AVA RISK GROUP LIMITED — Investor Presentation 2021

Sep 13, 2021

ASX RELEASE

14 September 2021

ASX Small and Mid-Cap Conference Presentation

Ava Risk Group Limited (ASX: AVA) announces that CEO Rob Broomfield is presenting in the on-demand segment of the ASX Small and Mid-Cap conference which starts today.

A copy of the presentation can be found on the next page and the recording is available through registration via the following link: https://www2.asx.com.au/investors/investment-tools-and-resources/events/smid

ENDS

Approved for release by the Board of Directors.

Investor Enquiries:

Vanessa Beresford, Citadel-MAGNUS, T: +61 451 422 892, E: vberesford@citadelmagnus.com

About Ava Risk Group

Ava Risk Group is a global leader in providing technologies and services to protect critical assets and infrastructure. Its Technology Division manufactures and markets ‘smart’ fibre optic sensing systems (Future Fibre Technologies) and high security access control and electronic locking products (BQT Solutions). Its Services Division provides secure logistics for high-risk valuables such as banknotes and precious metals (Ava Global Logistics). Its products and services are trusted by some of the most security conscious commercial, industrial, military and government clients in the world.

Forward Looking Statements

Information in this release is for general information purposes only. Certain statements in this document regarding the Company’s financial position, business strategy and objectives, contain forward-looking statements (rather than being based on historical or current facts) and as such, are not able to be verified.

All forward-looking statements are based on the current views of the Company’s management as well as reasonable assumptions made by, and information currently available to the Company’s management. Forward-looking statements are inherently uncertain and must be read accordingly. There can be no assurance that some or all of the underlying assumptions will prove to be valid. If assumptions are invalid this is likely to have an impact on the accuracy of the statement itself.

All data presented in this document reflects the current views of the Company with respect to future events. Forward-looking statements are subject to a variety of risks, uncertainties and assumptions relating to the operations, results of operations, growth strategy and liquidity of the Company. Forward looking statements are also subject to external matters outside the control of the Company.

To the maximum extent permitted by law, the Company, its officers, employees and agents do not assume any obligation to release any updates or revisions to the information (including any forward-looking statements) in this presentation to reflect any change to expectations or assumptions; and disclaim all responsibility and liability for any loss arising from reliance on this presentation or its content.

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Ava Risk Group (ASX: AVA) ASX Small & Mid-Cap Conference

14-15 September 2021

MARKET LEADER IN RISK MANAGEMENT SERVICES & TECHNOLOGY

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PROTECTING HIGH VALUE ASSETS AND CRITICAL INFRASTRUCTURE AROUND THE WORLD

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FY2021 REVENUE
28%
62%
10%
FY2021 EBITDA
37%
48%
15%
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AVA Global Logistics
Future Fibre Technologies
BQT Solutions
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FINANCIAL INSTITUTIONS MILITARY & GOVERNMENT | MINING | ENERGY | TRANSPORT | INDUSTRIAL & COMMERCIAL

+100 countries +2,500 systems deployed

+3,500 sites protected

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TWO DIVISIONS, THREE MISSION-CRITICAL BUSINESSES

TECHNOLOGY DIVISION

SERVICES DIVISION Global provider of secure international logistics

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Global leader in fibre optic intrusion detection systems

Leader in high security access control technology

• Access Control Readers

• • High Security Locking

• • Custom Encryption

• • Biometric Solutions

• Risk Consulting

• • Precious Metals

• Perimeter Intrusions Access Control Readers Risk Consulting

• • • • Pipeline Intrusion High Security Locking Precious Metals

• • • • Condition Monitoring Custom Encryption High Risk Valuables

• • • • Data Network Protection Biometric Solutions Banknotes

• • • • 2,500+ Systems Deployed 3,500+ Sites Partners in 100+ Countries

• • • • Products & Services Model COTS[1] & Custom Product Recurring Services Model

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1. Commercial off-the-shelf

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FY2021 FINANCIAL HIGHLIGHTS

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Group Revenue Technology Revenue Services Revenue $65.0m $24.7m $40.3m Up 41% on pcp[1] Up 17% on pcp Up 61% on pcp Group EBITDA Technology EBITDA Services EBITDA $16.0m $8.3m $7.7m Up 116% on pcp Up 64% on pcp Up 225% in pcp

Strong financial position with cash of $17.3m and no debt

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1. All figures compare 12 months to 30 June 2021 unless otherwise indicated.

