www.tz.net

TZ LIMITEDFY14 FULL YEAR PRELIMINARY RESULTS27th August 2014

“FY14 was a milestone year …TZ is demonstrating and delivering the characteristics of a true high growth, global technology business.”

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What We Will Cover

1 2 3 4

Business Strategy, Growth Drivers,

Competitive Strengths

OperationalHighlights

2014 FinancialPerformance

TZ BusinessOverview

5

2015 Key Prioritiesand Outlook

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TZ Business Overview

1

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Countries whereTZ Products are Sold

208%2014 Revenue Growth

12Large Corporate

Customers

> 40

76Total Patents Granted

102014 New HW +SWProducts Launched

Number of Staff42

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TZ Business Overview TZ is the market leader in SMArt Device technology – SMA actuated, IP enabled, intelligent fastening and

locking devices controlled remotely via software.

TZ technology provides enhanced security and asset protection through remote monitoring and software control.

FY14 was a milestone year: verified market opportunities, proven business model, major global contract wins, achieved revenue guidance, significant momentum going into FY15.

Two business segments – IXP (data centre cabinet locking) and PAD (automated parcel lockers). Leveraging global growth trends in E-commerce and Cloud computing.

Proprietary IP with strong patent protection. Unique integrated hardware + software model. Low cost base outsourced contract manufacturing.

Recognised Product leader, building presence in Asia, EU and US through cornerstone contracts

Strategy to leverage IP through partnerships and major contract opportunities

TZ is beginning to show the true characteristics of a true high growth global technology business

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TZ Snapshot

TZ is the leader in SMArt Device™ technology combining state-of-the-art SMA actuated intelligent fastening and locking devices with TZ remote software control:

Enables Granular Security and Protection

Enables Remote Monitoring and Compliance

Reduces and Manages Security Risk

Eliminates Manual Work Practices

Allows Workflow Management / Optimisation

Improves System Productivity

infrastructureprotection

packaged asset delivery

Business Streams

Company Purpose

Revenue Model

Data Centre Rack Security

Intelligent Lockers

market size: ~ 25M installed base+ 2M new cabinets per year

addressable opportunity: > US$120M (estimated)

hardwaresale

softwarelicense

softwaremaintenance

supportservices+ + +

once off once off annuity service fee

corporate lockers: > 250,000 Locker Units per yearpostal lockers > 5,000 Locker Banks per year

addressable opportunity: Global, Large > US$500M

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FinancialPerformance

2

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Financial Performance – Continuing Operations

Normalised EBITDA

EBITDA

2014Preliminary

2013*Audited

REVENUE

(A$8.5M)

(A$5.6M)

(A$11.8M)

(A$6.3M)

A$8.5M A$2.8M

NPAT (A$11.8M) (A$16.5M)

Normalised NPAT (A$8.9M) (A$11.1M)

Change %

EPS (cents)

Normalised EPS (cents)

(4.4) (9.7)

(3.3) (6.4)

28%

11%

208%

28%

20%

55%

48%

* Excludes PDT

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Normalised EBITDA and NPAT

2014 Preliminary(A$’000s)

2013 Audited(A$’000s)

Add Back:

Net loss on movement in fair value of derivative liabilities

Net loss on renegotiation of convertible notes

Loss on debt/equity conversion

Impairment of assets – TZI Goodwill

Less:

Net gain on movement in fair value of derivative liabilities

(8,479) (11,803)

- 380- 1,125

4,356 -

- 4,010

(1,508) -

2014 Preliminary(A$’000s)

2013 Audited(A$’000s)

(11,789) (16,524)

EBITDA NPAT

- 380- 1,125

4,356 -

- 4,010

(1,508) -

(5,631) (6,288) (8,941) (11,009)NORMALISED

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Revenue Growth Accelerating

FY2010 FY2011 FY2012 FY2013 FY2014 FY2010 FY2011 FY2012 FY2013 FY2014

infrastructureprotection

packaged asset delivery

A$1M

A$2M

A$3M

A$4M

A$5M

A$6M

A$2.4M

A$5.4M

A$1.2M

A$1.6M

A$1.2M to A$2.4MBacklog: A$0.3M

A$1.6M to A$5.4MBacklog: A$3.0MBacklog means purchase orders received but goods not yet dispatched

