TZ LIMITED — Investor Presentation 2016

Nov 27, 2016

Company Update

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FY 2016

BUSINESS PERFORMANCE

CRAIG SOWDEN Chief Financial Officer, TZ Limited

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Year-on-Year Revenue Growth

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$A25M
A$20.8M
A$20M
A$15.2M
A$15M
A$8.5M
A$10M
A$5M
A$2.8M
A$1.7M
FY2012 FY2013 FY2014 FY2015 FY2016
Top Line Growth
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Business Performance

		2013	2014	2015	2016
	REVENUE	A$2.8M	A$8.5M	A$15.2M	A$20.8M
	GROSS MARGIN	50%	49%	44%	30%
	EBITDA	(A$11.8M)	(A$8.5M)	(A$4.4M)	(A$5.3M)
	NPAT	(A$16.5M)	(A$11.8M)	(A$6.4M)	(A$7.0M)
	EPS (cents)	(9.7)	(4.4)	(1.6)	(1.5)
		Q1 2017	Revenue	Gross Margin
			A$7.6M	40%
				Business Performance

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Operating Expenditure

		2013	2014	2015	2016
	EMPLOYEE BENEFIT	A$3.85M	A$5.74M	A$6.98M	A$8.12M
	OCCUPANCY EXPENSE	A$0.22M	A$0.28M	A$0.36M	A$0.51M
	COMMUNICATIONS EXPENSE	A$0.13M	A$0.11M	A$0.24M	A$0.23M
	PROFESSIONAL SERVICES	A$1.93M	A$1.61M	A$1.16M	A$1.08M
	TRAVEL AND ACCOMMODATION	A$0.72M	A$0.84M	A$0.98M	A$0.89M

Operating Expenditure

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FY 2016

OPERATING HIGHLIGHTS

JOHN WILSON Founder, TZ

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Business Unit Revenue

Infrastructure Protection Packaged Asset Delivery A$25M Data Centre Cabinet Security Smart Locker Business A$20M A$17.7M A$15M A$10M A$5M A$2.1M FY2013 FY2014 FY2015 FY2016 FY2013 FY2014 FY2015 FY2016 Growth by Business Unit

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Design Services
Europe
(Infinity)
IXP
APAC
Corporate
Postal Americas
PAD
PAD
Sales by Product Sales by Region
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Sales by Region / Product

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Indicative Units Sold

# of Locks Sold

To Data Centre Cabinet Security

# of Lockers Sold

Smart Locker Business

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20,000
15,000
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10,000
5,000
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40,000

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30,000
20,000
10,000
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FY2013 FY2014 FY2015 FY2016

FY2013 FY2014 FY2015 FY2016

Growth by Units Sold

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US Logistics Company Poste Italiane Singapore Post 300 Locker Banks 12 Locker Banks 50 Locker Banks May 2016 January 2016 September 2015

Pos Malaysia CouriersPlease 50 Locker Banks 45 Locker Banks October 2016 July 2016

FY 2016 Highlights

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Brisbane | Sydney | Melbourne > 12,000 Day Lockers

Sydney | Melbourne > 5,000 Day Lockers

Brisbane > 1,000 Day Lockers

FY 2016 Highlights

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1
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OPERATING CONDITIONS

Improve operational performance through manufacturing cost reduction, extended credit terms and improved payment conditions.

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2
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PARTNERING

Increase the speed of penetration through new channel distribution partnerships

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3 4
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LICENSING

NEW APPLICATIONS

Accelerate the rate of adoption through licensing

Explore new applications for the technology and expand into new sectors

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IMPROVING
OPERATING
CONDITIONS
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UNIT COST REDUCTION

CREDIT TERMS

CUSTOMER PAYMENTS

• TZ Devices manufactured ex-Asia

• Assembly in Asia and US (Mexico)

• Component sourcing ex-Asia

• Asian based 3PL partner

• Credit terms with key Suppliers

• Extended payment terms  Loan facility secured – if needed

• Upfront deposit with PO

• Transition to progress payments  Move from 45 to 30 day accounts  Improving collection process

Improving Operating Conditions

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Corporate / Residential / Higher Education:

