2015 Annual General Meeting th November 2015 For personal ...Quickstep has secured its first...

© copyright 2015. Quickstep Holdings. All Rights Reserved.

2015 Annual General Meeting27th November 2015

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© Copyright 2015. Quickstep Holdings. All Rights Reserved.

Disclaimer

» This Presentation is provided by Quickstep Holdings Limited (“Quickstep” or the “Company”) as a summary of the Company and its operations and forgeneral information purposes only.

» This presentation is not a disclosure document and should not be considered as investment advice or an offer or invitation to subscribe for or purchaseany securities in Quickstep, or an inducement to make an offer or invitation with respect to such securities. This presentation does not purport tocover all relevant information about any potential investment in Quickstep. Accordingly, potential investors are advised to seek appropriateindependent advice, if necessary, to determine the suitability of any investment. This presentation must not be relied on to make an investment orother financial decision and recipients should conduct their own investigations, enquiries and analysis and place no reliance on this presentation inevaluating any potential investment.

» None of Quickstep, or their respective employees, officers, related entities or advisers have audited or investigated the accuracy or completeness ofthe information, statements and opinions contained in this presentation. Accordingly, to the maximum extent permitted by applicable laws, none ofthem makes any representation and none of them gives any assurance, guarantee or warranty, express or implied, as to, and none of them takes anyresponsibility or assumes liability (including in negligence) for the authenticity, validity, accuracy, suitability or completeness of, or any errors in oromissions from, any information, statement or opinion contained in this presentation.

» This presentation contains certain forward-looking statements which have not been based solely on historical facts but, rather, on Quickstepʼs currentexpectations about future events and on a number of assumptions which are subject to significant uncertainties and contingencies, many of which areoutside the control of Quickstep and its directors, officers and advisors. Quickstep undertakes no obligation to update these forward-lookingstatements for events or circumstances that occur subsequent to such statements or to keep current any of the information provided. Any estimatesor projections as to events that may occur in the future (including projections of revenue, expense, net income and performance) are based upon thebest judgement of Quickstep and there is no guarantee that any of these estimates or projections will be achieved. Actual results will vary from theprojections and such variations may be material. Quickstep has no obligation to tell recipients if it becomes aware of any inaccuracy in or omissionfrom the information in this presentation.

» Other than for the pictures of the Quickstep facilities and machinery, the assets featured in the pictures in this presentation are not assets of theCompany.

» By accepting this presentation, you acknowledge and agree to be bound by each of the foregoing statements.

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» Aerospace Manufacturing– Manufacturer of choice for composite

components and complex assemblies

» Quickstep Aerospace– Global provider of disruptive technologies,

lowering cost of parts manufacturing

» Quickstep Automotive– Global provider of Class A components and

structural parts for vehicles

» Quickstep Systems– Leading innovator of advanced composite

parts and capital manufacturing solutions

Quickstep – Business Model

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Quickstep is well positioned to become a global leader in advanced composite manufacturing solutions through:

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Global Carbon Fibre Industry Opportunities

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Various studies point to significant growth in carbon fibre usage over the next decade in both the aerospace and automotive sectors

Quickstepʼs advanced composites capabilities and patented process technologies position us well to take advantage of this industry growth

US$

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Aerospace Manufacturing – Core Processes

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Bankstown, NSW, Manufacturing Site

Traditional Autoclave Curing

Precision Milling Machine (PMM)

NDT 10 Axis Automatic Centre

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Qure Process – Moulding / Curing» Reduced production time» Greater design flexibility» Better end-product technical characteristics» Reduced capital investment» Reduced energy consumption» Lower tooling costs» Greater control over cure cycle

Quickstep - Patented Process Technologies

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Resin Spray Transfer (RST) – Lay-up» Automated process» Faster processing times» Resin rich surface for exterior panels» ʻClass Aʼ surface finish» Reduced material costs» Reduced tooling costs» PaintabilityF

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Quickstep – Key Customers and Locations

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MUNICHQuickstep support office for Aerospace and Automotive– Sales and R&D– 10 employees

Australia

USA

Europe

WAURN PONDSQuickstep Automotive– Fit-out complete CY15– Expected to employ

30 by 2017

BANKSTOWNManufacturing and Quickstep Aerospace– Nadcap accredited

facility– 150 employees

Global Auto OEM

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Quickstep - Business Overview

