IPD GROUP LTD — Investor Presentation 2022

Aug 29, 2022

FY22 RESULTS PRESENTATION | 30 AUGUST 2022

Important notice & disclaimer

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NO RELIANCE

The information contained in this document is not investment or financial product advice and is not intended to be relied upon as the basis for an investment decision, and is not, and should not be assumed to be, complete. The information provided in this presentation may not be suitable for your specific needs and should not be relied upon by you in substitution for obtaining independent advice.

To the maximum extent permitted by law, neither the Company nor any other party guarantees or makes any representations or warranties, express or implied, as to, or takes responsibility for, the accuracy or reliability of the information contained in this document or as to any other matter, or takes any responsibility for any loss or damage suffered as a result of any inadequacy, incompleteness or inaccuracy in any statement or information in this document including, without limitation, any financial information, any estimate or projections or any other financial information.

Past performance information provided in this document may not be a reliable indication of future performance. No representation is being made that any investment will or is likely to achieve profits or losses similar to those achieved in the past, or that significant losses will be avoided. Statements contained in this document that are not historical facts are based on current expectations, estimates, projections, opinions, and beliefs of the Company. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon.

FORWARD LOOKING STATEMENTS

This document contains certain forward-looking statements and comments about future events. Forward-looking statements involve known and unknown risks, significant uncertainties, assumptions, contingencies, and other factors, many of which are outside the control of the Company, are subject to change without notice, and may involve significant elements of subjective judgement and assumptions as to future events which may or may not be correct, and which may cause the actual results or performance of the Company to be materially different from any results or performance expressed or implied by such forward-looking statements. Such forward-looking statements speak only as of the date of this document. Forward looking statements should not be relied on as an indication or guarantee of future performance. No representation, warranty or undertaking is made that any projection, forecast, assumption or estimate contained in this document should or will be achieved. The Company disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements in this document to reflect any change in expectations in relation to any forward looking statements or any change in events, conditions or circumstances on which any such statement is based.

MISCELLANEOUS

No person, especially those who do not have professional experience in matters relating to investments, may rely on the contents of this document. If you are in any doubt as to the matters contained in this document you should seek independent advice and/or consult your stockbroker, bank manager, solicitor, accountant, or other financial adviser.

A number of figures and calculations in this presentation are subject to the effects of rounding. Accordingly, the actual calculation of these figures may differ from the figures set out in this presentation. All dollar figures within this document represent Australian Dollars unless otherwise specifically stated.

PRESENTATION AUTHORISED BY THE BOARD

IPD GROUP FY22 RESULTS PRESENTATION

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Presenters

Michael Sainsbury Executive Director & CEO

Mohamed Yoosuff Executive Director & CFO

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IPD GROUP FY22 RESULTS PRESENTATION

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What we’ll share today

– FY22 Overview

FY22 RESULTS PRESENTATION |

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– FY22 Financial performance

– Our focus

– Outlook

IPD GROUP FY22 RESULTS PRESENTATION

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FY22 RESULTS PRESENTATION |

FY22 Overview

IPD GROUP FY22 RESULTS PRESENTATION

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FY22 Overview

• Extension of distribution agreement with ABB

• Successful transition of additional products and customers from ABB

• $1.3m of orders received for EV charger hardware and solutions FY23 YTD

HTC and Gemtek acquisition complete

• Integration into IPD offices

• System integrations of Control Logic, HTC and Gemtek executed during the financial year

Successful listing on ASX (December 2021) raising $20m of new capital for growth initiatives

• Share price growth of 69% since listing[1]

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Positive outlook for continued growth

• Continued buoyant market

• Continuing supply disruption and global trade uncertainty

• As at 26 August 2022

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IPD GROUP FY22 RESULTS PRESENTATION

FY22 Overview

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Financial perfomance Strong organic and inorganic growth for the Group

$180.5m

Pro forma revenue Up 26.6% (PCP $142.6m)

$63.4m

Net assets

($50.0m[2] as at 30 June 2021)

$22.1m

Pro forma EBITDA Up 38.1% (PCP $16.0m)

$25.4m

Net cash ($17.6m[2] as at 30 June 2021)

$18.5m

Pro forma EBIT Up 54.2% (PCP $12.0m)

Zero

0.0 LTIFR[3]

$12.6m

Pro forma NPAT Up 59.5% (PCP $7.9m)