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W0 Receive PO Deposit Invoice
W8 Ship Lockers
W10 Install Lockers Full Invoice Final Invoice
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Postal:

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M0 Receive PO Ship Lockers Install Lockers M3 M4 M5 Clear Customs End Warranty M15			Pay Bond		Pay Bond
					Deposit Invoice
			Final Invoice
			Bond Refund

Improving Operating Conditions

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• Established distribution relationship with Ricoh to support accelerated deployment of TZ Smart Lockers in US

• Market launch in April 2016

• Over 3,000 managed services corporate accounts

• 300 sales people across the US

• Pipeline established of over 60 qualified opportunities

Partnering

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MEDICINE
CABINETS
New TZ
Smart Devices
DOMESTIC
FURNITURE
OFFICE
STORAGE
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Gaming
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Healthcare
Retail
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New Applications

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1
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OPERATING CONDITIONS

Improve operational performance through manufacturing cost reduction, extended credit terms and improved payment conditions.



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2
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PARTNERING

Increase the speed of penetration through new channel distribution partnerships



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3 4
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LICENSING

NEW APPLICATIONS

Explore new applications Accelerate the rate of for the technology and adoption through expand into new sectors licensing relationships





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TZ LABS

LEVERAGING TZ TECHNOLOGY

ADAM FORSYTH General Manager, TZ Labs

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2/237 Montague Road West End, QLD

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The alignment of all developmental capabilities to:

• Leverage TZ Intellectual Property

• Increase the tempo of product evolutions

• Optimise for lean production

• Drive modularity and scalability across the portfolio

• Agile development of customer centric solutions

Building Our Technology Capability

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~~1 2~~

TECHNOLOGY DEVELOPMENT

PRODUCT DEVELOPMENT

Development of new SMArt Devices and Systems that leverage, grow and support commercialisation of TZ IP

Design and Engineering of Products, Devices and Integrated Systems based on TZ SMArt Devices

• Locker Design and Engineering

• 82 patents granted

• Radial Design Improvements

• 23 patents pending based on 18 core concepts

• Manufacturing Optimisation

• 21 patents pending based on 7 new concepts

• Engineering Change Management

• TZ Electronic SwingHandle

• 11 registered trade marks

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3
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FEE-FOR-SERVICE INDUSTRIAL DESIGN

Provision of Design Services to key and retained customers

• GNSS survey technology

• Parking management

• Drone enhancements

• Fire protection systems

• 3 new technology demonstrators

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Office
Commercial
Facilities
Asset
Postal
Security
Logistics Assets
Delivery Future
Solutions
Data Centre
Security
Personal
Retail Assets &
Packages
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Cyber-Physical Solutions for infrastructure, logistics and asset management

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• TZ Software delivers customer value by leveraging data from TZ SMArt Devices

• TZ SMArt Devices are the enablers of differentiated customer solutions

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Our next generation devices are built for the Industrial Internet of Things …

• Security is part of the device fabric

• Advanced wireless mesh, Wi-Fi and wired communications

• Inbuilt ambient condition and usage sensors

TZ SMArt Devices are unique … They gather data. They communicate it. They take action.

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 Programmable and Networkable
 Self Diagnosing
Intelligence
 Adaptive
Sensors
 Ambient Conditions
 Low Power Consumption  Device Health and Usage
 User Identification
 No EMF
Smart
 High Reliability
Materials
 Long Life  Ultra Low Power Designs
 Optional Power Sources:
Wired, Battery, Harvested…
Power
 Open and Proprietary Protocols
Connectivity
 Wired and Wireless Capability
 Smart Node on a Network
Mechanisms
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Modular  Scalable  Adaptive

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Next Gen TZ Devices will not only support wired networks but will be smarter in how they communicate wirelessly:

• All TZ SMArt Devices will cooperate in the distribution of data in the network

• It will be a self healing mesh topology based on industry standards

• Mobile devices will be considered as nodes on the network

• It will extend the network range without the need for multiple communication hubs

• It will save power and increase bandwidth

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TZ Software and Cellular
Informatics Internet
TZ
SmartPhone
App
CANbus
RS485
TZ TZ Future Off-the-Shelf
Radial SwingHandle TZ Devices Sensors
and/or Internet
Corporate Infrastructure
TZ Gateway
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TZ SMArt Device Ecosystem

