ENERGY TECHNOLOGIES LIMITED — Capital/Financing Update 2021

Sep 19, 2021

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Energy Technologies Limited (ASX:EGY)

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A specialised cable & wires manufacturer Entitlement Offer Presentation supplying the high value infrastructure sector September 2021

1

Important Notice & Disclaimer

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This presentation has been prepared by Energy Technologies Limited (EGY or the Company). It should not be considered as an offer or invitation to subscribe for, or purchase any shares in EGY, or as an inducement to purchase any shares in EGY. No agreement to subscribe for securities in EGY will be entered into on the basis of this presentation or any information, opinions or conclusions expressed in the course of this presentation.

Although the Company believes that the expectations reflected in the forward looking statements included in this presentation are reasonable, none of the Company, its Directors or officers can give, or gives, any assurance that the results, performance or achievements expressed or implied by the forward-looking statements contained in this document will actually occur or that the assumptions on which those statements are based are exhaustive or will prove to be correct beyond the date of its making.

This presentation is not a prospectus, product disclosure document, or other offering document under Australian law or under the law of any other jurisdiction. It has been prepared for information purposes only. This presentation contains general summary information and does not take into account the investment objectives, financial situation and particular needs of an individual investor. It is not a financial product advice and the Company is not licensed to, and does not provide, financial advice.

This presentation may contain forward-looking statements which are identified by words such as ‘may’, ‘could’, ‘believes’, ‘estimates’, ‘targets’, ‘expects’, or ‘intends’ and other similar words that involve risks and uncertainties. These statements are based on an assessment of past and present economic and operating conditions, and on a number of assumptions regarding future events and actions that, as at the date of this presentation, are expected to take place. Such forward-looking statements do not guarantee of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors many of which are beyond the control of the Company, its Directors and management.

Readers are cautioned not to place undue reliance on these forward-looking statements. Except to the extent required by law, the Company has no intention to update or revise forward-looking statements, or to publish prospective financial information in the future, regardless of whether new information, future events or any other factors affect the information contained in this presentation.

Readers should make their own independent assessment of the information and take their own independent professional advice in relation to the information and any proposed action to be taken on the basis of the information. To the maximum extent permitted by law, the Company and its professional advisors and their related bodies corporate, affiliates and each of their respective directors, officers, management, employees, advisers and agents and any other person involved in the preparation of this presentation disclaim all liability and responsibility (including without limitation and liability arising from fault or negligence) for any direct or indirect loss or damage which may arise or be suffered through use of or reliance on anything contained in, or omitted from, this presentation. Neither the Company nor its advisors have any responsibility or obligation to update this presentation or inform the reader of any matter arising or coming to their notice after the date of this presentation document which may affect any matter referred to in the presentation.

2

Executive Summary

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Company

Energy Technologies Limited (ASX:EGY) is 100% owner of Bambach Wires and Cables (Bambach), a major supplier of Australian manufactured low voltage copper cable products targeting specialised uses

Industry Focus

The Australian cables industry is a growing >$3.3bn opportunity with Bambach targeting multiple high value industries in the $1bn-$1.5bn low voltage sub-industry

In the low voltage category, Bambach targets:

• Rail and Road Infrastructure: ~$110m pa

• Defence: ~$130m pa

• Mining: ~$60m pa

• Construction: ~$600m pa

• Power/Energy: ~$100m pa

Entitlement Issue

• Raise ~$10.3m net of costs through a 1 for 1.72 rights issue at 11c with a 1 for 4 attaching option

• Issue price is at a 9.03% discount to the 10-day volume weighted average and 8.33% to the last traded price

• Increases working capital by $1.794m to capitalise on a sharp increase in Sales and Orders

• Capital Expenditure increase of $805k to expand Factory and Silicon Line to launch new products

• $1.1m to fund re-structuring costs ($1.4m in cost savings)

• Replenish Balance Sheet by $6.599m ($1.18m in cost savings)

