COSOL LIMITED — Interim / Quarterly Report 2021

Mar 10, 2021

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An Introduction and Half Year Results FY’21 Euroz Hartleys Annual Conference – March 2021

2

Important Notices & Disclaimer

USE OF THIS DOCUMENT

You must read the following notices before reading or making any use of this document or any information contained in this document. By continuing to read, use or otherwise act on this document, you agree to be bound by the following terms and conditions, including any modifications to them, and make or give the acknowledgements, representations or warranties (as applicable).

This presentation is provided for information purposes only. The information in this presentation is in a summary form, does not purport to be complete and is not intended to be relied upon as advice to investors or other persons. The information contained in this presentation was prepared by COSOL Limited (COSOL) as of its date, and remains subject to change without notice. This presentation has been provided to you solely for the purpose of giving you background information about COSOL.

This presentation should be read in conjunction with COSOL's other periodic and continuous disclosure announcements lodged with ASX, including COSOL’s Annual Report for the financial year ended 30 June 2020.

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

This document is not to be distributed or released in the United States.

FORWARD-LOOKING STATEMENTS

This presentation may include forward-looking statements. Such statements can generally be identified by the use of words such as 'may', 'will', 'expect', 'intend', 'plan', 'estimate', 'anticipate', 'believe', 'continue', 'objectives', 'outlook', 'guidance‘, ‘forecast’ and similar expressions. Indications of plans, strategies, management objectives, sales and financial performance are also forward-looking statements.

Such statements are not guarantees of future performance, and involve known and unknown risks, uncertainties, assumptions, contingencies and other factors, many of which are outside the control of COSOL. No representation is made or will be made that any forward-looking statements will be achieved or will prove to be correct. Actual results, performance, operations or achievements may vary materially from any forward-looking statements. Circumstances may change and the contents of this presentation may become outdated as a result. Readers are cautioned not to place undue reliance on forward-looking statements and COSOL assumes no obligation to update such statements.

No representation or warranty, expressed or implied, is made as to the accuracy, reliability, adequacy or completeness of the information contained in this presentation.

PAST PERFORMANCE

Past performance information given in this presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance.

NOT FINANCIAL PRODUCT ADVICE OR OFFER OF SECURITIES

This presentation is not, and is not intended to constitute, financial advice, or an offer or an invitation, solicitation or recommendation to acquire or sell COSOL shares or any other financial products in any jurisdiction and is not a prospectus, product disclosure statement, disclosure document or other offering document under Australian law or any other law. This presentation also does not form the basis of any contract or commitment to sell or apply for securities in COSOL or any of its subsidiaries. It is for information purposes only.

COSOL does not warrant or represent that the information in this presentation is free from errors, omissions or misrepresentations or is suitable for your intended use. The information contained in this presentation has been prepared without taking account of any person’s investment objectives, financial situation or particular needs and nothing contained in this presentation constitutes investment, legal, tax or other advice. The information provided in this presentation may not be suitable for your specific needs and should not be relied up on by you in substitution of you obtaining independent advice. Subject to any terms implied by law and which cannot be excluded, COSOL accepts no responsibility for any loss, damage, cost or expense (whether direct, or indirect, consequential, exceptional or special damages including but not limited to loss of revenue, profits, time, goodwill, data, anticipated savings, opportunity, business reputation, future reputation, production or profit, any delay costs, economic loss or damage) incurred by you as a result of any error, omission or misrepresentation in this presentation.

PRESENTATION OF INFORMATION

All currency amounts in this presentation are in Australian dollars unless otherwise stated. "FY" refers to the full year to 30 June. Amounts in this document have been rounded and any differences between this document and COSOL's financial statements are due to rounding.

AUTHORISATION

This presentation is dated 11 March 2021, and was authorised for release by the Board of COSOL.

For more information, please contact: Mr Ben Buckley, T +61 409 405 550, E ben.buckley@cosol.com.au

COSOL Limited ABN 66 635 371 363 Level 3, 201 Leichhardt Street, Spring Hill QLD 4000

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DATA
MAINTENANCE
DATA
MONITORING
DATA
ANALYTICS
DATA
MANAGEMENT
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DATA
INSIGHTS
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Company Overview

COSOL is a global provider of proprietary digital solutions to asset intensive industries. We drive quantifiable business improvements through the enhanced use of data and data analytics.