90% / 10%

Products / services revenue split

3.7cents

Dividend[1] 32.1% greater than prospectus forecast (2.8c per share)

18% / 27%

ROIC[4] / ROCE[5]

1. Relates to second half of FY22

2. Pro forma per IPO prospectus

3. Lost time injury frequency rate at 30 June 2022. LTIFR Average number of lost time injuries over the past 12 months for every 1,000,000 hours worked

4. Return on invested capital (ROIC) = NOPAT / Invested Capital. NOPAT = NPAT (no debt on balance sheet). Invested capital = Equity + lease liabilities

5. Return on capital employed (ROCE) = EBIT / Capital Employed. Capital employed = Total assets – current liabilities

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IPD GROUP FY22 RESULTS PRESENTATION

FY22 Overview

Prospectus forecast

Strong operating performance delivers revenue, gross profit, EBITDA and NPAT above prospectus forecasts Revenue outperformance driven by:

• expanded distribution agreement with ABB

• organic growth of existing product portfolio

• synergies created with acquisitions and larger product portfolio

• acquisition of Gemtek

Gross margins have benefited from product portfolio mix and careful margin management

Operating expenses as % of revenue are slightly higher than forecast, due to employee benefits expense associated with supporting new acquisitions and revenue growth

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$m	FY22 prospectus pro forma forecast	FY22 pro forma actuals1	% variance (vs prospectus)
Revenue	169.6	180.5	6.4%
Gross profit	61.8	68.6	11.0%
EBITDA	18.1	22.1	22.1%
EBIT	14.5	18.5	27.6%
NPAT	9.7	12.6	29.9%
Operating expenses as % of revenue	25.9%	26.2%	0.3%
Gross profit margin	36.4%	38.0%	1.6%
EBITDA margin	10.7%	12.3%	1.6%
EBIT margin	8.5%	10.3%	1.8%
NPAT margin	5.7%	7.0%	1.3%

1. Pro forma reconciliation presented on page 30

IPD GROUP FY22 RESULTS PRESENTATION

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FY22 RESULTS PRESENTATION |

Financial performance

IPD GROUP FY22 RESULTS PRESENTATION

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Sales growth & margins

Record revenue results achieved

Pro forma revenue and gross profit margins[1]

Statutory revenue

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• Pro forma revenue of $180.5 million, up 26.6% on pcp

• strong revenue growth has been achieved despite the effect of lockdown in some states as well as global supply chain issues

• strong organic growth displayed through the pro forma revenue CAGR of 10.2%

• FY22 pro forma gross profit margins have declined year on year by 0.4% due to expanded distribution agreement with ABB

• Statutory revenue of $176.8 million, up 49.7% on pcp

• statutory revenue includes the acquisitions of Addelec in August 2019 (FY20), Control Logic in October 2020 (FY21) HTC in October 2021(FY22) and Gemtek in April 2022 (FY22)

• statutory revenue CAGR of 32.6%, representing both organic and inorganic growth

• Includes the revenue contribution of all acquisitions which have occurred over the period. Refer to page 30 for a reconciliation

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Sales growth & margins

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Sales growth highlights

Successful	Significant growth	Elsteel Techno	On 1 October 2021,	On 4 April 2022
executionof	in the automation &	revenue continues	IPD acquired	IPD acquired the
the expanded	control products	to growdue to	100% interestin	assets of
distribution		compliance	High Technology	Gemtek, a
agreement with	Growing demand	standards changes	Control (HTC), a	specialist EV
ABB (effective	for Industrial Cyber	resulting in	well established	charging
1 September	Security solutions	increased demand	electrical industry	solutions
2021)	by Control Logic	from switchboard	specialist	provider
		builders

IPD GROUP FY22 RESULTS PRESENTATION

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Earnings growth & margins

Record earnings results achieved

• Pro forma EBITDA of $22.1 million up 38.1% on pcp, representing a pro forma EBITDA margin of 12.2%

• pro forma EBITDA assumes acquisition of Addelec Control Logic and HTC occurred prior to FY19, thus organic growth has resulted in a 25.1% CAGR

• growth in FY22 partly due to expanded distribution agreement with ABB effective 1 September 2021 (FY22)

• pro forma EBITDA margins have expanded year on year from 8.3% in FY19 to 12.2% in FY22 showing benefits of economies of scale

