factors” risk risk factors” · source: “the video surveillance market,” abi research, 2010...

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1 INVESTOR PRESENTATION THIRD QUARTER 2011 2 Private and confidential 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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Page 1: Factors” Risk Risk Factors” · Source: “The Video Surveillance Market,” ABI Research, 2010 • Public security • Theft prevention • Liability management • Greater efficiency

1

INVESTOR PRESENTATION

THIRD QUARTER 2011

2Private and confidential

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.

Page 2: Factors” Risk Risk Factors” · Source: “The Video Surveillance Market,” ABI Research, 2010 • Public security • Theft prevention • Liability management • Greater efficiency

3Private and confidential

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

4Private and confidential

Security concerns are growing around the world

4

Page 3: Factors” Risk Risk Factors” · Source: “The Video Surveillance Market,” ABI Research, 2010 • Public security • Theft prevention • Liability management • Greater efficiency

5Private and confidential

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

6Private and confidential

AIRPORTS

OFFICES

SCHOOL CAMPUSTRANSPORTATIONCASINOSLAW ENFORCEMENT& PRISONS

BANKSRETAIL

CRITICAL INFRASTRUCTUREHOSPITALSSTADIUMS

PORTS

6

Page 4: Factors” Risk Risk Factors” · Source: “The Video Surveillance Market,” ABI Research, 2010 • Public security • Theft prevention • Liability management • Greater efficiency

7Private and confidential

>80%of video surveillance systems sold today are still analog/digital hybrid

is ideal for today’s needs

Source: ABI Research

HD7

8Private and confidential

Conditions for HD to overtake analog

Cost

Compatibility

Ease of Integration

Page 5: Factors” Risk Risk Factors” · Source: “The Video Surveillance Market,” ABI Research, 2010 • Public security • Theft prevention • Liability management • Greater efficiency

9

10Private and confidential

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

Page 6: Factors” Risk Risk Factors” · Source: “The Video Surveillance Market,” ABI Research, 2010 • Public security • Theft prevention • Liability management • Greater efficiency

11Private and confidential

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

12Private and confidential

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

Page 7: Factors” Risk Risk Factors” · Source: “The Video Surveillance Market,” ABI Research, 2010 • Public security • Theft prevention • Liability management • Greater efficiency

13Private and confidential

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

3030VANCOUVER 2010 OLYMPICS

minutes faster response time

13

14Private and confidential

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

Page 8: Factors” Risk Risk Factors” · Source: “The Video Surveillance Market,” ABI Research, 2010 • Public security • Theft prevention • Liability management • Greater efficiency

15

FINANCIAL REVIEW

16Private and confidential

Revenue

$ Millions CDNYear-end Dec. 31

5.2

16.9

32.3

0.2

148%CAGR

2007 2008 2009 2010

International

North America

Page 9: Factors” Risk Risk Factors” · Source: “The Video Surveillance Market,” ABI Research, 2010 • Public security • Theft prevention • Liability management • Greater efficiency

17Private and confidential

Year-to-date revenue

$ Millions CDNNine months ended June 30

41.2

22.1

86%GROWTH

2011

Q2

Q1

2010

18Private and confidential

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

Page 10: Factors” Risk Risk Factors” · Source: “The Video Surveillance Market,” ABI Research, 2010 • Public security • Theft prevention • Liability management • Greater efficiency

19Private and confidential

Attractive business model

• Large software component

• Ownership of intellectual property

• Manufacturing costs under our control

• Efficient sales model

>40%Gross margin

20Private and confidential

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

Page 11: Factors” Risk Risk Factors” · Source: “The Video Surveillance Market,” ABI Research, 2010 • Public security • Theft prevention • Liability management • Greater efficiency

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22Private and confidential

Our Vision

To become the world’s largest supplier of video surveillance systems.

Page 12: Factors” Risk Risk Factors” · Source: “The Video Surveillance Market,” ABI Research, 2010 • Public security • Theft prevention • Liability management • Greater efficiency

23Private and confidential

Executive Management Team

24Private and confidential

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

Page 13: Factors” Risk Risk Factors” · Source: “The Video Surveillance Market,” ABI Research, 2010 • Public security • Theft prevention • Liability management • Greater efficiency

25Private and confidential

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

2626Private and confidential

large, growing market

strong momentum

complete, end-to-end surveillance system