CVC LIMITED — Investor Presentation 2018

Aug 29, 2018

FINANCIAL RESULTS

YEAR ENDED 30 JUNE 2018

INVESTOR PRESENTATION

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May 2018

[ CVC Limited | 2018 Investor Presentation ]

Disclaimer

Important Notice

This Presentation (Presentation) has been prepared and issued by CVC Limited ACN 002 700 361 (CVC).

This Presentation must not be copied or distributed to other persons without the prior written consent of CVC, which may be given or withheld in its absolute discretion.

Financial amounts

All dollar values are in Australian Dollars (A$) and financial data is presented as at the date of this presentation unless stated otherwise. CVC’s results are reported under Australian International Financial Reporting Standards, or AIFRS.

Future performance

This document is not a prospectus and does not contain all of the information which would be required to be disclosed in a prospectus.

Summary Information

The information contained in this Presentation is of a general nature and in summary form. Neither CVC (nor any of its respective officers, employees, related bodies corporate, affiliates, agents or advisers) guarantees or makes any representation or warranty, express or implied, as to, or takes responsibility for, the accuracy, or reliability of the information contained in this document. CVC does not represent or warrant that this document is complete or that it contains all material information about CVC or which a prospective investor or purchaser may require in evaluating a possible investment in CVC or acquisition of CVC shares.

It is not intended to be relied upon as advice to investors or potential investors, and does not contain all information relevant or necessary for an investment decision or that would be required in a prospectus prepared in accordance with the Corporations Act.

Statements in this Presentation are made only as of the date of this Presentation unless otherwise stated and information in this Presentation remains subject to change without notice.

Not an Offer

This Presentation is not a prospectus, disclosure document, product disclosure statement or other offering document under Australian law and does not constitute an invitation to subscribe for or buy any shares in CVC, including in any jurisdiction in which it would be unlawful, or a solicitation to engage in or refrain from engaging in any transaction.

Not investment advice or a recommendation

This Presentation does not constitute investment or financial product advice, nor is it a recommendation to acquire shares in CVC. It is not intended to be used as the basis for making a financial decision, nor is it intended to constitute legal, tax, accounting or other advice. In particular, this Presentation is not intended to be relied upon as advice to any person and does not take into account the financial situation, objectives or needs of any person. This Presentation may not be relied on to make an investment or other financial decision, and you should make your own assessment and take independent professional advice in relation to the information, before making any investment decision in relation to CVC.

This Presentation contains certain ‘forward looking statements’ including statements regarding or based on CVC’s current belief, intent, assumptions or expectations with respect to the financial condition and performance, results and operations, business plans and objectives or management, capital adequacy, risk management practices and specific or general provisions.

Forward looking statements can generally be identified by the use of forward looking words such as ‘anticipate’, ‘believe’, ‘expect’, ‘project’, ‘forecast’, ‘estimate’, ‘likely’, ‘intend’, ‘should’, ‘will’, ‘could’, ‘may’, ‘target’, ‘plan’ and other similar expressions within the meaning of securities laws of applicable jurisdictions. Indications of, and guidance or outlook on future earnings, distributions or financial position or performance are also forward looking statements. The forward looking statements contained in this Presentation involve known and unknown risks and uncertainties and other factors, many of which are beyond the control of CVC, and may involve significant elements of subjective judgement and assumptions as to future events which may or may not be correct.

There can be no assurance that actual outcomes will not differ materially from these forward-looking statements.

Disclaimer

No party other than CVC has authorised or caused the issue, lodgement, submission, dispatch or provision of this Presentation, or takes any responsibility for, or makes or purports to make any statements, representations or undertakings in this Presentation. Any information or representations not contained in this Presentation may not be relied upon as having been authorised by CVC.

Nothing contained in this document nor any information made available to you is, or shall be relied upon as, a promise, representation, warranty or guarantee, whether as to the past, present or future. Past performance information given in this document is given for illustrative purposes only and should not be relied upon as (and is not) any indication of future performance.

To the maximum extent permitted by law, CVC, officers, employees, agents and advisers disclaim all liability for any expenses, losses, damages or costs incurred by you as a result of this presentation being inaccurate or due to information being omitted from this Presentation, whether by way of negligence or otherwise, make no representation or warranty, express or implied, as to the currency, accuracy, reliability or completeness of the information in this Presentation.

The information in this Presentation remains subject to change without notice.

[ CVC Limited | 2018 Investor Presentation ]

2

CVC Result Highlights

1 July 2017 – 30 June 2018

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$22.7M $0.15 $1.71 $1.00 $68.5M $65.2M
UNRECOGNISED
NPAT DIVIDEND STATUTORY NTA NET CASH REVENUE
NTA PRE-TAX
to shareholders 100% franked Per Share (Cash of $71.1M less at
UPLIFT [1] call debt of $2.6M)
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1. Refer commentary on slide 13 for further information.

