IVE GROUP LIMITED — AGM Information 2022

Nov 21, 2022

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IVE Group Limited 2022 Annual General Meeting

Chief Executive Officer’s Presentation Matt Aitken

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22 November 2022

Annual General Meeting 22 November 2022

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Contents

Financial performance

Financial performance 3 Key business highlights 4 Lasoo 7 Ovato transaction 10 Capital raising 13 Packaging – further growth and diversification opportunity 14 Outlook 15

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Annual General Meeting 22 November 2022

Financial performance dashboard A strong uplift in underlying financial performance following two years of unprecedented uncertainty and volatility

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REVENUE EBITDA NPAT $759.0m $96.6m $33.1m ↑15.6% on PCP ↑13.3% on PCP ↑66.1% on PCP

NET DEBT $76.8m CASH ON HAND $67.0m

EARNINGS PER SHARE 23.1c ↑71.1% on PCP

OPERATING CASH CONVERSION TO EBITDA OF 95%

GROSS PROFIT MARGIN 46.6%

48.1% PCP

FY22 DIVIDEND 16.5c ↑17.9% on PCP

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The underlying financial results are on a non IFRS basis and are not audited or reviewed The underlying financial results are on a continuing operations basis, post AASB16 and exclude non-operating items (refer page 32 of the 2022 Annual Report)

Underlying results exclude net JobKeeper receipts in FY21

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Annual General Meeting 22 November 2022

Key business highlights

Strong uplift in underlying financial performance following two years of unprecedented uncertainty and volatility. Significant uplift in both earnings and dividends, strong cash flow (despite a necessary and material increase in inventories) demonstrates underlying resilience and contributed to further balance sheet strengthening

Strong operating performance

• Strong results achieved in challenging environment demonstrate the diversity of our offer and operational resilience

• Successfully managed the impact of higher input prices and material supply chain constraints

• Delivered on earnings guidance:

• Revenue $759.0m, up 15.6%;

• EBITDA $96.6m, up 13.3%; and

• NPAT $33.1m, up 66.1%.

• Balance sheet further strengthened affording the Company capacity for ongoing strategic initiatives

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4

Annual General Meeting 22 November 2022

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Strategic initiatives

• Integration of the November 2021 acquisitions of Active Display Group (ADG) and AFI Branding Solutions (AFI) has progressed in line with expectations and has significantly expanded IVE’s third party logistics (3PL) and retail display businesses

• Although delayed by COVID-19 and poor weather, our Victorian site consolidation recently completed with meaningful efficiencies and enhanced client service resulting from the consolidation of five sites into two comprising our facilities in Sunshine and the expanded Braeside precinct

• During the year we elected to carry materially elevated inventory levels (particularly paper) which helped insulate us from significant supply chain disruption, further enhancing our service reputation

• Post year end, we successfully completed the acquisition of select assets of Ovato Limited (Ovato) and a modest capital raising to maintain balance sheet capacity

Balance sheet further strengthened

• Strong cash flow generation with operating cash flow conversion of 95%

• Net debt at 30 June 2022 broadly unchanged at $76.8m despite carrying circa $30m of additional inventory

• Net debt equates to 1.1x pre AASB16 EBITDA, down from 1.3x at 30 June 2021, and well below the Company’s conservatively stated target of 1.5x

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Annual General Meeting

22 November 2022

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Improving shareholder returns

• EPS growth of 71.1% over PCP

• Final dividend of 8 cents per share, contributing to a full year dividend of 16.5 cents per share fully franked, up 17.9% from 14 cents per share PCP

• Return on funds employed (ROFE) improved to 21% from 14% PCP

• Improving shareholder return metrics contributed to a pleasing recovery in IVE’s share price which has increased from $1.75 this time last year to $2.53 (at 21 November 2022), despite a 19% decline in the S&P/ASX Small Ordinaries Index over the same period

Continuation of our strategy through actively pursuing growth opportunities

• The Company expects to continue to invest in growth initiatives

• Growth initiatives target a minimum ROFE of 15%

• There are a range of initiatives and opportunities for the Company to pursue:

• Organic initiatives;

• Bolster the existing product and service offering through attractive ‘bolt-on’ acquisitions; and

• Further diversify and expand into complementary adjacencies.

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Annual General Meeting

22 November 2022

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transformation

• Lasoo was the first digital catalogue site in Australia, established in 2007 and acquired by IVE in 2020

• Despite limited historical functionality, Lasoo retained significant and loyal consumer and retailer support, as evidenced by impressive and regular site traffic (around 200,000 users per month)

• Given the support for Lasoo and our strong retail sector ties, IVE identified a meaningful opportunity to transform Lasoo into a superior e-Commerce marketplace for retailer’s specials

• During 2022, the Group invested $4.7m to completely rebuild and market test the Lasoo platform

• The new platform is expected to deliver a greatly enhanced on-line consumer experience reflecting:

• Game changing upgrade of functionality;

• Greatly improved product range, pricing visibility, search and comparison engine; and

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• Consumers’ ability to easily discover, compare and purchase specials from multiple retailers on the one platform in a single transaction.

