SDL FY2025 Financial Results & Dividend

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ANNUAL
REPORT
FY
2024/2025
Transforming Global Customer
Communications leveraging AI

Annual Shareholders
Meeting
The Annual Meeting of shareholders will be held at 10:30 am on
Thursday, 20th November 2025, as an in-person meeting in the Jupiter
Meeting Room, Solution Dynamics Limited, 18 Canaveral Drive, Albany,
Auckland, and as an online meeting with details to be provided when the
Company provides the Notice of Meeting to shareholders.
2025 Key Financials
• Net profit after tax of $2.62 million, down 7.1%
• Revenue up 6.9% to $41.3 million
• EBITDA down 8.0% to $4.45 million
• Earnings per share of 17.8 cents (prior year 19.2 cents)
• Dividends per share of 3.0 cents (prior year 9.5 cents)
• Net cash on hand $11.2 million (76 cents per share)
• Directors signalling share buybacks to resume

Table of Contents
Management Discussion and Analysis
FY2025 Result Overview 4
Major Customer Update 4
FY2025 Business Performance 5
Business Description 6
Description and Review of Revenue Streams 7
Financial Performance 9
FY2026 Outlook 12
Independent Auditor’s Report 14
Consolidated Financial Statements
Consolidated Statement of Comprehensive Income 20
Consolidated Statement of Changes in Equity 21
Consolidated Statement of Financial Position 22
Consolidated Statement of Cash Flows 23
Notes to the Consolidated Financial Statements 24
Statutory Information
(I) Employee Remuneration 48
(II) Shareholders and Substantial Security Holders 49
Statement of Corporate Governance
Principle 1 – Code of Ethical Behaviour 52
Principle 2 – Board Composition & Performance 53
Principle 3 – Committees 55
Principle 4 – Disclosure and Financial Reporting 56
Principle 5 – Remuneration 57
Principle 6 – Risk Management 58
Principle 7 – Auditors 58
Principle 8 – Shareholder Rights & Relations 59
Leadership Team 60
Company Directory 61

Management Discussion
and Analysis
FY2025 Result Overview
Solution Dynamics Limited (“SDL” or “Company”)
recorded a net profit after tax of $2.62 million for
FY2025. This was 7.1% lower than the profit of $2.82
million the prior financial year. FY2025 earnings per
share was 17.8 cents, down 7.0% from 19.2 cents in
FY2024.
The Company’s revenue rose to $41.3 million (up
6.9% from $38.7 million). Some of the increase was
the result of a pass through of (very low margin)
higher postage charges while the Company’s largest
customer saw little business in 2H and its revenue
contribution was down 15% overall for the year. The
revenue highlight was that the other nine of of SDL’s
top ten customers saw strong growth of 21% for the
year.
SDL’s New Zealand operations again gained market
share in a (still) falling local print and mail market,
marked by a continuation of the FY2024 trend of
securing ongoing new work from local councils in
particular. Some of this is from council customers
new to SDL, some is the increasing trend amongst
larger councils to outsource print work previously
undertaken in-house.
SDL’s International operations generated new
business from new accounts following the successful
onboarding of a marketing services company in North
America. There was also success with new products
in the dental market from an existing customer
who has embedded SDL’s software in its software
solutions. However, this growth was overshadowed
by the decline in our largest customer revenue
contribution. This resulted in a 3.8% overall reduction
of SDL’s total Software & Technology revenue to $24.1
million.
Following the reduction in our largest customer’s
revenue the Company swiftly enacted a significant
cost restructuring. This started in late 1H and
continued through 3Q with the benefits fully seen in
the final quarter of FY2025 and it will annualise across
FY2026.
Earnings before interest, tax, depreciation and
amortisation (“EBITDA”) declined 8.0% to $4.45 million
(FY2024 $4.84 million). Gross Profit was 3.8% lower,
helped by a general price increase at the start of
FY2025. Selling, General and Administration (“SG&A”)
expenses were effectively controlled, declining 1.7%
over the full year. SG&A was noticeably split over
FY2025, rising 6.8% year-on-year in 1H, but then
aggressively declining 10.0% year-on-year in 2H
following SDL’s restructuring that commenced in late
1H.
Cash flow from operations improved to $4.30 million
(FY2024 $3.36 million) and the net cash and short-
term deposit position at year end was $11.19 million
(FY2024 $7.95 million). Normalising this for year-end
accruals plus adjusting for around $1.3 million of
capital expenditure (print inserter equipment) in early
FY2026, the current cash position is around $9 – 10
million (about 61 – 68 cents per share).
The directors have declared a final dividend of 3.0
cents per share (FY2024 2.5 cents), bringing total
cash dividends for FY2025 of 3.0 cents per share
(FY2024 9.5 cents) with all dividends fully imputed.
The total FY2025 dividend of 3.0 cents brings the
FY2025 payout ratio to 16.8%.
The directors are conscious of the current share
price and note it is presently less than the current
cash backing per share. The Company is unable to
undertake share buybacks when it is in possession of
potentially material, non-public information or during
the “black out” period between year end (30 June) and
reporting the annual result. Should the share price
remain around or near current levels and there is no
material, non-public information, share buybacks will
be undertaken.
Major Customer Update
The most significant factor in FY2025 was SDL’s
largest customer advising it would transition from a
single supplier (SDL) model to a multi-vendor (SDL
and one other) model, with the full profitability impact
to only be fully felt in FY2026. SDL was advised it
will remain a supplier to the customer and that the
customer now expects to tender its communications
programme services (software/professional services
and print/logistics) on a project by project basis.
4 Management Discussion and Analysis

