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TZ LIMITED

Company Overview

November 2015

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High growth, scalable business

model … Rapidly developing

opportunities for broad based

distribution and product licensing

Over US$40 million invested to

establish SMA actuator

technology and end-to-end

smart device hardware and

software platform

World leader in intelligent locking

and fastening technology with

over 180 patent applications

covering the field of invention

About TZ

Australian publicly listed

technology company with offices

in Sydney, Brisbane, Singapore

and Chicago

ASX : TZL

Retained and recurring business

with large blue chip corporate

client base. Tight software

integration enables TZ to be

strategically coupled with client’s

business

Annuity revenue business

developing from installed base.

Software and service

maintenance standard part of

business offering

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Our Technology …

Shape Memory Alloy Actuated Locking Device

Supports Electronic Trends:

Embedded logic controller

Smaller – 1/10th volume of Solenoids

Lighter – 1/100th weight of Solenoids

More Efficient, Less Power Hungry

TZ Smart Devices

Highlights:

Proprietary technology with clear functional

advantages - Lighter, Smaller, Smarter

Digital Locking Device with embedded microchip

with integrated sensing and switching – IOT

functionality

Only SMA actuated locking device in the world …

NASA Tech Brief – Product of the Year 2005

TZ is the leader in SMArt Locking

Device™ technology combining state-

of-the-art SMA actuated intelligent

locking devices controlled over the

internet with TZ software

Nickel Titanium

Shape Memory Alloy (SMA)

About our Technology

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infrastructureprotection

packaged asset delivery

Revenue Model

Data Centre Rack Security

Smart Lockers

market size: ~ 25M installed base

+ 2M new cabinets per year

addressable opportunity: > US$120M (estimated)

hardware

sale

software

license

software

maintenance

support

services+ + +

once off once off annuity service fee

corporate lockers: > 250,000 Locker Units per year

postal lockers > 5,000 Locker Banks per year

addressable opportunity: Global, Large > US$500M

Re

ve

nu

e G

row

th

Year 1 Year 2 Year 3 Year 4

Y1

Annuity

Y1+Y2

Annuity

Y1+Y2+Y3

Annuity

Y1

Capital Purchase

Strong Annuity Revenues

Annuity = SW Maintenance + Service / Support Fees

= Target 10% of previous year’s sales value

(cumulative)

Our Business …

The TZ Business

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FY2015 Financial Performance

NPAT

EBITDA

2015 2014

REVENUE

(A$4.4M)

(A$6.4M)

(A$5.7M)

(A$11.8M)

A$15.2M A8.5M

EPS (cents) (1.6) (4.4)

Change %

22%

45%

79%

64%

GROSS MARGIN 44% 49% 10%

FY 2015 Results

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FY2010 FY2011 FY2012 FY2013 FY2014 FY2010 FY2011 FY2012 FY2013 FY2014

infrastructureprotection

packaged asset delivery

A$2M

A$4M

A$6M

A$8M

A$10M

A$12M

A$5.4M

A$1.2MA$1.6M

FY2015 FY2015

A$2.4MA$1.7M

A$12.4M

Year-on-Year Revenue Growth

Revenue Growth

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infrastructureprotection

A$1.7M

packaged asset delivery

A$12.4M

Corporate

US

Corporate

APAC

Postal

APAC

Postal

US

IXP

AmericasIXP

EMEA

IXP

APAC

Strong sales growth in all

geographies and across all

sectors

Sales by Region/Sector

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Growth Continues in 2016

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

$14.0

$16.0

$18.0

$20.0

Q1 FY14 Q2 FY14 Q3 FY14 Q4 FY14 Q1 FY15 Q2 FY15 Q3 FY15 Q4 FY15 Q1 FY16

Quart

erly R

evenue ‘000,0

00s

Good Start to 2016

36% up on

previous period

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Why TZ Smart Lockers?

Anyone can manufacture a Locker …

It’s not about Locker manufacture …

It’s about how the Locker is used …

TZ offers solutions that caters for customer

workflows, provides a range of security

options and delivers optimised productivity

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Range of Solutions

Corporate

Accountable Mail

Corporate

Day Lockers

Residential

Concierge Lockers

Retail

Click ‘n Collect LockersFor

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Turn-Key Postal Locker Provider

Singapore Post Poste Italiane

Pos IndonesiaFor

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Extensive Customer Base

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Mobile workforce means parcel delivery to an employee is

increasingly difficult. There is no chain of custody if there is no

physical delivery to an employee.

TZ Solutions provide an optimized approach to parcel and mail

management … which means time and cost savings.

TZ is the first mover in this segment and offers a modular

platform that enables a highly customised solution in both

metal and millwork.

