VERBREC LIMITED — AGM Information 2017

Oct 24, 2017

ASX Announcement 25 October 2017

Chairman’s address

To the Annual General Meeting of LogiCamms Limited (ASX: LCM ), held at 2.00pm (AEST) on Wednesday 25 October 2017 at Capri by Fraser, 80 Albert Street, Brisbane.

Welcome, and thank you for joining us today for the Company’s 2016-17 Annual General Meeting.

The 2016-17 financial year has been a turning point for LogiCamms. While the financial outcome for the year was disappointing for shareholders, we are pleased with the work of the new management team to re-shape the business and drive improving performance. Our CEO, Flora Furness and CFO, Dan Drewe have responded decisively to re-structure the business to reduce the operating cost base, re-balance our workforce, and sharpen the focus on our core technical engineering strengths. The low margin Hunter Valley and Petromod businesses were also closed, which freed up more than $1.5 million in working capital for re-investment into our technology and innovation business.

As a result of this work, the business has been re-positioned to capitalise on increasing client activity in our traditional markets. Market conditions for our clients are improving with recent increases in commodity prices and commitments to new public and private sector infrastructure projects.

These factors are giving our clients greater confidence to progress capital expenditure projects that were deferred in 2016-17, to optimise asset performance and productivity. As a result, LogiCamms is benefitting from increasing spending on specialist engineering services.

Early indications since the start of the current financial year are that the business is making solid progress. We remain on track to achieve our guidance for the 2018 financial year, that the business will generate a similar level of revenue to last financial year’s figure of $81.1 million, at EBITDA margins in the mid-single digits. The Company is on budget with revenue and has returned positive EBITDAs throughout the first quarter of the current financial year.

As we reported in August, the increase in client spending has translated into LogiCamms entering the current financial year with $25.1 million of work in hand, which represents approximately a third of forecast consulting engineering revenue. At that time, we had also secured new contracts with a total value of more than $13 million. Since then, we have been awarded new project roles like the engineering design contract we announced recently, for the Timaru bulk fuel terminal on New Zealand’s South Island, that will generate revenue mostly in the second half of the financial year. As of today our work in hand is $26m.

Our investments in technology and innovation are beginning to bear fruit, and we continue to focus on developing and commercialising our new products. The focus of these investments is to build on our expertise in automation and control systems, and develop products that streamline the engineering design process, reducing time and costs on our clients’ projects. We are working closely on these products with a number of clients and have our first commercial agreement in place, and expect to roll more of these out during the financial year.

LogiCamms Limited ASX:LCM ACN 127 897 689 www.logicamms.com.au

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Safety is always our first and most important priority, given the nature of our work. With that in mind, I am pleased to report that we reported no Lost Time Injuries in 2016-17. While this was a very positive outcome, our Total Recordable Injury Rate increased last financial year, to 3.59 per million hours worked. Fortunately none of these were significant injuries, but they serve as a reminder that safety must remain our foremost day-to-day priority.

We still have a great deal of work to do to strengthen the business and restore profitable growth. Nevertheless, we are confident that the revised strategic direction of the business has set LogiCamms on the right path with a clear focus, and the early signs of improving operational and financial performance are encouraging. Flora will expand on the roll-out of the strategy in her address.

I would like to take this opportunity to introduce some Board changes to shareholders.

Shareholders have been asked to vote at this meeting on the re-election of Charles Rottier as a non-executive Director, after he was appointed to the Board on 4 September this year. Charles is a former CEO of ASX-listed, Austin Engineering and he has extensive experience in engineering, construction and maintenance services businesses in Australia and internationally. His first-hand knowledge of LogiCamms’ sector will be invaluable to the business, and Charles is making an active contribution to Board discussions as he develops a detailed understanding of the Company’s operations.

After a decade of service to LogiCamms, Peter Wall will retire from the Board at the conclusion of today’s AGM. Peter is a founding Board member of the Company, having joined in 2007. On behalf of shareholders, I would like to thank Peter for his dedication, passion, and commitment to LogiCamms and for the important contribution he has made as a director and committees’ chairman.

