ZOONO GROUP LIMITED — Annual Report 2021

Aug 25, 2021

==> picture [230 x 74] intentionally omitted <==

==> picture [213 x 74] intentionally omitted <==

==> picture [344 x 74] intentionally omitted <==

==> picture [301 x 74] intentionally omitted <==

==> picture [162 x 74] intentionally omitted <==

==> picture [218 x 74] intentionally omitted <==

26 August 2021

==> picture [262 x 68] intentionally omitted <==

==> picture [148 x 68] intentionally omitted <==

==> picture [343 x 68] intentionally omitted <==

==> picture [246 x 68] intentionally omitted <==

Revenue Gr oss pr of i t -29.2% -43.2% vs FY20 vs FY20

Repor t ed NPBT Repor t ed NPAT Tot al Asset s -71.1% -72.2% -8.6% vs FY20 vs F Y20 vs FY20

==> picture [289 x 60] intentionally omitted <==

FY21 REVIEW

Year in Review – Key Achievements

==> picture [52 x 51] intentionally omitted <==

Revenue per f or m ance dow n i n t he cur r ent year due t o hi gh st ock over -or der i ng of NZ $11M par t i cul ar l y i n Apr i l 2020

==> picture [52 x 51] intentionally omitted <==

Sol i d ear ni ngs per f or m ance, bal ance sheet - and cash f l ow despi t e m ar gi n er osi on & i nvest m ent i n new subsi di ar i es

==> picture [51 x 51] intentionally omitted <==

Capi t al i si ng on di r ect B2B r el at i onshi ps

3

4

==> picture [498 x 540] intentionally omitted <==

==> picture [200 x 50] intentionally omitted <==

==> picture [126 x 50] intentionally omitted <==

==> picture [100 x 50] intentionally omitted <==

R epor t ed r ev enue dow n due pr i m a r i l y t o ov er-or der i ng i n Apr i l 2020

	NZ $M	30 JUN 2021	30 JUN 2020	Var i ance $	%
	Total revenue	27.1	38.3	(11.2)	(29.2%)
	Gr oss pr of i t	16.1	28.3	(12.2)	(43.2% )
	Operating expenses	(9.8)	(7.6)	(2.2)	(28.9%)
	E BI TDA	6.3	20.7	(14.4)	(69.6% )
	Amortisation ROU assets	(0.26)	(0.15)	(0.11)	(173.3%)
	Depreciation & amortisation	(0.10)	(0.05)	(0.05)	(100.0%)
	E BI T	5.9	20.5	(14.6)	(71.2% )
	NPAT	4.6	16.7	(12.1)	(72.4% )
	GM	59.3%	73.9%		(14.6%)
	EBIT margin	21.8%	53.8%		(32.0%)

==> picture [204 x 50] intentionally omitted <==

Revenue

• Down 29.2% in face of COVID-19 impacts and reduced trading in some sectors around the globe and lots of customers over-ordering and stock piling especially in April 2020 (NZ$11M)

• US Revenue growth was NZ$2.5M in its maiden year as a Group subsidiary

Gr oss m ar gi n

• Reduced revenue and margins from large B2B customers

• Margins impacted by higher freight charges

• Gross Profit decreased 43.2% (vs PCP) on lower revenues and margins

Oper at i ng cost s

• Higher overheads despite revenue contraction caused by higher regulatory costs and additional staff in the UK and the new US operation

• Doubtful debt provision of NZ$552k for Clear Facilities – NZ.

• US Regulatory progression costs NZ$370k

• Increase in marketing costs of NZ$392k due to:

• Additional marketing programs for the US and UK

5

==> picture [180 x 49] intentionally omitted <==

==> picture [125 x 49] intentionally omitted <==

St abl e bal ance sheet , r ef l ect i ng r ei nvest m ent i n gr ow t h i ni t i at i ves