• Statutory EBITDA of $20.2 million up 48.5% on pcp, representing a statutory EBITDA margin of 11.4% (includes $1.6 million of IPO costs)

• statutory EBITDA CAGR of 76.0%, representing both organic and inorganic growth

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Pro forma [1] EBITDA
and EBITDA margin
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Statutory EBITDA and EBITDA margin

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20.2
76.0%
CAGR
13.6
9.1
11.5%
11.4%
10.4%
3.7
4.9%
FY19 FY20 FY21 FY22
Statutory EBITDA ($m) Statutory EBITDA margin (%)
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1. Includes the contribution of all acquisitions which have occurred over the period and other pro forma adjustments. Refer to page 30 for a reconciliation

IPD GROUP FY22 RESULTS PRESENTATION

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Strong & flexible financial position

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Balance Sheet

Balance Sheet
	As at
	30 Jun 2021	As at	As at
$m	(Prospectus)1	31 Dec 2021	30 Jun 2022
Total current assets	71.8	87.5	97.0
Total non-current assets	25.6	28.6	27.8
Total assets	97.4	116.1	124.8
Total current liabilities	34.9	47.1	50.7
Total non-current liabilities	12.5	11.8	10.7
Total liabilities	47.4	58.9	61.4
Net assets	50.0	57.2	63.4

• •

• $25.4 million of cash at bank as No borrowings on balance sheet at 30 June 2022, an increase of

• Net assets of $63.4 million

• $7.8 million since 30 June

• 2021 (per IPO Prospectus) [1]

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Cash at bank ($m) Net assets ($m)
No borrowings 25.4
on balance sheet
63.4
57.2
19.8
50.0 [1]
17.6 [1]
JUN 21 DEC 21 JUN 22 JUN 21 DEC 21 JUN 22
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1. Pro forma per IPO prospectus

IPD GROUP FY22 RESULTS PRESENTATION

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Cash flow

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Pro forma cash flow

$m	Pro forma FY21	Pro forma FY22	FY22 prospectus pro forma forecast	Variance vs FY22 prospectus pro forma forecast
EBITDA	16.0	22.1	18.1	22.1%
Change in working capital	(4.6)	(11.4)	(10.7)	6.5%
Operating free cash flow	11.4	10.7	7.4	44.6%
Capital expenditure / acquisitions	(0.7)	(2.0)	(1.1)	81.8%
Net free cash flow before financing, tax and dividends	10.7	8.7	6.2	40.3%
Operating free cash flow conversion (pre tax payment)	97.0%	73.0%	63.8%
Net free cash flow before financing, tax and dividends conversion	67.0%	39.5%	34.4%

• Pro forma operating free cash flow of $10.7 million with an operating free cashflow conversion (pre tax) of 73.0%

• • Working capital increased to support revenue growth

• • Operating free cashflow conversion will remain strong

IPD GROUP FY22 RESULTS PRESENTATION

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Diligent management of working capital & capex

Net working capital (NWC)

CAPEX summary

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• Net working capital requirements
25.0 have been increasing year on year, in
line with the acquisitions of Addelec
in August 2019 (FY20), Control Logic
in October 2020 (FY21) and HTC in
19.6 October 2021 (FY22)
•
Increase in NWC in FY22 largely
16.8
the result of expanded distribution
15.4
agreement with ABB requiring an
additional $4.4m of NWC in FY22
22.2%
•
NWC as a percentage of sales has
17.6% been decreasing year on year since
FY19, showing material efficiencies
16.6%
being made throughout the
14.1% Company’s working capital cycle
• Management has increased the
inventory levels to minimise the
impact of global supply chain
FY19 FY20 FY21 FY22 disruptions to maintain customer
service
Statutory net working capital ($m) NWC / sales (%)
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2.3
2.8
1.2
1.8
1.0
0.7
0.5
FY19 FY20 FY21 FY22
Net CAPEX ($m) Cash costs of acquisitions ($m)
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• Net CAPEX primarily relates to computer equipment, motor vehicles and leasehold improvements

• Cash costs of acquisitions relates to the acquisition of Addelec in August 2019 (FY20), Control Logic in October 2020 (FY21) and HTC in October 2021 (FY22)

IPD GROUP FY22 RESULTS PRESENTATION

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FY22 RESULTS PRESENTATION |

Our focus

IPD GROUP FY22 RESULTS PRESENTATION

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IPD are exposed to a number of high growth areas