Over 200 Locker Banks have been sold into the corporate

sector in the US to customers who represent the world’s

largest software, technology and financial services

corporations.

Many of these customers are expanding their operations,

building new facilities and/or relocating to new office premises,

which means the outlook in this sector for sustained growth is

extremely positive.

Growth is also underpinned by strong recurring sales to the

installed base and an expanding pipeline of new corporate

clients embracing new mail management programs.

Corporate Mail Locker Business

Accountable Mail Lockers

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Agile work practices such as hot-desking means corporations

need to provide personal storage spaces for employees.

Keyed locks generate significant issues with key management.

Electronic access control provides access but does not provide

real-time locker status granularity.

TZ Day Locker solution is the only solution on the market that

offers a hoteling system with full back-end security and HR

system integration.

TZ’s Day Locker business grew from scratch to greater than

A$4M in FY 2015 on the back of sales to Westpac, KPMG and

another major banking group.

On-going Day Locker sales to these customers, in line with

their progressive office establishment plans, will drive revenue

growth for our Australian business in the coming 12 to 24

months.

KPMG is scheduled for major installs in Sydney and

Melbourne starting later this calendar year

TZ Day Lockers are now being actively promoted to the US

corporates for the first time which we believe will drive further

growth for TZ.

TZ Day Locker Business

Corporate Day LockersFor

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High end Property Owners are looking for a premium offering

that is customised to suit their requirements – materials,

aesthetics and functionality. Competitor offerings are typically

cheaper metal offerings and are limited in their range of

possible options.

US Residential Locker sales volume more than doubled to

around US$1M in FY 2015.

Despite the competition, TZ is continuing to win business to

the high end residential sector.

TZ is currently the supplier of choice for a number of major

property management companies who have an aggregated

total of over US$10B of properties under management.

This sector should continue to grow strongly as e-commerce

parcel volume continues to grow exponentially and Lockers

become a standard utility for parcel management.

TZ is currently negotiating exclusive supply agreements with a

number of major Property Developers who collectively have a

portfolio of several hundred properties and are primed for

Locker deployments over the next 24 months.

Residential Locker Business

Residential Lockers

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EDUCATIONAL SECTOR

Mail rooms in Universities are starting to embrace Locker

solutions to manage parcel deliveries to students on campus.

Larger Universities are looking for total end-to-end solutions

which are integrated with their current track and trace and mail

management systems. TZ is the only provider to offer this

level of third party integration.

Vanderbilt University represents the latest deployment and will

serve as a very strong reference customer to support TZ’s

penetration into this segment.

TZ Solutions are currently being specified by a number of

Universities as they reconsider their mail room policies and

work practices..

This sector is potentially very significant given the 4,000 plus

colleges and universities across the US. Although this

business is highly seasonal, the sector should represent a

strong growth opportunity in the US as Lockers become a

standard for University mail management systems.

University Mail Locker Business

Educational Mail Lockers

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SingPost continues to aggressively expand their network

within Singapore and now regionally. Purchase orders have

been received that take the Singapore Post POPStation

Network from 100 to 150.

The recent sale of the ADAM Parcel Locker assets to Couriers

Please is the first step towards a broader collaborative

initiative and deployment plan for the Australian market. We

are anticipating supply of POPStations to Couriers Please as

they build the network in Australia.

Pos Malaysia’s and Poste Italiane are both expanding

deployment beyond their initial pilot. This is encouraging for

TZ as Parcel Lockers are a strategic part of their new business

and service strategies.

TZ continues to work closely with the US logistics and

transportation company to support business case development

that will allow them to finalise their plans for a roll-out strategy.

Work has included consideration of new locker design and

hardware options and software upgrades to enable new and

more efficient workflows.

TZ also selectively participates on new “invitation only” postal

tenders in countries where TZ can support a roll-out.

Postal Locker Business

Postal Lockers

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For the past 20 years, most IT security budgets have

been allocated to network security.

Security to prevent data loss generally receives much

less attention than the prevention of data theft by

remote intrusion, such as hackers.

However — lost, stolen and missing equipment or

improper equipment disposal — occurs twice as often

as malicious incidents like hacking, malware and fraud.

Accordingly Data Center Managers are increasingly

compelled to look for a level of security beyond just

controlling access to buildings and spaces.

TZ offer solutions that integrate physical security and

environmental monitoring right down to the cabinet or

server level which provides a more holistic approach to

remote data centre security, protection and control.

Why TZ IXP Solutions?

TZ offers a cost effective access

control and micro-security solution

suitable for application across 90% of

all the cabinets currently available on

the market. No other solution offers

this extensive level of compatibility.

