XRF SCIENTIFIC LIMITED — Investor Presentation 2022

Feb 21, 2022

==> picture [145 x 81] intentionally omitted <==

Investor Presentation February 2022

Sample Preparation Technology

==> picture [225 x 165] intentionally omitted <==

----- Start of picture text -----

Minerals : Materials :
Iron ore Cement
----- End of picture text -----

==> picture [393 x 83] intentionally omitted <==

----- Start of picture text -----

Raw Prepared
Samples
Samples
----- End of picture text -----

==> picture [173 x 173] intentionally omitted <==

----- Start of picture text -----

Analysis Techniques :
XRF
----- End of picture text -----

2

3

==> picture [218 x 233] intentionally omitted <==

----- Start of picture text -----

X-Ray Flux
----- End of picture text -----

==> picture [141 x 88] intentionally omitted <==

==> picture [197 x 77] intentionally omitted <==

==> picture [158 x 158] intentionally omitted <==

==> picture [324 x 182] intentionally omitted <==

==> picture [194 x 162] intentionally omitted <==

Drift Monitors

4

==> picture [252 x 315] intentionally omitted <==

==> picture [402 x 399] intentionally omitted <==

----- Start of picture text -----

Smart Splitting
Crushing Systems
----- End of picture text -----

5

==> picture [122 x 153] intentionally omitted <==

XRF Analysis

Pulverise sample into fine powder

ICP Analysis

Pulverise sample into fine powder

Fire Assay

Pulverise sample into fine powder

==> picture [75 x 74] intentionally omitted <==

==> picture [68 x 55] intentionally omitted <==

==> picture [93 x 52] intentionally omitted <==

Present solid glass bead sample to XRF spectrometer for analysis*

Dose flux into platinum crucible, add sample

Fuse crucible contents into solid glass bead

==> picture [75 x 75] intentionally omitted <==

==> picture [68 x 55] intentionally omitted <==

==> picture [93 x 52] intentionally omitted <==

Present dissolved liquid sample to ICP spectrometer for analysis*

Dose flux into platinum crucible, add sample

Fuse crucible contents, dissolve into liquid solution

1. Fluxing and fusion of the precious metals sample*

2. Separation of the slag from the lead precious metals-containing button*

3. Cupellation – separating precious metals from the lead*

4. Analysis of precious metals content*

Photon Assay

1. Present crushed samples to Photon Assay machine for gold analysis*

6

Precision Products for Industry

==> picture [705 x 397] intentionally omitted <==

----- Start of picture text -----

Aerospace Glass Production Crystal Growing Measurement
Components Bushings Vessels Instrument
Components
Chemical Laboratory Research and Niche Applications /
Production Components Development Custom Designs
Vessels
----- End of picture text -----

7

FY22 H1 Highlights

==> picture [104 x 58] intentionally omitted <==

• Record half-year revenue and profit

• Record quarterly profit before tax of $2.1m during December Q2

• Very strong demand from mining and industrial customers

• Strong demand for capital equipment products, currently at record order levels

• Completion of 50% acquisition in Orbis Mining Pty Ltd

• Continued R&D investment in new products across all divisions

8

FY22 H1 Financial Highlights

• Revenue up 24% to $18.5m vs 1H21

• NPAT up 17% to $2.8m vs 1H21

• Adjusted PBT up 56% to $3.7m vs 1H21

• $1.8m positive operating cashflow

• Orbis Mining Pty Ltd fully consolidated into XRF’s accounts with minority interest reflected in profit or loss statement

==> picture [266 x 184] intentionally omitted <==

----- Start of picture text -----

18,535
16,334
15,744
15,020 14,961
14,009
13,348
1H19 2H19 1H20 2H20 1H21 2H21 1H22
Revenue ($'000)
----- End of picture text -----

==> picture [262 x 185] intentionally omitted <==

----- Start of picture text -----

2,748 2,792
2,382
1,626
1,496
1,076 1,061
1H19 2H19 1H20 2H20 1H21 2H21 1H22
Net Profit After Tax ($'000)
----- End of picture text -----