• Total Initial Forecast Savings $2.6m

3

Strategic Plan

Corporate

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Management control
- Finance
Improved financial
reporting systems to
Board - New stance away Short term
-reportingImproved Board from debt ($1.14m in savings) - Fast track the Medium term
- Strong focus on - Re-structure completion of the
governance framework of the second factory - Expand KMP’s roles Long term
operational business - Replenish the with industry
($1.4m in savings) working cap to drive stakeholders - Use positive
COMPLETE - Removal of legacy sales - Fully automated cashflow to expand
obligations - Re-structure KMP reporting systems in machines through
UNDERWAY compensation to be to the board new factory
STI and LTI focused - Expand KMP’s and - Drive sales to $45m
IDENTIFIED reduce reporting lines on an annual run rate
- Australian
IDENTIFIED manufacturer of
choice for target
industry
NEXT STAGE
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Operational

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Management Re-structure
• - Control Costs
Identify efficient
work descriptions
with critical KPI’s - Centralise Automation
• compliance and - Expand company wide expenses - Automate costings Efficiencies
governance operations -consolidate sales Incentivise and process- Automate AP and - Targeted training Structural
functions AR at the factory to job
- Stringent controls - Automate Sales share - Complete building
COMPLETE on current liabilities and Finance function - 2 [nd] shift introduced of second factory for
to handle increased the Silicon Line and
sales further expansion
UNDERWAY - Use automation to - Reduce freight
UNDERWAY drive down costings costs
UNDERWAY
IDENTIFIED
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4

Why EGY?

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Specialised branded cables targeting ~38% gross margin (not commoditised) Considerable ‘know how’ & IP for new and custom product development Australian designed & manufactured (fast turnaround, high standards) using locally sourced input materials Capitalisation allows Rosedale, VIC the capacity for significant expansion & earnings growth Strategic Australian made – true downstream industry using Australian Copper Advantages Short lead times and certainty of delivery Competitive pricing Post the expansion the company is well placed for an increase in Defence spending Innovation culture identifying new market opportunities, designing and manufacturing new products

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Company Capability

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6

Bambach Wire and Cables

Bambach Wire and Cables manufactures low voltage industrial and specialised copper cables

Founded in 1936 and is the oldest existing Australian cable manufacturer and 100% owned by Energy Technologies since 2012

Factory in Rosedale, VIC capable of processing up to 250 tonnes of finished product per month

Significant investment to R&D leading to complete new ranges of cables for high value heavy industries

Main manufacturer (out of only two manufacturers) with braiding capability in Australia

Manufacturing inputs (eg copper) from Australian sources

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Rosedale, VIC
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The addition of silicon cable capability would make Bambach the only end-to-end supplier of locally manufactured silicon cables

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High Value Industry Focus

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Defence
$130m in cables pa
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Mining
$60m in cables pa
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Road and Traffic
$40m in cables pa
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Power / Energy
$100min cables pa
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Rail Infrastructure
$70m in cables pa
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Construction
$600m in cables pa
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Provision of specialised and customised cables and wires for large scale projects

$400m in annual demand in addressable market from target sectors plus $60m from bespoke cable projects in the short to medium term

Captures upfront value from major projects and long tail of products for maintenance

Significant pent-up and increasing demand to supply major projects

Previously limited by lack of working capital, legacy debt issues, low inventory and manufacturing limitation

Source: Internal estimates

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Top Tier Client List

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Supplying some of the world’s largest companies. Many relationships established in last two years with opportunity to grow revenue.

