SCHOOLBLAZER LIMITED — AGM Information 2020

Feb 27, 2020

SYDNEY, 28 February 2020

Address by Chair to Shareholders

Good afternoon Ladies and Gentlemen, welcome to the 116th Annual General Meeting of HGL Limited.

My name is Helen Coonan, I am the Chair of HGL.

Please now allow me to introduce your other directors:

• Peter Miller, Deputy Chair
• Kevin Eley, Chair of the Audit and Risk Committee
• Cheryl Hayman, Chair of the Nomination and Remuneration Committee, and
• Julian Constable.

Also with me are Greg Timar, who has recently joined us as HGL's new Chief Executive Officer with a long career in various senior executive and corporate finance roles both in Australia and overseas; and Iain Thompson, our Company Secretary and Chief Financial Officer for the past 5 years.

Further, I would also like to acknowledge the attendance today of the CEO's from our various portfolio companies.

• James Baldwin the CEO of Mountcastle, who together with his wife Trish are our partners in our school and corporate wear business;
• Brad Aurisch, CEO of LW Reid, the business acquired at the end of last year by Mountcastle;
• Scott Nowland, CEO and our partner in the Pegasus Healthcare business in which we acquired an interest during 2018;
• Nikki Somerset CEO of our beauty and wellness business, BLC;
• Anthony Berman who has recently joined us after many years in the lighting industry in senior executive roles, as the CEO of JSB, our lighting solutions business; and
• Julian Pidcock, the CEO of our retail merchandising business SPOS and the former COO of HGL.

All of the CEO's will remain after the meeting together with directors and HGL management to share a cup of tea with investors.

I would also like to welcome Carlo Pasqualini, our signing audit partner from Deloitte, who is present and available to answer questions relevant to the audit and the financial statements; as well as Trish Paton, a partner with Hamilton Locke lawyers, who has been assisting the company with respect to various legal matters.

I would like to provide shareholders with some high-level perspectives on the business on behalf of the board.

Can I start by saying what a pleasure it is for me to preside over my first AGM at HGL Limited, one of this country's oldest listed companies.

While being somewhat different by comparison to other businesses that I am involved in, it is nonetheless one which has captured my imagination for its potential,given its proud history of entrepreneurial endeavour over many years. This includes:

• having acted as the incubator for what are now two substantial ASX listed enterprises;
• the very long-term commitment it has enjoyed from two substantial family owned groups; and
• its investment portfolio expansion in significant entrepreneur or family-run businesses.

In Australia, I note it is family concerns that have, and will continue to account for, an important share of economic activity and growth.

Equity and Skills

Looking at HGL's achievements over the last 30 years, our greatest successes have been gained through our tried and tested equity and skills model. This is where we co-invest with owners and managers in small to medium sized enterprises that have a long-term commitment to these growing businesses and bring extensive industry experience. I see HGL maintaining this successful strategy as we focus on continually improving the business.

Our attention over the next 12 months will be on realising the potential in our existing portfolio.

Priorities

Greg's first major task after bedding down our recently announced capital raise is, together with Iain, to run a full strategic review of our existing businesses, working together with the respective portfolio CEO's. The aim is to identify and implement the path forward to maximising the value of our portfolio. Greg will provide further commentary on this shortly. As I said, we expect the results of this review to manifest itself in actions and decisions throughout the course of this year.

I would also like to see us continue to focus on seeking additional investment in those businesses with growth potential.

While the results of the last 12 months are disappointing on most metrics at a group level, a standout performance was delivered by Mountcastle.

A part of the growth story late last year was the acquisition by Mountcastle of the LW Reid business. With integration underway with Mountcastle, the two businesses now represent the leader in a competitive and a highly fragmented industry.

Our other partner business, Pegasus, has had a pleasing first full year, having secured a major contract win and laid the groundwork for its interstate expansion.

Notwithstanding the challenges impacting the performance of our other business units, we remain committed to making sure that the group overall is well positioned for continuous improvement.

Shareholders would be pleased to know that we are actively considering opportunities for new brand acquisition and M&A opportunities across our portfolio of businesses.

With a focus on growth, our intention is for the group to return to a sufficient level of sustainable earnings and value for our shareholders.

Capital Raise

Our recent announcement of a 1 for 4 rights issue, the Company's first capital raise in 25 years, is a seminal event for HGL. I would like to take this opportunity to thank our two substantial shareholder groups for their confidence in HGL by providing a short-term shareholder loan. This is underlined by their confirmed support to take up their full pro-rata share of the rights issue.

The new funds raised will allow us to repair our balance sheet, in particular our working capital position. This is important to allow us to make further small and relevant investments for our businesses to aid their growth, whether in people, systems, new brands or acquisitions.

With the rights issue being priced at an attractive discount to the closing price before its announcement, I would commend all shareholders to consider taking up their full entitlements under the issue.

Governance Developments

Developments since the last AGM which saw a first strike on the Remuneration Report, have included my appointment to the board as Chair; securing the services of a new CEO with a wide range of management experience across industries, together with extensive M&A skills.

In addition, we now have a remuneration structure aligned to value delivery. All of these changes indicate that we have listened and responded in a positive and timely way to the views of our shareholders. I will also be working with the Board on further board succession and renewal initiatives over the coming year.

In closing, I believe much groundwork has been laid over the last year to ensure we are well placed this financial year under new leadership at HGL to be making continuous improvements across our portfolio to create value. We look forward to demonstrating this to shareholders as the year progresses.

Finally, I would like to thank Greg, Iain and the HGL head office team, as well as the business unit CEO's and their respective teams for their contribution and dedication.

I would also like to thank my fellow Directors for their efforts over the past year.

I now hand over to Greg, following which we will take questions.

Enquiries:

Greg Timar CEO (02) 8667 4660 info@hgl.com.au