==> picture [104 x 58] intentionally omitted <==

9

alf Year Results - Overview	alf Year Results - Overview	alf Year Results - Overview
	Half Year Results			Full Year Results
($m)	1H22	1H21	Change	2021	2020	2019
Sales revenue	18.5	15.0	24%	31.3	29.1	29.0
Profit before tax	3.7	3.1	19%	6.8	4.5	3.2
Adjusted profit before tax*	3.7	2.4	56%	5.9	4.2	3.2
Net profit after tax	2.8	2.4	17%	5.1	3.1	2.1
Earnings per share (cents)	2.1	1.8	17%	3.8	2.3	1.6
Weighted average no. of shares	134,699,698	134,133,506		134,345,542	133,825,803	133,825,803
Dividends (cents per share)	0.0	0.0		2.0	1.4	1.0
Dividend payout ratio	-	-		*60%	60%	63%
*As a percentage of adjusted NPAT
*Adjustments ($)
COVID-19 wages subsidies	-	(700,281)		(826,629)	(212,729)	-
COVID-19 other grants/subsidies	-	(20,000)		(29,522)	(74,776)	-
COVID-19 payroll tax refunds	-	-		-	(82,837)	-
Interest on early loan repayment	-	-		-	22,496	-
Redundancy / other employee payments	-	-		-	97,328	-
Total adjustments	-	(720,281)		(856,151)	(250,518)	-
							1

Half Year Results - Overview

10

Balance Sheet

($m)	1H22	2021	Change
Cash and cash equivalents	4.6	5.3	(12%)
Trade and other receivables	4.9	4.5	9%
Inventories	13.4	12.5	7%
Other assets	0.3	0.4	(18%)
Property, plant and equipment	8.1	8.1	(1%)
PPE lease asset	1.0	0.6	66%
Intangible assets	16.9	15.9	6%
Deferred tax asset	1.0	1.1	(4%)
Total assets	50.2	48.4	4%
Trade and payables
- platinum loan provisions	2.7	3.8	(27%)
- other items	4.0	3.0	37%
Debt (short-term)	0.2	0.8	(77%)
Debt (long-term)	1.6	0.0	100%
Current lease liabilities	0.5	0.4	27%
Non-current lease liabilities	0.5	0.2	126%
Income tax liability	0.2	0.6	(60%)
Deferred tax liability	0.7	0.5	24%
Total liabilities	10.4	9.3	12%
Total equity	39.8	39.1	2%

==> picture [104 x 58] intentionally omitted <==

 Net cash position of $2.9m

 $0.9m of platinum on loan converted to owned inventory asset. Platinum asset remains classified as Inventories. Liability shifts from Platinum Loan Provisions to Debt

• Orbis Mining acquisition movement

• contributions at 1H22:

• Trade and other receivables: $0.1m

• Inventories: $1.1m

• Intangible assets: $0.9m

• Trade and payables (other items): $0.9m

11

Cash Flow Statements

==> picture [104 x 58] intentionally omitted <==

($m)	1H22	2H21	1H21
Net cash inflow from operating activities	1.8	3.2	1.3
Net cash (outflow) from investing activities	(0.9)	(0.3)	(0.4)
Net cash inflow/(outflow) from financing activities	(1.5)	(0.3)	(1.9)
Cash at start of period	5.3	2.6	3.6
Net increase/(decrease) in cash	(0.7)	2.7	(1.0)
Cash at end of period	4.6	5.3	2.6

Highlights:

• $2.1m cash paid out for FY21 dividend (1H21: $1.65m)

• Conversion of $0.9m in platinum on loan to owned asset resulted in $0.9m additional outflow from operating activities and $0.9m inflow from financing activities

