WORLD LEADER IN NARROWBAND MESH NETWORKS General Meeting Presentation 2 October 2017 1
Disclaimer The information contained in this confidential document ( Presentation ) has been prepared by CyanConnode Holdings Plc (the "Company"). It has not been fully verified and is subject to material updating, revision and further amendment. This Presentation has not been approved by an authorised person in accordance with Section 21 of the Financial Services and Markets Act 2000 ( FSMA ) and therefore it is being delivered for information purposes only to a very limited number of persons and companies who are: (i) persons who have professional experience in matters relating to investments and who fall within the category of person set out in Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the Order ) or are high net worth companies within the meaning set out in Article 49 of the Order; (ii) qualified investors as defined in section 86 of FSMA; and (iii) persons who are otherwise permitted to receive it (each a "Relevant Person"). Any other person who receives this Presentation should not rely or act upon it. Please note that the information in this Presentation has yet to be announced or otherwise made public and as such constitutes relevant information for the purposes of section 118 of FSMA and non-public price sensitive information for the purposes of the Criminal Justice Act 1993. You should not therefore deal in any way in the securities of the Company until after the formal release of an announcement by the Company as to do so may result in civil and/or criminal liability. finncap Ltd ( finncap ) are acting in the provision of corporate finance business to the Company, within the meaning of the Financial Conduct Authority s Conduct of Business Sourcebook ( COBS ), and no-one else in connection with the proposals contained in this Presentation. finncap is a company regulated and authorised in the United Kingdom by the Financial Conduct Authority. Accordingly, recipients should note that finncap is neither advising nor treating as a client any other person and will not be responsible to anyone other than the Company for providing the protections afforded to clients of finncap under the COBS nor for providing advice in relation to the proposals contained in this Presentation. This Presentation includes geographic and economic information, industry data and market share information obtained from independent industry publications, market research and analyst reports, surveys and other publicly available sources. Although the Company believes these sources to be generally reliable, geographic and economic information, industry data and market share information is subject to interpretation and cannot be verified with complete accuracy due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in any statistical survey. Accordingly, the accuracy and completeness of this data is not guaranteed. The Company has not independently verified any of the data from third party sources referred to in this Presentation nor ascertained the underlying assumptions relied upon by such sources. Prospective investors must rely on their own examination of the legal, taxation, financial and other consequences of an investment in the Company, including the merits of investing and the risks involved. Prospective investors should not treat the contents of this Presentation as advice relating to legal, taxation or investment matters and are advised to consult their own professional advisers concerning any acquisition of shares in the Company. While the information contained herein has been prepared in good faith, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers give, have given or have authority to give, any representations or warranties (express or implied) as to, or in relation to, the accuracy, reliability or completeness of the information in this Presentation, or any revision thereof, or of any other written or oral information made or to be made available to any interested party or its advisers (all such information being referred to as Information ) and liability therefore is expressly disclaimed. Accordingly, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers take any responsibility for, or will accept any liability whether direct or indirect, express or implied, contractual, tortious, statutory or otherwise, in respect of, the accuracy or completeness of the Information or for any of the opinions contained herein or for any errors, omissions or misstatements or for any loss, howsoever arising, from the use of this Presentation. All statements of opinion and/or belief contained in this Presentation and all views expressed represent the directors own current assessment and interpretation of information available to them as at the date of this Presentation. In addition, this Presentation contains certain forward-looking statements that involve substantial risks and uncertainties, and actual results and developments may differ materially from those expressed or implied by these statements. These forward-looking statements include, but are not limited to, statements regarding the Company's intentions, beliefs or current expectations concerning, among other things, the Company's results of operations, financial condition, prospects, growth, forecasts, projections, strategies and the industry in which the Company operates. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Therefore, actual results and future events could differ materially from those anticipated in such statements. Risks and uncertainties that could cause results of future events to differ materially from current expectations expressed or implied by the forward-looking statements include, but are not limited to, factors associated with requirements of additional financing risk, risks of delays in construction, production, competitive pressures, changes in the regulatory framework and prevailing macroeconomic conditions and other risks. No representation is made or assurance given that such statements or views are correct or that the objectives of the Company will be achieved. The reader is cautioned not to place reliance on these statements or views and no responsibility is accepted by the Company or any of its directors, officers, employees or agents in respect thereof. The Company does not undertake to update any forward-looking statement or other information that is contained in this Presentation. Neither the issue of this Presentation nor any part of its contents is to be taken as any form of commitment on the part of the Company to proceed with any transaction and the right is reserved to terminate any discussions or negotiations with any prospective investors. The Company reserves the right without any notice or liability to the recipient of this Presentation or its advisers to: (i) change any of the procedures, timetable or requirements or terminate negotiations at any time prior to the signing of any binding agreement with investors; (ii) provide different information or access to information to different persons; (iii) agree variations to the property, rights and liabilities comprised in the Company; and (iv) to negotiate at the same time with more than one person. In no circumstances will the Company be responsible for any costs, losses or expenses incurred in connection with any appraisal or investigation of the Company. In furnishing this Presentation, the Company does not undertake or agree to any obligation to provide the recipient with access to any additional information or to update this Presentation or to correct any inaccuracies in, or omissions from, this Presentation which may become apparent. This Presentation should not be considered as the giving of investment advice by the Company, finncap or any of their respective shareholders, directors, officers, agents, employees or advisers in relation to the acquisition of shares in the Company. In particular, this Presentation does not constitute an offer or invitation to subscribe for or purchase any securities and neither this Presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever. Each party to whom this Presentation is made available must make its own independent assessment of the Company after making such investigations and taking such advice as may be deemed necessary. In particular, any estimates or projections or opinions contained herein necessarily involve significant elements of subjective judgment, analysis and assumptions and each recipient should satisfy itself in relation to such matters. Neither this Presentation nor any copy of it may be (a) taken or transmitted into Australia, Canada, Japan, the Republic of Ireland, the Republic of South Africa or the United States of America (each a Restricted Territory ), their territories or possessions; (b) distributed to any U.S. person (as defined in Regulation S under the United States Securities Act of 1933 (as amended)) or (c) distributed to any individual outside a Restricted Territory who is a resident thereof in any such case for the purpose of offer for sale or solicitation or invitation to buy or subscribe any securities or in the context where its distribution may be construed as such offer, solicitation or invitation, in any such case except in compliance with any applicable exemption. The distribution of this document in or to persons subject to other jurisdictions may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the laws of the relevant jurisdiction. By accepting this document, and in consideration for it being made available to such recipient, each recipient agrees to keep strictly confidential the information contained in it and any information otherwise made available by the Company, whether orally or in writing. In the case of a corporate recipient, this presentation may only be disclosed to such of its directors, officers or employees who are required to review it for the purpose of deciding whether to make an investment in the Company. This document has been provided to each recipient at their request, solely for their information, and may not be reproduced, copied, published, distributed or circulated, to any third party, in whole or in part, or published in whole or in part for any purpose, without the express prior consent of the Company. The purpose of this document is solely to provide information to persons who have expressed an interest in investigating the possibility of investing in the Company. By accepting receipt of attending any delivery of, or electronically accessing, this Presentation, each recipient agrees to be bound by the above limitations and conditions and, in particular represents, warrants and undertakes to the Company that: (i) they are a Relevant Person (as defined above); (ii) they will not forward the Presentation to any other person, or reproduce or publish this document, in whole or in part, for any purpose; and (iii) they agree to comply with the contents of this notice. 2