Backlog means purchase orders received but goods not yet dispatched

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Sales by Business Unit

INFINITY REVENUE

PAD REVENUE

2014Preliminary

2013Unaudited

IXP REVENUE

A$5.4M

A$0.7M

A$1.6M

N/A

A$2.4M A$1.2M

TOTAL A$11.8M A$3.4M

Change %

238%

100%

247%

TOTAL BACKLOG A$3.3M A$0.6M 450%

TZ met guidance of >$A8M in sales as outlined in the 2013 Annual Report

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Investing for Growth2014 2013

GROSS MARGIN

COST OF GOODS

OPERATING REVENUE

50%

50%

A$8.48M

COMMUNICATIONS EXPENSE

OCCUPANCY EXPENSE

EMPLOYEE BENEFITS EXPENSE

A$0.28M

A$0.11M

A$5.74M

TRAVEL AND ACCOMMODATION

PROFESSIONAL/CORPORATE EXPENSE A$1.60M

A$0.84M

50%

50%

A$2.75M

A$0.22M

A$0.13M

A$3.85M

A$1.93M

A$0.72M

DEVELOPMENT COSTS A$0.07M A$0.38M

Change %

208%

50%

27%

18%

17%

17%

82% No Change

No Change

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OperationalHighlights

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FY14 Major EventsAUG Acquisition of Infinity Design to support internal development initiatives

Intelligent Locker contract wins as TZ pursues US University and College marketAccelerated roll-out of Sing Post POPStation Locker Network – 100 Locker Banks by YE 2014

NOV Large IXP contract win with Defense Agency for European major project

JAN Secure Parcel Locker supply contract for Poste Italiane Pilot Program – Significant Tender WinSecure Parcel Locker supply contract for Pos Indonesia Pilot ProgramReceive A$800,000 IXP purchase order for major South American data centre deployment

FEB Conversion of QVT Convertible Notes – TZ debt free

MAR Launch of TZ Day Locker Management System to the Australia Market

APR Share placement to raise working capital to support expanding sales baseMajor PAD contract wins in the US Corporate Accountable Mail SectorWestpac Banking Corporation specify TZ’s Solution as its preferred Day Locker Management System

MAY Supply of Day Locker Solution to Westpac Kent Street and Collins Street OfficesSecure Parcel Locker supply contract with major US Logistics and Transportation Company

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infrastructureprotection

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IXP Sales Highlights

North America Strong growth into US Govt,

Defense, Banking and Financial Sectors

Expanding business with world recognised IT and technology corporations

South America Largest single PO received

for large South American data centre

Africa New Distribution Partner

– Bytes Technology Group

Europe and the Middle East Major supply contract for significant

Defence Agency project

Expanding business with major IT service providers

Asia New Distribution Partner

– LanTroVision

Australia On-going sales with

NextDC, MacTel and others

IXP specification secured on new data centres

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““The electronic locking system we deployed didn’t provide the full accountability that we need to meet our customers’ strict security standards, so we went shopping for a new solution.

We considered solutions offered by dedicated rack manufacturers and we also looked at TZ. Once we experienced the TZ system, we were sold on two key points – cost and functionality.” ”

Control Circle

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packaged asset delivery

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PAD Sales Highlights

North America Expanding business with

world recognised IT and technology corporations for Accountable Mail offering

Secured wins for Locker supply to large University and College campuses

Strong sales growth with major Property Developers / Managers for Residential Locker offering

Won Parcel Locker supply contract for major logistics company

Europe Won supply contract for Poste

Italiane Parcel Locker pilot Asia On-going supply contract for

100 Locker Banks for Sing Post

Won supply contract for PosIndonesia Parcel Locker pilot

Australia Secured specification as Westpac’s

Day Locker Management System

Expanded ADAM Locker deployment and service offerings

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“Poste Italiane selected TZ, following an extensive evaluation lasting over a year and involving several stages of qualification.

TZ was judged to be the best provider because the solution represented the best value in terms of reliability, ease of use, customisation possibilities and, last but not least, a strong benefit‐to‐cost value proposition.”

