SAFEROADS HOLDINGS LIMITED — AGM Information 2013

Nov 18, 2013

Innovative Road Safety Solutions

SAFEROADS HOLDINGS LIMITED

2013 Annual General Meeting

Melbourne 19 November 2013

Contents

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• Chairman's Welcome and Address
• CEO's Address on Product Developments
• Questions to Board and Management
• Formal Resolutions
• Questions and Close
• Informal Refreshments

Innovative Road Safety Solutions Chairman's Address - Mr David Ashmore

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FY2013: Rebuilding and Restructuring the Company

• 2012/13 Focus on core business to drive recovery
  • Identified our Core Products future demand and margin
  • Improved sales in SnaplocTM guide posts, Omni-stopTM bollards, Safepole
  • Sold Traffic Signals portfolio
  • Streamlined Civil Services offering

Innovative Road Safety Solutions

FY2013: Rebuilding and Restructuring the Company

• 2012/13 Focus on operational efficiency
  • Transitioned NZ operations to a distributor model
  • Rationalised production sites and exited leasehold offices in two States
  • Consolidated management structure a Northern and Southern regional model to better align with customers
  • Progressive cost reduction initiatives throughout the Company
  • Overall 29% overhead cost reduction

Innovative Road Safety Solutions

FY2013: Rebuilding and Restructuring the Company

• 2012/13 Reduce bank debt and associated costs
  • Sale and leaseback of head office
  • Proceeds of asset sales used to reduce bank debt by $2.6 million
  • Rationalised bank facilities and removed excess lines
  • Renegotiated our ongoing bank facility to better suit our recovery phase
  • Complied with new covenant requirements
  • Reduced finance costs by 18% (33% in full year)
  • A more stable relationship with our bankers

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FY2013: Rebuilding and Restructuring the Company

• Operating Performance for FY2013
  • Operating loss of $1.56 million* compared to the operating loss in FY2012 of $4.25 million+
  • Full year impact of cessation of Energy Absorption Systems agreement
  • Constrained economic activity prior to Federal election
  • Operating environment was tough and the fight for sales is ongoing
  • Cash generated from operations in FY2013 was $2.38 million compared to $0.28 million in FY2012
  • Substantial improvements in working capital drove this cash generation
  • Improved gross margin from 28% in FY12 to 33% in FY13
  • Workzone Solutions was created to offer rent or buy options

* excl. once-off capital gains and restructuring costs + excl. goodwill impairment write-down

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Strategic Initiatives

• Independent advisor engaged in February 2013 to identify strategic opportunities
• Pleased with responses but nothing sufficiently attractive to pursue
• Process confirmed core unrealised values and potential in our existing IP assets
• Ongoing focus is to unlock that IP value and potential for our Shareholders

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Strategic Growth Opportunities

• Returned to our initial strategic advantage - Innovative road safety solutions
• Identified untapped opportunities with our existing Intellectual Property
  • Ironman Hybrid
  • Omni-stopTM bollards
  • Export opportunities

Innovative Road Safety Solutions

FY2014 Outlook

• Business Plan and specific actions agreed to improve sales effectiveness and ongoing growth of the Company
• Trading conditions have not improved and securing sales remains a challenge
• Order deferrals are common which highlights demand but funding constraints
• First half trading result will not be a profit but projecting it to be an improvement on the first half operating loss last year (excluding asset sales)
• Full year forecasting is difficult, due to abovementioned order deferrals
• Working capital management remains satisfactory

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Focus for FY2014

• Improve Sales
  • Current products to known markets
• Maintain efficiencies
  • Ensure margins are maintained and/or improved and costs are managed tightly
• Innovation
  • Commercialise existing IP to the extent possible

Innovative Road Safety Solutions CEO's Address – Mr Darren Hotchkin

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Product Innovation – Looking ahead

• Ironman Hybrid
• Omni-Stop TM Bollard
• Export opportunities

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Benefits of the Ironman Hybrid can be summarised as follows :

Criteria	Water-filled	AnchoredSteel	Precastconcrete	IronmanHybrid
Low deflection	X			
Economical to transport			X	
Economical to deploy *	X	X	X	
No pavement damage		X		
Durable/long life span	X		X	

* Note: Water-filled barriers require Water trucks to fill up and empty / Anchored steel barriers require large anchoring devices and road repair costs / Precast concrete barriers require large lifting equipment and greater transport costs

Actively seeking the best commercial rollout opportunity

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OMNI-STOPTM BOLLARDS

• Diversity of applications
  • Street dining
  • Shopping centre car parks
  • Pedestrian crossings
  • Crane bay applications
• True lifesaver product

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EXPORT OPPORTUNITIES

• Rollout existing IP
• Intertraffic 2014 new ideas

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QUESTIONS