[ CVC Limited | 2018 Investor Presentation ]

3

CVC Result Highlights

1 July 2017 – 30 June 2018

• Underlying FY18 NPAT of $27.1 million

• FY18 NPAT to shareholders of $22.7 million

• FY18 Dividends of 15 cents per share / Final Dividend 8 cents per share

• Overriding 5 year strategic plan is to build and develop underlying recurrent profitability to de-couple share price from NTA and significantly increase shareholder value. Substantial balance sheet strength, underlying property portfolio, refreshed investment base, enhancements to management team, deal flow, and investment management capabilities place us in an ideal position to execute the plan.

• Completed $60 million note raising at BBSW + 3.75% (equivalent to a current underlying rate of 5.87% per annum), with 5 year exercise price of $3.40. Objective to deploy proceeds during H1 FY19 at > 5% margin spread. A significant milestone for CVC’s corporate history

• Strong balance sheet with Net Tangible Assets of $206.2 million including net cash of $68.5 million[1] . Unrecognised pre-tax NTA uplift of approximately $1.00 per share of projects at current estimates.

• Significantly increased value of property portfolio with improved terms for Marsden Park / Mirvac PDA and progress on construction, planning and commercialisation of all projects

• Successful capital raising for EDC now fully deployed. Key objective to raise significant additional capital for EDC and other unlisted syndicates during FY19.

• Contributions from all investment segments, with pipeline developed for future profit contribution, including a number of meaningful strategic stakes in Listed and Unlisted investments.

• ASX Listed portfolio delivered investment returns of 20% during FY18 on an average investment base of $90 million. One key strategic objective is to launch a managed small cap / emerging companies focused investment fund in FY19.

• Successful scrip and cash sale of Southpack investment into ASX listed Probiotec (PBP) during year – with subsequent substantial re-rating of PBP from $0.50 at sale to $1.15 at June 30.

• Key investment stakes in private debt focussed businesses – Australian Invoice Finance Limited and Bigstone Capital Pty Limited – as a source of both asset backed lending opportunities and future capital returns.

• Total income generated up 38.3% to $65.2 million

• Progressing due diligence on multiple investment opportunities

• Completed conditional sale of Donnybrook for $134 million, which will deliver NTA uplift of 42 cents per share, and $49 million profit release over 4 financial years expected to commence FY20

1. Net cash has been calculated as cash and cash equivalents of $71.1 million less at call debt of $2.6 million.

[ CVC Limited | 2018 Investor Presentation ]

4

CVC Overview

1 July 2017 – 30 June 2018

CVC Limited (“CVC”) is an ASX listed diversified investment company, deploying capital across a variety of asset classes

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$318
300+
million
investments
Market
13
made across all industries at Capitalisation [2]
30+ varying stages of development investment
22%
professionals
years Annualised
Total Shareholder
300+ Return [1] with a range of
investment,
history as an ASX-listed deal flow
transactional and
institutional investor Over past 20 years
operational skills
per annum
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1. For the 20 year period 30 June 1998 to 30 June 2018. 2. Based on a share price of $2.66 as at 30 June 2018.

[ CVC Limited | 2018 Investor PEvans & Partne r s esentation ] ]

55

CVC Track Record

1 July 2017 – 30 June 2018

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Total Shareholder Return Since 30 June 1998
$4.50
$4.00
$3.50
$3.00
$2.50
$2.00
$1.50
$1.00
$0.50
$0.00
Share Price Cumulative Dividends Paid
22% Annualised Return over 20+ years
30/06/1998 30/06/1999 30/06/2000 30/06/2001 30/06/2002 30/06/2003 30/06/2004 30/06/2005 30/06/2006 30/06/2007 30/06/2008 30/06/2009 30/06/2010 30/06/2011 30/06/2012 30/06/2013 30/06/2014 30/06/2015 30/06/2016 30/06/2017 30/06/2018
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Total Shareholder Return since 30 June 1998

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$450,000
$400,000
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$-
30/06/1998 30/06/1999 30/06/2000 30/06/2001 30/06/2002 30/06/2003 30/06/2004 30/06/2005 30/06/2006 30/06/2007 30/06/2008 30/06/2009 30/06/2010 30/06/2011 30/06/2012 30/06/2013 30/06/2014 30/06/2015 30/06/2016 30/06/2017 30/06/2018
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1. Based on $10,000 as at 30 June 1998 with all dividends reinvested into CVC shares results in an investment value of $362,874 as at 30 June 2018.

