 Investor Presentation

November 2016

Important Notice and Disclaimer

This investor presentation has been prepared by DTI Group Ltd, ACN 069 791 091 (DTI or Company) and is dated November 2016.
Summary of information: This presentation contains summary information about DTI and its activities which is current as at the date of this presentation. The information in this presentation is of a general nature and does not purport to be complete, nor does it contain all the information which a prospective investor may require in evaluating a possible investment in DTI or that would be required in a prospectus or product disclosure statement prepared in accordance with the requirements of the Corporations Act. DTI’s historical information in this presentation is or has been based upon information that has been released to the Australian Securities Exchange (ASX). This presentation should be read in conjunction with DTI’s other periodic and continuous announcements lodged with ASX, which are available at www.asx.com.au The information in this presentation is based on DTI’s own information and estimates and has not been independently verified. DTI is not responsible for providing updated information and does not assume any responsibility to do so. In attending this presentation or by viewing this document, you agree to be bound by the following terms and conditions.
Not financial product advice: This presentation is not a financial product, or investment advice or a recommendation to acquire DTI securities and has been prepared without taking into account the objectives, financial situation or needs of individuals. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs; and seek legal, taxation and financial advice appropriate to their jurisdiction and circumstances. DTI is not licensed to provide financial product advice in regard to its securities or any other financial products. Cooling off rights do not apply to the acquisition of DTI securities.
Disclaimer: Each of DTI and its related bodies corporate and its directors, agents, officers, employees and advisors expressly disclaim to the maximum extent permitted by law, all liabilities (howsoever caused including negligence) in respect of, make no representations regarding and do not take any responsibility for, any part of this presentation and make no representation or warranty as to the accuracy, reliability or completeness of any information, statements, opinions, conclusions or representations contained in this presentation. In particular, this presentation does not constitute and shall be relied upon as a promise, representation, warranty or guarantee as to the past, present or the future performance of DTI.
Not an offer: This presentation is not a prospectus, product disclosure document or other offering document under Australian law (and will not be lodged with ASIC) or any other law. This presentation is for information purposes only and should not be considered as an offer or an invitation to acquire shares in DTI or any other financial products and neither this document nor any of its contents will form the basis of any contract or commitment.
Past and future performance: Past performance information is given for illustrative purposes only and is not, and should not be relied upon as, an indication of future performance. This presentation also contains certain forward-looking statements with respect to the financial condition, results of operations, projects, contracts and business of DTI and certain plans and objectives of the management of DTI. These forward-looking statements involve known and unknown risks, uncertainties and other factors which are subject to change without notice. Forward-looking statements are provided as a general guide only and there can be no assurance that actual outcomes will not differ materially from these statements. Neither DTI nor any other person gives any representation, warranty, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statement will actually occur. In particular, such forward-looking statements are subject to significant uncertainties and contingencies, many of which are outside the control of DTI. Further, none of DTI, its officers, agents or employees, except to the extent permitted by law, accept responsibility for any loss, claim, damages, costs or expenses arising out of or in connection with the information contained in this presentation. Investors should independently satisfy themselves as to the accuracy of all information contained herein.
Monetary values: All dollar values are in Australian dollars ($ or A$) unless stated otherwise.

DTI’s Business

OUR BUSINESS

The supply of world-leading surveillance, video analytics and passenger communication solutions for the mobile transit industry

OUR TARGET MARKETS Rail, bus, taxi, law enforcement, high-value freight

OUR PRODUCTS & SERVICES

Proprietary Supplementary Proprietary Managed Our Major
Data Recording Our Customers Hardware Software Services Markets
Hardware
• Bus mobile • CCTV cameras • Fleet manager • Full service • Government Our major digital recorders • GPS tracking • Vehicle bureau offering agencies markets: (MDR) • Passenger monitoring • Rail and bus • Australia
• Rail data counting • CCTV managed manufacturers • European Union recorder unit • Driver displays systems • Private • United Kingdom (DRU) • Signage • Route operators • United States
• Hybrid MDRs for adherence • South Africa other target • Remote live markets view
Video analytics (eg Pantograph)

DTI’s Business Case

Mass Public Transportation Sector

Sector to continue to grow throughout the world:

major investment significant investmeplanned i n t plan rail a n d ed light rail in major in rail and light rail in cities in major ci t ies in thehe world world

Mass Transit Mass Transit Operator Challenges Challenges

Mass transit operators face wide range of challenges including:

acts of terrorism
•• crime crime
• public disturbance public disturbance
safety
safety
liability
customer service

Mass Transit Surveillance Solutions

Mass transit operators require surveillance solutions which are:

high quality
•• reliable reliable
•• easily recoverable easily recoverable

Technology Advances

Technology advances continue to improve surveillance : and services: • quality

reliability Intelligent
• recoverability Transportation Systems
Next Bus
Smart City