FBA Press Release

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IXP Product Development

Launch TZ SwingHandle™ to target traditional handle market

Introduced world’s first in-situ electronic upgradable mechanical swinghandle lock

Improve software capability to support larger DC deployment needs:

Upgraded IXP Bridge Firmware

Extended Centurion Server Software Capability

Launch annual support and maintenance offering

Established annual maintenance and support package offering through integrator partners

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PAD Product Development

Launch Day Locker Management System offering:

Secured specification as Westpac’s preferred Day Locker Management System

Expand PAD platform software capability to support Postal offering:

Built new Client Software engine

Extended Asset Manager Server Offer

Established Reservation Capability

Expand Corporate Mail software offering:

Extended Corporate Mail Software capability to support new corporate client needs

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Other Initiatives

OurPAD Development:

Development of production version of OurPAD based on partner and courier feedback

Expand PAD platform software into mobile applications:

New mobile phone app for Postal Networks

New C2C mobile phone app for ADAM Locker Network

Next Generation NFC Devices:

Extend TZ SMArt Device thinking to leverage NFC (near field communication) opportunities

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Execution Strategy, Growth Drivers and Sensitivities

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1 2 3 4 5

Explore and contract licensing and partnership

opportunities

Expand technologyoffering and pursue

new sectors.

Drive market leadershipin selected segments

Eliminate debt, improve financial position,

build competencies, business systems and

processes

Fixed corporate structure and legacy issues

Execution Strategy

Remedial Strengthen Innovate,New Product Development

Develop and launch new HW and SW System Solutions

Awareness,Marketing,

Commercialisation

Accelerated Growth

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IXP Growth Drivers

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

FY2013

FY2014

FY2015

FY2016

FY2017

FY2018

FY2019

FY2020

Rac

ks D

eplo

yed

Per A

nnum

OTHER

APAC

EMEA

CALA

NA

Frost & SullivanProjections

TZ ManagementEstimates

Where adopted, there are two TZSmart Locking Devices on every cabinet in the data centre …

25,000,000 installed base of data centre cabinets globally

2,000,000 date centre cabinets sold each year globally

200,000 cabinets per year estimated to want electronic locking

Increasing market preference for electronic locking due to compliance requirements …

HIPAAHealth information security

PCI-DSSPayment card security

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PAD Growth Drivers

E-commerce growth rates vary widely but the general trend is upwards and significant …

Postal organisations and logistics companies are exploring automated parcel locker to:

Improve operational efficiency and address the increasing costs associated with unsuccessful first try deliveries to households

Provide cost effective and convenient physical distribution of goods to the consumer.

Improve the delivery experience for consumers.

Benchmark – DHL Germany:

870M Domestic Parcels per year Total of 2,500 Parcel Lockers (Packstations) deployed over seven (7) years

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Sensitivities TZ sales highly dependent on infrastructure roll-out … Delays in deployment could impact timing of revenue

recognition. TZ only recognises sales revenue when the product is dispatched.

A number of major postal tender submissions are pending where TZ is short listed as a possible supplier. This could have a material impact on the TZ’s forecast revenues.

Day Locker sales projections are based on supply of the electronic hardware and software solution. TZ is also actively pursuing turn-key supply inclusive of supply of the Locker Unit as well. This has the potential to double revenue.

Manufacturing transition currently underway to expand production capacity and reduce manufacturing cost base. Anticipated high production demand could push current production to maximum thresholds in the near term until Asian base manufacturing is fully commissioned.

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2015 Key Prioritiesand Outlook

5

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1

Key Priorities

focus on revenue growth … >$15M FY15 sales target

2 improve manufacturing cost … target 15% overall GM gain

3 build annuity revenue stream … higher value SW offerings

4 explore partnership opportunities to leverage TZ IP and technology

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Focus on Revenue Growth Infrastructure Protection:

Secure OEM supply relationships for TZ SwingHandle to penetrate existing mechanical lock market and build opportunities for future TZ electronic upgrade. Increases total available market substantially.