[ CVC Limited | 2018 Investor Presentation ]

6

CVC Business Overview

Total reported assets at 30 June 2018

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Unallocated
Cash and deposits
6%
5%
24%
Funds Management
Investments in listed equities
managers, property investment
managers, debt managers and
litigation funding managers
1%
Property Backed Loans
35%
Loans backed by an underlying
13%
property asset at a LVR of < 80%
Direct Property
16%
Direct exposure, including
ordinary equity, preference
equity, joint ventures and options
to acquire an interest in direct
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Direct exposure, including ordinary equity, preference equity, joint ventures and options to acquire an interest in direct property subject to planning outcomes

Private Equity

Investments in unlisted businesses including pre-IPO, unlisted funds and relevant corporate assistance fees

Commercial Debt and Alternative Assets

Secured lending to corporates, projects and individuals against various securities and assets. Includes receivables, contracted income, resources, listed equities, litigation claims and others.

Listed Equity

Investments in companies with shares listed on a recognised stock exchange. Includes underwriting, options, and short term trading and long term holdings

[ CVC Limited | 2018 Investor Presentation ]

7

CVC Note Raising Rationale

1 July 2017 – 30 June 2018

• Surplus cash balances from H1 FY18 deployed during H2 FY18

• Increasing quality of deal flow and opportunities to deploy capital at return rates below historical target of >15% return - but which are accretive to shareholders. Limited capacity to participate without either a new capital raise or debt issue

• Sub-optimal to recycle balance sheet prematurely for new investments

• Significant value in portfolio which Board do not believe is reflected in share price – accordingly dilutive capital raising was not optimal to shareholders at prevailing market value

• Note structure allows the benefits of reduced cost of capital, and opportunity to attract new shareholders at fair price in the future subject to performance

• Objective is to deploy capital patiently which delivers an initial minimum 5% margin on funding cost, and as higher prospective return opportunities emerge - to cycle into a higher (10% plus) margin on funding

[ CVC Limited | 2018 Investor Presentation ]

8

About CVC – Listed Investments

1 July 2017 – 30 June 2018

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2018 Return
$105m
$14.9m 20%
Invested
Profit IRR
at 30 June 18
Average Number of Investments
70
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Investment Highlights and Objectives

• Substantial positive contributions from PBP, TLX, EDC, CYC, TOT, BNO, MSV, SEA

• Substantial negative contributions from INP, UBI, TFL, PRT, IDZ

• Implementation of new accounting standard will result in annual movements in value being booked as profit or loss during the year

• Created a new internal investment fund with $15 M initial allocation which is being actively managed as a separate strategy for direct institutional and high net worth investment during FY19

• Stakes in PBP, TFL, IDT, MSV, INP, UBI, HBA targeted to provide platform for short to longer term value uplift potential

• Increased size and capability of dedicated investment team during year

2019 Objectives

• Objective to rebalance portfolio to more concentrated holdings with increasing investment size on high conviction positions

• Continue to build deeper networks to increase transaction flow

[ CVC Limited | 2018 Investor Presentation ]

9

About CVC – Listed Investments

1 July 2017 – 30 June 2018

CVC Equity Portfolio includes the following investments, with holdings and values as at 30 June 2018

• Creates value through active management of large strategic holdings that are identified as undervalued, counter-cyclical or underperforming.

• CVC utilises a range of value creation tools including options, capital raisings and underwritings where available.

• CVC target returns of >15% per annum from the listed equity portfolio.

• Value based methodology including analysis of company fundamentals such as:

• price to earnings multiples;

• earnings growth;

• relativity of price to net tangible assets;

• multiples of free cash flow;

• dividend history;

• competitive market positioning; and

• arbitrage opportunities

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||||
|---|---|---|
|CVC Top 20 Holdings|
|Name|Code|Value (AUD)|
|Eildon Capital Ltd|EDC|18,536,741|
|Bionomics Limited|BNO|11,861,688|
|Cyclopharm Limited|CYC|7,970,393|
|Probiotec Limited|PBP|6,328,227|
|Nsx.Heritage Brands|HBA|4,747,569|
|Villa World Ltd.|VLW|4,736,292|
|Mitchell Services|MSV|4,003,902|
|Prime Media Grp Ltd|PRT|3,612,628|
|Incentiapay Ltd|INP|2,799,791|
|Otto Energy Limited|OEL|2,600,000|
|Universal Biosensors|UBI|2,573,712|
|Us Residential Fund|USR|2,020,688|
|Westpac Banking Corp|WBC|1,758,000|
|Telix Pharmaceutical|TLX|1,709,837|
|Tasfoods Ltd|TFL|1,668,599|
|Idt Australia Ltd|IDT|1,471,316|
|Longtable Group Ltd|LON|1,459,416|
|Raiz Invest Limited|RZI|1,383,244|
|Pivotal Systems Corporation|PVS|1,303,641|
|Anz Banking Grp Ltd|ANZ|1,270,800|

