EOSMarket Update24 September 2018

This document contains proprietary and copyright material which may not be copied or distributed without the consent of EOS.

Disclaimer

This presentation and any related communication may contain statements that areforward looking with regard to the business and future performance of Electro OpticSystems Holdings Limited [“EOS”] and its subsidiaries.

These statements reflect EOS’ current views, assumptions and projections based on,but not limited to, currently available information with regard to its existing andpotential customers, markets and the prevailing economic conditions.

These statements may involve risks and uncertainties which may cause EOS actualfinancial performance to differ materially from those inferred from any forward-lookingstatements.

Such statements, therefore, should not be regarded as an expressed or impliedforecast of the future financial performance of EOS. You are cautioned not to putundue reliance on this presentation.

2006

2007

Market Update

1. Defence Systems Sector

2. Space Systems Sector

3. Company Outlook

Copyright EOS

Defence Sector Status

R-400S Mk2 mounted on US Army JLTV Vehicle

14.5x114mm HMGRange 1800mLow accuracy

30x165mm 2A42960m/s 2000m

Friendly Forces

30x113mm M230Range 2500mHigh accuracy

• Problem. Current vehicles are generally fitted with only 12.7mm/0.50cal HMGs. These are outranged by threat HMGs & cannons.

• Answer. 30x113mm cannons are light enough to be fitted to any vehicle, delivering capability overmatch due to unprecedented accuracy of weapon system

© Electro Optic Systems Pty Limited

EOS RWS: Correcting the Lethality Imbalance

12.7x99mm HMGRange 1250mHigh accuracy

Unfriendly Forces

Production

Production tracking to the EOS schedule and contractual requirements Production for 2018 should meet or exceed upgraded forecast of 264 units All metrics meet or exceed expectations including yield, quality and cost A strong platform for further expansion

© Electro Optic Systems Pty Limited

Introducing the R-150 RWS

R-150 mounted on an Australian Army Hawkeye vehicle. The R-150 was developed with significant funding support from the Commonwealth Department of Defence.

Minister for Defence the Hon. Christopher Pyne MP announcing the release of the R-150 lightweight RWS from EOS. This new product delivers more than double the firepower previously available at this weight class.

© Electro Optic Systems Pty Limited

Integration Standards

GVA VICTORY

BMSAS LDM

Common Control Interface

EOS, GVA or MFoCS DU

ICU EMU

SPUGrip

Machine Guns5.56m Minimi

7.62m MAG58

7.62m Mk52

0.50cal M2HB

M134 Minigun

Medium Calibre

30mm M230LF/M914

30mm MK44

40mm Mk19

Lightweight RWS

R150

Medium Weight RWS

R400

R600

Heavy Weight RWSR800

Sensor Unit

Long range SU

Cooled TIHigh-zoom

day

Light-weight SUUncooled TIMed-Zoom

day

Multi-Mission Options

CUAS Detection

CUAS Soft Kill

CUAS Hard Kill

Shot Detection

Active Protection

C-RAM

RF Cueing

Slew-to-Cue

Far-Target LocateSmoke

GrenadesSituational Awareness

MissilesJavelin ATGM

Spike ATGM

Stinger SHORAD

Talon LGR

Unmanned Turrets

R1600

The Expanding EOS RWS Ecosystem

Defence: Key Points

1. Production capacity, yield, quality and margins all meet or exceed expectations. Profits goingforward are trending above earlier forecasts.

2. $620 million of cumulative contracts from 4 customers [at Q1] extended to $800 million from 7customers [at Q3]. This is on track.

3. No competitor has won an award against EOS. The cumulative sales target for 31 December2018 is now $900 million.

4. Accelerated expansion to reinforce success has been funded:

1. US activities have been accelerated with new Huntsville plant, expanded marketing andmultiple demonstrations already executed

2. GCC expansion accelerated thru new subsidiary and facilities in Abu Dhabi

3. New products. R-600DE, SHORAD, EOS turret, R-150

5. Very strong fundamentals support current and future profitability

Outlook: Defence Systems

• $0.9 billion in RWS sales expected across 2017 and 2018 with 90% [$810M] already secured

• Production risks rapidly receding as new production facilities achieve all milestones for performance and cost

• Market is developing as expected and customer liquidity going forward is strong

• New products are being released as funded customer requirements emerge

• The outlook for Defence Systems is for strong growth in both revenue and profit, under-pinned by market fundamentals, excellent technology and products, and strong execution

EOS Learmonth SSA facility. This $30M site is now fully operational and already performing customer missions

Space Sector Status

Space Sector Key Points

Learmonth WA site fully operational

Long-term military and commercial space operations tests concluded in September 2018

All performance metrics exceeded, including data volume, accuracy, capacity and cost

EOS output now exceeds 15,000 space tracks per week, or 10% of full-scale requirements

Both performance and costs can now be accurately forecast for full scale applications

Long term space contracts now in negotiation on a sole source basis with key customers

Missile defence, optical communications and directed energy will leverage infrastructure

Copyright EOS

Outlook: Space Systems

• Space Systems expected to transition to profitability from H2 2019

• The outlook for Space Systems is for strong profit growth driven by market fundamentals, excellent technology and products, product momentum and performance

2006

2007

Outlook: Revenue and Profit

Key points:

1. Revenue for 2018 is as forecast in Q1 but profit will be double original estimates despite $1 million increase in business development costs targeting new orders.

2. New accounting standards will push 25% of 2019 revenue to 2020 however forecast profit for 2019 is unchanged, due to improving profitability in all EOS sectors.

3. Order intake is already sufficient to sustain revenue and profit growth beyond 2020.

4. The company currently has $58 million in cash and will not need to raise funds unless very large new orders are received.

0

50

100

150

200

250

300

2016 2017 2018 2019 2020

Revenue to 2020

At Feb 2018 At Sep 2018

‐15

‐10

‐5

0

5

10

15

20

25

30

2016 2017 2018 2019 2020

Profit to 2020

At Feb 2018 At Sep 2018