DTI’s Business Model

Business Product Recurring Development Prospects Contracts Development Revenue & Marketing Maintain Product Grow prospects Ongoing orders Prospects market-leading development by investing in converted to from customers position by supported by business for new vehicle contracts by continued committed development procurements; offering investment in investment in and marketing customised maintenance product business advanced agreements; development development surveillance DTI solutions and product and marketing solutions specified in expansion, eg long-term passenger procurements; communication framework solutions, agreements with pantograph major suppliers

Maintain Product market-leading development position by supported by continued committed investment in investment in product business development development and product and marketing expansion, eg passenger communication solutions, pantograph

FY2016 Financial Metrics

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Sales $16.2m Recurring EBITDA $3.6m
up $1.5m, revenue 55% up 140% from
10% increase of sales, up $1.5m
from 38% at HY
FY17 contracted Marketing and
and recurring business
revenue $15.0m,
development
up 39% from
expenses
$10.8m for FY16
up 11%
R&D $5.9m, Positive Prospects
up 56% from operating cash $400m, up
$3.8m flow $193k 100% from
$200m
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Recurring revenue includes maintenance agreements and ongoing monthly sales to vehicle manufacturers and transit authorities

Key Drivers

R&D and marketing intended to deliver double-digit revenue growth for DTI

Increased

Investment

R&D and Marketing

Investment up by over 47% on previous year

Focus on Rail Broader product offering across all sectors of Intelligent Sector Transport Solutions

Strategic Rail Rail passenger communications systems, Pantograph Expansion

Result of R&D and Marketing

Prospects up 100% in 12 months to $400 million

Growing Global Demand

Surveillance systems across all forms of public transport

7 wins out of 7 in UK demonstrates DTI’s technology strengths and market acceptance. 15 wins since FY16 – 11 rail, 3 bus and 1 law enforcement

Contract Wins

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Significant Milestones

Strong start to FY17 with contracted and expected revenue at $15.0 million at the end of August, up 39% from $10.8 million for FY16. Now at $16.1 million.
Awarded $5.3 million Alstom contract
22 new trains for the Sydney Northwest Rail Link

Signed Alstom framework agreement

Defines general conditions under which DTI and Alstom wish to cooperate with regards to equipment design, manufacture, delivery, and services for potential future projects

Awarded $3.4 million Dallas contract

48 light rail vehicles for Dallas Area Rapid Transit
Options for an additional 115 light rail vehicles valued at $8.2 million

Awarded $1.5 million London Underground contract

106 trains for the Northern Line
Awarded $220,000 Cape Town Police contract for 27 police vehicles
Options for 300 plus a further 600 police cars

Record number of new contracts secured

Sydney, Dallas, London underground, Philadelphia, Cape Town Police, Dallas, Irish Rail, MerseyRail, Wright Bus

Record Number of Key Project Wins in FY2016

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Mersey Rail
London Midland  8 trains with automatic Bus
 66 trains with passenger counting Irish Rail Rail/Light Rail
surveillance  168 rail cars with surveillance
Police
Wright Bus
 80 buses with surveillance Alstom London Underground
Virgin Trains  106 trains with surveillance
 31 trains with
pantograph
Bordeaux
 74 trams with
Dallas surveillance
 48 trains with surveillance
 Options for further 115
Utrecht
 Trams with surveillance
Brisbane
 137 buses with
surveillance
France Framework Agreement
Cape Town
 172 potential operators with  27 Police cars with surveillance and ANPR
surveillance  Options for further 900
Marseille
Philadelphia  36 trains with surveillance and PCS Alstom Sydney
 231 trains with surveillance  22 trains with surveillance & PCS
9
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Operational Update – Americas

Sales of $6.46 million, up 66% from

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$3.89 million in prior period
Contract awarded for Dallas Area Rapid Transit
48 light rail vehicles worth $3.4m. Options worth $8.2m
531 firms requested tenders, 4 submitted, only DTI compliant
DTI’s surveillance solution specified in a bus procurement tender issued by SEPTA (South Eastern Pennsylvania Transport Authority) in Philadelphia
Procurement tender involves manufacture of 525 new buses over a five-year period. Now commenced
Similar deal to the surveillance solution which DTI won in July 2014 for 454 new buses over a five-year period for San Francisco MTA. Now commenced
DTI’s surveillance solution, specified for SEPTA’s next procurement of 44 Silverliner rail cars
Appointed an additional business development and marketing consultant for large rail projects