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Industrial

Renewable

Data centres

Electric vehicles

control systems

energy

High profile cyber attacks on companies resulting on increased demand and investment in cybersecurity protection

Increased focus on compliance measures regarding ‘green buildings’, including NABERS and Greenstar ratings

Rising demand for components and systems for data centres

Public and private sector commitments to transition vehicle fleets to EVs and expand EV charging infrastructure

IPD’s power monitoring products enable commercial buildings and utilities to monitor energy usage at a granular level

IPD sell hardware and software solutions which protect enterprise’s electrical infrastructure

IPD sell various critical products to data centres and offer installation, test and commission, maintenance and ad hoc engineering services

IPD sells EV infrastructure on behalf of ABB and provides related services (installation, commissioning, maintenance, etc)

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Modular switchboard systems

Changes in the newly introduced low voltage switchgear & control gear assemblies standard

Both Elsteel and IPD

invested heavily in design and testing to provide a comprehensive modular electrical switchboard solution

IPD GROUP FY22 RESULTS PRESENTATION

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Strategic priorities

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Become a significant end to end solution provider to the EV charger market

EV hardware distribution agreement with ABB Design and project delivery skills – Gemtek Appointment of an experienced leader to the EV business Unit – David Sullivan Increase the scale of business development, engineering and project delivery staff – in progress Establish a nationwide network of licensed EV installers – in progress

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Expand product range UPS – Uninterrupted Power Supply BESS – Battery Energy Storage Systems High efficiency motors Renewables

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IPD GROUP FY22 RESULTS PRESENTATION

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Strategic priorities

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Acquisitions	The Group has a proven track record of successful acquisitions IPD continues to assess potential complementary acquisitions that add to its customer offering Potential targets have been identified and preliminary discussions are taking place
Strategic sales focus	Investment in resources over and above the current pool to create pull-through demand by driving specification of IPD solutions through key influencers and identify significant opportunities earlyin theproject life cycle Promote “packaged” solutions covering all products, create and deliver an education program for consultants, become a trusted advisor for relevant solutions to end users in key targeted vertical markets

IPD GROUP FY22 RESULTS PRESENTATION

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FY22 RESULTS PRESENTATION |

Outlook

IPD GROUP FY22 RESULTS PRESENTATION

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External factors

Buoyant Market

• Infrastructure

• Mining

Global Supply Chain

• Cost increase of materials and freight

• Increase inventory levels to mitigate disruption

Regulatory Environment

• Decarbonisation

• Mandatory emission reduction

• Incentive Schemes

COVID-19

• Lock downs relaxed

• Increase in staff travel to meet customers face to face

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Electrification of the Economy

• Renewables

• Energy Management

• EV Chargers

Sri Lanka

• Political and economic uncertainty in Sri Lanka

• Colombo employees continue to work from home uninterrupted

• Have started a back up operation in Manila

• IPD has increased salaries provided to employees however the changes in FX rates have offset increased costs

IPD GROUP FY22 RESULTS PRESENTATION

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Trading update & outlook

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FY23 outlook

IPD’s business continues to perform well in a buoyant market

Supply chain disruptions and global trade continue to remain uncertain

Board will provide an update on Q1 trading performance at the Company’s AGM on 10 November 2022

IPD GROUP FY22 RESULTS PRESENTATION

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FY22 RESULTS PRESENTATION |

Questions

IPD GROUP FY22 RESULTS PRESENTATION

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FY22 RESULTS PRESENTATION |

Supplementary information

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Business summary

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IPD’s business is split between the sale of infrastructure products and the provision of services to businesses across Australia

FY22 pro forma Customer Revenue revenue split Description Brands types End users/industries Locations model Commercial Sale and Switchboard construction, distribution Sydney, manufacturers, OEMs residential of a range Brisbane, and system construction, Sale of Products 90% of electrical Melbourne, infrastructure integrators, electrical infrastructure, Adelaide products and wholesalers, electrical mining, power solutions products and and Perth contractors and power utilities, healthcare solutions utilities and education Specialist Sydney, Project provider of Data centres, healthcare, power Melbourne, 10% management Services low and generation, utilities, industrial, mining, Bendigo ,labour and high roads and rail infrastructure and Burnie materials voltage electrical (Tasmania) services

