IVE GROUP LIMITED — Investor Presentation 2016

Dec 4, 2016

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Strategic Acquisitions of Franklin Web and AIW and Capital Raising

/ 5 DECEMBER 2016

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Not for distribution or release in the United States

Not for distribution or release in the United States | 2

Important notices

This investor presentation ( Presentation ) has been prepared by IVE Group Limited (ABN 62 606 252 644) ( IVE ). This Presentation has been prepared in relation to a pro-rata accelerated non-renounceable entitlement offer of ordinary shares ( Shares ) in IVE. This offer will comprise an accelerated institutional entitlement offer ( Institutional Entitlement Offer ) and a retail entitlement offer ( Retail Entitlement Offer ), under section 708AA of the Corporations Act 2001 (Cth) ( Corporations Act ) as modified by Australian Securities and Investments Commission ( ASIC ) Instrument 2016/84 (together, the Entitlement Offer ). A separate institutional placement will also take place concurrently with the Institutional Entitlement Offer ( Placement ). In this Presentation, the Entitlement Offer together with the Placement is referred to as the Offer .

Summary information: This Presentation contains summary information about IVE and its activities which is current as at the date of this Presentation. The information in this Presentation is of a general nature and does not purport to be complete nor does it contain all the information which a prospective investor may require in evaluating a possible investment in IVE or that would be required in a prospectus or product disclosure statement prepared in accordance with the requirements of the Corporations Act.

The historical information in this Presentation is, or is based upon, information that has been released to the Australian Securities Exchange ( ASX ). This Presentation should be read in conjunction with IVE’s other periodic and continuous disclosure announcements lodged with the ASX, which are available at www.asx.com.au. Certain information in this Presentation has been sourced from AIW Printing ( AIW ) and Franklin Web ( Franklin ), its representatives or associates. While steps have been taken to review that information, no representation or warranty, expressed or implied, is made as to its fairness, accuracy, correctness, completeness or adequacy. Certain market and industry data used in connection with this Presentation may have been obtained from research, surveys or studies conducted by third parties, including industry or general publications. Neither IVE nor its representatives have independently verified any such market or industry data provided by third parties or industry or general publications.

Not an offer: This Presentation is not a prospectus, product disclosure statement or other offering document under Australian law (and will not be lodged with ASIC) or any other law. This Presentation is for information purposes only and is not an invitation or offer of securities for subscription, purchase or sale in any jurisdiction (and will not be lodged with the U.S Securities Exchange Commission). Any decision to purchase New Shares must be made on the basis of the information to be contained in the offer document to be prepared and issued to eligible investors.

The Retail Offer Booklet for the Retail Entitlement Offer will be available following its lodgement with ASX. Any eligible retail shareholder who wishes to participate in the Retail Entitlement Offer should consider the Retail Offer Booklet in deciding to apply under that offer. Anyone who wishes to apply for New Shares under the Retail Entitlement Offer will need to apply in accordance with the instructions contained in the Retail Offer Booklet and the entitlement and application form.

This Presentation does not constitute investment or financial product advice (nor tax, accounting or legal advice) or any recommendation to acquire entitlements or New Shares and does not and will not form any part of any contract for the acquisition of entitlements or New Shares.

This Presentation does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in the United States.

Neither the New Shares nor the entitlements have been, and none of them will be, registered under the U.S. Securities Act of 1933 (the ‘ U.S. Securities Act ’) or the securities laws of any state or other jurisdiction of the United States. Accordingly, the entitlements may not be taken up by, and the New Shares may not be offered or sold to, directly or indirectly in the United States or to persons that are acting for the account or benefit of persons in the United States, unless they have been registered under the U.S Securities Act, or are offered and sold in a transaction exempt from, or not subject to, the registration requirements of the U.S. Securities Act and any other applicable securities laws. This Presentation may not be released or distributed in the United States.

Not investment advice: Each recipient of this Presentation should make its own enquiries and investigations regarding all information in this Presentation including but not limited to the assumptions, uncertainties and contingencies which may affect future operations of IVE and the impact that different future outcomes may have on IVE. This Presentation has been prepared without taking account of any person’s individual investment objectives, financial situation or particular needs. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own investment objectives, financial situation and needs and seek legal, accounting and taxation advice appropriate to their jurisdiction. IVE is not licensed to provide financial product advice in respect of IVE shares.

Cooling off rights do not apply to the acquisition of New Shares.

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Important notices (cont.)

Investment risk: An investment in IVE shares is subject to known and unknown risks, some of which are beyond the control of IVE. IVE does not guarantee any particular rate of return or the performance of IVE. Investors should have regard to the risk factors outlined in this Presentation and any other common investment risks when making their investment decision.

Financial data: All dollar values are in Australian dollars (A$ or AUD) unless otherwise stated. Investors should note that this Presentation contains pro forma and forecast financial information. In particular, a pro forma balance sheet and historical combined profit and loss statement have been prepared by IVE based on adjusting the financial statements for IVE for the financial year ended 30 June 2016 and adjusting for the impact of the acquisitions of AIW and Franklin and the Offer. The financial information for AIW has been extracted from the audited financial statements of AIW for the financial year ended 30 June 2016 and the financial information for Franklin has been extracted from the unaudited statutory accounts of Franklin for the financial year ended 30 June 2016 and, to the maximum extent permitted by law, IVE does not take responsibility for it.

The pro forma and other financial information, and past information, provided in this Presentation is for illustrative purposes only and is not represented as being indicative of IVE’s views on its future financial condition and/or performance.

Investors should also note that this Presentation does not include the financial statements of AIW or Franklin. While this Presentation includes a pro forma balance sheet and historical combined profit and loss statement of IVE as at 30 June 2016 to reflect the impact of the acquisition of AIW and Franklin and the Entitlement Offer, the pro forma financial information has been prepared by IVE in accordance with the measurement and recognition requirements, but not the disclosure requirements, of applicable accounting standards and other mandatory reporting requirements in Australia.

Investors should also note that the pro forma financial information does not purport to be in compliance with Article 11 of Regulation S-X of the rules and regulations of the U.S. Securities and Exchange Commission.

Investors should be aware that certain financial data included in this Presentation are ‘non-IFRS financial information’ under ASIC Regulatory Guide 230: ‘Disclosing non-IFRS financial information’ published by ASIC and are also ‘non-GAAP financial measures’ under Regulation G of the U.S. Securities Exchange Act of 1934. These measures include underlying net profit after tax, EBITDA, EBIT, revenue and NPATA.

The disclosure of such non-GAAP financial measures in the manner included in the Presentation may not be permissible in a registration statement under the U.S. Securities Act. The non-IFRS financial measures does not have a standardised meaning prescribed by Australian Accounting Standards and International Financial Reporting Standards ( IFRS ). Therefore, the non-IFRS financial information is not a measure of financial performance, liquidity or value under the IFRS and may not be comparable to similarly titled measures presented by other entities, and should not be construed as an alternative to other financial measures determined in accordance with Australian Accounting Standards. Investors are cautioned, therefore, not to place undue reliance on any nonIFRS financial measures included in this Presentation.

Future performance: This Presentation contains certain ‘forward looking statements’, including but not limited to projections, guidance on future revenues, earnings, margin improvement, other potential synergies and estimates, the timing and outcome of the AIW and Franklin acquisitions, the outcome and effects of the Offer and the use of proceeds, and the future performance of IVE, AIW and Franklin post acquisition. Forward looking statements can generally be identified by the use of forward looking words such as, ‘expect’, ‘anticipate’, ‘likely’, ‘intend’, ‘should’, ‘could’, ‘may’, ‘predict’, ‘plan’, ‘propose’, ‘will’, ‘believe’, ‘forecast’, ‘estimate’, ‘target’ ‘outlook’, ‘guidance’, ‘potential’ and other similar expressions within the meaning of securities laws of applicable jurisdictions and include, but are not limited to, indications of, or guidance or outlook on, future earnings or financial position or performance of IVE, estimated net synergies after combination with AIW and Franklin, the outcome and effects of the Offer and the use of proceeds. The forward looking statements contained in this Presentation are not guarantees or predictions of future performance and involve known and unknown risks and uncertainties and other factors, many of which are beyond the control of IVE, and may involve significant elements of subjective judgement and assumptions as to future events which may or may not be correct. Refer to the ‘Key Risks’ section of this Presentation for a summary of certain general and IVE specific risk factors that may affect IVE.