I would like to thank our CEO, Flora Furness and her team for their hard work in re-positioning the business and driving improving performance. I would also like to thank our staff for their commitment and for staying focused on our clients during a year of change. I would also like to express my personal appreciation to the Board for their endeavours on behalf of shareholders during the year.

Finally, thank you to our shareholders for continuing to support LogiCamms as we endeavour to drive sustained improvement in financial performance on your behalf.

I would now like to invite our CEO, Flora Furness to provide an update on the re-positioning of the business and implementation of our corporate strategy.

Peter Watson

Chairman LogiCamms Limited

LogiCamms Limited ASX:LCM ACN 127 897 689 www.logicamms.com.au

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Chief Executive Officer’s address

To the Annual General Meeting of LogiCamms Limited (ASX: LCM ), held at 2.00pm (AEST) on Wednesday 25 October 2017 at Capri by Fraser, 80 Albert Street, Brisbane.

Thank you for joining us today for the Company’s 2016-17 Annual General Meeting. I am delighted to present an update for shareholders at this, my first AGM as Chief Executive Officer of LogiCamms.

As I mentioned in the annual report, I have spent a great deal of time since taking on this role eight months ago, talking with our clients, employees and shareholders to understand their perspectives on what drives our business. These conversations have provided some invaluable insights and formed the basis for a renewed direction for LogiCamms under the theme of Clear Focus.

At the start of the 2017 financial year, LogiCamms was geared to support a revenue budget of more than $100 million. In simple terms, that meant the business was carrying too many resources for the level of work we were able to secure in challenging market conditions.

To address this we have streamlined and re-shaped the business to achieve two goals.

• Firstly, we have re-based our consulting workforce and operating costs, so we can return to profitability. During the second half of 2016-17, we reduced our operating cost base by $10.5 million, and those cost savings will be realised from this financial year.

• Secondly, we are now focused on the value proposition and the markets where we have the strongest competitive position. Those are the markets where we are most likely to succeed and as a result, create the greatest value for shareholders.

This is what we refer to as our Clear Focus strategy. Today, I would like to take the opportunity to explain three specific elements of the strategy, and how they are helping us to return the business to profitable growth.

LogiCamms has always been recognised by clients for leading technical expertise in automation, electrical instrumentation and control systems. Playing to these strengths is the first element of our Clear Focus strategy.

Our strategy is about being narrow and deep. We are concentrating on our core areas of strength, where our clients and partners recognise our value proposition as a market leader. This specialist focus helps us to win work, and allows us to pull through a range of complementary services in:

• project management and commissioning,

• competency training,

• asset integrity, and

• environmental consulting.

One of the benefits of our Clear Focus strategy is that we complement rather than compete with, broad multi-specialty engineering businesses and large-scale project developers and asset owners. This has opened up a broad range of new opportunities for LogiCamms, through strategic partnerships, to work on projects that would otherwise have been beyond the scale and scope of our capabilities.

LogiCamms Limited ASX:LCM ACN 127 897 689 www.logicamms.com.au

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Since the end of 2016-17, LogiCamms has won a role on Northconnex, Australia’s longest road tunnel project, connecting the M1 Pacific Motorway with the Hills M2 Motorway in Northern Sydney. The principal contractor selected LogiCamms to undertake this work because of our proven ability to deliver complex control system solutions for major projects, and I am pleased to report that we have recently secured the Phase 2 works on the project. This is another demonstration that our strategy is creating new business opportunities for LogiCamms.

Progressing the development and commercialisation of our suite of new technology products is the second element of our Clear Focus strategy.

Tough market conditions for our clients over the past few years have given them a need to make fundamental, lasting change to the way they manage their cost bases.

This is an opportunity for us. We understand our clients’ challenge because most of our work is helping them to optimise their existing operating assets. We have recognised expertise in automation and control systems which is fertile ground for innovative ideas. And we have longterm relationships with our clients which enables us to collaborate and develop ideas into real solutions.