12

Consumables

($m)	1H22	2H21	1H21
Sales revenue	5.2	5.1	4.2
Change in % *	2%	21%	5%
NPBT	1.7	1.6	1.3
Change in % *	8%	25%	7%
Margin % 33% 31% 30%

• Compared to immediately prior half-year period

==> picture [281 x 183] intentionally omitted <==

----- Start of picture text -----

1,739
1,609
1,339
1,287
1,186 1,207
1,044
972
550
1H18 2H18 1H19 2H19 1H20 2H20 1H21 2H21 1H22
Net Profit Before Tax ($'000)
----- End of picture text -----

==> picture [104 x 58] intentionally omitted <==

 Overview for 1H22:

• Revenue up 2% on 2H21

• NPBT up 8% on 2H21

• Robust demand from the mining sector driven by production and exploration

• Key production input lithium compounds rising in price due to demand from EV sector. We expect revenue and costs to rise by a double-digit percentage, and no negative impact on margins. Impact to materialise more fully in 2H

• Inventory levels expected to rise by ~$1.5m by 30 June 2022 as a result of lithium raw material cost increases

13

Precious Metals

($m)	1H22	2H21	1H21
Sales revenue	8.7	7.6	6.8
Change in % *	15%	11%	15%
NPBT	1.3	1.3	1.2
Change in % *	(1%)	14%	73%
Margin % 15% 18% 17%

• Compared to immediately prior half-year period

==> picture [281 x 180] intentionally omitted <==

----- Start of picture text -----

1,333 1,326
1,174
710 677
449 476
127
-72
1H18 2H18 1H19 2H19 1H20 2H20 1H21 2H21 1H22
Net Profit Before Tax ($'000)
----- End of picture text -----*

==> picture [104 x 58] intentionally omitted <==

 Overview for 1H22:

• Revenue up 15% on 2H21

• NPBT flat on 2H21

• Strong demand from mining and industrial markets

• Margins different this half due to revenue mix (precious metals vs fabrication sales)

• Germany office contributed revenue $2.8m (1H21: $1.5m) and NPBT $233k (1H21: $29k)

• Robust order book maintained into the 2H with margin % expected to expand

• *COVID-19 wages subsidies included in NPBT:

• 1H22: Nil

• 2H21: $41k

• 1H21: $321k

• 2H20: $114k

14

Capital Equipment

($m)	1H22	2H21	1H21
Sales revenue	5.1	4.6	5.0
Change in % *	10%	(8%)	33%
NPBT	0.6	0.7	0.8
Change in % *	(13%)	(6%)	297%
Margin % 13% 16% 16%

• Compared to immediately prior half-year period

==> picture [281 x 183] intentionally omitted <==

----- Start of picture text -----

781
730
632
386
356
269
197
111
71
1H18 2H18 1H19 2H19 1H20 2H20 1H21 2H21 1H22
Net Profit Before Tax ($'000)
----- End of picture text -----*

==> picture [104 x 58] intentionally omitted <==

 Overview for 1H22:

• Revenue up 10% on 2H21

• NPBT down 13% on 2H21. Normalised $727k NPBT before Orbis Mining loss, up 13% on 2H21 adjusted NPBT excluding COVID-19 wages subsidies

• Steady level of machine sales during 1H, continuing into 2H with record orders on hand

• 50% acquisition of Orbis Mining Pty Ltd, contributing loss of $95k in 1H. Loss expected to reverse into profit in 2H due to sales delayed into 2H. Good forward sales momentum from large customers due to growing market reputation

• Moving towards launch of new products in 2H

• *COVID-19 wages subsidies included in NPBT:

• 1H22: Nil

• 2H21: $86k

• 1H21: $306k

• 2H20: $93k

15

==> picture [104 x 58] intentionally omitted <==

• New additional focus of growing Orbis laboratory crusher sales, utilising XRF’s sales network and resources

Growth Strategy for FY22

==> picture [42 x 46] intentionally omitted <==

• Continuing our expansion in the Precious Metals Division

• Continue with geographical expansion initiatives

• New product releases from all divisions

• Continue to pursue M&A opportunities. Our targets are complementary manufacturing companies, in the laboratory supply or precious metals sectors

