UWFA Stock Pitch Competition:

Avigilon (TSX: AVO)

Presented by: Varun Bhambhani and Irene Liu

March 8, 2014

Introduction

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SPX Index

AVO

• Share Price:• Market Cap:• Enterprise Value:• Revenue LTM:• EBITDA Margin:• Capital Structure:• Shares out. (mm):• 52 wk High/Low:• Diluted EPS:• Dividend Yield %:• Beta:

$31.83$1.37B$1.26B$155.1M16%100% Equity43.034.5/11.0110.45N/A1.36

Normalized Performance

Avigilon (TSX: AVO) is a Canadian-based manufacturer of high definition and megapixel network-based video surveillance systems and equipment for the security market worldwide. The company was incorporated in 2004.

Avigilon’s system is promoted by its sales staff and sold through a global network of security installers and dealers.

Product Lines

Company Description Key Financials

• Video management software• High-definition IP cameras• Recording hardware• System accessories

Company Overview

Company Overview

Investment Thesis

Macro OutlookCatalysts &

RisksValuation

YoY Revenue Management Team

Alexander Fernandez, Founder & CEO

Brad Bardua,CFO

Bryan Schmode,COO

2008 2009 2010 2011 2012 2013 -

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100 120 140 160 180 200

Annual Revenue

Reve

nue

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illio

ns C

AD)

CAGR = 102%

Canada US UK EMEA Asia Pacific

Latin America

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100 Revenue by Region

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AD

Name Background

Alexander Fernandez Previous success with Qimaging

Brad Bardua Previously CFO of Gateway Casinos Group, where the executive team grew revenue from $80 to $250 million in a short amount of time

Bryan Schmode Over 15 yrs of experience in the industry; instrumental in success of companies such as Broadware

Investment Thesis

1. Strong revenue growth driven by expansion into US & other geographic regions

Company Overview

Investment Thesis

Macro OutlookCatalysts &

RisksValuation

2. Avigilon’s recent acquisitions of VideoIQ and RedCloud will drive growth in 2014 and beyond

3. As one of the few end-to-end solution providers, Avigilon will maintain an edge over competitors

Macro Outlook

Company Overview

Investment Thesis

Macro OutlookCatalysts &

RisksValuation

The global market for video surveillance equipment is expected to grow by more than 12% in 2014, as per a study conducted by HIS, a global think tank

There is push towards video data analytics; the ability to differentiate products will be important in 2014.

The rising use of big data means that cloud computing would become more prevalent.

Governments across the globe have been increasing their budgets for video surveillance, which will drive growth in this industry in 2014.

180/360 degree panoramic network cameras will be high demand with global unit shipment forecast to increase by more than 60% YoY

Catalysts & RisksCatalysts

Risks

Successful integration and synergy from acquisition of VideoIQ: VideoIQ provides analytics and active learning technology that detects intrusion from video surveillance without human involvement. This has the potential to become a selling factor for Avigilon.

Major contract wins and global expansion: Avigilon has been focusing on expanding the reach of its products in the US and EMEA.

End-to-end solution: Avigilon provides end-to-end solution to its customers, which is a significant advantage over competitors who only provide either the software or hardware for video surveillance.

Large competitors: Avigilon’s competitors have a much greater scale, which could impact its ability to compete at the global stage.

Ability to innovate: Given that video surveillance can essentially be considered a commodity, Avigilon needs to continue to innovate in order to set the brand apart from its competitors.

M&A Integration: There is a risk that the integration of VideoIQ and RedCloud (both acquired in 2013) might not go smoothly and it can impact Avigilon’s ability to leverage the synergies.

Company Overview

Investment Thesis

Macro Outlook ValuationCatalysts &

Risks

Valuation - DCF

Company Overview

Investment Thesis

Catalysts & Risks

Macro Outlook Valuation

Valuation - DCF

Company Overview

Investment Thesis

Catalysts & Risks

Macro Outlook Valuation

Valuation – Trading Comparables

Company Overview

Investment Thesis

Macro OutlookCatalysts &

RisksValuation

Comparables Universe

DCF

52-week

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Recommendation

Company Overview

Investment Thesis

Macro Outlook ValuationCatalysts &

Risks

Football Field

Entry & Exit Strategy

Entry Price: Market Price

Target Price: $40.43

Price Upside: 27%

Time Horizon: 12 months

Stop Loss: $20

1. Strong revenue growth driven by expansion into US & other geographic regions

2. Avigilon’s recent acquisitions of VideoIQ and RedCloud will drive growth in 2014 and beyond

3. As one of the few end-to-end solution providers, Avigilon will maintain an edge over competitors