VERIS LIMITED — Investor Presentation 2016

Jul 17, 2016

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FY2016 Earnings Guidance Acquisition of Lawrence Group

July 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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Executive Summar y

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OTOC FY2016 Guidance

• FY2016F EBITDA: OTOC expects FY2016 underlying EBITDA +$15.2m

• Earnings growth: significant year-on-year growth (FY15: $4.3m)

• • Operations: strong contribution Infrastructure division, execution of National Surveying Strategy • Cash: $13.0m • Balance sheet: strong balance sheet position to execute growth strategy

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Acquisition of Lawrence Group

• OTOC has agreed to acquire Lawrence Group, a multi-disciplinary surveying consultancy in Sydney

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• Established in 2003, Lawrence has expertise in residential and commercial construction, civil infrastructure and land development

• • Purchase price: $3.85m cash, $1.0m OTOC shares and $1.0m in performance payments

• Purchase price multiple approximately 4x FY2016F EBITDA

• Expected to be earnings per share accretive in FY2017[1]

Strategic Rationale for Acquisition

• Growth: enhanced exposure to Sydney infrastructure and property sectors

• Services: multi-disciplinary, complementary to Geo-Metric and Linker

• Clients: blue-chip commercial clients and government

• Financial: strong track record of financial performance and growth outlook

• Synergies: combined leader in Sydney market; revenue and operational synergies

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Slide 3

Note 1: excluding amortisation

OTOC Corporate Structure

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OTOC provides professional surveying and infrastructure services to the property, civil infrastructure, government and resources sectors For the financial year ending 30 June 2016, OTOC expects to report underlying EBITDA of at least $15.2m

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Corporate Snapshot
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ASX Code	OTC
Share Price	$0.23
Ordinary Shares	266m
Market Capitalisation	$61m
Cash (est. 30-Jun-16)	$13m
Debt (est. 30-Jun-16)	$12m
Enterprise Value	$60m
FY2016F Underlying EBITDA	$15.2m
EV/FY2016F Underlying EBITDA	4.0x

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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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Share Price
$0.30
$0.25
$0.20
$0.15
$0.10
$0.05
$0.00
Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16
Substantial Shareholders
Directors 22.2%
Acorn Capital 7.2%
Paradice Investment 7.1%
Reindeer Investments 5.2%
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Slide 4

FY2016 Earnin s Guidance g

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• OTOC expects FY2016 underlying EBITDA to exceed $15.2m

Underlying EBITDA

• 250% increase on FY15 (FY15: $4.3m)

• Survey Division

• strong performance by East Coast businesses Bosco Jonson and THG

• continued national expansion strategy with acquisition of Sydney-based businesses Linker Surveying (March 2016) and Lawrence Group (pending)

• Infrastructure Division

• Excellent project execution and financial returns on key projects: solar and battery facility at DeGrussa Mine, and civil infrastructure works at Nauru Island

• Lower operating cost structure

• Balance Sheet

• Strong balance sheet and cash flow generation

• Cash ~$13m at 30 June 2016, after acquisition of Linker

• Expected net cash position ~$1m at 30 June 2016, FY15: net debt ~$5.8m

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$20
$15.2m
$15
$10
$4.3m
$5
$0
FY2015 FY2016F
Balance Sheet
$20
$16.0m
$15
$13m
$12m
$10.2m
$10
$5
$0
FY2015 FY2016F
Cash Debt
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Slide 5

Note 1: Debt is includes hire purchase financing

Acquisition of Lawrence Group

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Lawrence is a Sydney-based residential, commercial and infrastructure surveyor

• History Established by Shane Lawrence in 2003, Lawrence provides construction surveying services for residential, commercial and infrastructure projects

• 34 staff with offices in Sydney and Eden, southern NSW

• Diversified exposure to growth in Sydney property and infrastructure investment

• FY2016F EBITDA ~$1.4m, strong margin

• Key clients include:

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Slide 6

Major Projects – Infrastructure

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Major infrastructure projects undertaken by Lawrence

NorthConnex

• Client: Bouygues/Lend Lease

• 9km motorway tunnel

• Longest road tunnel project in Australia

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Northern Road – Stage 1

• Client: Roads and Maritime Services (RMS)

• Stage 1 is a 3.3km road upgrade

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• $3bn project

• Support a western Sydney airport at Badgerys Creek

• Expected to be completed in 2018

• Expected to be completed in 2017

Royal Northshore Hospital

Northern Beaches Hospital

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• Client: Thiess

• Redevelopment of Northshore Hospital

• New main hospital building and refurbishment of existing facilities

• $840m project

• Completed in 2014

• Client: CPB Contractors (CIMIC)

• New Northern Beaches Hospital

• Largest new hospital in Sydney in 20 years

• $1bn project

• Expected to be completed in 2018

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Slide 7

Major Projects – Residential and Commercial

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Major residential and commercial projects undertaken by Lawrence

Leichardt Green

Wynyard Walk

• Client: Richard Crookes

• Apartment development, western CBD

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• Client: CPB Contractors (CIMIC)

• Pedestrian link between Wynyard Station and CBD

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• Developed by Greenland Group

