SDL AGM & Contracts update

2020 Annual Meeting Address 22 October 2020
FY2020 Overview
FY2020 was a year of significant progress for Solution Dynamics (“SDL” or “Company”). After a
difficult FY2019, mainly in the domestic NZ market which further suffered from the COVID-induced
downturn in late FY2020, the Company’s offshore expansion gained traction with new business gains
and US expansion.
SDL’s software platforms continue to gain traction across the UK and Europe and increasingly now in
the US. The DéjarMail post-on-demand (POD) solution allows customers to route mail
correspondence, traditionally handled by companies on an in-house basis, to printers such as SDL
and the Company’s print partners. Along with efficiency, this provides costs savings for small and
medium sized businesses, especially for ad hoc or low volume mailings. The Jupiter solution is a
technology platform that links a range of customer communication origin points with a global
network of print production and fulfilment services. There is clear customer demand for these
solutions and limited competition at the scale and with the integration functionality SDL provides.
Customer wins from the last couple of years progressively onboarded and ramped up business
during FY2020 and further growth from finalisation of these onboardings is expected to continue
into FY2021.
Historically, SDL has been a New Zealand business with some international software and technology-
related revenue. An important milestone for the Company saw that position change in FY2020. SDL
noted earlier this year that international Software & Technology revenue as a proportion of total
revenue had moved from around 26% in 1H FY2019 to around 49% in 1H FY2020. This trend is
continuing and for FY2020 international Software & Technology revenues as a proportion of total
revenue was around 65%.
Looking ahead into FY2021, and assuming the software contracts underway deliver as expected,
then SDL’s international activities will further dominate the sales mix. Note that international
Software & Technology revenue includes two different business models: in one, SDL is a pure
software SaaS provider and earns revenue solely from the customer utilising the software. In the
other, SDL still provides software on a SaaS basis but also earns revenue directly related to the
software platform by acting as the customer’s provider of a total communications solution service
(including third party print, logistics, postage and digital).
The requirement to provide high levels of international customer service for software delivery and
support capability means SDL’s New Zealand technology staff are regularly called upon after hours to
support overseas customers and the Company’s international staff. SDL recognises the stress that
international expansion and time zone differences have placed on staff, both in New Zealand and
globally, and is actively increasing the number of support-related staff in the northern hemisphere.
Growth in employee numbers is needed to increase for both global customer support and the sales
infrastructure necessary to address the scale of sales prospects. Additionally, the need for in-market
offshore staff has heightened to counter the travel restrictions imposed by COVID on New Zealand-
based staff. Additional employees have been added in the UK, France and the USA.

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SDL continues to maintain a conservative approach to debt and balance sheet management. The
Company only has lease-related debt, which is now recognised on balance sheet as a result of
changes to accounting standards in FY2020 (SDL’s leases are predominantly for premises and print
equipment).
FY2020 Financial Metrics
As the financial metrics table notes, revenue growth for the year was strong at 35%, despite some
impact late in the year from COVID on New Zealand and UK volumes. The Company achieved
milestones of new highs in revenue and net profit and has achieved a five-year compound annual
growth rate (CAGR) of 21%.
As previously noted, SDL is investing in staff, particularly in northern hemisphere markets, to address
sales opportunities and provide a range of customer support activities. International expansion has
been the key factor in the rise of Selling, General and Administration (SG&A) expenses over the past
few years, along with significantly improving the breadth and depth of the management team
reporting to the CEO.

(a) Around half the decline in Digital Print & Outsourced is the result of reallocation of certain UK services (including postage) to
Software & Technology as that revenue is derived from the customer’s usage of SDL’s software platforms.
(b) EBITDA (i.e. Earnings before Interest, Taxation, Depreciation, Amortisation and Impairment) is a non-GAAP earnings figure that
equity analysts tend to focus on for comparable company performance analysis. The Company considers that it is a useful
financial indicator because it avoids the distortions caused by the differences in amortisation and impairment policies.
(c) An accounting standard change to the way in which leases are treated for expense allocation purposes means the FY2015 and
FY2020 figures for Gross Profit and EBITDA are not comparable.
SDL’s reported profit in FY2020 included two items of a one-off nature. The first was a requirement
under accounting rules to mark-to-market unrealised gains on foreign exchange contracts that relate
to activity in FY2021. The second was incentive expenses relating to previous international contract