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[ CVC Limited | 2018 Investor Presentation ]

10

Private Equity => ASX – South Pack Case Study

1 July 2017 – 30 June 2018

CVC completed a trade-sale of South Pack Laboratories (AUST) (“South Pack”) to ASX listed Probiotec Limited (ASX:PBP) generating an 85% internal rate of return

• South Pack is a TGA licensed contract packer located in Kirrawee, NSW specialising in complimentary medicines

• CVC acquired 48% in November 2016 for $3.84 million. Received a dividend of $0.8 million during 2018 financial year

• Trade-sale to Probiotec in October 2017 for cash and scrip totalling $5.7 million generating a profit of $1.9 million and an internal rate of return of 85%

• 3.45 million shares issued by Probiotec to CVC at a value of $0.51 per share which are trading at $1.70 cents per share as at 28 August 2018 generating a further internal rate of return of 284%

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Trade-sale
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[ CVC Limited | 2018 Investor Presentation ]

11

About CVC – Direct Property Investments

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1 July 2017 – 30 June 2018
2018 Return
2 1
$19.1m $15.6m 79%
Invested Profit gross return
Number of Investments
13
Investments
2019 Objectives
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Highlights

Advancement of major planning projects including:

• Marsden Park (Exhibition of PSP)

• Donnybrook (PSP progressed)

• East Bentleigh (VPA Strategic Site)

• Turrella (Priority Precinct)

• Liverpool (Collaboration Area)

Commercialisation of significant projects:

• Caboolture (Caltex completed and sold, advancement of leasing and planning)

• Port Macquarie (Bunnings under construction, asset sold on fund through structure)

• Mooloolaba (re-leasing and repositioning strategy well advanced)

• Continue progression of key investments through planning and repositioning

• Detailed assessment of divestment vs development business cases

• Complete development of Bunnings at Port Macquarie (collect delivery fee income)

• Secure more pre-lease commitments for Caboolture development

• • Look to add another investment requiring $5m+ of equity capital with qualified partner

1. Gross return is calculated as 2018 earnings divided by the average of total opening and closing direct property investments, net of property debt, during the financial year.

2. Invested amount at 30 June 2018 includes direct property investment, net of specific property debt.

[ CVC Limited | 2018 Investor Presentation ]

12

About CVC – Direct Property Investments

1 July 2017 – 30 June 2018

Investment Philosophy

When taking a direct investment in property assets, CVC seeks to capitalise from:

• Partner capability

• Capital protection / limit downside

• Asset mispricing

• Rockhampton – Development

• • Caboolture – Development • Maroochydore – Development • Mooloolaba – Repositioning • Woolloongabba – Core plus

• Attractive upside outcomes through:

• Planning

• Re-leasing

• Change in market conditions

• Flexible capital structures

• Efficient and timely deal execution process

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QUEENSLAND
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NEW SOUTH WALES
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VICTORIA
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• Port Macquarie – Development

• • Turrella – Option – Rezoning • Marsden Park – Rezoning / Development • Liverpool – Option – Rezoning

• Kingsgrove – Option - Rezoning

• Bentleigh – Rezoning

• • Donnybrook – Rezoning • Burnley – Planning

Potential NTA Growth

• Major projects in planning are forecast to deliver rezoning outcomes over the next 1-4 years

• Utilising todays value rates for assets, assuming these projects are successful in planning outcomes, have potential to add in excess of a pre-tax NTA uplift of $2.00 per share value, including:

• Unrecognised uplift of $1.00 per share from projects that have made significant progress through a repositioning / planning process; plus

• Further estimated uplift of $1.00 per share from projects when a reposition / planning process has been achieved. Projects have not received a verifiable valuation uplift.

[ CVC Limited | 2018 Investor Presentation ]

13

About CVC – Direct Property Investments

1 July 2017 – 30 June 2018

CVC has a strong property portfolio at various stages through the reposition / planning phase

