of November, 2021

Commission File Number 1-10928

INTERTAPE POLYMER GROUP INC.

9999 Cavendish Blvd., Suite 200, Ville St. Laurent, Quebec, Canada, H4M 2X5

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F x           Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	INTERTAPE POLYMER GROUP INC.
Date: November 12, 2021	By:	/s/ Jeffrey Crystal
		Jeffrey Crystal, Chief Financial Officer

Intertape Polymer Group Inc.

Management’s Discussion and Analysis

This Management’s Discussion and Analysis (“MD&A”) is intended to provide the reader with a better understanding of the business, strategy and performance of Intertape Polymer Group Inc. (the “Company”), as well as how it manages certain risks and capital resources. This MD&A, which has been prepared as of November 11, 2021, should be read in conjunction with the Company’s unaudited interim condensed consolidated financial statements and notes thereto as of and for the three and nine months ended September 30, 2021 and 2020 ("financial statements") and “Item 5 Operating and Financial Review and Prospects (Management’s Discussion & Analysis)” located in the Company’s annual report on Form 20-F for the year ended December 31, 2020 and the other statements contained in the Company’s filings with the Canadian securities regulators and the US Securities and Exchange Commission. It should also be read together with the text on forward-looking statements in the “Forward-Looking Statements” section below.

For the purposes of preparing this MD&A, the Company considers the materiality of information. Information is considered material if the Company believes at the time of preparing this MD&A that: (i) such information results in, or would reasonably be expected to result in, a significant change in the market price or value of the common shares of the Company; (ii) there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision; and/or (iii) it would significantly alter the total mix of information available to investors. The Company evaluates materiality with reference to all relevant circumstances, including potential market sensitivity.

Except where otherwise indicated, all financial information presented in this MD&A, including tabular amounts, is prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS” or “GAAP”) and is expressed in US dollars ("USD") unless otherwise stated to be in Canadian dollar ("CDN"), Indian Rupee ("INR"), or Euro ("€" or "EUR"). Variance, ratio and percentage changes in this MD&A are based on unrounded numbers.

This MD&A contains certain non-GAAP financial measures and key performance indicators as defined under applicable securities legislation, including adjusted net earnings (loss), adjusted earnings (loss) per share, EBITDA, adjusted EBITDA, and free cash flows (please see the "Adjusted Net Earnings (Loss)" section below for a description and reconciliation of adjusted net earnings (loss) and adjusted earnings (loss) per share, the “EBITDA and Adjusted EBITDA” section below for a description and reconciliation of EBITDA and adjusted EBITDA, and the “Cash Flows” section below for a description and reconciliation of free cash flows). In determining these measures, the Company excludes certain items which are otherwise included in determining the comparable GAAP financial measures. The Company believes such non-GAAP financial measures are key performance indicators that improve the period-to-period comparability of the Company’s results and provide investors with more insight into, and an additional tool to understand and assess, the performance of the Company's ongoing core business operations. As required by applicable securities legislation, the Company has provided definitions of those measures and reconciliations of those measures to the most directly comparable GAAP financial measures. Investors and other readers are encouraged to review the related GAAP financial measures and the reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures set forth in the "Non-GAAP Financial Measures and Key Performance Indicators" section belowand should consider non-GAAP financial measures and key performance indicators only as a supplement to, and not as a substitute for or as a superior measure to, measures of financial performance prepared in accordance with GAAP.

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Consolidated Quarterly Statements of Earnings

Three month periods ended

(In thousands of US dollars, except per share amounts)

(Unaudited)

	September 30, 2021		June 30, 2021		March 31, 2021		December 31, 2020
	$		$		$		$
Revenue	395,552		376,686		345,566		344,079
Cost of sales	308,509		287,402		263,016		255,599
Gross profit	87,043		89,284		82,550		88,480
Gross margin	22.0	%	23.7	%	23.9	%	25.7	%
Selling, general and administrative expenses	43,048		44,075		46,743		53,424
Research expenses	2,897		2,910		3,048		2,763
	45,945		46,985		49,791		56,187
Operating profit	41,098		42,299		32,759		32,293
Finance costs
Interest	6,157		10,070		5,368		6,757
Other finance expense, net	3,639		11,951		1,342		3,188
	9,796		22,021		6,710		9,945
Earnings before income tax expense	31,302		20,278		26,049		22,348
Income tax expense (benefit)
Current	5,878		6,039		2,184		9,871
Deferred	(353)		(484)		4,076		(4,910)
	5,525		5,555		6,260		4,961
Net earnings	25,777		14,723		19,789		17,387
Net earnings attributable to:
Company shareholders	25,336		14,338		19,052		17,089
Non-controlling interests	441		385		737		298
	25,777		14,723		19,789		17,387
Earnings per share attributable to Company shareholders
Basic	0.43		0.24		0.32		0.29
Diluted	0.42		0.24		0.32		0.28
Weighted average number of common shares outstanding
Basic	59,165,617		59,027,230		59,027,047		59,012,869
Diluted	60,579,770		60,519,144		60,358,431		60,083,664

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Consolidated Quarterly Statements of Earnings

Three month periods ended

(In thousands of US dollars, except per share amounts)

(Unaudited)

	September 30, 2020		June 30, 2020		March 31, 2020		December 31, 2019
	$		$		$		$
Revenue	323,027		267,710		278,212		291,489
Cost of sales	238,917		210,623		219,105		231,167
Gross profit	84,110		57,087		59,107		60,322
Gross margin	26.0	%	21.3	%	21.2	%	20.7	%
Selling, general and administrative expenses	38,621		34,534		30,907		32,533
Research expenses	2,554		2,546		3,333		3,010
	41,175		37,080		34,240		35,543
Operating profit before manufacturing facility closures, restructuring and other related charges (recoveries)	42,935		20,007		24,867		24,779
Manufacturing facility closures, restructuring and other related charges (recoveries)	466		3,211		651		(657)
Operating profit	42,469		16,796		24,216		25,436
Finance (income) costs
Interest	7,368		7,513		7,798		7,668
Other finance (income) expense, net	1,296		(9,590)		(1,132)		3,630
	8,664		(2,077)		6,666		11,298
Earnings before income tax expense	33,805		18,873		17,550		14,138
Income tax expense (benefit)
Current	9,373		3,996		2,355		3,459
Deferred	(2,741)		296		881		(1,010)
	6,632		4,292		3,236		2,449
Net earnings	27,173		14,581		14,314		11,689
Net earnings (loss) attributable to:
Company shareholders	26,726		14,479		14,376		11,631
Non-controlling interests	447		102		(62)		58
	27,173		14,581		14,314		11,689
Earnings per share attributable to Company shareholders
Basic	0.45		0.25		0.24		0.20
Diluted	0.45		0.25		0.24		0.20
Weighted average number of common shares outstanding
Basic	59,009,685		59,009,685		59,009,685		58,900,337
Diluted	59,745,118		59,467,336		59,075,593		59,027,917

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Overview

The Company develops, manufactures and sells a variety of paper-and-film based pressure sensitive and water-activated tapes, shrink and stretch films, protective packaging, woven and non-woven products and packaging machinery for industrial and retail use. The Company provides packaging and protective solutions for industrial markets in North America, Europe and other geographies.

The Company’s products primarily consist of carton sealing tapes, including pressure-sensitive and water-activated tapes; packaging equipment; industrial and performance specialty tapes, including masking, duct, electrical, foil, process indicator, sheathing, sports and reinforced filament tapes; protective packaging solutions, including inflatable systems, mailer products, bubble cushioning, paper void fill, thermal solutions and protective foam roll stock; stencil products; shrink film; stretch wrap; lumber wrap, structure fabrics, geomembrane fabrics; and non-manufactured flexible intermediate bulk containers. Most of the Company’s products are made from similar processes. A vast majority of the Company’s products, while brought to market through various distribution channels, generally have similar economic characteristics.

The Company has assembled a broad range of products by leveraging its manufacturing technologies, research and development capabilities, global sourcing expertise and strategic acquisitions. Over the years, the Company has made a number of strategic acquisitions intended to offer a broader range of products to better serve its markets. The Company’s extensive product line permits the Company to offer tailored solutions to a wide range of end markets. The Company's largest end markets as of December 31, 2020 were: general manufacturing, fulfillment/e-commerce, food and beverage, building and construction, retail and transportation(1).

The Company's unique bundle of products positions it to serve the market with a broad and comprehensive range of packaging, protective and industrial product solutions. The Company believes that its broad and unique product bundle is a key competitive advantage. The portfolio of products is valuable to the Company’s customers as it contributes to the flexibility of its distributor partners by allowing them to offer a solutions-oriented approach to address specific end user needs, creates operating efficiencies and lowers operating costs. Management believes this flexibility is unique to the Company and differentiates the Company from its competitors.