People 134 Clients 68 Share Price $0.64 Market Cap $84M

Locations: Australia Brisbane North America Denver

As at 8 March 2021

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Our Board

The COSOL Limited Board of Directors have a strong cross section of skills and a proven track record in growing IT and digital businesses and returning value to shareholders and stakeholders.

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Geoffrey Lewis Non-Executive Chairman

Founder of ASG Group Ltd (ASG) an IT services company which listed on the ASX in 2003. ASG was acquired by the Nomura Research Institute for approx. $350m in December 2016. Geoff was Managing Director & CEO of ASG from 1996 – 2019.

Stephen Johnston Non-Executive Director

Founder and major shareholder of

DSL Packaging Pty Ltd (DSL) a privately-owned industrial packaging company. DSL was acquired by Schutz GmBh in December 2011 for $120m. NonExecutive Director of ASG from 2003 – 2010, and 2013 – 2016.

Gerald Strautins

Independent Non-Executive Director

Senior Executive (Strategy and M&A) for ASG from 2010 to 2017. Extensive executive, M&A,

consulting, program and business management experience. Completed over $500m in M&A transactions

Grant Pestell LLB

Independent Non-Executive Director

Founding Director of Law firm, Murcia Pestell Hillard.

Recognised by Lawyer Monthly magazine as one of the global 250 leading lawyers in 2014. NonExecutive Director of ASG from 2014 to 2016.

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Our Management Team

The COSOL Management Team have extensive industry experience coupled with a broad set of commercial and management skills with several leading domestic and international companies.

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Ben Buckley Managing Director, COSOL Limited

Scott McGowan

Chief Executive Officer, COSOL Australia

Max Rogers Chief Executive Officer, AddOns Inc.

Andrew McVinish Chief Financial Officer, COSOL Limited

Ben has over 30 years of commercial management and director experience and has held senior roles including CEO, COO and Marketing Director roles with major companies in Australia and internationally.

Scott has held executive roles in global companies including Head of Natural Resources for Wipro Technologies and Associate Partner Business Analytics and Optimisation for IBM.

Founder of AddOns Inc., and veteran entrepreneur and leader with a track record of growing successful businesses.

Andrew has over 20 years experience in advising businesses on financial management, compliance and strategy. Andrew was formerly an Associate Partner in Business Advisory at Findex.

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Our Story

Whilst COSOL Limited was born on the ASX in January 2020, its operating entities have been established leaders in their field for over 20 years.

COSOL Australia was established as a business focused on asset intensive industries including energy, utilities, defence, mining & mineral processing with a focus on Enterprise Asset Management software platforms and specialising in data management to drive business improvements. 2000

COSOL Limited listed on the Australian Securities Exchange after raising $12million. Successfully acquired COSOL Australia Pty Ltd on 16 January 2020.

January 2020

Successfully acquired AddOns Inc on 15 October 2020. AddOns is a Denver Colorado USA based managed services IT and professional services organisation with a portfolio of propriety digital IP used to support 85% of the North American installed based of ABB Ellipse Asset Management clients. It has been in operation for 20 years.

October 2020

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December 2019

COSOL Limited formed.

August 2020

Exceeded the financial performance forecast in its IPO prospectus and was above the profit guidance.

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Our Market

Our point of view on digital transformation

• We believe that digital transformation is now well underway, and every Board is, and should be, worried about how to become a truly digital enterprise.

• For organisations to succeed, Data must be treated as a mission critical Asset; Enterprise Data Asset Management (EDAM) is the single biggest success factor in a digital transformation journey, and most organisations are ill prepared due to many islands of disconnected data that is of unknown and/or poor quality.

• Ultimately, Enterprise Data is the fact base that keeps your customers, your employees and your value chain partners connected and informed to deliver to your customer expectations and to achieve your financial goals.

• Strong Enterprise Data foundations will be required to enable adoption of digital solutions including advanced analytics, robotic process automation, machine learning and artificial intelligence which are the next frontiers to productivity and market competitiveness.

• There will be the haves and the have nots, the winners and the losers – if you are not investing in Enterprise Data Asset Management to feed your Digital Hub/Digital Operations Centre, then you are not investing in your future.