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||||||||
|---|---|---|---|---|---|---|
|Project|State|Style|Location|Status|Forecast|Proposed Land Use|
|Outcome Date|
|Kingsgrove|NSW|Option|South West Sydney|Planning Commenced|FY 2021|Mixed Use|
|Turrella|NSW|Option|South West Sydney|Planning Commenced|FY 2021|Mixed Use|
|Woolloongabba|QLD|Equity|Brisbane Central|Development Approval|FY 2021|Mixed Use|
|Port Macquarie|NSW|Equity|Regional NSW|Development|FY 2019|Bulky Goods|
|Donnybrook|VIC|Equity|Northern Melbourne|Planning Commenced|FY 2020|Residential Subdivision|
|Marsden Park|NSW|Equity|North West Sydney|Planning Commenced|FY 2019|Residential Subdivision|
|Bentleigh|VIC|Equity|South East Melbourne|Planning Commenced|FY 2020|Mixed Use / Residential|
|Caboolture|QLD|Equity|Northern Brisbane|Development|FY 2019 – 2023|Mixed Use / Retail / Medical|
|Burnley|VIC|Equity|North Melbourne|Planning to Commence|FY 2021|Residential|
|Maroochydore|QLD|Equity|North Brisbane|Development|FY 2020|Medical|
|Rockhampton|QLD|Equity|Regional Queensland|Development|FY 2019|Residential Subdivision|
|Mooloolaba|QLD|Equity|North Brisbane|Repositioning|FY 2019|Retail|
|Liverpool|NSW|Option|West Sydney|Planning Commenced|FY 2022|Mixed Use|

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[ CVC Limited | 2018 Investor Presentation ]

14

About CVC – Direct Property Investments

1 July 2017 – 30 June 2018

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Portfolio Investments DONNYBROOK Investment Commencement 2014 CVC Ownership 49% in partnership with Villa World Limited Investment Strategy Rezoning of Urban Growth Zone land to residential land Current Status Precinct structure plan being progressed. Revenue Event Presale of land subject to rezoning approval contracted for total price of c$134m. Staged settlement over 4 years post rezoning completion. Initial revenue anticipated FY20.

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PORT MACQUARIE

Investment Commencement 2012 CVC Ownership 50% in partnership with Private Developer Investment Strategy Rezoning of rural land to Business 5 zoning to allow bulky goods development Current Status Under construction with Bunnings as major tenant for 18,000sqm with residual 2,400sqm for other tenancies Revenue Event Property has been sold on a fund through structure. Anticipated to complete in FY19.

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CABOOLTURE

Investment Commencement 2015 CVC Ownership 60% in partnership with Private Developer Investment Strategy Planning improvement and development of site allowing service centre, retail, hospitality and other uses. Current Status Substantial planning approvals secured to allow local shopping centre and other uses. Development of Caltex anchored service centre completed. Revenue Event Service centre has been sold at attractive value. Development of residual site to commence in early 2019 over a number of stages, with initial revenue contribution anticipated FY20.

[ CVC Limited | 2018 Investor Presentation ]

15

About CVC – Direct Property Investments

1 July 2017 – 30 June 2018

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Portfolio Investments MARSDEN PARK Investment Commencement 2012 CVC Ownership 66% in partnership with private developer Investment Strategy Rezoning of rural land to greenfield residential development Current Status Precinct structure plan on pubic exhibition. Anticipated project will yield c.550 allotments Revenue Event Project Delivery Agreement with Mirvac will see CVC receive payments through development process. Anticipated that development will commence in FY20 with initial revenue anticipated FY21

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MOOLOOLABA

Investment Commencement 2016 CVC Ownership 50% in partnership with private developer Investment Strategy Asset repositioning through releasing and refurbishment Current Status Program 50% complete with income increased c.35% Revenue Event Asset delivering attractive equity yield and valuation improving as works continue. Likely hold for short-medium term.

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Subject
Site
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EAST BENTLEIGH

Investment Commencement 2015 CVC Ownership 50% in partnership with private developer Investment Strategy Rezoning of industrial income producing asset to mixed use development Current Status In process with Victorian Planning Authority and Glen Eira Council as a Strategic Site Revenue Event Asset divestment or development on rezoning outcome. Initial revenue and potential planning outcome of FY20

[ CVC Limited | 2018 Investor Presentation ]

16

About CVC – Property Backed Lending

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1 July 2017 – 30 June 2018
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2018 Return
1
$40.7m $8.6m 22%
invested profit gross return
Number of Investments
10
Investments
2019 Objectives
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Investment Philosophy

• CVC has a long and successful track record of providing secured property finance to developers and investors. It has been active in this space for over 20 years

• Through a rigorous deal assessment process, management aim to reduce the risk in each transaction

• This is achieved through consideration of:

  • Macro economic analysis

  • Micro market / deal specific financial assumption testing

  • Detailed independent project feasibility development

  • Sensitivity analysis

  • Sponsor assessment and qualification

  • Robust documentation processes

• Transaction flow in this segment is anticipated to continue to be strong as major banks reduce / re-weight their portfolio from certain areas of the property segment.

