SDI LIMITED — Investor Presentation 2021

Mar 30, 2021

INVESTOR PRESENTATION

Samantha Cheetham CEO March 2021

WHO IS SDI

• The only Australian dental manufacturer for its group of products (class 2 medical devices)
• Fully owned subsidiaries in Brazil, USA, Germany and the UK
• Registrations from the appropriate global authorities ( TGA, FDA, ANVISA , Health Canada, etc)
• All R & D and manufacturing is done in Melbourne Australia
• Competes with large global companies
• Growth has been purely organic

YOUR SMILE. OUR VISION.

Long successful operating history – founded in 1972 and listed on ASX in 1985 and Australia's largest dental manufacturer

SDI conducts research and development of specialist dentist materials undertaking the development, manufacturing and marketing of dental restorative materials

SDI sells to 100+ countries on all continents, with sales teams and warehouses in Australia, Brazil, Europe and North America

INVESTMENT SUMMARY

• Long established business with experienced management and operational teams focused on serving the dental profession globally
• Consistent above market growth leading to increased market shares in key Aesthetics and Whitening categories
• Cost effective distribution model using a combination of global distributors, exclusive agents and direct to market
• Diverse geographic exposure with largest markets Europe 37% and North America 25% of sales respectively
• In-house highly qualified leading-edge research and development team delivering 1 2 new products per year to drive growth
• Continued investment in highly sophisticated manufacturing equipment driving automation
• Significant capacity to fund growth, underpinned by strong balance sheet

BUSINESS SUMMARY

Core Markets

• Europe
• o 37% of HY21 sales
• North America
• o 25% of sales
• Oceania & Asia
• o 24% of sales
• Middle East & Africa
• o 5% of sales
• South America
• o 9% of sales

Sales channels

• Worldwide distribution via 800+ distributors and agents
• Direct to dentist (in Australia only)
• Offices and warehouses in Melbourne, Brazil, USA, Germany

Profit drivers

• Sales growth

• Continued focus on cost control in manufacturing, sales & corporate

• Sales mix improvements

• New product launches

• Automation of manufacturing processes

• HY21 figures for % of sales total

• FY19 figures for CAGR (pre-Covid)

PRODUCT CATEGORIES

AESTHETICS

EQUIPMENT AMALGAM

WHITENING

KEY COMPETITORS

	KEY PRODUCT CATEGORIES
COMPETITORS	Whitening	Aesthetics	Equipment	Amalgam
SDI LIMITED				
3M (US)			
ULTRADENT (US)			
DENTSPLY (US)			
KERR KAVO (US)				
IVOCLAR VIVADENT (LI)				
COLTENE (CH)			
VOCO (DE)			
GC (JP)			
KULZER (DE)			

INVESTING FOR THE FUTURE

• Shifting industry trends identified more than 20 years ago
• Invested heavily in Research and Development
• R&D portfolio mostly relates to Aesthetics
• 83% of the research and development intangibles consist of Aesthetic products
• Aesthetics have grown from 22% of total sales in FY13 to 44% 1H21

$m Aesthetics

FINANCIAL HIGHLIGHTS

POSITIVE TRENDS

EPS & DPS

SHAREHOLDER RETURNS

12

STRATEGY & OUTLOOK

RESEARCH, INNOVATION, RESULTS

• Product mix improving our margins with focus on high margin Aesthetics and Whitening products
• New products for 2021:

5 New Products	Category	Benefit to dentist
Riva Star Aqua	Aesthetics	Less irritation
Riva SC EA	Aesthetics	Easy to use; stronger
Riva LC EA	Aesthetics	Easy to use; stronger
Pola Rapid	Whitening	Super fast
Radiometer V2	Equipment	Accurate LED tester

