Global leader in smart security and sensing technologies INVESTOR PRESENTATION 31 OCTOBER 2024 COMPELLING CASE FOR INVESTMENT Leading technology with scalable model and organisational capability to support growth plans TRACK RECORD OF GROWTH AND RESULTS STRONG COMPETITIVE ADVANTAGES • • • • Q1 FY25 sales order intake up 16% High gross margins – circa 60% - 65% Trusted by blue chip and government customers HIGHLY SCALABLE MODEL • • • Blue chip customer base and long-term recurring revenue potential • • Defensible competitive position and investments in innovation including AI and deep learning Experienced leadership team Customer-centric focus with customised, flexible, and scalable solutions GLOBAL OPPORTUNITY • Efficient, scalable go-to-market strategies which include key distributor partners • FY25 target revenue range of $42.7m to $55.2m with operating leverage • Well-placed to become a global leader in smart digitisation for security and asset protection, thousands of products installed in +70 countries Emerging global partnerships with large multinationals Existing global revenue base 2 FY2025 OPERATIONS AND OUTLOOK GLOBAL LEADER IN RISK MANAGEMENT TECHNOLOGIES Protecting high value assets and critical infrastructure globally DETECT ILLUMINATE ACCESS Fibre optic intrusion detection systems Security and intruder detection equipment High security access control technology • Perimeter intrusions • Telecommunication networks • Pipeline intrusion • Condition monitoring • Data network protection • Products, services and recurring revenue model • Outdoor security sensors • LoRa wireless system developed • Surveillance solutions • Video illuminators • Camera analytics • Off-the-shelf & custom products • • • • Access control readers High security locking Custom encryption Biometric solutions • Off-the-shelf & custom products. • Highly encrypted for security conscious end users. World-leading portfolio of complementary premium solutions and technologies Strong competitive position underpinned by Ava’s IP, OEM and distribution relationships, and wealth of data for machine learning Trusted by some of the world’s most discerning security conscious customers – commercial, industrial, military and government sectors Flexible commercial models with growing recurring revenues 4 SENSING BEYOND SECURITY Building on success in existing deployments in multiple infrastructure types USE OF SOLUTIONS FOR SENSING APPLICATIONS • Identifying and responding to a threat at the perimeter, or within a facility. • Managing personnel access to restricted areas. • Securing critical assets and buildings. Example of solutions at a correctional facility AVA RISK GROUP’S SOLUTIONS DETECT • Borders, Perimeters, Critical Infrastructure. • Data investigation on patterns of intrusion. • Data generation and analytics using existing fibre networks targeting telecommunications sector. ILLUMINATE • Supports Detect’s smaller physical sites, targeted customer designs, illuminate CCTV images, identifying activity. ACCESS • Protect key infrastructure assets and strengthen vulnerable access points. DETECT ILLUMINATE ACCESS 5 GO TO MARKET AND REVENUE MODEL PROVEN GO-TO-MARKET STRATEGIES WITH GLOBAL REACH DETECT ILLUMINATE PRODUCTS SERVICES SYSTEM INTEGRATORS ACCESS (INCLUDING OFF THE SHELF) DISTRIBUTORS CABLE STRUCTURE PROVIDERS END USERS 1. Original Equipment Manufacturer MANUFACTURERS RECURRING SUBSCRIPTIONS GLOBAL PARTNER SECURITY NETWORK Products: Project based revenue in Detect supporting system integrator solutions to end users. Key distributor relationships driving product sales in the Access and Illuminate segments. Services: Support for the installation and commissioning of Detect systems. Recurring Subscriptions: Multi-year support agreements providing access to machine learning algorithms and data libraries to improve Detect system performance. Established go to market through extensive global partner network: Mix of system integrators and direct distribution partners allows us to provide our solutions worldwide and in remote and challenging locations. 