• Increase investment position in secured mortgage transactions (after accounting for capital returns from loan repayments)

• Look to increase deployed funds to first mortgage segment as a solid risk adjusted return area of exposure (growth area for CVC)

• Continue to foster lending relationships that can span both senior and mezzanine positions as transactions mature

• Remain focused on metropolitan locations with strong underlying demand

1. Gross return is calculated as 2018 earnings dividend by the average of total opening and closing loans during the financial year.

[ CVC Limited | 2018 Investor Presentation ]

17

About CVC – Property Backed Lending

1 July 2017 – 30 June 2018

AUSTRALIAN COMMERCIAL PROPERTY LENDING

PROPERTY DEVELOPMENT FUNDING PYRAMID

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($bn) Major Bank Position Alternative Financier Opportunity
Senior Bank Debt
Mezzanine Debt
84% $26bn 16% $30bn 35% $56bn 65% “Gap” financingopportunity Pref Equity/Equity
Present Future
Developer
Equity
Source: Goldman Sachs Equity Research Report (2017)
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SENIOR LENDING OPPORTUNITY

• Australian real estate lending market is $200 billion

• Historically, major Australian Banks write approximately 80% of all real estate loans

• APRA guidelines and recent internal credit policy is now limiting major bank exposure. It is forecast that banks may only provide 65% of the total lending pool in the future

MEZZANINE LENDING/EQUITY OPPORTUNITY

• In the last 18 months, senior debt LVRs on development facilities have experienced a downward shift, moving from the traditional 75% to c.50% and mezzanine debt LVRs are down to c.70%, from 80%, highlighting the difficulty developers are facing

• Reduction in bank funding poses an opportunity for CVC as a alternative financier to fill the market gap by way of mezzanine lending or equity investment

• This creates a debt funding gap of circa $30 billion that would need to be filled when this pull back occurs

• This can in part be filled by CVC at attractive rates

[ CVC Limited | 2018 Investor Presentation ]

18

About CVC – Property Backed Lending

1 July 2017 – 30 June 2018

Portfolio Investments

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Palm Beach, QLD

• Stretch Senior Finance Facility Subject Site

• Peak Forecast LVR: 70%

• Forecast Investment IRR: 15%

• Loan Term: 12 Months

East Bentleigh, VIC

• Mezzanine Finance Facility

• • Peak Forecast LVR: 70%

• Forecast Investment IRR: 15%

• • Loan Term: 18 Months

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Carrara, QLD

• Stretch Senior Finance Facility

• Peak Forecast LVR: 75%

• Forecast Investment IRR: 18%

• Loan Term: 18 Months

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Coburg, VIC

• Senior Land Finance Facility

• • Peak Forecast LVR: 50%

• Forecast Investment IRR: 15%

• Loan Term: 12 Months

[ CVC Limited | 2018 Investor Presentation ]

19

About CVC – Private Equity Investments

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1 July 2017 – 30 June 2018
2018 Return
1
$18.5m $0.8m 4%
invested profit Gross return
Number of Investments
28
Investments
2019 Objectives
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Highlights

• Sale of CVC investment in South Pack Laboratories (Aust) Pty Ltd during the financial year to Probiotec Limited (ASX: PBP).

• Acted as joint underwriter of a capital raising of CleanSpace safety product manufacturer, PAFtec Pty Limited, with the objective of providing funds for it to continue its growth strategy, with expansion of its markets and research and development of new and existing products.

• Continuing to review investment opportunities with the objective of rebalancing the portfolio to more concentrated holdings with increasing investment size on high conviction positions.

• Identify, assess and invest in new transactions with one meaningful position requiring approximately $15m investment for a significant ownership interest

• Continue to develop networks to deliver more investment opportunity

• Consolidate investments - look to make larger quantum investments in companies that are well understood and have exceptional management

• Divest from under performing / stagnant investments

• Execute synergistic acquisition of a portfolio of investments

• Undertake IPO’s of a number of portfolio companies

1. Gross return is calculated as 2018 earnings dividend by the average of total opening and closing unlisted equity investments during the financial year.

[ CVC Limited | 2018 Investor Presentation ]

20

About CVC – Private Equity Case Study

1 July 2017 – 30 June 2018

CLEANSPACE® IS A BREAK THROUGH TECHNOLOGY FOR PERSONAL PROTECTION DEVICES & CONSUMABLES

• Founded by a team of biomedical engineers from ResMed in 2009.

• Advanced technology in low innovating large stable markets.

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• Strong financial metrics; Sales growth 50% yoy; GPM avg 66%; “Razor-blade” business model - recurring consumables sales 45%.

• Differentiated patent protected disruptive technology with clear competitive advantages. New product pipeline and connected data revenue opportunities.

• Growing installed base in key markets with annuity from consumables from Tier 1 Corporate users. Expanding global distribution.