NZ $M	30 Jun 2021	30 Ju n 2020
Cash	4.9	10.3
Trade & other receivables	5.3	9.2
Inventories	12.9	13.2
Property, plant & equipment	0.7	0.2
Lease ROUA	2.0	1.5
Intangibles	5.7	0.03
Other	0.2	0.3
TOTAL ASSE TS	31.7	34.7
Trade & other payables	2.2	8.4
Current tax liabilities	0.7	3.8
Lease liability	2.0	1.5
Provisions	5.7	-
TOTAL LI ABI LI TI E S	10.6	13.7
NE T ASSE TS	21.1	21.0

Wor k i ng capi t al m anagem ent Efficient management of receivables & inventory Decrease in payables Payment of Dividend of $5.1M Payment of income taxes $4.3M No debt

PPE & l eases Growth in-line with business expansion into other locations

I nt angi bl es f r om acqui si t i ons US operation acquisition

Pr ovi si ons Contingent consideration for the US operation payable over time

6

==> picture [122 x 49] intentionally omitted <==

Decl i n e i n oper at i ng cash & cash conver si on

Statutory cashflows NZ$M	30 JUN 2021	30 JUN 2020
Net cash pr ovi ded by oper at i ng a ct i vi t i es	1.5	8.1
Acquisition of subsidiary, net of cash	(0.8)	-
Purchases of property, plant and equipment	(0.6)	(0.1)
Net cash used i n i n vest i ng act i vi t i es	(1.4)	(0.1)
Proceeds from the exercise of options	0.2	-
Dividends paid to shareholders	(5.1)	-
Repayment of borrowings and lease liabilities	(0.3)	(0.2)
Net cash used i n f i n anci ng act i vi t i es	(5.2)	(0.2)
Net change i n cash and cash equi val ents	(5.1)	7.8
E f f ect s of f or ei gn exch an ge on cash bal an ce Cash and cash equ i val ent s at begi n n i n g of year Cash and cash equ i val ent s at en d of year	(0.3) 10.3 4.9	(0.6) 3.1 10.3

• Operating cashflows in FY21 down due to payment of taxes of $4.3M and higher operating costs with the acquisition of the US operation

• Acquisition investing outflow ($0.8M), due to:

• US Stock purchased $0.6M

• deferred earn-out consideration payment of ($0.2M)

• Dividends paid out of $5.1M

7

8

==> picture [498 x 540] intentionally omitted <==

==> picture [198 x 50] intentionally omitted <==

==> picture [235 x 50] intentionally omitted <==

==> picture [161 x 50] intentionally omitted <==

==> picture [87 x 18] intentionally omitted <==

==> picture [60 x 18] intentionally omitted <==

==> picture [66 x 18] intentionally omitted <==

==> picture [172 x 18] intentionally omitted <==

Increase B2B Customers

• Inventory logistics management systems in place around the globe (the systems talk to each other) to ensure adequate capacity and forecasting

• Leveraging cost base to deliver margin expansion on incremental revenue

• Additional BDMs and Sales reps being secured for expansion and driving growth in FY22

• Additional targeted marketing spend to secure large key corporates in key markets

• Utilise current reference sites to attract key corporates

• Large stock holdings to meet demand

==> picture [609 x 46] intentionally omitted <==

• Private label strategy – commenced with Fine Hygienic and rolling out to 80 countries

• New sites opening up and further planned – i.e. Shanghai

• Further international testing confirming Zoono’s efficacy as required

==> picture [619 x 46] intentionally omitted <==

Del i ver i ng l eadi ng m ar k et pr oduct s t o secur e l ar ge cor por at es

==> picture [208 x 42] intentionally omitted <==

==> picture [160 x 50] intentionally omitted <==

==> picture [181 x 50] intentionally omitted <==

==> picture [162 x 50] intentionally omitted <==

==> picture [95 x 50] intentionally omitted <==

Capi t al i si ng on t he COVI D pa n dem i c t o del i v er expansi on i n k ey m ar k et s

Si gni f i cant m ar k et oppor t uni t i es

• COVID rates surging in regional growth corridors

• Hand and surface sanitisers becoming increasingly important to fight against current, and future diseases

Pot ent i al Ai r condi t i oni ng Oppor t uni t y

• 150 buildings utilizing 400 litres per month (speaking to an interested party but contract not finalized yet)

