VERIS LIMITED — Investor Presentation 2018

Nov 20, 2018

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Slide 1

Veris is a national professional services business offering surveying, professional and advisory and geospatial services

Slide 2

FY2018 Financial Dashboard

Revenue EBITDA[1] NPATBA[2] $106.8m $11.2 $5.3m$11.2m $5.3m 45% 96% 92% 45% 96% 92%

Cash Dividend Per Share Net Debt $106.8m $11.2 $5.3m $5.6m 0.5 cents $8.0m 45% 96% 92%

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1. EBITDA is a non-IFRS measure

2. Underlying NPATBA Note: % increase from prior period represents the movement from continuing operations

Slide 3

FY18 Results Overview

$m	FY18	FY17
Revenue	106.8	73.5
EBITDA	11.296%	5.7
Depreciation	(3.6)	(3.7)
Acquisition related costs	(1.6)	(1.2)
Restructuring costs1	(1.8)	(0.9)
Share-based payments	(1.0)	(0.3)
EBITA	3.2900%	(0.4)
Amortisation	(4.1)	(4.2)
EBIT	(0.9)80%	(4.6)
Net interest expense	(1.0)	(0.6)
Profit before tax	(1.9)	(5.2)
Income tax benefit/(expense)	0.9	3.8
NPAT	(1.0)	(1.4)
Amortisation net of tax	2.8	2.9
NPATBA	1.820%	1.5

Note 1: FY18: includes costs associated with the restructuring and integration activities for the surveying business

Note 2: FY17 restated for continuing operations

Slide 4

FY18 Balance Sheet

$m	FY18	FY17
Cash	5.6	14.6
Receivables	30.9	16.0
Work in progress	10.5	4.6
Other current assets	1.7	1.1
Plant and equipment	15.2	11.0
Intangibles	58.6	40.5
Deferred tax asset	6.3	7.6
TOTAL ASSETS	128.8	95.4
Payables	17.5	7.3
Deferred vendor payments	6.0	2.7
Loans and borrowings	26.0	11.5
Employee benefits	10.6	6.4
Current tax liabilities	0.5	0.6
TOTAL LIABILITIES	60.6	28.5
NET ASSETS	68.2	66.9
NET CASH (DEBT)	(8.0)	11.2

Elton Purchase Consideration	$000
Net Assets acquired	1,853
Brand	293
Customer relationships	3,496
Goodwill	12,251
Total Purchase consideration	17,893

LANDdata Purchase Consideration	$000
Net Liabilities acquired	(880)
Customer relationships	3,360
Goodwill	2,930
Total Purchase consideration	5,410

Slide 5

Amortisation of Intangibles

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Gross Amortisation $m Amortisation After Tax $m
4.5 3.5
4.0 4.2
4.1 3.0
3.5 3.8 2.9 2.9
2.5 2.7 2.7 2.7
3.0 3.2
3.0
2.5 2.7 2.0 2.2
1.9
2.0 1.5
2.1
1.5
1.0
1.0
0.5
0.5
- -
FY15 FY16 FY17 FY18 FY19F FY20F FY21F FY15 FY16 FY17 FY18 FY19F FY20F FY21F
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Based on acquisitions to 30 June 2018

Slide 6

Cash flow

Borrowings	$000
Opening 1 July 2017	3,375
Drawdown Elton	11,000
Repayments	(750)
Closing 30 June 2018	13,625

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$m Repayments (750)
Closing 30 June 2018 13,625
30
25
20 11.2 10.2 11.0
16.0
15
1.8
3.8
1.1
10 1.2
14.5 4.6
5
5.6
0
Opening EBITDA Working Capex Interest Equip Debt Acquisitions Dividend Debt/HP Closing
Cash Capital (net HP) net Disposals drawdown repayments cash
other
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Dividend Debt/HP Closing repayments cash

Slide 7

FY2018 Highlights

• Transition to single business complete

• –

• Strategic Completed Elton Consulting Group acquisition – Achieved stage one milestone of $100 million revenue with national footprint

• – Finalised systems integration of Surveying business by 30 June 2018

• –

• Operational Strong growth potential in Eastern Australian infrastructure markets – Awarded projects on the back of cross selling

• – FY2018 Revenue $106.8 million

• –

• Financial FY2018 EBITDA $11.2 million – Strong organic revenue growth

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Slide 8

Revenue Bridge FY17 to FY18

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$m
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100
5.1
5.5
90
34.4 5.1
80
17.5
70
60
107.9
50 106.8
40
30
20
10
0
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Organic LANDdata operations growth Surveying

AQURA

FY17 Discontinued

Elton FY18

Revenue from discontinued contracting business has been replaced by consulting revenue.

