AUDINATE GROUP LIMITED — AGM Information 2017

Oct 26, 2017

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Im ortant notice and disclaimer p

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presentation. The non-IFRS information has not been subject to audit or review by Audinate's external auditor. The non-IFRS measures do not have any standard definition under IFRS and may be calculated differently by other companies.

Past performance

Disclaimer

To the maximum extent permitted by law, none Past performance information, including past of the Audinate Group Limited or its share price information, given in this subsidiaries or their directors, employees or presentation is given for illustrative purposes agents accepts any liability, including, without only and should not be relied upon as an limitation, any liability arising out of fault or indication of future performance. negligence, for any loss arising from the use of the information contained in this presentation. Future performance In particular, no representation or warranty, express or implied, is given as to the accuracy, Forward-looking statements, opinions and completeness or correctness, likelihood of estimates provided in this presentation are achievement of reasonableness of any based on assumptions and contingencies which forecasts, prospects, statements or returns are subject to change without notice, as are contained in this presentation. Such forecasts, statements about market and industry trends, prospects, statements or returns are by their which are based on interpretations of current market conditions. nature subject to significant uncertainties and contingencies. Actual future events may vary Financial information from those included in this presentation.

Market share information

All market share information in this presentation Forward-looking statements, opinions and is based on management estimates and estimates provided in this presentation are internally available information, unless based on assumptions and contingencies which otherwise indicated. are subject to change without notice, as are statements about market and industry trends, No offer of securities which are based on interpretations of current market conditions. Nothing in this presentation should be

Nothing in this presentation should be construed as either an offer to sell or a solicitation of an offer to buy or sell Audinate securities in any jurisdiction.

Certain financial data included in this presentation is 'non IFRS financial information.' These measures are used internally by management to assess the performance of the business and make decisions on the allocation of resources and are included in this presentation to provide greater understanding of the underlying financial performance of the Group's operations. When reviewing business performance, this non-IFRS information should be used in addition to, and not as a replacement of, measures prepared in accordance with IFRS. Readers are cautioned not to place undue reliance on any non-IFRS financial information and ratios included in this

Summary information

Reliance on third party information

This presentation is for information purposes only is not a recommendation or advice in relation to Audinate or any product or service offered by Audinate or any of its subsidiaries. The information in the presentation is of a general nature only and is not intended to be relied upon as advice to investors or potential investors.

The views expressed in this presentation contain information that has been derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. This presentation should not be relied upon as a recommendation or forecast by Audinate.

Currency

All amounts in this presentation are in Australian dollars unless otherwise stated.

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Annual General Meeting
2017
David Krall
Chairman of the Board
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Agenda

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Welcome

Chairman’s Address CEO’s Presentation Formal Business

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Board of Directors

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David Krall Lee Ellison Chairman of the Board Chief Executive Officer

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John Dyson - Non Executive Director

Alison Ledger - Non Executive Director

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Tim Finlayson Non-Executive Director

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Roger Price - Non Executive Director

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Highlights: Listing on the Australian Stock Exchange

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• ASX Listing: 30 June, 2017 (“AD8”)

• $21,000,000 capital raise

• $14.0M primary capital

• $7.0M secondary capital

• Market cap of $120M*

  • *(as of 24 October, 2017)

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Stadiums Churches Parliament Education Concerts & Theatre

Conference Casinos Rooms Hotels Transport

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Cruise Ships
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Leading the digital transformation of the AV industry

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Audinate Customers
products (OEM Brands)
Chips
Modules
Cards
Software
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OEM Products

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Audinate is the dominant global supplier of digital audio networking

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• Audinate is the leading supplier of digital audio networking for the Professional AV industry

• Audinate’s market leading Dante networking has been adopted by over 380 OEM brands

• More than 5x OEM products available on the market than any other competitor

• High gross margins of 75%, reflecting strong product differentiation and market leadership

The Dante platform is used in thousands of installations for professional AV verticals globally

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Sydney Trains- Sydney, Australia

Financial highlights – FY17

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30%
growth in
revenue to
USD 11.3M
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$0.8M
statutory
EBITDA
compared to
$0.1M loss
pcp
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$0.3M
better than
prospectus
forecast pro
forma with
EBITDA loss
of ($0.4M)
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$1.2M
in positive
operating
cashflow
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$14M
in primary
capital raised
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*Statutory EBITDA excludes the one-off impact of IPO costs and for conversion of preference shares

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Melbourne Convention Centre- Melbourne, Australia

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Lee Ellison
Chief Executive Officer
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Benefits of Dante

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Analogue signal distribution

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Rapid product development

Commercially supported, turnkey solution for OEMs, with unsurpassed networking expertise

Plug and play

Auto discovery with one-click routing and stored network configuration

Simplified connection management

Simple, logical user interface, easy to scale, real-time network monitoring

Interoperability

Interoperability between all Dante-enabled devices regardless of the manufacturer

Product ecosystem

Large number of available Dante-enabled devices, interoperability, and support services

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Dante signal distribution
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Operational highlights – FY17

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35%
growth in
Dante-
enabled
products
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48%
growth in
hardware
units shipped
to 180k
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369
OEM brands
adopted
Dante
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Dante
Broadway
and Dante
Adaptors
launched
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39,000
online
certification
courses
delivered
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Westfield Mall Shopping Centre- London, England

