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INVESTOR PRESENTATION
THIRD QUARTER 2011
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Forward-looking statements
This presentation contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Forward-looking information may include, but is not limited to, information with respect to the developments in Avigilon’s operations in future periods, the adequacy of Avigilon’s financial resources, costs and timing of development and Avigilon’s executive compensation approach and practice. Wherever possible, words such as “plans”, “expects” or “does not expect”, “budget”, “scheduled”, “estimates”, “forecasts”, “anticipate” or “does not anticipate”, “believe”, “intend” and similar expressions or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, have been used to identify forward-looking information.
Forward-looking information is subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those expressed or implied by the forward-looking information, including, without limitation, those described under “Risk Factors” in the Prospectus and the following: reduced spending by the Corporation’s customers that result from changes in spending policies or budget priorities; the Corporation’s ability to manage risks inherent in foreign operations; the Corporation’s ability to protect its brand; the Corporation’s ability to obtain products and parts from suppliers on a timely basis and on favorable terms; the Corporation’s ability to manage its manufacturing and logistical services successfully; the reliability of product manufacturing and assembly and logistical services provided by third parties; possible changes in the demand for the Corporation’s products; the Corporation’s ability to successfully execute its business strategies; the Corporation’s ability to establish new relationships and to build on its existing relationships with integrators and dealers; and the Corporation’s ability to manage cash flow, foreign exchange risk and working capital.
This list is not exhaustive of the factors that may affect any of the Corporation’s forward-looking information. Although Avigilon has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Forward-looking information involves statements about the future and is inherently uncertain, and Avigilon’s actual achievements or other future events or conditions may differ materially from those reflected in the forward-looking information due to a variety of risks, uncertainties and other factors, including, without limitation, those referred to in the Prospectus under the heading “Risk Factors” and elsewhere in the Prospectus. Avigilon’s forward-looking information is based on the beliefs, expectations and opinions of management on the date the statements are made, and the Corporation does not assume any obligation to update forward-looking information, whether as a result of new information, future events or otherwise, other than as required by applicable law. For the reasons set forth above, prospective investors should not place undue reliance on forward-looking information.
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Avigilon Corporation
COMPANY
Product: High definition video surveillance systems
Head office: Vancouver, BC
Revenue (TTM): $51 million
Founded: 2004
STOCK
TSX ticker: AVO
Shares O/S: 30.8 million
Recent range: $3.95–$4.90
Market cap: ~$130 million
I.P.O.
Completed: Nov. 8, 2011
Treasury offering: $20 million
Secondary offering: $5 million
Issue price: $4.50
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Security concerns are growing around the world
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Demand for surveillance systems increasing
Source: “The Video Surveillance Market,” ABI Research, 2010
• Public security
• Theft prevention
• Liability management
• Greater efficiency
• Asset monitoring
• Regulatory compliance2011 2015
$16B
$29B
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AIRPORTS
OFFICES
SCHOOL CAMPUSTRANSPORTATIONCASINOSLAW ENFORCEMENT& PRISONS
BANKSRETAIL
CRITICAL INFRASTRUCTUREHOSPITALSSTADIUMS
PORTS
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>80%of video surveillance systems sold today are still analog/digital hybrid
is ideal for today’s needs
Source: ABI Research
HD7
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Conditions for HD to overtake analog
Cost
Compatibility
Ease of Integration
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Avigilon has the complete solution
• First and only 29 MP HD camera – replaces 95 conventional cameras
• Widest range of multi-MP cameras
• Visually lossless reproduction
• Lower bandwidth/ storage requirements
• Easy to use, live/recorded viewing
• Quick image retrieval
HD CAMERAS HD STORAGE CONTROL CENTER SOFTWARE
PROPRIETARY SOFTWARE
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Avigilon’s advantage: HDSM(High-Definition Stream Management)
Visually lossless compression
Bandwidth-optimized transmission
Intelligent image capture & storage
Conventional transmission
Limited storageLossy compression
The full HD image
Very little image info left
HDSM preserves complete image integrity:
Conventional systems compress data and degrade the image:
Visually lossless compression
Bandwidth-optimized transmission
Intelligent image capture & storage
Conventional transmission Limited storageLossy compression
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Key benefits of the Avigilon system
• Unmatched image quality
• Easier installation
• Ease of use
• Scalability
• Compatible with legacy infrastructure
• Lower bandwidth/storage requirement
• Fewer cameras needed
• Competitive price
Superior image detailand value
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ASSOCIATED BRITISH PORTS
more efficient monitoring of ports
$10$10MMOKLAHOMA COUNTY DETENTION CENTER
saved annually
75%75%EXEMPLA MEDICAL CENTER
decrease in investigation times
75%75%SELMA, ALABAMARESIDENTIAL BUILDING
drop in criminal reports 35%35%
M.M. ROBERTS STADIUM
reduction in personnel
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minutes faster response time
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Effective distribution model
Sell through security equipment dealers and integrators
• >800 active relationships
• Deployed in >80 countries
• Top dealers in each market
>160,000camera and software
licenses installed at over
10,000customer sites
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FINANCIAL REVIEW
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Revenue
$ Millions CDNYear-end Dec. 31
5.2
16.9
32.3
0.2
148%CAGR
2007 2008 2009 2010
International
North America
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Year-to-date revenue
$ Millions CDNNine months ended June 30
41.2
22.1
86%GROWTH
2011
Q2
Q1
2010
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Net income
$ Millions CDN
FY/09 FY/10 YTD/10 YTD/11
0.0
1.5
1.0
2.2
Year ended Dec. 31 Nine months ended Sept. 30
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Attractive business model
• Large software component
• Ownership of intellectual property
• Manufacturing costs under our control
• Efficient sales model
>40%Gross margin
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Growth strategy
Accelerated product innovation• Release more new products
• Additional enhancements to existing products
Expand sales capabilities• Add personnel in new territories
• Open additional branch offices
Build awareness through branding & marketing•Increase participation in industry trade shows
•Targeted marketing to decision-makers in key verticals
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Our Vision
To become the world’s largest supplier of video surveillance systems.
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Executive Management Team
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Board of Directors
ALEXANDER FERNANDESChairman
President & CEO, Avigilon
WAN JUNG CFO, Avigilon
HARRY JAAKO President, Discovery Capital Management Corp
Director, TMX Group
Chairman, Paradigm Environmental Technologies
BRUCE MARGINSON President, Fusion Security Inc.
MURRAY TEVLIN Lawyer,TevlinGleadle
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Security Sales & Integration Magazine 2009One of the “Top 30 Technology Innovations”
GSN Homeland Security Award 2010 Most effective Municipal or County Security Program, Project or Agency, 2010
Red Herring Global 2010 One of the top 100 private companies in the world
Track record of innovation & leadership
Deloitte Technology Fast 500Fastest-growing software company in North America (#4 overall)
Frost & Sullivan 2010 Global New Product Innovation Award – video surveillance market
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large, growing market
strong momentum
complete, end-to-end surveillance system