Business Acquisition – Normaclass

24 April 2019 Listed Company Relations New Zealand Exchange Limited PO Box 2959 Wellington Dear Sir/Madam BUSINESS ACQUISITION - NORMACLASS The Board of Scott Technology Ltd (SCOTT) is pleased to announce the company has reached agreement in principle to purchase 100% of the shares in Normaclass, a French based technology provider specialising in automated beef grading using machine vision. Normaclass is the leading provider of this grading technique to meat processors in both France and Uruguay. The system uses digital cameras to collect data and measurements of each carcass which is then analysed by software in real-time to determine a carcass classification. This classification, in conjunction with carcass weight and market prices, determines the carcass price paid to the farmer. Normaclass has long standing and extensive relationships throughout the large French and Uruguayan red meat industries (France is the largest red meat producer in Europe). These relationships will offer SCOTT exciting opportunities to showcase our wider meat automation technology, our bandsaw safety technology (Bladestop) and backend logistics within these markets. In particular, we look forward to working collaboratively with the current majority owner of Normaclass, Interbev (the Interprofessional Association for Livestock and Meat) on ways our technology can help the French red meat industry. In broader terms, SCOTT has a goal to build out our suite of image/vision related technologies and applications for our meat industry customers (DEXA, x-ray, hyperspectral and methods for contamination detection). Normaclass will greatly add to this effort, both with an established product in market, along with helping to advance our wider R&D investigations into these areas. SCOTT also expects demand for objective machine grading methods to continue to increase in coming years around the globe, particularly export-focused countries who want product quality support for their meat in the global market place. Normaclass will also provide SCOTT with a complementary technology to DEXA for those customers who simply want an objective carcass grading tool. Normaclass has a well-established track record of profitability which is expected to continue as its French customers upgrade to the newest version of the system and equipment. While earnings are modest in the context of the Group, the transaction is expected to be immediately earnings accretive. Settlement is expected during May 2019 and the market will be further updated once this has been concluded. Yours faithfully S J McLauchlan C C Hopkins Chairman Chief Executive Ph: +64 27 433 5481 Ph: +64 21 815 975 End CA:00333668 For:SCT Type:TRANSACT Time:2019-04-24 13:45:17