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wins. The net gain (after tax) from these two items totals $0.23 million, meaning a more normalised
picture of SDL’s underlying earnings for FY2020 is $1.63 million (note this is a non-GAAP measure).
The Company’s FY2020 dividends totalled 9.0 cents per share (fully imputed), up from 4.0 cents the
prior year. Directors reiterate SDL’s policy of pay dividends of around 70-75% of earnings, subject to
no abnormal internal requirements for unusual capital expenditure items or acquisitions, as well as
being able to fully impute any dividend. A market development grant for North America was
obtained from NZ Trade and Enterprise. The Company acknowledges and appreciates NZTE’s
support and note the grant limits SDL to a maximum dividend payout ratio of 75% of net profit after
tax plus amortisation while it is in effect. Given the expansion of the US cost base recently, this
grant is expected to be fully utilised during FY2021.
Effects of COVID
SDL is pleased with its success to date in ensuring its staff remained safe. Strict health monitoring
and effective work practices were put in place early and rigorously adhered to. The use of
segregated teams, health monitoring, and controlled facility access helped ensure no SDL staff
member has been infected by COVID-19. These measures are expected to remain in place for an
extended period or at least until a vaccine is available.
A range of SDL’s clients were deemed essential services businesses and consequently the Company
continued partial onsite production operations throughout the New Zealand lockdown. The
Company’s non-production employees were able to work successfully from home, including SDL’s
international staff.
Revenue during the New Zealand lockdown period only declined by around 15%, a better result than
had initially been anticipated, but nevertheless causing a drag on New Zealand profitability over a
three-month period. UK volumes were materially affected as large parts of that economy slowed
significantly during lockdown, including one large client whose activity declined around 80%. The UK
economy has been slow to recover and, at the time of this report has seen a slight uplift in activity as
the government there is attempting to slowly normalise conditions. The UK lockdown and economic
slowdown tipped SDL’s UK business into loss for the half and this has distorted the Company’s
overall tax rate upwards as that loss is ring fenced for tax purposes so is not able to offset profits in
other jurisdictions.
Some costs savings were achieved around travel and temporary rent relief, however, these were
insufficient to offset the decline in gross profit from lower revenues and the Company estimates
COVID caused a modest drag to FY2020 earnings.
A longer term question is whether COVID causes the ongoing decline in transactional mail volumes
to accelerate. While this would have little to no effect on SDL’s international expansion, it could
cause increased competition with higher risk of client loss and margin erosion in the domestic print
and mail business.
Global contract: World Vision
SDL noted in June 2019 that it had signed a Master Services Agreement with a major multinational
organisation that would progressively ramp up over 2020. That organisation is World Vision (WV), a

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Christian, humanitarian not-for-profit (with headquarters in the US and UK). WV is a global leader in
improving and transforming the lives of children, their families, and their communities, with over
37,000 employees in more than 100 countries covering six continents (for further information see
https://www. https://www.wvi.org/about-us/our-structure).
WV has complex requirements for the several global communications it undertakes each year.
These involve challenging data processing and production and logistics requirements, with logistics
into over 50 countries and mail into over 175 countries. SDL’s solution has initially involved utilising
the Jupiter platform to centralise printing and distribution, resulting in significant cost savings. A
later phase may see a move to utilise Jupiter’s platform of global distributed print partners, which
should provide further efficiencies and cost savings.
COVID-19 has affected WV’s operations during 2020, and SDL is endeavouring to assist WV in
ensuring that communications flows can be maintained in an efficient and timely manner.
US contract: Pitney Bowes
SDL noted in April 2020 that the Company had successfully concluded and signed a multiyear
contract with a major US-based company that provides commerce solutions including technology for
physical and digital communications. That company is NYSE-listed Pitney Bowes which has over
11,000 employees globally and supports over 750,000 business customers (for further information
see www.pitneybowes.com/us/our-company.html)
SDL’s solution is being delivered through its proven Jupiter and POD platforms which will enable
Pitney Bowes’ customers to access that company’s cloud-based print and digital services. A range of
Pitney Bowes’ US customers have been successfully onboarded and SDL’s solution is now
commencing rollout for Pitney Bowes France, Australia and New Zealand.
SDL’s solution provides a technology platform which links together customer communication origin
points such as ERP, transactional and marketing output with production and fulfilment on a globally
distributed basis. Closely integrated with over 300 service providers globally, customers can use a
highly flexible web service API to achieve simultaneous concurrent fulfilment across five continents,
all while retaining visibility and control of the process via an intuitive and mobile friendly web portal.
The roll out of this contract commenced earlier this year. Implementation will occur progressively
over a number of phases and is expected to be fully complete across Pitney Bowes globally by late
2021.
US Customer Communications Management (CCM)
The small to medium business (SMB) CCM market in the US is significant. There are around 15,000
medium-sized businesses of 500 to 5,000 employees. Existing service providers typically have CCM
software aimed at enterprise customers; this software is very fully featured and complex. While this
is effective for enterprise customers where individual client volumes are significant, it means the
complexity, cost and time to onboard medium and small-sized businesses generally makes that
market uneconomic to serve. Consequently, much of the SMB market utilises in-house
communications operations (both digital and print) which is less efficient and higher unit cost than
external service provider solutions.