There can be no assurance that actual outcomes will not differ materially from these forward-looking statements. A number of important factors could cause actual results or performance to differ materially from the forward looking statements, including the risk factors set out in this Presentation. Investors should consider the forward looking statements contained in this Presentation in light of those disclosures. The forward looking statements are based on information available to IVE as at the date of this Presentation.

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Important notices (cont.)

Except as required by law or regulation (including the ASX Listing Rules), IVE undertakes no obligation to provide any additional or updated information whether as a result of new information, future events or results or otherwise. Indications of, and guidance or outlook on, future earnings or financial position or performance are also forward looking statements.

Past performance: Investors should note that past performance of IVE, including past share price performance of IVE and pro forma historical information in this Presentation, is given for illustrative purposes only and cannot be relied upon as an indicator of (and provides no guidance as to) future IVE performance including future share price performance. The pro forma historical information is not represented as being indicative of IVE’s views on its future financial condition and/or performance.

Disclaimer: Determination of eligibility of investors for the purposes of the institutional or retail components of the Offer is determined by reference to a number of matters, including legal and regulatory requirements, logistical and registry constraints and the discretion of IVE and/or the underwriters, and each of IVE and the underwriters and each of their respective affiliates disclaim any duty or liability (including for negligence) in respect of that determination and the exercise or otherwise of that discretion, to the maximum extent permitted by law. Each underwriter will rely on information provided by or on behalf of institutional investors in connection with managing, conducting and underwriting the Offer without having independently verified that information and the underwriters do not assume responsibility for the accuracy or completeness of that information.

For the avoidance of doubt, the underwriters and their respective advisers, affiliates, related bodies corporate, directors, officers, partners, employees and agents have not authorised, permitted or caused the issue, dispatch or provision of this Presentation, and have not made or purported to make any statement in this Presentation and there is no statement in this Presentation which is based on any statement by any of them.

To the maximum extent permitted by law, IVE, the underwriters and their respective advisers, affiliates, related bodies corporate, directors, officers, partners, employees and agents exclude and disclaim all liability, including without limitation for negligence or for any expenses, losses, damages or costs incurred by you as a result of your participation in the Offer and the information in this Presentation being inaccurate or incomplete in any way for any reason, whether by negligence or otherwise.

To the maximum extent permitted by law, IVE, the underwriters and their respective advisers, affiliates, related bodies corporate, directors, officers, partners, employees and agents make no representation or warranty, express or implied, as to the currency, accuracy, reliability or completeness of information in this Presentation and, with regards to the underwriters, them and their respective advisers, affiliates, related bodies corporate, directors, officers, partners, employees and agents take no responsibility for any part of this Presentation or the Offer.

The underwriters and their respective advisers, affiliates, related bodies corporate, directors, officers, partners, employees and agents make no recommendations as to whether you or your related parties should participate in the Entitlement Offer nor do they make any representations or warranties to you concerning the Offer, and you represent, warrant and agree that you have not relied on any statements made by the underwriters, or their respective advisers, affiliates, related bodies corporate, directors, officers, partners, employees or agents in relation to the Offer and you further expressly disclaim that you are in a fiduciary relationship with any of them.

Statements made in this Presentation are made only as the date of this Presentation, except where otherwise indicated. The information in this Presentation remains subject to change without notice. IVE reserves the right to withdraw the Entitlement Offer or vary the timetable for the Entitlement Offer without notice.

IVE reserves the right to withdraw, or vary the timetable for the Offer without notice.

Disclosure: The underwriters, together with their respective affiliates, are full service financial institutions engaged in various activities, which may include trading, financing, financial advisory, investment management, investment research, principal investment, hedging, market making, brokerage and other financial and non-financial activities and services including for which they have received or may receive customary fees and expenses.

In the ordinary course of their various business activities, the underwriters and their respective affiliates may purchase, sell or hold a broad array of investments and actively trade securities, derivatives, loans, commodities, currencies and other financial instruments for their own account and for the accounts of their customers, and such investment and trading activities may involve or relate to assets, securities and/ or instruments of IVE, its affiliates and/ or persons and entities with relationships with IVE and/ or its affiliates. The underwriters are acting for and providing services to IVE in relation to the Offer. The underwriters have been engaged solely as independent contractors and are acting solely in a contractual relationship on an arm’s length basis with IVE. The engagement of the underwriters by IVE is not intended to create any agency, fiduciary or other relationship between the underwriters and IVE, its security holders or any other investors. The underwriters, in conjunction with its affiliates, are acting in their capacity as such in relation to the Entitlement Offer and will receive fees and expenses for acting in this capacity.

CONTENTS

6	01 / Transaction overview
10	02 / Overview of Franklin and AIW
14	03 / Transaction rationale and impact on IVE
22	04 / Transaction funding, pro forma financials and terms
26	05 / Offer summary
30	A / Key risks
36	B / Offer jurisdictions

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01 / Transaction overview

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Overview

IVE is expanding into the LFWO sector via the strategic acquisitions of Franklin and AIW

• IVE Group Limited ( IVE ) has entered into binding agreements to acquire:

• Franklin Web ( Franklin ) for $100 million as the cornerstone acquisition; and

• AIW Printing ( AIW ) for $16 million (together, the Acquisitions )[(1) ]

• The Acquisitions represent IVE’s strategic expansion into the large format web offset ( LFWO ) sector:

• LFWO operators specialise in the production of retail catalogues;

• the Acquisitions are consistent with IVE’s strategy to be a leading, full service marketing and print communications provider

Overview

• The Acquisitions will make IVE a leading player in the LFWO sector and establish it as a low cost and highly efficient specialist catalogue producer through:

• the acquisition of Franklin and integrating AIW’s operations into Franklin’s market leading facility in Victoria over the next 12 months; and

• enhancing the combined group’s national coverage through the establishment of a catalogue production capability in IVE’s Blue Star WEB facility in Sydney

• The IVE management team have a successful track record of acquiring, integrating and rationalising manufacturing businesses and a detailed integration plan has been developed

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(1) The Acquisitions are subject to customary conditions precedent

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Strategic rationale and highlights

Combining IVE, Franklin and AIW will create a competitive advantage and opportunities for future growth

1

LFWO sector is an attractive and complementary sector for IVE

• Catalogues continue to be a core part of retailers’ marketing strategies due to their audience reach and affordability

Franklin is considered a market leading, low cost catalogue producer and the cornerstone acquisition for IVE’s expansion into the LFWO sector

2

• IVE integrating AIW into Franklin and leveraging its low cost production environment is expected to deliver operational synergies of approximately $11.5 million per annum

• Establishing a catalogue production capability in Sydney will significantly enhance IVE’s ability to service national retailers

Significant opportunity to cross sell across the broader combined customer base

3

• Broadening IVE’s customer base across a range of leading retailers

• Minimal overlap between IVE’s existing customers and the customers of Franklin and AIW

4

Diversifies IVE’s revenue base through expanding the range of value added products and services

5

Financially compelling with expected EPS accretion of over 20%[(1)] through unlocking operational synergies

• Post-synergies, the Acquisitions represent an enterprise value / FY16 pro forma normalised EBITDA of 3.8x

6

Strengthens management capabilities to support integration and growth

(1) Once synergies are fully realised and excludes one off restructuring costs and one off capital expenditures

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Expected financial impact Trading update

Transaction summary

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Overview of
Franklin
Overview of
AIW
Synergies
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• Franklin is the third largest LFWO operator in the Australian market by revenue[(1) ] with pro forma revenues of $151.2 million[(2)] and EBITDA of $21.2 million[(2)] in FY16 (FY16 EBITDA margin of 14%)

• Owned by Phil Taylor, who will lead the combined Franklin and AIW business

• • AIW is the fourth largest LFWO operator in the Australian market by revenue[(1) ] with pro forma revenues of $76.8 million[(2)] and an EBITDA loss of $1.8 million[(2)] in FY16