6 STRONG SALES PIPELINE TO DRIVE GROWTH IN FY25 AND BEYOND Building on our market verticals and geographies with sophisticated global partners Detect Sales Opportunity Pipeline (A$m) Proven technology • Aura Ai-X • Cobalt YD30 series development • LoRa Connect wireless system • Growing recurring revenue via subscription High Probability 8.2 In Progress 26.3 Early Stage 73.5 Enhanced commercial capability with high profile, quality partners • Telstra • UGL • Siemens • dormakaba • Other key partners Grow annual recurring revenue: • Currently $2m ARR under contract • Sell subscription contract with every sale of Aura Ai-X • Total Pipeline with expected close dates in FY25 is currently greater than $100m (excludes expected telco sector orders) • Opportunities across key geographies – APAC, Americas, Europe and Middle East. • 12 opportunities > $1m ($38m of the pipeline) • Pipeline excludes Access / Illuminate, expected to deliver revenue of $12m - $15m in FY25. 7 HIGH QUALITY PARTNER AND END USER BASE Strong network of OEM and distributor relationships worldwide 8 CASE STUDY: TELSTRA OPPORTUNITIES Opportunities: • • • • Protection of data cabling via surface and subsea sensing Intrusion events on major communication Towers Access to critical assets Pit lid intrusion / lifting, cable tampering, digging Protection of communication pits  Technology demonstrated the superior ability of Aura AiX DAS technology in detecting events and providing appropriate classification and reporting.  Illuminate products demonstrated an excellent capability in point and small site detection and sensing of interference.  Protects the assets, the public and the network performance. Securing mobile tower access Monitoring of subsea telco cables 9 MARKET VERTICAL : GLOBAL BORDERS Ava Risk Group successfully completed installation and support for highly critical European borders • Monitoring of a 200km+ Border perimeter fence, buried with extremely challenging environmental conditions • • • New Aura Ai-X reduced alarms substantially, nuisance alarms down to under 2 per day. Replaced incumbent due to too many alarms and lacking functionality The fence is currently operating at 96% probability of detection (POD) and 4% nuisance alarm rates (NAR). Customer upgrading other borders now (replacing the failed incumbent competitor) with further orders expected. Development: Aura Ai-X is now being deployed in additional sites globally including additional Eastern Europe, plus Southeast Asia, LATAM and Southern Africa. The current border pipeline is in excess of 12m for FY25 and FY26. Fence along border Covert sensing 10 MARKET VERTICAL: TRANSPORT INFRASTRUCTURE - METRO • Major new adjacency for Ava Group – Metro 7-8m+ in FY25 • Sydney: • Sydney Metro – City & Southwest line 3m+, installing • Sydney Metro – fallen object project – submitted 1m+ • Sydney Metro – West - bid 1.5m+ submitted • Sydney Metro – Western Sydney Airport – bid 3m+ submitted • Driverless train Global • Nepal enquiry – early stage. • Turkey – Istanbul – early stage. • Southeast Asia – Various early stag. • Australia – Metro Trains Melbourne, Suburban Rail Loop, Queensland Rail various discussions linked to Sydney. Security fence for rail corridor 11 MARKET VERTICAL: TRANSPORT INFRASTRUCTURE - AIRPORTS • Major new adjacency for Ava Group – Airports perimeters FY26 – 5m plus. Driven by activism and civil disobedience. • Australia: • Melbourne – March 2025 project kick off • Adelaide – FY26 • Brisbane, Gold Coast, Darwin part of the Melbourne Airport FIDS working group • Security breach extinction rebellion Global Airports: • Turkey Istanbul Extension – 0.5m incumbent. • Australia – Melbourne / Adelaide early stage. • France – Aeroports de Paris – Various plus Lyon and global. • UK – Heathrow, Stansted, Edinburgh. • Vietnam – Long Thanh Airport. Security breach Airports 12 MARKET VERTICAL : MINING, OIL AND GAS Ava Risk Group has recently successfully won major upgrades to Oil and Gas facilities worldwide. These include