Traffic Technologies Ltd

Investor Presentation

29 January 2014

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H1’14 EARNINGS GUIDANCE

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Earnings Guidance - Half Year to 31 Dec 2013

Half Year Ended 31 Dec 2013 ($m) 31 Dec 2012 ($m)

Revenue 19.5 – 20.0 26.6

EBITDA 1.0 – 1.2 3.3

EBIT 0.1 – 0.3 2.4

NPAT (0.6) – (0.8) 1.6

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H1’14 EARNINGS GUIDANCE

• First half of FY’14 behind expectations, reflecting State government expenditure cutbacks & Federal Election

uncertainty

• Slower than expected start to NSW traffic signals upgrade

• Restructuring costs and acquisition costs of QTC in December 2013

• Results due to be released in final week of February For

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OUTLOOK

Medium Term Outlook

Major contributors to growth in medium term are:

1. Intersection Products

• $25m NSW upgrade underpins major contract revenue until

late CY’15 (slow start, but project is expected to complete on

time)

• Further upgrade projects across Australia with ~35% of

market not yet LED

• Expansion of product range with QTC acquisition

• Implementation of new products e.g. electronic speed signs

Exports

Domestic

Exports vs. Domestic Revenue

4. Operations

• Continued focus on margin improvement with further

product rationalisation & manufacturing efficiencies

• Synergy benefits of QTC acquisition

3. Exports

• Export opportunities for existing

product to 27 countries with

SCATS operated traffic systems

• Further sales into UK

• Market for emergency

telephones also large offshore

• Expanded worldwide distribution

network from QTC acquisition

FY’14 Outlook

• Too early to give FY’14 guidance but expect:

– Pick up in revenue from NSW traffic signals upgrade

– Improved revenue & earnings from exports & road

lighting

– QTC expected to contribute to second half of FY’14

2. Road Lighting

• LED road light trials (VIC, NSW & SA) expected to complete

in near term

• Market is 2-3x size of intersection products

• LED product offers

- Increased energy efficiency + reduced carbon footprint

- Operational cost savings - longer life + reduced

maintenance costs over life

• Traditional road lighting contracts in conjunction with Rexel

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COMPANY OVERVIEW

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COMPANY SNAPSHOT

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* Numbers from continuing operations and pre 2013 placement

Traffic Technologies (TTI) Company Background

• TTI is Australia’s premier traffic solutions company

• Established 2004 and listed on ASX 2005

• TTI’s head office is in Eltham, Victoria with offices in all Australian States

and the UK

• TTI designs, manufactures and supplies

- Technical Products – including traffic intersection products (signals,

timers, controllers etc), road lighting and emergency phones through

its Aldridge, QTC and Clearsonics businesses

- Road Signage – through its De Neefe, Sunny Signs and Norsign

businesses

• Majority of earnings come from Technical Products

2013 Revenue

Technical

Signage

2013 EBIT

Earnings Summary

Y/E June FY11A* FY12A* FY13A*

Revenue ($m) 47.9 53.1 45.2

EBITDA ($m) 4.4 5.9 6.1

EBIT ($m) 2.7 4.0 4.3

NPAT ($m) (0.2) 1.9 3.1

EPS (cents) (0.13) 1.07 1.74

DPS (cents) 0.0 0.0 0.4

Shares on Issue 275.6m

Price 7.0c

12 month (Low - High) 5 - 10c

Market cap $19.3m

Net Debt (pro forma Jun 13) $21.9m

EV $41.2m

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STRATEGIC HIGHLIGHTS

Since the GFC we have been repositioning the company, now we are finally poised for growth

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1. Core business stabilised, profitable and growing