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SDL’s solution (Jupiter and POD) was designed to be effective for a key pain point for service
providers: the time and cost to onboard clients along with ease of integration with the customer
communication output of most SMBs. The Company has an opportunity to gain share in the largely
unaddressed US SMB market for customer communications.
Strategy and FY2021 Outlook
SDL’s key focus is on continuing and accelerating international expansion based around the
Company’s key software platforms, particularly Jupiter and POD. For most of FY2021 the critical
delivery factor is to successfully execute the onboarding of key client wins. This will deliver growth
in FY2021 that should also continue into FY2022.
While SDL has traditionally used channel partners for its go-to-market strategy, a trial of direct
selling has recently commenced in a US state. This is targeting the smaller to medium-sized business
market that the channel partner strategy is unlikely to reach, but which is, in aggregate, a significant
and under-served market for software platforms such as POD and Jupiter. The results of the trial will
be evaluated in early 2021.
The Directors reiterate previous guidance for FY2021 of earnings in a range of $2.0 to $2.5 million.
This outlook assumes little recovery in lower offshore volumes and that new client projects and
onboarding activities proceed as currently planned.
Risks from COVID mean the outlook for the short to medium term remains volatile. The possibility
of macroeconomic shocks or delays to customer plans and projects could cause significant variation
in earnings outcomes for FY2021. The need to bring on new staff internationally, coupled with an
inability of NZ staff to travel offshore, increases execution risk.
The Directors advise that profit in FY2021 is expected to be baised towards the first half, which is
likely to be around two-thirds of full year guidance (prior year 1H FY2020 earnings of $0.47 million).

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Solution Dynamics Limited
Annual Shareholder Meeting, 22 October 2020
S O L U T I O N
D Y N A M I C S
1

S O L U T I O N
D Y N A M I C S
•Voting and Questions procedure
•Business commentary
•Effects of COVID
•US market opportunity
•Key contracts: Pitney Bowes and World Vision International
•Strategy and FY2021 Outlook
•Formal business of the meeting, including resolutions:
•to fix Auditor remuneration
•to re-elect John McMahon
•to re-elect Nelson Siva
•General business and Questions
A g e n d a
2

S O L U T I O N
D Y N A M I C S
O n l i n e A t t e n d e e s : V o t i n g P r o c e s s
3
•When the poll is open, the vote will be
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S O L U T I O N
D Y N A M I C S
O n l i n e A t t e n d e e s : Q u e s t i o n s P r o c e s s
4
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•To send in a question, simply click in the
‘Ask a question’ box, type your question and
the press the send
arrow to the right
•Your question will be sent
immediately for review

S O L U T I O N
D Y N A M I C S
B u s i n e s s C o m m e n t a r y : F Y 2 0 2 0 O v e r v i e w
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•FY2020 a year of significant progress
•difficult domestic market, compounded by COVID during 2H FY2020
•successful international growth: onboarding new business, with US expansion
•International expansion driven by software platforms:
•Jupiter and Post-on demand (POD)
•providing system and platform interconnectivity for global print and electronic communications
•Large, multi-national customer wins are driving step growth in revenue
•FY2020 first year where international sales exceeded NZ sales
•international Software & Technology represented ≈65% of total Company revenue
•Scale up of cost structure for global sales and in-market customer support operations
•Maintaining a conservative balance sheet (only lease related debt)