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Annual General Meeting 22 November 2022

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relaunched

• The new platform went live in September 2022 and provides an opportunity for IVE to commercialise and grow Lasoo’s already active user base

• The Lasoo marketplace comprises a large number of Australia’s leading retailers across a broad range of sectors, including health, groceries, jewellery, electronics, home & garden, hardware, furniture, fashion, beauty, automotive, baby, sports & outdoor, alcohol, pets and other

• A $4m consumer go-to-market campaign to launch and amplify the newly upgraded Lasoo platform commenced rolling out from October 2022

• Initial site activity and user feedback is encouraging, and we look forward to providing a more in-depth update on Lasoo in due course

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Lead-generation retailers live on the platform

ALDI Coles Target Vintage Cellars Australia Post Chemist Warehouse The Good Guys Woolworths Big W Foodland (IGA) Tyres & More Bob Jane T-Marts Kmart Liquorland

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e-Commerce enabled retailers live on the platform

ABM DCO Millers SK Designer Living Andala Pets Decathlon Minimax Sollys Autobarn Flower Power Mr Toys Stratco Autograph GiftBox Noni B Toymate AZAU Golf Division Nutro Nourish Wanderlust Bayfields Grahams Jewellers Office Catch Watch Depot Berne In Trading Pillow Talk Watches Galore Bevilles Jewellers Jaycar Road Tech Marine W.Lane Boutique Retailer Katies Rockmans Wow Baby Brand Merchant Klika Rivers Zohi Interiors BBQ’s Galore Lava Deals Sanity Camera Electronic Lennox Sheils Jewellers Camera House Liz Jordan Simply Wholesale

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e-Commerce enabled retailers currently integrating onto the platform

Andoo	Domain Appliances	Leon Cycle	Sip’n Save
Appliances Online	Global Fitness & Leisure	Lincraft	Thirsty Camel
Azura Runway	Harris Technology	Malouf Pharmacies	Winning Appliances
Booze Brothers	Harry Brown	Nestz Furniture	Zamel’s
Bottlemart	iWorld Online	Pet Culture
Camping Australia	KG Electronic	PETstock
CUB	LatestBuy	Ramsay Pharmacies

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• A further 18 e-Commerce enabled retailers are also scheduled to begin integrating onto the platform in the coming months

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Annual General Meeting 22 November 2022

go-to-market campaign

DOOH large format

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DOOH small format/retail

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Radio
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Print
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APEX native

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Social

Digital TVC prospecting and remarketing

SEM

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Annual General Meeting 22 November 2022

Ovato transaction

• On 14 September 2022, IVE completed the highly accretive and strategically attractive acquisition of substantially all of Ovato’s printing and finishing assets

• The net purchase consideration (including transaction costs) was $16m

• Key Ovato production assets will be integrated into IVE’s existing footprint over a phased transition period of approximately 18 months

• Integration and associated capital expenditure costs are expected to be approximately $22m, excluding redundancies

Overview of Ovato

• Ovato was a large print producer of catalogues and publications, and was the largest competitor to IVE in this important sector

• At the time of acquisition, Ovato operated out of three key sites:

  • Warwick Farm (Sydney) – major production hub;

  • Geebung (Brisbane); and

  • Bibra Lake (Perth).

• Ovato has maintained a strong and loyal customer base, with major customers including Woolworths, Aldi, News Limited, IGA and Are Media (all of which are also customers of IVE)

• In addition to significant catalogue production, Ovato also prints well known magazine titles such as Australian Women’s Weekly, Woman’s Day, Gourmet Traveller, Vogue, Reader’s Digest etc

• Relevant Ovato revenue comprises circa 70% catalogues and 30% publications/other

• The Ovato Board appointed voluntary administrators in July 2022

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Annual General Meeting 22 November 2022

Transaction strategic rationale

• The transaction represents the final significant consolidation of this segment of the printing industry

• Highly attractive acquisition return metrics reflecting the benefit of significant operating leverage on the expected $160m of annual revenue post-integration, which would represent a circa 21% uplift on IVE’s recently reported FY22 revenue of $759m

• The acquisition of Ovato assets (rather than the corporate entity) reduces transaction risk and avoids legacy issues

• IVE has a strong track record of successfully integrating businesses and optimising operating leverage to deliver synergies

• In addition to attractive financial metrics, the acquisition is expected to:

• Further strengthen and deepen IVE’s already tier 1 customer base;

• Ensure continuity of product and service deliver to existing IVE and Ovato customers;

• Underpin the scale and strength of IVE’s national letterbox distribution

  • network; and

• An opportunity to cross-sell IVE’s broader diversified offer into the acquired customer base.

