Announcement PDF Investor Presentation 18 August 2021 Chris Tait, Executive Chair James Cody, Chief Financial Officer PG.1 FY21 Summary Chris Tait, Executive Chair PG.2 FY21 Summary Key Highlights Sales • Record FY21 revenue of $78.6m, up 77% on pcp1 (FY20: $44.4m) • Strong growth driven by rapid adoption of ProRes RAW and new product launches Margin • Gross profit of $37.4m (47.6%), up significantly on pcp (39.8%) • Driven by less promotional activity, new product launches and supplier management EBITDA • EBITDA2 of $8.2m (FY20: -$7.1m) • EBITDA margin of 10.4% Cash • Generated $7.1m of cash – represents an 87% cash conversion Strong Balance Sheet • $26m of cash (FY20: $19m) and access to $5m working capital facility 1 Previous corresponding period 2 Includes one-off gain of $0.47m resulting from the renegotiation of the Melbourne head office lease PG.3 Summary Atomos Overview • Whole of business review: structure, cost base, processes • Leaner, stronger, more efficient • Captured the video growth phenomenon across all market segments External Factors • Video growth phenomenon • Forex – EBITDA natural USD hedge but revenue influenced • Component supply – tight management, buffer inventory Organisation • Build management capability • Harness / protect entrepreneur-led innovation heritage Investing for Growth • New silicon platforms and technologies • Direct customer engagement • Exploring new markets – gaming, corporate, pro-AV, etc. Outlook • Sales momentum is continuing • EBITDA margin trending towards 12-15% with operational leverage PG.4 FY21 Revenue Analysis Revenue by Market Segment / Region ($m) Revenue ($m)1 53.7 FY20 78.6 FY21 31.4 54.0 45.8 18.7 44.4 31.1 16.7 35.6 29.7 9.6 11.8 1H 17.3 14.4 18.4 FY17 FY18 +96% 24.2 32.6 32.8 FY19 FY20 FY21 2H Social +71% Pro Video +82% Entertainment 34.7 • Record revenue of $78.6m driven by multiple ProRes RAW camera implementations and new product launches 26.5 • Pro Video performed strongly (+71%) with excellent growth from emerging Social (+96%) and Entertainment (+82%) markets • Australian company with global presence growing strongly across all regions 6.2 3.4 19.7 17.4 14.1 10.5 • Appreciation of the AUD over the year impacted sales by ~$6m 24% 1 1H17, 2H17, 1H18 & 2H18 Unaudited 22% APAC 32% 34% EMEA 44% 44% US PG.5 Financial Review James Cody, CFO PG.6 FY21 Financial Summary Year Ending 30 June 2021 Margin • Higher margin from new products • Reduced promotional discounting • Procurement gains Costs • Variable costs in line with revenue • Lack of tradeshows drove cost savings • Investment for growth and scale • R&D investment of $5m Earnings • EBITDA margin (pre R&D) of 16.8% • EBITDA margin of 10.4% • Maiden NPAT of $4.2m (FY20: -$12.2m) Balance Sheet & Cash • Cash flow positive: $7.1m, 87% conversion • Strong balance sheet with $26m of cash • Significant tax losses available PG.7 FY21 Earning Analysis EBITDA ($m) 15.0 Gross Margin 5.1 10.0 1.1% (2.3) 47.6% 13.6 2.4% 0.4 8.2 Fixed Cost FY21 (2.5) 5.0 1.3% 4.1% (0.0) 39.8% (5.0) (1.0%) (7.1) (10.0) FY20 FX Impact Product Mix Pricing Procurement Tariffs Margin improvement from: • Impact of strengthening AUD (-1%) • Improved margin across all products (inc. software): 4.1% • Pricing improvement due to reduced promotional discounting: 1.3% • Procurement gains: 2.4% • Relaxation of the initial US import tariffs: 1.1% FY21 FY20 Revenue Margin Var. Costs STI Cost • 77% growth in revenue and 7.8% lift in gross margin percentage drove $20m of the overall EBITDA improvement • Variable cost increase in line with revenue growth • Trade show savings funded fixed cost base investment for growth • Reported EBITDA of $8.2m: 10.4% EBITDA