Rail Rail Road & Traffic Other Defence

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9

Revenue Mix and Uplift Potential

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Revenue mix by industry

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||||||
|---|---|---|---|---|
|12 Month|Target|
|Other|
|Revenue Goal|Market (Low|
|10.9%|
|Current|Run Rate|Voltage) Size|
|Made to Order|
|10.9%|Rail|$5.1m|$5.7m|$60m-$80m|
|Mining|$400k|$6m|$600m|
|~$9.6m|
|Rail|Road|$300k|$4.2m|$60m|
|55.7%|
|Average revenue|Defence|$350k|$5.7m|$60m|
|Power &|
|last 2 years|
|Energy|
|10.9%|Power & Energy|$1m|$3.8m|$50-80m|
|Defence|Made to Order|$1m|$5m|$60m|
|3.8%|
|Road|
|3.3%|Other|$1m|$2m|$400m+|
|Mining|
|4.4%|
|Total|$9.1m|$32.4m|>$1.0bn|

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Primed for New Growth

Rosedale, VIC
Factory • Large factory with high throughput
Capacity • Expansion to ~250 tonnes of copper wire cable / month + located next to rail line
Revenue • Significant capacity to increase revenue • Expansion into silicon cables to service Navy construction contracts, add plugs / harnesses, enter medium voltage product market
Expansion • Currently expanding factory footprint by 60% to house new silicon line and defence capacity
Workflow • Optimised through fit-out to maximise efficiency
Order • Order Book at levels not seen for 3 (three) years
Sales • Constricted by working cap albeit up 68% and continuing through July and August
Demand • Ability to meet demand and grow post raise • Many immediate contracts to fulfil
Fulfilment • Ability to fulfil order quickly (~4 weeks)

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Large machines can process 200-250 tonnes of copper per month

10x increased capacity and expanding, plus Government support for regional development & employment

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Strategic Advantage

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	Specialised Cables	Asian-sourced Cables	Eu-sourced Cables
High value & margin industries
Approved for specific projects
Turnaround times for custom product	~4 weeks	~8-12 weeks	>12 weeks
Custom manufacturing capability
Knowledge & process advantage
Sales channels developed
Suitable for Australian Defence & essential industries
Suitable for ‘Brand Australia’ insourcing initiatives
Price of goods	Competitive	Competitive	Expensive
Quality of output	High	Variable	High
Manufacturing input costs	AUD linked	Relies on imports	High
Preference to local manufacturing
Reseller/importer of other/s manufactured product

12

Client Lifecycle

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Approval & Product creation Standards

• •

• R&D and custom ISO AS/NZS production of 9001:2015 new product lines standards

• •

• Decades of Industry approval knowhow & for use capability •

• Type approval for

• • Developed >5,000 products by customised government products since organisations incorporation

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Quote & Order & Proposal Delivery

• Significant inbound enquiry

• Receive order

• Fulfil from existing inventory or make to order

• Dedicated sales team in place to convert prospects

Customer profile:

• ~1,000 customers

• 50 major customers with repeat business

• Tenders for larger work & (low voltage) electricity industry – prefer Project sales

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Repeat Orders

• Repeat sales to organisations that have successfully used Bambach products

• Average client tenure of several years

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Market Opportunity

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Significant Market Opportunity

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Fulfil existing demand from heavy industries

Generate new demand from adjacent markets and export

Develop new indemand products (eg silicon cable)

Market Size (2020)

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Imported
Domestic
cable and
wires $3.3B production
$1.5B
$1.8B Revenue
45%
55%
(2019)
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Of the $3.3bn cables industry, sub-industries are estimated as:

• Low Voltage ($1-1.5bn)

• Fibre (~$1bn)

• Medium Voltage, High Voltage & Extra High Voltage (~$1bn)

Source: IBISWorld, 2020

15

Market Tailwinds

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Significant infrastructure
spend over mid term
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• Major Federal and State Govt spend planned (~$110 billion) over next decade on infrastructure

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Increased focus on
defence and rail
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• ~$200 billion in defence spend planned

• $65 billion of major rail projects, regional rail upgrades and rail crossing removals planned and underway

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Push to procure products
domestically post COVID-19
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• Require high Australian standards

• Federal and State Govt policies to support ‘economic sovereignty’

• Remove supply chain bottlenecks

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Australian Made Advantages

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Made in Quicker Weaker AUD Satisfies local Australian Leverage postAustralia with turnaround for makes pricing procurement and Standards and COVID environment ~92% production comparable to Australian Industry Type for insourced composition of imported Government Approval manufacturing (4 weeks vs ~8-12 Australian products ‘economic provides ongoing due to Govt weeks for China materials sovereignty’ advantage requirement or and >12 weeks for initiatives supply chain Europe) security