• Work to improve our scale/market cap and the share price

Corporate Overview

Shareholder Wealth	EBIT	Earnings Per Share	Dividends Declared Per Share	Share Price	Market Capitalisation
Financial Year	$	Cents	Cents	Cents	$
2015/16	2,318,737	1.2	0.5	18.0	24,088,645
2016/17	982,440	0.6	0.24	17.0	22,750,387
2017/18	1,598,268	0.8	0.3	16.0	22,081,257
2018/19	3,249,762	1.6	1.0	20.0	26,765,160
2019/20	4,602,319	2.3	1.4	24.0	32,118,193
2020/21	6,818,111	3.8	2.0	47.5	63,916,519
18 February 2022				55.0	74,688,883

18 February 2022

Directors

Shareholders

Capital Structure

Fred Grimwade – Chairman Vance Stazzonelli – Managing Director David Brown – Non-Executive Director David Kiggins – Non-Executive Director

Board and Management – 14.8% Top 20 – 49.4%

Substantial Shareholders Michael Karl Korber – 8.1% Private Portfolio Managers – 7.9% D & GD Brown Nominees Pty Ltd – 7.3%

Ordinary shares on issue: 135,797,969 Options: Nil

DRP

Locations

Please visit www.xrfscientific.com for a copy of the Dividend Reinvestment Plan

Head Office – Perth Manufacturing – Perth and Melbourne International Sales/Service – Brussels (Belgium), Karstein (Germany) and Montreal (Canada)

17

==> picture [283 x 113] intentionally omitted <==

----- Start of picture text -----

Tel: (08) 9244 0600
86 Guthrie Street, Osborne Park WA
Vance Stazzonelli – CEO
vance@xrfscientific.com
----- End of picture text -----

18

Disclaimer

No responsibility for contents of Investor Presentation

• •To the maximum extent permitted by law, XRF Scientific Limited and representatives:

• •make no representation, warranty or undertaking, express or implied, as to the adequacy, accuracy, completeness or reasonableness of this Investor Presentation or any other written or verbal communication transmitted or made available to any recipient;

• •accept no responsibility or liability as to the adequacy, accuracy, completeness or reasonableness of this Investor Presentation or any other written or verbal communication transmitted or made available to any recipient; and

• •accept no responsibility for any errors or omissions from this Investor Presentation whether arising out of negligence or otherwise.

Accuracy of projections and forecasts

• •This Investor Presentation includes certain statements, opinions, estimates, projections and forward-looking statements with respect to the expected future performance of XRF Scientific Limited. These statements are based on, and are made subject to, certain assumptions which may not prove to be correct or appropriate. Actual results may be materially affected by changes in economic and other circumstances which may be beyond the control of XRF Scientific Limited. Except to the extent implied by law, no representations or warranties are made by XRF Scientific Limited, its advisers or representatives as to the validity, certainty or completeness of any of the assumptions or the accuracy or completeness of the forward-looking statements or that any such statement should or will be achieved. The forward-looking statements should not be relied on as an indication of future value or for any other purpose.

No offer to sell or invitation to buy

• •This Investor Presentation does not, and should not be considered to, constitute or form part of any offer to sell, or solicitation of an offer to buy, any shares in XRF Scientific Limited, and no part of this Investor Presentation forms the basis of any contract or commitment whatsoever with any person.

This Investor Presentation does not constitute an offer or solicitation in any jurisdiction in which such offer or solicitation is not permitted under applicable law. Distribution of this Investor Presentation in or from certain jurisdictions may be restricted or prohibited by law. Recipients must inform themselves of and comply with all restrictions or prohibitions in such jurisdictions. Neither XRF Scientific Limited, its advisers or representatives accept any liability to any person in relation to the distribution or possession of this Investor Presentation from or in any jurisdiction.

19