IVE GROUP LIMITED — Investor Presentation 2017

Aug 27, 2017

FY17 RESULTS AND CAPITAL RAISING

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August 28, 2017
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Geoff Selig - Executive Chairman Warwick Hay - Managing Director Darren Dunkley - Chief Financial Officer

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) .

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 SEMA Holdings Pty Ltd (ABN 92 158 886 689) (SEMA) 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

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 has been prepared by IVE based on the audited financial statements for IVE for the financial year ended 30 June 2017 and adjusting for the impact of the Entitlement Offer, FY17 dividend and use of proceeds. The financial information for SEMA has been extracted from the financial statements of SEMA for the financial years ended 30 June 2015, 2016 and 2017 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.

FY17 Results and Capital Raising - Not for distribution or release in the United States

IMPORTANT NOTICES continued

Investors should also note that this Presentation does not include the financial statements of SEMA. While this Presentation includes a pro forma balance sheet for IVE as at 30 June 2017 to reflect the impact of the Entitilement Offer, FY17 dividend and use of proceeds, 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 ‘nonIFRS financial information’ under ASIC Regulatory Guide 230: ‘Disclosing non-IFRS financial inform- ation’ 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 do 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 SEMA acquisition, the outcome and effects of the Entitlement Offer and the use of proceeds, and the future performance of IVE and SEMA 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 SEMA, the outcome and effects of the Entitlement 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 forwardlooking 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.

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 Entitlement 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 Entitlement 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 Entitilement Offer and the information in this Presentation being inaccurate or incomplete in any way for any reason, whether by negligence or otherwise.

FY17 Results and Capital Raising - Not for distribution or release in the United States

IMPORTANT NOTICES continued

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 EntitlementOffer.

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 Entitlement 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 Entitlement 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.

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 Entitlement 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 their 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.

FY17 Results and Capital Raising - Not for distribution or release in the United States

TABLE OF CONTENTS

• 01 Business overview

• 02 Highlights & outlook

• 04 Capital raising

• 05 Acquisition of SEMA and strategic rationale

• 09 Capacity expansion - Franklin WEB (NSW)

• 13 FY17 Results

• 19 Acquisition & integration update

• 20 Offer summary

• 25 Appendices

• 29 Key risks

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FY17 Results and Capital Raising - Not for distribution or release in the United States

BUSINESS OVERVIEW A leading product and service offering

IVE is a vertically integrated marketing services and print communications provider. IVE enables its customers to communicate more effectively with their customers by creating, managing, producing and distributing content across multiple levels.

The marketing services and print communications industry is dynamic and constantly evolving. IVE’s response to this evolution has been to maintain relevance with our customers through ongoing investment and expansion of our product and service offering.

A customer experience agency that helps brands prosper through creative concept development, digital services, customer analytics & marketing automation

Integrated print, point of sale, personalised communications, promotional products, warehouse & logistics services

This has been achieved through an effective combination of both organic growth initiatives and strategic acquisitions.

IVE has a leading product and service offering in Australia and holds leading positions across multiple industry sectors. IVE delivers its products and services through four operating divisions.

Fundraising strategy, data-driven solutions and telephone fundraising agency serving the not-for-profit sector

Managed solutions. Bundles the Group’s broad range of products and services into multi-channel solutions for customers

FY17 Results and Capital Raising - Not for distribution or release in the United States

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HIGHLIGHTS AND OUTLOOK

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FY17 Results and Capital Raising - Not for distribution or release in the United States

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HIGHLIGHTS AND OUTLOOK IVE continues to enhance its position as one of Australia’s leading diversified marketing communications businesses

FY17 results highlights

• Revenue growth of 30.1% over FY16 pro forma revenue

• EBITDA of $55.2 million (up 23.0% over PCP), before acquisition and

• restructure costs

• Final dividend of 6.4 cents per share (on increased shares on offer following the capital raising and issue of shares to the vendors of SEMA)

• Strategically entered the Large Format Web Offset (LFWO) sector through the acquisition of Franklin WEB and AIW Printing in December 2016

• Incremental $70.0 million of LFWO revenue secured since entering the sector, this has resulted in a phased shut down of the AIW site

• All major clients have been retained

• Investment in NSW greenfield site and re-balancing of capacity between Sydney and Melbourne have been instrumental in achieving growth

• Successful integration of smaller acquisitions completed during the year

• New client wins across all other business units

• Strong growth in the share of wallet (SOW) for existing customers through expansion of the Group’s product and service offering

Strong outlook

• FY18 EBITDA expected to be approximately $70 – 75 million

• (before restructure costs)

• FY18 restructure costs expected to be $2.5 – 3.5 million

• Key drivers of FY18 expected to be:

• full year contribution of Franklin WEB

• phased realisation of new contract wins in LFWO

• phased realisation of synergies from Franklin/AIW integration °[Franklin WEB (NSW) fully operational from October 2017 ] °[AIW to be closed by end of December 2017]

• The FY18 outlook excludes any contribution from the SEMA acquisition and additional LFWO press (discussed on the following page), which primarily drive further growth beyond FY18

• The Company has a strong pipeline of value accretive bolt-on acquisitions which if completed in FY18 would be expected to provide additional revenue and EBITDA. These have not been included in the FY18 outlook