• • Expected operational synergies of approximately $11.5 million per annum (full run rate) expected to be realised within 12 months post completion, driven by consolidating the assets and business operations of Franklin and AIW and integrating IVE’s Blue Star DISPLAY business in Victoria with Franklin’s retail display business. In addition, there is potential for additional unquantified revenue and cross-sell opportunities available

• • Implementation costs include one off restructuring costs expected to be between $6.5 million and $7.5 million, and one off capital expenditures expected to be up to $18 million

• • The Acquisitions and associated transaction costs will be fully funded through a combination of equity and debt

• a fully underwritten equity raising comprising a placement and entitlement offer:

Funding

  - a 1 for 8.9 pro-rata, accelerated, non-renounceable entitlement offer to raise $20 million

  - a placement of 10m shares to raise $20 million

• the issue of approximately $4.3 million of IVE shares to the Franklin vendors and approximately $16 million of IVE shares to the AIW vendors

• $62.2 million draw down of the $92.0 million new additional senior debt facilities provided by a syndicate of banks, including IVE’s existing lender

• •

EPS accretion of over 20% expected once synergies are fully realised (excluding one off restructuring costs and capital expenditures)

The Acquisitions will result in a pro forma net debt / pro forma FY16 EBITDA of approximately 1.8x at completion

  - debt levels are expected to reduce from high cash generation and synergies

• IVE intends to maintain its stated dividend policy of a payout ratio between 65% and 75% of NPAT

• Continue to execute IVE’s strategy to further diversify and grow

• Integration of recent acquisitions and the continuation of a disciplined acquisition program

• IVE is well-positioned to build on its business momentum and on the strong culture that defines the company and delivers year on year growth

• (1) Based on IVE’s management estimates of FY16 LFWO revenues

• (2) The pro forma historical combined profit and loss statement has been prepared by IVE based on the audited financial statements for IVE for the financial year ended 30 June 2016 and adjusting for the impact of the acquisitions of AIW and Franklin and the Offer. The financial information for AIW has been extracted from the audited financial statements of AIW for the financial year ended 30 June 2016 and the financial information for Franklin has been extracted from the unaudited statutory accounts of Franklin for the financial year ended 30 June 2016 A number of pro forma adjustments have been made to the Franklin and AIW financial information. The primary adjustment is to reflect the terms of the new Franklin lease agreement to be entered into in relation to the Franklin property and the terms of the sale and lease back of the AIW property on 30 June 2015

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02 / Overview of Franklin and AIW

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Overview of Franklin

Franklin is a market leading specialist catalogue producer and the cornerstone acquisition

Business overview

Services

• Established in 1936, Franklin is a third generation business owned by Phil Taylor

• Franklin is the third largest LFWO operator in the Australian market by revenue[(1)] and has 182 employees

• Operating locations

• headquartered in Sunshine, Victoria with a 55,000sqm operating facility providing the opportunity to accommodate AIW equipment

  • Franklin’s core capability is the production of retail catalogues and associated 94% of materials Franklin’s

  • Catalogues • Franklin is a leading catalogue producer FY16 pro forma

  • in Australia, providing innovative solutions revenues[(2) ]

  • to increase the impact of a customer’s catalogue campaign

• sales office locations in Sydney, Brisbane and Adelaide

• A strong culture of customer service combined with a history of product innovation has enabled Franklin to build long term relationships with many of the leading retailers in Australia

• In recent years, Franklin has developed a complementary retail display business to broaden its customer offering

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• 6% of

• • Franklin provides a wide range of retail Franklin’s

• Retail display products as a complementary FY16 pro

• display ‘value-add’ to its core catalogue offering forma revenues[(2)]

• (1) Based on IVE’s management estimate of FY16 LFWO revenues

• (2) The pro forma financial information is based on Franklin’s unaudited statutory accounts for the financial year ended 30 June 2016

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Financial performance of Franklin

Franklin is a low cost and highly efficient specialist catalogue producer

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Pro forma revenue and gross margin [(1) ]
160 40.0%
140 25.3% 24.4% 30.0%
23.0%
120 20.0%
100 10.0%
134.4 150.3 151.2
80 0.0%
FY14 FY15 FY16
Revenue Gross margin
Pro forma EBITDA and EBITDA margin [(1) ]
22 30.0%
20
20.0%
18 14.0%
13.5% 12.3%
16
10.0%
14
18.2 18.5 21.2
12 0.0%
FY14 FY15 FY16
EBITDA EBITDA margin
$ millions
$ millions
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Revenue

• Revenue growth of 12.4% from FY14A to FY16A was primarily driven by new contract wins and growth in retail display sales

• Gross margin improvement from FY15A to FY16A was driven by improved procurement of key input costs and growth in retail display sales which attract a higher gross margin

• Franklin has high quality customers across multiple industries with the top three industries serviced being:

• department stores;

• pharmacy retailers; and

• electrical retailers

• Average tenure of Franklin’s top twelve customers[(1)] is nine years

EBITDA

• EBITDA growth of 16.5% from FY14A and FY16A was driven by new contract wins, reduced input costs and growth in the higher margin retail display business

• High EBITDA to operating cash flow conversion in excess of 100% between FY14A and FY16A

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• (1) The pro forma financial information is based on Franklin’s unaudited statutory accounts for the financial year ended FY14, FY15 and FY16. A number of pro forma adjustments have been made to the Franklin financial information. The primary adjustment is to reflect the terms of the new Franklin lease agreement to be entered into in relation to the Franklin property

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Overview of AIW

AIW will be integrated with Franklin to deliver significant integration and synergy benefits

Business overview

Pro forma revenue and gross margin[(2) ]

• Established in 2001, AIW specialises in catalogue production and is owned by the Taverners Group

• AIW is the fourth largest LFWO operator in the Australian market by revenue[(1)] and has 121 employees

• Headquartered in a 32,000sqm operating facility in Springvale, Victoria

• Customers include a range of long term blue chip retailers

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100 25.0%
80 20.0%
12.9%
60 15.0%
7.6%
40 10.0%
4.8%
20 5.0%
92.5 79.4 76.8
0 0.0%
FY14 FY15 FY16
Revenue Gross margin
$ million
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Financial performance commentary

Pro forma EBITDA and EBITDA margin[(2) ]

• The deterioration in the financial performance between FY14A to FY15A is due to the loss of a major contract. Further decline in the financial performance between FY15A and FY16A is primarily due to pricing pressures and a fixed cost base

• Opportunity for IVE to integrate AIW’s operations into Franklin’s market leading facility and leverage Franklin’s low cost production environment

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8.0 12.0%
5.8
6.0
8.0%
6.2%
4.0
2.0 4.0%
0.3
0.4% (1.8)
0.0
FY14 FY15 FY16 (2.4%) 0.0%
(2.0)
(4.0) (4.0%)
EBITDA EBITDA margin
$ million
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• (1) Based on IVE’s management estimate of FY16 LFWO revenues

• (2) The pro forma financial information is based on AIW’s audited financial statements for the financial year ended FY14, FY15 and FY16. A number of pro forma adjustments have been made to the AIW financial information. The primary adjustment is to reflect the terms of the sale and lease back of the property on 30 June 2015

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03 / Transaction rationale and impact on IVE

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Strategic rationale

Consolidating the LFWO sector is a strategic move by IVE to unlock value for shareholders

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1 Attractive and complementary sector
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• LFWO is a sector in which IVE does not currently operate but is complementary to its product and service offering

• Attractive sector as catalogues continue to be a core part of retailers’ marketing strategies due to their audience reach and affordability

Combines Franklin’s market leading Broader customer base and significant 2 3 business with AIW and IVE opportunity to cross sell

• The integration of AIW with Franklin’s low cost production environment will establish IVE as a low cost and highly efficient specialist catalogue producer

• Broadens the customer base across a range of leading retailers

• Minimal overlap between IVE’s existing customers and the customers of Franklin and AIW

• Greater national coverage with expanded manufacturing footprint in Sydney and Melbourne, which is attractive to national retailers