margin • COVID recovery STI impacted EBITDA by 3.2% and with ongoing profitability the STI will decrease as a % PG.8 FY21 Cost Management Monthly Fixed Costs ($m) Cost Structure ($m) 2.3 2.0 Sales 100% COGS 52% $5m / month breakeven 1.6 1.0 Pre COVID COVID low Post COVID Vaiable costs 8% GP (ex var costs) 40% Jun 21 Run Rate Fixed costs $2m / month run-rate • Following the significant cost-cutting that took place during the initial COVID impact, the business has been re-investing throughout FY21 to enable ongoing growth and scale • We will continue to cautiously re-invest in our cost base during FY22 to support our continued growth PG.9 FY21 Financials - Pro Forma Income Statement Pro Forma (A$m) FY20 FY21 Δ pcp1 Revenue 44.4 78.6 77% COGS (26.7) (41.2) (54%) 17.7 37.4 111% 39.9% 47.6% Variable Operating Expense (3.5) (5.8) (66%) Wages & Salaries (8.7) (12.9) (48%) Marketing (4.6) (2.5) 46% General & Administration (4.8) (3.9) 19% Other 0.4 0.9 125% Operating Expenses (21.2) (24.2) (14%) EBITDA (pre R&D) (3.5) 13.2 $16.7m R&D Expenses (3.8) (5.0) (32%) EBITDA2 (7.3) 8.2 $15.5m Depreciation & Amortisation (3.8) (3.2) 16% EBIT2 (11.1) 5.0 $16.1m Tax and Interest (1.1) (0.8) 27% (12.2) 4.2 $16.4m Gross Profit Gross Profit Margin NPAT2 1 Previous corresponding period 2 Includes one-off gain of $0.47m resulting from the renegotiation of the Melbourne head office lease PG.10 FY21 Financials - Pro Forma Balance Sheet Pro Forma (A$m) Key Insights 30 Jun '20 30 Jun '21 Cash and cash equivalent 18.8 26.0 • Strong balance sheet with $26m of cash at 30 June 2021 Trade and other receivables 4.7 12.8 Inventories 16.8 16.6 • Receivables increase a reflection of much higher sales in Q4 vs pcp Other assets 2.3 5.2 Plant and equipments 2.6 2.4 Right of use asset 8.9 3.0 Intangible assets 25.1 25.2 Total assets 79.2 91.2 Trade and other payables (10.7) (21.9) Borrowings (0.1) 0.0 Provisions (0.9) (1.5) Lease liabilities (9.4) (3.2) Deferred tax liability (1.0) (0.9) (22.1) (27.5) Net assets 57.1 63.7 Issued capital 101.5 101.7 1.0 3.1 (45.4) (41.1) 57.1 63.7 Total liabilites Reserves Accumulated losses Equity • Renegotiation of head office lease drove reduction in right of use asset and lease liabilities • Higher payables reflective of growth in orders to build depth of inventory • $35m of tax losses and R&D tax credits unrecognized and available to offset future tax payable (after $7m of losses utilised in respect of FY21) PG.11 Group Strategy & Outlook Chris Tait, Executive Chair PG.12 Our Strategic Pillars Our mission is to combine our own deep video tech with that of other great video tech companies, to build products, services and an ecosystem that democratises content creation for everyone. Accessible, affordable, intuitive products & services Our Mission Deep Video Tech Partnerships with world’s best video tech cos. PG.13 Who are our customers? …Social… PG.14 Our Pro-Video Customer PG.15 Our Entertainment Customers PG.16 FY21 Revenue Growth Highlights New standards & new products drove record sales Rapid adoption of ProRes RAW ProRes RAW Enabled Camera Market • The standard driven by AMS and Apple partnership • Oscar & Emmy awarded Apple video format launched in 2018 enabled cameras • 10 major camera partners have now embraced the RAW ecosystem Monthly ProRes RAW Activations • Monthly activations of ProRes RAW increased sevenfold in 18 months • RAW enabled cameras increased by 200% in 18 months • Supported by major video editing platforms (Adobe, Avid & Apple) New Product Launches (Devices) • Ninja V+ - world’s first 8K and high frame rate monitor recorder • Ninja Stream - provides multiple on-set streaming options • Shinobi 7 - 7” monitor