The addressable market is large and growing significantly

• The global EAM market stood at USD 5.5 billion in 2019 and is expected to grow at a compound annual growth rate CAGR of 17% during the period 2020 – 2030, with its market size predicted to reach USD 25.9 billion. Key drivers underpinning the predicted growth include:

• The strong focus on the best utilisation of assets,

• Growing need to reduce maintenance and procurement expenses,

• Digitalisation in industries resulting in increased market competitiveness,

• The increasing preference globally for cloudbased/Software as a Service (SaaS) solutions, and

• Growing internet penetration through the Internet of Things (IOT)

• Historically the North American EAM market has been dominant. Major factors for this have been regulatory requirements, a strong presence of EAM vendors, and the investment by private & public organisations in the better management and exploitation of their asset base.

• However, the Asia-Pacific (APAC) region is forecast to be the fastest growing geographic market. The key drivers for this growth, particularly in an Australian context, are the fact that large business operations and utilities are asset intensive and that organisations are adopting, and continuing to refine, their use of EAM solutions.

Global EAM market is predicted to reach

$25.9B USD by 2030

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Our Services and Solutions

COSOL is the largest Ellipse ABB enterprise software managed service provider in Asia Pacific and North America and in addition, maintains networks, relationships and capabilities with industry-recognised solution providers such as SAP, IFS, Microsoft and major System Integrators such as IBM, Accenture, DXC, Delloitte and EY.

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Market Digital Products Delivery Specific Services
Segments & Solutions Practices and Solutions
Hitachi ABB Digital Enterprise Solutions
Enterprise Asset
IFS Enterprise Asset Management Implementations, Upgrades, Support
Management Services
SAP Enterprise Asset Management
Evergreen
RP Connect Data Management Advisory, Quality Assessments, Migrations, Legacy Data Management
Copernicus
Enterprise Data Asset Add Ons
Data Driven Business Improvement Process Improvement, Change Management, Training, ICT Benchmarking
Management Services
Data Driven Digitalisation Advanced Analytics, Automation, Artificial Intelligence
Service Management - Applications EAM and non-EAM Application Management Services
Managed Services
Service Management - Infrastructure Desktop, Datacentre, Telecommunication and Cloud Management Services
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Our Clients

COSOL works with some of the world’s leading companies in their sectors

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Asia Pacific

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North America

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6

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Our Promise to Customers – an example

COSOL delivered an award-winning data migration project for CleanCo, Queensland’s clean energy provider, utilising its Proprietary Digital Solution RPConnect® and proprietary services and proving our capability to deliver SAP to S4 data migration, unlocking significant market potential.

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“We trusted COSOL to get this unusually complex project delivered, and have been consistently pleased throughout to see you continue to deliver every step of the way. I am certain that CleanCo’s journey to migrate our data from Stanwell and CS Energy would have been more stressful without COSOL.”

Graham Yerbury General Manager – Performance, Risk & Finance

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DATA
MAINTENANCE
DATA
MONITORING
DATA
ANALYTICS
DATA
INSIGHTS
DATA
MANAGEMENT
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COSOL Limited Half Year FY’21 Financial Results

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COSOL Limited Half Year Financial Highlights

We are achieving on our strategy - 1st half results have shown strong growth across all operating entities and have exceeded guidance provided at last year's AGM and in its first 12 months will pay a fully franked interim dividend of 0.5 cents per share.

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Revenue growth 45.4% on pcp
Group
EBIT growth of 32% on pcp
Results
NPAT growth of 36% on pcp
Revenue = $15.6m
EBIT = $2.56m
NPAT = $1.85m Group EBIT margin = 16%
Dividend = 0.5 cents
/share fully franked Strong Balance Sheet - Cash balance of $9.3m and net debt of $960k
Basic EPS = 1.43 cents per share
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• Comprises: Cash $9.36m, less Client Advances $3.65m, less Term Loans $2.75m, less Deferred consideration (cash component) $3.92m = Net Debt $960k

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H1 FY’21 Financial Performance

Strong financial performance continued in H1 FY’21 – N.B. H1FY'20 Group results are proforma

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Group Revenue Growth of 45.4%
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$15,654,936
$10,766,871
$5,820,639
HY 2019 HY 2020 HY 2021
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Earnings Before Interest & Tax up 32% Net Profit After Tax up 36%