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Aerospace Manufacturing

»Advanced manufacturing of composite components and complex assemblies

»Advanced manufacturing processes & systems

»All facets of aerospace & defence manufacturing

»Strong forward order book

»Focused on aerospace & defence sectors globally

»Proprietary patented process technologies

»Qualifying processes as alternative to Autoclaves for Aerospace sector

»Parts manufacturing growth opportunities

Quickstep Aerospace

»Automotive located at Waurn Ponds in Victoria

»Niche volume components & assemblies

»Focus is on ʻClass Aʼ surface components and structural parts/assemblies

»Two parts manufacturing contracts already secured

Quickstep Automotive

Quickstep Systems

»Global R&D Centre based at Deakin University

»Systems responsible for:- Research & Development- Process development- IP & commercialisation - Program management

»Developing higher volume manufacturing processes

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Aerospace Manufacturing

Joint Strike Fighter program» Sole supplier globally to Northrop Grumman for 21 JSF parts

– 464 parts delivered in FY15 (increase of 152% y.o.y.)

– Expecting three-fold increase in production over next three years

» Supplier of vertical tails for production ramp up forecast in FY16 (subject to final customer approval) – Which will provide significant revenue momentum from FY17

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C-130J Hercules» Exclusive supplier of composite wing flaps to Lockheed Martin

for the C-130J Hercules aircraft under US$75m MoA– 31 sets delivered in FY15 (343% y.o.y.)

– FY16 production to continue at rate of 3 wing flap sets per month

» Circa A$40m divisional sales in FY16 (20% growth y.o.y)

» Firm order book currently in excess of A$120m with expected further growth

» New growth projects now under advanced discussion

Aerospace Manufacturing division manufactures composite parts and assemblies for the C-130J Hercules and the Joint Strike Fighter programs

Divisional outlook and strategic objectives

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Aerospace Manufacturing - Growth Roadmap

PHASE ONE6-18 months

Manufacturing Growth Roadmap

PHASE TWO 1 -3 years

PHASE THREE3-5 years

Targeted Activities• JSF and C-130J component

manufacturing expansion• Capital expansion to provide

additional production capacity• Maximum asset utilisation

through composite opportunities and consolidation

• Discussion with global partners re new growth prospects

Outcomes• Increase Profitability• Drive positive cash flow out of

Aerospace Manufacturing business to support growth (Phase 2 and 3)

Targeted Activities• Niche projects with light aircraft

manufacturers 2,000 - 5,000 units p.a. for global markets

• Additional components using Autoclave & OoA processes

• Qualification of Qure process

Outcomes• Additional projects with

diversified customer base to fully utilise existing assets

• Additional composites business secured with PRIMEs

Targeted Activities• Medium volume projects –

Defence and commercial aircraft• Sustainment of Regional

composites for JSF• Focus on multiple market

opportunities and partnerships given scale in home market

Outcomes• New business implemented on

Quickstepʼs patented technologies

• Autoclave assets loaded with appropriate new business

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Quickstep Automotive

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Hawkei» Exclusive supplier of the bonnet, side skirts and mud guards

for Hawkei vehicles under LOI with Thales– Australian government awarded Thales a A$1.3bn contract to build

1,100 military vehicles and 1,000 trailers in October 2015– Project utilises Quickstepʼs innovative Qure and RST processes

» Waurn Ponds facility fit-out to be completed in Q2 FY16

» Target small volume projects (including composite seat structure and A-class panel projects)

» Increase production volume capability to secure larger projects - RapidQure

Quickstep has secured its first contract with a global OEM and will supply parts for the recently announced Hawkei project


Global OEM» Production of up to 1,000 lightweight carbon fibre engine

compartment parts– Production - expected to commence early 2016– Opportunity to sell additional parts through OEM dealerships

PRESCHE project» German-government funded project undertaken with Audi

and other partners» High quality outcome for Quickstep in June 2015

– Confirmed Qure and RST processes ability to produce paintable Class A surface parts at lower cost for niche volumes productionF

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Quickstep Automotive – Target Products

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Lightweight Sandwich/Core Structures

(Class-A Surfaces)

• Rapid Qure low-medium pressure cure process protects core/sandwich structure

- Bonnets, decklids, door skins• RST ensures ʻClass Aʼ surface finish• Suits low-medium volume production

Lightweight Structural Parts(Class-A Interiors)

• Structural interior parts • Focus on lower volume niche programs• Significant weight savings & greater

strength compared to steel

Lightweight Structural Body Parts

(Sound Absorptive)