2. Short term growth underpinned by NSW signals upgrade project (up to $25m over 30 months)

3. Strong growth expected in the UK (Signals and countdown timers)

4. Strong growth expected from entry into road lights (conventional and LED)

5. Entry into controller market with acquisition of QTC, significant synergies and growth potential

Positioned for Growth

* Post placement pro forma 30 June 2013

Balance Sheet

Remediation

• Sold non-core divisions

• Acquired small but direct competitor

• Resolved legacy legal issues

• Stable management

Streamlined

Operations

• Manufacturing

efficiencies

• Supply renegotiation

• Overhead cost reduction

• Continuing to deliver

margin improvements

Invested in Core

Product

Development

• Higher efficiency signal

products

• Countdown timers

• Conventional road lights

• LED road lights

Balance Sheet

Remediation

• Reduced debt from peak

of ~$46m to net debt of

$21.9m*

• Ongoing focus on debt

repayment from

operating cash flows

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PRODUCT OFFERING

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TECHNICAL PRODUCTS

Intersection Products

• Traffic signals

• Pedestrian count-down timers

• Electronic road signs

• Traffic signal controllers

Road Lighting

• Category V luminaires

• Category P luminaires

• HID and LED products

Other

Portable Roadside Technology

• Roof mounted signs

• Portable traffic signals

• Variable message signs

Emergency Telephones

• Roadside pole telephones

• Pedestal and bollard telephones

SIGNAGE

• Directional, regulatory + information signs

• Portable signs

• Vehicle decals

Technical Products Revenue Mix

• Majority of Technical Product income is derived

from Traffic Signals

Traffic Signals

Road Lighting

Other

TTI Other

Signage market share

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TECHNICAL PRODUCTS:

INTERSECTION PRODUCTS

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TTI is a fully integrated designer, manufacturer and supplier* of

road intersection products including • LED traffic signals

• Pedestrian push-buttons

• Count-down timers

• Traffic controllers

Australian Market • 12,000+ signalled intersections in Australia, of which ~35% are old

technology

• Core Market (maintenance + new installations) ~ $15-18m pa

• Major Upgrades (upgrades of legacy infrastructure) ~$200m+

opportunity

TTI’s market leading position • TTI has an estimated 90%+ market share of LED traffic signals

*TTI does not install or maintain products

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TECHNICAL PRODUCTS:

ROAD LIGHTING

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Traditional road lighting • In partnership with Rexel (180+ branches), TTI supplies category-V (major

roads) & category-P (residential, minor) conventional road lighting

New LED Technology • TTI has developed and is trialling (in VIC, NSW, SA) new LED lighting for

category-V applications

Australian Market • Approx. 2.3m road lights across Australia

• Up to 60% of local government energy costs and greenhouse gas

emissions attributable to road lighting

TTI’s market position • Potential market size of 2-3x intersection market

• LED offers substantial reduction in emissions and increased life

52% 43%

5%

Types of installed lighting

High PressureSodium (HPS)

MercuryVapour (MV)

Other

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MV HPS LED

Economic Benefit

Emissions Service Life (years)

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INTELLIGENT TRANSPORT

SYSTEMS

Market Size

$300m

Emergency Systems

Traffic Signals

Signage

Road Lighting

Controllers

Addressable Messaging

Communicate

Direct

Illume

Inform

Guide Instruct

•Through State of the art Emergency Roadway Systems Communicate

• Traffic through energy efficient, long lasting LED traffic signals Direct

• Motorists, cyclists and pedestrians through the use of static signage on roadways and public spaces Guide

• Illuminating roadways and public spaces to the highest standards with state of the art LED technology Illume

• Traffic signals to change phase and coordinate the phase changes that occur between the relationship to other nearby intersections and signals or to pedestrian buttons

Instruct

• Motorists, cyclists and the public of traffic hazards ahead of the current position for continual flow and management of roadways Inform

QTC acquisition was the missing piece within the Intelligent Transport Systems (ITS) Sector

• ITS are advanced applications which aim to make safer, more coordinated and smarter use of roadways

• ITS uses information and communication technology to manage traffic flows

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QTC ACQUISITION

Acquisition of Quick Turn Circuits (QTC)

• Completed acquisition of QTC in December 2013

• Purchase Price $4m – consists of business, inventory and IP

• Expected to be earnings accretive in 2014

QTC Traffic Solutions

• Sydney based manufacturer of SCATS* based traffic controllers**

• Established in 1995

• TTI has been distributing QTC controllers in VIC since 2010

• Export opportunities to 27 countries with SCATS systems

Strategic Rationale of QTC acquisition

• Expansion of intersection product range

• Opens up new export markets for TTI’s existing SCATS

accredited products

• Acquisition of IP will negate substantial R&D costs of developing

a controller and time associated with obtaining accreditation

* SCATS (Sydney Coordinated Adaptive Traffic System) is a fully adaptive urban traffic control system that optimises traffic flow. The system is recognised worldwide as an intelligent

transport system and has been deployed to over 35,000+ intersections in 27 countries.