• If the contract is secured could result in NZ$11.5M revenue per annum

• Safeguards employees and customers

• Interest is already coming in from other building operators

• Large corporates looking to add additional protection to staff in their working environments

• Air conditioning systems utilized as a dispenser to protect surfaces and prevent diseases through cleaning the air

• Successful trials in spraying on cardboard packaging for fruit and vegetables preventing mould resulting in longer lasting fresh fruit and vegetables

10

==> picture [960 x 121] intentionally omitted <==

Z AH E xpect s Sal es Vol um es t o i ncr ease over t he next 6 m ont hs

• Foundations around the globe built over the last 24 months

• Strong interest from pig, poultry and veterinary industries

• Zoono products have demonstrated feed efficiency and growth rate production gains in poultry

• Pig productivity trials to establish economic benefit are progressing well in both Australia & the US with excellent results obtained

• Trials commenced with a large UK poultry producer of 300 million birds per annum. To date, results have shown increased bird weights, overall better production performance and improved bird health

• Trials are at a 6 month midpoint with a large poultry producer in Central America. The first trial was successful and the second trial is showing further improvement again

• Many trials take up to a year before a commitment is made from the producer. Overall trials to date have been outstanding, and the expectations are that on completion, sales will increase and continue over time, building momentum throughout the industry.

I nnovat i ve pr opr i et ar y sani t i ser and di si nf ect ant

• Provides ongoing mechanical activity (length of time against animal pathogens currently subject of trials)

• Demonstrated effectiveness in global trials against a range of viruses including COVID-19 surrogate, Avian influenza, African Swine Fever, PEDv and PRRSv.

• Range of products including Z-71 Microbe Shield – applied to surfaces via fogging or spraying

• Range of products listed by the various regulatory bodies in Australia, USA, and Canada.

11

==> picture [131 x 68] intentionally omitted <==

==> picture [191 x 68] intentionally omitted <==

• Pursue large corporates with large selling teams and presence in many countries to drive B2B sales

• Increase mould remediation presentations to large fruit, meat and vegetable producers in target markets

• Target large commercial building owners for building sanitization to help protect employees and customers

• Increase sales and earnings for FY22 over FY21

==> picture [179 x 37] intentionally omitted <==

==> picture [226 x 50] intentionally omitted <==

==> picture [228 x 50] intentionally omitted <==

==> picture [178 x 38] intentionally omitted <==

Com m er ci a l i n Conf i dence

Zoono has not audited or investigated the accuracy or completeness of the information, statements and opinions contained in this presentation. Whilst provided in good faith, to the maximum extent permitted by applicable laws, Zoono makes no representation and can give no assurance, guarantee or warranty, express or implied, as to, and takes no responsibility and assumes no liability for (1) the authenticity, validity, accuracy, suitability or completeness of, or any errors in or omission from, any information, statement or opinion contained in this presentation and (2) without prejudice to the generality of the foregoing, the achievement or accuracy of any forecasts, projections or other forward looking information contained or referred to in this presentation.

This overview of the Company 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 Zoono’s prospects. You should conduct your own investigation and perform your own analysis in order to satisfy yourself as to the accuracy and completeness of the information, statements and opinions contained in this presentation before making any investment decision.

Fut ur e Per f or m a nce

This presentation contains forecasts, projections and forward looking information. Such forecasts, projections and information are not a guarantee of future performance and involve unknown risks and uncertainties, many of which are out of Zoono’s control. Actual results and developments will almost certainly differ materially from those expressed or implied.

Zoono disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise. The words “believe”, “expect”, “anticipate”, “indicate”, “contemplate”, “target”, “plan”, “intends”, “continue”, “budget”, “estimate”, “may”, “will”, “schedule” and other similar expressions identify forward-looking statements. All forward-looking statements made in this presentation are qualified by the foregoing cautionary statements. Investors are cautioned that forward-looking statements are not guarantees of future performance and accordingly investors are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty therein.

13

==> picture [328 x 69] intentionally omitted <==

NZ +64 9 600 1188

www.zoono.com | Zoono Group Limited (ASX:ZNO)

Com m er ci a l i n Conf i dence

14