X2M CONNECT LIMITED — Investor Presentation 2021

Nov 21, 2021

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Investor Presentation

22 November 2021

Disclaimer

This Presentation (“Presentation”) has been prepared by X2M Connect Limited (Company). You must read and accept the conditions in this notice before considering the information set out in or referred to in this Presentation. If you do not agree, accept or understand the terms on which this Presentation is supplied, or if you are subject to the laws of any jurisdiction in which it would be unlawful to receive this Presentation or which requires compliance with obligations that have not been complied with in respect of it, you must immediately return or destroy this Presentation and any other confidential information supplied to you by the Company. By accepting this document, you acknowledge and agree to the conditions in this notice and agree that you irrevocably release the Company from any claims you may have (presently or in the future) in connection with the provision or content of this Presentation. Statements in this Presentation are made only as at 22 November 2021 and the information in this Presentation remains subject to change without notice. The information in this Presentation is of a general nature and does not purport to be complete, nor does it contain all the information which a prospective investor may require in evaluating a possible investment in the Company or that would be required in a prospectus or product disclosure statement prepared in accordance with the requirements of the Corporations Act. Certain market and industry data used in connection with this Presentation may have been obtained from research, surveys or studies conducted by third parties, including industry or general publications. Neither the Company nor its representatives have independently verified any such market or industry data provided by third parties or industry or general publications, and they take no responsibility for it.

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This Presentation is for informational purposes only and is not a financial product or investment advice or recommendation to acquire any securities in the Company (or any new holding company of the Company) and does not take into consideration the investment objectives, financial situation or particular needs of any particular investor. Recipients of this Presentation should make their own assessment of an investment in the Company and should not rely on this Presentation. Recipients should conduct their own research into the financial condition, assets and liabilities, financial position and performance, profits and losses, prospects and business affairs of the Company and its business, and the contents of this Presentation. Recipients should seek legal, financial, tax and other advice appropriate to your jurisdiction. Cooling off rights do not apply to the acquisition of X2M Connect Limited Shares.

Investment risk

An investment in Shares is subject to known and unknown risks, some of which are beyond the control of the Company, including possible loss of income and principal invested. The Company does not guarantee any particular rate of return or the performance of the Company nor does it guarantee the repayment or maintenance of capital or any particular tax treatment.

Past and future performance

Past performance information given in this Presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance.

This Presentation may contain certain forward-looking statements with respect to the financial condition, operations and business of the Company and certain plans and objectives of the Company. Forward-looking statements can be identified by the use of forward-looking terminology, including, without limitation, the terms “believes”, “estimates”, “anticipates”, “expects, “predicts”, “intends”, “plans”, “targets”, “aims”, “outlook”, “guidance”, “forecasts”, “may”, “will”, “would”, “could” or “should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. Such forward looking statements involve known and unknown risks, uncertainties and other factors that because of their nature may cause the actual results or performance of the Company to be materially different from the results or performance expressed or implied by such forward looking statements. Such forward looking statements are based on numerous assumptions regarding the Company’s present and future business strategies and the political and economic environment in which the Company will operate in the future (including in respect of the COVID-19 pandemic, which makes all forwardlooking statements highly uncertain), which may not be reasonable, and are not guarantees or predictions of future performance. No representation is made that any of these statements or forecasts will come to pass or that any forecast result will be achieved, or that there is a reasonable basis for any of these statements or forecasts.

Forward-looking statements speak only as at the date of this Presentation and to the full extent permitted by law, the Company, This document should be read in conjunction with other publicly available information such as the prospectus, available on the Company’s website.

This document provides information in summary form only and is not intended to be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor.

Disclaimer

To the maximum extent permitted by law, the Company and its respective advisers, affiliates, related bodies corporate, directors, officers, partners, employees and agents exclude and disclaim all liability, including without limitation for negligence or for any expenses, losses, damages or costs incurred by you as a result of your participation in an investment in the Company and the information in this Presentation being inaccurate or incomplete in any way for any reason, whether by negligence or otherwise. To the maximum extent permitted by law, the Company and its respective advisers, affiliates, related bodies corporate, directors, officers, partners, employees and agents make no representation or warranty, express or implied, as to the currency, accuracy, reliability or completeness of information in this Presentation. Statements made in this Presentation are made only as the date of this Presentation. The information in this Presentation remains subject to change without notice.