(1)Represents management estimates as the Company does not have access to exact point of sale data.

COVID-19

In response to the coronavirus ("COVID-19") pandemic that began in December 2019, the Company implemented measures to prioritize the health and safety of its employees while protecting its assets, customers, suppliers, shareholders and other stakeholders. The Company instituted paid leave for all U.S. employees for certain COVID-19-related reasons, implemented remote work practices where possible, and added significant safety protocols for those needing to be on site at manufacturing facilities. The Company's aggressive COVID-19 safety practices can be bucketed into four main areas:

•PROACTIVE COMMUNICATION: Portal to facilitate communication, including weekly COVID-19 updates for operations managers and town halls for all staff conducted by the Company's senior management.

•PREVENTION: Cleaning and sanitization processes including disinfection using UVC light and ozone to sanitize areas and objects; social distancing, including camera monitoring to assess social distancing performance and wearables to alert workers when the adequate distance is not maintained and help with contact tracking; mandatory mask requirement; remote working; physical barriers; touchless entry and exit, and temperature monitoring; and thank you bonuses for employees electing to receive the vaccination.

•RESPONSE PLAN: Incident response and ‘ready-to-go’-resources like cleaning kits.

•BEST PRACTICE SHARING AND TECHNOLOGY: Quicker knowledge transfer across locations managed by a dedicated corporate team, including a COVID-19 Best Practice Matrix, as well as the evaluation of technologies to manage risk and automate processes.

While the Company has delivered positive financial results to date, the pandemic could yet materially impact the Company’s ability to manufacture, source (including the delivery of raw materials to its facilities) or distribute its products both domestically and internationally and reduce demand for its products, any of which could have a significant negative impact on the Company’s financial results in 2021 and beyond. Given the dynamic nature of the pandemic (including its duration, the severity of its impact on the global economy and the applicable governmental responses), the extent to which the COVID-19

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pandemic impacts the Company’s future results will depend on unknown future developments and any further impact on the global economy and the markets in which the Company operates and sells its products, all of which remain highly uncertain and cannot be accurately predicted at this time.

Financial Highlights

The Company reported a 22.5% increase in revenue for the third quarter of 2021 compared to the third quarter of 2020 and a 28.6% increase in revenue for the first nine months of 2021 compared to the same period in 2020. The increase in the third quarter of 2021 as compared to the third quarter of 2020 was primarily due to the impact of higher selling prices in tape, film, woven, and protective packaging products driven by increases in the cost of many raw materials and freight. The increase in the first nine months of 2021 as compared to the same period in 2020 was primarily due to organic growth in certain film, tape, woven, and protective packaging products, including continued strength in products with significant e-commerce end-market exposure, such as water-activated tape and dispensing machines and the non-recurrence of COVID-19 related demand declines experienced in the second quarter of 2020.

Gross margin decreased to 22.0% in the third quarter of 2021 compared to 26.0% in the third quarter of 2020. Gross margin increased to 23.2% in the first nine months of 2021 compared to 23.1% for the same period in 2020. The decrease in the third quarter of 2021 compared to the third quarter of 2020 was primarily due to the impact of maintaining dollar spread on higher average selling prices. The increase in the first nine months of 2021 compared to the first nine months in 2020 was primarily due to an increase in the spread between selling prices and combined raw material and freight costs, partially offset by the unfavourable impact of higher average selling prices.

Net earnings attributable to the Company's shareholders ("IPG Net Earnings") decreased to $25.3 million ($0.43 basic and $0.42 diluted earnings per share) for the third quarter of 2021 from $26.7 million ($0.45 basic and diluted earnings per share) for the third quarter of 2020, primarily due to an increase in selling, general and administrative expenses ("SG&A") resulting from an increase in employee- and technology-related costs mainly due to the growth of the business in 2021 and the non-recurrence of cost saving measures implemented in response to COVID-19 related uncertainty in 2020. This unfavourable impact was partially offset by an increase in gross profit.

IPG Net Earnings increased to $58.7 million ($0.99 basic and $0.97 diluted earnings per share) for the first nine months of 2021 from $55.6 million ($0.94 basic and diluted earnings per share) for the same period in 2020, primarily due to an increase in gross profit and the non-recurrence of termination benefits related to employee restructuring initiatives in 2020 in manufacturing facility closures, restructuring and other related charges. These favourable impacts were partially offset by (i) an increase in SG&A mainly due to increases in both share-based and variable compensation, (ii) an increase in finance costs mainly due to the 2018 Senior Unsecured Notes Redemption Charges (1) and the non-recurrence of a gain in 2020 resulting from a fair value adjustment to the Company's contingent consideration related to the Nortech Acquisition (2), and (iii) an increase in income tax expense.

Adjusted net earnings (3) decreased to $30.0 million ($0.51 basic and $0.50 diluted adjusted earnings per share (3)) for the third quarter of 2021 from $31.5 million ($0.53 basic and diluted adjusted earnings per share) for the third quarter of 2020, primarily due to an increase in SG&A, partially offset by an increase in gross profit.

Adjusted net earnings increased to $92.6 million ($1.57 basic and $1.53 diluted adjusted earnings per share) for the first nine months of 2021 from $57.4 million ($0.97 basic and diluted adjusted earnings per share) for the same period in 2020, primarily due to an increase in gross profit, partially offset by (i) an increase in SG&A mainly due to an increase in variable compensation and professional consulting services, both of which are mainly due to the growth of the business in 2021 and the non-recurrence of COVID-19 related impacts in 2020 including demand declines and cost saving measures, and (ii) an increase in income tax expense.

Adjusted EBITDA(3) decreased to $63.0 million for the third quarter of 2021 from $64.5 million for the third quarter of 2020, primarily due to an increase in SG&A, partially offset by an increase in gross profit.

Adjusted EBITDA increased to $188.9 million for the first nine months of 2021 from $143.5 million for the same period in 2020, primarily due to an increase in gross profit, partially offset by an increase in SG&A.

(1)    The "2018 Senior Unsecured Notes Redemption Charges" refers to debt issuance costs of $3.6 million that were written off, as well as an early redemption premium and other costs of $14.4 million recorded in connection with the redemption of the $250 million 7.00% senior unsecured notes that were scheduled to mature on October 15, 2026 (the “2018 Senior Unsecured Notes”). For additional information, see the "Liquidity and Borrowings" section below.

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(2)    The "Nortech Acquisition" refers to the acquisition by the Company of substantially all of the operating assets of Nortech Packaging LLC and Custom Assembly Solutions, Inc. (together "Nortech") on February 11, 2020..    

(3)    Non-GAAP financial measure. For definitions and reconciliations of non-GAAP financial measures to their most directly comparable GAAP financial measures, see the "Non-GAAP Financial Measures and Key Performance Indicators" section below.

Other Highlights

Dividend Declaration

On November 11, 2021, the Company declared a quarterly cash dividend of $0.17 per common share payable on December 31, 2021 to shareholders of record at the close of business on December 17, 2021.

Sustainability

The Company continues to embrace sustainability as a key strategy to drive operational excellence. In June 2021, the Company published its 2020 annual sustainability report, titled “Our Circular Economy”. The report provides an overview of the Company’s sustainability progress in 2020 and highlights future opportunities. The Company's achievements during the third quarter of 2021 include:

•Achieved Cradle to Cradle Certified™ Silver level for Curby® Mailer HD and the Curby® Cushioning Solutions family of products.

•Supported customer sustainability initiatives with cradle to cradle certification of private label water-activated tape.

•Submitted its first report to CDP Climate to be scored on the comprehensiveness of disclosure, awareness and management of environmental risks and best practices associated with environmental leadership.

•Signed the CEO Water Mandate making an aspirational pledge to advance water stewardship across six commitment areas including direct operations, public policy and transparency, and submit annual progress reports.

•Committed to net-zero emissions by 2040 in line with the Climate Pledge, an initiative co-founded by Amazon and Global Optimism, as well as the Business Ambition for 1.5°C campaign by Science Based Targets initiative.

The Climate Pledge commitment has obligations that include:

•measuring and reporting greenhouse gas emissions on a regular basis;

•implementing decarbonization strategies in line with the Paris Agreement through real business changes and innovation, including efficiency improvements, use of renewable energy, material reductions and other carbon emission elimination strategies; and

•neutralizing any remaining emissions with additional, quantifiable, real, permanent, and socially-beneficial offsets to achieve net-zero annual carbon emissions by 2040.

Read the full report at https://www.itape.com/sustainability.

Nuevopak Acquisition

On July 30, 2021, the Company completed the acquisition of Nuevopak Global Limited (“Nuevopak”) (the "Nuevopak Acquisition") for $37.3 million in total estimated consideration, consisting of $34.5 million paid at closing (net of cash received) and the remaining amount, subject to certain post-closing adjustments and potential contingent consideration, to be paid within three years from the date of closing. The Company financed the acquisition with funds available under its 2021 Credit Facility (defined later in this document).