• Parts with relatively flat, large surface areas & NVH requirements

• Processes provide cost benefits for automotive companies

• Targeting non-global platform models

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Quickstep Automotive - Growth Roadmap

Automotive Growth Roadmap

PHASE ONE6 -18

months

PHASE TWO18 – 36months

PHASE THREE

3 -5 years

Targeted Activities• Small volume projects – from 500 -

2,000 units p.a.• Non-visible components, fast to

market• Material and Process Validation with

customer

Outcomes• Define manufacturing process &

logistics• Process capability confirmed• Increasing process speed• Industrialisation of Qure

Targeted Activities• Niche volume projects – up to

2,000 - 5,000 units p.a.• ʻClass Aʼ surface parts, medium

time to market• Explore opportunities for

accelerated growth

Outcomes• Improved cure cycles & faster

resins developed• Production of larger components &

assemblies• Industrialisation of RapidQure

Targeted Activities• Medium –high volume projects –

greater than 10,000 units p.a.• Focus on multiple market

opportunities and partnerships

Outcomes• In series manufacture at target of 5

mins cycle time as minimum speed• Automated solutions to pre-forming

and trimming• Optimised painting solutions

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Quickstep Aerospace

ORPE Technologiya» First commercial sale of Qure technology achieved in FY15

– Integrated, assembled, tested and approved by customer

– Delivery and installation in FY16

» Significant cost savings for customer– Estimated at 10% of the capital cost of traditional Autoclave

process and 33% of operating costs

» Strong endorsement of Quickstepʼs Qure process» In discussions with companies in USA, Europe & Asia

(including China)

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» Qualification of Qure and RST processes

» Target unmanned aircraft, light aircraft and sports aircraft markets in FY16

» Commercial aircraft applications currently under discussion

Quickstep is completing the commissioning of its first Qure machine for ORPE Technologiya in FY16


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Quickstep Aerospace – Customer Targets

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Space & Exploration Aircraft

(Unmanned)

• Use of Qure process to manufacture spacecraft & UAV parts – i.e. ORPE

• Focus on supply to low-medium volume production customers

• Customers potentially in developing markets – i.e. Russia, China, India

• Parts relatively flat, large surface area

Light & Sports Aircraft

(Small to medium size)

• Use of Qure process to manufacture light & sports aircraft components

• Flexible manufacturing solution for low volume multiple tooling opportunities

• Seeking opportunities in both developing & mature markets

Defence & Commercial Aircraft

(Large global platforms)

• Qualification of Qure with Defence & Commercial producers

• Use of Qure process to manufacture parts for large PRIMEs & Tier 1 suppliers

• Identify opportunities for RapidQure in the aerospace & defence sectors

• Manufacturing of parts in-house; outside Australia in asset light modelF

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Quickstep Aerospace - Growth Roadmap

PHASE ONE6 -18

months

Aerospace Growth Roadmap

PHASE TWO18 – 36months

PHASE THREE

3 -5 years

Targeted Activities• Niche commercial projects

identified – i.e. ORPE• Qualification commenced with

commercial & defence PRIMEs

Outcomes• Industrialisation of Qure process

for Aerospace• Process capability optimised• Aerospace Business Model & cost

competitiveness confirmed through multiple RFI/RFP processes with key customers

Targeted Activities• Low-medium manufacturing

application projects secured• Additional niche commercial

projects secured• Qualification completed• New R&D technology developments

completed

Outcomes• Improved cure cycles & faster

resins developed• In-house manufacturing using Qure

process with key customers secured

• RST opportunities identified

Targeted Activities• Increase in parts manufacturing

projects annually• Focus on multiple global market

opportunities & partnerships• Partnership sought with a key

PRIME

Outcomes• RapidQure opportunities identified

in Aerospace further enhancing competitiveness & cost optimisation

• Focus on both commercial & defence Aerospace sectors

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Quickstep Systems

Qure Process» ʻOut of Autoclaveʼ process for Aerospace/Defence as

replacement for Autoclave– Low-niche volume manufacturing of large flat panel components

– Also suitable for premium automotive applications

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RapidQure Process» Next generation Qure process capable of mass production

(>50,000 parts p.a.)» Will provide an alternative to automotive industryʼs resin

transfer moulding and compression moulding

» Full industrialisation of proprietary Qure and RST processes

» Development of next generation RapidQure technology

» Further expand strategic relationship with Deakin University

Quickstep continues to enhance its patented composite manufacturing technologies


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Quickstep – Unique Value Proposition

