avigilon corporate presentation

© 2016, Avigilon Corporation. All rights reserved. No license is granted with respect to any copyright, industrial design, trademark, patent or other IP rights of Avigilon or its licensors.

Corporate Presentation | August 2016

All amounts in US$ unless otherwise stated


August 2016 | page 2

Certain information and statements in this presentation, including all statements that are not historical facts, contain and constitute forward-looking information or forward-looking statements as defined under applicable securities laws (collectively, “forward-looking statements”). Forward-looking statements normally contain words like ‘believe’, ‘expect’, ‘anticipate’, ‘plan’, ‘intend’, ‘continue’, ‘estimate’, ‘may’, ‘will’, ‘should’, ‘ongoing’, and similar expressions and, within this presentation include, without limitation, any statements (express or implied) respecting: Avigilon’s mission, strategies, and objectives; projected growth, revenues (including the annual run rate goal), expenses, capital expenditures, and earnings; trends, opportunities, growth (including projected growth of the global video surveillance and access control market), and Avigilon’s competitive advantages within its industry; Avigilon’s plans to consider acquisitions; Avigilon’s product and research and development plans; product functionality, suitability, and performance; potential cost reductions; the addition and retention of personnel; the expansion of Avigilon’s sales reach; increases to brand and market penetration; strategies respecting intellectual property protection; the strength and projected growth of Avigilon’s intellectual property portfolio; the outlook for and strategies respecting the Avigilon Patent Licensing Program; and the expansion, development, and adequacy of Avigilon’s manufacturing and other real property facilities. Forward-looking statements, are provided for the purpose of presenting in formation about management's current expectations and plans relating to the future and allowing investors and others to get a better understanding of our anticipated financial position, results of operations, and operating environment. You are cautioned that such information may not be appropriate for other purposes. Forward-looking statements are not guarantees of future performance, actions, or developments and are based on expectations, assumptions, and other factors that management currently believes are relevant, reasonable, and appropriate in the circumstances. The material expectations, assumptions, and other factors used in developing the forward-looking statements set out herein include or relate to the following, without limitation: assumptions regarding Avigilon’s business, products, financial position, and industry; and those assumptions discussed in detail in Avigilon’s Annual Information Form dated March 1, 2016 (the “AIF”) and most recent Management’s Discussion and Analysis, each of which is available under Avigilon’s profile on SEDAR at www.sedar.com. Although management believes that the forward-looking statements are reasonable, actual results could be substantially different due to the risks and uncertainties associated with and inherent to Avigilon’s business, as more particularly described in the “Risk Factors” section of the AIF. Additional material risks and uncertainties applicable to the forward-looking statements set out herein include, but are not limited to, unforeseen events, developments or factors causing any of the aforesaid expectations, assumptions, and other factors ultimately being inaccurate or irrelevant. Although Avigilon has attempted to identify important factors that could cause actual actions, events, or results to differ materially from those contained in any forward-looking statement, there may be other factors that cause actions, events, or results not to be as anticipated, predicted, estimated, or intended. Also, many of the factors are beyond the control of Avigilon. Accordingly, readers should not place undue reliance on forward-looking statements. Avigilon undertakes no obligation to reissue or update any forward-looking statements as a result of new information or events after the date hereof except as may be required by law. All forward-looking statements contained in this presentation are qualified by this cautionary statement.© 2016, Avigilon Corporation. All rights reserved. AVIGILON, the AVIGILON logo, HIGH DEFINITION STREAM MANAGEMENT (HDSM), and TRUSTED SECURITY SOLUTIONS are trademarks of Avigilon Corporation. Other product names mentioned herein may be the trademarks of their respective owners. The absence of the symbols ™ and ® in proximity to each trademark in this document is not a disclaimer of ownership of the related trademark. Avigilon Corporation protects its innovations with patents issued in the United States of America and other jurisdictions worldwide: www.avigilon.com/patents. Unless stated explicitly and in writing, no license is granted with respect to any copyright, industrial design, trademark, patent or other intellectual property rights of Avigilon Corporation or its licensors.*NON-IFRS MEASURES - Management uses certain non-International Financial Reporting Standards (“IFRS”) measures that it believes are useful to investors in evaluating the performance and results of Avigilon. The term “Adjusted EBITDA” refers to earnings before deducting interest, taxes, depreciation, amortization, foreign exchange gain or loss, business acquisition-related costs, restructuring costs, non-recurring legal costs, non-recurring lease termination costs, and share-based payments. Management believes that Adjusted EBITDA is a useful measure as it provides an indication of the operational results of the business prior to taking into consideration how those activities are financed and taxed and also prior to taking into consideration asset amortization, foreign exchange gain or loss, business acquisition-related costs, restructuring costs, non-recurring legal costs, non-recurring lease termination costs, and share-based payments. Management also believes that analyzing operating results exclusive of significant non-cash and non-recurring items provides a useful measure of the Avigilon’s performance. The term “Adjusted Earnings” refers to net earnings before share-based payments, foreign exchange gain or loss, business acquisition-related costs, financing costs, restructuring costs, non-recurring legal costs, non-recurring lease termination costs, amortization of acquired intangibles and related tax effects. Please refer to the reconciliation table that accompanies Avigilon’s Q1 2016 financial statements and associated management’s discussion and analysis, which are available under Avigilon’s profile on SEDAR at www.sedar.com. Adjusted EBITDA and Adjusted Earnings do not have standardized meanings prescribed by IFRS and are not necessarily comparable to similar measures provided by other companies. Investors are cautioned that Adjusted EBITDA and Adjusted Earnings should not be construed as an alternative to operating income or net income determined in accordance with IFRS as an indicator of Avigilon’s financial performance or as a measure of its liquidity and cash flows.This presentation includes content supplied by IHS Global Inc. (“IHS”); Copyright © IHS Global Inc., 2016. The use of this content was authorized in advance by IHS. Any further use or redistribution of this content is strictly prohibited without written permission by IHS. All rights reserved. No representation or warranty, expressed or implied, is or will be made in relation to, and no responsibility or liability is or will be accepted by IHS as to or in relation to, the accuracy, reliability, or completeness of this information and IHS expressly disclaims any and all responsibility or liability for the accuracy, reliability and completeness of such information. Such information has been prepared as at a particular date and there is no obligation for IHS to update such information.