Nuevopak designs and develops a range of machines that provide void-fill and cushioning protective packaging solutions primarily targeting protective paper packaging solutions. Nuevopak supplies the Company with paper dispensing machines and converted paper for protective packaging distribution in North America. Nuevopak is headquartered in Hong Kong with subsidiaries in Jiangmen, China and Scheden, Germany that serve customers around the world, providing protective packaging solutions using a combination of world-class innovation and specialized industry experience.

This acquisition is expected to further strengthen the Company's product bundle and secure a broader suite of sustainable packaging solutions, thereby supporting the Company’s vision to be a global leader in packaging and protective solutions. The

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acquisition is also expected to enable the Company to secure dispensing machine supply, vertically integrate its paper converting operation, and expand market share in this growing, sustainability-focused market.

The Company expects to achieve a post-synergy adjusted EBITDA acquisition multiple on the Nuevopak transaction that is approximately 5x by 2023. In management’s view, the post-synergy multiple is more representative of the contribution Nuevopak can offer within the Company, compared to Nuevopak’s current modest contribution on a stand-alone basis given its early stage growth profile. Expected cost synergies include margin expansion through the vertical integration of the Company’s paper converting operations, as well as savings on future capital expenditures by leveraging Nuevopak’s strategic parts sourcing and assembly capabilities. The Company also believes additional revenue synergies will materialize as it continues to scale its protective packaging business across multiple market verticals, led by the continued demand growth in the e-commerce fulfillment vertical and customer preferences for sustainable packaging solutions. In total, deal and integration costs are expected to be approximately $2 to $3 million, with the majority of these costs expected to be recognized by the end of 2022.

Outlook

The Company has revised its expectations for fiscal 2021 revenue, capital expenditures and effective tax rate as outlined below:

	As stated in the 2021 Second Quarterly Report	Current Revision
Revenue	$1.425 to $1.5 billion	$1.5 to $1.54 billion
Adjusted EBITDA	$245 to $255 million	No change
Free cash flows (1)	$70 to $80 million	No change
Capital expenditures	~ $100 million	~ $85 million
Effective tax rate (2)	25% to 30%	22% to 25%
Cash taxes paid (3)	~ 10% greater than income tax expense	No change

The Company revised its expectation for fiscal 2021 revenue primarily due to higher selling prices driven by the persistence of higher raw material prices.

Various disruptions in the market have created challenges for the supply of many raw materials as well as labour shortages. The Company recognizes that the impact that multiple global economic events, including COVID-19, ten-year highs in many commodity prices, weather-related events, transportation capacity limitations, port congestion, and energy consumption and intensity restrictions, have had and likely will have on the availability and price of raw materials and freight remains uncertain and could have a material adverse effect on the expected level of revenue, adjusted EBITDA and free cash flows. The Company continues to monitor these situations and will modify supply plans as needed to navigate any further supply chain disruptions as effectively as it can.

The capital expenditures expectation originally included $70 million to expand production capacity in the Company's highest growth product categories, specifically water-activated tape, wovens, protective packaging and films, as well as $10 million for digital transformation and cost savings initiatives and $20 million for regular maintenance. These projects remain on track and the amount of capital not expended in 2021 with this revision will occur in early 2022. By installing new capacity within its existing footprint, the Company expects the expansion projects will provide shorter-term investment horizons and return profiles that exceed a 20% after-tax internal rate of return. The Company is investing directly into categories where it expects demand to exceed production in the near term. The Company views these as low risk, margin accretive projects. Based on its capital plan, the Company still anticipates generating more than $100 million in incremental revenue on an annualized run-rate basis by the end of 2022, as well as additional growth into 2023 and beyond.

The revision to the effective tax rate is primarily due to a favourable mix of earnings between jurisdictions.

The above description of the Company's 2021 financial outlook in this MD&A is based on management's current views, strategies, assumptions and expectations concerning growth opportunities, expansion and investment projects, the potential impact of COVID-19, as well as management's assessment of the opportunities for the Company and its industry. The purpose of disclosing this outlook is to provide investors with more information concerning the fiscal impact of the Company's business initiatives and growth strategies. The above description of the Company's 2021 outlook is forward-looking information for the purposes of applicable securities laws in Canada and the United States and readers are therefore cautioned that actual results

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may vary materially from those described above. Refer to the "Forward-Looking Statements" section below as well as "Item 3. Key Information - Risk Factors," located in the Company’s annual report on Form 20-F for the year ended December 31, 2020 for a reference to the risks and uncertainties impacting the Company that could cause actual results to vary.

(1)    Non-GAAP financial measure. For definitions and reconciliations of non-GAAP financial measures to their most directly comparable GAAP financial measures, see the "Non-GAAP Financial Measures and Key Performance Indicators" section below. As in previous years, the Company expects the majority of free cash flows to be generated in the second half of the year due to the normal seasonality of working capital requirements.

(2)    The Company's effective tax rate expectation excludes the impact of changes resulting from potential US tax legislation that increases rates (particularly, if such increased rates are retroactive).

(3)    The Company's 2021 cash taxes paid expectation is based on less availability of tax attributes and loss carryforwards than were available for 2020, as well as the impacts of bonus depreciation previously taken.

Results of Operations

Revenue

Revenue for the third quarter of 2021 totalled $395.6 million, a $72.5 million or 22.5% increase from $323.0 million for the third quarter of 2020, primarily due to:

•The impact of higher selling prices of approximately $54 million primarily in tape, film, woven, and protective packaging products driven by increases in the cost of many raw materials and freight; and

•An increase in volume/mix of approximately 4% or $14 million primarily driven by organic growth in certain tape products as well as continued strength in products with significant e-commerce end-market exposure, such as water-activated tape, dispensing machines and protective packaging products.

Revenue for the first nine months of 2021 totalled $1,117.8 million, a $248.9 million or 28.6% increase from $868.9 million for the first nine months of 2020, primarily due to:

•An increase in volume/mix of approximately 16% or $136 million primarily driven by organic growth in certain film, tape, woven, and protective packaging products, including continued strength in products with significant e-commerce end-market exposure such as water-activated tape and dispensing machines, and the non-recurrence of COVID-19 related demand declines experienced in the second quarter of 2020;

•The impact of higher selling prices of approximately $100 million primarily in film, tape, woven, and protective packaging products driven by increases in the cost of many raw materials and freight; and

•A favourable foreign exchange impact of $10 million.

Gross Profit and Gross Margin

Gross profit totalled $87.0 million for the third quarter of 2021, a $2.9 million or 3.5% increase from $84.1 million for the third quarter of 2020 and totalled $258.9 million for the first nine months of 2021, a $58.6 million or 29.2% increase from $200.3 million for the first nine months of 2020. The increase in the third quarter of 2021 compared to the third quarter of 2020 was primarily due to a favourable product volume/mix and an increase in the spread between selling prices and combined raw material and freight costs, partially offset by an increase in plant operating costs which were partially due to the impacts of supply chain disruptions and labour shortages. The increase in the first nine months of 2021 compared to the same period in 2020 was primarily due to a favourable product volume/mix and an increase in the spread between selling prices and combined raw material and freight costs.

Gross margin decreased to 22.0% in the third quarter of 2021 from 26.0% in the third quarter of 2020. Gross margin increased to 23.2% in the first nine months of 2021 from 23.1% in the first nine months of 2020. The decrease in the third quarter of 2021 compared to the third quarter of 2020 was primarily due to the impact of maintaining dollar spread on higher average selling prices and increased plant operating costs, partially offset by a favourable product volume/mix. The increase in the first nine months of 2021 compared to the first nine months in 2020 was primarily due to an increase in the spread between selling prices and combined raw material and freight costs, partially offset by the unfavourable impact of the higher average selling prices.

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Selling, General and Administrative Expenses

SG&A for the third quarter of 2021 totalled $43.0 million, a $4.4 million or 11.5% increase from $38.6 million for the third quarter of 2020. The increase was primarily due to increases in (i) employee- and technology-related costs, (ii) advisory fees and other costs associated with mergers and acquisitions activity, including due diligence, integration and certain non-cash purchase price accounting adjustments ("M&A Costs") and (iii) other professional consulting services. The employee- and technology-related costs, as well as professional consulting services, increased mainly due to the growth of the business in 2021 and the non-recurrence of cost saving measures implemented in response to COVID-19 related uncertainty in 2020.

