Synertec : 2021 AGM - Addresses and Presentation

Chair and Managing Director Addresses & Presentation

Synertec Corporation Limited (ASX:SOP)

2021 Annual General Meeting

Synertec	Corporation Ltd	T [phone]	Ground Floor
[e-mail]	2-6 Railway Parade, Camberwell
ABN 37 161 803 032
www.synertec.com.au	Victoria, 3124, AUSTRALIA
			www.synertec.com.au

ASX Announcement

only16 December 2021

useMelbourne, Australia: Diversified technology design and development growth company, Synertec Corporation Limited

(ASX: SOP, "Synertec" or "the Company") advises the following addresses and presentations are attached and will be delivered today at the virtual Annual General Meeting of the Company, beginning at 11.00am (AEDT):

• Chair's Address - Mr. Dennis Lin
• Managing Director's Address - Mr. Michael Carroll
• Managing Director's Presentation to accompany his Address - Mr. Michael Carroll

personal-ENDS-

For more information and all media enquiries, please contact:

Mr. David Harris

Executive Director & Company Secretary

Phone: [phone]

Email:[e-mail]

This ASX announcement is authorised by the Directors of Synertec Corporation Limited (ASX: SOP).

About Synertec:

Synertec Corporation Ltd (ASX: SOP) is a diversified technology design and development growth company enabling a low carbon future through innovative technology solutions. Commercialising scalable, environmentally friendly and energy efficient technology for global markets in energy, critical infrastructure and advanced manufacturing through innovative partnerships with a portfolio of blue-chip customers, Synertec is proactively

articipating in the world's transition to a low carbon economy in a practical way for the benefit of future generations. For

Synertec Corporation Limited (ASX:SOP)

2021 Annual General Meeting - Chair's Address

16 December 2021

onlyIn presenting our year in review, we must first acknowledge the COVID-19 pandemic and its impacts on the communities in which we operate and our stakeholders including our people, customers, suppliers and shareholders.

FY21 was a challenging year for our business due to the ongoing impacts of COVID-19 and the travel restrictions it placed on our people and our customers. During the year, Governments around the world took steps to protect their citizens from

usethe worst of the pandemic's effects. This was particularly evident in Australia, and especially the State of Victoria where Synertec and many of its key customers are based.

Although lockdown restrictions presented some operating challenges and impacted demand in some of the Group's end markets, Synertec has maintained the health, well-being and safety of its people as a key priority and maintained a strong focus on providing a safe and inclusive work environment for all while continuing to deliver for our customers.

I am proud of the way our team has dealt with the challenges encountered during the COVID-19 pandemic. We believe

personalthis demonstrates our strong commitment to our people, our customers and their mission-critical projects, our alliance p rtners, our suppliers and our shareholders.

Strategy

Over the past year, we have rapidly accelerated our strategic transformation. Having built a stable foundation for sustainable growth across earlier years, our actions in FY21 have set up Synertec for the future. We secured important c mmercial partnerships and gathered the resources we need to execute on multiple, highly scalable and near-term environmentally focused technology-led growth opportunities, as well as increased demand for our specialist engineering capability across our target industries.

As a diversified technology growth company, Synertec designs, develops and delivers technology that provides a viable t ansition for its commercial partners to a low carbon future. Our niche multi-disciplinary engineering expertise supporting our Tier-1 blue chip customer base has us uniquely positioned to generate scalable solutions to decarbonise industry globally.

In summary, we remain focused on our long-term sustainable growth agenda, with our mission of pursuing transition technologies for a low carbon future.

Sustainability

ForOver the course of the year, our focus on developing innovative ESG-focused solutions culminated in the establishment of a Technology division that now houses a strong portfolio of market opportunities and continues to review technologies which are introduced to the Company through a variety of sources. Each of these technologies holds a different solution to achieving the widely-held ambition of rapidly reducing emissions in a way that supports economic growth and is commercial, as well as being reliable, sustainable and socially responsible.

Importantly, helping our clients address their sustainability needs is now a growing part of our business, and we expect it to have more substantial profit margins and scale than conventional engineering services. We are supporting our customers as they address the magnitude of the transition to achieve a low carbon future, and the scale of the longer-term opportunities we have identified, particularly in energy and wastewater management technology, has presented us with exciting opportunities to partner with companies during the year in Asia, Europe and Australia, each seeking to expand their offering across the Asia Pacific region.

Funding

onlyTo secure these technology-led growth opportunities and maintain our strong capital structure, the Company successfully completed a fully subscribed share placement in July 2020, raising $1.3 million at 2.3 cents per share, and another more substantial share placement in August 2021, raising $7.1 million before costs at 10.0 cents per share.