Disclaimers

http://www.sedar.com/

http://www.avigilon.com/patents

http://www.sedar.com/


Be the world’s most trusted

security solutions company

Our Mission



Avigilon at a Glance

Trusted Security Solutions™Avigilon designs, develops, and manufactures video analytics,

network video management software and hardware, surveillance cameras, and access control solutions.

2015 Sales of ~$287.6M with ~65% in North America (USA + Canada)

2011 - 2015 Revenue CAGR of ~48%

Customers in over 120 countries

Installed in more than 60,000 end-users

>2,000 active resellers

>650 patent assets

2011 - 2015 Adjusted EBITDA* CAGR of ~66%

2015 Adjusted EBITDA* of ~$51.3M

Market Cap CAD $550M

Ticker Symbol TSX: AVO

* Refer to Non-IFRS Measures set out on page 2 hereof.

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRxqFQoTCNOgopDitsgCFQVuPgodYloPVw&url=http://escc-ksa.com/&psig=AFQjCNGi4H2k0RAInltXlRJaIeY9GZtjcg&ust=1444527417158287

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRxqFQoTCNOgopDitsgCFQVuPgodYloPVw&url=http://escc-ksa.com/&psig=AFQjCNGi4H2k0RAInltXlRJaIeY9GZtjcg&ust=1444527417158287



Highlights

1 Large and growing market

2 Market and technology leader

3 Complete security solutions & differentiated channel strategy

4Recently launched Avigilon Patent License Program provides high margin recurring revenue

5 Diversified customer base

6 Strong management team

7Proven strategy with rapid revenue growth and demonstrated operating leverage



Security Needs are Everywhere

STADIUMS HEALTH CARE CRITICALINFRASTRUCTURE

AIRPORTS LOGISTICS RETAIL

BANKS COMMERCIAL CITY SURVEILLANCE CASINOS PUBLIC TRANSIT EDUCATION



Advanced Video Surveillance and Analytics Solutions

Video Analytics

Video Management Software (VMS)

Network Video Recorders (NVR)

IP Cameras (1MP upto 30MP)

Analog Encoders

Access Control

H4 Edge Solution (All-in-one Internetof Things surveillance solution)



Public safety

Asset protection

Liability management

Regulatory compliance

2016E 2020E

$20B

$25B

Source: IHS Global Inc., 2016

Global Video Surveillance and Electronic Access Control

Large and Growing Market



The Video Surveillance Market is Evolving

Analog Cameras

1990 2000 20162010

VCR

TV

Analog Cameras

DVR

Monitor

HD Cameras

NVR

Computer & Mobile

Devices

HD Cameras (Avigilon 7K)

Real-Time Alerts/Access

Control

Computer & Mobile Devices

Video Analytics(Avigilon Appearance Search)

NVR



Video Analytics - the Future of our Industry

Industry-leading analytics:o Transforms video from reactive to proactiveo Intelligent self-learning security solutionso Plug and play