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IPD’s history of growth

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Reliably serving Australia for over 70 years

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Evolution of IPD Key acquisitions
1950s 1968 1989 1998 2005 2014 2017 2018 2019 2020 2021 2022
1950s 1968 1979 1989 2005 2008 2010 2014 2017 2018 2019 2020 2021 2022
English Electric GEC Industrial Management team Sri Lankan Acquired Acquisition of Addelec Acquired
Company of Products buy the business operations Central Test and formation of HTC
Australia Pty Ltd division from ALSTOM commenced Calibration & services division
Incorporated formed through an MBO Testing
Regents Park
factory opened GEC merged with GEC Power Acquired PJ White Acquired Hivotech HV Trio Test & Measurement Acquired Successful initial
English Electric systems group Specialist Lighting Testing & Equipment and Zinfra’s HV Testing Control Logic public offering on
merged with company business the ASX
CGE subsidiary
IPD Services Aquired
Alsthom to
created Gemtek
create GEC
Alstom
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IPD GROUP FY22 RESULTS PRESENTATION

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FY22 RESULTS PRESENTATION |

Appendices

IPD GROUP FY22 RESULTS PRESENTATION

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Profit & loss

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Summary pro forma profit and loss

	Pro forma	Pro forma	%
$m	FY21	FY22	change
Revenue	142.6	180.5	26.6%
Gross profit	54.7	68.6	25.4%
Other income	0.6	0.8	33.3%
Operating expenses	39.3	47.3	20.4%
EBITDA	16.0	22.1	38.1%
Depreciation and amortisation	4.0	3.6	(10.0%)
EBIT	12.0	18.5	54.2%
Net interest expense	0.6	0.5	(16.7%)
PBT	11.4	18.0	57.9%
Income tax expense	3.5	5.4	54.3%
NPAT	7.9	12.6	59.5%
Gross profit margin	38.3%	38.0%	(0.3%)
EBITDA margin	11.2%	12.2%	1.0%
EBIT margin	8.4%	10.2%	1.8%
NPAT margin	5.5%	7.0%	1.5%

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Balance

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Statutory balance sheet

	31 Dec 21	30 Jun 22
$m	Statutory	Statutory
Cash	19.8	25.4
Trade and other receivables	35.2	37.6
Inventories	31.3	32.9
Other current assets	1.2	1.1
Total current assets	87.5	97.0
Right-of-use assets	12.5	11.1
PP&E	2.9	3.4
Intangibles	10.1	10.5
Deferred tax assets	3	2.9
Other non-current assets	–	–
Total non-current assets	28.6	27.8
Total assets	116.1	124.8
Trade and otherpayables	37.9	40.4
Current tax liabilities	2	1.6
Lease liabilities	2.4	2.4
Provisions	4.8	6.3
Total current liabilities	47.1	50.7
Lease liabilities	11.4	10.2
Provisions	0.4	0.3
Deferred tax liabilities	–	0.2
Total non-current liabilities	11.8	10.7
Total liabilities	58.9	61.4
Net assets / equity	57.2	63.4

IPD GROUP FY22 RESULTS PRESENTATION

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P&L Reconciliation

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$m FY19 FY20 FY21 FY22 Statutory revenue 75.8 87.5 118.1 176.8 Impact of acquisitions 59.2 53.9 24.6 3.7 Pro forma revenue 135.0 141.4 142.6 180.5 $m FY19 FY20 FY21 FY22 Statutory EBITDA 3.7 9.1 13.6 20.2 Offer costs - - - 1.6 Underlying EBITDA 3.7 9.1 13.6 21.8 Public company costs (0.4) (0.4) (0.4) (0.2) Impact of acquisitions 4.2 6.5 2.8 0.6 AASB16 2.6 - - - Product recall 1.2 (0.4) - - Pro forma EBITDA 11.3 14.8 16.0 22.1	$m FY19 FY20 FY21 FY22
	Statutory EBIT 0.6 5.8 9.6 16.6
	Offer costs - - - 1.6
	Underlying EBIT 0.6 5.8 9.6 18.2
	$m FY19 FY20 FY21 FY22
	Statutory NPAT (0.2) 4.0 6.5 11.1
	Offer costs - - - 1.6
	Tax impact - - - (0.4)
	Underlying NPAT (0.2) 4.0 6.5 12.3

IPD GROUP FY22 RESULTS PRESENTATION

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