Expected transaction financial metrics

• The integration of an estimated $160m of Ovato revenue into IVE’s manufacturing footprint is expected to generate meaningful synergies as we further leverage IVE’s operating assets and cost base

• Once integration is complete (expected in 18 months from the date of completion), the acquisition is expected to increase the Group’s:

• EBITDA by $28m or 27%*

• Underlying NPAT by $15m or 43%*

• While the transaction is expected to be accretive in FY23, IVE is not yet able to provide guidance around the expected timing of the emergence of net synergies as the phasing of the integration plan remains subject to ongoing refinement

• Ovato integration costs will be treated as a significant item for reporting purposes with no impact on underlying NPAT

Although the transaction only recently completed, integration is progressing as planned with revenue from Ovato’s Geebung site (subsequently closed by the Administrator) and some revenue from Ovato’s Warwick Farm site already transitioned across to IVE

IVE will update investors on the detailed integration plans and expected phasing of the associated synergy benefits in conjunction with the release of the Group’s 1H23 result on 22 February 2023

* Relative to FY23 guidance issued in conjunction with the release of the FY22 result on 25 August 2022 and reaffirmed today

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Annual General Meeting 22 November 2022

Overview of Ovato integration

IVE has a strong track record of successfully integrating acquisitions across a range of sectors in which it operates

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Ovato sites Brisbane Sydney Perth
revenue split $30m $120m $10m
Integration plan – key principles
> 18 month timeline
>
Phased relocation of key equipment over
3 stages
>
Revenue transitioned progressively
Sydney Sydney Melbourne
IVE sites Perth
(Silverwater) (Huntingwood) (Sunshine)
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Total revenue
$160m
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Total revenue
$160m
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Through the integration period, revenue will be produced across the expanded (IVE and Ovato) production footprint to manage production capacity and facilitate the eventual relocation and recommissioning of all key Ovato production assets into IVE’s existing operations

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Annual General Meeting 22 November 2022

Capital raising

• While Ovato’s net purchase consideration was funded from existing facilities, IVE subsequently completed a $19.3m capital raising in October 2022 comprising an $18m institutional placement and a $1.3m retail share purchase plan which resulted in the issuance of 8.8m new shares at $2.25 per share

• The capital raising was undertaken to:

• Preserve balance sheet capacity to pursue organic growth initiatives;

• Support further opportunistic “bolt-on” and strategic acquisitions such as in the adjacent packaging sector; and

• Strengthen and deepen IVE’s institutional shareholder base and increase liquidity in the market for IVE shares.

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Annual General Meeting 22 November 2022

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Packaging – further growth and diversification opportunity

• As previously advised, the Company views (segments of) the packaging sector as a natural adjacency to the Group’s existing diversified product and service offering

• To assist in further refining and developing our strategy to build a meaningful packaging capability over the next two to five years, the Company has been working closely with an expert advisory firm

• An in-depth analysis of the Australian packaging market has been completed and confirms that IVE’s strategic imperative to grow its packaging offer is sound, and IVE should progress to finalise an execution plan to enter the market

• Specific areas of interest within the packaging sector include the higher margin, shorter run segment of the folding cartons market and the flexible packaging market, both of which share the following characteristics:

• Large and growing markets that are fragmented and ripe for consolidation;

• Significant overlap with IVE’s existing customer base eg retail, food and beverage, offering sound cross-selling opportunities;

• Machinery and skills overlaps;

• Printing capability value-add; and

• Dovetails with IVE’s logistics and retail display businesses.

• We intend providing further updates on this exciting potential adjacency during the first half of 2023

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Annual General Meeting 22 November 2022

Outlook

The solid underlying fundamentals of the business combined with the strength of our balance sheet place IVE in an ideal position to deliver further revenue and earnings growth, supplemented by the Ovato transaction and expected investment in further growth initiatives

• The revenue momentum evident in FY22 and underpinned by the post lockdown recovery has continued into the current year

• As illustrated by the FY22 YTD results, heightened operating leverage across the business should underpin solid earnings growth on the back of continued revenue growth

• The business has performed strongly in the 4 months to 31 October 2022, with revenue, EBITDA and NPAT up pleasingly on the same period last year (excluding the incremental contribution from the ADG/AFI acquisitions completed on 1 November 2021)

• While the likely trend in revenues beyond the current half is more difficult to predict given an increasingly uncertain economic landscape, we are encouraged by the strong YTD performance

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Annual General Meeting 22 November 2022

• Accordingly, the Company reaffirms the FY23 guidance provided on 25 August 2022:

• Underlying EBITDA of $105m*

• Underlying NPAT of $36m*

• Full year capital expenditure is expected to be $14m**

• We remain vigilant with respect to the management of paper (and other) supply chain pressures which are expected to continue for the foreseeable future

• Not surprisingly in light of the Ovato transaction and the aforementioned supply chain pressures, the level of inventory (and thus working capital) is expected to be further elevated at 31 December 2022

• In addition to organic growth initiatives and notwithstanding the integration of Ovato, we would anticipate additional attractive acquisition opportunities will present over the coming 12-24 months

* FY23 underlying EBITDA and NPAT guidance excludes an expected $3.3m after-tax loss associated with Lasoo’s consumer go-to-market campaign and team buildout, and exclude any contribution from the Ovato transaction

• * Excludes Ovato

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Thank you

IVE Group Limited ABN 62 606 252 644 Level 3, 35 Clarence Street 0 Sydney NSW 200 oup.com.au

Authorised by the IVE Board

Contact: Tony Jackson Investor Relations investors@ivegroup.com.au +61 410 499 043

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