added to extremely popular Shinobi range • AtomX Cast – turns the Ninja into a standalone multi-camera production device New Product Launches (Software) • RAW over SDI enabled for Ninja V via USD 99 software upgrade • Ninja V enabled for H.265 video codec via USD 99 software upgrade 489 12 12 12 13 19 22 22 24 26 28 29 32 32 33 35 35 39 47 PG.17 FY21 Operational Highlights As we made savings in FY21 we ensured that we continued to invest in the right areas to drive future growth Next Generation Platforms • Increased engineering headcount (~$2m/annum) to develop next generation 8K30 silicon and product range upgrade • Series 2 platform built on AtomIC 3 - products to launch through late FY22 / early FY23 • Continue development of 8K60 silicon (~$1m/annum) Customer engagement • Re-aligned marketing expenditure (trade show cost savings refocused to direct customer engagement): • Atomos Academy and MyAtomos • Instagram: 116k (+20% YoY), Facebook: 35k (+10%), Twitter: 18k (+10%), YouTube: 20k (+33%) • CRM: captured data on 112k customers (+44%) • EDM open rates: 40% (industry standard: ~20%) and click through: 5% (industry standard: ~2.5%) New markets • ~$1m/annum investment in targeting entry into new markets such as gaming, corporate and pro AV PG.18 FY22 Outlook Demand for high quality video creation, consumption and delivery is growing • Core pro video market growing at ~70% (corporate events, streaming, etc) • YouTube viewers watch over one billion hours of videos on the platform every single day • 207m Netflix subscribers (+40% over 2 years) • 6.3b Twitch viewing hours in Q1 2021 (+125% over 2 years) • Zoom’s daily meeting participants have grown from 10m in Dec-19 to 300m Apr-21 Atomos has a solid base • New products and services in the pipeline already • Will continue to invest in technology for future products and services for rapid growth • We continue to build partnerships with the world’s great technology companies • Sales momentum is continuing • EBITDA margin trending towards 12-15% with operational leverage Key risks / Upsides • Managing component supply constraints with good planning • Natural USD hedge – nevertheless, forex impact on revenue and margin % • Balancing product mix to ensure margin growth • Customer engagement investment PG.19 Outlook – Potential M&A Atomos will carefully consider acquisitions in the following areas Technology Standards Complimentary Tech New Complimentary Markets Selective businesses with an industry standard technology or which has the potential to define future standards. Businesses with great technology / capability which will accelerate Atomos own organic plans. Businesses which provide access to selective new markets: • Products • Services • Geographies PG.20 Corporate Snapshot Pricing Snapshot Major Shareholders Ticker AMS Ellerston Capital Ltd 7.2% Share Price $1.11 Regal Funds Mgmt 6.8% Shares on Issue (m) 218.5 Wilson Asset Mgmt 6.0% $242.5m Top 8 shareholders ~41% Board & Senior Management ~7% Market Capitalisation (m) Board of Directors Chris Tait Executive Chairman Megan Brownlow Non-Executive Director Stephen Stanley Deputy Chairman Lauren Williams Non-Executive Director Sir Hossein Yassaie Non-Executive Director Jeromy Young Executive & Co-Founder Share Price History Senior Management Team James Cody Chief Financial Officer Trevor Elbourne Chief Technology Officer Mark Harland Chief Operating Officer Estelle McGechie Chief Product Officer PG.21 Q&A Reminder: • Strategy update and meet the senior executive on Monday, 13 September 2021 • Address “Forum 1” at Melbourne Connect, 700 Swanston Street, Carlton and by Video-link • Register here to attend or to receive Video-link