This important capital funding has been largely dedicated to investment in key technology-led growth initiatives. This activity attracted many new investors for Synertec, including several high-quality institutions, and we warmly welcome them to our Company.

As we have communicated consistently to our shareholders since listing on the ASX in 2017, with a solid framework useb coming established for a technology-led growth strategy, commercialising exciting ESG-focused technology through

strategic partners and growing out a high-end engineering solutions business, we expect the investments our long term hareholders and the Company have made will continue to drive outstanding shareholder returns from a business

delivering scalable growth in revenue and profitability from a sustainability mega-trend in the years ahead.

The Company is future-fit and has the balance sheet to support these growth initiatives, and continues to focus and deliver on its key stated priorities: Safety; Shareholder Value; Industry Focus; High Performing Teams; and Innovation.

Board Changes

personalAfter almost two years as a Non-Executive Director, I was honoured to succeed Leeanne Bond as Synertec's Independent Non-Executive Chair from 1 April 2021. Leeanne oversaw a period of great transformation in the business as Synertec

successfully developed into an ASX-listed company with significant growth aspirations. We are grateful that we will retain Leeanne's valuable counsel, strategic contributions and industry insight as a Non-Executive Director.

This year also marked the retirement of Independent Non-Executive Director, Mr. Kiat Poh, effective from 31 March 2021. P h served as a foundation Director of the Company before it acquired Synertec, and played a key role in the successful ASX re-listing of the Company in 2017, and on behalf of my fellow Directors I thank him for his contributions.

We strengthened our Board in April 2021 by welcoming Synertec's CFO and Company Secretary, Mr. David Harris, to the Board as Executive Director, Corporate Development, and remaining as CFO and Company Secretary.

David has loyally served the Company since 2017. He now leads our Technology and Future Business initiatives and this appointment reflects David's key role in developing the many technology-led growth opportunities identified, and helping to set and deliver our corporate strategy at a pivotal time for the Company.

Stakeholders

In FY21, our team demonstrated discipline and focus, with many of our key strategic objectives for FY21 achieved. I would Forlike to thank each and every employee for their contribution to Synertec during the 2021 financial year. Their remarkable

dedication has underpinned Synertec's success in earning further awards of projects and programs of work during the year fr m our existing customer base and in developing our portfolio of technologies, enabling the strong positioning of the business as the world emerges from the pandemic.

I would also like to thank our customers and partners for their support and loyalty to Synertec throughout the year and for the opportunities they have provided for us to continue to work together into FY22 and beyond.

Finally, I am grateful to our shareholders for supporting Synertec's vision, strategy and development ambitions. I look forward to your continued support.

This concludes the Chair address, and I now hand over to our Managing Director and CEO, Mr. Michael Carroll, for a more in-depth review of our business and progress with the growth strategy.

-ENDS-

Synertec Corporation Limited (ASX:SOP)

2021 Annual General Meeting - Managing Director's Address

16 December 2021

onlyI troduction

Good morning, my name is Michael Carroll and I am the Managing Director of Synertec Corporation Limited. I would like to extend Dennis' welcome to the Company's 2021 Annual General Meeting.

The financial year ended 30 June 2021, FY21, has been a transformative one for Synertec. The environment in which we useoperate has presented ongoing challenges, but I am pleased to report that these same conditions have provided opportunities

for us. Our technologies are well placed to help the planet move towards a lower carbon future whilst generating value to our customers, partners and investors.

Our Technology and Engineering businesses are well placed to strongly grow diversified revenue streams. We are currently commercialising three exciting Technology opportunities: our Powerhouse Project, LNG marine Custody Transfer Systems and Composite Dry Powder. I will go into more detail on these opportunities shortly.

personalOur Engineering business is well diversified, offering multi-disciplinary expertise across our blue chip tier-1 customers in key industries including energy, infrastructure, water, rail and advanced manufacturing and pharmaceutical.

I am particularly excited about the progress we have achieved in our Technology business during FY21. Following many months of work during FY21, we announced an MOU with Santos Limited (ASX:STO) in July this year to progress our unique Powerhouse offering; our LNG marine Custody Transfer System (CTS) recently achieved GASA approval (General Approval f r Ship Application) from DNV, and we signed a perpetual licence agreement for the exclusive use of Composite Dry Power (CDP) technology subsequent to the financial year end.

While COVID-19 presented challenges to our Engineering business, we generated strong revenue growth of 40% during the second half of the financial year, and I am proud to report that FY21 represented record Engineering Consultancy Services Revenue for the company. Our Engineering business remains the backbone of the company, providing us with the cash flows and access to a Tier-1 blue chip customer base to support the development and commercialisation of our Technology opportunities.