Strong growth in revenue and units shipped

Revenue (USD$M)

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$12 11.3 100%
90%
$1.6
$10
80%
8.7
70%
$8 $1.3
6.7 60%
6.0
$6 $1.2 50%
$1.2
$9.7 40%
$4
$7.4 30%
$5.5
$4.8 20%
$2
10%
$- 0%
FY14 FY15 FY16 FY17
Chips, Cards, Modules Other Gross Margin
Millions
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• 30% USD revenue growth in FY17

• 4% better than FY17 forecast

• Audinate bills customers & pays COGS in USD

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Dante units shipped Chips Modules and Cards

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200
180.7
180
160
140
121.9
120
100
80 73.1
60
43.1
40
20
0
FY14 FY15 FY16 FY17
Thousands
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• 48% growth in units shipped in FY17

• 5% better than FY17 forecast

• 70% growth in Ultimo, ~ 30% growth in Brooklyn

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Leveraging the network effect

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Total Dante-enabled products available

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1,400
1232
1182
1,200
1077
973
1,000 925
874
771
800
681
633
600 553
383
400 348
319
223
181
200
0
1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
Note: per calendar quarter
Number of Dante-enabled products
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Consistent growth in number of Dante-enabled products available in the market

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Increasing customer adoption: Pipeline for growth

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Total customers and customers with Dante-enabled products available

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Customers with Dante-enabled products available Total customers 383
346
258
189 180 185
170
153 160
144
120 129
106 109
93
64 73 80
52
44
4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
Note: per calendar quarter
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• Audinate has grown to 383 OEM customer brands as at 30 September 2017

• 185 OEM brands have announced products in the market

• Number of customers with Dante-enabled products available lags total customers due to OEM product development cycle

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Marketing initiatives – FY18

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• Work closely with OEM partners to increase penetration, and expand the Dante ecosystem to take advantage of the network effect

• Drive market awareness and increase adoption of Dante among consultants, system integrators, and end customers

• Expand sales, marketing and customer service to support new product introductions which leverage the existing installed base

• Continued education training programs on the benefits of Dante

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Foo Fighters World Tour

Operational initiatives – FY18

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• Investing in new product development initiatives to double the addressable market size

• Introduce Dante Domain Manager software platform offering a suite of services to better manage, control and secure Dante-enabled networks

• Launch cost-effective adapters to increase proliferation Dante enabled endpoints

• Prototype IP video distribution solution to displace HDMI cables to enable the “V to AV”

• Improve operational efficiencies by investing in back-end systems

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Indian Wells Tennis Center- Indian Wells, California

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Dante Domain Manager™

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SECURITY

SCALABILITY

VISIBILITY

• Usernames/passwords identify users

• Roles control access to the system

• Create Dante systems spanning campus networks

• Group Dante devices into logical managed systems

• Centralise Dante system management

• Monitor system status and changes from anywhere

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Complete network management for Dante systems

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Dante Domain Manager opportunity

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Dante Domain Manager is

• A software product

• A system management tool

• For system integrators and end users

• Sold into Dante installations

Builds upon the OEM product ecosystem

• Addresses customers felt needs

• Additive revenue opportunity

• New channel

• Complements existing OEM offerings

Opens the way for future software and service offerings

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Revenue

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Revenue (AUD $M) FY17 Revenue by region
$20
18.6
$18
$16 15.1
$14
11.9
$12
Asia, 33% Americas,
$10 Forecast
8.0 38%
Actual
$8 6.5
$6
$4
EMEA, 29%
$2
$-
FY14 FY15 FY16 FY17 FY18
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• Audinate bills its customers in USD, therefore revenue is sensitive to FX fluctuations

• Consistent record of strong revenue growth, with FX impact evident in FY16

• Diversified global customer base, with no significant geographic concentration

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Forecast – FY18

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A$('000) Forecast	A$('000) Forecast
Year Ended 30 June	FY18
Sales Revenue	18,552
COGS	(4,428)
Gross Profit	14,125
Employee related costs	(10,342)
Marketing expense	(2,006)
Admin and other operating expenses	(2,965)
Total operating expenses	(15,313)
EBITDA	(1,188)

• FY18 prospectus forecast was calculated using an AUD/USD exchange rate of 77c. The sensitivity to changes in exchange rates is summarised in the table below (per page 79 of the prospectus)

A$('000)		FY18 EBITDA	FY18 EBITDA	FY18	NPAT
Assumption	Variance	Negative	Positive	Negative	Positive
Foreign exchange rate (AUD/USD)	-/+ 1c	105	(102)	104	(101)
Foreign exchange rate (AUD/USD)	-/+ 5c	554	(486)	549	(482)

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Summary

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Global market leader

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Dominant position as global leader in audio networking Five times the market adoption of its closest competitor

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Attractive financial profile

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High gross margins supported by strong IP Revenue growth supported by repeat product orders

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Innovative products

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Strong portfolio of intellectual property developed in Australia Significant continued investment in R&D

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Significant market opportunity

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AV market currently in the early stages of transformation to digital networking Audinate is perfectly positioned to capitalise on market growth and increased penetration

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Strong customer base

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Existing customer base includes leading global AV equipment companies Customer base is broad and expanding

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Experienced management team

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Stable executive team with extensive industry experience

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Built Audinate into a sustainable market leadership position

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Meeting close

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Thank you for joining us today and your continuing support of the Company.

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