• Support Barangaroo waterfront development

• Up to 300 apartments, plus commercial space

• $150m project

• Expected to be completed in 2017

• Expected to be completed in 2016

Macquarie Park Village

Hurstville

• Client: Parkview

• Apartment development, north-west CBD

• Developed by Stamford Land Corporation

• Approximately 640 apartments

• Expected to be completed in 2017

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• Client: Toga

• Apartment development, southern Sydney

• Developed by TOGA Group

• Approximately 450 apartments

• Expected to be completed in 2017

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Slide 8

Ac uisition Terms q

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Structure	• Acquisition of 100% of the issued capital of Lawrence Group Pty Ltd
Purchase price: Cash	• $3.85m, funded from existing OTOC cash reserves
	• $1.0m in OTOC shares: 4.9m shares based on 30-day pre-announcement VWAP of $0.202
Purchase price: Shares	• Voluntary escrow period 12 months
	• OTC pro-forma shares on issue 271.4m
	• Performance payments up to $1.0m over two years
Purchase price: Performance	• Performance payment = $0.3m + (EBITDA - $1.2m), if EBITDA is at least $1.2m
	• Maximum performance payment $0.5m in any performance period
Net Adjustment	• A Net Adjustment will be paid (refunded) following completion • Net Adjustment = Cash + Debtors/WIP – Liabilities – Employee Entitlements
Employment Contract	• Shane Lawrence, founder, will enter into an employment contract with a minimum term of two years, an option to renew for a further two years, and a restraint period of four years
	• Completion of due diligence
Conditions Precedent	• Execution of employment contract with Shane Lawrence
	• All necessary consents and approvals
	• No material adverse change
Completion	• Expected to be completed in late July 2016
EBITDA Multiple	• Approximately 4x FY2016F EBITDA
Earnings Accretive	• Expected to be earnings per share accretive in FY2017 (excluding amortisation)

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Slide 9

Sydney Market

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• NSW dwelling approvals remain robust, with other residential (apartment) approvals at near record levels

• State government funding and support for new infrastructure projects

• Significant pipeline of public infrastructure and transport networks to be completed over many years

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NSW: Number of dwelling approvals
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NSW: Number of Dwelling Starts NSW: Engineering Construction, value of work yet to be done

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5000
4000
3000
2000
1000
0
Houses Other residential
Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16
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14,000
12,000
10,000
8,000
6,000
4,000
Value of work yet to be done
$m
Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15
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Source: Australian Bureau of Statistics

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Slide 10

NSW Surveying Business

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Combination of Lawrence, Linker and Geo-Metric creates a leading survey business in NSW with capabilities across cadastral, residential and commercial construction, civil infrastructure and scanning; revenue and operational synergies

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• Complementary property clients

• Services across project life cycle i.e. Linker strata approval/design, Lawrence construction

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• Staff, equipment and scale to deliver large infrastructure projects

• Combined capability in construction (Lawrence) and specialist infrastructure (Geo-Metric)

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Combined benefits:

• Complete surveying solutions across land, urban development, commercial property and civil infrastructure

• Revenue synergies

• Economies of scale, improved margins

• Access to specialist equipment and growth capital

• Differentiated from smaller peers

• Strong platform for organic growth and further acquisitions

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Slide 11

Lawrence Acquisition Highlights

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Lawrence is a quality addition to the National Surveying Strategy, and in combination with Linker and Geo-Metric creates a leading surveying business in Sydney

 Expansion enhanced exposure to Sydney infrastructure and property sectors  Services multi-disciplinary service offering, complementary to Geo-Metric and Linker

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||||
|---|---|---|
||Clients|longstanding relationships with blue-chip commercial clients and government|
||Financial|strong track record of financial performance and positive growth outlook|
||Management|experienced executive management and senior surveyors|

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 Synergies combined leader in Sydney surveying market; revenue and operational synergies

• Outlook

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||||
|---|---|---|
||Outlook|strong growth in civil infrastructure and residential property investment|
||Diversification|further diversification of OTOC’s earnings, greater exposure to East Coast investment expenditure|

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Slide 12

National Market Footprint

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OTOC has created a National Surveying, Town Planning and Urban Design company

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NSW: Number of Dwelling Starts
NSW: Number of dwelling approvals NSW: Engineering Construction, value of work yet to be done
VIC NSW, QLD, VIC & WA NSW NSW QLD WA
Land and Urban Infrastructure, Infrastructure, Land and Urban Land and Urban, Land and Urban,
Resources Land and Urban Infrastructure, Resources Infrastructure, Resources
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Slide 13

History of the National Strategy

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OTOC has created a National Surveying, Town Planning and Urban Design Business

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Formed from listing post Land and Urban,
Emerson Stewart Land and Urban Infrastructure, Land and Urban
acquisition
Resources
2011 2012 2013 2014 2015 2016 2017
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Land and Urban, Infrastructure, Resources

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Strategy Formalised Infrastructure,
and commences Resources Land and Urban
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Slide 14

Growth Profile

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Substantial growth opportunity: organic growth, synergies and industry consolidation

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Growth Target Revenue $150m EBITDA $25-30m

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Bolt-on
Acquisitions
Revenue $60-70m
Platform
EBITDA $10-12m Acquisitions
Improved
Revenue $20m Earnings
Revenue
EBITDA $4m Synergies
Organic Growth
EBITDA
Revenue
EBITDA
EBITDA
Strong Funding Platform
Cash Reserves Operating Cashflow Equity Markets CBA Facility
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Revenue
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EBITDA

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Slide 15

Summar and Outlook y

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FY16 Achievements

• FY16F Underlying EBITDA +$15.2m, up 250% year on year

• Continued to implement national surveying strategy with acquisitions of Linker Surveying and Lawrence Group, further diversifying group earnings

• Excellent project delivery and financial performance by Infrastructure Division

• Maintained strong cash position, and reduced debt

Outlook

• Continue to pursue strategy of creating a premium multi-disciplinary national surveying business

• Evaluating further acquisitions

• Appointed Executive General Manager (Survey) to manage national collaboration and drive integration benefits

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Slide 16

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Contact Details

Simon Thomas Chief Executive Officer Brian Mangano Chief Financial Officer Tel (08) 9317 0628

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Slide 17
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