VERIS LIMITED — AGM Information 2016

Nov 22, 2016

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2016 Annual General Meeting

Simon Thomas Chief Executive Officer

23 November 2016

Disclaimer

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This Document should not be considered as an offer or invitation to subscribe for or purchase any securities in OTOC Limited (“OTOC” or “The Company”) or as an inducement to make an offer or invitation with respect to those securities. No agreement to subscribe for securities in OTOC should be entered into on the basis of this Document.

This Document contains high level information only and does not purport to be all inclusive or to contain all information which its recipients may require in order to make an informed assessment of OTOC and its prospects. Any forecasts and forward looking information contained in this Document are subject to risks and uncertainties and are not a guarantee of future performance. Actual performance will almost certainly differ from those expressed or implied.

OTOC makes no representation or warranty, express or implied, as to the accuracy, currency or completeness of the information presented herein. Information contained in this Document may be changed, amended or modified at any time by OTOC. OTOC is under no obligation to update any information or correct any error or omission which may become apparent after this Document has been issued.

To the extent permitted by law, OTOC and its officers, employees, related bodies corporate and agents (‘Associates’) disclaim all liability, direct, indirect or consequential (and whether or not arising out of the negligence, default or lack of care of OTOC and/or its Associates) for any loss or damage suffered by recipients of this Document or other persons arising out of, or in connection with, any use of or reliance on this Document or information contained herein. By accepting this Document, the recipient agrees that it shall not hold OTOC or its Associates liable in any such respect for the provision of this Document or any other information provided in relation to this Document.

Recipients of this Document must make their own independent investigations, consideration and evaluation of the information contained herein. Any recipient that proceeds further with its investigations, consideration or evaluation of the information described herein shall make and rely solely upon its own investigations and inquiries and will not in any way rely upon this Document. Recipients of this Document should not act or refrain from acting in reliance on material in this Document.

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Slide 2
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Introduction

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OTOC provides professional surveying and infrastructure services to the property, civil infrastructure, government and resources sectors

Corporate Snapshot

Share Price (July 15 to Present)

ASX Code	OTC
Share Price	$0.245
Ordinary Shares	323m
Market Capitalisation Cash (est.)	$79m $14m
Debt (est.) Enterprise Value	$12m $77m
FY2016 Underlying EBITDA	$16.2m
EV/FY2016 Underlying EBITDA	4.8x

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Board and Management
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Derek La Ferla	Non-Executive Chairman
Simon Thomas	Chief Executive Officer
Adam Lamond	Executive Director
Tom Lawrence	Non-Executive Director
Karl Paganin	Non-Executive Director
Brian Mangano	Chief Financial Officer
Lisa Wynne	Company Secretary

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$0.35
Maiden dividend
$0.30
$0.25
Acquisition of Linker $12m Placement
$0.20
Trading update
Acquisition of Lester Franks
$0.15
Earnings guidance,
acquisition of Lawrence
$0.10
$0.05
$0.00
Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16
Substantial Shareholders
Directors 16.7%
Commonwealth Bank 6.7%
Acorn Capital 6.0%
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Slide 3

FY2016 Performance - Summar y

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Strategic

Operational

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Financial
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• Ongoing execution of growth strategy

• Transition nearly complete from mining services to national professional services

• Acquisitions of Linker Surveying, Lawrence Group and WKC Spatial

• Evaluating further surveying acquisitions

• Commenced five year strategic implementation plan

• Delivered sound financial results from Infrastructure Division and enhanced our capability in the Communications and LTE infrastructure service sector

• 100% Lost Time Injury free

• Early stages of integration across national surveying business

• Excellent project delivery performance

• Infrastructure business continues to secure projects in WA Resources market

• Enhanced client relationships

• FY2016 revenue $121m

• FY2016 underlying EBITDA $16.2m

• Maiden dividend

• $12m capital raising and expanded debt facility to fund acquisitions

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Group TRIFR
7 6.5
6
5
4
2.8
3
1.8 1.9
2
1
0
2013 2014 2015 2016
Group TRIFR
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• Total Recordable Injury Frequency Rate

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Slide 4

Investment Review

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Share Price (across the survey growth)

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$0.40
$0.35
$0.30
$0.25
$0.20
$0.15
$0.10
$0.05
$0.00
Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16
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EPS
8c
6c
4c
2c
0c
-2c
-4c
FY13 FY14 FY15 FY16
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• Diversified markets

