VERIS LIMITED — Investor Presentation 2017

Nov 21, 2017

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Slide 1

Veris is a national professional services business in surveying, town planning, urban design and geospatial services

Slide 2

FY2017 Performance - Summary

	–	Completed transition to Professional Services
	–	Expanded East Coast operations, including strategic acquisition of LANDdata in the ACT
Strategic	–	Approaching stage one milestone target of $100 million professional services revenue
	–	Clear focus on delivering shareholder value
	–	Finalised National Operating Model – to be fully implemented by 30 June 2018
	–	Appointed Regional Managers
Operational	–	Consolidated operations. Established Market-leading position to target Sydney’s $72.7bn1 Infrastructure investment
	–	Strong growth in Eastern Australian infrastructure markets
	–	Organic growth achieved through cross-selling and integration of NSW operations
	–	FY2017 Revenue $108 million
		–Professional Services $67m
		–Construction Infrastructure $41m
Financial	–	80% of revenue from the East Coast, including 30% from NSW
	–	FY2017 EBITDA $9.8 million
	–	Second consecutive annual dividend

Slide 3

1 2017-18 Budget Paper No. 2 - Infrastructure Statement

FY17 Results

Professional Services revenue increased 40% to $66.8m and corresponding EBITDA increased 16% to $9.4m. Group revenue fell 11%. The infrastructure construction division (OTOC Australia) completed its largest project (Nauru) in FY17 and has been discontinued.

$m	FY17	FY16
Revenue	107.9	120.9
EBITDA (before significant items)	9.8	16.2
Depreciation	(4.1)	(2.5)
Amortisation	(4.2)	(3.0)
Acquisition related (cost)/income	(1.2)	1.3
Restructuring costs1	(1.3)	(0.2)
Share-based payments	(0.3)	(1.1)
EBIT	(1.3)	10.7
Net interest expense	(0.8)	(0.8)
Profit before tax	(2.1)	9.9
Income tax benefit/(expense)2	2.1	9.8
Net profit after tax	0.0	19.7
Net profit after tax, before amortisation	3.0	21.8

Note 1: FY17: includes costs associated with the restructure of the OTOC Australia business and integration activities for the surveying business

Slide 4

Note 2: Includes tax benefit related to historic earnings from Nauru

Journey to date

• Diversification strategy – from mining construction to professional services

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• Acquisition strategy – securing premium surveying companies across key geographical locations

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Formed from listing post Land and Urban Land and Urban, Land and Urban 3D scanning,
– Creation and launch of national Emerson Stewart acquisition Infrastructure, Resources Infrastructure Specialist consulting
brand in November 2016 – Veris 2011 2012 2013 2014 2015 2016 2017
– Divestment of construction Infrastructure, ResourcesLand and Urban, Strategy Formalised and commences Infrastructure, Resources Land and Urban Infrastructure, ResourcesCivil, Process Land and Urban
business – OTOC Australia
–
Capital raising and improved
banking facilities completed -
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• Capital raising and improved banking facilities completed - ready for future opportunities

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• Share price return – share price increased ~130% since the strategy was implemented in 2014

Slide 5

National Professional Services Strategy

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Creating a national professional services business, with three pillars of growth
Town Planning, Urban Design Surveying Geospatial
Australian
Market $1.0bn $3.0bn $2.0bn
Veris
Revenue $5m 0.5% $65m 2.2% $5m 0.3%
Veris 3-5yr $50m 5.0% $150m 5.0% $100m 5.0%
Target
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Slide 6
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Source: IBIS, management estimates

Our Strategy – The Veris advantage

Strategic Rationale for National Strategy

Diversification

• Diversified end-user exposure: land, urban development, civil infrastructure, government, resources

• National client base, providing diversification against state-specific economic conditions

Enhanced Product Offering

• Integrated service offering for national clients - key differentiator and value add product

• Distribution channel to underpin specialist equipment and technology

• Critical mass to offer specialist services – high margins

Fragmented Markets

• Town Planning & Urban Design $1.0bn

• – Surveying $3.0bn

• Geo Spatial $2.0bn

– First mover advantage on national strategy, targeting premium firms

Employees

• Enhanced professional development opportunities

Attract, retain and incentivise top talent

• Industry leaders and technical specialists – greater profitability

• In excess of 500 staff nationwide

Financial Returns

• Recurring revenue base and solid growth

• – Attractive earnings margins

• Low capital expenditure

• Capacity to increase margins through successful integration

Synergistic Growth

• National client service offering

Cross-selling between geographic markets and service capabilities Centralised finance, HR and OH&S