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4	Diversifies revenue base	5	Financially compelling through unlocking synergies	6	6	Strengthens management capabilities to support growth	Strengthens management capabilities to support growth
	Expands IVE’s range of value added products		Unlocking operational synergies expected			Phil Taylor,	the current owner of Franklin,
	and services		to be approximately $11.5 million per			will lead the	combined Franklin and AIW
	’		annum			business

• Strengthens IVE’s offering to the retail sector

• Enhanced management capabilities and relevant expertise to support integration and growth

• Acquisitions are expected to be over 20% EPS accretive once synergies are fully realised[(1) ]

(1) Excludes one off restructuring costs and one off capital expenditures

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Attractive and complementary sector

The LFWO sector produces catalogues which are a core media distribution channel

Sector overview

Industry volumes by distribution[(1) ]

• The LFWO sector specialises in the production of retail catalogues

• In Australia, approximately eight billion catalogues are distributed each year

• The market for catalogues is estimated to be ~$1.5 billion[(1)] in Australia, and reaches an estimated audience of 19.7 million[(1)] people

• With 70% of customers preferring print catalogues over digital media[(1)] , catalogues offer advertisers an affordable media channel with strong customer engagement

• The four key operators in the sector are Franklin, AIW, PMP and IPMG – PMP and IPMG have recently announced a proposed merger

• In recent times, the sector has suffered from over-capacity

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10,000
8,000
6,000
4,000
2,000
0
FY09 FY10 FY11 FY12 FY13 FY14 FY15
millions
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Preferred media channel (Catalogues)[(1)]

Catalogue readership: print vs online[(1)]

• Catalogues remain a key media channel in influencing purchasing decisions in key consumer segments

Segment	Influence(2)
Groceries 49%
Liquor 42%
Children's wear 40%
Toys 39%
Cosmetics / toiletries 36%
Clothing/ fashion 35%

• 70% of Australian aged 14+ read catalogues, with 67% of 25-34 year olds (a power consumer market) reading printed catalogues compared to 13% reading online

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100%
80%
60%
Print
40%
Online
20%
0%
Australian 14-24 25-34 34-49 50+
14+
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• (1) Source: Australian Catalogue Association 2015 industry report

(2) Influence is the portion of Australians who believed that catalogues were the most useful form of media when making purchasing decisions

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Attractive and complementary sector (cont.)

The Acquisitions further enhance IVE’s unparalleled marketing offering

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IVE Group
Creative services Direct marketing Retail display Promotional Logistics and Fundraising Managed
merchandising fulfilment agency solutions
Print
production
n/a Number 1 Top 2 Top 3 n/a Number 1 Top 2
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Commercial and Niche web offset Large format web
digital offset
Number 1 Top 2 Top 3
AIW Printing Franklin Web
Integrate
Number 4 [(1)] Number 3 [(1) ]
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(1) Based on IVE’s management estimate of FY16 LFWO revenues

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Combining Franklin and AIW

Integrating AIW into Franklin and leveraging its low cost production environment

Franklin

Integration

Industry leading specialist catalogue producer

• Cornerstone of new LFWO strategy

• Extensive due diligence completed

• Well known to IVE for a number of years

• Lowest cost producer, quality manufacturing assets

• Long term customer relationships, track record of customer retention

• Focus on customer service and product innovation

• Strong cultural fit with IVE

• Experienced management team, led by Phil Taylor

• Additional space available for expansion

• Detailed integration plan developed

• Execution within 12 months

• Selected AIW assets relocated to Franklin's market leading facility

• Staged exit from AIW site

• Key AIW staff retained

• Catalogue capability established in Blue Star WEB’s Sydney facility

• LFWO sector revenues re-balanced across Sydney and Melbourne operations

• IVE's Victorian retail display business integrated with Franklin's retail display business

• Quality asset base

• Highly efficient, low cost specialist catalogue producer

• Attractive Sydney and Melbourne manufacturing capability to support national retailers

• Strong, performance based culture delivering for customers

• New business and cross sell opportunities to drive growth

• Leverage the combined Franklin and IVE reputation and expanded national footprint

• Comprehensive marketing solutions for retail vertical

• Strong forward bookings

• Excellent reputation and extensive knowledge and contacts

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Broader customer base and cross sell

The Acquisitions further enhance IVE’s diverse customer base, adding a range of long term, blue chip customers

IVE standalone (% of FY16 pro forma revenue)[(1)]

IVE post transaction (% of FY16 pro forma revenue)[(1) ]

Pro forma FY16 Revenue of $382 million

Pro forma FY16 Revenue of $610 million

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

Top customer
4%
Top 2 - 5 customers
10%
Top
customer Top 2 - 5
4% customers
9%
Top 6 - 20
customers Top 6 - 20
19% customers
60% increase
16%
in FY16 pro
forma
revenues
Others
customers
69%
Others customers
70%
----- End of picture text -----

Total number of customers: 2,412

Total number of customers: 2,728

• (1) The pro forma historical combined profit and loss statement has been prepared by IVE based on the audited financial statements for IVE for the financial year ended 30 June 2016 and adjusting for the impact of the acquisitions of AIW and Franklin and the Offer. The financial information for AIW has been extracted from the audited financial statements of AIW for the financial year ended 30 June 2016 and the financial information for Franklin has been extracted from the unaudited statutory accounts of Franklin for the financial year ended 30 June 2016

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Financially compelling

Expected operational synergies of approximately $11.5 million per annum (full run rate) expected to be realised within 12 months post completion. In addition, there is potential for additional unquantified revenue and cross-sell opportunities available

Targeted synergies	Targeted synergies
Gross margin synergies	• Procurement savings through leveraging the buying power of the combined group to lower input costs • Opportunity to realise savings through insourcing work previously outsourced • Reduction in freight costs and paper wastage
Direct cost synergies	• Savings associated with the integration of the AIW facility into Franklin and IVE’s Blue Star WEB facility including labour costs, rental expense, repairs and maintenance expenses, utilities and other manufacturing expenses
SG&A synergies	• Reduction in corporate overheads • Streamlining of sales teams • Integration of business support functions (including IT, HR and payroll)
Other synergies	• Integration of IVE’s Blue Star DISPLAY operations in Victoria with Franklin’s retail display business
Implementation costs
Implementation costs	• One off restructuring costs expected to be between $6.5 million and $7.5 million • One off capital expenditures expected to be up to $18 million in relation to the relocation of equipment, establishment of a catalogue production capability in the Blue Star WEB facility in Sydney and the expansion of IVE’s retail display capability in Victoria • Implementation costs are expected to be incurred within the first 12 months post acquisition

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Expected financial impact

Expected EPS accretion of over 20%[(1)] through unlocking operational synergies

Description • Expected EPS accretion of more than 20% once synergies are fully realised (excluding one off restructuring costs) Accretion • Post-synergies, the Acquisitions represent an enterprise value / FY16 pro forma normalised EBITDA of 3.8x • An increase in Borrowings of $60.4 million[(2)] from additional new debt facilities of $92 million provided by a syndicate of banks, including IVE’s existing lender – Total pro forma Borrowings of $127.7 million[(3)] with headroom of $30 million at completion Capital structure • The increased Borrowings are expected to result in pro forma net debt / pro forma FY16 EBITDA of approximately 1.8x at completion • Debt levels expected to reduce from high cash generation and synergies • Cash conversion is expected to remain high Dividend policy • IVE intends to maintain its stated dividend policy of a payout ratio between 65% and 75% of NPAT

• (1) Once synergies are fully realised and excludes one off restructuring costs and one off capital expenditures

• (2) The increase in Borrowings of $60.4 million is net of transaction costs in relation to the increased debt facility of $1.8 million which are capitalised and amortised over the life of the facility (3) Total pro forma Borrowings include Finance Leases of $14.3 million

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04 / Transaction funding, pro forma financials and terms

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Acquisition funding and terms

Acquisition terms

Acquisition terms
Purchase price	IVE has entered into binding agreements to acquire the assets of Franklin for $100 million and the shares of AIW for $16 million
Closing conditions	The Acquisitions are subject to customary conditions precedent
Completion date	The Acquisitions are expected to complete by 13 December 2016