new and upgrade installations with Aura Ai-X. • Australia – Woodside, Santos, Exxon, Various. Value YTD >1.5m, pipeline >3m plus recurring revenue. • Middle East – Qatar gas, Dubai, Hail and Ghasha, Various. Value YTD1.2m, pipeline >8m plus recurring revenue. • US – Atlas Sands – 80 kms buried system. Preventing access to critical delivery system. • Global major opportunities South Africa, LATAM in protecting critical infrastructure. YTD 0.5m, pipeline >3.5m Major facility installed PIDS Impact: Aura Ai-X has been proven as the most effective Detection sensor coupled with low alarms and successful integration into total security systems New Infrastructure Sites 13 CLEAR PATH TO DELIVER ON GROWTH PLANS IN THE MID-TERM $m Core Revenue Adjacencies Total Revenue Gross Profit H1 FY24 Actual H2 Total 14.2 8.7 Low FY25 16.0 30.2 37.7 5.0 42.7 High Low FY26 • Revenue growth driven by pipeline conversion in Detect and expansion in adjacent markets. High 45.2 10.0 55.2 47.1 10.0 57.1 56.5 15.0 71.5 GM% 61% 59% 9.4 18.1 27.3 35.3 36.5 45.8 Opex EBITDA 9.6 (0.9) 9.4 0.1 19.0 (0.9) 19.7 7.6 22.0 13.3 22.0 14.5 24.0 21.8 FX Movement (0.1) Impairment of Goodwill D&A 1.1 EBIT (2.1) (0.0) (1.5) 1.4 (2.8) (0.1) (1.5) 2.5 (5.0) 60% -3% 64% 18% 2.6 5.0 64% 24% 2.6 10.7 64% 25% 2.9 11.6 64% 30% 2.9 18.9 • Leverage the existing drivers of growth across all business segments: • Adjacencies such as telecommunications in Detect. • Grow recurring revenue via annual upgrade path in the Detect segment to improve system performance. • OEM / Distribution channels to support the Access and Illuminate segments. • Improved gross margin due to growth in higher margin Detect segment. • Operating cost base stabilised in H2 FY24 and demonstrates leverage of revenue growth in H2 to improve EBITDA performance. 14 Q1 FY25 SALES ORDER INTAKE AND H1 REVENUE OUTLOOK Sales Orders Received (A$m) • Total sales order intake of $8.9m in Q1 • Growth in both Detect and Illuminate segments compared to same period in the prior year. 12.0 Sales Order Value (A$m) 10.0 • Access recorded its strongest quarter since receiving initial stocking orders for Cobalt series locks from dormakaba a year ago. 8.0 • Revenue guidance for H1 FY25 in the range of $16.5m - $17.5m. 6.0 4.0 • Based on revenue guidance expect to be EBITDA positive in H1 FY25. 2.0 0.0 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Access Detect Illuminate Q3 FY24 Q4 FY24 Q1 FY25 • Second half revenue is expected to be substantively stronger than the first half. 15 FORWARD LOOKING STATEMENTS This presentation is given on behalf of Ava Risk Group Limited (AVA) Information in this presentation is for general information purposes only, and is not an offer or invitation for subscription, purchase, or recommendation of securities in AVA. Certain statements in this document regarding the Company’s financial position, business strategy and objectives may contain forward-looking statements (rather than being based on historical or current facts). Any forward-looking statements are based on the current beliefs of the Company’s management as well as assumptions made by, and information currently available to, the Company’s management. Forward-looking statements are inherently uncertain and must be read accordingly. There can be no assurance that the underlying assumptions will prove to be valid. All data presented in this document reflects the current views of the Company with respect to future events. Forward-looking statements are subject to risks, uncertainties and assumptions relating to the operations, results of operations, growth strategy and liquidity of the Company. To the maximum extent permitted by law, the Company, its officers, employees and agents do not assume any obligation to release any updates or revisions to the information (including any forward-looking statements) in this presentation to reflect any change to expectations or assumptions and disclaim all responsibility and liability for any loss arising from reliance on this presentation or its content. 16