Citadel and Tech Market Trends

April 2016

The information contained in this presentation prepared by The Citadel Group Limited (ASX:CGL) is

not investment or financial product advice and is not intended to be used as the basis for making an

investment decision. This presentation has been prepared without taking into account the investment

objectives, financial situation or specific needs of any particular person. Potential investors must make

their own independent assessment and investigation of the information contained in this presentation

and should not rely on any statement or the adequacy or accuracy of the information provided.

To the maximum extent permitted by law, none of the CGL Group of Companies, its directors,

employees or agents accepts any liability, including, without limitation, any liability arising out of fault or

negligence, for any loss arising from the use of the information contained in this presentation. In

particular, no representation or warranty, express or implied, is given as to the accuracy, completeness

or correctness, likelihood of achievement or reasonableness of any forecasts, prospects, statement or

returns contained in this presentation. Such forecasts, prospects, statement or returns are by their

nature subject to significant uncertainties and contingencies. Actual future events may vary from those

included in this presentation.

The statements and information in this presentation are made only as at the date of this presentation

unless otherwise stated and remain subject to change without notice.

Important Notice and Disclosure

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Who is Citadel 4

Example Technology & Innovation case studies 6

Technology market trends & drivers 10

Emerging future opportunities 14

Appendices 17

Contents

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Who is Citadel?

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Citadel Overview

We manage information securely anywhere-anytime-any device

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Case Studies of Our Tech Innovation

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Delivering to Government Clients Leveraging trusted provider status to deliver tangible outcomes

Chosen because of pedigree as a security specialist.

Provided an ‘end-to-end’ solution: scoping, training,

migration, integration, security & service support.

Now over 110,000 users (30,000 log in every day).

Users access and manage over 350 million electronic

objects from across the globe.

Size and complexity of this deal usually reserved for

global SIs, but in this domain we are seen as an

obvious Strategic Partner.

Enterprise Content Management Lifecycle

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Enabling complex e-health integrations Optimising service delivery in a disconnected sector

Solution includes amongst others:

Order placement and management

Positive patient identification

Specimen and Image handling

Point of care testing (POCT)

Biochemistry, microbiology and haematology

Molecular diagnostics and molecular genetics

Immunology and anatomical pathology.

Largest Australian-based LIMS supporting over 3500

laboratory staff on a 24/7 basis.

Over 25,000 daily transactions (approx. 40% of all public

hospital tests nationwide).

Leveraging this case study into other health areas.

Highly configurable lab information management

system (LIMS)

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Enabling unified collaboration Anytime-anywhere-any device

World’s largest multi-point video conferencing

deployment: entire student-teacher-staff

population can connect real-time from

anywhere using any device.

Designed and delivered through combining

proprietary software and hardware.

Integrates seamlessly with scheduling,

timetabling, audio visual and recording

solutions.

Done at significantly less cost.

Students are happier with their learning

experience.

Device and application-agnostic solution has

enabled a true “BYOD” culture.

Tech Market Trends & Drivers

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Where the Tech World is going

Overall Industry Trends

Increasing convergence [the IOTT/device mesh] and

ability to share information between devices.

Desire for mobility, functionality and Information

availability: anytime – anywhere – any device.

Unprecedented information flows resulting in big data

issues: storage, search, awareness, mass drowning.

Increasing number of competitors.

Blurring lines between individual and the corporation

in social media and apps.

‘First mover’ advantage still of benefit.

Entire approach to enterprise architectures, security

and sharing is changing.

Still a trade-off between cost, benefit and exposures.

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Where Tech World is going (2)…

Application Trends

Demand for open source, ‘plug-n-play’, or ability to

integrate with other apps.

Rise in AI, 3D, augmentation, visualisation and

immersion capabilities…all lead to disruption...

Number of competitors and applications increasing

exponentially.

Because of this proliferation, search engines,

marketplaces, app stores and social media referrals

are now the start point for awareness.

Users often ignorant of the IP or information they hand

over as part of signing up for ‘free’ apps.

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Where Tech World is going (3)…

Device Trends

Greater number of interoperable platforms and smart

sensors.

Highly commoditised at lower end.

But still a place for advanced manufacturers.

Users are happy to adopt devices if these add

perceived value.

Network Trends

Can source experts and expertise from anywhere.

Original giants predominate. Strength of their position

allows them to bundle offerings.

But more agile teams are ‘swarming’ to make rapid

advances.

Increasing criticality of securing data and identities: it

gets harder to hide and easier to steal information.

The next war is likely to be won or lost in cyberspace.

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Emerging future opportunities

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Advancing Healthcare

Advances are enabling innovations across

health ecosystem.

A data explosion, accompanied by new

processing power and cognitive technology, is

fuelling software intelligence.

Ecosystem is moving from one of sickness to

one of wellness.

Not only is it proactive, it is also personalised.

But where there’s a healthcare

advance…then issues with interoperability,

payments/processing, privacy and information

security won’t be far behind…

This is where Citadel will continue to play…

Technology is innovating faster than the marketplace

Virtual dissections

DIY biotech

Home diagnostics

Digital pathology

Opto- genetics

Semantic Health record

Nanorobots In blood

Wearable e-skins

Robotic assistants

3D printed biomaterials

AI in decision support

Virtual trials & databases

Gamification of healthcare

Digestible sensors

Remote monitoring

Anti-ageing drugs

Body part regeneration

Capability augmentation

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Federating Information

Developing next generation of Secure

Content & Collaboration.

Currently designing the prototype.

