EVZ LIMITED — AGM Information 2010

Nov 25, 2010

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EVZ LIMITED

26 November 2010

ABN 87 010 550 357 ACN 010 550 357 Level 7, 410 Collins Street Melbourne VIC 3000 Australia PO Box 237 Collins Street West Melbourne VIC 8007 Tel: +61 3 9670 4545 Fax: +61 3 9670 6670 www.evz.com.au

Company Announcements Office Australian Stock Exchange Limited 20 Bridge Street SYDNEY NSW 2000

Dear Sir/Madam

Please find attached the Chairman’s address and CEO’s presentation to the Annual General Meeting of EVZ Limited.

Yours faithfully

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Ian Wallace Company Secretary

EVZ Limited

’ – CHAIRMAN S ADDRESS 2010 ANNUAL GENERAL MEETING

Good morning and welcome to the Annual General Meeting of EVZ. Thank you for coming and I will update you in broad terms on the company’s activities over the last twelve months and Andrew will talk to you in detail about operational and strategic issues of the business.

The 2010 result has been extremely disappointing in spite of a number of managerial initiatives undertaken during the year to reposition the company in terms of markets, geographic spread and business development. The Profit after Tax was $260,000 which was mainly affected by the combined losses for Danum and National.

It is easy to blame everything on the GFC but we have, as a Board and management team, reviewed the last two to three years’ results to ensure that the actions taken are in fact working towards future growth of the group.

The first two businesses acquired by the group were Syfon and Brockman and, although both have suffered margin erosion with the GFC, both have market and product niches which have preserved their business foundations during this period.

On the other hand, Danum and TSF, which were both acquired in 2007, had a customer concentration and, in the case of Danum, also a geographic concentration. Danum, within twelve months of purchase, however, lost their primary customer which represented 70% of its sales, and in the case of TSF, Telstra dramatically reduced their spend on capital works projects. It should be noted that since the TSF acquisition, we have worked to reduce customer concentration and Telstra has fallen as a percentage of revenue from 95% to 50%. In addition, over this period, we have had to rebuild not only the customer/business base but also a business development team to facilitate the transformation.

National Engineering is a general steel fabricator mainly in the construction sector and the last two years have seen the market contract, margins tighten and many competitors desperate for work. To maintain volume, this has necessitated winning work at or below full cost.

Unfortunately, our last three acquisitions were made at the peak of the market with no clawback provisions on the purchase price to account for short term business deterioration.

Given the above comments, we believed it was important for us to analyse the business dynamics to ensure that the actions that we have taken will strengthen the business as we move forward.

Following this and, in summary, some of the actions that we have undertaken are as follows:

• Business Development resourcing and strategy

• Expansion of market/geographic exposure

• Product lines and new product extension

• Development of recurring opportunities

• Rationalisation of company and business structure

• Active involvement of Board members in providing contacts and sales leads

Changes of this magnitude do not occur overnight, but I am convinced that the 2010/2011 performance will be a significant improvement on 2009/2010. As the economy recovers, we will be well-placed to take advantage of the opportunities for growth.

Dividend

Because of the poor result last year and a desire to conserve cash, the Board decided to suspend the second half dividend payment. The company is fundamentally strong with relatively low debt levels so the directors remain committed to return to a dividend payment policy after our cash base grows and profitability returns.

Working Capital & Bank Covenants

As reported, the company was in breach of its bank covenant at 30 June 2010 which dictated that, until we received confirmation from the bank, our debt had to be treated as current for financial reporting purposes. The bank was very supportive and has since confirmed that no further action would be taken but the company had to return progressively to compliance by 31 December 2010. EVZ is currently compliant.

Projections for the Current Year

The results for the first four months are on budget for both revenue and profit. The three business units of Brockman, Syfon and TSF are the major contributors and National has made a small profit year-to-date while Danum has returned to profit for the month of October.

We will be investing more resources into growing the TSF Maintenance business which will underpin the recurring revenue stream and further reduce our dependence on Telstra. We are also targeting the resource and infrastructure industries.

In closing, it is important to recognise the ongoing support of our shareholders. Your directors and management remain committed to improving the performance of the company. We have been through a period of consolidation and a difficult business environment. This phase, albeit requiring ongoing work, has been successful and we are now ready to grow the business and develop a sustainable future.

I would like to now hand over to Andrew to provide more detail on the business operations.

Max Findlay Chairman

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Engineering the Future Annual General 26 November 2010 Meeting

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Index
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• Key Messages

• FY09/10 – Brief Review

� A Diverse Engineering Business

3 4 5

� Rebuilding Profitability

• 2010/2011 – Goals

• � 2011/2012 – Plans

• � Corporate Overview

6-8 9 10 11

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Key Messages
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• Diverse Engineering Business – Multiple Skills and Resources

• Rebuilding Profitability

• BDM Network – New Clients / New Products / New Locations

• o Alliances o Maintenance Services Growth o Competitive Suppliers

• o Consolidated Group Services

• FY 10/11 – Goals

• Build EVZ Brand / Reputation

• o Product and Market Diversification o Financial Strength

• FY 11/12 – Plans

• Enhance EVZ Brand / Reputation

• o Organic Growth / Expansion – States and Sectors

• o Consolidate Financial Strength

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FY 09/10 – Brief Review
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� A Year of 2 Halves:

• Danum / Food Processing Project – Project Overrun

• National / Slower than Expected Recovery

• Low Margins / Delayed Decisions

• Preserve Skill Base

� Action Taken:

• Brockman / Danum Restructure

• Experienced Staff – Estimating/Production/Construction

• � Intensify BDM Activities

• Design Support - Alliances

� Finance Facilities:

• Bank Covenant Compliant

• Working Capital – Continued Emphasis

� Achievements:

• Improving Safety Performance

• � Maintained Skill Base

• Steady Forward Workload – approx $35m

• Growing Tender Book – approx $230m

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A Diverse Engineering Business
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Specialist Operations in the Engineering Services Sector

• Three Divisions: EVZ Engineering / EVZ Power / EVZ Water – Shared Resources

• Multiple Sector Exposure: Mining / Petrochemical / Water / Infrastructure / Building & Construction / Power

• Heavy Engineering Fabrication Facilities: Victoria/NSW

• Skilled Workforce in Excess of 380: Apprenticeships / Training

• Excellent East Coast Coverage & Constant Push into WA/SA

• Overseas Operations: Access to Competitive Quality Supplier Resource

• Expanding Range of Products & Services: Recognised Expertise

• Extensive Maintenance Operations: Tanks / Generators / Roofs, etc

• Innovative Quality Solutions at Competitive Prices

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Rebuilding Profitability
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� EVZ Brand Recognition

• EVZ Limited

• Divisions – EVZ Engineering / EVZ Power / EVZ Water

• Companies – EVZ Brockman / EVZ National / etc

• Ongoing process to build reputation

� Continue to Drive Commercial & Operational Performance

• KPIs measured on a monthly and a project basis

� Continue to Enhance Productivity

• Constant push to derive cost effective solutions

� Continue to Build Business Development Network

• New & Existing Customers

• New Locations

• New Products - Co- & Tri-Generation

• Equipment Hire

• Maintenance Services

• Volume Production

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Rebuilding Profitability
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� Alliances

• →

• General Dynamics Alcoa stack design and construct bid

• BMT-WBM → Design and construct resource

• projects

• →

• Energy Response Embedded power

• � → Power Systems Australia (PSA) Equipment supply

• Petrochem Industries (PCI) → Design services

� Resources / Mining Sector Focus

• Exact Mining – Mineral sands mining

• Hitec Welding – Coal seam gas

• Fluor/Newcrest – Gold mining

• Iluka – Mineral sands mining

� Volume / Repeat Business

• Remote accommodation

• Mining vehicles

• Plant & Equipment Hire

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Rebuilding Profitability
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� Overseas Suppliers

• Generators/Load Banks/Radiators – Quality products at competitive prices

• Pipe supply and fabrication

� Maintenance

• TSF Maintenance – East Coast expansion

• UGL Resources – Esso maintenance bid

• Shell – Tank maintenance

• BP Bitumen – Maintenance contract

• Australian Essential Services Compliance – Roof maintenance

� Consolidated Group Projects

• Avalon Airport – Brockman/Danum – Tanks and associated pipework ∼ $2.2m

• � Wonthaggi Desalination Plant – National/Syfon ∼ $5.0m

• Canberra Airport, Stage 1 – National/Syfon ∼ $1.9m

• Charlestown Square Shopping Centre – Syfon/TSF ∼ $3.3m

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2010-2011 Goals
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A Year of Transition

Targets

• Increase sales by 10%

• EBIT margin to 3% - 4% (first quarter on target)

• Strengthen financial resources by increasing working capital to support expected growth

• � Continue to strengthen and build the EVZ brand

EVZ Engineering

• Brockman - successful business expanding naturally

• Danum - management reorganisation and integration with Brockman

• National - regional expansion in Central New South Wales and Victoria

• developing opportunities in resource sector

• volume production product

EVZ Water

• Syfon - continue expansion into WA and continued growth in Asia - new cost competitive product range

EVZ Power

• TSF - consolidating market niche

• expanding into Victoria and Queensland

• co- and tri-generation opportunities

• expanded maintenance business

• embedded power

• EVZ Energy

• plant and equipment hire

Risks

• Continued margin pressure

• Slower than expected recovery

• Continued delays in project decision-making

• Drain on skilled labour to Western Australia/Queensland

• Global instability

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2011-2012 Plans
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Targets

• Increase sales by minimum of 10% per annum

• Increase EBIT margin to 5-6%

• Consolidate financial strength

EVZ Engineering

• Pursue local and regional alliances

• Develop a balanced portfolio of activities/sectors

• Continue to seek out high growth opportunities

EVZ Water

• Continued expansion into Western Australia/Asia

• Develop Maintenance Services business

• Develop new products/services to capitalise on the extensive client network

EVZ Power

• Exploit opportunities arising out of restructuring of Australia’s power industry

• � Greater use of client overseas supply

• Continue to expand the Maintenance Services business

• EVZ Energy expansion throughout East Coast

Enhance Reputation Based on the EVZ Brand and Performance

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Corporate Overview
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Directors CEO CFO & Company Secretary Max Findlay – Chairman Andrew Powis Ian Wallace Peter Jones Keith Fagg Graham Burns ASX Code: EVZ Current Share Price: 9.5 cents (at c.o.b. 19/11/10) Market Value: $19.8m Shares on Issue Listed ordinary shares 207,387.735 Unlisted employee shares 551,679 Total 207,939,414

EVZ Limited Regional Offices: Level 7, 410 Collins Street Melbourne Sydney Kuala Lumpur Victoria, Australia 3000 Brisbane Singapore Tel: +61 3 96704545 Perth Fax: +61 3 96706670 Geelong Young