GLOBAL DENTAL INDUSTRY

• Dental market is recovering quickly after pandemic hit dentistry is an essential business
• $2bn industry in SDI's focus categories aesthetics and whitening
• SDI has approximately 1.7% of the market. We need to double our market share. To gain more market share, we will invest in:
  • Sales force in key US, European and Export markets
  • Global CRM system almost implemented: salesforce.com
  • More KOL and research collaboration
  • Focused R+D initiatives
  • High speed automation throughout factory
  • Improved global distribution and supply chain

o Source of market share data, Keystone, Italy 2021

STRATEGY PRIORITIES

• Rationalise product portfolio DONE; 1000 or 35% less SKUs
• Focus on key product categories Whitening, Aesthetics Glass Ionomers and Composites – 5 new products planned for 2021
• Drive Amalgam replacement on track for 2023
• Drive innovation and speed to market current full pipeline for next 5 years
• Undertaking a review of the manufacturing foot print to improve productivity
• Review of future growth plans including organic and through acquisition for product and market diversification

QUESTIONS

DISCLAIMER

THIS PRESENTATION CONTAINS SUMMARY INFORMATION ABOUT SDI LIMITED (SDI) AND ITS SUBSIDIARIES AND THEIR ACTIVITIES. THE INFORMATION IN THIS PRESENTATION DOES NOT PURPORT TO BE COMPLETE. IT SHOULD BE READ IN CONJUNCTION WITH SDI'S OTHER PERIODIC AND CONTINUOUS DISCLOSURE ANNOUNCEMENTS LODGED WITH THE AUSTRALIAN SECURITIES EXCHANGE, WHICH ARE AVAILABLE AT WWW.ASX.COM.AU.

THE INFORMATION CONTAINED IN THIS PRESENTATION IS NOT INVESTMENT OR FINANCIAL PRODUCT ADVICE AND HAS BEEN PREPARED WITHOUT TAKING INTO ACCOUNT THE INVESTMENT OBJECTIVES, FINANCIAL SITUATION OR PARTICULAR NEEDS OF ANY PARTICULAR PERSON. BEFORE MAKING AN INVESTMENT DECISION, INVESTORS SHOULD CONSIDER THE APPROPRIATENESS OF THE INFORMATION HAVING REGARD TO THEIR OWN INVESTMENT OBJECTIVES, FINANCIAL SITUATION AND NEEDS AND SEEK INDEPENDENT PROFESSIONAL ADVICE APPROPRIATE TO THEIR JURISDICTION AND CIRCUMSTANCES.

TO THE EXTENT PERMITTED BY LAW, NO RESPONSIBILITY FOR ANY LOSS ARISING IN ANY WAY FROM ANYONE ACTING OR REFRAINING FROM ACTING AS A RESULT OF THIS INFORMATION IS ACCEPTED BY SDI, ANY OF ITS RELATED BODIES CORPORATE OR ITS DIRECTORS, OFFICERS, EMPLOYEES, PROFESSIONAL ADVISORS AND AGENTS (RELATED PARTIES). NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, IS MADE BY ANY PERSON, INCLUDING SDI AND ITS RELATED PARTIES, AS TO THE FAIRNESS, ACCURACY, COMPLETENESS OR CORRECTNESS OF THE INFORMATION, OPINIONS AND CONCLUSIONS CONTAINED IN THIS PRESENTATION.

AN INVESTMENT IN SDI SECURITIES IS SUBJECT TO INVESTMENT AND OTHER KNOWN AND UNKNOWN RISKS, SOME OF WHICH ARE BEYOND THE CONTROL OF SDI OR ITS DIRECTORS. SDI DOES NOT GUARANTEE ANY PARTICULAR RATE OF RETURN OR THE PERFORMANCE OF SDI SECURITIES.

PAST PERFORMANCE INFORMATION GIVEN IN THIS PRESENTATION IS GIVEN FOR ILLUSTRATIVE PURPOSES ONLY AND SHOULD NOT BE RELIED UPON AS (AND IS NOT) AN INDICATION OF FUTURE PERFORMANCE.