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REVENUE: + 30% TO $496.9 million
EBITDA: + 23% TO $55.2 million
NPATA: + 14% TO $27.3 million
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The Pro Forma financial results are on a non IFRS basis and not audited FY2017 excludes restructuring and acquisition expenses (refer Appendix)

FY17 Results and Capital Raising - Not for distribution or release in the United States

Page 03

CAPITAL RAISING

Capital raising to support initiatives to drive further growth beyond FY18

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Acquisition and integration
Expansion of IVE’s direct marketing and data analytics capability through the acquisition of SEMA
of SEMA, and growth capex • Further consolidates Blue Star DIRECT’s position as the leader in the Australian direct communications sector
$19.6 million • Acquired at 4.8x EV / EBITDA (2.6 x post synergies), immediately contributing to IVE Group's earnings
• Expected synergies in excess of $5.0 million following full integration by 30 June 2018
(excludes $3.4 million
• Targeted capex program to deliver a further $1.0 million in annual EBITDA
of IGL scrip)
Additional LFWO Acquisition of second 80 page web offset press and ancillary equipment in Franklin WEB (NSW) to accommodate growth
Press • Strong business case underwritten by secured contracts
• Core to rebalancing capacity between Victoria and NSW to better service national retailers and publishers
$22.0 million • Annual EBITDA contribution of $5.0 million based on secured contracts (from August 2018), with capacity for additional growth
Strong acquisition
Strong potential pipeline of value accretive bolt-on acquisitions
pipeline
• Successful track record of identifying & integrating profitable bolt-on acquisitions (typically 2.0x to 3.0x EV / EBITDA post synergies )
$11.2 million
• Capital raising of approximately $55.6 million being conducted at $2.05 per share through a fully underwritten accelerated,
non- renounceable Entitlement Offer
• Approximately 27.1 million new shares to be issued
Capital Raising • Proceeds used to:
$55.6 million ° Fully fund the cash component of the acquisition, integration and growth capex for SEMA ($19.6 million)
° Acquire the second 80 page press ($22.0 million)
° Capacity for future bolt-on acquisitions and balance sheet flexibility ($11.2 million)
° Associated transaction costs ($2.8 million)
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FY17 Results and Capital Raising - Not for distribution or release in the United States

Page 04

ACQUISITION OF SEMA AND STRATEGIC RATIONALE

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Page 05

ACQUISITION OF SEMA Further enhancing IVE´s position as one of the leaders in data driven personalised communications

Business overview

• Established over 35 years ago

• FY17 revenue of $40.1 million & EBITDA of $3.1 million

• Provides cross-channel communications solutions to some of Australia’s biggest brands

Broad service offering

• Multi-channel marketing – including personalised direct mail, email,

• social media and mobile

• Consolidation of data – ability to access data from a single data source

• Assist clients with the transition to electronic communications

• Leverages leading technologies to allow companies to:

• personalise customer communications using any number of variables;

• communicate via the customer’s channel of choice (mail, email, mobile, social media);

• Digitisation – transform hard copy documents into digital formats

• Security – maintain data integrity and security as well as customer privacy

• Systems that allow clients to easily switch between electronic and digital

• maintain data integrity, security and privacy; and

• report, track and analyse customer response

• One of the largest partners of Salesforce Marketing Cloud in Australia

• together with IVE’s Kalido business

• Operations in Sydney, Melbourne and Brisbane with Sydney and Melbourne to be fully integrated into Blue Star DIRECT’s existing locations

Example customers

• A range of long-term, high quality clients including:

CBA AGL CGU Origin Energy NAB State & Federal Governments ANZ Energy Australia ATO Optus Local Government Westpac

FY17 Results and Capital Raising - Not for distribution or release in the United States

Page 06

SEMA FINANCIAL PERFORMANCE SEMA has a record of strong growth and margin expansion

FINANCIAL PERFORMANCE

REVENUE

• Revenue has increased by approximately 9.6% between FY15 and FY17 to $40.1 million, primarily as a result of:

• new client wins; and

• growth in Salesforce related marketing automation & data analytics revenue across new and existing customers

REVENUE AND EBITDA ($m)[ (1)]

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50 3.5
40 2.8
30 2.1
20 1.4
10 0.7
0 0
FY15 FY16 FY17
Revenue ( LHS ) EBITDA ( RHS )
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• Majority of revenue is contracted

• FY18 will benefit from the full year impact of recent contract wins

REVENUE CONTRIBUTION[ (1)]

EBITDA

• EBITDA has increased between FY15 and FY17,

• resulting from:

• revenue growth outlined above; and

• operating leverage

By customer

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Other
21%
Top 10
Customers
Customers 57%
11 - 25
22%
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(1) Source: SEMA management

FY17 Results and Capital Raising - Not for distribution or release in the United States

Page 07

SEMA TRANSACTION AND STRATEGIC RATIONALE SEMA will be integrated into Blue Star DIRECT unlocking significant integration and synergy benefits

Transaction overview

• Up to $14.5 million in total consideration[(1)]

• $11.15 million on completion

• $7.75 million of cash

• $3.4 million in IVE shares issued at $2.06 per share

• Up to $3.35 million to be paid in cash based on the achievement of FY18 revenue targets