Sources and uses of funding

Sources of funds	$ million		Uses of funds	$ million
Draw down on new additional debt facilities	62.2		Purchase consideration for Franklin	100.0
Placement	20.0		Purchase consideration for AIW	16.0
Entitlement Offer	20.0		Associated transaction costs	6.5
Scrip to vendors	20.3
Total	122.5		Total	122.5

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Pro forma historical combined Profit and Loss

	FY16 pro forma Profit and Loss(1)	FY16 pro forma Profit and Loss(1)	FY16 pro forma Profit and Loss(1)	FY16 pro forma Profit and Loss(1)	FY16 pro forma Profit and Loss(1)
$ millions (unless otherwise stated)	IVE	Franklin(2)	AIW(2)	Adjustments for the Acquisitions(3)	Pro forma combined group
Revenue 382.0 151.2 76.8 - 610.0
EBITDA 42.8 21.2 (1.8) 11.5 73.7
EBIT 32.8 13.7 (2.6) 11.5 55.3
PBT 30.6 13.7 (2.6) 8.1(4) 49.7
NPAT 20.9 9.6 (1.9) 5.7 34.3
NPATA 22.5 9.6 (1.9) 5.7 35.9
Shares on issue 89.2m 30.1m 119.3m

• (1) The pro forma historical combined profit and loss statement have been prepared by IVE based on the audited financial statements for IVE for the financial year ended 30 June 2016 and adjusting for the impact of the acquisitions of AIW and Franklin and the Offer. The financial information for AIW has been extracted from the audited financial statements of AIW for the financial year ended 30 June 2016 and the financial information for Franklin has been extracted from the unaudited statutory accounts of Franklin for the financial year ended 30 June 2016

• (2) A number of pro forma adjustments have been made to the Franklin and AIW financial information. The primary adjustment is to reflect the terms of the new Franklin lease agreement to be entered into in relation to the Franklin property and the terms of the sale and lease back of the AIW property on 30 June 2015

• (3)

• Commentary on the Adjustments:

• Full run rate of synergies have been estimated at $11.5 million (excludes one off restructuring costs and one off capital expenditures)

• Excludes any post completion purchase price accounting adjustments (which may give rise to a change in fair value of identifiable assets and liabilities and subsequent changes to depreciation and amortisation costs), any potential write-down or impairment of surplus equipment and any impact of drawdowns on debt facilities to fund implementation costs

• (4) Pro forma finance costs are based on net debt in the pro forma historical combined Balance Sheet and the terms of the new debt facilities

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Pro forma historical combined Balance Sheet

	FY16 pro forma Balance Sheet(1)	FY16 pro forma Balance Sheet(1)	FY16 pro forma Balance Sheet(1)	FY16 pro forma Balance Sheet(1)	FY16 pro forma Balance Sheet(1)
$ millions (unless otherwise stated)	IVE FY16 Statutory	IVE pro forma adjustment	Impact of Offer and new banking facilities	Impact of the Acquisitions	Pro forma combined group
Cash 14.5 (0.4) 95.7 (95.7) 14.1
Receivables 66.7 - - 26.9 93.6
Inventory 12.5 - - 27.7 40.2
PP&E 41.7 - - 58.2 99.9
Goodwill and Intangibles 87.5 2.6 0.5 31.6 122.2(2)
Other Assets 8.5 - - 0.6 9.1
Total Assets 231.4 2.3 96.2 49.3 379.2
Trade and Other Payables 73.4 (6.6) - 24.3 91.1
Borrowings 36.8 16.2 60.4(3) - 113.4
Finance leases 14.3 - - - 14.3
Other Liabilities 25.5 0.2 - 4.6 30.3
Total Liabilities 149.9 9.9 60.4 29.0 249.1
Total Equity 81.5 (7.7) 35.9 20.3 130.0

• (1) The pro forma balance sheet is based on the audited balance sheet of IVE as at 30 June 2016 which is then adjusted to reflect the IVE dividend paid in October 2016, the acquisition of The Mailing House in October 2016 and the payment of deferred consideration for historical acquisitions post 30 June 2016. The financial information for AIW has been extracted from the audited financial statements of AIW for the financial year ended 30 June 2016 and the financial information for Franklin has been extracted from the unaudited statutory accounts of Franklin for the financial year ended 30 June 2016

• (2) Excludes any post completion purchase price accounting adjustments, any potential write downs or impairment of surplus equipment and any impact of draw down on debt facilities to fund implementation costs

• (3) The increase in Borrowings of $60.4 million is net of transaction costs in relation to the increased debt facility of $1.8 million which are capitalised and amortised over the life of the facility

05 / Offer summary

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Sources of funding

• A fully underwritten equity raising comprising a placement and entitlement offer (the Offer ):

• Placement and – a 1 for 8.9 pro-rata, accelerated, non-renounceable Entitlement Offer to raise approximately $20 million; and

• Entitlement Offer

• a 1 for 8.9 pro-rata, accelerated, non-renounceable Entitlement Offer to raise approximately $20 million; and

• a placement of 10m shares to raise $20 million

Scrip to vendors

• Issue of approximately $4.3 million of IVE shares to the vendors of Franklin and approximately $16 million of IVE shares to the vendors of AIW

• • $8 million of shares issued to the AIW vendors are subject to a 12 month escrow

• Draw down of $62.2 million from additional new debt facilities of $92 million provided by a syndicate of banks, including IVE’s

• Debt existing lender

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Offer details

• Fully underwritten placement and 1 for 8.9 pro-rata, accelerated, non-renounceable Entitlement Offer to raise gross proceeds of

• Offer structure and size approximately $40 million • Approximately 20 million New Shares to be issued • Entitlement Offer will be conducted at $2.00 per New Share ( Offer Price ) -

• Offer price 3.4% discount to the last traded price of $2.07 on Friday 2 December 2016 - 2.6% discount to TERP[(] ¹[)] of $2.05

• $20 million Placement to institutional and sophisticated investors

• • Approximately $15.5 million Institutional Entitlement Offer to existing institutional shareholders

Institutional investors

• the Institutional Entitlement Offer will be conducted on Monday 5 December 2016

• • New Shares equivalent to the number of New Shares not taken up and those that would have been offered to ineligible shareholders will be placed into an institutional shortfall bookbuild to be conducted on Tuesday 6 December 2016

• • Approximately $4.5 million Retail Entitlement Offer to existing eligible retail shareholders - the Retail Entitlement Offer will open on 9.00am (Sydney time) Monday, 12 December 2016 and close on 5.00pm (Sydney time)

• Retail investors Wednesday, 21 December 2016 - eligible retail shareholders may also apply for additional New Shares beyond their entitlement, up to a maximum of 100% of their Entitlement, subject to the limitations and scale-back discretion detailed in the Retail Offer Booklet

• • Caxton Print Holdings Pty Limited As Trustee For Selig Family Trust (which represents the interests of Geoff Selig, Executive Chairman, and Paul Selig, Non-Executive Director), intends to take up 50% of its entitlement as part of the Entitlement Offer. Wolseley Partners Pty Ltd,

• Director commitments being the largest shareholder of IVE and representing the interests of Wolseley Private Equity, is unable to take up any rights in the Entitlement Offer as its investment in IVE is held within a fully invested fund. All IVE directors who hold shares in IVE have stated they intend to take up some or all of their entitlements

• • New Shares issued under the Entitlement Offer and Placement will rank equally with existing fully paid ordinary shares from their time of

• Ranking issue, however, New Shares under the Placement do not have rights to participate in the Entitlement Offer

• Underwriters • Offer is fully underwritten by Bell Potter Securities Limited and Evans and Partners Pty Ltd

• (1) The TERP is the theoretical price at which IVE shares should trade at immediately after the ex-date for the Entitlement Offer. The TERP is a theoretical calculation only and the actual price at which IGL shares trade immediately after the ex-date for the Entitlement Offer will depend on many factors and may not equal the TERP. TERP is calculated by reference to IVE’s closing price of $2.07 on Friday 2 December 2016 and includes shares issued under the Placement and shares issued to the vendors of Franklin and AIW