• Strong regulatory competence with successful track record in International approvals.

• Distribution channels with network geographical and sector expansion

• Sales growth (30%) in major safety markets - Europe, North America and APAC

• Increasing Gross Profit Margin (currently 66%) driven by consumable sales

• Accelerated growth opportunities in 3 large markets of North America and Health Asia.

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[ CVC Limited | 2018 Investor Presentation ]

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About CVC – Private Equity

1 July 2017 – 30 June 2018

Highlights

• Sale of CVC’s investment in South Pack Laboratories (Aust) during the financial year to Probiotec Limited (ASX: PBP) for a combination of cash and scrip

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• Telix Pharmaceuticals IPO in January 2017: 3.7x return on IPO

• Holding value of Lendi x2 during the FY; Liquidity event and further increase in value expected next 12-24 months

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• Targeting returns >25% p.a. from the private equity / early stage / Pre-IPO portfolio

Current Investments

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[ CVC Limited | 2018 Investor Presentation ]

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About CVC –Alternative Assets/Debt

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1 July 2017 – 30 June 2018
2018 Return
1
$14.6m $1.4m
12%
invested profit
Number of Investments
15
Investments
2019 Objectives
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Investment Philosophy

• CVC has the ability to provide flexible funding solutions for private equity investments which include ordinary debt and convertible notes

• • This is achieved through consideration of:

  • Macro economic analysis

  • Micro market / deal specific financial assumption testing

  • Detailed independent project feasibility development

  • Sensitivity analysis

  • Sponsor assessment and qualification

  • Robust documentation processes

• Transaction flow in this segment is anticipated to continue to be strong as major banks reduce / re-weight their portfolio from certain areas of the property segment.

• Increase allocation by $10 - $20 million

• Maintain Diversification across industries and borrowers

• Look to provide a warehouse solution which could deliver equity opportunities at later stage for other investment strategies

1. Gross return is calculated as 2018 earnings divide by the average of total opening and closing loans during the financial year.

[ CVC Limited | 2018 Investor Presentation ]

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About CVC – Funds Management

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1 July 2017 – 30 June 2018
2018 Return
1
$3.9m $0.5m
22%
invested profit
Number of Investments
4
Investments
2019 Objectives
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Highlights

• Growth of funds management businesses, including provision of seed and growth capital for:

  • Australian Invoice Finance Limited; and

  • Bigstone Capital Pty Limited

• Support by CVC of investment vehicles, including

  • Participation in follow-on $16.6 million capital raising by Eildon Capital Limited;

  • Cornerstone investor in Australian Invoice Finance Limited’s debt factoring portfolio;

  • Underwriter of Bigstone Capital Pty Limited’s commercial loan portfolio; and

  • Co-investor in investment funds managed by JAK Investment Group Pty Limited.

• Launch of 2-3 new investment products (likely to centre around property, private debt and listed equities)

• Increase contribution to group revenue from management fees / performance fees

• Explore partnership opportunities with existing fund managers where investment / balance sheet support can deliver growth outcomes for manager

1. Gross return is calculated as 2018 earnings divide by the average of total opening and closing investment in fund managers during the financial year.

[ CVC Limited | 2018 Investor Presentation ]

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About CVC – Funds Management

1 July 2017 – 30 June 2018

Highlights:

• CVC’s expertise across a broad range of investments permits investment in a number of strategies

• CVC’s funds management business has increased quality and quantity of the deal flow available to CVC and provides opportunities to develop stable income streams

• CVC makes investments through its funds management business utilising the same investment approach as listed equity, private equity and property depending on the asset class in which the particular investment is exposed

• Increasing deal flow investment opportunities via syndication between CVC and fund management businesses

• Continued investment in new fund managers is validation of CVC’s long term track record of partnering with successful managers seeking patient capital to develop and grow investment opportunities

The fund managers in which CVC is currently invested include:

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[ CVC Limited | 2018 Investor Presentation ]

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About CVC – Funds Management

1 July 2017 – 30 June 2018

PORTFOLIO INVESTMENT

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jakinvestmentgroup.com

• Boutique Real Estate Finance and Investment House

• Established in 2011 by founders Adam Jane and Daniel Knights (ex-Macquarie Group executives)

• CVC Ownership 40%

• Provides wholesale investors with opportunities to participate in property backed transactions with enhanced return characteristics

• Facilitates third party capital solutions for property developers to enable their businesses to deliver on their strategies

• Proven track record of exceptional returns and transaction management

• Since inception 12 transactions with an initial investment value in-excess of $100m are being managed and/or have been completed

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[ CVC Limited | 2018 Investor Presentation ]