• Represents ~4.8x FY17 EBITDA pre-synergies or 2.6x post-synergies

Integration and synergies

• Estimated annualised synergies in excess of $5.0 million

• Full run rate by FY2019

• significant rationalisation opportunities, with Sydney and Melbourne operations to be fully integrated into Blue Star DIRECT

Strategic rationale

• Highly complementary to Blue Star DIRECT

• Diverse, long-term and high quality client list with exposure to attractive sectors

• minimal cross-over with existing IVE customer base

• positions IVE in new sectors (e.g. local government)

• cross-sell opportunities given IVE’s diversified offering

• Enhance IVE's position as a leading Asia Pacific provider of marketing

• automation, data analytics & personalised content in a multi-channel world

• Provides new products and services which enhance IVE’s existing diversified offer

• online archive and retrieval platform

• access to the trans promo (physical and digital) market (estimated $500 million market size)

• Estimated $4.5 million of integration costs

• Capital expenditure program of $4.0 million, driven by recently secured additional revenue will deliver in excess of $1.0 million additional EBITDA

• (1) Consideration excludes any completion working capital adjustment, and assumes SEMA is acquired on a debt free/cash free basis

FY17 Results and Capital Raising - Not for distribution or release in the United States

Page 08

CAPACITY EXPANSION TO SUPPORT REVENUE GROWTH - FRANKLIN WEB (NSW)

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FY17 Results and Capital Raising - Not for distribution or release in the United States

Page 09

STRATEGIC RATIONALE The capacity expansion at Franklin WEB ( NSW ) is underwritten by additional revenue secured

• Since the acquisition of Franklin and AIW in December 2016, IVE has successfully won contracts totalling $70 million in annual incremental revenue including:

• Coles (Coles Supermarkets, Vintage Cellars, First Choice Liquor)

• Pacific Magazines

• NARTA extension (including an additional large national retailer)

• Approximately $40 million of this revenue will be serviced by IVE’s existing capacity

• To fully service these contracts and allow future growth, IVE has ordered a second new 80 page heatset web offset press and auxiliary equipment for the Franklin WEB (NSW) greenfield site:

• $22 million capital cost

• commissioning expected by 31 August 2018

• highly automated, low cost operation

• Expected to generate annualised EBITDA contribution in excess of $5.0 million (based on existing,

• contracted revenue) before additional growth

• With the new contract wins, the new press will be significantly utilised from day one. The press also:

• — provides further growth potential; and

• continues the re-balance of capacity from Victoria to NSW to better service national retailers and publishers. This has been instrumental in securing new contracted revenues

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FY17 Results and Capital Raising - Not for distribution or release in the United States

Page 10

REDUCED CAPACITY DRIVES HIGHER UTILISATION Recent consolidation in the LFWO sector has resulted in a significant reduction in capacity

• Both major large format web offset operators have undertaken significant

• rationalisation of press capacity since late 2016

• IVE management estimate that:

• theoretical sector capacity will reduce by 8 - 9% between December 2016 and FY19, inclusive of IVE’s new presses at Franklin WEB (NSW)

• utilisation across the sector will increase commensurately as a result

• Rationalisation and increased utilisation has been driven by positive change in market structure (5 major operators down to 2 major operators)

• Much of the excess capacity retired has been older, less efficient equipment,

• increasing the overall efficiency of the sector

REDUCED SECTOR CAPACITY

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800,000
700,000
600,000
500,000
December 2016 Sector Estimated
rationalisation FY2019
Theoretical capacity in tonnes
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Source: IVE management

FY17 Results and Capital Raising - Not for distribution or release in the United States

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IVE´s RATIONALISED PRESS FLEET Significant investment to support additional secured revenue

• Since the Franklin / AIW transaction, IVE has undertaken an integration plan to:

IVE HEATSET WEB OFFSET PRESS FLEET

• consolidate the Franklin / AIW press fleet; and

• re-balance capacity to NSW through the establishment of a Franklin WEB greenfield site in Sydney

• Following finalisation of integration and commissioning of the second 80 page

• press, IVE will have:

• rationalised its heatset web press fleet from 21 to 18; and

• significantly increased utilisation and efficiency

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21
5 5
18
2
5
6
3
10 10
At Franklin/AIW Removed New Post integration
acquisition (July 2018)
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Blue Star WEB Franklin WEB VIC AIW Printing VIC Franklin WEB NSW

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FY17 RESULTS

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REVENUE

• IVE’s FY17 revenue increased by 30.1% on PCP to $496.9 million

• IVE’s unique and diverse offering remains appealing to new and prospective customers

• as they look to explore the full diversity of our value proposition

• Strong new business performance across a broad cross section of customers.