Although the COVID-19 pandemic continues to impact the business to some extent, our determined leadership, sound strategy and hardworking team have empowered us to position the Company for a strong post-COVID growth phase. We recently announced a trading update for the first quarter of FY22 which highlighted 44% revenue growth on the prior

Forcorresponding period.

ESG, Health and Safety

We are proud of our strong Environmental, Social and Governance (ESG) credentials. During the year, Synertec adopted the formal ESG framework of 21 key areas designed by the World Economic Forum. This further aligns Synertec with its Tier-1 customer base, who track their progress against well-defined ESG metrics, and places ESG at the forefront of our strategy and day-to-day operations. Our Engineering and Technology solutions are well placed to help address the global focus on carbon emissions reductions.

Safety is Synertec's highest priority, and we continue to focus sharply on the ongoing safety, well-being and care of all people associated with Synertec. We are pleased to again report a clean safety record and no lost time injuries during the year.

Throughout FY21, the COVID-19 pandemic and associated community restrictions imposed by Governments significantly influenced market behaviour. Synertec's priority has always remained the health, well-being and safety of its people and continuing to provide a safe and inclusive work environment for all.

We are proud that in FY21 we provided a stable work environment for our people and our customers, choosing not to make a onlysingle employee redundant or force people to take leave during lockdown periods and enabling all of our projects to continue

smoothly despite the many logistical challenges of the pandemic.

Financial Performance

The initiatives we delivered this year have seen Synertec make significant progress in establishing a sustainable growth platform. Overall, the business invested approximately $1.5 million during the year in establishing a Technology division in which the various technologies we announced throughout the year have progressed to position the Company for growth, and we have restructured the business accordingly to accommodate this development from FY22 onwards.

useEvident from our results is our focus on solid revenue diversification across our four target industries of energy, water, critical infrastructure and advanced manufacturing. With approximately 25% of revenue coming from each of these sectors it is fair to

ay we are building strong and integral foundations, through deep customer relationships, for further growth in the Engineering business, while providing a strong platform for our Technology business to expand across all of these sectors.

Synertec's gross margins continued to improve, with FY21 almost doubling the rate achieved in FY19. This improvement reflects our prioritisation of higher-value programs of consultancy work with our blue-chip customer base, particularly across water and rail, creating a growing pipeline of opportunities and stable work in hand position.

personalAlthough our business was heavily impacted by COVID-19 during FY21, we saw the fruits of our hard work with substantial growth in revenue during the second half of the financial year. The revenue of the Group for the period was $8.4 million,

growing by 40% from H1 ($3.5 million) to H2 ($4.9 million). This represents the strongest year of Engineering Consultancy Services revenue the Group has ever delivered, spurred by growing demand from major energy and critical infrastructure customers. As a result, to grasp these immediate opportunities, we rapidly expanded our billable workforce through 2H FY21 by almost 50%, and we are continuing to recruit roles in a challenging skilled labour environment.

This year the Group produced an EBITDA loss before corporate development costs of $1.3 million, in line with FY20. While we continue to strive to achieve near-term profitability through greater scale, and the commercialisation of our announced technologies, the operating result also reflects several significant strategic investments in both project bidding and additional technology development opportunities, as well as maintaining our highly specialised workforce for the anticipated demand coming out of the pandemic, which has been evident since early this year. We firmly believe the combination of our

ngineering capabilities and technology opportunities will deliver sustainable long-term profitable growth and continue the strong shareholder returns most of our shareholders have enjoyed over the past 18 months.

Of particular note we have re-shaped and re-positioned the business for growth in a low carbon future while effectively maintaining our cash position throughout FY21. Following our $7.1M equity raise in August 2021, our cash balance as at 30

ForSeptember 2021 was approximately $8M. We believe this underscores our fiscal controls and our prudent approach to any application of funds.

Technology update

We continue to explore a range of strategic inorganic growth opportunities across our target markets. The common theme uniting these opportunities is how they ignite our imagination to solve current challenges with our partners in their pursuit of a low carbon future To this end, we see significant opportunities to add technology-led value in a range of subsectors of the global energy industry.

Powerhouse

During FY21, we made significant progress on our Powerhouse Project: an AI-powered solar and battery renewable baseload power system. We identified that this technology had application in remote gas well sites in Queensland. We approached a long-time customer in Santos and later formalised a cooperation agreement in the form of an MOU that was announced subsequent to year-end, in July 2021. A first of its kind project in Australia, Synertec will design, construct, own and field test a prototype Powerhouse system throughout the coming year, with our anticipated investment fully funded.