Examples:o Person and object identificationo Perimeter protectiono Anomaly detectiono Behavior recognitiono License plate recognitiono Advanced search



Key Video Analytics Patents

Foundational industry patents

> 650 international patent assets o Video Analytics

o Metadata

o Video Tripwire

o Video Segmentation

o Retail Point-of-Sale Integration

o Object Inserted/Removed

o Automated License Plate Recognition

o Access Control

o Firmware Upgrading

Patents help protect us from infringement by other company’s products and form part of our sustainable competitive advantage



Strong Patent Portfolio Generating Recurring Revenue

Major industry Licensees in the Avigilon Patent License Program include, among others:o 3VR Security, Inc.

o ACTi Corporation

o Agent Video Intelligence Ltd.

o Aimetis Corp.

o Bosch Security Systems, Inc.

o FLIR Systems, Inc.

o Hangzhou HikvisionDigital Technology Co., Ltd.

o i3 International Inc.

o Illisis,Inc.

o IntelliVisionTechnologies Corp.

o IQrity Inc.

o ITX Security Co., Ltd.

o IVS Technology Co., Ltd.

o Luxriot (A&H Software House, Inc.)

o March Networks Corporation

o Merit LILIN Ent. Co., Ltd.

o Pelco, Inc.

o SensormaticElectronics, LLC

o Sony Corporation

o TopviewOptronics Corp.

o UDP Technology Ltd.

o VIVOTEK Inc.

The Avigilon Patent License Program provides a high margin recurring revenue stream



Global Organization Global Headquarters

o Vancouver, Canada US Headquarters

o Dallas, USA Manufacturing & Fulfilment Centers

o Vancouver, Canadao Plano, USAo Amsterdam, Netherlands

Global Reseller Networko >2,000 active resellers

Global Sales Teamo Regional sales teams selling in > 120 countries

Full-time personnelo >1,100 globally

Regional Offices North America

o Bostono Washington, DC

Europeo Lisbono London o Milan

Asiao Dubaio Singapore



Manufacturing Advantage

US and Canadian Manufacturing Facilities:o production capacity of over $1 Billion in annual

revenue

Key Advantages:o higher quality control o rapid and lower cost prototypingo shorter delivery lead timeso greater IP protection

Fully automated high-speed Surface Mount Technology (SMT) lines

Multi-product assembly lines



Delivering Greater ROI for Customers

Improved securityo Proactive vs Reactive

More valueo H4 Edge Solution

combines camera, video analytics, video management software, and solid state hard drive storage in a cost effective all-in-one device

o Business intelligence provides operational efficiencies

Lower Total Cost of Ownership

Higher Quality and Performance

Industry-Leading Analytics Capabilities

Lower deployment costso Less hardware

o Less software

o Less labor

High Definition Stream Management (HDSM)TM

o Patented technology

o Reduces bandwidth

Superior customer supporto Single point of contact Vertically integratedo In-house design,

development, and manufacturing

Fully integratedo Video surveillance, access

control, and video analytics Open platformo Integrates with third party

products



High Quality and Diversified Customer Base

Q2 2016 Revenue Breakdown by GeographySelect Case Studies

UnitedStates60%

EMEA25%

Canada6%

AsiaPacific

6%

LatinAmerica

3%

Select Markets & Clients

Rogers CentreStadiums

Salop Design & EngineeringBusiness Intelligence

GripponRetail

San Diego Metro Transit SystemPublic Transit

LaSalle PlazaCommercial

University of SydneyEducation

Pan Nordic Logistics Logistics

The Point CasinoCasinos

Tampere City Department of Social Services and Health CareHealth Care

Timmins Police ServiceLaw Enforcement

City of YerevanCity Surveillance

Whistler BlackcombRecreational Facilities

Aguas do MondegoSACritical Infrastructure

King AbdulazizInternational AirportAirports



Growth Strategy - Proven and Successful

Into emerging marketso APAC and LATAM

Increase coverage in established marketso NA and EMEA

Grow Business Development Department

Expanded trade show presence

Focused marketing initiatives

Strategic advertising

R&D teams to leverage deep talent pools in Boston and Vancouver

Continue to bring new products and features to market faster

Continue to identify cost reductions

Grow our patent portfolio

Increase Brand Awareness Innovation LeaderExpand Sales Reach



Strong Management Team

Ric LeongChief Financial Officer and Senior Vice President

• Mr. Leong oversees Avigilon’s finance and accounting operations on a global basis, including public reporting, treasury, financial planning & analysis• Prior to joining Avigilon in 2014, Mr. Leong served in several senior financial leadership positions, including Corporate Controller and Director of