S O L U T I O N
D Y N A M I C S
B u s i n e s s C o m m e n t a r y : F i n a n c i a l M e t r i c s
6
Financial Metrics ($000)FY20FY19GrowthY/YFive-YrCAGR
TotalRevenue34,03025,17635.2%21.0%
Digital Print & Outsourced
(a)
12,01816,831-28.6%4.6%
Software & Technology22,0128,345163.8%44.4%
Gross Profit13,4598,49458.5%18.4%
Gross Margin39.6%33.7%
SG&A expenses
(c)
9,1056,17447.5%n.a.
EBITDA
(b) (c)
4,3542,32087.7%n.a.
EBITDA Margin12.8%9.2%
Net Profit after Tax1,866526254.8%18.3%
Earnings per share (cents)12.753.59254.8%17.3%
Dividends per share (cents)9.004.00125.0%43.1%
(a)Around half the decline in Digital Print & Outsourced in FY20 is the result of reallocation of certain UK services (including postage) to Software & Technology as that revenue is derived from the customer’s
usage of SDL’s software platforms.
(b)EBITDA is a non-GAAP earnings figure that equity analysts tend to focus on for comparable company performance analysis. The Company considers that it is a useful financial indicator because it avoids the
distortions caused by the differences in amortisation and impairment policies.
(c)An accounting standard change to the way in which leases are treated for expense allocation purposes means the FY2015 and FY2020figures for SG&A and EBITDA are not comparable.

S O L U T I O N
D Y N A M I C S
E f f e c t s o f C O V I D
7
•Key outcome has been success to date with staff safety
•health and temperature monitoring, effective work practices (e.g. split production teams)
•work from home where possible; no loss of productivity
•Many of SDL’s NZ customers were essential businesses so SDL provided them with services
•Estimate that COVID has a modestly negative effect on FY2020 profitability overall
•lower costs in some areas (travel, temporary rent relief)
•loss of non-essential NZ volumes and significant drop in parts of UK volumes
•no effect on new client onboarding but some project delays
•COVID may accelerate the existing trend of transactional mail volumes towards electronic
•this should not affect international expansion and growth (aside from possible project timing delays)
•but could cause increased competition, higher risk of client loss and margin erosion in NZ print/mail

S O L U T I O N
D Y N A M I C S
U S c o n t r a c t u p d a t e : W o r l d V i s i o n I n t ’ l
8
•Contract commenced in 2019 with multinational organisationis with World Vision International
•WVI is a US-headquartered, humanitarian, not-for-profit global leader in improving and transforming
the lives of children, their families, and their communities
•over 37,000 employees in more than 100 countries covering six continents
•for further information see https://www.wvi.org/about-us
•Master Services Agreement with Statements of Works for each global mailing project
•WVI usually conducts several global mailings each year
•large volume, difficult jobs with complex data management and processing requirements
•complex production: logistics into over 50 countries and mail into over 175 countries
•Delivered predominantly with SDL’s Jupiter platform
•centralisationof WVI’s distributed processing has improved efficiency and generated cost saving s
•Some effect from COVID in FY2021: SDL endeavouring to assist WVI to maintain efficient and
timely communications.

S O L U T I O N
D Y N A M I C S
U S c o n t r a c t u p d a t e : P i t n e y B o w e s
9
•Contract concluded earlier this year with a major US-based company is with Pitney Bowes
•Pitney provides commerce solutions including technology for physical and digital communications
•it is NYSE listed, has over 11,000 employees globally and supports over 750,000 business customers
•for further information see www.pitneybowes.com/us/our-company.html
•Delivered predominantly with SDL’s Jupiter platform (plus POD functionality)
•some SDL software development work is required for further integration
•Range of Pitney Bowes customers now onboarded in the US
•Presently commencing rollout in France, Australia and New Zealand
•Phased global introduction across Pitney Bowes that should complete by late 2021

S O L U T I O N
D Y N A M I C S
U S C u s t o m e r C o m m u n i c a t i o n s M a n a g e m e n t ( C C M )
10
•CCM around 345 billion comms(2018)
•around 80% marketing, 20% transactional
•split 68% digital, 32% physical print
•growing at ≈3.3% but physical print declining
•Underserved mid-market of ≈15k firms
•mostly do commsin-house (is inefficient)
•high cost to onboard for service providers who
are mostly geared to the enterprise market
•Jupiter + POD solution for small to mid-market
•strong domain expertise in SMB space
•efficient, low-cost client onboarding
•US SMB a significant, largely unaddressed
opportunity
US Transactional Mail (print only) analytics

S O L U T I O N
D Y N A M I C S
S t r a t e g y a n d F Y 2 0 2 1 O u t l o o k
11
•Key strategy is ongoing development of SDL’s international software & technology business
•mainly through use of channel partners but currently triallingdirect sales in one US state
•FY2021 focus is execution of onboarding of several large clients and integrating into their systems
•significant growth upside is possible if opportunities are successfullyexecuted
•Key risk remains further COVID-related economic shocks or customer timing delays
•Reiterate previous earnings guidance for FY2021 of $2.0 to $2.5 million
•significant potential upwards and downwards risks (largely from COVID) to possible FY2021 outcomes
•guidance assumes little recovery in offshore COVID volume loss, but new clients onboard as planned
•need to increase international staff levels
•inability of NZ staff to travel increases operational execution risks
•FY2021 result biased to stronger first half, which is expect to be around two-thirds of the full
year outlook (prior year 1H result was $0.47 million)