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Investor Presentation November 2021

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Key Messages/Highlights

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2021 momentum
continues to build on the
back of a strong Q1
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Enterprise and
Government customers
now up to 40
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X2M’s South Korea subsidiary
wins tender to deploy its
technology to 20,278 households
in the city of Jeonju through the
Korean Water Resources
Corporation
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Momentum to continue as
customer base is
harvested and pipeline is
converted
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Contracted revenue for
FY22 is already at $7.8m -
Total revenue for FY21 was
$5.7m
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X2M’s patented platform
continues to offer market
differentiation
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Investor Presentation November 2021

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The Jeonju City Tender

What we have secured – the details

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•
This is a contract between X2M’s South Korea subsidiary and the Korea Water
Resources Corporation (K Water) Jeonju Branch further cementing our relationship
with the Korean government owned water authority
•
The contract is for the deployment of X2M technology to 20,278 households to a value
of 2.3bn Korean Won, approximately $AUD 2.6m
•
The Total Addressable Market in Jeonju is 232,028 households and the estimated
potential value of future tenders for remaining households is $AUD 25m
•
With the size of this deployment, X2M is well positioned to bid for the remaining
tenders as they arise
•
We have until 8 December to finalise and execute contracts for which the main terms
are as set out in the tender documents
•
The Jeonju tender brings the total of Q1 and other contracted revenue to S7.8m and
compares with a FY21 full year result of $5.7m
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Investor Presentation November 2021

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Jeonju builds on an impressive start to the 2022 FY

Secured orders in every market – existing customers have given repeat orders and pipeline customers have been converted during Q1

Repeat orders from existing customers increase penetration

Repeat orders from existing customers increase penetration	Repeat orders from existing customers increase penetration	Repeat orders from existing customers increase penetration	Repeat orders from existing customers increase penetration
Customer Order number Total addressable market (TAM)1 Penetration (% of households)
Okcheon (South Korea)	Seventh repeat order	16k devices ($1.9m)	29
Yangsan (South Korea)	Second repeat order	20k devices ($2.4m)	5
Goseong (South Korea)	Second repeat order	13k devices ($1.4)	4

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Other orders of note
• Far EasTone (Taiwan) – Second order through this channel and first for supply of residential gas monitoring to Shin Ping Gas Co. Current
penetration of Shin Ping households is 7% following this order
• ETC (Taiwan) – New customer. First order for supply of our energy management solution for one government building. TAM in Taiwan – 500k
devices
• LianQing (China) – Third repeat order for water quality sensors and accessories
• Customisation orders in Japan
• Subscription extension orders in Australia for gas monitoring platform deployed at a major gas retailer
Additional tender wins in South Korea already announced in Q2 expected to deliver an incremental
$4.1m revenue
1. Total addressable market revenue estimates are based on $120 per device. Actual order values per device may vary significantly from this
depending on order quantities and inclusions.
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Investor Presentation November 2021

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Q1 KPI’s reflect a strong performance

X2M is experiencing strong growth in revenues, connected devices, enterprise and government customers and annualised subscription revenues

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75% Q1 year on year revenue growth
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Connected devices increases by 24%
in the quarter to reach 152,203 with
101% Q1 year on year growth
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Enterprise and government
customers increase by 11 on PCP
delivering 42% Q1 year on year growth
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Revenue ($A ’000’s) Connected devices (‘000’s)
1595 162
+75% +101%
912 78
742 47
Q1FY2020 Q1FY2021 Q1FY2022 Q1FY2020 Q1FY2021 Q1FY2022
Enterprise and government Annualised subscription
37 229
customers revenues ($A ’000’s)1
+42% +152%
28 81
18 40
Q1FY2020 Q1FY2021 Q1FY2022 Q1FY2020 Q1FY2021 Q1FY2022
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1. Annualised subscription revenues is September SaaS revenue value times 12 and excludes Gochang platform subscriptions which include both hardware as well as SaaS subscription revenue

2. Q1FY2020 data is from periods of subsidiaries under the previous operator of the business

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Investor Presentation November 2021

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X2M in the field – what we do

Doing more of what we know – tried, tested and proven

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Now servicing 19 municipalities for water monitoring in South Korea

• Continuing to convert the pipeline of municipalities in South Korea

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Driving new customers and repeat orders from existing
customers through providing them with improved:
• Service to their end customers
• Safety and efficiency data
• Data analytics
• Infrastructure management and leak detection
• Billing and process automation
and expanded deployments in Japan
• Driving growth in our Japanese licensing customers
monitoring gas bottles
• centralised platform acting as point of coordination to
remotely monitor usage and levels
• enterprise productivity improvement through data analytics
and improved logistics management
• customisation additions to the platform to enhance gas bottle
distributor appeal
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Investor Presentation November 2021