SG&A for the first nine months of 2021 totalled $133.9 million, a $29.8 million or 28.6% increase from $104.1 million for the first nine months of 2020. The increase was primarily due to increases in (i) share-based compensation mainly due to an increase in the fair value of cash-settled awards, (ii) variable compensation due to the growth of the business in 2021, as compared to COVID-19 related demand declines experienced in the second quarter of 2020, and (iii) professional consulting services mainly due to the growth of the business in 2021 and the non-recurrence of cost saving measures implemented in response to COVID-19 related uncertainty in 2020.

Finance Costs

Finance costs for the third quarter of 2021 totalled $9.8 million, a $1.1 million or 13.1% increase from $8.7 million in the third quarter of 2020, primarily due to greater foreign exchange losses in the third quarter of 2021 compared to the same period in 2020, partially offset by a decrease in interest expense. The decrease in interest expense is primarily due to a lower average cost of debt, partially offset by higher average debt outstanding.

Finance costs for the first nine months of 2021 totalled $38.5 million, a $25.3 million increase from $13.3 million in the first nine months of 2020, primarily due to the 2018 Senior Unsecured Notes Redemption Charges and the non-recurrence of a gain in 2020 resulting from a fair value adjustment to the Company's contingent consideration related to the Nortech Acquisition.

Income Taxes

The Company is subject to income taxation in multiple tax jurisdictions around the world. Accordingly, the Company’s effective tax rate fluctuates depending on the geographic source of its earnings. The Company’s effective tax rate is also impacted by tax planning strategies that the Company implements. Income tax expense is recognized in each interim period based on the best estimate of the weighted average annual income tax rate expected for the full financial year.

The table below reflects the calculation of the Company’s effective tax rate (in millions of USD):

	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020
	$		$		$		$
Income tax expense	5.5		6.6		17.3		14.2
Earnings before income tax expense	31.3		33.8		77.6		70.2
Effective tax rate	17.7	%	19.6	%	22.3	%	20.2	%

The decrease in the effective tax rate in the three months ended September 30, 2021 as compared to the same period in 2020 was primarily due to a favourable mix of earnings between jurisdictions, partially offset by an unfavourable impact from the reduction of the foreign sales benefit.

The increase in the effective tax rate in the nine months ended September 30, 2021 as compared to the same period in 2020 was primarily due to an unfavourable mix of earnings between jurisdictions.

9

IPG Net Earnings

IPG Net Earnings totalled $25.3 million for the third quarter of 2021, a $1.4 million or 5.2% decrease from $26.7 million for the third quarter of 2020, primarily due to an increase in SG&A resulting from an increase in employee- and technology-related costs mainly due to the growth of the business in 2021 and the non-recurrence of cost saving measures implemented in response to COVID-19 related uncertainty in 2020. This unfavourable impact was partially offset by an increase in gross profit.

IPG Net Earnings totalled $58.7 million the first nine months of 2021, a $3.1 million or 5.7% increase from $55.6 million the first nine months of 2020, primarily due to an increase in gross profit and the non-recurrence of termination benefits related to employee restructuring initiatives in 2020 in manufacturing facility closures, restructuring and other related charges. These favourable impacts were partially offset by (i) an increase in SG&A mainly due to increases in both share-based and variable compensation, (ii) an increase in finance costs mainly due to the 2018 Senior Unsecured Notes Redemption Charges and the non-recurrence of a gain in the second quarter of 2020 resulting from a fair value adjustment to the Company's contingent consideration related to the Nortech Acquisition, and (iii) an increase in income tax expense.

Non-GAAP Financial Measures and Key Performance Indicators

The Company measures the success of the business using a number of key performance indicators, many of which are in accordance with GAAP as described throughout this MD&A. This MD&A also contains certain non-GAAP financial measures and key performance metrics as defined under applicable securities legislation, including adjusted net earnings (loss), adjusted earnings (loss) per share, EBITDA, adjusted EBITDA, and free cash flows (please see the "Adjusted Net Earnings (Loss) and Adjusted Net Earnings (Loss) Per Share" section below for a description and reconciliation of adjusted net earnings (loss) and adjusted earnings (loss) per share, the “EBITDA and Adjusted EBITDA” section below for a description and reconciliation of EBITDA and adjusted EBITDA, and the “Cash Flows” section below for a description and reconciliation of free cash flows). In determining these measures, the Company excludes certain items which are otherwise included in determining the comparable GAAP financial measures. The Company believes such non-GAAP financial measures are key performance indicators that improve the period-to-period comparability of the Company’s results and provide investors with more insight into, and an additional tool to understand and assess, the performance of the Company's ongoing core business operations. As required by applicable securities legislation, the Company has provided definitions of those measures and reconciliations of those measures to the most directly comparable GAAP financial measures. Investors and other readers are encouraged to review the related GAAP financial measures and the reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures set forth below and should consider non-GAAP financial measures and key performance indicators only as a supplement to, and not as a substitute for or as a superior measure to, measures of financial performance prepared in accordance with GAAP.

Adjusted Net Earnings (Loss) and Adjusted Earnings (Loss) Per Share

A reconciliation of the Company’s adjusted net earnings (loss), a non-GAAP financial measure, to IPG Net Earnings, the most directly comparable GAAP financial measure, is set out in the adjusted net earnings (loss) reconciliation table below. Adjusted net earnings (loss) should not be construed as IPG Net Earnings as determined by GAAP. The Company defines adjusted net earnings (loss) as IPG Net Earnings before (i) manufacturing facility closures, restructuring and other related charges (recoveries); (ii) advisory fees and other costs associated with mergers and acquisitions activity, including due diligence, integration and certain non-cash purchase price accounting adjustments ("M&A Costs"); (iii) share-based compensation expense (benefit); (iv) impairment of goodwill; (v) impairment (reversal of impairment) of long-lived assets and other assets; (vi) write-down on assets classified as held-for-sale; (vii) (gain) loss on disposal of property, plant, and equipment; (viii) other discrete items as shown in the table below; and (ix) the income tax expense (benefit) effected by these items. The term “adjusted net earnings (loss)” does not have any standardized meaning prescribed by GAAP and is therefore unlikely to be comparable to similar measures presented by other issuers. Adjusted net earnings (loss) is not a measurement of financial performance under GAAP and should not be considered as an alternative to IPG Net Earnings as an indicator of the Company’s operating performance or any other measures of performance derived in accordance with GAAP. The Company has included this non-GAAP financial measure because it believes that it allows investors to make a more meaningful comparison of the Company’s performance between periods presented by excluding certain non-operating expenses, non-cash expenses and, where indicated, non-recurring expenses. In addition, adjusted net earnings (loss) is used by management in evaluating the Company’s performance because it believes it provides an indicator of the Company’s performance that is often more meaningful than GAAP financial measures for the reasons stated in the previous sentence.

Adjusted earnings (loss) per share is also presented in the following table and is a non-GAAP financial measure. Adjusted earnings (loss) per share should not be construed as IPG Net Earnings per share as determined by GAAP. The Company

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defines adjusted earnings (loss) per share as adjusted net earnings (loss) divided by the weighted average number of common shares outstanding, both basic and diluted. The term “adjusted earnings (loss) per share” does not have any standardized meaning prescribed by GAAP and is therefore unlikely to be comparable to similar measures presented by other issuers. Adjusted earnings (loss) per share is not a measurement of financial performance under GAAP and should not be considered as an alternative to IPG Net Earnings per share as an indicator of the Company’s operating performance or any other measures of performance derived in accordance with GAAP. The Company has included this non-GAAP financial measure because it believes that it allows investors to make a more meaningful comparison of the Company’s performance between periods presented by excluding certain non-operating expenses, non-cash expenses and, where indicated, non-recurring expenses. In addition, adjusted earnings (loss) per share is used by management in evaluating the Company’s performance because it believes it provides an indicator of the Company’s performance that is often more meaningful than GAAP financial measures for the reasons stated in the previous sentence.

Adjusted Net Earnings Reconciliation to IPG Net Earnings

(In millions of USD, except per share amounts and share numbers)

(Unaudited)

	Three months ended September 30,		Nine months ended September 30,
	2021	2020	2021	2020
	$	$	$	$
IPG Net Earnings	25.3	26.7	58.7	55.6
Manufacturing facility closures, restructuring and other related charges	—	0.5	—	4.3
M&A Costs	1.8	0.5	3.3	3.1
Share-based compensation expense	4.0	4.7	20.9	4.5
Impairment of long-lived assets and other assets	—	0.2	0.4	0.3
(Gain) loss on disposal of property, plant and equipment	(0.1)	0.0	(0.1)	0.2
Other item: change in fair value of contingent consideration liability (1)	—	—	—	(11.0)
Other item: Nortech incremental tax costs incurred (2)	—	—	0.8	—
Other item: 2018 Senior Unsecured Notes Redemption Charges	—	—	18.1	—
Income tax (benefit) expense, net	(1.1)	(1.1)	(9.5)	0.4
Adjusted net earnings	30.0	31.5	92.6	57.4
IPG Net Earnings per share
Basic	0.43	0.45	0.99	0.94
Diluted	0.42	0.45	0.97	0.94
Adjusted earnings per share
Basic	0.51	0.53	1.57	0.97
Diluted	0.50	0.53	1.53	0.97
Weighted average number of common shares outstanding
Basic	59,165,617	59,009,685	59,073,806	59,009,685
Diluted	60,579,770	59,745,118	60,495,043	59,444,092

(1)    Refers to the potential earn-out consideration obligation associated with the Nortech Acquisition.