• Best practice technology and systems

• Insurance and procurement savings

Slide 7

Revenue Analysis – strong exposure to east coast infrastructure

Transformed revenue base from historic reliance on WA resources sector to a diversified geographic and industry profile

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Survey Revenue by Location – FY17 Survey Revenue by Industry – FY17
WA VIC/SA/TAS NSW QLD/NT Infrastructure Property Resources
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• Approximately 80% of revenue from the east coast, including approximately 30% from NSW

• Expect strong revenue growth in NSW/ACT given organic growth projections, project awards and acquisition of LANDdata

Revenue from civil and transport infrastructure approximately 40%; approximately 50% from property and real estate, and 10% from resources

Slide 8

Top Tier clients across Australia

Diversified, national client base; adding value to our clients through seamless national service offerings

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Slide 9

Top Tier Projects across Australia

Veris is completing significant property, commercial, infrastructure and resources projects across Australia, with a combined construction value in excess of $26bn

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Sydney Light Rail
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Western Sydney Airport
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North Connex
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Australia 108
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Melbourne Metro
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Sofitel Darling Harbour
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Nepean Hospital
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Westmead Hospital
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Aurora Melbourne
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Northern Gas Pipeline
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Alkimos
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Gruyere Gold Project
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Slide 10

Industry Outlook − record levels of infrastructure investment

Slide 11

Geographic Outlook

		–	Continued strong revenue growth
	NSW/ACT	–	Engaged on several large infrastructure projects
		–	Operational benefits from consolidation of operations at Sydney Olympic Park
		–	Very strong position in property and inner city developments
	VIC/SA/TAS	–	Targeting major infrastructure project opportunities
		–	Launched subsurface mapping division
		–	Signs of improvement in QLD property sector activity
	QLD/NT	–	Targeting growth in solar and renewable energy projects
		–	Northern Gas Pipeline Project
		–	Market conditions continue to be difficult
	WA	–	Revenue stabilised in past three months
		–	Competition for work is high, placing pressure on margins
				lid

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Slide 12
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Focus on Sydney

Slide 13

Greater Sydney – Three Cities

“It sets the stage for the emergence of a global metropolis of three productive, liveable and sustainable cities: the Eastern Harbour City, the Central River City and the Western Parkland City”

Western Parkland City

The Western Sydney Airport will be the catalyst for an emerging aerotropolis and tourism gateway. It will grow a strong economy in trade, logistics, advanced manufacturing, health, education and science.

Central River City

Greater Parramatta and the Olympic Peninsula (GPOP) will be the focus for this developing city, with health, education, administration, finance and business services driving the economy.

Eastern Harbour City

The established Eastern harbour city will continue to grow as Australia’s global gateway, with a strong financial, professional services, FinTech, health and education economy.

Slide 14 Source: Greater Sydney Commission

Greater Sydney – Housing the city

“Record levels of growth and investment combined with significant changes in demographics across the Greater Sydney region require a coordinated and strategic response”

Sustained population growth over the coming decades will require a minimum of 36,250 new homes every year.

Combined with changing demographics and housing affordability challenges, greater housing choice will be needed. The provision of more housing will occur concurrently with the creation of liveable neighbourhoods close to employment opportunities, public transport, walking and cycling options for diverse, inclusive multi-generational and cohesive communities

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Slide 15 Source: Greater Sydney Commission

Case Study – Sydney Light Rail

Introduction

Project size - $2.1 Billion Client – Acciona Infrastructure Australia

Veris supplied topographic detail survey used for engineering design. Veris also supported all construction activities undertaken at this early works stage.

Offices engaged

Sydney - Cadastral works Melbourne - Scanning works Brisbane - Monitoring

Upon the successful completion of the early works, Veris were engaged to provide surveying services for the major construction works. With a peak workforce of 32 staff.

Work of note

Service supplied

• Tunnels – Topographical Detail Surveying

• Rail-bridge

• Pedestrian Bridge

• Engineering Construction Surveying

• Cadastral Surveying

• Track Works – Mobile Laser Scanning

• Road Works – Terrestrial Laser Scanning

• Monitoring (manual and automated)

• Utilities Surveying & Data Management

Summary

Veris has secured additional contracts to supply Surveying services to clients who were on sub-contracts of this project:

• Geotech/Coleman Rail – Randwick Stabling yard & Lilyfield Maintenance Depot.