DELIVERING SUSTAINABLE PROFIT GROWTH

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$65.0m
$46.1m
$31.6m
$19.8m
$16.0m
$7.4m
-$2.9m -$2.9m
FY2018 FY2019 FY2020 FY2021
Revenue EBITDA
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• FFT merger with MaxSec (BQT & Ava Global) in December 2017

• Since then, achieved strong revenue growth and positive EBITDA

• Delivered FY2021 results above original guidance (revenue of $60-64m and EBITDA of $13-15m)

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DIVESTMENT OF SERVICES DIVISION

• FFT merger with MaxSec (BQT & Ava Global) in December 2017

• Entered into Sale and Purchase Agreement on 16[th] August to divest Ava Global Logistics

• Sale price of US$46.4m (~A$63.1m) with anticipated net cash proceeds[1] of US$31.1m (~A$42.4m)

• Expected completion by the end of October 2021

• As at 30 June 2021, Ava Risk Group had circa $21.6m carried forward tax losses. Whilst these losses and their application against profits are subject to relevant tax laws, management believes that the proceeds received on the sale will be not impacted by taxation

US$0.6-1.0bn 100+ est. addressable market 587%[1] ~A$42.4m Countries Net cash investment Net cash proceeds[1] return over ~5 years

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$40.3m
$25.1m
$15.9m
$7.7m
$4.5m
$2.4m
-$0.1m
-$0.9m
FY2018 FY2019 FY2020 FY2021
Revenue EBITDA
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1. Anticipated net cash proceeds after closing adjustments, payment of management incentives and FY2021 accrued bonuses

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CAPITAL MANAGEMENT

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Capital Return to Shareholders of $39.2m (circa 16 cents per share); On-Market Buy Back of $1.0m

CAPITAL MANAGEMENT FRAMEWORK

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MANDATORY DISCRETIONARY
1. Operational working 2. Growth capital
capital - Product Development 3. Dividends 4. Surplus cash flow
- Product Dev Sustainment Innovation
- Special Dividends - Return capital to
- Inventory
- Acquisition seed fund - Circa $7m paid in FY21 shareholders
- Circa $4m
- Circa $16m
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MAXIMISE RETURN TO SHAREHOLDERS

• Post divestment of Services Division, $57.9m of cash available

• Following the completion of the divestment, Ava Risk Group is expected to hold $40.2m in excess capital

• The Board’s intention is to use the excess capital for a capital return to shareholders of $39.2m (circa 16 cents per share) and an on-market buy back of $1.0m

• Subject to the Company obtaining a favorable Class Ruling from the Australian Taxation Office, a formal proposal could be put before shareholders for approval at the AGM scheduled to be held on 28 October 2021. Depending on the results of the on-market buy back, and the surplus cash available to the Company, the amount allocated to the buy back may increase over time.

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STRATEGY & OUTLOOK

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AVA RISK GROUP POST DIVESTMENT

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• ‘Pure play’ technology company • Global Sales and Support Operations • Growth driven by increasing global security concerns and rise in connectivity • Expanding solutions and new applications 100+ Countries US$0.6-1.0bn est. addressable market1 Leader in fibre optics for intrusion detection Leader in high security access technology	Proforma numbers based on FY2021 results	Ava prior to Transaction $(000)	Ava after Transaction $(000)
	Consolidated total assets	$43,253	$72,667
	Consolidated total equity interests	$32,040	$70,815
	Consolidated revenue	$65,040	$24,700
	Consolidated EBITDA	$16,037	$8,284
	Consolidated profit before tax	$13,770	$6,695