(2)    Refers to charges incurred related to an amount payable to the former shareholders of Nortech for tax-related costs associated with the Nortech Acquisition that was subsequently paid in July 2021.

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Adjusted net earnings totalled $30.0 million for the third quarter of 2021, a $1.4 million or 5% decrease from $31.5 million for the third quarter of 2020. The decrease was primarily due to an increase in SG&A, partially offset by an increase in gross profit.

Adjusted net earnings totalled $92.6 million for the first nine months of 2021, a $35.2 million or 61% increase from $57.4 million for the first nine months of 2020. The increase was primarily due to an increase in gross profit, partially offset by (i) an increase in SG&A mainly due to an increase in variable compensation and professional consulting services, both of which are mainly due to the growth of the business in 2021 and the non-recurrence of COVID-19 related impacts in 2020 including demand declines and cost saving measures, and (ii) an increase in income tax expense.

EBITDA and Adjusted EBITDA

A reconciliation of the Company’s EBITDA, a non-GAAP financial measure, to net earnings (loss), the most directly comparable GAAP financial measure, is set out in the EBITDA reconciliation table below. EBITDA should not be construed as earnings (loss) before income taxes, net earnings (loss) or cash flows from operating activities as determined by GAAP. The Company defines EBITDA as net earnings (loss) before (i) interest and other finance costs (income); (ii) income tax expense (benefit); (iii) amortization of intangible assets; and (iv) depreciation of property, plant and equipment. The Company defines adjusted EBITDA as EBITDA before (i) manufacturing facility closures, restructuring and other related charges (recoveries); (ii) advisory fees and other costs associated with mergers and acquisitions activity, including due diligence, integration and certain non-cash purchase price accounting adjustments ("M&A Costs"); (iii) share-based compensation expense (benefit); (iv) impairment of goodwill; (v) impairment (reversal of impairment) of long-lived assets and other assets; (vi) write-down on assets classified as held-for-sale; (vii) (gain) loss on disposal of property, plant and equipment; and (viii) other discrete items as shown in the table below. The terms "EBITDA" and "adjusted EBITDA" do not have any standardized meanings prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other issuers. EBITDA and adjusted EBITDA are not measurements of financial performance under GAAP and should not be considered as alternatives to cash flows from operating activities or as alternatives to net earnings (loss) as indicators of the Company’s operating performance or any other measures of performance derived in accordance with GAAP. The Company has included these non-GAAP financial measures because it believes that they allow investors to make a more meaningful comparison between periods of the Company’s performance, underlying business trends and the Company’s ongoing operations. The Company further believes these measures may be useful in comparing its operating performance with the performance of other companies that may have different financing and capital structures, and tax rates. Adjusted EBITDA excludes costs that are not considered by management to be representative of the Company’s underlying core operating performance, including certain non-operating expenses, non-cash expenses and, where indicated, non-recurring expenses. In addition, EBITDA and adjusted EBITDA are used by management to set targets and are metrics that, among others, can be used by the Company’s Human Resources and Compensation Committee to establish performance bonus metrics and payout, and by the Company’s lenders and investors to evaluate the Company’s performance and ability to service its debt, finance capital expenditures and acquisitions, and provide for the payment of dividends to shareholders.

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EBITDA and Adjusted EBITDA Reconciliation to Net Earnings

(In millions of USD)

(Unaudited)

	Three months ended September 30,		Nine months ended September 30,
	2021	2020	2021	2020
	$	$	$	$
Net earnings	25.8	27.2	60.3	56.1
Interest and other finance costs	9.8	8.7	38.5	13.3
Income tax expense	5.5	6.6	17.3	14.2
Depreciation and amortization	16.1	16.2	48.3	47.6
EBITDA	57.2	58.6	164.4	131.1
Manufacturing facility closures, restructuring and other related charges	—	0.5	—	4.3
M&A Costs	1.8	0.5	3.3	3.1
Share-based compensation expense	4.0	4.7	20.9	4.5
Impairment of long-lived assets and other assets	—	0.2	0.4	0.3
(Gain) loss on disposal of property, plant and equipment	(0.1)	0.0	(0.1)	0.2
Adjusted EBITDA	63.0	64.5	188.9	143.5

Adjusted EBITDA totalled $63.0 million for the third quarter of 2021, a $1.5 million or 2.3% decrease from $64.5 million for the third quarter of 2020. The decrease was primarily due to an increase in SG&A, partially offset by an increase in gross profit.

Adjusted EBITDA totalled $188.9 million for the first nine months of 2021, a $45.5 million or 31.7% increase from $143.5 million for the first nine months of 2020. The increase was primarily due to an increase in gross profit, partially offset by an increase in SG&A.

Off-Balance Sheet Arrangements

There have been no material changes with respect to off-balance sheet arrangements since December 31, 2020 outside of the Company’s ordinary course of business. Reference is made to the “Off-Balance Sheet Arrangements” section in the Company's MD&A as of and for the year ended December 31, 2020 ("2020 MD&A").

Working Capital

The Company experiences some business seasonality that results in the Company’s efforts to effectively manage its working capital resources. Typically, a larger investment in working capital is required in quarters during which accounts receivable increases due to a higher level of sales invoiced toward the end of the quarter and inventory builds in anticipation of higher future sales. This working capital build normally unwinds later in the fiscal year. Furthermore, certain liabilities are accrued for throughout the year and are paid only during the first quarter of the following year.

The Company uses Days Inventory to measure inventory performance. Days Inventory increased to 70 for the third quarter of 2021 from 66 for the third quarter of 2020. Days Inventory decreased to 66 for the nine months ended September 30, 2021 from 68 for the same period in 2020. Inventories increased $72.7 million to $267.2 million as of September 30, 2021 from $194.5 million as of December 31, 2020, primarily due to inventory builds to both support organic growth as well as mitigate supply chain disruptions, and impacts from increases in raw material prices.

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The calculations are shown in the following table (in millions of USD, except days):

	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020
Cost of sales	$	308.5	$	238.9	$	858.9	$	668.6
Days in period	92		92		273		274
Cost of sales per day	$	3.4	$	2.6	$	3.1	$	2.4
Average inventory	$	236.0	$	172.4	$	208.3	$	166.6
Days inventory	70		66		66		68
Days inventory is calculated as follows:
Cost of sales ÷ Days in period = Cost of sales per day
(Beginning inventory + Ending inventory) ÷ 2 = Average inventory
Average inventory ÷ Cost of goods sold per day = Days inventory
For purposes of this calculation inventory excludes items considered parts and supplies

The Company uses Days Sales Outstanding (“DSO”) to measure the performance of its trade receivables. DSO increased to 47 in the third quarter of 2021 from 45 in the third quarter of 2020. DSO decreased to 49 for the nine months ended September 30, 2021 from 50 for the same period in 2020. Trade receivables increased $38.9 million to $201.1 million as of September 30, 2021 from $162.2 million as of December 31, 2020, primarily due to the impact of higher selling prices and the timing and amount of revenue invoiced and collected later in the third quarter of 2021 compared to the fourth quarter of 2020.

The calculations are shown in the following table (in millions of USD, except days):

	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020
Revenue	$	395.6	$	323.0	$	1,117.8	$	868.9
Days in period	92		92		273		274
Revenue per day	$	4.3	$	3.5	$	4.1	$	3.2
Trade receivables	$	201.1	$	158.8	$	201.1	$	158.8
DSO	47		45		49		50
DSO is calculated as follows:
Revenue ÷ Days in period = Revenue per day
Ending trade receivables ÷ Revenue per day = DSO

Accounts payable and accrued liabilities increased $16.6 million to $197.1 million as of September 30, 2021 from $180.4 million as of December 31, 2020, primarily due to (i) an increase in sales-driven accruals including customer volume rebates, customer deposits, and variable compensation due to the growth of the business in 2021, (ii) additional accounts payable and accrued liabilities resulting from the Nuevopak Acquisition, and (iii) the timing of payments related to interest and SG&A.

Liquidity and Borrowings

Liquidity

The Company relies upon cash flows from operations and funds available under its credit facilities to meet working capital requirements, as well as to fund capital expenditures, business acquisitions, dividends, share repurchases, obligations under its other debt instruments, and other general corporate activities.