** Traffic controller is an automated device that regulates the sequencing and timing of traffic signals by monitoring vehicular and pedestrian demands and adjusting to meet these

requirements. The controller has the ability to allow co-ordination of traffic flows between adjacent intersections when connected to a co-ordinated adaptive traffic system.

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TECHNICAL PRODUCTS:

POSITIONED FOR GROWTH

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After years of investment and development we now have four areas of growth that are beginning to contribute to earnings

Intersection Products Road Lighting

• Dominant position in traffic

lights

• QTC acquisition enables

complete package to be

offered

• Medium term outlook

underpinned by NSW signals

upgrade project (up to $25m

over 30 months ending late

CY’15)

• Further upgrade projects with

~35% of Australian

intersections still utilising old

technology

• Well positioned to win further

large scale project work in

coming years

Australia & NZ

• QTC acquisition opens up

further export markets - 27

countries using SCATS

London market alone has

~6,000 intersections: Already supplying

countdown timers

Appointed to panel to supply traffic intersection products

Export markets

• Road lighting market in

Australia estimated to be 2-3x

intersection market

• Agreement with Rexel to

manufacture and supply a

range of traditional road

lighting products for

distribution through Rexel’s

branch network across

Australia

Conventional

• Developing Category V & P

LED luminaires

• Initial focus on Category V:

− Trials conducted on roads in

SA, VIC and NSW

− First commercial sales on a

trial basis in SA

− Formal approval in SA, VIC

and NSW expected in the

near term

LED

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DISCLAIMER

This document has been prepared by Traffic Technologies Ltd (TTI) and comprises written material/slides for a presentation

concerning TTI.

The presentation is for information purposes only and does not constitute or form part of any offer or invitation to acquire, sell or

otherwise dispose of, or issue, or any solicitation of any offer to sell or otherwise dispose of, purchase, or subscribe for, any

securities, nor does it constitute investment advice, nor shall it or any part of it nor the fact of its distribution form the basis of, or

be relied on in connection with, any contract or investment decision.

Certain statements in this presentation are forward looking statements. You can identify these statements by the fact that they use

words such as “anticipate”, “estimate”, “expect”, “project”, “intend”, “plan”, “believe”, “target”, “may”, “assume” and words of similar

import. These forward looking statements speak only as at the date of this presentation. These statements are based on current

expectations and beliefs and, by their nature, are subject to a number of known and unknown risks and uncertainties that could

cause the actual results, performances and achievements to differ materially from any expected future results, performance or

achievements expressed or implied by such forward looking statements.

No representation, warranty or assurance (express or implied) is given or made by TTI that the forward looking statements

contained in this presentation are accurate, complete, reliable or adequate or that they will be achieved or prove to be correct.

Except for any statutory liability which cannot be excluded, TTI and its respective officers, employees and advisers expressly

disclaim any responsibility for the accuracy or completeness of the forward looking statements and exclude all liability whatsoever

(including negligence) for any direct or indirect loss of damage which may be suffered by any person as a consequence of any

information in this presentation or any error or omission therefrom.

Subject to any continuing obligation under applicable law or any relevant listing rules of the ASX, TTI disclaims any obligation or

undertaking to disseminate any updates or revisions to any forward looking statements in these materials to reflect any change in

expectations in relation to any forward looking statements or any change of events, conditions, or circumstances on which any

statement is based. Nothing in these materials shall under any circumstances create an implication that there has been no

change in the affairs of TTI since the date of this presentation.

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