Operational Update – Australasia

Sales of $8.34 million, up from $7.88 million in prior period
Maintained strong market position with sales to wide range of customers
Signed a key $5.3 million contract with Alstom for 22 driverless trains for Sydney to provide:
an advanced digital video surveillance system with 24 internal and 2 forward-facing high-definition IP rail rated cameras
an IP-based audio communications system comprising public address with hearing aid loops, plus an automated voice announcement system and passenger emergency intercom
external LED driven destination indication signs, 48” wide-screen LCD route displays, and internal passenger information displays
a driver display screen which provides status information which also provides low latency live views from all cameras in the train plus a second 6 car coupled train
deliveries to commence first half FY2017 for a two-year period
Bus and rail contracts in Perth, Brisbane, Sydney, Melbourne and Adelaide

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Alstom Trains, Sydney 11
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Operational Update – EMEA

Sales of $1.42 million, down from $2.93 million due to delay in contract awards
United Kingdom, Merseyrail – advanced automatic
passenger counting on trains in the Liverpool area
United Kingdom, London Underground – 106 trains to be
fitted with CCTV on the Northern Line with Alstom

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London Underground
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United Kingdom, Virgin Trains – 31 trains with pantograph
United Kingdom, London Midland – 66 trains with CCTV

 France, AGIP

DTI’s French partner awarded a five-year agreement to supply CCTV systems for AGIR – an association of 172 independent transport providers in France. First order received from City of Niort
Order from Marseilles Metro for 36 passenger communication systems which follows order in 2014 for CCTV systems
Order from Bordeaux for 74 trams with surveillance
Holland, Stadler – trial order from VisiOn ISP for CCTV
Ireland, Irish Rail – 168 rail cars to be fitted with CCTV
Northern Ireland, Wright Bus – 80 new buses for Dublin
South Africa, Cape Town Police – 27 police cars with
CCTV and ANPR and options for 900 cars

Outlook

New recurring revenue projects building on existing recurring revenue

Siemens (up to 13 years with options)
NewFlyer for San Francisco MTA (5 years)
Specified in tender for SEPTA Buses (5 years)

Successful rail strategy now poised to deliver returns

Rail lead times long but high value projects
High value Passenger Communication System added to DTI product range

Outlook for DTI in core markets remains strong

Prospects valued at $400 million
Significant opportunities across rail, bus and law enforcement vehicles

Continued investment in R&D

Maintain market leading suite of technology offerings

Currently undertaking 11 trials in various cities worldwide

Including United States, Sweden, France, Australia and Poland which are expected to lead to adoption of DTI solutions

Strong Sales Pipeline

Region

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13%
$52m 30%
$121m
$227m
57%
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Sector

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3%
21%
$12m $85m
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Australasia EMEA Americas

Note :

Factors influencing decisions on prospects proceeding and timing of delivery are unknown and outside the control of DTI. However, DTI is well positioned with a number of these prospects.

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76%
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Bus Rail Other

Year-on-year Prospect Growth

Building a strong base for future growth

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$m
400
350 126%
300
Other
250
Bus
200
Rail
Total
150
48%
100
50
0
30.6.15 30.6.16
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Passenger Communication Systems (PCS)

First contract awarded by Alstom for the Sydney Northwest Rail Link
$5.3 million value ̶ 82% PCS, 18% surveillance
Investment in specialist equipment for software and hardware testing
Significant savings in time and development costs

High-calibre development team

20 engineers build the PCS solution

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Pantograph Preventative Failure Detection

Electric trains use pantographs to draw power from overhead wires
Pantographs with overhead wires are now the dominant form of power collection for modern electric trains
Serious damage to the overhead wiring makes the track unusable until repairs are completed
Such damage is costly in both repairs and loss of rail service
Failure prevention normally requires regular inspection, but manual inspections are costly and difficult to prevent pantograph-related de-wirements.
The DTI pantograph overhead wire network inspection system visually analyses, detects and reports potential maintenance concerns in real time
Four inventions have been provisionally protected and filed
Commercialisation has commenced with two orders in the UK: Virgin Trains and London Midland

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World’s Largest Rail System Suppliers

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Company	Country Base	DTI Technology Tendered	DTI Technology Purchased	Framework Agreement
Alstom France   
Bombardier Canada  
Hyundai-Rotem Korea 
Siemens Germany  
PESA Poland  
Ansaldo Italy  
CRRC Changchun China 
CAF Spain 
Mitsubishi Japan 
Stadler Switzerland  

Key Strengths

Strong market position and capability in bus and rail markets
Exposure to high-growth mobile security market and passenger communication systems
Global terrorism threats driving increasing customer demand
Proprietary hardware and software products developed in-house
Growing recurring revenue stream
Scalable business model
Strong relationships with world-class customers
Strong business partners