We have a rigorous development process to work with our clients to convert innovative ideas into better, cheaper and faster solutions. The process ensures these solutions are tested and proven, to minimise risk for LogiCamms and our shareholders.

Our Automated Infrastructure Design Engine, or AIDE, has been developed by a team of LogiCamms software engineers and Geographic Information Systems specialists. It reduces development time and capital costs for linear infrastructure projects like gas pipelines, and telecommunication, energy and transport networks. We have secured our first commercial contract for AIDE, and it is currently in use with a blue-chip CSG producer.

Our in-field data capture and tracking solution, called Stacks On, is designed to optimise materials stockpiles. It is currently in proof of concept trials with an ASX-listed client, and we are targeting first commercial contracts this financial year.

As you can see, these innovations are reaching a level of technical and commercial maturity, and clients are beginning to see how they can be applied to benefit their businesses. To roll them out we are using commercial models that allow us to share in the value created for clients, as opposed to traditional professional fees. We are continuing to invest to accelerate the development of these products, and we are excited about their potential to create new, higher margin revenue streams for the business.

A third element of our Clear Focus strategy involves defining the ‘sweet spot’ among our portfolio of more than 50 Master Service Agreements, or MSAs, with clients.

These agreements position LogiCamms as a pre-qualified supplier in our core areas of expertise, and represent more than half of budgeted revenue. About 35 of them are actively growing and delivering an increasing number of firm orders.

We are analysing our performance under the MSAs so that we have a better understanding of how we make the most of them. By understanding the value, duration and margins of typical MSA projects, we can manage our consulting resources more precisely so that our resources are deployed where they are most profitable, and deliver the best outcomes in terms of shareholder value.

Those are three of the key elements of our Clear Focus strategy:

LogiCamms Limited ASX:LCM ACN 127 897 689 www.logicamms.com.au

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• Playing to our acknowledged technical strengths in automation, electrical instrumentation and control systems.

• Continuing to invest in developing and commercialising our technology innovations that build on those strengths, to create new, higher margin revenue streams.

• And analysing our Master Service Agreements so that we can deploy our resources where they are most valuable to our clients and therefore, most profitable for our business.

After re-structuring the business last financial year, we are encouraged by the early indications that the strategy is restoring LogiCamms to profitable growth. As Peter mentioned in his address, the business has returned to positive EBITDA results. We started the financial year with a strong order book and since then, we have added new projects that will contribute to our results this year, mainly in the second half. There is still a lot of work for us to do, but these are all signs that LogiCamms is on the right track to create new value for you, our shareholders.

In closing, I would like to take the opportunity to thank:

• our clients and partners for continuing to choose to work with LogiCamms;

• the Board for their hard work and guidance as we have re-shaped the business and charted this new strategic course;

• And of course a special mention to Peter Wall who has been a supportive guiding hand since I have taken on the CEO role; and

• all of our staff for the work they do to provide outstanding project outcomes for our clients.

Most importantly, I would also like to thank shareholders for continuing to support LogiCamms as we improve the performance of the business.

Thank you.

Flora Furness

Chief Executive Officer

LogiCamms Limited

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Further information

Flora Furness Media enquiries Chief Executive Officer Alasdair Jeffrey +61 7 3058 7000 0404 926 768

About LogiCamms

LogiCamms is an agile, flexible engineering and related services company which draws upon our wealth of experience to deliver innovative tailored solutions to our clients, including leading owners and operators of minerals and metals, hydrocarbons and infrastructure assets. The Company works to reduce costs, increase efficiencies, and enhance the value of our customers’ operations. LogiCamms is also an Australian leader in the provision of automation and control systems. LogiCamms is an Australian Securities Exchange listed Company (ASX:LCM) with offices across Australia, New Zealand and Papua New Guinea. LogiCamms’ Vision is to be a market leader delivering outstanding customer solutions.

LogiCamms Limited ASX:LCM ACN 127 897 689 www.logicamms.com.au

Share Registry Link Market Services Limited Ph: +61 7 3320 2200 www.linkmarketservices.com.au