THIS PRESENTATION CONTAINS CERTAIN FORWARD‐LOOKING STATEMENTS WITH RESPECT TO THE FINANCIAL CONDITION, RESULTS OF OPERATIONS AND BUSINESS OF SDI AND ASSOCIATED ENTITIES OF SDI AND CERTAIN PLANS AND OBJECTIVES OF THE MANAGEMENT OF SDI. FORWARD‐LOOKING STATEMENTS CAN BE IDENTIFIED BY THE USE OF FORWARD‐LOOKING TERMINOLOGY, INCLUDING, WITHOUT LIMITATION, THE TERMS "BELIEVES", "ESTIMATES", "ANTICIPATES", "EXPECTS", "PREDICTS", "INTENDS", "PLANS", "GOALS", "TARGETS", "AIMS", "OUTLOOK", "GUIDANCE", "FORECASTS", "MAY", "WILL", "WOULD", "COULD" OR "SHOULD" OR, IN EACH CASE, THEIR NEGATIVE OR OTHER VARIATIONS OR COMPARABLE TERMINOLOGY. THESE FORWARD‐LOOKING STATEMENTS INCLUDE ALL MATTERS THAT ARE NOT HISTORICAL FACTS. SUCH FORWARD‐LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH BECAUSE OF THEIR NATURE MAY CAUSE THE ACTUAL RESULTS OR PERFORMANCE OF SDI TO BE MATERIALLY DIFFERENT FROM THE RESULTS OR PERFORMANCE EXPRESSED OR IMPLIED BY SUCH FORWARD‐LOOKING STATEMENTS.

SUCH FORWARD‐LOOKING STATEMENTS ARE BASED ON NUMEROUS ASSUMPTIONS REGARDING SDI'S PRESENT AND FUTURE BUSINESS STRATEGIES AND THE POLITICAL, REGULATORY AND ECONOMIC ENVIRONMENT IN WHICH SDI WILL OPERATE IN THE FUTURE, WHICH MAY NOT BE REASONABLE, AND ARE NOT GUARANTEES OR PREDICTIONS OF FUTURE PERFORMANCE. NO REPRESENTATION OR WARRANTY IS MADE THAT ANY OF THESE STATEMENTS OR FORECASTS (EXPRESS OR IMPLIED) WILL COME TO PASS OR THAT ANY FORECAST RESULT WILL BE ACHIEVED.

FORWARD‐LOOKING STATEMENTS SPEAK ONLY AS AT THE DATE OF THIS PRESENTATION AND TO THE FULL EXTENT PERMITTED BY LAW, SDI AND ITS RELATED PARTIES DISCLAIM ANY OBLIGATION OR UNDERTAKING TO RELEASE ANY UPDATES OR REVISIONS TO INFORMATION TO REFLECT ANY CHANGE IN ANY OF THE INFORMATION CONTAINED IN THIS PRESENTATION (INCLUDING, BUT NOT LIMITED TO, ANY ASSUMPTIONS OR EXPECTATIONS SET OUT IN THIS PRESENTATION).

STATUTORY PROFIT IS PREPARED IN ACCORDANCE WITH THE CORPORATIONS ACT 2001 AND THE AUSTRALIAN ACCOUNTING STANDARDS, WHICH COMPLY WITH THE INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS). UNDERLYING PROFIT IS CATEGORISED AS NON-IFRS FINANCIAL INFORMATION AND THEREFORE HAS BEEN PRESENTED IN COMPLIANCE WITH AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION REGULATORY GUIDE 230 – DISCLOSING NON-IFRS INFORMATION, ISSUED IN DECEMBER 2011.

ALL FIGURES IN THIS PRESENTATION ARE A$ UNLESS STATED OTHERWISE AND ALL MARKET SHARES ARE ESTIMATES ONLY. A NUMBER OF FIGURES, AMOUNTS, PERCENTAGES, ESTIMATES, CALCULATIONS OF VALUE AND FRACTIONS ARE SUBJECT TO THE EFFECT OF ROUNDING. ACCORDINGLY, THE ACTUAL CALCULATIONS OF THESE FIGURES MAY DIFFER FROM FIGURES SET OUT IN THIS PRESENTATION.