Solution combines:

o Collaboration & search via shared web front-end

o Standardised reports and templates

o Fully integrated information back-end (linking

2200 disparate document stores) and ensuring

‘single version of the truth’ always available

o Increased resilience when unreliable connectivity

o Security to operate across sensitive and

restricted networks globally

o Low bandwidth/mixed bearer solutions

o Managed service to ensure solution is always

supported.

Demonstrating ability to extend information boundaries securely

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Appendices

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1H Results:

Statutory total revenues of $46.77m (up 57%);

EBITDA of $12.61m (up 515%);

Business acquisitions, contract wins and renewals

have increased profit before income tax of $8.65m

(up 432%);

Net Profit After Tax of $5.57m (up 312%);

Cash and cash equivalent reserves remain strong at

$42.98m (up from $37.22 million in FY2015);

An increase in the balance sheet by $3.26m with net

assets of $60.25m; and,

Earnings per share 11.9 cents (up 222%).

Market data as at close 15 February 2016:

Share price up from $2.20 (15 Feb 2015) to $4.60

(up 109%);

46.7m shares on issue; and,

Market capitalisation circa $215m.

Statutory Results 1H2016 (v PCP)

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$46.77m total revenue

57%

$12.61m EBITDA

515%

$8.65m profit before

income tax

432%

$5.57m net profit

after tax

312%

11.9¢

earnings per share

222%

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People and Advisory

Integration and

Technology

Private Sector Education

Lockheed Martin Australia

Tatts Group

Australian Federal Police

Leading Australian Telco

Defence &

Secure Agencies

Australian Government

Department of Defence

Australian Government

Department of Defence

Australian Government

Department of Defence

Government

Australian Government

Solicitor

Health Sector

Big Data & Knowledge

Management

Strong Client List

Managing complexity across multiple verticals

Long-standing relationships with multiple clients providing stable revenue streams

Commentary

Only material, long-term contracts shown in the chart above.

Evidences strong track record of winning and retaining clients.

Managed service contracts prolong the average duration of client relationships.

Concurrent managed service contracts provide stable, recurring revenue streams.

All managed service contracts ongoing until at least end of 2017 (with a strong history of renewal).

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Contract 1

Contract 2

Contract 3

Contract 4

Contract 5

Contract 6

Contract 7

Contract 8

Contract 9

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Transaction highlights

Strategic rationale

Key outcomes for

CGL

Board of Directors

Mr Kevin McCann, AM

Chairman & Independent Non-Executive Director

Former Chairman of Macquarie Group and Macquarie Bank

Chairman of Dixon Hospitality Group

Partner of Allens Arthur Robinson from 1970 to 2004 and was Chairman of Partners

from 1995 to 2004

Member of the Order of Australia in 2005

Bachelor of Arts and Law (Honours) from Sydney University and Master of Law from

Harvard University

Dr Miles Jakeman

Managing Director

Managing Director since CGL’s inception

Highly skilled in business strategy, program management, security risk management

and staff development

Extensive experience working overseas with multinational companies with full P&L

responsibility

PhD Asian Studies and a PhD in Business Leadership

Lieutenant General Peter Leahy, AC (Rtd)

Independent Non-Executive Director

Retired from the Army in 2008 after a 37 year career as a soldier. He concluded his

career with a six year appointment as the Chief of Army.

Professor and foundation Director of the National Security Institute at the University of

Canberra

Member of the Australian Institute of Company Directors and has been appointed to

Boards of Codan and Electro Optic Systems Holdings

Ms Deena Shiff

Independent Non-Executive Director

Extensive executive experience in the communications industry, serving as Group

Managing Director at Telstra Corporation between 2005 and 2013

Chair of Regional Telecommunications Independent Review Committee and Sydney

Writers Festival

NED Appen, CRC Alertness Safety & Productivity, and BAI Communications

Bachelor of Science (Economics) from the London School of Economics and Political

Science and a Masters of Arts (Law) from the University of Cambridge

Mr Mark McConnell

Executive Director

Founder of New Territories Investments (NTI), a private equity fund focussed on

clients in Hong Kong and China

Experienced in acquisitions, capital raising and strategy

Member of multiple private boards and previously served on several public company

boards

BSc and MBA and is a fellow of AICD

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Company Highlights

Matrix

Organisation

Citadel operates five brands across the growing industry sectors of technology, health & education

Structure generates cross-selling opportunities and cost synergies across business segments / client base

High quality business offerings rewarded with numerous quality awards over many years

Defensive and

Diversified

Long-standing relationships with government and corporate clients providing high level of recurring revenue

Unique IP that can be leveraged further

Over 240 Panel, endorsed supplier or exclusive supplier arrangements

Trusted advisor with outstanding reputation for complex project delivery and superior outcomes

Strong

Financial

Profile

Profitable since inception with strong cash generation and dividend payment history

Revenues and EBITDA growing strongly

Strong booked pipeline of future revenue

The Company has strong cash reserves and is executing on its growth strategy

Attractive

Industry

Sectors

Large target markets with strong growth drivers

Continued opportunities as a result of strong industry fundamentals and increased outsourcing

Supportive regulatory and policy environment

Highly

Regarded

Management

& Board

Key management has deep experience in the business and hold substantial continuing investments

High-quality Board of Directors including Kevin McCann AM as Independent Chairman, Deena Shiff and Lieutenant-General Peter Leahy AC (Retd) (former Chief of Army) as Independent Non-Executive Directors

Investor/Media Inquiries

Mark McConnell, Executive Director Tel: +61 2 6124 0800 Mark.McConnell@citadelgroup.com.au Andrew Burns, Chief Financial Officer / Company Secretary Tel: +61 2 6124 0800 Andrew.Burns@citadelgroup.com.au

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