Business Planning at two large U.S.-listed public companies

Mahesh Saptharishi Chief Technology Officer and Senior Vice President

• Dr. Saptharishi has extensive experience in intelligent video analytics technology, software and camera hardware specifically for the security industry• Dr. Saptharishi joined Avigilon in January 2014 after its acquisition of VideoIQ Inc. and previously served as Senior Vice President, Analytics and Data

Science of Avigilon

Joel Schuster Chief Legal Officer, Senior Vice President, and Corporate Secretary

• Mr. Schuster joined Avigilon in 2013 and heads the Legal department and oversees the company’s legal and regulatory matters on a global basis• Prior to joining Avigilon, Mr. Schuster was Corporate Secretary and in-house counsel, managing the legal responsibilities for a group of public

companies

James HendersonSenior Vice President, Global Sales

• Mr. Henderson has extensive experience running Global Sales organizations in the Security, IT and Technology industries• Prior to Avigilon, Mr. Henderson held several key roles for various technology companies, including overseeing both domestic and international sales

strategies

Alexander FernandesFounder, President, Chief Executive Officer and Chairman of the Board

• Mr. Fernandes founded Avigilon in 2004 and grew Avigilon to become a global technology leader in high definition surveillance• Prior to Avigilon, Mr. Fernandes successfully founded and grew QImaging (Quantitative Imaging Corporation), a leading developer and manufacturer

of high performance quantitative digital cameras and software for the scientific imaging and machine vision markets

Years of Relevant Experience

>20

>14

>15

>17

>10



Financial Overview

Rapid Revenue Growth

1

Strong Gross Margins

2

Demonstrated Operating Leverage

3

Track Record of Profitability

4



Rapid Revenue Growth

60.7

100.3

172.7

245.2

287.6268.4

309.6

2011 2012 2013 2014 2015 2015 2016

International

North America

15%

Year ended December 31

~48% CAGR

$ Millions

Trailing twelve-month period ended June 30



Strong Gross Margins

48%49% 49% 50%

51% 52%

54%55% 56% 57% 57% 57% 58% 58% 58%

57%55%

40%

45%

50%

55%

60%

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2012 2013 2015

Trailing 12 Months Performance For the Period Ended

2016

We continue to outgrow the market while maintaining strong gross margins.

2014



Demonstrated Operating Leverage

4.1 6.4

11.4

22.4 24.7

5.9 8.4

0.0

9.0

18.0

27.0

36.0

2011 2012 2013 2014 2015 Q2 2015 Q2 2016

Gross Research & Development($ Millions)

14.4 25.0

40.2

56.4

70.8

17.9 20.5

0.0

25.0

50.0

75.0

100.0

2011 2012 2013 2014 2015 Q2 2015 Q2 2016

4.5 8.9

17.6

30.0

42.3

12.1 13.3

0.0

15.0

30.0

45.0

60.0

2011 2012 2013 2014 2015 Q2 2015 Q2 2016

Sales & Marketing($ Millions)

General & Administrative($ Millions)

7% 6% 7%9% 9% 8% 10%

0%

5%

10%

15%

20%

2011 2012 2013 2014 2015 Q2 2015 Q2 2016

% of Revenue

24% 25% 23% 23%25% 25% 24%

0%

10%

20%

30%

40%

2011 2012 2013 2014 2015 Q2 2015 Q2 2016

% of Revenue

7%9% 10%

12%

15%17%

16%

0%

5%

10%

15%

20%

2011 2012 2013 2014 2015 Q2 2015 Q2 2016

% of Revenue



Track Record of Profitability

3.98.2

23.7

33.530.4

32.7

24.8

6.7

12.7

33.9

48.951.3 51.5

46.8

2011 2012 2013 2014 2015 2015 2016

Adjusted Earnings

Adjusted EBITDA

Year ended December 31 For the twelve-month period ended June 30

Adjusted Earnings*: ~67% CAGRAdjusted EBITDA*: ~66% CAGR

$ Millions

* Refer to Non-IFRS Measures set out on page 2 hereof.



On Track to Accomplish CAD$ Revenue Goal

$500MAnnual revenue run rate

goal by end of 2016

CAD$

>$445MAnnual revenue run rate

Q2 2016

$60MAnnual revenue run rate

Q3 2011 at IPO

5-year goal from 2011 IPO



Highlights

1 Large and growing market

2 Market and technology leader

3 Complete security solutions & differentiated channel strategy

4Recently launched Avigilon Patent License Program provides high margin recurring revenue

5 Diversified customer base

6 Strong management team

7Proven strategy with rapid revenue growth and demonstrated operating leverage


Thank you!

avigilon corporate presentation

Investor Relations