• Highlights of major new contract wins include:

• IVEO : L’Oréal, Diageo, BP and Blackmores

• Kalido : AXA Asia, Johnson & Johnson, Kalbe, The Mall Group, L’Oréal and Foxtel

• Blue Star Group : Coles, Pacific Magazines, Kmart, Lovatts, Globus Travel, Nestle and Suncorp

• Pareto : Red Cross and Greenpeace

• IVE continues to explore new opportunities with existing customers and has

• grown share of wallet (SOW). Major SOW wins include:

• IVEO : Diageo, iCare, McDonalds and RACV

• Kalido : Super Retail Group, Foxtel and ANZ

• Blue Star Group : NBN, H+R Block, Birdnest, Fairfax and ANZ

• Pareto : World Wildlife Fund and Lifeline

• IVE has successfully renewed a number of key contracts:

• CBA, Optus, Fairfax, Tupperware, Travelcorp, Australian Electoral Commission, Glaxo Smith Kline, Flight Centre, IAG, NBN, Yaffa Media, Beyond Blue and Kmart

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FY17 Results and Capital Raising - Not for distribution or release in the United States

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KEY INITIATIVES

• Kalido Expansion

The Kalido division continues its growth trajectory into Asia (specifically in the data analytics, marketing automation and website optimisation space) with strong new business wins in Indonesia, Thailand and China. Kalido Hong Kong opened in April 2017 to complement the existing Singapore office, established in May 2016

As a leading Salesforce Marketing Cloud partner in Asia Pacific, Kalido’s Platinum Certification should see them take advantage of many new business and revenue opportunities in Asia, specifically in data analytics, marketing automation and website optimisation

• Blue Star CONNECT relocation

Towards the end of 2016, Blue Star CONNECT (NSW) relocated from three existing premises into one new 20,000 sqm purpose-built facility in Erskine Park. The new facility has the capacity to hold 17,000 pallets, supporting the ongoing growth of the Group’s logistics and fulfilment offer, which continues to play a key part in our success to secure large managed solutions customers in IVEO. Simultaneously the warehouse management system was upgraded to support further automation and growing activity levels

• Capital expenditure

A range of capital expenditure initiatives were actioned across the Group to ensure our production environment remains highly efficient

• Relocation and expansion of Blue Star DISPLAY in Victoria

Building on the growth of the Blue Star DISPLAY business in NSW over recent years, the Group’s existing Victorian operation was relocated and merged with Franklin WEB’s retail display business into a dedicated facility in Sunshine. This coincided with a significant investment program to provide more capacity to better service national retailers for their retail display requirements

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FY17 Results and Capital Raising - Not for distribution or release in the United States

Page 15

PROFIT AND LOSS

• Revenue growth - Revenue increase of $114.8 million or 30.1% over PCP, this reflects the impact of Franklin and AIW acquisition, as well as increased revenue from new customer wins and the existing customer base through expanded service offering

• Gross profit margin - The gross profit increase of $48.5 million over PCP largely driven by increased revenue. The Group achieved gross profit margin of 49.9% to revenue compared with 52.2% in PCP. Catalogue revenue has historically been at lower gross profit margin to that of IVE existing revenue. Normalising for this, gross profit has remained stable as a result of managing of inputs, continued leveraging of supply chain and reducing outsource spend wherever possible by producing internally

• EBITDA growth - EBITDA of $55.2 million represents an increase of $10.3 million or 23.0% over PCP, achieved via a combination of revenue growth and efficiency gains. EBITDA margin of 11.1% is a decrease on PCP of 11.7% impacted by carrying higher costs through transitional year

• FY17 final dividend – Final dividend of 6.4 cents per share fully

• franked, after issue of new shares via the rights issue. This is consistent with the company’s stated dividend policy, the payout ratio is 73% of NPAT (before restructure and acquisition costs)

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PRO FORMA [(1)]
Actual Actual
FY2017 FY2016 Variance Variance
$M $M $M %
Revenue 496.9 382.0 114.8 30.1%
Gross Profit 248.1 199.6 48.5 24.3%
—
% of Revenue 49.9% 52.2% -4.4%
EBITDA 55.2 44.9 10.3 23.0%
—
% of Revenue 11.1% 11.7% -5.4%
EBIT 41.4 34.8 6.6 18.9%
—
% of Revenue 8.3% 9.1% -8.6%
Profit before tax 36.0 32.6 3.4 10.5%
NPAT 24.6 22.3 2.3 10.5%
NPATA 27.3 23.9 3.3 14.0%
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(1) The Pro Forma financial results are on a non IFRS basis and not audited FY2016 & FY2017 excludes restructuring and acquisition expenses (refer Appendix)

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IVE GROUP LIMITED Statutory Balance Sheet

• The increase in drawn senior facilities of $99.3 million relates to the acquisition of both Franklin and AIW on 13th December 2016

• The acquisitions were funded through a combination of new equity via issue of shares to vendors ($20.3 million), a share placement and entitlement offer ($40.0 million), and a new 3 year senior debt facility which resulted in the senior debt facility increasing from $53.0 million to $140.0 million as at 30 June 2017 and drawn to $136.0 milliion[(1)]

• The asset base including intangibles has significantly expanded over the period primarily as a result of the Franklin and AIW acquisitions

• During the year, capital expenditure was $21.5 million (including capex WIP) with further capital commitments of $23.3 million. This capital expenditure largely relates to the LFWO projects of Blue Star Web ($12.0 million) and Franklin WEB ($30.0 million), and will be fully reflected by the end of FY2018