IXP Business…

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IXP business is heavily dependent on building cycles of

infrastructure projects.

The Company has received a number of new project wins in

Defence, Financial Services and Healthcare segments.

Established multinational technology OEM partners are

starting to expand their deployments across multiple

geographies. TZ recently completed a new deployment for

one such US OEM provider in the Hong Kong Data Centre.

Substantial projects are in the pipeline with a number of new

data centres anticipated in 2016.

TZ SwingHandle demand is growing with production underway

in earnest. The TZ SwingHandle was developed specifically

for Cabinet Manufacturers as the only mechanical locking

handle that can be easily upgraded in the field to an electronic

system with the attachment of a smart TZ module. New orders

and new customers are anticipated in early 2016.

IXP Business should see on-going steady growth across all

regions underpinning a strong 2016.

IXP Business Status

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City of New York

Extensive IXP Customer Base

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Focus on Improving Business Performance

Reducing operating costs

through better utilisation of

operational resources and

leveraging partner resources

Increasing the speed of

penetration through new

channel distribution

partnerships

Profitability

Time

Looking into new applications

for the technology and

expanding into new sectors

Accelerating the rate of

commercial adoption by

entering into licensing

relationships with major OEMs

Improving Business Performance

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COMPLETE PRODUCTION TRANSITION

Transition to Asian manufacturing remains the number one

priority for the Company.

We have experienced delays in completion of the transition

program due to production consistency issues which has

delayed full scale production by six months.

Production issues have now been resolved and we are

confident of commencing full scale production in January

2016.

Once in production, we should see the anticipated efficiencies

start to come through in 2016.

Transition will …

Realise margin gains through the lower cost production

base

Enable scalable manufacturing to keep up with sales

demand

Lower Cost Asian Production

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ACCELERATING GROWTH VIA PARTNERS:

Focus on leveraging the Company’s strong leadership position

particularly in the PAD business to develop broad based

distribution and licensing opportunities.

The Company is currently in negotiation with major market

players and multinationals that will:

Significantly expand the breadth of TZ’s customer

engagements through their organizational scale,

geographic spread and established customer base.

Lead to licensing and partnership opportunities in

geographies where the Company does not currently have a

presence.

These relationships could offer future liquidity strategies

through equity acquisition as TZ becomes strategically

important to their business growth plans.

Building Strategic Partnerships

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INVESTMENT IN NEW PRODUCTS

The Company continues to invest heavily in its core

technologies, for its PAD and to a lesser extent, its IXP

solutions.

Significant capital expended in Q1 FY 2016 to enable

completion of the development of cost effective proprietary

metal Parcel Locker to position us strongly for regional

business with Singapore Post and the US Postal and Logistics

corporation.

Significant software upgrades to the US PAD product suite to

support growth into the Accountable Mail, Residential and

Educational Locker segments and to protect our differentiated

position and market share against new competitors and

entrants; and

Investment in new smartphone technologies to support TZ’s

position as a differentiated technology provider.

New Product Development

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EXPANSION INTO NEW SECTORS

The Company is looking to grow its current offerings into new

and attractive market segments where the existing TZ

technology platform can be leveraged:

In particular, the Company is exploring potential product

extensions into secure access control in the:

Defence and Law Enforcement through new channel

relationships

Access Control in the Security sector through the

established Security Integrator channels

Access Control in the Healthcare sector due to increasing

compliance requirements due to HIPAA (Health Insurance

Portability and Accountability Act of 1996). One of the

goals of HIPAA is to protect the confidentiality and security

of healthcare information – this is driving the need for the

use of secure cabinet locking solutions where healthcare

electronic data is being kept.

Pursuing New Applications

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Outlook …

Looking Forward

FY15 Sales momentum is continuing in FY16

US sales momentum increasing with new sales resources building sales pipeline > USD$7M …

Discussions continue with US Logistics and Transportation organisation for US Locker roll-out

TZ expects US sales to accelerate further when agreements with national distribution partners are finalised

APAC business momentum also extremely strong …

Current backlog of purchase orders and high probability business sitting at > AUD$8M

Singapore Post purchase more Lockers as they expand POPStation network in Singapore to over 150 banks

Couriers Please set to purchase Lockers as they start to roll-out POPStation Lockers in Australia, leveraging

purchase of TZ’s ADAM Parcel Lockers

Focus on improving overall business performance through:

Ramping up production to Asia to improve margins

Rationalising organisational structure to more effectively align with go-to-market strategies

Leveraging strategic partner distribution relationships to increase market penetration and improve working capital

Expanding into new application areas

Continue technology licensing opportunities to accelerate technology adoption globally

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