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Offer timetable

Event	Date(1)
Trading halt and announcement of the Acquisitions, Placement and Entitlement Offer Monday, 5 December 2016
Placement and Institutional Entitlement Offer opens Monday, 5 December 2016
Institutional Entitlement Offer closes Tuesday, 6 December 2016
Placement and Institutional Shortfall Bookbuild Tuesday, 6 December 2016
Trading halt lifted and shares recommence trading on ASX Wednesday, 7 December 2016
Record Date for determining entitlement to subscribe for New Shares 7.00pm (Sydney time)(2)Wednesday, 7 December 2016
Retail Entitlement Offer opens 9.00am (Sydney time)(2)Monday, 12 December 2016
Retail Entitlement Offer Booklet despatched to eligible shareholders Monday, 12 December 2016
Settlement of Placement and applications in the Institutional Entitlement Offer Monday, 12 December 2016
Allotment and normal trading of New Shares under the Placement and Institutional Entitlement Offer Tuesday, 13 December 2016
Retail Entitlement Offer closes 5.00PM (Sydney time)(2)Wednesday, 21 December 2016
Settlement of Retail Entitlement Offer Friday, 30 December 2016
Allotment of New Shares issued under the Retail Entitlement Offer Tuesday, 3 January 2017
Quotation of New Shares under the Retail Entitlement Offer Wednesday, 4 January 2017
Despatch of holding statements in respect of New Shares issued under the Retail Entitlement Offer Wednesday, 4 January 2017

Notes: (1) All dates and times are indicative and subject to change without notice (2) Australian Eastern Daylight Savings Time

Appendix A / Key risks

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Key risks

Acquisition and Offer Risks

Topic	Summary	Summary
Reliance on		IVE undertook a due diligence process in respect of Franklin and AIW,
Information Provided		which relied mostly on the review of financial and other information provided
		by the vendors. While IVE considers the due diligence process undertaken
		to be appropriate, IVE has not been able to verify the accuracy, reliability or
		completeness of all the information which was provided to it against
		independent data. Similarly, IVE has prepared (and made assumptions in
		the preparation of) the financial information relating to Franklin/AIW and the
		IVE Group post-completion included in this Presentation in reliance on limited financial information and other information provided by the vendors. Some of this information was unaudited. If any of the data or information provided to and relied upon by IVE in its due diligence process and its preparation of this Presentation proves to be incomplete, incorrect, inaccurate or misleading, there is a risk that the actual financial position and performance of IVE may be materially different to the financial position and performance expected by IVE and reflected in this Presentation.
		Investors should also note that there is no assurance that the due diligence conducted was conclusive and that all material issues and risks in respect of the Acquisitions have been identified. Therefore, there is a risk that unforeseen issues and risks may arise, which may also have a material impact on IVE. This could adversely affect the operations, financial performance or position of IVE. Further, the information reviewed by IVE
		includes forward looking information. While IVE has been able to review
		some of the foundations for the forward looking information relating to
		Franklin/AIW, forward looking information is inherently unreliable and based
		on assumptions that may change in the future.
		IVE has sought to mitigate the risks associated with the information
		provided during due diligence by seeking certain warranties and indemnities
		from the vendors.
Analysis of Opportunity		IVE has undertaken financial, business and other analyses of Franklin and AIW in order to determine its attractiveness to IVE and whether to pursue the transaction. It is possible that such analyses, and the best estimate assumptions made by IVE, draw conclusions and forecasts that are
		inaccurate or which are not realised in due course. To the extent that the
		actual results achieved by Franklin and AIW are different than those
		indicated by IVE’s analysis, there is a risk that the profitability and future
		earnings of the operations of IVE may be materially different from the
		profitability and earnings expected as reflected in this Presentation.

Topic	Summary	Summary
Acquisition		While the acquisition agreements do not contain any material conditions
Completion Risk		precedent to completion and completion is scheduled to occur shortly after
		settlement of the Institutional Entitlement Offer, there is a risk that the AIW
		Acquisition or the Franklin Acquisition does not proceed on the current
		terms and expected timing due to unforeseen circumstances, and that this
		could materially and adversely affect IVE.
Debt Facilities and		IVE has entered into a syndicated facilities agreement (Facility
Funding Risk		Agreement) to refinance its existing indebtedness and provide funding for
		the Franklin Acquisition and associated acquisition costs. If certain
		conditions precedent are not satisfied or certain events occur, the
		financiers may be entitled not to fund under the terms of the Facility
		Agreement , which would have an adverse impact on IVE’s sources of
		funding for the transaction.
		If the conditions precedent are not satisfied and IVE’s financiers do not
		fund under the Facility Agreement and IVE is unable to source alternate
		funding, it may be unable to complete the Franklin Acquisition and/or the
		AIW Acquisition and could be required to pay damages. If this was to
		occur the Offer may not proceed and in this circumstance all application
		moneys paid would be refunded to investors.
		If the proposed Acquisitions occur, there will be an increase in IVE’s debt
		levels. The use of debt financing to partially fund the transaction means
		that IVE will be more exposed to risks associated with gearing. For
		example, IVE will be more exposed to any movements in interest rates.
Historical liabilities		Since it is acquiring the shares in AIW, IVE will also indirectly assume any
		liabilities that AIW has from its past operations, including any liabilities
		which were not identified during its due diligence or which are greater than
		expected, for which insurance may not be adequate or available, and for
		which IVE will not have post-closing recourse under the AIW Acquisition
		Agreement. Such liabilities may adversely affect the financial performance
		or position of IVE post-acquisition.

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Key risks (cont.)

Acquisition and Offer Risks (cont.)

• Topic Summary Franklin and AIW  Reduced demand for catalogue products – The post-acquisition specific risks performance of IVE will be influenced by the overall condition of the marketing and print communications industry in Australia. The primary services offered by AIW and Franklin are the printing of catalogue products and new end-user marketing and communications preferences may result in an unexpected reduction in demand for these catalogue products. This may result in the reduction in the level of IVE’s revenue.

• Loss of key management personnel – Franklin and AIW’s historical performance is attributable in part to its key management personnel and members of the senior management team. There is a risk that IVE may not be able to retain these persons or be able to find effective replacements for them in a timely manner. The loss of such personnel or any delay in their replacement may adversely affect IVE’s ability to develop and implement its business strategies and ultimately adversely affect IVE’s business, operating and financial performance. The loss of key personnel could have an adverse impact on IVE’s operations and potentially result in the loss of key client relationships and the potential loss of business knowledge.

• Loss of key customers – IVE’s business is dependent on its ability to retain its existing customers. Its growth is dependent on its ability to attract new customers and increase its business with its existing customers. IVE may not be successful in retaining the historical clients of AIW or Franklin. Within the printing industry, customer contracts typically permit termination for convenience on short notice (less than 90 days). Accordingly customer contracts are subject to the risk of termination, as well as expiry and nonrenewal and the risk that customers reduce the volume of IVE’s products they consume. Each of these would result in the reduction in the level of IVE’s revenue.

• Underwriting Risk  IVE has entered into an Underwriting Agreement under which the Underwriters have agreed to fully underwrite the Offer, subject to the terms and conditions of the Underwriting Agreement. The Joint Lead Managers’ obligation to underwrite the Offer is conditional on certain customary matters, including IVE delivering certain certificates, sign-offs and opinions. Further, if certain events occur, some of which are beyond IVE’s control, the Joint Lead Managers may terminate the Underwriting Agreement, including if:

  • the acquisitions do not proceed for a number of reasons including if the acquisitions or acquisitions funding arrangements are terminated, the agreements are withdrawn, revoked or varied in any respect that is materially adverse to IVE or terminated or rendered void, voidable, illegal or otherwise unenforceable;