Organic Surveying revenue growth of 27% on FY17 revenue was driven from increased Infrastructure projects works in Eastern Australia.

LANDdata acquisition contributed 11 months for revenue in FY18.

Elton Consulting contributed three months revenue to the FY18 result. ($1.1m EBITDA)

AQURA Technologies has achieved strong revenue growth during FY18.

Slide 9

Veris Revenue

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Consistent increase in revenue achieved through acquisition, organic growth and cross selling
$120.0
Professional & Advisory Surveying & Geospatial
$100.0
$80.0
$60.0
$40.0
$20.0
$-
$m $m $m $m $m $m $m $m
1
2012 2013 2014 2015 2016 2017 2018 2019
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Slide 10
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1 Increase in revenue is a result of Professional Advisory revenue acquired and organic growth in survey

National Revenue by Region FY19 forecast

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Survey & Geospatial $100m
Professional and Advisory $25m
Total $125m
$20m [1] $4m [1]
$18m [1]
$14m [1]
$1m [1]
$39m [1]
$27m [1]
1 Estimated annualised figures for FY19, pro-forma for acquisition of Elton $2m [1]
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Slide 11

Revenue Analysis – strong exposure to east coast infrastructure

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Survey Revenue by Location – FY18 Survey Revenue by Industry – FY18
Resources
WA 10%
17%
NSW/ACT
37% Property
40%
QLD/NT
19%
Infrastructure
Vic/SA/Tas 50%
27%
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• Approximately 83% of revenue from the east coast, including approximately 37% from NSW

• Expect strong revenue growth in NSW/ACT given organic growth projections and project awards

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

Slide 12

National Professional Services Business

Creating a national professional services business, with three pillars of growth

Professional and Advisory

Professional and Advisory Services are engaged to provide expert advice to businesses, governments and not-for-profit organisations to support them to make considered and informed decisions on policy, strategy, city-making and service delivery.

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Surveying Surveying is a profession that involves examining and recording the features of a piece of land or infrastructure in order to create maps, plans, detailed descriptions and to facilitate construction.

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Geospatial

Geospatial Services relate to products, services and tools involved in the collection, integration and management of geospatial data. Geospatial Services are prominent in many areas.

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Market Size
$2.0bn $3.0bn $2.0bn
Veris annualised revenue
$25m 1.25% $95m 3.2% $5m 0.3%
Veris target revenue
$50m - $80m 2.5%-4.0% $150m 5.0% $70m - $100m 3.5%-5.0%Slide 13
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Addressing the project cycle

Maximising exposure to the project development lifecycle

Realising value from initial concept, through construction and during ongoing maintenance

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Slide 14

Q1 Performance

Revenue 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0

$000s

Surveying Professional and Advisory Aqura Total

EBITDA 2,500 2,000 1,500 1,000 500

0

-500 -1,000

$000s

Surveying Professional and Advisory AQURA Corporate Total

Slide 15

Margin improvement - FY19

Focus on Surveying Earnings Improvement

A Operational Alignment

• Matching skills base to revenue

• Improved professional staff utilisation through national resource management

• Improved utilisation of equipment

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B
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Overhead Synergies

• Realising synergies through shared services model

C Subcontractor Management – Focus on improving margin for subcontracted work D Culture and People

• National operating model

• Greater sharing and utilization of support services across the business

• Establishing tools and channels to support wider communication, accountability and collaboration

• Aligning incentives with business targets and performance

Slide 16

Margin improvement - FY19 Continued

Enhancing our Ability to grow

E

Systems and Process

G Cash Management

• System enhancement projects

• Concerted process improvement on identified areas

• Automation of key processes

• Focus on Debtors and WIP conversion to cash

• Streamlining invoicing

• F

• – Risk and controls

Governance

• Establishment of Internal Audit function

• Commencement of Corporate Social Responsibility Strategy

• Undertaking Reconciliation Action Planning

Slide 17

Veris Australia – Surveying NSW

Recent Awards

• WestConnex M4/M5 Link – Tunnels – Early works

• Project runs to 2023. Project budgeted at $10bn

Parramatta Light Rail Stage 1 - Early works

• Project runs to 2023. Project budgeted at $2.2bn

Outlook

• The surge in multi billion $ “Road, Rail, Runway” infrastructure continues in NSW

• Veris is well positioned to secure further significant projects, including:

• Westconnex Stage 3B

  • Parramatta Light Rail

• Sydney Metro City & Southwest- corridor upgrade - cpb

Ongoing projects of note

Road Infrastructure

• Northconnex 9km Tunnel M2 to M1 motorways - Lend Lease

• Northern Road upgrades, Western Sydney Airport - Lend Lease

• Westconnex Stage 3A - Project runs to 2023

• M4 titling/acquisition - RMS

• • Station site upgrades

  • Central Station redevelopment

• Sydney Metro West- 30km new rail corridor

• Western Sydney Airport construction packages

• ‒ Snowy 2.0

• F6 Motorway extension

• Berry to Bomaderry bypass

• Albion Park Bypass

Rail Engagements

• Sydney Light Rail - Acciona

• Sydney Metro City & Southwest, Martin Place Station - Lend Lease ‒ Sydenham Junction - cpb

• Parramatta Light Rail - Project runs to 2023

• Moorebank Intermodal – Project runs to 2020

Runway

• Western Sydney Airport – Project runs to 2026

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Slide 18
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Veris Australia – Surveying WA

Recent Awards

• Wodgina Airport Pilbara – Crushing Services Int.

• Gascoyne Rare Earth – Hastings Metals

• Northlink 2 Construction – Tracc Civil & BGC

• Perth Hub - Far East Consortium

• Cape Lambert Jetty Remediation - Austral

• Old Fremantle Museum Re-Development – Landcorp

Outlook

• Resource Sector continues to improve, with new mine starts and maintenance works since the beginning of 2018.

• Property Sector showing signs of improvement – Whilst residential land sales have been slow in 2018, large apartment developments continue to be relatively strong.

• Infrastructure sector remains a competitive market, driven predominantly by government projects including Northlink and Metronet.

Ongoing projects of note

• Gruyere Eastern Goldfields ‒ Ellenbrook

• Wodgina Project Pilbara ‒ Alkimos

• ‒

• BHP All Sites Project Pilbara Whiteman Edge

• ‒

• Perth Airport Survey Contract Waterbank Re-Development

• Elizabeth Quay Lot 9, 10

• Water Corporation Panel Contract Minor Works

Slide 19

Veris Australia – Surveying QLD/NT

Recent Awards

• Cross River Rail - Subsurface utility locating

• Eton Range Realignment

• APLNG – Gas Project

• Bruce Highway upgrade

• Gold Coast Airport

• Brisbane Airport

Outlook

• Government budget shows strong emphasis and funding on:

  • Infrastructure – rail/road

• Energy and water

• Education

• Health

• Economic outlook for next five years remains steady at 2.75%

• Interest in renewal energy projects remains strong

Ongoing projects of note

• Cross River Rail

• Residential Communities – mixed use high-rise developments

• Solar Farms

• Regional Councils – modelling and visualisation strategy

• Regional road work infrastructure

• Flagstone – residential greenfield development

• Capestone – residential greenfield development

Slide 20

Veris Australia – Surveying VIC/TAS/SA

Recent Awards

Outlook

• MCG – Reestablishment feature and level survey

• Victorian economy remains strong. Continued investment in:

• 472-478 Bourke Street – Terrestrial laser scanning works

• Education – New and upgraded schools

• MAC - Infrastructure scanning services

• Healthcare

• Solar Farm – Roberts Town

• Infrastructure – road and rail

• Mars Confectionary – Scanning works

• Healthscope – Due diligence on 20 healthcare provider sites

• Population growth over 2.0% expected to continue, driving ongoing investment in residential development

• 4,000 Lot Residential Subdivision, Beveridge (Melbourne)

Ongoing projects of note

• Melbourne Metro - cadastral & civil

• West Side Place - Far East Consortium

• Melbourne Square - OSK Property

• Australia 108

• Aurora Melbourne

• Cloverton (10,000 lots) - Stockland

• Highlands (8,000 lots) - Stockland

• Urbnsurf Melbourne

Slide 21

Elton Consulting

Recent Awards

• Communications and engagement projects supporting the development of school infrastructure at two schools

• Housing, residential and rural lands strategies for two local councils

• Recreation needs analysis for NSW state government agency

• Consultation regarding the redevelopment of a large housing estate for a NSW state government agency

Ongoing projects of note

• Western Sydney Airport

• Inland Rail – Melbourne to Brisbane

• Tweed Hospital Communications &

• Prince of Wales Hospital redevelopment

• Sydney Light Rail

• Infrastructure NSW

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Outlook

• Strong, particularly in eastern Australia

• End October, proposals/tenders valued at $6.8 million. Win rate for previous quarter 74%

Infrastructure

• Opportunities in rail, light rail, roads, health infrastructure, school infrastructure.