• FY19 capex outlook approximately $7.5 million

(1) Gross of capitalised establishment costs

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STATUTORY
Actual Actual
June 2017 June 2016
$’M $’M
CURRENT ASSETS
Cash and cash equivalents 23.9 14.5
Trade receivables, prepayments and others 101.3 74.2
Inventories 46.6 12.5
Current tax receivable 3.0 –
Total Current Assets 174.7 101.2
NON CURRENT ASSETS
Deferred tax assets 19.2 17.2
Property, plant and equipment 80.5 41.7
Intangible assets and goodwill 153.9 70.3
Other non current assets – 1.0
Total Non Current Assets 253.6 130.2
Total Assets 428.3 231.4
CURRENT LIABILITIES
Trade payables and provisions 119.4 80.0
Finance lease liabilities 2.8 2.6
Bank loans 10.0 –
Current tax payable – 3.7
Total Current Liabilities 132.2 86.3
NON CURRENT LIABILITIES
Trade payables and provisions 23.0 15.1
Finance lease liabilities 11.2 11.7
Bank loans 124.3 36.8
Total Non Current Liabilities 158.5 63.6
Total Liabilities 290.7 149.9
NET ASSETS 137.6 81.5
EQUITY
Share Capital 98.8 39.8
Reserves 0.2 –
Retained Earnings 38.6 41.7
Total Equity 137.6 81.5
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CASH FLOW

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PRO FORMA [(1)] STATUTORY
FY2017 FY2017
$M $M
EBITDA 55.2 35.9
Movement in NWC/non cash items in EBITDA 10.2 12.9
Free Cash Flow 65.4 48.8
Capital expenditure (net) -20.1 -20.1
Payments for acquisitions & deferred consideration -122.8 -122.8
Net cash flow before financing and taxation -77.5 -94.0
Tax -15.9 -10.0
Proceeds from bank loans (net) 99.3 99.3
Payment of finance lease liabilities -2.6 -2.6
Proceeds from new share issue 40.0 40.0
Dividends paid -15.2 -15.2
Interest paid (net) -4.9 -4.9
Transaction costs (equity and debt) -3.3 -3.3
Net cash flow 20.0 9.3
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(1) The Pro Forma financial results are on a non IFRS basis and not audited FY2017 excludes restructuring and acquisition expenses (refer Appendix)

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Acquisition and integration update

The Group continued its disciplined acquisition program with five businesses acquired during the period. Three acquisitions (excluding Franklin WEB and AIW Printing) were seamlessly integrated into existing Blue Star businesses throughout the year:

Franklin WEB (Franklin) and AIW Printing (AIW) (completed 13th December 2016)

Customers' response to IVE’s acquisition of Franklin and AIW has been very positive:

• $70 million in incremental annual contracted revenue has been secured

• since December 2016 - Coles, Pacific Magazines and the extension of NARTA (including an additional large national retailer)

• It is expected that the synergies will be a minimum of $11.5 million per annum (full run rate effective January 2018)

The AIW plant at Springvale in Victoria was significantly scaled down in January 2017 and currently operates as a short term transitional satellite manufacturing arm of Franklin WEB. As a result of the decision to establish the Franklin greenfield operation in NSW on the back of significant revenue growth, the final closure of AIW has been delayed.

The delayed closure of AIW has resulted in additional costs being incurred over the integration period. This is necessary to ensure customer delivery requirements are met until Franklin WEB (NSW) is fully operational.

• All major customers of both Franklin and AIW have been retained

• Customers of both Franklin and AIW are actively engaged to explore

• IVE Group’s diversified offering

Establishment of Franklin NSW in conjunction with Franklin VIC to efficiently service national retailers with quicker speed to market and reduced costs:

The Mailing House	(completed September 2016) fully integrated
	into Blue Star DIRECT (NSW)
Display BayandR25	(completed December 2016) fully integrated
	into Blue Star DISPLAY (NSW)

• The installation of a new 80 page Lithoman printing press in Franklin NSW,

• and supporting infrastructure

• The Franklin NSW facility will also include highly automated stitching and

• perfect binding equipment to enable a full service offering to the market. The opening date of the facility is on track and to budget, and will be fully operational in October 2017

• All key staff have been retained over the last six months and actively

• recruiting staff for the new Franklin NSW operation

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OFFER SUMMARY

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OFFER SUMMARY Sources and uses of funds

SEMA acquisition terms

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Purchase price IVE has entered into binding agreements to acquire shares in SEMA for up to $14.5 million [(1)]
Closing conditions The Acquisition is subject to customary conditions precedent
Completion date The Acquisition is expected to complete by 5th September, 2017
Up to $11.1 million cash from fully underwritten entitlement offer at $2.05
Funding
$3.4 million in IVE scrip issued to the vendors of SEMA at $2.06, subject to a 6 month escrow
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Sources and uses of funding

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Sources of Funds $ million
Entitlement offer 55.6
Scrip to vendors of SEMA 3.4
TOTAL 59.0
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Uses of Funds $ million
Payment for SEMA (assuming full earn-out) 14.5 [(1)]
SEMA integration and capex costs 8.5
Second press acquisition and commissioning 22.0
Growth capital 11.2
Associated transaction costs 2.8
TOTAL 59.0
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• (1) Consideration excludes any completion working capital adjustment, and assumes SEMA is acquired on a debt free/cash free basis

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OFFER SUMMARY Details of the entitlement offer