Unique value proposition for customers:» Innovative processes» Solutions focus» Lower costs» Lightweighting

Specific growth strategies in place for each Quickstep division

» Aerospace Manufacturing– Growth with existing customers– Manufacturing excellence

» Quickstep Aerospace– Use of disruptive processes– Light aircraft focus

» Quickstep Automotive– Niche volume parts initially– Development RapidQure

Strong value proposition for aerospace, defence and automotive sectors

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» Qure Process– Significant economic advantages

over Autoclave & Oven curing- Lower capital costs

- Lower tooling costs

- Lower running costs

- Reduced processing times

- Reduced cycle times

- Reduced de-bulking

- Improved resin flow

» RapidQure Process– Being developed to compete with

Compression moulding for volume- Lower capital & tooling costs

- Lower running costs

- Low pressure core structures

- Improved surface quality with RST

Quickstep –Technology Comparison

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10,000 units p.a.

Hand Lay-upHand Lay-up

Oven CuringOven Curing

AutoclaveAutoclave

QureQure

RapidClaveRapidClave

RTMRTM

RapidQureRapidQure

CompressionMoulding

CompressionMoulding

Aerospace/Defence

Main Moulding Process Technologies

Automotive

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Quickstep - FY15 Highlights

» Aerospace manufacturing driving revenue growth and PBIT

» Record sales of A$39.5m in FY15, up 229%– Versus FY14 revenue of A$12m

– 31 ship-sets to Lockheed Martin for C-130J

– 464 JSF parts delivered to Northrop Grumman

– Aerospace manufacturing FY15 sales A$33m

» Strong FY15 second half PBIT performance – First half-year operating profit (PBIT) in H2 of A$2.23m

– Significant turnaround in full year PBIT

» A$1.76m GRIIF grant awarded in FY15– Start-up of Automotive in Waurn Ponds

» Customer acceptance of first Qure sale– A$5.8m from ORPE Technologiya for first sale

» Letter of Intent signed with Thales Australia– Supply of several parts for Hawkei vehicle

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» Aerospace Manufacturing– Double production of JSF parts for Northrop Grumman

– Achieve 3 ship-sets of C-130J a month consistently during the year

– Progress qualification of JSF vertical tails to enable deliveries in 2015/16

» Quickstep Aerospace– Deliver ORPE manufacturing cell

– Progress development toward contracting for aerospace production parts

» Quickstep Automotive– Produce first Hawkei parts

– Complete Presche contract

– Establish Automotive Division in Geelong to service global opportunities

» Corporate– Deliver sales budget of A$35m

– Achieve positive operating cash flow from manufacturing activities

All targets achieved

Quickstep – Achievement of FY15 Targets

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Achieved in Q1 FY16

Accepted awaiting final shipment

Target exceeded – A$39.5m sales

Two programs in development

Validated Qure & RST processes

Achieving customer milestones, SOP in FY16

Quoting for new projects

Supply commencing

11 Achieved Q4 FY15

464 in FY15 versus 188 in FY14

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» Aerospace Manufacturing– Sales to grow 20% in FY16 to A$48m– Commence supply of JSF vertical tail parts – Expansion for increased JSF volumes – Secure additional ʻBuild to Printʼ Contract

» Quickstep Aerospace– Completion of ORPE project– Secure new global program utilising RST and Qure

» Quickstep Automotive– Facility commissioned in Waurn Ponds– First two Automotive contracts into production

» Quickstep Systems– R&D located in Waurn Ponds– RapidQure development – 10 min cycle time

» Corporate– Capital raise completed to fund business plan

Quickstep - FY16 Targets

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» Continued strong momentum – Sales A$12.7m vs. A$5.9m (FY14)– Net operating cash flow A$1.5m

» Firm order book increased to A$130m– Further C-130J & JSF orders – C-130J orders extend to 2019

» JSF vertical tail qualification continuing– Fairings qualification completed

» New R&D facility established in Victoria– Invest Victoria assistance for relocation– Strategic R&D Agreement with Deakin

» First Automotive contract secured– In development with global vehicle OEM

» Thales Hawkei program progressing» PRESCHE project with Audi completed

– Confirmed capability to produce Class A parts– Lower cost for volumes below 10,000 parts p.a.