The Company's liquidity risk management process serves to maintain a sufficient amount of cash and to ensure that the Company has financing sources for a sufficient authorized amount. The Company establishes budgets, cash estimates, cash management policies and long-term capital structure strategies to ensure it has the necessary funds to fulfill its obligations for the foreseeable future and ensure adequate liquidity on a long-term basis.

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The Company believes it has sufficient cash on hand, and that it will generate sufficient funds from cash flows from operating activities, to meet its ongoing expected capital expenditures, working capital and discretionary dividend payment funding needs for at least the next twelve months. In addition, funds available from borrowings may be used, as needed, to fund more significant strategic initiatives.

As of September 30, 2021, the Company had $7.5 million of cash and $455.1 million of loan availability (comprised of committed funding of $449.4 million and uncommitted funding of $5.7 million), yielding total cash and loan availability of $462.6 million compared to total cash and loan availability of $408.7 million as of December 31, 2020.

The Company's total outstanding borrowings and lease liabilities increased $110.8 million to $605.9 million ($597.3 million net of unamortized debt issuance costs of $8.6 million) as of September 30, 2021 from $495.1 million ($490.0 million net of unamortized debt issuance costs of $5.1 million) as of December 31, 2020. The incremental borrowings were primarily to support increases in working capital needs as discussed in the "Working Capital" section, as well as to fund the Nuevopak Acquisition and other strategic initiatives as discussed in the "Capital Resources" section.

Senior Unsecured Notes

On June 8, 2021, the Company completed the private placement of $400.0 million aggregate principal amount of senior unsecured notes due June 15, 2029 ("2021 Senior Unsecured Notes"). The 2021 Senior Unsecured Notes bear interest at a fixed rate of 4.375% per annum, payable semi-annually in cash in arrears on June 15 and December 15 of each year, beginning on December 15, 2021. As of September 30, 2021, the 2021 Senior Unsecured Notes outstanding balance amounted to $400.0 million ($395.5 million net of $4.5 million in unamortized debt issuance costs). The 2021 Senior Unsecured Notes include optional redemptions on or after June 15, 2024. The Company may redeem the 2021 Senior Unsecured Notes in 2024 at a redemption price of 102.188%, in 2025 at a redemption price of 101.094%, and in 2026 and thereafter at a redemption price of 100%.

The Company used the net proceeds from the 2021 Senior Unsecured Notes (i) to redeem its previously outstanding $250 million of 2018 Senior Unsecured Notes which bear interest at a fixed rate of 7.00% per annum and were scheduled to mature on October 15, 2026, (ii) to repay a portion of the borrowings outstanding under its 2018 Credit Facility (defined below) and (iii) to pay related fees and expenses, as well as (iv) for general corporate purposes. In connection with the redemption of its 2018 Senior Unsecured Notes, the Company wrote-off debt issuance costs of $3.6 million, which are recorded as interest under the caption finance costs in earnings, and recognized an early redemption premium and other costs of $14.4 million recorded as other finance expense (income), net under the caption finance costs in earnings.

2021 Credit Facility

On June 14, 2021, the Company entered into a new five-year, $600 million credit facility (“2021 Credit Facility”) with a syndicated lending group, amending and extending the Company's previous $600 million credit facility that was due to mature in June 2023 ("2018 Credit Facility"), to June 2026.

The 2018 Credit Facility's outstanding balance of $112.8 million was transferred to the 2021 Credit Facility, and corresponding unamortized debt issuance costs of $1.1 million are being amortized using the straight-line method over the five-year term of the 2021 Credit Facility. In addition, in securing the 2021 Credit Facility, the Company incurred debt issuance costs amounting to $3.3 million which were capitalized and are being amortized using the straight-line method over the five-year term.

The 2021 Credit Facility consists of a $600.0 million revolving credit facility, as well as an incremental accordion feature of $300.0 million, which would enable the Company to increase the limit of this facility (subject to the credit agreement's terms and lender approval) to $900.0 million if needed. The 2021 Credit Facility matures on June 12, 2026 and bears an interest rate based, at the Company’s option, on the London Inter-bank Offered Rate (or a lender-approved comparable or successor rate), the Federal Funds Rate, or Bank of America’s prime rate, plus a spread varying between 10 and 235 basis points (110 basis points as of September 30, 2021) depending on the debt instrument's benchmark interest rate and the consolidated secured net leverage ratio.

The 2021 Credit Facility has two financial covenants, a consolidated secured net leverage ratio not to be more than 4.00 to 1.00, with an allowable temporary increase to 4.50 to 1.00 for the quarter in which the Company consummates an acquisition with a price not less than $50 million and the following three quarters, and a consolidated interest coverage ratio not to be less than 2.25 to 1.00. The Company was in compliance with the consolidated secured net leverage ratio and consolidated interest coverage ratio, which were 0.77 and 10.24, respectively, as of September 30, 2021. In addition, the 2021 Credit Facility has

15

certain non-financial covenants, such as covenants regarding indebtedness, investments, and asset dispositions. The Company was in compliance with all covenants as of and for the three months ended September 30, 2021.

As of September 30, 2021, the 2021 Credit Facility’s outstanding principal balance amounted to $148.8 million (outstanding principal balance of $144.8 million, net of unamortized debt issuance costs of $4.0 million). Standby letters of credit totalled $1.7 million resulting in total utilization under the 2021 Credit Facility of $150.5 million. Accordingly, unused availability under the 2021 Credit Facility as of September 30, 2021 amounted to $449.5 million. The Company's capacity to borrow available funds under the 2021 Credit Facility may be limited because of the secured net leverage ratio covenant and other restrictions as defined in the Company's credit agreement.

Cash Flows

The Company’s net working capital on the balance sheet increased in the third quarter of 2021 due to the effect of a business acquisition. However, working capital amounts acquired are not included in cash flows from operating activities under IFRS. As such, the discussions below regarding 2021 working capital items appropriately exclude this effect.

Cash flows from operating activities decreased in the third quarter of 2021 by $24.9 million to $42.6 million from $67.5 million in the same period in 2020 primarily due to increases in inventories and less of an increase in accounts payables, partially offset by less of an increase in accounts receivable.

Cash flows from operating activities decreased in the first nine months of 2021 by $55.1 million to $35.9 million from $91.0 million in the same period in 2020 primarily due to an increase in cash used for working capital items and an increase in federal income taxes paid, partially offset by an increase in gross profit. Changes in working capital items consisted primarily of (i) a greater increase in inventories, (ii) a greater increase in accounts receivable and (iii) share-based compensation settlements in the first quarter of 2021 related to cash-settled awards as discussed in the "Capital Stock" section below, partially offset by an increase in accounts payable.

In both the third quarter and first nine months of 2021, the larger investment in working capital reflects the impacts of higher selling and raw material prices, organic growth and efforts to mitigate supply chain disruptions, as well as the timing of payments and receipts. This investment compares to conservative working capital management strategies in 2020 in response to COVID-19 related uncertainty, including inventory management and cost saving initiatives.

Cash flows used for investing activities increased in the third quarter of 2021 by $50.1 million to $59.0 million from $9.0 million in the same period in 2020, primarily due to the Nuevopak Acquisition in the third quarter of 2021 and an increase in capital expenditures mainly for capacity expansion initiatives in the Company's highest growth product categories, as compared to reduced capital expenditures in 2020 as a precautionary measure given market uncertainty caused by COVID-19.

Cash flows used for investing activities increased in the first nine months of 2021 by $30.1 million to $87.4 million from $57.3 million in the same period in 2020, primarily due to an increase in capital expenditures as discussed above. Cash flows used for investing included $34.5 million related to the Nuevopak Acquisition in the first nine months of 2021 and $35.7 million related to the Nortech Acquisition in the same period in 2020.

Cash flows from financing activities increased in the third quarter of 2021 by $66.4 million to an inflow of $5.6 million from an outflow of $60.8 million in the same period in 2020 primarily due to net borrowings in 2021, compared to net debt repayments in 2020. Cash flows from financing activities increased in the first nine months of 2021 by $71.9 million to an inflow of $44.5 million from an outflow of $27.4 million in the same period in 2020, primarily due to greater net borrowings in 2021.

Net borrowings in 2021 was primarily to support increases in working capital needs, as well as to fund the Nuevopak Acquisition and other strategic initiatives as discussed in the "Capital Resources" section. The net borrowings in the first nine months of 2021 was partially offset by the early redemption premium and other costs related to the 2018 Senior Unsecured Notes and an increase in debt issuance costs primarily associated with the 2021 Senior Unsecured Notes and the 2021 Credit Facility. For more information, see the "Liquidity and Borrowings" section above.