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STRONG TRACK RECORD AND GLOBAL OPPORTUNITY

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||||
|---|---|---|
|•|Technology division FY21 revenue of $24.7m, up 17% vs pcp despite COVID-19 challenges|
|•|High margins and ongoing cost discipline, strong cash generation, and surplus cash for investment and return|
|to investors|
|TRACK RECORD OF|
|GROWTH AND RESULTS|•|Global footprint with thousands of products installed in more than 70 countries|
|•|Blue chip customer base, with significant long term recurring revenue potential|
|•|Expanding application markets beyond security into condition monitoring through low CAPEX partner|
|programs, OEM|[1]|, and technology licencing and extended support services|
|HIGHLY SCALABLE|•|Efficient, scalable go-to-market strategies which include key distributor partners in Europe and the US|
|MODEL|(dormakaba and Assa Abloy)|
|•|Highly defensible competitive position, breadth of product range, TCO and performance advantages,|
|investments in innovation including AI and Machine Learning, Australian made|
|•|Experienced leadership team with broad global industry knowledge and deep market domain expertise|
|STRONG COMPETITIVE|•|Customer-centric focus on product and services development provides high performance, customised, flexible,|
|ADVANTAGES|and scalable solutions|
|•|Well-placed to become a global leader in smart digitisation for security and asset protection|
|•|Global smart cities market spend on technology expected to reach US$327bn by 2025, growing at a CAGR of|
|22.7% from $96bn in 2019|[2]|.|
|GLOBAL OPPORTUNITY|

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1. Original Equipment manufacturer 2. Source: Frost & Sullivan

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AURA AI: NEW APPLICATION FOR TECHNOLOGY

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• Using real-time data to enhance asset management, improve reliability and introduce new predictive capabilities to an expanding set of large market opportunities, including Smart Cities of the future

• Built on FFT’s latest advanced optical designs and signal processing algorithms to detect, classify and report ‘real’ threats

• Extending into adjacent markets including monitoring of conveyor belt, roads, rail lines and sub-sea power cables

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Buried Pipeline High security
Perimeter
intrusion access control
intrusion
readers and locking
Conveyor belt
monitoring
Data fibre
Rail threat
protection, detection
manhole cover
Boat activity & anchor removal.
drops near sub-sea
Road monitoring
power cables
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GROWTH INITIATIVES

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To be a global leader in actionable, intelligent data streams that protect and optimise critical assets

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LEVERAGE LEVERAGE
GROW RECURRING
PARTNERSHIPS SCALABLE MODEL
REVENUE
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• Licence technology for low cost and high margin access into new markets (similar to IMoD)

• Leverage BQT distribution partnerships with dormakaba and Assa Abloy

• Convert Aura IQ conveyor health monitoring POVs into sales ($50M+ opportunity)

  • Leverage existing install base of 2,500 customers for upgrades and extensions

• Leverage existing install base of 2,500 customers for support contracts .

• Extend FFT partnerships into the global power cable sensing market

• Extend solutions capability and fit to address adjacent market segments

• Leverage Aura AI technology and partnerships into new applications and verticals

• Expand comprehensive maintenance products with remote monitoring, and AI upgrade solutions

• Operating leverage from both cost discipline and economy of scale

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OUTLOOK

Strong uplift in Q1 FY2022 orders, continuing the momentum of Q4 FY2021 and building on the $4.3m FY2021 backlog

Leverage strong base to grow and close the existing projects sales opportunity pipeline

Drive BQT sales through key distributor partners in the US and Europe

Convert Aura-IQ POV trials to generate SaaS revenue , and expand the solution with additional sensing capabilities

Expansion of sales capacity and revenues in the US

Grow FFT long term contracts and recurring revenue from technology licencing agreements and multi-year support contracts

Expand solution fit and partner programs to enter and expand in new and growing markets: power cable, transport & Smart Cities

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INVESTOR ENQUIRIES vberesford@citadelmagnus.com | +61 451 422 892

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FORWARD LOOKING STATEMENTS

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This presentation is given on behalf of Ava Risk Group Limited (AVA)

Information in this presentation is for general information purposes only, and is not an offer or invitation for subscription, purchase, or recommendation of securities in AVA. Certain statements in this document regarding the Company’s financial position, businessstrategy and objectives may contain forward-looking statements (rather than being based on historical or current facts).

Any forward-looking statements are based on the current beliefs of the Company’s management as well as assumptions made by, and information currently available to, the Company’s management. Forward-looking statements are inherently uncertain and must be read accordingly. There can be no assurance that the underlying assumptions will prove to be valid.

All data presented in this document reflects the current views of the Company with respect to future events. Forward-looking statements are subject to risks, uncertainties and assumptions relating to the operations, results of operations, growth strategy and liquidity of the Company. To the maximum extent permitted by law, the Company, its officers, employees and agents do not assume any obligation to release any updates or revisions to the information (including any forward-looking statements) in this presentation to reflect any change to expectations or assumptions and disclaim all responsibility and liability for any loss arising from reliance on this presentation or its content.

ASX Small and Mid-Cap Conference | September 2021

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