Topic	Summary	Summary
Underwriting Risk		o there are certain delays in the timetable for the Entitlement Offer,
(cont.)		without the Joint Lead Managers’ consent;
		o there are certain financial or economic disruptions in key market or
		hostilities commence or escalate in certain key countries;
		o there is a change in the board or certain senior management
		changes; or
		o an adverse change, or an event that is likely to lead to an adverse
		change, occurs in the assets, liabilities, financial position or
		performance, profits, losses or prospects of IVE or the IVE Group
		from that disclosed to ASX up to, and including, the Announcement
		Date.
		The ability of the Underwriters to terminate the Underwriting Agreement
		in respect of some events will depend on whether the event has or is
		likely to have a material adverse effect on the success, marketing or
		settlement of the Offer, the value of the securities, or the willingness of
		investors to subscribe for securities, or where they may give rise to
		liability for the Underwriters. Termination of the Underwriting Agreement
		would have an adverse impact on the amount of proceeds raised under
		the Offer and could affect IVE’s ability to pay the purchase price for the
		AIW/Franklin acquisitions. If the Underwriting Agreement is terminated,
		IVE will generally not be entitled to terminate the acquisition agreements.
		In these circumstances, IVE would need to find alternative funding to
		meet its contractual obligations under the acquisition agreements to pay
		the purchase price. Termination of the Underwriting Agreement could
		materially adversely affect IVE’s business, cash flow, financial
		performance, financial condition and share price.
		If the Underwriting Agreement is terminated and IVE is unable to source
		alternate funding, it may be unable to complete the Franklin Acquisition
		and/or the AIW Acquisition and could be required to pay damages. If this
		was to occur the Offer may not proceed and in this circumstance all
		application moneys paid would be refunded to investors.
		If the Underwriting Agreement was terminated after the settlement of the
		Institutional Entitlement Offer, the funds proposed to be raised in the
		Retail Entitlement Offer would not be raised, either in full or at all.

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Key risks (cont.)

Acquisition and Offer Risks (cont.)

Topic Summary

• Integration Risk  The Acquisitions involves the integration of Franklin and AIW, which have previously operated independently from IVE. As a result, there is a risk that the integration of Franklin and AIW may be more complex than currently anticipated, encounter unexpected challenges or issues and take longer than expected, divert management attention or not deliver the expected benefits. This may affect IVE’s operating and financial performance. Further, the integration of Franklin and AIW accounting functions may lead to revisions, which may impact on IVE’s reported financial results.

• The success of the Franklin/AIW acquisitions and, in particular, the ability to realise the expected synergy benefits of the acquisition outlined in this Presentation, will be dependent on the effective and timely integration of Franklin’s and AIW’s business alongside IVE’s business following completion of the acquisition. While IVE has undertaken analysis in relation to the synergy benefits of the Franklin/AIW acquisitions, they remain IVE’s estimate of the synergy benefits expected to be achievable as part of the Franklin/AIW acquisitions, and there is a risk that the actual synergies able to be realised as part of the acquisition may be less than expected or delayed, or that the expected synergy benefits of the acquisition may not materialise at all or cost more to achieve than originally expected.

• Achievement of  A key determinant of the long-term benefits IVE expects to derive from the Synergies Acquisitions is the achievement of expected synergies. There is a risk that the realisation of synergies or benefits described in this Presentation may not be achieved in a timely manner, at all or to the extent envisaged, or that the costs associated with achieving them may be higher than anticipated. Potential issues and complications influencing the achievement of targeted benefits include experiencing lower than expected cost savings, experiencing lower than expected efficiency improvements, unintended losses of key employees, and changes in market conditions.

• Topic Summary Risks Associated  Entitlements cannot be traded on ASX or privately transferred. If eligible With Not Taking Up retail shareholders do not take up all or part of their available New Shares Under entitlements, individuals’ percentage shareholding in IVE will be diluted the Entitlement (in addition to the dilution which will take place as a result of the Offer Placement and issue of shares to the vendors of Franklin and AIW).

• Any New Shares which are not subscribed for by eligible retail shareholders pursuant to their entitlements will be available for other retail shareholders who have elected to subscribe for additional New Shares as part of the Top Up Facility, subject to the limitations and scale-back discretion detailed in the Retail Offer Booklet. To the extent that eligible retail shareholders elect to receive additional New Shares under the Top Up Facility, this may result in further dilution of individual percentage shareholdings in IVE.

• Acquisition liability  The acquisition of AIW may trigger change of control clauses in some risk material contracts to which AIW (and its subsidiaries) are a party. Where triggered, the change of control clauses will, in most cases, require IVE to seek the counterparty’s consent in relation to the acquisition of AIW. There is a risk that a counterparty may not provide their consent, which may trigger a termination right in favour of that counterparty. If any of the material contracts are terminated by a counterparty or renegotiated on less favourable terms, it may have an adverse impact on IVE’s financial performance and prospects. There can be no assurance that IVE would be able to renegotiate such contracts on commercially reasonable terms, if at all.

• As IVE is acquiring the assets of Franklin, meaning that contracts with Franklin’s customers and suppliers will not automatically be transferred, there is also a risk that material contracts with Franklin customers and suppliers will be unable to be successfully transferred to IVE. This could materially adversely affect the financial performance of IVE’s business.

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Key risks (cont.)

Operational risks

Operational risks
Topic Summary Competition in the marketing and print communications industry  The marketing and print communications industry in Australia is highly fragmented and competitive. IVE faces competition in all market sectors in which it operates  Any increase in competition (for example, a competitor launching similar products or services) may lead to a loss of market share or decreased profitability Reliance on customer relationships  IVE’s ability to maintain successful relationships with existing and new customers is fundamental to its business, growth and profitability.  Failure to successfully maintain relationships with existing and new customers (for example, by failing to identify or react to changes in customer preferences) could negatively impact IVE’s future financial performance.  Customers may choose to rely on termination rights in customer contracts which apply in a range of circumstances including in some cases for convenience, or upon a change of control or declining to renew contracts on their expiry. Reduced demand for IVE’s products and services  The performance of IVE will continue to be influenced by the overall condition of the marketing services and print communications industry in Australia. New end-user marketing and communications preferences may result in an unexpected reduction in demand for IVE products and services. Reliance on key management personnel  IVE’s performance depends significantly on its key management personnel managing and growing its business and responding to customers’ needs.  The unexpected loss of any key management personnel, or the inability on the part of IVE to attract experienced personnel, may adversely affect its future financial performance.	Topic Summary
	Acquisition strategy may not be successful  IVE intends to selectively pursue acquisitions to complement its organic growth. However, IVE may not be able to identify suitable acquisition candidates at acceptable prices or complete and integrate acquisitions successfully.  Even if successfully executed and integrated, there can be no guarantee of continued successful performance of those acquisitions. To the extent that IVE’s acquisition strategy is unsuccessful, its financialperformance could be adverselyimpacted.
	Adapting IVE’s business processes as it expands  As part of its growth strategy, IVE intends to expand its product and service offering, either organically or via acquisitions. As this expansion occurs, the complexity of its business will increase. If IVE is unable to adapt to address different market dynamics, its operational and financial performance may be adversely affected.
	Brand and reputation damage  The success of IVE is largely dependant on its reputation and branding.  Maintaining the strength of the reputation and branding of the IVE Group is integral to its ability to maintain relationships with existing customers, appeal to new customers, maintain sales growth and attract key employees. Factors which adversely affect IVE’s reputation may have a negative impact on its competitiveness, growth and profitability.
	Foreign exchange exposure  An investment in IVE will include indirect exposure to currency fluctuations. The impact of foreign exchange rate fluctuations is mitigated by the purchase of forward foreign exchange contracts, holding suitable levels of inventory and through price adjustments passed on to customers. If IVE’s hedging strategies are not successful, IVE may experience financial loss.

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Key risks (cont.)

Operational risks (cont.)