The Company has included free cash flows, a non-GAAP financial measure, because it is used by management and investors in evaluating the Company’s performance and liquidity. Free cash flows does not have any standardized meaning prescribed by GAAP and is therefore unlikely to be comparable to similar measures presented by other issuers. Free cash flows should not be interpreted to represent the total cash movement for the period as described in the Company's financial statements, or to represent residual cash flow available for discretionary purposes, as it excludes other mandatory expenditures such as debt

16

service. The Company experiences business seasonality that typically results in the majority of cash flows from operating activities and free cash flows being generated in the second half of the year.

The Company defines free cash flows as cash flows from operating activities less purchases of property, plant and equipment.

A reconciliation of free cash flows to cash flows from operating activities, the most directly comparable GAAP financial measure, is set forth below.

Free Cash Flows Reconciliation to Cash Flows from Operating Activities

(In millions of USD)

(Unaudited)

	Three months ended September 30,		Nine months ended September 30,
	2021	2020	2021	2020
	$	$	$	$
Cash flows from operating activities	42.6	67.5	35.9	91.0
Less purchases of property, plant and equipment	(22.4)	(8.3)	(47.6)	(21.0)
Free cash flows	20.2	59.2	(11.7)	69.9

Free cash flows decreased by $39.0 million in the third quarter of 2021 to $20.2 million from $59.2 million in the same period in 2020 and decreased by $81.6 million in the first nine months of 2021 to negative $11.7 million from $69.9 million in the same period in 2020. The decrease in both periods was primarily due to a decrease in cash flows from operating activities and an increase in capital expenditures.

Capital Resources

Capital expenditures totalled $22.4 million and $47.6 million in the three and nine months ended September 30, 2021 and were funded primarily by borrowings and cash flows from operating activities. The Company had commitments to suppliers to purchase machinery and equipment totalling approximately $31.8 million as of September 30, 2021 that are expected to be paid out in the next twelve months and will be funded by borrowings and cash flows from operating activities. These capital expenditures and commitments to suppliers were primarily to support the Company's capacity expansion initiatives in its highest growth product categories, specifically protective packaging, films, wovens, and water-activated tape, as discussed in the "Outlook" section above.

Contractual Obligations

There have been no material changes with respect to contractual obligations since December 31, 2020 outside of the Company’s ordinary course of business and the 2021 Senior Unsecured Notes and 2021 Credit Facility discussed in the "Liquidity and Borrowings" section above. Reference is also made to the “Contractual Obligations” section in the Company’s 2020 MD&A.

Capital Stock and Dividends

As of September 30, 2021, there were 59,284,947 common shares of the Company outstanding.

The Company's share-based compensation plans include: stock options, Performance Share Units ("PSU"), Restricted Share Units ("RSU") and Deferred Share Units ("DSU").

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The table below summarizes share-based compensation activity that occurred during the following periods:

	Three months ended September 30,		Nine months ended September 30,
	2021	2020	2021		2020
Equity-settled
Stock options granted	—	—	243,152		1,533,183
Stock options exercised	241,260	—	257,900		—
Stock options cancelled/forfeited	—	—	—		77,500
Cash-settled
DSUs granted	3,325	4,959	55,694		101,802
PSUs granted	—	—	200,982		694,777
PSUs forfeited	—	—	6,174		5,032
PSUs added (cancelled) by performance factor (1)	—	—	143,512		(346,887)
PSUs settled (1)	—	—	409,670		—
RSUs granted	—	—	81,981		281,326
RSUs forfeited	—	—	2,058		1,678
RSUs settled	—	—	106,906		—
Cash settlements (in millions of USD) (2)	—	—	$	13.2	—

(1)    The following table provides further information regarding the PSUs settled and adjusted by performance factor included in the table above. The number of "Target Shares" reflects 100% of the PSUs granted and the number of PSUs settled reflects the performance adjustments to the Target Shares.

Grant Date	Date Settled	Target Shares	Performance		PSUs settled
March 20, 2017	March 20, 2020	346,887	—	%	—
March 21, 2018	March 23, 2021	266,158	153.9	%	409,670

(2)    Includes a cash payment of dividend equivalents on PSUs and RSUs equaling the product that results from multiplying the number of settled awards by the amount of cash dividends per common share declared and paid by the Company from the date of grant of the awards to the settlement date.

As of September 30, 2021, $20.1 million was recorded in share-based compensation liabilities, current, and $18.4 million was recorded in share-based compensation liabilities, non-current.

The table below presents the share-based compensation expense recorded in earnings in SG&A by award type (in millions of USD):

	Three months ended September 30,		Nine months ended September 30,
	2021	2020	2021	2020
	$	$	$	$
Equity-settled	0.2	0.2	0.7	0.6
Cash-settled	3.8	4.5	20.3	3.9
Total	4.0	4.7	20.9	4.5

On September 30, 2021 the Company paid cash dividends of $0.17 per common share to shareholders of record at the close of business September 16, 2021 for an aggregate amount of $10.0 million.

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On November 11, 2021, the Company declared a quarterly cash dividend of $0.17 per common share payable on December 31, 2021 to shareholders of record at the close of business on December 17, 2021.

The dividends paid and payable in 2021 by the Company are “eligible dividends” as defined in subsection 89(1) of the Income Tax Act (Canada).

The Company renewed its normal course issuer bid ("NCIB") under which the Company will be entitled to repurchase for cancellation up to 4,000,000 common shares over a twelve-month period starting on July 23, 2021 and ending on July 22, 2022. As of November 11, 2021, no shares had been repurchased under the current or prior NCIB.

Financial Risk, Objectives and Policies

Interest Rate Risk

The Company is exposed to a risk of changes in cash flows due to the fluctuations in interest rates on its variable rate borrowings. To minimize the potential long-term cost of floating rate borrowings, the Company entered into interest rate swap agreements.

The Company was party to the following interest rate swap agreements, which are qualifying cash flow hedges designated as hedging instruments as of September 30, 2021 (in millions of USD):

Effective Date	Maturity	Notional Amount	Settlement	Fixed interest rate paid
		$		%
June 8, 2017	June 20, 2022	40.0	Monthly	1.7900
August 20, 2018	August 18, 2023	60.0	Monthly	2.0450

Hedge of net investment in foreign operations

A foreign currency exposure arises from Intertape Polymer Group Inc.'s net investment in its USD functional currency subsidiary, IPG (US) Holdings Inc. The risk arises from the fluctuations in the USD and CDN current exchange rate, which causes the amount of the net investment in IPG (US) Holdings Inc. to vary. Both the 2018 Senior Unsecured Notes and the 2021 Senior Unsecured Notes (collectively "Senior Unsecured Notes") are used to hedge the Company’s exposure to the USD foreign exchange risk on this investment.

The changes in value related to the net investment in IPG (US) Holdings, Inc., designated as the hedged item, and the Senior Unsecured Notes, designated as a hedging instrument, in the hedge of a net investment, are as follows (in millions of USD):

	Three months ended September 30,		Nine months ended September 30,
	2021	2020	2021	2020
	$	$	$	$
Gain (loss) from change in value of IPG (US) Holdings, Inc. used for calculating hedge ineffectiveness	11.6	(5.4)	8.8	6.0
(Loss) gain from change in value of the Senior Unsecured Notes used for calculating hedge ineffectiveness	(11.6)	5.4	(10.2)	(6.0)
(Loss) gain from Senior Unsecured Notes recognized in other comprehensive income	(11.6)	5.4	(8.8)	(6.0)
Loss from hedge ineffectiveness recognized in earnings in finance costs, in other finance expense (income), net	—	—	(1.4)	—
Deferred tax (expense) benefit on change in value of the Senior Unsecured Notes recognized in other comprehensive income	—	—	(1.6)	0.0

The cumulative amounts included in the foreign currency translation reserve recognized in other comprehensive income related to the hedge of net investment in foreign operations are a loss of $1.4 million and a gain of $7.3 million as of September 30, 2021 and December 31, 2020, respectively.

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Legal Matters

The Company is engaged from time-to-time in various legal proceedings and claims that have arisen in the ordinary course of business. The outcome of all of the proceedings and claims against the Company is subject to future resolution, including the uncertainties of litigation. Based on information currently known to the Company and after consultation with external legal counsel, management believes that the probable ultimate resolution of any such proceedings and claims, individually or in the aggregate, will not have a material adverse effect on the financial condition of the Company, taken as a whole, and accordingly, no material amounts have been recorded as of September 30, 2021.

Critical Accounting Judgments, Estimates and Assumptions

The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Significant changes in the underlying assumptions could result in significant changes to these estimates. Consequently, management reviews these estimates on a regular basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. The judgments, estimates and assumptions applied in the financial statements were the same as those applied in the Company’s most recent annual audited consolidated financial statements, except for the estimate of the provision for income taxes, which is determined in the financial statements using the estimated weighted average annual effective income tax rate applied to the earnings before income tax expense of the interim period, which may have to be adjusted in a subsequent interim period of the financial year if the estimate of the annual income tax rate changes. The financial statements should be read in conjunction with the Company’s 2020 annual audited consolidated financial statements.

