IVE GROUP LIMITED — AGM Information 2018

Nov 19, 2018

IVE GROUP LIMITED – 2018 ANNUAL GENERAL MEETING MANAGING DIRECTOR’S PRESENTATION

==> picture [118 x 11] intentionally omitted <==

----- Start of picture text -----

November 20, 2018
----- End of picture text -----

==> picture [526 x 285] intentionally omitted <==

==> picture [155 x 10] intentionally omitted <==

----- Start of picture text -----

Warwick Hay - Managing Director
----- End of picture text -----

TABLE OF CONTENTS

03 Financial performance highlights 05 FY18 financial results

• Profit & loss

• Capital expenditure - Net debt and cash flow

• Historical performance

10 Operational initiatives

==> picture [53 x 34] intentionally omitted <==

==> picture [285 x 507] intentionally omitted <==

----- Start of picture text -----

PAGE 02
----- End of picture text -----

IVE GROUP LIMITED - 2018 ANNUAL GENERAL MEETING - MANAGING DIRECTOR’S PRESENTATION

HIGHLIGHTS

==> picture [842 x 507] intentionally omitted <==

----- Start of picture text -----

IVE GROUP LIMITED - 2018 ANNUAL GENERAL MEETING - MANAGING DIRECTOR’S PRESENTATION PAGE 03
Page 02
----- End of picture text -----

FINANCIAL PERFORMANCE DASHBOARD ( PRO FORMA )

==> picture [741 x 325] intentionally omitted <==

----- Start of picture text -----

$695.4M $73.2M EBITDA $35.9M NPATA (1)
↑ 32.4% PCP ↑ 32.4% PCP
REVENUE
↑ 39.9%
85.4% (2)
PCP 18.3% ROFE
FREE CASH CONVERSION
15.5 cents (4)
DPS↑ 22% (3) NET Debt EPS $0.252
1.79x EBITDA ↓ 2.6% PCP
PCP ( FULL YEAR )
----- End of picture text -----

(1) NPAT excluding amortisation of customer contracts

• (2) EBIT/average funds employed where funds employed equals net assets plus net debt

• (3) Growth based on FY2017 shares on issue post August 2017 capital raise (DPS growth pre August 2017 capital raise shares on issue 8.8%)

• (4) NPATA/weighted average shares on issue

IVE GROUP LIMITED - 2018 ANNUAL GENERAL MEETING - MANAGING DIRECTOR’S PRESENTATION

PAGE 04

FY18 FINANCIAL RESULTS

==> picture [526 x 285] intentionally omitted <==

IVE GROUP LIMITED - 2018 ANNUAL GENERAL MEETING - MANAGING DIRECTOR’S PRESENTATION

PAGE 05 Page 0 1352

FY18 FINANCIAL RESULTS Profit and loss

==> picture [353 x 301] intentionally omitted <==

----- Start of picture text -----

PRO FORMA
Actual Actual
FY2018 FY2017 Variance Variance
$M $M $M %
Revenue 695.4 496.9 198.5 39.9%
Gross Profit 338.6 248.1 90.5 36.5%
—
% of Revenue 48.7% 49.9% -2.5%
EBITDA 73.2 55.3 17.9 32.4%
—
% of Revenue 10.5% 11.1% -5.4%
EBIT 54.3 41.5 12.8 30.9%
—
% of Revenue 7.8% 8.4% -6.5%
Profit before tax 46.4 35.8 10.6 29.7%
NPAT 32.4 24.5 7.9 32.1%
NPATA 35.9 27.1 8.8 32.4%
----- End of picture text -----

• Revenue increased on PCP due to a combination of strong

• organic growth and the acquisitions of Franklin WEB, AIW and SEMA

• Gross profit margin stable to PCP after normalising for the impact

• of an increase in work mix weighting to catalogue revenue and the impacts of Franklin Web outsourcing through the integration period

• EBITDA margin of 10.5% (11.1% in PCP) driven by a number factors:

• Delayed closure of AIW site due to contract wins

• SEMA integration

• Electricity and gas price increases

• Q4 paper price increases

• Bad debts associated with Kalido Asia

The Pro Forma financial results are on a non IFRS basis Excludes all restructuring and acquisition expenses (refer Appendix)

IVE GROUP LIMITED - 2018 ANNUAL GENERAL MEETING - MANAGING DIRECTOR’S PRESENTATION

PAGE 06

FY18 FINANCIAL RESULTS Capital expenditure to support revenue growth

	FY2018 $M			FY2019 $M
Franklin WEB NSW	32.0		Previously committed capital expenditure FY18 Franklin WEB NSW Blue Star DIRECT	10.7 5.5
Blue Star WEB - new 16 page web offset press	10.4
SEMA integration	3.1		Sub Total	16.2
Group wide targeted investment and maintenance	9.1		Targeted investment and maintenance FY19	9.0
TOTAL	54.6		TOTAL	25.2

• The conclusion of these growth projects will see our move forward capital expenditure significantly reduce

IVE GROUP LIMITED - 2018 ANNUAL GENERAL MEETING - MANAGING DIRECTOR’S PRESENTATION

PAGE 07

FY18 FINANCIAL RESULTS Net debt

==> picture [363 x 283] intentionally omitted <==

----- Start of picture text -----

Actual
FY2018
$M
Borrowings - Short Term 15.7
Borrowings - Long Term 137.5
Borrowings [1] - Sub Total 153.2
Cash -22.3
Net debt 130.9
FY18 EBITDA 73.2
NET Debt / FY18 EBITDA 1.79
----- End of picture text -----

