Downer EDI : SPO Investor Update

Attached is an Investor Update which will be dispatched my mail to all Spotless shareholders.

25 May 2017

Spotless Group Holdings Limited ABN 27 154 229 562

549 St Kilda Rd, Melbourne VIC 3004 Australia www.spotless.com 1 of 17

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SPOTLESS GROUP HOLDINGS LIMITED ACN 154 229 562

IMPORTANT NOTICES

Important notice and disclaimer

This document is a presentation of general information about Spotless Group Holdings Limited (Spotless) current at the date of the presentation (25 May 2017). The information contained in this presentation does not purport

to be complete. It does not constitute personal advice and does not take into account the investment objectives, financial situation or needs of any particular investor. It is important that you consider the information in the Bidder's Statement (together with supplementary Bidder's Statements) issued by Downer Services and the Target's Statement (together with the supplementary Target's Statement) issued by Spotless in light of your particular circumstances. You should seek advice from your financial, legal or other professional adviser before deciding whether to accept or reject the Offer.

Forward looking statements

This document contains certain forward looking statements and comments about future events, including Spotless' expectations about the performance of its businesses and statements of current intention or expectation.

Forward looking statements can generally be identified by the use of forward looking words such as, 'outlook', 'expect', 'anticipate', 'likely', 'intend', 'should', 'could', 'may', 'predict', 'plan', 'propose', 'will', 'believe', 'forecast', 'estimate', 'target', 'guidance' and other similar expressions within the meaning of securities laws of applicable jurisdictions. Indications of, and guidance on, future earnings or financial position or performance are also forward looking statements.

Forward-looking statements are subject to inherent risks and uncertainties. Although Spotless believes that the expectations reflected in any forward-looking statement included in this document are reasonable, no assurance can be given that such expectations will prove to be correct. Actual events, results or outcomes may differ materially from the events, results or outcomes expressed or implied in any forward-looking statement.

None of Spotless or its Directors, officers and advisers gives any representation, assurance or guarantee to Spotless Shareholders or any other person as to the accuracy or likelihood of fulfilment of any forward-looking statement, or any events or results expressed or implied in any forward-looking statement, except to the extent required by law. You are cautioned not to place undue reliance on any forward-looking statement. The forward- looking statements in this document reflect views held only as at the date of this document. Except as required by applicable law or the ASX Listing Rules, Spotless does not undertake to update or revise these forward-looking statements nor any other statements (written or oral) that may be made from time by or on behalf of Spotless, whether as a result of new information, future events or otherwise.

Risk factors

Spotless Shareholders should note that there are a number of risk factors attached to their investment in Spotless and other risks which apply in the event the Offer is accepted. You should refer to section 7.2 of the Target's Statement (as supplemented by the Supplementary Target's Statement) which sets out further information regarding those risks.

25 May 2017

Dear fellow Spotless Shareholder,

You will have recently received the Bidder's Statement from Downer in respect of its takeover offer to acquire your Spotless Shares for $1.15 per share (the Offer), which Downer has declared as its final price, in the absence of a superior proposal. You will have also received our Target's Statement containing the unanimous recommendation of your Spotless Directors to REJECT the Offer.

Spotless is currently at an inflection point and, for the reasons outlined in the Target's Statement dated 27 April 2017 (and as supplemented by the Supplementary Target's Statement dated 23 May 2017), your Board continues to believe that the Offer does not represent adequate value for your Spotless Shares and, unanimously recommend

you REJECT the Offer.

The management team has a clear strategy to deliver earnings growth and is executing on this strategy. Early signs are promising with an uplift in contract win and renewal rates, a growing pipeline of business development opportunities, the mobilisation of new PPPs and progress on the turnaround of Laundries.

For the reasons set out in the Target's Statement dated 27 April 2017 (and as supplemented by the Supplementary Target's Statement date 23 May 2017), the Board believes that Spotless can create more value for shareholders over the medium term as an independent company through continued execution of management's strategy.

The enclosed business update demonstrates the positive momentum of the business and highlights the reasons for the Directors' recommendation to REJECT the Downer offer:

1. Spotless has a clear strategy to deliver earnings growth and value to shareholders as an independent company.

2. The Spotless management team has driven a strong agenda of change over the last 18 months to drive earnings growth.

3. Spotless' contract portfolio is being optimised for growth. It already comprises 47% high margin, multi-service and facilities management contracts(1) and 57% of contracted revenue is in identified growth markets(2). Spotless is set to increase the proportion of earnings from priority growth services and end markets from here.

4. Investment in business development is demonstrating early signs of success, including improved win and renewal rates of high quality contracts - with $330m of revenue signed during March 2017(3)…

5. …and a continued strong pipeline of high quality opportunities- with annual revenue prospects of over $500m from the top 15 opportunities.

6. Spotless has a proven track record in the social infrastructure PPP market with 18 PPPs with a total life time revenue of $10.8 billion. New PPP mobilisations are progressing well and we continue to win new PPP contracts.

7. The Laundries turnaround is underway and the recent Cabrini laundry acquisition strengthens Spotless' market-leading position in Health.

8. Spotless has guided to growth in NPAT for FY18, with an outlook for continued growth in FY19 and the longer term.

9. Downer has acknowledged Spotless' strong fundamentals including earnings from stable businesses with resilient earnings and long term contracts that provide high certainty over revenues.

10. Downer has adopted a conservative approach to estimating potential synergies.

Your Directors continue to unanimously recommend that shareholders REJECT the Downer Offer and each Director who holds or controls Spotless Shares continues to intend to REJECT the Offer in relation to those Spotless Shares.

If you have any questions in relation to the enclosed materials or your shareholding in Spotless, please call the Spotless Shareholder Information Line on 1300 963 991 (for calls made from within Australia) or +61 1300 963 991 (for calls made from outside Australia) Monday to Friday between 8.30am and 5.30pm (AEST).

Thank you for being a Spotless Shareholder. Yours sincerely,

Garry Hounsell

Chairman

1. Based on estimated FY17 revenue.

2. Based on estimated FY17 revenue. Growth end markets include Health, Government, Education, Defence and Leisure and Hospitality.

3. Total value of key strategic contracts awarded (including new wins) during March 2017.

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