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MEDICINE
CABINETS
New TZ
Smart Devices
DOMESTIC
FURNITURE
OFFICE
STORAGE
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Gaming
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Healthcare
Retail
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New Applications

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A New Retail Security, Control and Management Solution …

KEY DRIVERS:

• To reduce administration overheads by eliminating keys and conventional locks and automating record keeping

• To improve workflow by knowing which and what items are being accessed, by whom and at what time

• To simplify staff records through digital time sheets using cyber identities

• To provide system security by alerting to unsecured cabinets

• To improve data driven decision making by capturing transactional data and events

Targeting Retail

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Replaceable Battery

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Intelligent Electronics

Patented SMArt Lock Mechanism

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Integrated LED, TZ SMArtNet and NFC

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Deadbolt system available in rear, mortise and front mount configurations

Knob available in range of colors and forms

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Staff are issued an identity ring

Cabinet secured by TZ SMArt CabLock TZ SMArt CabLock recognizes authorized identity ring and allows staff to open the cabinet

Staff close the cabinet and serve the customer TZ SMArt CabLock warns staff and their supervisor if cabinets are left open too long

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Corporate
TZ SCMS
Infrastructure
Informatics
and Systems
3 [rd] Party store Wireless or Ethernet 3 [rd] Party store
based CCTV based LPS
systems systems
TZ SCMS
Gateway
TZ SMArt
TZ SCMS
CabLock
Supervisor
App
TZ SMArt
TZ SMArt
CabLock
TZ SMArt
CabLock
CabLock
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TZ SMArt Cabinet Lock

• Patented SMArt Object technology

• Uses NFC cyber identification

TZ SCMS Gateway

• Secure management and interchange of data on a store by store basis

TZ SCMS Supervisor App

• Tablet based store supervisor tools

TZ SCMS Informatics

• Secure cloud based central management, database and analytics suite

TZ SCMS Store System

System Architecture

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Store Based Supervisor App …

• Supports iOS and Android Devices

• TZ SMArt CabLock Management

• Authorized User Management

• Alarms and Events

• Store-based Reports

• Exception-based Reports and Alerts

• Timesheets and Log Review

System Administration

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Secure cloud based central

management and analytics suite …

• Data management, storage and analytics

• SMArt device management and reporting

• Exception based reporting

• Interfaces to corporate HR and ERP systems as ‘sources of truth’

• Integrates with leading BI suites leveraging advanced machine learning

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Back End
Integration
TZ SCMS
Informatics
Stores using
TZ SMArt CabLocks
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Big Data Analytics

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FY 2017

BUSINESS OUTLOOK

KENNETH TING Executive Director, TZ Limited

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Growth Continues in FY2017

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FY2014 FY2015 FY2016
$22.0
$20.0
$18.0
$16.0
$14.0
$12.0
$10.0
$8.0
$6.0
$4.0
$2.0
$0.0
Q1 FY14 Q2 FY14 Q3 FY14 Q4 FY14 Q1 FY15 Q2 FY15 Q3 FY15 Q4 FY15 Q1 FY16 Q2 FY16 Q3 FY16 Q4 FY16 Q1 FY17
Quarterly Revenue (A$M)
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Quarterly Performance

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Corporate Mail

On-going expansion within established customer base.

Ricoh partnership also building awareness of TZ corporate offering to their extensive base of managed mail service customers.

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Corporate Day Locker

On-going expansion within established customer base.

New contracts secured:

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Sydney

Sydney

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Postal and Logistics

On-going locker deployment program into 2017…

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• USA

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Malaysia 

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 Australia

Residential

Strategic supply relationships established with major US property developers on the West and East Coast.

West Coast

New York, New Jersey

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South East

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New World of Work
Launch Markets 2017
UK and Ireland
Germany
Spain
Italy
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PAD Business in Europe

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SMArt Mailbox
New Application
 Large Addressable Market
 Supported by Market Trends
 Early Adopter identified
 Finalising System Design
 Will be Credible Reference
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Launch New Application

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