Urban renewal

• Significant government projects and private sector opportunities

• Short term - Sydney, Melbourne, Adelaide (current projects and future opportunities)

• Medium term – above plus Brisbane, Perth

• Urban renewal in particular provides opportunities for all service lines

• Additional opportunities for strategy work in planning and social sustainability e.g. all Sydney Councils required to review Local Environment Plans ( LEPs) in next two-three years

Slide 22

Aqura Technologies

Recent Awards

• Excellent contract wins YTD. Recent award of $5.6m new contracts across its key service lines:

• Industrial Wireless

• Content Access Networks

  • Unified Communications

• Projects utilise all parts of Aqura’s business, providing services to key Tier 1 clients (Rio Tinto, BHP & Bunnings) and include the provision of turnkey project solutions and managed services to Aqura’s diverse client-base across Australia and New Zealand

Outlook

• Continued focus to extend geographical position within Australia with services provided in all regions.

• Growth in revenue 40% year-on-year.

• Strong demand for Aqura’s capabilities with >70% of FY19 revenue secured by December 18.

• On track to continue solid organic EBITDA contribution.

Ongoing projects of note

Industrial Wireless

• Rio Tinto - BHP

• CPM - Northern Star Resources

• South 32

• Content Access Networks

• BHP

• Rio Tinto

• CPM

• Unified Communications

• Bunnings

Slide 23

Shared Client Base

Revenue by Business

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Survey Professional
$100m & Advisory
$20m
Aqura
$18m
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Cross pollination of business opportunities showing significant early promise:

• Elton introduction resulted in Veris being engaged by the Roads and Maritime Services to supply services to support the recently completed M4 Widening road infrastructure, the first stage to the WestConnex project.

• Elton appointed to undertake town planning work on subdivision in Western Sydney. Veris were subsequently appointed to undertake survey work.

• Veris appointed to survey a road corridor in NSW. Veris requested Elton to do the Review of Environmental Factors (REF)

• Ongoing joint tender submissions in process

Slide 24

Transport ‘mega’ projects fuel the infrastructure ‘wave’ across Australia

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Mega projects = over $2 billion
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Slide 25

Source: NSW Government – Major Projects 2023 – Roads and Maritime Services BIS Oxford Economics 2018. Based on projects with over $2 billion in construction. Solid shading is roads. Dotted is rail.

2018-19 Australian infrastructure funding levels, ranked by share of budget expenditure

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• The Commonwealth Government primarily funds state infrastructure projects. As such it is not formally included in the rankings. We include it in the report to provide a comprehensive view of funding commitments.

** Based on 2017-18 Mid-Year Budget Review

Source: Infrastructure Partnerships Australia calculations, based on 201819 and 2017-18 Budgets

Slide 26

Infrastructure spend across Australia

National infrastructure funding, share of total, by jurisdiction (FY18-19 to FY21-22)

State infrastructure funding per capita FY18-19 to FY21-22

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Source: Infrastructure Partnerships Australia analysis *Based on 2017-18 Mid-Year budget Revie

Source: Infrastructure Partnerships Australia analysis

Slide 27

Top Tier clients across Australia – Increasing National Agreements

Diversified, national client base; adding value through seamless national agreements and service offerings

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Slide 28

Summary and Outlook

FY2018

• Completion of integration of national surveying business

• Revenue synergies and organic growth, benefited from strong exposure to east coast infrastructure investment

FY2019

• Focus on Margin ahead of growth in Surveying business

• Improved resource utilisation

• Operational review to improve Surveying EBITDA margin

• Elton Consulting Group acquisition that enhanced service offering and market position - Creation of Professional and Advisory services pillar.

• Stabilisation period

• Back office synergies from integration

• Survey revenue of $89 million, annualised circa $100 million

• Completed divestment of OTOC Australia construction business

• Supported growth of AQURA Technologies; with a positive EBITDA contribution in FY18 of $900,000 and developed additional recurring revenue from managed services, LTE and communications

• Cross selling opportunities from Professional and Advisory business into Surveying and Aqura

• Cash conversion / Reducing lockup days

• Growth of Professional and Advisory business

• Reduce corporate costs by 26%

Slide 29

Corporate Directory

Capital Structure
Share price (ASX: VRS)	$0.1151
Ordinary shares	363m
Market capitalisation	$41.7m
Cash (30-June-18)	$5.6m
Debt (30-Jun-18)	$13.6m
Enterprise value	$94m
Dividend per share (FY18)	$0.005
Dividend yield	2.0%

Board and Management

Derek La Ferla	Non-executive Chairman
Adam Lamond	Managing Director
Tom Lawrence	Non-executive Director
Karl Paganin	Non-executive Director
Brian Elton	Executive Director
Brian Mangano	Chief Financial Officer
Lisa Wynne	Company Secretary

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Share Price
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
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	Substantial Shareholders
Directors		18.9%
Commonwealth Bank		14.9%
Paradice		6.5%

1. As at 14 November 2018

Slide 30

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 31

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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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