Topic	Summary	Summary
Availability of inputs		IVE relies on various procurement relationships for the steady supply of
and input costs		raw materials, finished goods and products such as paper, ink, and
		equipment, all of which are key to operating its business. Significant
		supply disruptions could result in a material reduction in the availability
		of inputs required to support IVE’s operation.
		Increases in the prices of these inputs, including those increases caused by foreign exchange movements, could adversely affect IVE’s earnings if selling prices are not adjusted, or if adjusting selling prices adversely
		impacts customers’ demand for IVE’s products.
Impact of changing		IVE’s business is significantly influenced by changing technology,
technology on IVE’s		evolving industry standards and the emergence of new technologies.
competitive position		These changes can impact the ways in which IVE’s customers communicate with their customers and the ways in which IVE produces
		its existing products.
		In order to remain competitive and relevant, IVE needs to enhance and
		expand its offering to meet its customers’ needs. If IVE is unable to do
		so, it may impact on its competitive position.
		IVE’s ability to compete effectively in the future may also be impacted by
		its ability to maintain or develop appropriate equipment and technology
		platforms for the efficient delivery of its products and services. No
		assurance can be given that IVE will have the resources to acquire or
		the ability to develop new competitive technologies and this may also
		impact on IVE’s competitive position in the market.
Protection of		Through the ordinary course of business, IVE collects a range of
confidential		personal and financial data from customers.
customer		It is possible that the measures taken by IVE to protect customer data
information		will not be sufficient to detect or prevent unauthorised access to, or a
		disclosure of, confidential information.
		Any successful cyber-attack or other breach of security could result in
		loss of information integrity, or breaches of IVE’s obligations under
		applicable laws or customer agreements, each of which could adversely
		impact IVE’s reputation, retention of customers, ability to attract new
		customers and financial performance.

Topic	Summary	Summary
Core technology and		IVE relies heavily on its information technology and equipment
systems failure		infrastructure and systems, and the success of its business depends on
		the efficient and uninterrupted operation of this infrastructure and these
		systems. Systems could be exposed to damage or interruption as a
		result of a number of events and factors. These events could result in
		business interruption, loss of customers and revenue, reputational
		damage and weakening of IVE’s competitive position and financial
		performance.

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Not for distribution or release in the United States | 36

Key risks (cont.)

General market risk

Topic	Summary	Summary
Risks Associated		There are risks associated with any investment in a company listed on
With Investment in		the ASX. The value of shares may rise above or below the current share
Equity Capital		price depending on the financial and operating performance of IVE and external factors over which IVE and the Directors have no control. These
		external factors include: economic conditions in Australia and overseas
		which may have a negative impact on equity capital markets; changing
		investor sentiment in the local and international stock markets; changes
		in domestic or international fiscal, monetary, regulatory and other
		government policies and developments and general conditions in the
		markets in which IVE proposes to operate and which may impact on the
		future value and pricing of shares. No assurances can be given that the
		New Shares will trade at or above the Offer Price. None of IVE, its Board
		or any other person guarantees the market performance of the New
		Shares.
Liquidity and		There may be few or many potential buyers or sellers of IVE Shares on
Realisation Risk		the ASX at any time. This may affect the volatility of the market price of
		IVE's shares. It may also affect the prevailing market price at which
		shareholders are able to sell their IVE shares.
Major Shareholder		IVE currently has a number of substantial shareholders on its share
Risk		register. There is a risk that these shareholders, future substantial
		shareholders, or other large shareholders may sell their shares at a
		future date. This could cause the price of IVE shares to decline.
Risk of Dividends		The payment of dividends is announced at the time of release of IVE
Not Being Paid		half year and full year results as determined by the Board from time to
		time at its discretion, dependent on the profitability and cash flow of
		IVE’s businesses. While IVE has a stated dividend policy, circumstances
		may arise where IVE is required to reduce or cease paying dividends for
		a period of time.

Topic	Summary	Summary
Taxation		Future changes in taxation law, including changes in interpretation or
		application of the law by the courts or taxation authorities, may affect
		taxation treatment of an investment in IVE shares or the holding and
		disposal of those shares. Further, changes in tax law, or changes in
		the way tax law is expected to be interpreted, in the various
		jurisdictions in which IVE operates, may impact the future tax liabilities
		and performance of IVE. Any changes to the current rates of income
		tax applying to individuals and trusts will similarly impact on
		shareholder returns.
General Economic		Adverse changes in economic conditions such as interest rates,
Conditions		exchange rates, inflation, government policy, national and international
		economic conditions and employment rates amongst others are
		outside IVE’s control and have the potential to have an adverse impact
		on IVE and its operations.

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Appendix B / International offer restrictions

Not for distribution or release in the United States

Not for distribution or release in the United States | 38

International offer restrictions

This document does not constitute an offer of new ordinary shares ( New Shares ) of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offered or sold, in any country outside Australia except to the extent permitted below.

Hong Kong

WARNING: This document has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong, nor has it been authorised by the Securities and Futures Commission in Hong Kong pursuant to the Securities and Futures Ordinance (Cap. 571) of the Laws of Hong Kong (the SFO ). No action has been taken in Hong Kong to authorise or register this document or to permit the distribution of this document or any documents issued in connection with it. Accordingly, the New Shares have not been and will not be offered or sold in Hong Kong other than to "professional investors" (as defined in the SFO).

No advertisement, invitation or document relating to the New Shares has been or will be issued, or has been or will be in the possession of any person for the purpose of issue, in Hong Kong or elsewhere that is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to New Shares that are or are intended to be disposed of only to persons outside Hong Kong or only to professional investors (as defined in the SFO and any rules made under that ordinance). No person allotted New Shares may sell, or offer to sell, such securities in circumstances that amount to an offer to the public in Hong Kong within six months following the date of issue of such securities.

The contents of this document have not been reviewed by any Hong Kong regulatory authority. You are advised to exercise caution in relation to the offer. If you are in doubt about any contents of this document, you should obtain independent professional advice.

Singapore

This document and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority of Singapore. Accordingly, this document and any other document or materials in connection with the offer or sale, or invitation for subscription or purchase, of New Shares, may not be issued, circulated or distributed, nor may the New Shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore except pursuant to and in accordance with exemptions in Subdivision (4) Division 1, Part XIII of the Securities and Futures Act, Chapter 289 of Singapore (the SFA ), or as otherwise pursuant to, and in accordance with the conditions of any other applicable provisions of the SFA.

This document has been given to you on the basis that you are (i) an existing holder of the Company’s shares, (ii) an "institutional investor" (as defined in the SFA) or (iii) a "relevant person" (as defined in section 275(2) of the SFA). In the event that you are not an investor falling within any of the categories set out above, please return this document immediately. You may not forward or circulate this document to any other person in Singapore.

Any offer is not made to you with a view to the New Shares being subsequently offered for sale to any other party. There are on-sale restrictions in Singapore that may be applicable to investors who acquire New Shares. As such, investors are advised to acquaint themselves with the SFA provisions relating to resale restrictions in Singapore and comply accordingly.

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International offer restrictions (cont.)

United Kingdom

Neither the information in this document nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act 2000, as amended ( FSMA )) has been published or is intended to be published in respect of the New Shares.

This document is issued on a confidential basis to "qualified investors" (within the meaning of section 86(7) of the FSMA) in the United Kingdom, and the New Shares may not be offered or sold in the United Kingdom by means of this document, any accompanying letter or any other document, except in circumstances which do not require the publication of a prospectus pursuant to section 86(1) of the FSMA. This document should not be distributed, published or reproduced, in whole or in part, nor may its contents be disclosed by recipients to any other person in the United Kingdom.

Any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) received in connection with the issue or sale of the New Shares has only been communicated or caused to be communicated and will only be communicated or caused to be communicated in the United Kingdom in circumstances in which section 21(1) of the FSMA does not apply to the Company.

In the United Kingdom, this document is being distributed only to, and is directed at, persons (i) who have professional experience in matters relating to investments falling within Article 19(5) (investment professionals) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 ( FPO ), (ii) who fall within the categories of persons referred to in Article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the FPO or (iii) to whom it may otherwise be lawfully communicated (together relevant persons ). The investments to which this document relates are available only to, and any invitation, offer or agreement to purchase will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

New Zealand

This document has not been registered, filed with or approved by any New Zealand regulatory authority under the Financial Markets Conduct Act 2013 (the FMC Act ).

The New Shares may only be offered or sold in New Zealand (or allotted with a view to being offered for sale in New Zealand) to a person who:

• is an investment business within the meaning of clause 37 of Schedule 1 of the FMC Act;

• meets the investment activity criteria specified in clause 38 of Schedule 1 of the FMC Act;

• is large within the meaning of clause 39 of Schedule 1 of the FMC Act;

• is a government agency within the meaning of clause 40 of Schedule 1 of the FMC Act; or

• is an eligible investor within the meaning of clause 41 of Schedule 1 of the FMC Act.

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Not for distribution or release in the United States