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Energy management – the path to net zero emissions

X2M’s solution optimises energy generation, storage and usage

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AC power
Communications
X2M platform products
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DC and AC electric vehicle chargers
• Connects devices
IoT Platform
• Enables remote
monitoring and control
Solar cells and inverter of end devices
Internet
Energy • Customer dashboard
Management with real-time energy
Battery and bi-directional inverter consumption,
generation and storage
analytics
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Investor Presentation November 2021

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Strategy

Continued focus on the Asia Pacific utility market

APAC utility market typically uses ageing analogue infrastructure in an environment of increasing population and demand for services.

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Market Overview
• Utilities and governments in the APAC region are migrating to sophisticated internet based technology solutions in
search of productivity improvements, environmental sustainability, waste reduction and enhanced public safety
• To meet demand, hardware and sensor manufacturers supplying the sector are seeking access to leading edge
technology platforms to enhance their product offerings
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• Key Drivers Infrastructure rollout by

• Population growth telco providers

• • Growth in Asia is forecast to be GDP growth • APAC Utility market is the • Rapid urbanisation across the Urbanisation • Telco providers worldwide are rolling out NB IoT and Lora solid, both in near term and largest in the world in terms of continent especially in India networks to connect sensors and coming decade and economic population and China[(3)] devices over the internet activity is expected to grow by • As of 2019, Asia had 4.6b • Advent of 5G is expected to be a 6.9 percent in 2021[(1)] people, comprising approx. turning point that propels smart 60% of world population[(2)] city tech. into mainstream and accelerates deployments

• Navigating the Pandemic:A Multispeed Recovery in Asia; Regional Economic Outlook: Asia and Pacific; Oct 2020.

• United Nations, Department of Economic and Social Affairs, Population Division (2019). World Population Prospects 2019, Online Edition. Rev. 1

• https://www.un.org/development/desa/en/news/population/2018-revision-of-world-urbanization-prospects.html.

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Investor Presentation November 2021

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5 Core Pillars of the X2M Strategy

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Consolidate
strong
position in
existing
markets
• Korea – continue
contract additional
municipalities
• Japan –
aggressively grow
connected devices
• Taiwan – expand
into adjacent
verticals
• China –
commercialise
• Existing customers
to be a significant
source of revenue
growth
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Expand into
compatible
verticals in
existing
markets
• Remote battery
energy monitoring
• Integrated
sustainable energy
management
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Continue
development
of SaaS
business
•
Replicate model
implemented in
Japan within other
markets
• Maintain market
leading IoT
platform offering
with high
customer focus
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Expand into
new
geographies
• China - POC’s
completed, initial
hardware
contracts as
reseller executed
• Philippines –
leverage POC’s
completed
•
Watching brief on
other APAC
markets
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Manage
margin and
cash burn
•
Strong focus on
operational and
financial controls
and efficiency
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Investor Presentation November 2021

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Capitalise on key market differentiators

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• –
Leading edge patented platform
making dumb devices smart, distributed
intelligence autonomously monitors and
controls devices, IoT platform provides
visibility, control, aggregation, predictive
and pre-emptive device management
• –
Many devices, radios, networks
operating simultaneously across short
range, long range, cellular, unlicensed
communications and radio networks
•
Maintain patent portfolio – building on >
60 patents with 5 additional applications
pending
•
Competitive advantage – few
competitors with the same capabilities
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WiSUN │ NB-IoT │ ZigBee │ LoRa

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Investor Presentation November 2021

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Summary

X2M is a technology disrupter changing the game for utilities in APAC and achieving good growth

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Jeonju is a significant tender win with a
large addressable market
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Growth story continues post Q1 – $7.8m
already contracted for FY22 against a
FY 21 full year result of $5.7m
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Addressable market is being converted
with existing customers giving repeat
orders and X2M’s penetration is getting
deeper
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Solid base being established for future
subscription revenues
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Investor Presentation November 2021

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X 2 M C O N N E C T

Shareholder Enquiries Automic Pty Ltd

hello@automic.com.au

GET IN TOUCH

+61 (2) 9698 5414

Media and Investor Enquiries Julia Maguire

julia@thecapitalnetwork.com.au +61 (2) 8999 3699

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Chief Executive Officer Mohan Jesudason, CEO investor.relations@x2mconnect.com

1 800 926 926 (1 800 X2M X2M)