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Appendices

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18

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EGY Corporate Overview

Key Metrics		Share Price ($)		Board of Directors
Shares on issue (m)	172.2	12 month high	0.18	Brian Jamieson	Mr. Jamieson has over 40 years’ experience in the advisory, manufacturing, resources and
Last traded price ($) Market capitalisation ($m)	0.14 24.1	12 month low 5 day VWAP	0.075 0.135	Non- Executive Chairman	technology industries in Australia and offshore. Mr. Jamieson was Chief Executive of Minter Ellison Melbourne from 2002-2005, Chief Executive Officer at KPMG Australia from 1998-2000, Managing Partner of KPMG Melbourne and Southern Regions from
Net debt ($m)* Enterprise valuation ($m)	-0.8 23.3	15 day VWAP 30 day VWAP	0.135 0.142		1993-1998 and Chairman of KPMG Melbourne from 2001- 2002. Prior to the merger of Touche Ross & Co and Peat Marwick Hungerfords to form KPMG, Mr. Jamieson was the Managing Partner for Australia for Touche Ross & Co. He has over 30 years’ experience in

Mr. Jamieson has over 40 years’ experience in the advisory, manufacturing, resources and technology industries in Australia and offshore. Mr. Jamieson was Chief Executive of Minter Ellison Melbourne from 2002-2005, Chief Executive Officer at KPMG Australia from 1998-2000, Managing Partner of KPMG Melbourne and Southern Regions from 1993-1998 and Chairman of KPMG Melbourne from 2001- 2002. Prior to the merger of Touche Ross & Co and Peat Marwick Hungerfords to form KPMG, Mr. Jamieson was the Managing Partner for Australia for Touche Ross & Co. He has over 30 years’ experience in providing advisory and audit services to a diverse range of public and large private companies. He is also a Fellow of the Institute of Chartered Accountants in Australia and New Zealand and a Fellow of the Australian Institute of Company Directors

Source: IRESS, Sentieo

			Matthew DriscollBA, Grad.	30 years’ experience in capital markets, financial services and as a Company Director. NED
			Dip. App Fin. SF Fin., GAICD	for Blina Minerals (ASX:BDI) and NED for BuyMyPlace.com.au (ASX:BMP). Experienced in
			Non- Executive Director	online technologies, fintech, property and resources.
Top 5 Shareholders J P Morgan Nominees Australia Pty Limited Cashel Family Office	28,274,193 12,591,949	16.4% 7.3%	Ian Campbell Non-Executive Director	Mr Campbell joined Olex Cables in 1989 as Group General Manager and then as Managing Director of the Pacific Dunlop Cables Group until 1998.In 1998 Mr Campbell joined ASX-200 listed GUD Holdings Ltd as its Managing Director and CEO until his retirement in mid-2013.
Advance Cables Pty Ltd	10,782,839	6.3%		Mr Campbell joined the BWX board in 2015 and was appointed Chairman in September
Alfred Chown (MD & Founder)	8,243,575	4.8%		2018. Mr Campbell has been a non-executive director of Mirrabooka Investments Ltd since 2007. He was formerly a national councillor and Victorian Vice-President of the
Howe Automotive Limited	4,989,465	2.9%		Australian Industry Group
Other shareholders (#933)	94,701,244	62.3%	Anthony Smith	Mr. Smith has over 30 years’ experience in finance with a variety of firms concentrating
Total	85,730,955	100.0%	Non-Executive Director	on small to medium sized companies in regard to corporate finance, institutional research sales and private wealth advice. During this time, he was charged with running
				these businesses along with titles of Head of Securities and Country Director of Austock
				Group and Phillip Capital. Mr Smith currently handles the investments at Cashel Family
				Office, a Melbourne based multi family office company and is a Non-Executive Director of
				IODM Limited
			Yulin Hu	An Australian resident and leading businessman whose roles include the President of
			Non-Executive Director	China City Construction Holdings Limited a construction business in China with

An Australian resident and leading businessman whose roles include the President of China City Construction Holdings Limited, a construction business in China with approximately 6bn RMB (A$1.1bn) turnover.