• CD Constructions – Substations (6 in total)

Slide 16

Case Study – Bankstown Shopping Centre

Introduction

Client – Vicinity Centres

Bankstown Central is a three level Major shopping centre that includes more than 240 specialty stores located approximately 20 kilometres south-west of the Sydney CBD.

Offices engaged

Sydney - Overall Project Management - Cadastral & subdivision advisory services Melbourne - 3D mobile & Terrestrial Laser Scanning Brisbane - CAD drafting & Point Cloud Modelling

Veris is providing every facet of the required survey, laser scanning, BIM modelling, titling and subsurface mapping for this project.

Work of note

Service supplied

• –

• Every aspect of survey related Detail & Internal Survey Data Capture –

• services for this iconic regional 3D Mobile and Terrestrial Laser Scanning –

• development that will transform this Cadastral Survey and Subdivision Sydney location Advisory Services

• Subsurface Utility Locating

• – CAD Drafting, Point Cloud Modelling and Revit Modelling

Summary

Veris is the only company in Australia that has the in-house capability to provide the services required for every aspect of this engagement.

Slide 17

Integration

2017 – Multiple companies and businesses – Multiple locations – Multiple operating systems – Duplication of support services

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30 June 2018
–
One company
– One brand
–
One system
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Slide 18

Why is integration important

Integration is pivotal in achieving our Vision to be a market leader in town planning, urban design, surveying and geospatial services.

• Integrate and enhance our servicing capabilities

• Develop new clients regionally and nationally

• Continue to provide and expand our services to new and existing clients

• To be a national professional services business with a culture that attracts and retains quality and innovative people

• Ability to service larger projects

• Ability to provide a full range of spatial services to our client base

• To be the employer of choice

• Synergies and cost savings leading to improvement on margins

• National client agreements

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Slide 19
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Women in Engineering Scholarship UNSW

Launched the Veris Women In Engineering Scholarship with the Faculty of Engineering at the University of New South Wales (UNSW).

The purpose of the scholarship is to encourage a female high school leaver to undertake a degree in Surveying and/or Geospatial Engineering by offering assistance of $10,000 p.a. for 4 years.

Eligible UNSW degree programs:

• Bachelor of Engineering (Surveying) (Honours)

• Bachelor of Engineering (Geospatial) (Honours)

A panel comprised of the Manager of UNSW Scholarships, the Dean of the Faculty of Engineering and a member of the Veris NSW team, will interview a short-listed group of applicants and select the recipient.

Slide 20

Outlook

FY2018

• Completion of integration of national surveying business

• Drive revenue synergies and organic growth, benefiting from strong exposure to east coast infrastructure investment

• Progress acquisitions that enhance service offering and/or geographic market position

• Target survey revenue of approximately $75m, subject to market conditions, at an EBITDA margin of approaching 17%

• Seek to expand in complementary town planning & urban design and geospatial segments

• Complete divestment of OTOC Australia construction business

• Support growth of AQURA Technologies: $10m revenue target in FY18 – strong revenue growth anticipated in industrial wireless, industrial internet of things and content access networks

• Reduce corporate costs by 20%

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Slide 21
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Corporate Directory

Capital Structure
Share price (ASX: VRS)	$0.17
Ordinary shares	329.2m
Market capitalisation	$56m
Cash (30-June-17)	$15m
Debt (30-Jun-17)	$12m
Enterprise value	$53m
Dividend per share (FY17)	$0.005
Dividend yield	2.9%

Board and Management

Derek La Ferla	Non-executive Chairman
Adam Lamond	Managing 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
$0.40
$0.35
$0.30
$0.25
$0.20
$0.15
$0.10
$0.05
$0.00
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Substantial Shareholders

Directors	14.1%
Perpetual	6.9%
Commonwealth Bank	6.7%
Paradice	6.5%

Slide 22

Disclaimer

This Document should not be considered as an offer or invitation to subscribe for or purchase any securities in Veris Limited (“Veris” 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 Veris 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 Veris 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.

Veris 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 Veris. Veris 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, Veris 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 Veris 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 Veris 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.

Slide 23

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–

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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Slide 24