S O L U T I O N
D Y N A M I C S
F o r m a l B u s i n e s s o f t h e M e e t i n g : V o t i n g P r o c e d u r e
12
•Voting will be by way of poll and though proxy submission
•votes will be counted by Computershare and the results then released on NZX
•you must have logged on to this meeting using the details you received in the Notice of Meeting to be
eligible to vote
•How to vote reminder
•if you are eligible a polling icon will have appeared on your screen; click this icon to vote
•the resolutions will appear along with voting options
•simply select the voting option and your vote will be recorded automatically
•you can change your vote any time until the meeting ends or cancel it by clicking ‘cancel’
•Chair of the meeting will verbally advise proxies at this time

S O L U T I O N
D Y N A M I C S
F o r m a l B u s i n e s s o f t h e M e e t i n g : R e s o l u t i o n s
13
•Resolution 1: Auditor remuneration
•That the Board be authorisedto fix the remuneration of Grant Thornton as the Company’s auditors
•Resolution 2: Re-election of John McMahon
•To re-elect MrJohn McMahon who is retiring by rotation as required by Listing Rule 2.7.1 of the NZX
Listing Rules and in accordance with the Company’s constitution, and being eligible, offers himself for
re-election as a director
•Resolution 3: Re-election of Nelson Siva
•To re-elect MrNelson Siva who is retiring by rotation as required by Listing Rule 2.7.1 of the NZX
Listing Rules and in accordance with the Company’s constitution, and being eligible, offers himself for
re-election as a director

S O L U T I O N
D Y N A M I C S
G e n e r a l b u s i n e s s a n d Q u e s t i o n s
14
•Any remaining general business or questions from shareholders?
•Meeting formally closes
Thank you for attending

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Global Contract: World Vision 22 October 2020
Solution Dynamics (SDL or Company) noted in June 2019 that it had signed a Master Services
Agreement with a major multinational organisation that would progressively ramp up over 2020.
That organisation is World Vision (WV), a Christian, humanitarian not-for-profit (with headquarters
in the US and UK). WV is a global leader in improving and transforming the lives of children, their
families, and their communities, with over 37 ,000 employees in more than 100 countries covering
six continents (for further information see https://www.wvi.org/about-us/our-structure).
WV has complex requirements for the several global communications it undertakes each year.
These involve challenging data processing and production and logistics requirements, with logistics
into over 50 countries and mail into over 175 countries. SDL’s solution has initially involved utilising
the Jupiter platform to centralise printing and distribution, resulting in significant cost savings. A
later phase may see a move to utilise Jupiter’s platform of global distributed print partners, which
should provide further efficiencies and cost savings.
COVID-19 has affected WV’s operations during 2020, and SDL is endeavouring to assist WV in
ensuring that communications flows can be maintained in an efficient and timely manner.


For further information please contact:
Nelson Siva John McMahon
CEO Chair
+64-(0)21-415 027 +61-(0)410-411 806

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US Contract: Pitney Bowes 22 October 2020
Solution Dynamics (SDL or Company) noted on 7 April 2020 that the Company had successfully
concluded and signed a multiyear contract with a major US-based company that provides commerce
solutions including technology for physical and digital communications. That company is NYSE-listed
Pitney Bowes which has over 11,000 employees globally and supports over 750,000 business
customers (for further information see www.pitneybowes.com/us/our-company.html)
SDL’s solution is being delivered through its proven Jupiter platform which will enable Pitney Bowes’
customers to access that company’s cloud-based print and digital services. A range of Pitney Bowes’
US customers have been successfully onboarded and SDL’s solution is now commencing rollout for
Pitney Bowes France, Australia and New Zealand.
Jupiter provides a technology platform which links together customer communication origin points
such as ERP, transactional and marketing output with production and fulfilment on a globally
distributed basis. Closely integrated with over 300 service providers globally, customers can use a
highly flexible web service API to achieve simultaneous concurrent fulfilment across five continents,
all while retaining visibility and control of the process via an intuitive and mobile friendly web portal.
The roll out of this contract commenced earlier this year. Implementation will occur progressively
over a number of phases and is expected to be fully complete across Pitney Bowes globally by late
2021.

For further information please contact:
Nelson Siva John McMahon
CEO Chair
+64-(0)21-415 027 +61-(0)410-411 806