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Offer structure and size Fully underwritten 1 for 4.4 pro-rata, accelerated, non-renounceable Entitlement Offer to raise gross proceeds of approximately $55.6 million
Approximately 27.1 million New Shares to be issued
Entitlement Offer will be conducted at $2.05 per New Share (Offer Price)
Offer price – 5.5% discount to the last traded price of $2.17 on Friday 25 August 2017
– 4.5% discount to TERP(¹) of $2.15
Approximately $38.5 million Institutional Entitlement Offer to existing institutional shareholders
– The Institutional Entitlement Offer will be conducted on Monday 28 August 2017
Institutional investors
– 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 29 August 2017
Approximately $17.1 million Retail Entitlement Offer to existing eligible retail shareholders
– The Retail Entitlement Offer will open at 9.00am (Sydney time) on Monday, 4 September 2017 and close at 5.00pm (Sydney time) on Wednesday,
Retail investors 13 September 2017
– 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,
Director commitments Non-Executive Director), intends to take up 50% of its entitlement as part of the Entitlement Offer. 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 issued to SEMA's vendor(s) will rank equally with existing fully paid ordinary shares from their time of
Ranking
issue, including being eligible for the full year FY17 dividend
Underwriters Offer is fully underwritten by Bell Potter Securities Limited and Shaw and Partners Limited
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(1) Theoretical ex-rights price

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OFFER SUMMARY Offer timetable

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EVENT DATE [(1)]
Trading halt and announcement of the Entitlement Offer Monday, 28 August 2017
Institutional Entitlement Offer opens Monday, 28 August 2017
Institutional Entitlement Offer closes Tuesday, 29 August 2017
Institutional Shortfall Bookbuild Tuesday, 29 August 2017
Trading halt lifted and shares recommence trading on ASX on an ex entitlement basis Wednesday, 30 August 2017
Record Date for determining entitlement to subscribe for New Shares 7pm (Sydney time) [(2) ] Wednesday, 30 August 2017
Retail Entitlement Offer opens 9am (Sydney time) [(2) ] Monday, 4 September 2017
Retail Entitlement Offer Booklet despatched to eligible shareholders Monday, 4 September 2017
Settlement of applications in the Institutional Entitlement Offer Monday, 4 September 2017
Allotment and normal trading of New Shares under the Institutional Entitlement Offer Tuesday, 5 September 2017
Retail Entitlement Offer closes 5pm (Sydney time) [(2) ] Wednesday, 13 September 2017
Settlement of Retail Entitlement Offer Tuesday, 19 September 2017
Allotment of New Shares issued under the Retail Entitlement Offer Wednesday, 20 September 2017
Quotation of New Shares under the Retail Entitlement Offer Thursday, 21 September 2017
Despatch of holding statements in respect of New Shares issued under the Retail Entitlement Offer Friday, 22 September 2017
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(1) All dates and times are indicative and subject to change without notice (2) Australian Eastern Standard Time

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OFFER SUMMARY Pro Forma Balance Sheet

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June 2017 Pro Forma Balance Sheet [(1)]
$ million
Capital Raise / Impact of Second press
IVE Statutory Dividend Pro Forma
transaction costs acquisition [(2)] capex [(3)]
Cash and cash equivalents 23.9 (9.5) 52.8 (7.8) (22.0) 37.4
Trade and other receivables 94.8 – – 7.3 – 102.1
Inventories 46.6 – – 0.3 – 46.8
Property, plant and equipment 80.5 – – 3.2 22.0 105.8
Intangible Assets 153.8 – – 14.1 – 168.0
Other Assets 28.7 – 0.7 0.4 – 29.8
Total Assets 428.3 (9.5) 53.6 17.5 – 489.9
Trade and Other Payables 98.4 – – 7.6 – 106.0
Borrowings 148.3 – – – – 148.3
Other Liabilities 44.0 – – 6.5 – 50.5
Total Liabilities 290.7 – – 14.1 – 304.8
Net Assets 137.6 (9.5) 53.6 3.4 – 185.0
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(1) The Pro Forma Balance Sheet is based on the audited balance sheet of IVE as at 30 June 2017. The financial information for SEMA has been extracted from the financial statements of SEMA for the financial year ended 30 June 2017

(2) Excludes any post completion purchase price accounting adjustments. Initial cash component of $7.75 million and estimated contingent consideration of $3.35 million included in trade and other payables. Total consideration of $14.5 million excludes any completion working capital adjustment, and assumes SEMA is acquired on a debt free/cash free basis

(3) Payment terms subject to further negotiation with manufacturer, majority to be paid in FY18

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APPENDICES

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APPENDIX A Statutory Results

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STATUTORY
Actual Actual
FY2017 FY2016 Variance Variance
$M $M $M %
Revenue 496.9 369.2 127.6 34.6%
Gross Profit 248.1 192.0 56.1 29.2%
% of Revenue 49.9% 52.0% - -4.0%
EBITDA 35.9 26.5 9.4 35.5%
% of Revenue 7.2% 7.2% - 0.7%
EBIT 22.2 16.9 5.3 31.3%
% of Revenue 4.5% 4.6% - -2.4%
Profit before tax 16.4 14.2 2.3 15.9%
NPAT 12.1 15.1 -2.9 -19.5%
NPATA 14.8 16.4 -1.6 -10.0%
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FY2017 PRO FORMA ADJUSTMENTS
FY2017
Restructure & Acquisitions costs
$M
Restructure - IVE other -1.5
Restructure - Franklin / AIW
-11.8
- redundancies, relocation and site closure costs
Acquisition
-5.9
- transaction costs
Interest expense
-0.3
- previous facility setup costs
TOTAL (pre-tax) -19.5
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APPENDIX B 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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APPENDIX B INTERNATIONAL OFFER RESTRICTIONS continued

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.