Quickstep - Q1 FY16 Highlights

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Quickstepʼs RST cell being programmed

Audi Demonstrator Roof produced during the PRESCHE Project F

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» Fully underwritten A$22m capital raising (before costs) commenced October 2015– Includes A$5m placement to a strategic investor at $0.15

» Shareholders at 30 October 2015 were given the opportunity to participate in a fully underwritten pro-rata 1 for 3.3 entitlement offer – At an issue price of A$0.13 per share; entitlement offer is non-renounceable & will raise A$17m

» Proceeds of the capital raising will be used to:– Fund capital expenditure associated with the forward C-130J & JSF sales pipeline

– Strengthen the companyʼs balance sheet by reducing short term debt

– Enable Quickstepʼs technology development program to be accelerated

– Set-up Quickstepʼs new Research & Development facility at Waurn Ponds

– Continue to commercialise the application of the companyʼs existing technologies. Now in a position to take advantage of potential growth opportunities. Speed of execution.

» Strong support from existing shareholders with over 97% or more than A$16.5m subscribed by existing shareholders

Quickstep - Capital Raising

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Left to Right: Bruce Griffiths, Peter Cooke, Nigel Ampherlaw, Tony Quick (Chairman), David Marino (CEO & Managing Director),

Errol McCormack, David Singleton, Jaime Pinto (Company Secretary)

Quickstep – Experienced Board of Directors

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Quickstep – Strengthened Management Team

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David MarinoManaging Director & CEO

» Joined Quickstep in February 2015 as MD & CEO» Previously COO of Futuris Automotive; led team

of 1,600 people & responsible for businesses in Australia, Thailand, China & USA

Philippe OdouardGeneral Manager, Strategy & BD

(Aerospace & Defence)» Previous MD & CEO 2008-2014; now focused

on business development» Previously at Thiess & Thomson-CSF (Thales)

Tim OldingVice President – Systems

» Appointed in February 2015; 25 yearsʼ automotive industry experience

» 19 years at GM Holden culminating as Managing Engineer of Advanced Vehicle Development

Michael SchramkoVice President – Operations

» Joined Quickstep in 2011 as Vice President, Manufacturing & Operations

» Aerospace experience includes Airbus (UK); Hawker De Havilland & Boeing Aerostructures

Andrew CraneChief Financial Officer

» Joined Quickstep in September 2015» Previously GM, Finance & Commercial for

GWA Ltd & CFO for SCA Hygiene Australasia

TBAChief Operating Officer

» Newly created senior management position; currently in recruitment phase

» Responsible for development & performance of all Quickstep operations

John JohnsonVice President - Commercial

» Appointed as CFO in 2009, now responsible for all commercial & administration activities

» Extensive aerospace & defence experience with Boeing, ASTA & BAE Systems

Tracy SwinleyVice President - HR

» Experienced Human Resources professional» Has held a number of senior & executive

roles in both listed & private companies

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Quickstep - Summary

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» We are meeting all of our commitments- Successful goals outcome in FY15. Good start to H1 FY16

» Our strong sales growth momentum is continuing- 20% aerospace manufacturing sales in FY16, strong growth in FY17- Aerospace manufacturing expected to continue profitability in FY16 on

anticipated volumes- Aerospace manufacturing business with strong barriers to entry & 20 year

manufacturing contracts- JSF contracted growth expecting 3 fold increase over the next 3 years- Firm order book now $120m (A$49M FY15), including C-130J orders to 2019

» Our JSF Vertical Tails qualification is progressing– First delivery of vertical tail parts expected in Q4 FY16

» Our customers have grown in confidence- With our delivery performance & financial position, helping deliver growth

» We have developed & own, ʻdisruptiveʼ process technologies– Focus is on technology penetration for both export and asset light set-up– In particular winning contracts in Aerospace & Defence using RST and Qure

Advanced Manufacturing, Smart Technology in one

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Quickstep - Summary

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» R&D relocated to Australia and strengthened Deakin relationship – Technology relationship with Deakin University for new material and process

developments strengthened

» We will have a healthy balance sheet and cash position to take advantage of the growth opportunities– Debt reduced and ready for growth after A$22m capital raising in November

» Our automotive growth activities have commenced – Fit-out for Automotive to be fully completed in Q3 FY16– Hawkei vehicle parts development is underway with Thales using new

technologies which have been accepted for production– Global OEM contract in development, for start in FY16

» RapidQure Development is progressing– This will leverage our Phase 1 and 2 development programs in Automotive as

material, design and validation activities complete

» We have strengthened our management team and Board» We can become an international leader in composites solutions

THANK YOU

Advanced Manufacturing, Smart Technology in one

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2015 Annual General Meeting th November 2015 For personal ...Quickstep has secured its first...

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