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$1,845,132
$2,564,503
$1,361,630
$1,940,935
$899,404
$1,247,901
HY 2019 HY 2020 HY 2021 HY 2019 HY 2020 HY 2021
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Earnings Per Share (cps)
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1.43
1.07
HY 2020 HY 2021
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H1 FY’21 Financial Performance

		Proforma
	Change %		$000's
Total Revenue	Up	45.4%	$15,655
Gross Profit			$5,698
Gross Profit Margin			36.4%
EBITDA			$2,834
EBITDA Margin			18.1%
Depreciation & Amortisation			-$269
EBIT	Up	32.0%	$2,565
EBIT Margin			16.4%
Finance costs			-$47
NPBT	Up	30.6%	$2,518
Tax			-$673
NPAT	Up	35.3%	$1,845
EPS (cents)			1.43
Dividend (cents)			0.50

• Exceeded Revenue guidance of $15.25m- $15.5m

• AddOns consolidated from 1 Sept 20 with Revenue $3m & EBIT $544k

• Expensed costs associated with AddOns acquisition - $60k

• Software product development costs of $600K expensed

• Share based payment expense of $218K

• The group was not eligible for Jobkeeper, received no financial assistance from this scheme

• EBIT margin of 16.4% compared with guidance of 16%

• Declared interim fully franked dividend

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Organic Growth – COSOL Australia

Cosol Australia continues to operate strongly and has achieved Revenue and EBIT growth above guidance targets

	H1 FY20	H1 FY21	Growth %
Revenue	10,398,623	12,666,756	22%
Cost of sales	6,923,515	8,458,052
Gross Profit	3,843,356	4,208,704
Overhead Expenses	1,409,103	1,607,329
Other Income / (Expenses)	(53,927)	(29,092)
EBIT	2,012,078	2,572,283	28%
EBIT%	19.3%	20.3%

• COSOL Aust Organic Revenue growth of 22% exceeded guidance of 20% on pcp

• COSOL Aust EBIT growth of 28% which also exceeded guidance of 25% on pcp

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Revenue Segments

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Revenue by Geography
Revenue by Sector
Revenue by Service
Government
Public Other
Managed Infrastructure
Services 9% International
7% Income
Product & Utilities
33%
Product
Support Services Defence
24% 36% 21%
Mining
36%
Profesional
Services
33%
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Domestic
Income
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NB: Only includes AddOns Inc. for 4 months

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1st Half Operating Highlights

During the six months to December, we expanded our IP and proprietary digital solutions which enabled major client wins and through the acquisition of AddOns Inc in October created a platform for expansion and deployment into North America.

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• RPConnect® ECC SAP to S4 enabled (& proven)

• RPConnect® - certified on the “protected cloud” – can now operate in highly secure environments

• Evergreen – Allows more efficient management of your Ellipse EAM upgrade

• Department of Defence

• Urban Utilities

• Ok Tedi Mining

• CleanCo

• With AddOns COSOL is now the largest HAPG Enterprise Software service provider globally

• “Follow the sun” capability for Clients globally

• AddOns acquisition provides a platform for future acquisitions in North America

• Copernicus - out of the box preconfigured EAM mining solution

• Established Global business solution capability

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Looking ahead

We are optimistic about H2 FY’21 and confident we have an extended platform to operate from and a more expansive product offering to take to the market. H2 Revenue growth is expected to be 23-25% above H1 FY’21.

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Digital Solutions Led
Strong Pipeline OneCOSOL Acquisition Strategy
Engagement
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• High % contracted and committed revenue

• Product sales and proprietary digital solutions contributing to highly profitable engagements

• Growth opportunities coming from within existing client base

• RPConnect® continues to position COSOL as a sole source provider

• Significant cross sell/up-sell opportunities have been identified through the Addons acquisition

• Evergreen provides COSOL with a competitive advantage in the EAM Managed Services market

• Established global strategic sales team to drive large scale • Copernicus enables COSOL an deal outcomes across multiple first mover advantage by territories lowering the barrier to entry

• OneCOSOL brand launch March 2021

• Centralised solution & business development function enabling cross sell / upsell across geographies

• Centralised shared service capability driving cost synergies

• Clear targets identified that are synergistic businesses which focus on:

• IP and product

• Industry relevance

• Sector Prominence

• Geography

• Capability

• Earnings accretive

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Thankyou