SAFEROADS HOLDINGS LIMITED — AGM Information 2014

Nov 24, 2014

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SAFEROADS HOLDINGS LIMITED 2014 Annual General Meeting Lardner Park, 25 November 2014

Contents

Innovative Road Safety Solutions

• Chairman’s Welcome and Address

• CEO’s Address on Product Developments

• Questions to Board and Management

• Formal Resolutions

• Questions and Close

• Refreshments

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Chairman’s Address – Mr David Ashmore

Innovative Road Safety Solutions Innovative Road Safety Solutions

FY2014: Transformation of the Company

• 2013/14 Return to underlying profitability

• Operating underlying loss of $0.78 million compared to $1.56 million loss in 2013 and $4.25 million loss in 2012.

• Further improved gross margin by 13.3% from 33.1% in FY13 to 37.4% in FY14.

• Now structured to yield underlying profitable operations.

• Q4 FY14 & Q1 FY15. Both profitable quarters.

• ow.

• We now have a stable platform to gr

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Chairman’s Address (Continued)

Innovative Road Safety Solutions

FY2014: Transformation of the Company

• Operating Performance for FY2014

• Reduced costs through headcount, productivity and premises rationalisation.

• Focus on winning products with dedicated product managers.

• Progressive cost reduction and productivity initiatives saving $2.8 million.

• Initiated the controlled wind down of our unprofitable Civil Services business.

• Maintained appropriate levels of working capital to meet operational needs as well as invested $297k in R&D activities.

• Generated $0.5 million in proceeds from sale of noncore assets, used to further reduce bank debt.

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Chairman’s Address (Continued)

Innovative Road Safety Solutions

FY2014: Transformation of the Company

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• 2013/14 Continue to reduce bank debt and

financing costs.

• Reduced core bank debt by 11% from $5.6 million to $5.0 million.

• Finance costs down by $83k to $534k.

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• Complied with financial covenants and exceeded minimum debt reduction targets through proceeds of asset sales.

• Constructive relationship with our bankers as we stabilise our earnings capability.

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Chairman’s Address (Continued)

Innovative Road Safety Solutions

Innovation - Strategic Growth

• Ironman Hybrid

• Initial approval for 80 KPH in all States.

• First rental deployments achieved (WA and NSW). Strong quote pipeline.

• Feedback very favourable, customers appreciate and are paying for its advantages.

• Continue to engage with interested parties to sell or licence. Australia and overseas.

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Chairman’s Address (Continued)

Innovative Road Safety Solutions

Innovation - Strategic Growth

• International opportunities

• Direct result of Intertraffic conference.

• Safepole to Canada.

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• National Signals in Australia.

• Crossafe Culvert Protector.

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Chairman’s Address (Continued)

Innovative Road Safety Solutions

Strategic Initiatives

• Bank Debt – 2/5 Entitlement Offer

• $1.2 million to reduce debt.

• Further $1.0 million reduction from internal sources.

• 3 year facility till July 2018.

• Substantial interest reduction.

• Capital Structure - Additional Share Placement.

• Create and control more winning products.

• Initiatives and Alliances to unlock IP value.

• Primary ongoing focus - to enhance shareholder value.

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Chairman’s Address (Continued)

Innovative Road Safety Solutions

Focus for FY2015

• Increase Profitable Sales - Current products to known markets and launch new innovative products into known and new markets.

• Develop export opportunities through contacts made at recent trade conferences

• We have secured an agreement with a major company to distribute Safepole in Canada.

• Pursue other established opportunities

• Maintain efficiencies - Ensure margins are maintained and/or improved and costs are managed tightly.

• Innovation - Develop and commercialise existing IP to the extent possible.

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Chairman’s Address (Continued)

Innovative Road Safety Solutions

FY2015 Outlook

• Recorded a positive EBIT in the first quarter of FY15, the second consecutive quarter of underlying profitability.

• Trading conditions are still irregular and securing sales remains an ongoing challenge. Federally funded major roads projects are an encouraging sign.

• Order deferrals are still common which highlights demand but also funding constraints

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• Anticipating a positive EBIT for the first half

• Full year forecasting is difficult but if we continue to deliver on our targets then we anticipate a positive EBIT for the full year.

• Cash generation remains good and we do not anticipate any need to seek additional funding for working capital.

• Rental fleet expansion may require further fundraising.

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CEO’s Address – Mr Darren Hotchkin

Innovative Road Safety Solutions

PRODUCT INNOVATION – LOOKING AHEAD

• Ironman Hybrid barrier

• Zone VMS

• Safepole impact absorbing pole

• New Flexible Sign System

• Crossafe Culvert Protector

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CEO’s Address (Continued)

Innovative Road Safety Solutions

Product Innovation – Ironman Hybrid

• We have our first rental deployments (WA and NSW)

• State road authority approvals granted in all States

• Still actively seeking the best commercial rollout opportunity

Criteria	Water-filled	Anchored Steel	Precast concrete	Ironman Hybrid
Low deflection	X			
Economical to transport			X	
Economical to deploy	X	X	X	
No pavement damage		X		
Durable / long life span	X		X	

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CEO’s Address (Continued)

Innovative Road Safety Solutions

Product Innovation – Zone VMS

• Program remotely via internet, mobile phone or message manager

• Australian built, fully galvanised trailers with powder coated toolboxes

• Training for customers and ongoing support through our ZoneCare program

• Security and diagnostic alerts can be sent to your mobile phone

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CEO’s Address (Continued)

Innovative Road Safety Solutions

Product Innovation – Safepole

• Only Impact Absorbing Pole tested to and exceeding the requirements of AS/NZS 11581-3-1997 and VicRoads TCS-041-3-2001

• Approved by VicRoads, Powercor, Citipower, Jemena and Ausnet Services

• Designed to enable the pole to deform and capture a vehicle in a controlled manner to provide safe and pedestrian-friendly outcomes

• Simple and easy to install

• Minimum life of 20+ years due to its robust construction and galvanising which exceeds AS/NZS 4680

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CEO’s Address (Continued)

Innovative Road Safety Solutions

Product Innovation – Flexible Sign System

• First fully integrated impact sign post assembly

• Potentially could save millions of dollars in sign maintenance and replacement

• Both domestic and international opportunities

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CEO’s Address (Continued)

Innovative Road Safety Solutions

Product Innovation – Crossafe Culvert Protector

• Only crash-tested culvert protection available worldwide

• First order received for South Australia

• Opportunity to retrofit thousands of culverts across Australia

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http://www.youtube.com/watch?v=f5OpCEmLsxE

CEO’s Address (Continued)

Innovative Road Safety Solutions

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INTERNATIONAL OPPORTUNITIES

• Intertraffic 2014 – new ideas

• We are currently engaging with various overseas parties on the prospect of distributing their unique products here in Australia

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• We are also exploring opportunities for parties to distribute our products in USA / Canada and Malaysia

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CEO’s Address (Continued)

Innovative Road Safety Solutions

INTERNATIONAL OPPORTUNITIES - IRF

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• Influencing the approach to road safety

• Over 1.3 million people are killed on roads around the world each year.

• The Decade of Action for Road Safety is a United Nations sponsored program that has called upon governments around the world to implement measures that will reduce road traffic fatalities by 50% by 2020.

• Over 120 countries have made the commitment to meet this challenge.

• Saferoads is actively playing its part in influencing road agencies in its respective areas of expertise.

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Innovative Road Safety Solutions

QUESTIONS

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