• Transition to higher margins from professional services

• Reduced volatility in earnings and growth in recurring revenue sources

• Strong free cash flow

• Year-on-year increase in cash balance and net asset levels

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Return on Investment
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Acquisition Date	Oct-14	Dec-14	May-15	May-16	Aug-16
Cumulative EBITDA	$10.5m	$2.6m	$2.0m	$0.6m	$0.6m
Purchase Price	$17.0m	$9.5m1	$4.4m	$4.0m	$5.6m
Average Annual Return	29%	17%	30%	31%	41%

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Slide 5

Note 1: Milestone Payments not expected to be paid

Financial Statistics

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OTOC Limited has developed a sustainable financial model

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• Early investment exposure to the
Targeting Recurring Revenue, Higher Earnings Margins
land, property and public
infrastructure development cycle
$160 $18
Revenue (LHS)
$140 $16 • Acquisitions are performing
EBITDA (RHS)
$14
$120
$12 • Increased market share across
$100
$10 several sectors
$80
$8
$60
$6 • On track to meet 5 year strategic
$40
$4
growth objectives
$20 $2
$0 $0 • Diversified risk exposure
FY11 FY12 FY13 FY14 FY15 FY16 Oct YTD
Revenue EBITDA
FY17
• Sustainable business model
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• Early investment exposure to the land, property and public infrastructure development cycle

• Increased market share across several sectors

• On track to meet 5 year strategic growth objectives

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Improved Conversion to Cash and Liquidity
$16 $16
Cash Flow from Operations Cash
$14 $14
$12 $12
$10 $10
$8 $8
$6 $6
$4 $4
$2 $2
$0 $0
CF from FY11 FY12 FY13 FY14 FY15 FY16 Cash
operations
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Market Capitalisation & Net Assets
$100 $100
Net Assets
$80 $80
Market Cap (RHS)
$60 $60
$40 $40
$20 $20
$0 $0
FY11 FY12 FY13 FY14 FY15 FY16 Oct YTD Market
Net Assets
FY17 Cap
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Slide 6

Share Price

Securing National Revenue

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Return on Investment

Revenue Waterfall – From FY2014 to FY2016 ($M) – Supports the Strategy

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$140.0
120.2
7.5
113.1
$120.0 15.6
0.0 11.4
$100.0 -
(13.2)
$80.0
(13.6)
$60.0
$40.0
$20.0
$0.0
FY 14 WA Survey WA Infrastructure International QLD Survey VIC Survey NSW Survey FY 16
Infrastructure
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Note : Figures are accumulative across the 2 year period (FY2014 to FY2016)

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Slide 7

Revenue Trend

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Return on Investment

Share Price Return on Investment OTOC Limited has developed a national customer base, providing diversification against any geographic or industry specific macro weakness

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Revenue by location - FY2014
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55%
Non-International
Component
WA
Intern’l
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45%
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Revenue by location - FY2016
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17%
52%
9%
NSW
QLD
VIC
22%
WA
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Revenue by location – OCT YTD FY2017
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17%
34%
NSW
24%
QLD
VIC
24%
WA
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Revenue by Sector - FY2014
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15%
6%
79%
Infrastructure
Resources
Property
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Revenue by Sector - FY2016
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27%
34%
Infrastructure
Resources
Property
39%
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Revenue by Sector – OCT YTD FY2017
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9%
44%
Infrastructure
Resources
47% Property
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Slide 8

National Surve O erations and Growth Path y p

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Growth Target
Revenue $150m
EBITDA $25-30m
EBITDA
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FY2015 to FY2016 FY2017 to FY2020
Bolt-on
Revenue $65-75m Acquisitions
Organic
EBITDA $11-13m Growth
Improved
Revenue $20m Revenue Earnings
Synergies
EBITDA $4m Platform
Acquisitions
Revenue EBITDA
EBITDA
National surveying strategy:
•
•
Land and Urban,
Formed from listing post Emerson Stewart acquisition Land and Urban Infrastructure, Resources Land and UrbanInfrastructure Specialist consulting3D scanning, •
•
2011 2012 2013 2014 2015 2016 2017
Infrastructure, ResourcesLand and Urban, Strategy Formalised and commences Infrastructure, Resources Land and Urban Civil, Process Infrastructure, Resources •
•
•
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• Primary growth through acquisition

• Create a national business – geographic & market diversification

• • Business model delivering professional services

• Exposure to property, urban development, civil infrastructure

• Transition from a historic focus on the WA resources sector

• Maximise integration opportunity across a fragmented industry Increase market share and organic growth