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CVC Board of Directors

1 July 2017 – 30 June 2018

John Read Alexander (Sandy) Beard Ian Campbell Chairman Managing Director Independent Director

• Experienced Chairman and Director in public, private and government organisations

• Currently Chairman of Patrys Limited

• Formerly Chairman of Pro-Pac Packaging, The Environmental Group, Central Coast Water Corporation and Director of Eildon Capital

• Joined CVC in 1991 as Group Financial Controller, has been Managing Director since 2000

• Currently Director of ASX listed US Residential Fund, Tasfoods, Probiotec, and Eildon Capital

• Formerly Chairman of Cellnet Group, and Director of Villa World and Grays Ecommerce Group

• 30 years experience as a former partner with Ernst and Young, principally working with entrepreneurial companies

• Currently Non-Executive Director of Kip McGrath Education Centres and Redox

• Formerly Non-Executive Director at Gloria Jeans Coffees International, Young Achievement Australia and Green’s Foods Holdings

[ CVC Limited | 2018 Investor Presentation ]

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CVC Management Team

1 July 2017 – 30 June 2018

Christian Jensen Investment Manager

• John Hunter Mark Avery

• Chief Financial Officer Property Manager

• Joined CVC in 2006 and has overseen the • Responsible for the group’s real estate development and management of a number investment activities, including Managing Director of Eildon Capital Limited (ASX: EDC)

• Jufri Abidin

• Investment Manager

• • Jufri takes an active role in deal procurement, structuring and investment management. Jufri has considerable funds management experience gained from his time at APN Property Group. He has managed property portfolios of multiple unlisted real estate investment trusts, consisting of up to 60 assets Jufri holds a Bachelor of Mechanical Engineering from the University of Melbourne

• Joined CVC in 2006 and has overseen the development and management of a number of investment vehicles

• Christian commenced his career with Ernst & Young in the corporate restructuring area before joining CVC Limited in 2001. At CVC he works primarily with small and medium sized expansion stage Australian companies. He performed similar roles at Macquarie Bank, and was a co-founder of a boutique global-equity fund manager before returning to CVC in 2014

• Extensive experience in ASX-listed and unlisted public reporting and accounting for property, equity trusts, managed investment companies and schemes, due diligence and compliance

• Formerly worked within the property finance division and residential development divisions at Macquarie Group and a subsidiary of Mirvac in the industrial property sector

   - **Specialisation: ASX Listed / Funds Management**
  

  • Specialisation: Property

• Specialisation: Property Investment / Management Funds Management

• Jonathan Pearce Elliot Kaplan Jonathan Feil Charles Williams

• Investment Manager Investment Manager Investment Manager Investment Manager

• Jonathan has worked in the finance industry for almost 15 years and focused on corporate finance and advisory for small and mid-cap companies listed on the ASX. Jonathan has a Bachelor of Finance from ANU and a Graduate Diploma of Applied Finance from the Kaplan Institute

• Specialisation: ASX Listed / Private Equity / Corporate Finance

• Elliott is a Chartered Accountant with extensive experience in senior financial and chief executive officer roles in both private and public listed companies. His experience, from both an investor and investee perspective, spans a diverse range of industries and businesses in the manufacturing, environmental, distribution and services sectors

• Specialisation: Unlisted Equities

• Jonathon is an Investment Manager with a • Charles has extensive expertise in focus on the development of private operational turnarounds and business businesses with a proven track record for strategy. He has experience in a variety of achieving recapitalisation solutions and industries including mining, manufacturing, liquidity events for private and micro cap media, biomedical research and hospitality. ASX listed companies. Prior to joining CVC Charles held various

• • Jonathan consulted to Aumake (ASX:AU8) roles as a Management Consultant and was the Strategy Manager for a large Australian

• in its development from a private business to mining services company.

• Jonathan consulted to Aumake (ASX:AU8) in its development from a private business to IPO on the ASX.

• Specialisation: ASX Listed • Specialisation: Private Equity / ASX Listed

[ CVC Limited | 2018 Investor Presentation ]

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CVC Outlook

1 July 2017 – 30 June 2018

• Dividend for FY19 not less than 15 cents per share

• NPAT expected to be not dissimilar to FY18 subject to market conditions and timing of investment realisations

• Targeting to increase funds under management by approximately $100 million, including launch of a minimum of two new products

• Expectation of at least one substantial new listed or unlisted investment with an investment amount exceeding $10 million

• Planning to deploy a minimum $50 million of new investment in asset backed / property backed loans at returns generating a minimum > 5% margin on cost of capital

• Expecting planning outcomes and progression of property developments to meaningfully increase underlying net asset value

[ CVC Limited | 2018 Investor Presentation ]

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