The Company is closely monitoring the impacts of the COVID-19 pandemic as a trigger for changes in critical accounting judgments, estimates and assumptions.

New Standards adopted as of January 1, 2021

In the current year, the Company has applied a number of amendments to IFRS Standards and Interpretations issued by the International Accounting Standards Board (“IASB”) that are effective for an annual period that begins on or after January 1, 2021. Their adoption has not had any material impact on the disclosures or on the amounts reported in the Company's financial statements.

New Standards and Interpretations Issued but Not Yet Effective

Certain new standards, amendments and interpretations, and improvements to existing standards have been published by the IASB but are not yet effective and have not been adopted early by the Company. Management anticipates that all the relevant pronouncements will be adopted in the first reporting period following the date of application. Information on new standards, amendments and interpretations, and improvements to existing standards, which could potentially impact the Company’s financial statements, are detailed as follows:

On January 23, 2020, the IASB published Classification of Liabilities as Current or Non-current (Amendments to IAS 1), which includes narrow-scope amendments to IAS 1 Presentation of Financial Statements. The objective of the amendments is to clarify how to classify debt and other liabilities as current or non-current depending on the rights that exist at the end of the reporting period. The amendments include clarifying the classification requirements for debt a company might settle by converting it into equity. The amendments are effective on January 1, 2023 and will be applied retrospectively. Management is currently assessing, but has not yet determined, the impact on the Company’s financial statements.

On May 14, 2020, the IASB published Property, Plant and Equipment: Proceeds Before Intended Use (Amendments to IAS 16), which prohibits deducting amounts received from selling items produced while preparing the asset for its intended use from the cost of property, plant and equipment. Instead, such sales proceeds and related costs will be recognized in earnings. The amendments are effective on January 1, 2022.

The amendments are applied retrospectively, but only to items of property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after the beginning of the earliest period presented in the financial statements in which the Company first applies the amendments. The Company will recognize the cumulative effect of initially applying the amendments as an adjustment to the opening balance of retained earnings (or other component of equity, as appropriate) at the beginning of that earliest period presented. Management has completed its analysis of the guidance and does not currently expect it to materially impact the Company’s financial statements.

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On May 7, 2021, the IASB published Deferred Tax Related to Assets and Liabilities Arising From a Single Transaction (Amendments to IAS 12), which clarifies that the initial recognition exemption does not apply to transactions in which both deductible and taxable temporary differences will result in the recognition of equal deferred tax assets and liabilities, and that the Company is required to recognize deferred tax on such transactions. The amendments are effective on January 1, 2023. Management is currently assessing, but has not yet determined, the impact on the Company’s financial statements.

Certain other new standards and interpretations have been issued but are not expected to have a material impact on the Company’s financial statements.

Internal Control Over Financial Reporting

In accordance with the Canadian Securities Administrators’ National Instrument 52-109, “Certification of Disclosure in Issuers’ Annual and Interim Filings” (“NI 52-109”), the Company has filed interim certificates signed by the Chief Executive Officer (“CEO”) and the Chief Financial Officer ("CFO") that, among other things, report on the design of disclosure controls and procedures and design of internal control over financial reporting. With regards to the annual certification requirements of NI 52-109, the Company relies on the statutory exemption contained in section 8.1 of NI 52-109, which allows it to file with the Canadian securities regulatory authorities the certificates required under the Sarbanes-Oxley Act of 2002 at the same time such certificates are required to be filed in the United States of America.

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its annual filings, interim filings or other reports filed or submitted by the Company under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation and that such information is accumulated and communicated to the Company's management including the CEO and CFO as appropriate to allow timely decision regarding required disclosure. The Company has also established internal control over financial reporting which is designed to provide reasonable assurance regarding the reliability of the Company’s financial reporting and its compliance with GAAP (as derived in accordance with IFRS) in its consolidated financial statements.

Management, under the supervision of the Company's CEO and CFO, evaluated the effectiveness of the Company's disclosure controls and procedures as well as the effectiveness of the Company's internal control over financial reporting as of December 31, 2020. The CEO and CFO concluded that the Company’s disclosure controls and procedures and internal control over financial reporting as of December 31, 2020 were effective.

There have been no changes to the Company’s internal control over financial reporting during the Company’s most recent interim period that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of its inherent limitation, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Additional Information

Additional information relating to the Company, including its Form 20-F filed in lieu of an Annual Information Form for 2020, is available on the Company’s website (www.itape.com) as well as under the Company’s profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.

Forward-Looking Statements

Certain statements and information included in this MD&A constitute “forward-looking information” within the meaning of applicable Canadian securities legislation and “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (collectively, “forward-looking statements”), which are made in reliance upon the protections provided by such legislation for forward-looking statements. All statements other than statements of historical facts included in this MD&A, including statements regarding the impact of the COVID-19 pandemic on the Company (including the impact on the Company's ability to

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manufacture, source or distribute its products), the impact of other global economic events, the Company's future dividend payments, anticipated demand, including in e-commerce, sustainability-focused markets and other high-growth product categories, the Company’s industry and the Company’s outlook, prospects, plans, financial position, future transactions, acquisitions and partnerships, expansion projects, capital expenditures, sales and financial results, inventory, income tax and effective tax rate, availability of funds and credit, expected credit spread, level of indebtedness, payment of dividends, capital and other significant expenditures, working capital requirements, liquidity, selling prices, fluctuations in costs, the Company’s integration of Nuevopak and the expected costs, savings, capabilities, contributions, synergies, earnings and contingent consideration related to the acquisition of Nuevopak (as well as the likelihood, and amount, of any future consideration to be paid in connection with this transaction), the Company's use of savings from the redemption of the 2018 Senior Unsecured Notes and issuance of the 2021 Senior Unsecured Notes, the impacts of new accounting standards, judgments, estimates, assumptions, litigation and business strategy, may constitute forward-looking statements. These forward-looking statements are based on current beliefs, assumptions, expectations, estimates, forecasts and projections made by the Company’s management. Words such as “may,” “will,” “should,” “expect,” “continue,” “intend,” “estimate,” “anticipate,” “plan,” “foresee,” “believe” or “seek” or the negatives of these terms or variations of them or similar terminology are intended to identify such forward-looking statements. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, these statements, by their nature, involve risks and uncertainties and are not guarantees of future performance. Such statements are also subject to assumptions concerning, among other things: business conditions and growth or declines in the Company’s industry, the Company’s customers’ industries and the general economy, including as a result of the impact of COVID-19; the impact of changes to tariffs and other international trade developments; the anticipated benefits from the Company’s greenfield projects and manufacturing facility expansions; the impact of fluctuations in selling prices; the availability of raw materials; the impact of fluctuations in raw material prices and freight costs; costs associated with the impact of climate change, including weather related events and environmental matters; the anticipated benefits from the Company’s acquisitions and partnerships; the expected financial performance and benefits of the Nuevopak acquisition; the Company’s growth strategy and the strength of the Company’s competitive position moving forward; the anticipated benefits from the Company’s capital expenditures; the quality, and market reception, of the Company’s products; the Company’s anticipated business strategies; risks and costs inherent in litigation; legal and regulatory requirements, including as related to COVID-19; the Company’s ability to maintain and improve quality and customer service; anticipated trends in the Company’s business, including the Company's growing e-commerce business; anticipated cash flows from the Company’s operations; anticipated changes in the tax treatment of intercompany debt; availability of funds under the Company’s 2021 Credit Facility; the Company’s flexibility to allocate capital as a result of the 2021 Senior Unsecured Notes offering; changes to accounting rules and standards; and the Company’s ability to continue to control costs. The Company can give no assurance that these statements and expectations will prove to have been correct. Actual outcomes and results may, and often do, differ from what is expressed, implied or projected in such forward-looking statements, and such differences may be material. Readers are cautioned not to place undue reliance on any forward-looking statement. For additional information regarding some important factors that could cause actual results to differ materially from those expressed in these forward-looking statements and other risks and uncertainties, and the assumptions underlying the forward-looking statements, you are encouraged to read “Item 3. Key Information - Risk Factors,” “Item 5 Operating and Financial Review and Prospects (Management’s Discussion & Analysis)” and statements located elsewhere in the Company’s annual report on Form 20-F for the year ended December 31, 2020 and the other statements and factors contained in the Company’s filings with the Canadian securities regulators and the US Securities and Exchange Commission. Each of the forward-looking statements speaks only as of the date of this MD&A. The Company will not update these statements unless applicable securities laws require it to do so.

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