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 are not being offered to the public within New Zealand other than to existing shareholders of the Company with registered addresses in New Zealand to whom the offer of these securities is being made in reliance on the FMC Act and the Financial Markets Conduct (Incidental Offers) Exemption Notice 2016.

Other than in the entitlement offer, 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.

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.

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APPENDIX C Key Risks - Acquisition and Offer Risks

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TOPIC SUMMARY TOPIC SUMMARY
Reliance on IVE undertook a due diligence process in respect of SEMA, which Analysis of IVE has undertaken financial, business and other analyses of SEMA
information provided relied mostly on the review of financial and other information provided opportunity in order to determine its attractiveness to IVE and whether to pursue
by the vendors. While IVE considers the due diligence process under- the transaction. It is possible that such analyses, and the best estimate
taken to be appropriate, IVE has not been able to verify the accuracy, assumptions made by IVE, draw conclusions and forecasts that are
reliability or completeness of all the information which was provided inaccurate or which are not realised in due course. To the extent
to it against independent data. Similarly, IVE has prepared (and made that the actual results achieved by SEMA are different than those
assumptions in the preparation of) the financial information relating indicated by IVE’s analysis, there is a risk that the profitability and
to SEMA and the IVE Group post-completion included in this future earnings of the operations of IVE may be materially different
Presentation in reliance on limited financial information and other from the profitability and earnings expected as reflected in this
information provided by the vendors. Some of this information Presentation.
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 Acquisition While the acquisition agreement does not contain any material
and performance expected by IVE and reflected in this Presentation. completion risk conditions precedent to completion and completion is scheduled to
occur shortly after settlement of the Institutional Entitlement Offer,
Investors should also note that there is no assurance that the due there is a risk that the SEMA Acquisition does not proceed on the
diligence conducted was conclusive and that all material issues and current terms and expected timing due to unforeseen circumstances,
risks in respect of the Acquisitions have been identified. Therefore, and that this could materially and adversely affect IVE.
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 Historical liabilities Since it is acquiring the shares in SEMA, IVE will also indirectly assume
forward looking information relating to SEMA, forward looking any liabilities that SEMA has from its past operations, including
information is inherently unreliable and based on assumptions that any liabilities which were not identified during its due diligence
may change in the future. (for example, in relation to the unauthorised use or infringement of
intellectual property) or which are greater than expected, for which
IVE has sought to mitigate the risks associated with the information insurance may not be adequate or available, and for which IVE will not
provided during due diligence by seeking certain warranties and have post-closing recourse under the SEMA Acquisition Agreement.
indemnities from the vendors. Such liabilities may adversely affect the financial performance or
position of IVE post-acquisition.
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APPENDIX C

Key Risks - Acquisition and Offer Risks continued

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TOPIC SUMMARY TOPIC SUMMARY
SEMA specific risks Reduced demand for marketing communications products – The Underwriting risk The acquisition does not proceed for a number of reasons including if
post-acquisition performance of IVE will be influenced by the overall (continued) the acquisitions or acquisitions funding arrangements are terminated,
condition of the marketing and print communications industry in the agreements are withdrawn, revoked or varied in any respect that
Australia. The primary services offered by SEMA are printed and is materially adverse to IVE or terminated or rendered void, voidable,
digital customer communications and new end-user marketing and illegal or otherwise unenforceable;° there are certain delays in the
communications preferences may result in an unexpected reduction in timetable for the Entitlement Offer,
demand for these services. This may result in the reduction in the level without the Joint Lead Managers’ consent;
of IVE’s revenue.
° [there are certain financial or economic disruptions in key market or ]
Loss of key management personnel – SEMA’s historical performance hostilities commence or escalate in certain key countries;
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 ° [there is a change in the board or certain senior management changes; or]
able to retain these persons or be able to find effective replacements
° [an adverse change, or an event that is likely to lead to an adverse ]
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 change, occurs in the assets, liabilities, financial position or
implement its business strategies and ultimately adversely affect performance, profits, losses or prospects of IVE or the IVE Group from
IVE’s business, operating and financial performance. The loss of key that disclosed to ASX up to, and including, the Announcement Date.
personnel could have an adverse impact on IVE’s operations and The ability of the Underwriters to terminate the Underwriting
potentially result in the loss of key client relationships and the potential Agreement in respect of some events will depend on whether the
loss of business knowledge. event has or is likely to have a material adverse effect on the success,
Loss of key customers – IVE’s business is dependent on its ability to marketing or settlement of the Offer, the value of the securities, or
retain its existing customers. Its growth is dependent on its ability the willingness of investors to subscribe for securities, or where
to attract new customers and increase its business with its existing they may give rise to liability for the Underwriters. Termination of the
customers. IVE may not be successful in retaining the historical clients Underwriting Agreement would have an adverse impact on the amount
of SEMA. Within the printing/ marketing communications industry, of proceeds raised under the Offer and could affect IVE’s ability to
customer contracts typically permit termination for convenience on pay the purchase price for the SEMA acquisition and the second
short notice (less than 90 days). Accordingly customer contracts are Sydney press. If the Underwriting Agreement is terminated, IVE will
subject to the risk of termination, as well as expiry and non-renewal generally not be entitled to terminate the acquisition agreements. In
and the risk that customers reduce the volume of IVE’s products they these circumstances, IVE would need to find alternative funding to
consume. Each of these would result in the reduction in the level of meet its contractual obligations under the acquisition agreements to
IVE’s revenue 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.
Underwriting risk IVE has entered into an Underwriting Agreement under which the
Underwriters have agreed to fully underwrite the Offer, subject to If the Underwriting Agreement is terminated and IVE is unable to
the terms and conditions of the Underwriting Agreement. The Joint source alternate funding, it may be unable to complete the SEMA
Lead Managers’ obligation to underwrite the Offer is conditional on Acquisition and could be required to pay damages. If this was to occur
certain customary matters, including IVE delivering certain certificates, the Offer may not proceed and in this circumstance all application
sign-offs and opinions. Further, if certain events occur, some of which moneys paid would be refunded to investors.
are beyond IVE’s control, the Joint Lead Managers may terminate the
Underwriting Agreement, including if: 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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APPENDIX C