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Slide 9

FY2016 O erational U date - Infrastructure p p

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Strategic

Focus placed on three core Market sectors:

• Resources Sustaining Capital - Accommodation and Non Process Infrastructure

• Renewables - Solar PV

• Government infrastructure and utilities

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• Continued delivery of work at Nauru. $140M+ to date, 923,838 man hours, no lost time injuries

• Perth Airport Fiber Optic Ring Main for Air Services Australia

Operational

• First project with Water Corporation – 3.2km of Poly pipe replacement at Corrigin

• Successful completion of 10.6 MW Solar PV facility at Sandfire’s Degrussa Mine site

• Increased scope across our Managed Services Agreement with Bunnings (Mitel telecommunications)

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Financial
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• FY2016 revenue $74m

• FY2016 underlying EBITDA $12.7m

• H1 FY2017 EBITDA ~ $3.0M to $4.0M. Impacted by continued market downturn in H1 FY2017 and delayed project awards

• Continued investment in Communications , ICT and LTE capability

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Slide 10

Project Awards in 2016

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	Greater Flagstone Peet Limited / Celestino / Pioneer Fortune Proprietary Limited Flagstone, QLD			Sydney Light Rail Acciona Sydney, NSW		Green Square Precinct Mirvac Sydney, NSW			Northconnex Tunnel Northconnex Lendlease Bouygues Joint Venture M1 Pacific to M2, Sydney			Australia 108 Melbourne, Vic OSARS			Land Surveying Consultancy Proposal North Baldivis, WA Cedar Woods Properties Ltd			Village Entertainment System upgrade WAIO Villages, WA BHP Billiton

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Slide 11

A new name, a new brand, a new era

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A latin derivation – to represent strength of conviction, truth, accuracy and reliability.

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Confident Assured Dynamic

Looking forward FY2017

Focus for FY2017

Surveying,

Town planning & urban design

Infrastructure

Division

• Continue growth through acquisition

• Organic growth – increased market share

• Confidence in the public infrastructure market

• Ongoing strength of Sydney and Melbourne property markets

• Weak trading conditions in WA due to resources sector exposure and soft property markets

• 1H FY2017 EBITDA anticipated $3.0 - 4.0m (1H FY2016: $6.0m); Nauru expected to be completed Q3 FY2017

• $4.3m communications project award at BHP Billiton's Area C mine - to upgrade camp entertainment systems

• Continue to source similar Communications and LTE project opportunities across WA mining operations

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• Costs to be managed in-line with revenue and project pipeline

Corporate & Strategy

• Continuing to grow and enhance professional services business

• Cash position ~$14 million to fund growth and acquisitions

• Currently evaluating several surveying acquisition targets

• Veris – national brand reflects growth and development of professional services business

• Integration in line with Target Operating Model

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Slide 16

Integration

Integration of our national surveying business shall be delivered in line with our Strategic Objectives

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FY 2017

FY 2017 Priorities

• Communicate our Vision

• Branding – phased approach

• • Acquisition & Organic Growth

• Deploy Corporate Values

• • Target Operating Model

• • Organisational design

• HSE Minimum Standards

• Deploy ERP across several businesses

• • Talent development and resource utilisation

Slide 17

Organisational Structure

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Professional Infrastructure
Services Services
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Slide 16

Summary and Outlook

CY2016 Achievements

• Strong revenue and earnings growth FY2016: Underlying EBITDA $16.2m

• Paid maiden dividend: 0.5 cents per share

• National surveying strategy: Linker Surveying, Lawrence Group, WKC Spatial, Goodwin Midson – enhance the national professional services business

• $12m capital raising to fund further surveying acquisitions

• Recent addition of Lester Franks to the national business.

FY2017 Outlook

• National surveying strategy – currently evaluating acquisitions that complement existing market presence and scale of operations

• National surveying strategy – integration and collaboration

• Launch of Veris as a national brand

• Infrastructure Division (OTOC Australia) – focussed on Communications & ICT capability

• LTE consultancy and Village Entertainment Systems – build on recent award from BHP Billiton

• Retain market strength in the WA resources - sustaining capital market

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Slide 18

Our vision

To be the market leading planning, design, survey and spatial solutions company; renowned for generating client value from innovation and excellence through our exceptional people.

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Thank you

Simon THOMAS Chief Executive Officer 23[rd] November 2016

–

Perth Level 12, 3 Hasler Road T 08 9317 0600 Locked Bag 9 F 08 9317 0611 Osborne Park WA 6017 mail@veris.com.au Australia veris.com.au

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