*Pro Forma Chart Source: IRESS

19

Historical Operating Results

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	Energy Technologies - Profit & Loss	Energy Technologies - Profit & Loss	Energy Technologies - Profit & Loss
(A$'000, unless indicated)		HY21	FY20	FY21
Sales revenue		4,054	10,058	9,428	•	Sales strengthened in the last quarter due to sharp increase in June as a result of
						working cap restructuring
COS		(4,455)	(7,642)	(6,794)
		(401)	2,416	2,634
Administrative		(2,544)	(5,113)	(5,668)
Finance costs		(743)	(1,242)	(1,594)	•	Finance costs to remain high until all debt commitments are re-financed
D&A		(1,120)	(1,236)	(2,503)	•	D & A higher due to decision to write down and impair multiple items
Operating Loss		(4,808)	(5,175)	(9,765)
Other Revenue		1,173	760	2,163
PBT		(3,635)	(4,402)	(5,344)	•	Loss lower in the second half due to accounting for R & D claim

20

Balance Sheet

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Balance Sheet	Balance Sheet	Balance Sheet
Energy Technologies – Balance Sheet (FY18 – 1H FY20)
(A$'000, unless indicated)	Period to Jul 21*	FY20	Pro Forma post EntitlementIssue	FOCUS POINTS
Assets
Cash	-25	27	2,922	•	Working cap facilities removed reducing finance costs and cash used for working cap to support
Trade and other Receivables	4,341	4,188	4,341		$3.4m Sales per month
Inventory	4,342	2,327	4,342
Other	673	358	673
	9,381	6,900	12,327
PP&E	12,126	12,871	12,126
Deferred Tax	0	229	0
Right of Use Asset	3,155	3,876	3,155
Intangibles	6,246	4,737	6,246	•	Intangibles higher due to R&D investment
Other	497	216	497
	22,024	21,929	22,024
Total Assets	31,406	28,830	34,352
Liabilities
Trade and other Payables	4,482	6,269	3,832
Debt	5,690	3,865	681	•	Legacy debt is Invoice Financing which will extinguish on normal trade terms
Other	2439	882	2439	•	Other liabilities includes Leasing of 923k and Staff provisions of 1.03m
Provisions	0	846	0
	12,612	11,862	12,612
Debt	2,395	339	0	•	Debt extinguished to reduce financing costs
Leasing	2,765	3,395	2,765
Other	132	157	132
	5,292	3,891	2,897
Total Liabilities	17,905	15,753	9,851
Net Assets	13,500	13,076	24,501

*Unaudited to July 2021

21

Appendix: Key Risks

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Risk	Risk Management
Demand Risk	• The target industries are varied and demand can be affected in numerous ways, not the least Covid related, Government and
	Defence spending, Construction industry, Private infrastructure and lack of confidence in delivery and pricing.
Capacity Risk	• Access to raw materials has been restricted due to limited capital. Capacity issues are a risk to Sales as Sales are booked once the
	product has been processed and delivered. Issues with machinery would also affect the capacity of production depending on
	timing and the relevant machine
Product Risk	• Each product is manufactured to ISO AS/NZS 9001:2015 and other Federal and State Government standards and by quality
	assured by industry in the majority of its uses
Delivery Risk	• The company had previously lacked inventory, working capital and manufacturing capacity to be able to meet delivery timeframes
	in a timely manner. Delivery times are extremely important in the industry
Competition	• Bambach’s main competition in specialised cables and wires is from offshore suppliers. The Company’s offering is competitive in a
	weaker AUD rate environment and delivery time
COVID-19	• The Company has experienced a decline in orders in relation to COVID-19 through the first half of FY21.

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