(1) Borrowings are gross of loan establishment costs

Net debt

• We maintain a strong balance sheet with net debt at 1.79X FY18 pro forma EBITDA

• Forecast net debt to further reduce in FY19 and FY20

Strong cashflow

• Operating cash flow was strong, reflecting the Group's EBITDA achievement

• Pro forma free cash conversion of 85.4%

• Full year dividend of 15.5 cents per share, fully franked with payout ratio of 71% of full year pro forma NPAT

==> picture [347 x 182] intentionally omitted <==

IVE GROUP LIMITED - 2018 ANNUAL GENERAL MEETING - MANAGING DIRECTOR’S PRESENTATION

PAGE 08

FINANCIAL RESULTS - historical performance ( pro forma ) Consistent growth from revenue through to NPATA

Revenue

==> picture [215 x 129] intentionally omitted <==

----- Start of picture text -----

$M
800
700
695.4
600
500
496.9
400
382
300
200
100
0
FY2016 FY2017 H1 FY18
----- End of picture text -----

==> picture [459 x 159] intentionally omitted <==

----- Start of picture text -----

EBITDA EBIT
$M $M
80 60
70 73.2 50 54.3
60
50 55.2 40 41.4
40 44.9 30 34.8
30
20
20
10
10
0 0
FY2016 FY2017 FY18 FY2016 FY2017 FY18
----- End of picture text -----

NPAT

==> picture [217 x 135] intentionally omitted <==

----- Start of picture text -----

$M
35
30 32.4
25
24.6
20 22.3
15
10
5
0
FY2016 FY2017 FY2018
----- End of picture text -----

==> picture [216 x 159] intentionally omitted <==

----- Start of picture text -----

NPATA
$M
40
35 35.9
30
25 27.3
23.9
20
15
10
5
0
FY2016 FY2017 FY2018
----- End of picture text -----

IVE GROUP LIMITED - 2018 ANNUAL GENERAL MEETING - MANAGING DIRECTOR’S PRESENTATION

PAGE 09

OPERATIONAL INITIATIVES

==> picture [526 x 285] intentionally omitted <==

IVE GROUP LIMITED - 2018 ANNUAL GENERAL MEETING - MANAGING DIRECTOR’S PRESENTATION

PAGE 10 Page 0 201352

OPERATIONAL INITIATIVES

Kalido

• Kalido continues growth trajectory both in Australia and Asia

• Kalido delivers omni-channel solution for Craveable Brands to enhance the customer experience

• Craveable Brands (Oporto, Red Rooster, and Chicken Treat) partnered with Kalido to transform the

• customer experience, leveraging leading marketing cloud platforms to enable a truly customer-centric, omni-channel automated solution

• Kalido has been recognised on a global stage for the outcomes of the project with Craveable Brands,

• winning the 2017 Salesforce Global Innovation Award

==> picture [166 x 173] intentionally omitted <==

==> picture [344 x 204] intentionally omitted <==

IVE GROUP LIMITED - 2018 ANNUAL GENERAL MEETING - MANAGING DIRECTOR’S PRESENTATION

PAGE 11

OPERATIONAL INITIATIVES

Pareto

• Pareto are the leading data experts in understanding and forecasting trends across the not-for-profit sector

• Pareto has developed and implemented a new “big data platform” that will enable all client fundraising data to be automatically uploaded and integrated to provide sophisticated reporting and an enhanced level of insights

• This new data platform enables Pareto to not only analyse trends and performance for specific clients, but also allows Pareto to analyse trends across the market

• A number of new analytical products have been released to the market on the back of this powerful data platform

Franklin WEB

Victoria

• Franklin Victoria/AIW merger fully complete December 2017

• AIW site ceased production in December 2017

• Excess press capacity retired

New South Wales

• To support revenue growth and to re-balance capacity between NSW and Victoria to further enhance our ability to service national retailers, $53 million has been invested to establish a highly automated low cost greenfield operation in Huntingwood NSW

• This facility was fully operational in November 2017 following the installation of the 1st new 80 page press and highly automated binding line

• Expanded stitching capacity in March 2018

• 2nd new 80 page press was commissioned in September 2018

• The site was officially opened on November 13, 2018

IVE GROUP LIMITED - 2018 ANNUAL GENERAL MEETING - MANAGING DIRECTOR’S PRESENTATION

PAGE 12

OPERATIONAL INITIATIVES

OTHER INITIATIVES

• ‘IVE 360’ company wide interactive workplace health and safety platform launched

• In addition to existing quality and environmental accreditation, ISO 27001 accreditation

==> picture [134 x 46] intentionally omitted <==

• was attained to significantly enhance our customers’ data security

• Expanded employee benefits program ‘IVE Plus’ to incorporate new Diversity and Inclusion program

==> picture [387 x 244] intentionally omitted <==

==> picture [226 x 233] intentionally omitted <==

IVE GROUP LIMITED - 2018 ANNUAL GENERAL MEETING - MANAGING DIRECTOR’S PRESENTATION

PAGE 13

==> picture [526 x 285] intentionally omitted <==

IVE GROUP LIMITED - 2018 ANNUAL GENERAL MEETING - MANAGING DIRECTOR’S PRESENTATION