Build sales momentum with Government, Banking and Finance customers leveraging increasing PCI-DSScompliance requirements

Expand sales focus to emerging growth markets such as South America and Asia

Packaged Asset Delivery:

Become the dominant Day Locker Offering for Corporate Australia targeting those corporates who are embracing agile workplace practices … i.e. Westpac >19,000 employees

Introduce Day Locker Offering to US market targeting established TZ Corporate Clients … Cisco >15,000 employees, Microsoft >40,000 employees

Proactively pursue Postal Parcel Locker tender opportunities in Asia, Europe, USA and South America as Postal organisations rapidly embrace parcel locker strategies to support e-commerce business

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Improve Manufacturing Cost Base

Successfully transition primary manufacturing of proprietary TZ components to China to materially improve manufacturing cost base

Build sourcing capability in Asia to improve purchasing economies for off-the-shelf hardware components that support system offerings

Establish scalable inventory management and logistics capability in Asia to ensure product availability and reduced freight costs through efficient consolidation and dispatch scheduling

GMGain

Dev

ice

Uni

t Cos

t

Current UnitCost Base

New UnitCost Base

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Build Annuity Revenue Streams

Move from single software license to higher value custom Application / Server / Integration software package offering

Establish new enterprise software licensing models to support major Client – Server deployments

Expand software offering to include hosted SaaS offerings to drive higher value licensing revenue

Build service and support maintenance packages to increase $ value of on-going annuity revenueAv

erag

e So

ftwar

e Sa

le

ApplicationSoftwareSell Value

Integrated Software/Service

Sell Value

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Explore Partnership Opportunities A.D.A.M. Parcel Locker Network

Proof of concept Pilot has been established to prove Locker Network viability to potential partners.

Explore partnering opportunities for A.D.A.M. Parcel Locker Network to enable end-to-end B2C and C2C offerings including integrated logistics

Explore Click & Collect offering with Retail Property Partners … focus roll out to targeted retailers.

Regional Parcel Locker Network

Explore PAD partnering options in Asia to leverage opportunity to build a regional Parcel Locker Network

Homebase OurPAD Network

Progress OurPAD partnering options to establish national channel for broad base commercialisation

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Outlook and Conclusions FY14 milestone year: verified market opportunities, proven business model, disciplined execution and cost control,

global customer endorsements and contract wins, strong momentum into FY15

FY14 revenue guidance achieved. New guidance for FY2015 >$15M revenue

Strategic focus on revenue growth, manufacturing costs, annuity income streams, and leveraging proprietary IP through partnerships and licensing deals

Exponential growth – TZ’s data centre cabinet locking sales growing at over 100% per annum and TZ’s parcel locker sales up over 238% per annum leveraging e-commerce and cloud global growth trends.

Extensive IP portfolio – 76 patents granted protecting TZ’s technology position in SMA actuated electronic locking and fastening devices including areas of technology application.

Clients are AAA rated - Cisco, Microsoft, Westpac, Singapore Post, Poste Italiane. Contract wins demonstrate TZ’s competitive strengths. Roll out programs underpin growth.

Business is scalable, debt free and well placed to support rapid growth with experienced board and management.

TZ is currently engaged in strategic discussions with a number of potential partners. A strategic deal, should it come to fruition, could have a significant impact on the business of TZ.

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“I believe that remotely controlled devices with integrated intelligence capable of manipulating things in space will be integral to building and maintaining the infrastructure of the built world … There are no other devices like ours in production and we are out in front of the technological curve.”

Dickory Rudduck, AGM 2010

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Important NoticeThe information contained in this presentation is given in good faith and has been prepared from information believed to be accurate and reliable. The information presented does not take into account your individual financial circumstances and it is not designed to be a substitute for specific financial or investment advice or recommendations and should be relied upon as such. You should consider talking to your financial adviser before making an investment decision. So far as the law allows, TZ Limited excludes all liability for any loss or damage whether direct, indirect or consequential.

This presentation includes forward-looking statements that are based on information and assumptions known to date and are subject to various risks and uncertainties. Actual results, performance or achievements could be significantly different from those expressed in, or implied by, these forward-looking statements. Such forward-looking statements are not guarantees of future performance. They involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of TZ Limited, and which may cause actual results to differ materially from those expressed in this presentation.

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