Introduction 30 million of R&D spend has given CyanConnode a world leading position in narrowband mesh networks Board investment of 1.6 million confirms commitment $100 million order book (includes $33 million expected software license/support revenue from UK smart meter contract) giving a high level of comfort over 2018 revenues $326 million pipeline of opportunities being pursued with several near term Full rollout of existing contracts in India, Iran, Bangladesh and UK alone would create a significant revenue stream and drive profitability 3
Narrowband Technology CyanConnode provides last mile wireless mesh communications to utilities Electricity, gas and water metering Street lighting Licence free radio bands Wi-Fi, broadband and mobile spectrums have limitations Coverage Penetration (through buildings etc.) Cost and availability of spectrum Narrowband is unoccupied, low cost, low power and penetrates walls Always on, secure, interoperability between different meters Ideal for machine to machine communication Extends network coverage, self forming/healing network The world s leading narrowband platform for smart meter, smart city and IoT applications 4
Typical Metering Installation 5
Live Meters in Mysore, India Reading history for each individual meter DCU and meters in mesh network = DCU Location Meter list for DCU in Network Manager Software Last reading data for each meter 6
Global Partners Established eco-system of local partners in focus markets: Supports the transfer of skills and experience Local wealth generation feeds sales pipeline Enables full end-to-end solution delivery Partners not resellers CyanConnode solutions enable larger partner sale 7
Market Scale - India 250M CyanConnode has won the highest number of AMI contracts awarded to date in India 35M 9.2M 25k Tata Power - Mumbai 1M 0.9M 0.5M 13k 21k 23k 82k PVVNL CESCOM Contracts awarded/deployed All 0.7M Tata Power - Mumbai 3.5M 2M PVVNL CESCOM 3M UGVCL Roll out opportunity All Smart meters to be installed by 2019 Note bars are not to scale Total Indian Market 8
Market Scale - Bangladesh Initial order for 150KU in Feb 2017, extended to 250KU in June 2017 and further extended to 550KU in Aug 2017 14.7M 7.2M 550KU ~58M Note bars are not all to scale 4.2M 250KU 150KU Electricity metering contract Feb 17 Contract extension awarded Jun 17 Contract extension awarded Aug 17 Total Electricity metering market 9
Market Scale - Iran CyanConnode was one of the first UK companies to win a contract in Iran following the lifting of economic sanctions 33M Note bars are not to scale 1M 10M 0.1M 360k 2k Street Camera Contract Electricity metering contract Active Electricity metering opportunity Total Electricity metering market 10
Customer Orders (last 10 months) Ukraine (Sept 2017) $29M order for 1,000,000 unit smart metering deployment $13M is hardware to be delivered over 36 months $19M is recurring revenue software licenses with 10 year contract term UGVCL, India (Jul 2017) $1.1M order for 23,000 unit smart metering deployment Order received from new Tier 1 meter manufacturer partner Genus Bangladesh (Feb, Jun & Aug 2017) $19.3M order for 550,000 unit smart metering deployment Half the order is hardware/services to be delivered over 12-18 months Half the order is recurring revenue software licenses with 10 year contract term Tata Power Mumbai (Dec 2016 & Jun 2017) Orders from Larsen & Toubro for 15,000 smart meters HM Power Sweden (Jan 2017) Orders for 100,000 software licenses 11
Sales Pipeline Rest of World outside India Region Solution Units 000 Value $ M Ukraine Order now closed Electricity Meters 1,000 29 South East Asia Electricity Meters 116 11 South East Asia Lighting 20 5 Middle East Gas Meters 1,000 61 Middle East Electricity Meters 2,500 132 Ghana, Canada, UK, Indonesia, Philippines, Australia, Iran Total current pipeline with 6-12 month window to close Electricity, Gas, Lighting, IoT 576 36 5,212 4,212 $274M $242M 12
Sales Pipeline India Customer Solution Units 000 Value $ M Public utility Electricity Meters 509 13 Public utility Electricity Meters 500 13 Public utility Electricity Meters 375 10 Public utility (follow on order) Electricity Meters 100 4 Private utility Smart City 33 2 Public & private utilities Electricity & Smart City 1,300 42 Total current pipeline with 6-12 month window to close 2,810 $84M 13
UK Smart Meter Implementation Programme CyanConnode s solution connecting meters in not-spots UK SMIP Ecosystem Contract and delivery model Hosting Payments for CommsHub & Bespoke Work Telefonica M2M Platform Connode Server Revenue Contracted licence fees until 2020 Support fees (over 15 years) Expected 10% mesh Medium Case 20% mesh Source: Smart DCC Best Case 30% mesh 6m 13m 20m 18m 36m 54m Total 24m 49m 74m Payments for C4 SW Licenses & Bespoke Work Connode Agent + Bespoke services for integration& product adaptations Sources of revenue 14
Expansion from Smart Metering to IoT Platform IoT Solutions Platform CyanConnode s hardware and software can be used in any IoT device/application Omnimesh IoT platform supports third party communication technologies enabling smart city multi-application networks Smart Metering 15
Current Shareholders CyanConnode has a stable register offering a strong growth platform Shareholder Shares % Holding Nightingale Investment Co Ltd 1,676,470,588 9.37 Biggles Enterprises Ltd 1,666,666,666 9.31 W.D. Johns-Powell 1,049,412,348 5.86 Herald Investment Management 956,821,100 5.35 Legal & General Investment Management 952,824,231 5.32 Swedestart Tech KB 558,754,227 3.12 John Cronin 429,590,662 2.40 Source: Company Announcements and RDIR Share Register analysis June 2017 16