Key Risks - Acquisition and Offer Risks continued

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TOPIC SUMMARY
Integration risk The Acquisition involves the integration of SEMA, which has
previously operated independently from IVE. As a result, there is a
risk that the integration of SEMA 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 SEMA’s accounting functions
may lead to revisions, which may impact on IVE’s reported financial
results.
The success of the SEMA acquisition 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 SEMA’s business alongside IVE’s business following completion
of the acquisition. While IVE has undertaken analysis in relation to the
synergy benefits of the SEMA acquisition, they remain IVE’s estimate
of the synergy benefits expected to be achievable as part of the
SEMA 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 A key determinant of the long-term benefits IVE expects to derive
of synergies from the Acquisition 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.
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TOPIC SUMMARY
Risks associated Entitlements cannot be traded on ASX or privately transferred. If
with not taking up new eligible retail shareholders do not take up all or part of their available
shares under the entitlements, individuals’ percentage shareholding in IVE will be
entitlement offer diluted (in addition to the dilution which will take place as a result of
the issue of shares to the vendors of SEMA).
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 The acquisition of SEMA may trigger change of control clauses in some
liability risk material contracts to which SEMA (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 SEMA. 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.
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APPENDIX C Key Risks -Operational Risks

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

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TOPIC SUMMARY TOPIC SUMMARY
Availability of inputs and IVE relies on various procurement relationships for the steady supply Protection of Through the ordinary course of business, IVE collects a range of
input costs of raw materials, finished goods and products such as paper, ink, and confidential customer personal and financial data from customers.
equipment, all of which are key to operating its business. Significant information
It is possible that the measures taken by IVE to protect customer data
supply disruptions could result in a material reduction in the availability
of inputs required to support IVE’s operation. will not be sufficient to detect or prevent unauthorised access to, or a
disclosure of, confidential information.
Increases in the prices of these inputs, including those increases
Any successful cyber-attack or other breach of security could result
caused by foreign exchange movements and electricity and gas prices,
in loss of information integrity, or breaches of IVE’s obligations
could adversely affect IVE’s earnings if selling prices are not adjusted,
nder applicable laws or customer agreements, each of which could
or if adjusting selling prices adversely impacts customers’ demand for
adversely impact IVE’s reputation, retention of customers, ability to
IVE’s products.
attract new customers and financial performance.
Impact of changing IVE’s business is significantly influenced by changing technology,
Core technology and IVE relies heavily on its information technology and equipment
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 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
its existing products.
as a result of a number of events and factors. These events could result
In order to remain competitive and relevant, IVE needs to enhance in business interruption, loss of customers and revenue, reputational
and expand its offering to meet its customers’ needs. If IVE is unable damage and weakening of IVE’s competitive position and financial
to do so, it may impact on its competitive position. performance.
IVE’s ability to compete effectively in the future may also be impacted
by its ability to maintain or develop appropriate equipment and
80 Page Press There is a risk that the press will not be delivered within the agreed
technology platforms for the efficient delivery of its products and timeline. IVE have placed the order for the press with a tier 1 global
services. No assurance can be given that IVE will have the resources
manufacturer ( Manroland ) of printing technology. Manroland have
to acquire or the ability to develop new competitive technologies
a proven track record of on time delivery & quality assurance. The
and this may also impact on IVE’s competitive position in the market.
press will be shipped from Germany to Australia so delivery may be
negatively impacted due to shipping issues.
Equipment and facilities IVE relies on having operational equipment and facilities with the
capacity to meet its customer demands.If any equipment becomes
unavailable or there is a delay in commissioning new equipment or
facilities, IVE's costs may be increased and it may experience delayed
revenue.
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APPENDIX C Key Risks - General Market Risk

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TOPIC SUMMARY
Risks associated with There are risks associated with any investment in a company listed on
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.
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TOPIC 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 share-
holder 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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385909/0817