Subsequently, that customer has seen its funding
reduced as a result of both American (closure of
US Aid) and British government policy changes.
Whether this affects the customer’s future
communications activity levels remains unclear; SDL
is forecasting only minor future revenue.
The Company appropriately moved forward with
a comprehensive restructure, affecting both New
Zealand and international operations. This resulted
in a material level of cost reduction and a focus
on reducing costs wherever possible will remain.
Additionally, from 1 January 2025 the Directors
reduced Board fees to the level prior to the last fee
increase in 2022 with the Chair no longer receiving
fees entirely.
FY2025 Business
Performance
FY2025 was a challenging year for the SDL team,
who demonstrated resilience while navigating the
impact of the major customer RFP and resulting
business restructure. Despite what was a highly
disrupted period of operations, revenue growth
was achieved in all regions, a commendable
achievement. The Company considers the
FY2025 result was a solid outcome given those
circumstances, but remains cognisant of the
challenges ahead.
The New Zealand operation’s ongoing focus
on new business activity – needed to offset
overall mail market declines – has continued
to deliver wins primarily in the Councils market,
with growth in digital transactions, cross
selling of SDL Postage, and market share
gains. Overall volumes of physical mail in New
Zealand continue their multi-year decline – NZ
Post’s FY2024 annual report noted a 15% mail
volume reduction, indicating SDL’s 7% decline
in mail lodgements was a reasonable result.
New Zealand revenues also benefited from 12%
growth in digital volumes, which is a key area of
focus.
A continued focus on operational efficiency has
led to notable improvements in internal systems
with successful implementation of a new ERP
system, a print job management system and
increased emphasis on workflow automation,
reducing operational costs and enabling further
headcount reductions, although much remains
to be done.
International operations made good progress over
the year, despite the effect of SDL’s major customer
RFP.
The North American market is back to profitable
growth for SDL, with revenue up 4% for the year,
27% in 2H, partly driven by the addition of the
GRI marketing services business we acquired
late in 1H resulting in gross profit for that market
growing 34% in the second half. GRI brings valuable
new marketing services capability to SDL that
complements the Company’s software, as well as
a range of clients including The Hartford Insurance
Group.
Europe/UK grew 33% largely due to one customer
in the dental software sector, following an RFP
that saw SDL successfully retain and grow the
Company’s share of their business. SDL continued
to benefit with our software supporting the growth
of our major North American partner, Pitney Bowes,
across the US, UK, France, and Japan.
As noted earlier, SDL implemented broad-based
price increases across the customer base during
the year, although at lower levels than in FY2024
and focused on mitigating ongoing supply chain and
inflation pressures in both NZ and internationally.
Renewal of ISO 27001:2022 certification
This internationally recognised standard verifies our
robust Information Security Management System (ISMS),
which safeguards both company and client data through
comprehensive security protocols. Our risk management
framework encompasses all aspects of our operations—
from organisational policies and business processes to IT
infrastructure.
At the heart of our ISMS is a commitment to continuous
improvement. This enables us to adapt to our evolving
business needs, counter emerging cybersecurity threats
and strengthen previously identified vulnerabilities.
The renewal of this certification reinforces our dedication
to maintaining the highest standards of information
security for us and our customers.
5 Solution Dynamics | 2025 Annual Report

The labour market remains noticeably soft and staff
cost pressures have somewhat abated compared to
recent years.
With the restructure completed, the business is now
appropriately resourced and well-aligned to execute
its strategic objectives. We remain committed to
refining and improving processes while ensuring
that exceptional delivery for our customers is our
highest priority.
Business Description
SDL operates in the global Customer
Communications market, providing a comprehensive
suite of software technology, professional services,
and managed services to facilitate the digital
transformation of global customer communications.
SDL operates primarily in New Zealand, North
America and the UK. The Company’s products and
services are represented by two revenue streams:
• Services (split into Digital Print & Document
Handling, and Outsourced Services); and,
• Software & Technology.
Services reflects the New Zealand business where
SDL owns and operates mail house activities.
Within Services, Digital Print & Document Handling
revenues are generated from digital printing and
mail house processing for two categories of mail
items: transactional mail, such as invoices and
statements, direct marketing and promotional mail.
Outsourced Services such as envelope printing and
postage are typically bundled as part of the total
solution albeit generally at much lower margins.
Software & Technology, reflecting the International
business principally in North America and the UK,
provides a comprehensive suite of global customer
communications cloud solutions. This cloud service
provides a complete global solution while the DMC
(Digital Mail Centre) leverages and extends the
capabilities of the SDL cloud to the desktop through
a simple yet powerful user experience. Primary
components of the SDL technology stack include:
• complex digital document management,
workflow and integration;
• complete digital and print multi-channel
distribution;
• global distributed print integration in over 50
countries;
• digital asset management;
• digital and print campaign optimisation and
management;
• document scanning, workflow and archiving;
• artificial intelligence applied to document
enhancement;
• document composition and hyper-
personalisation;
• desktop digital mail centre User Interface (UI);
• data quality and enhancement; and,
• dashboards and analytics.
SDL has several different business models for
international clients. For some, the Company
provides only software and related consulting
services, but for others it also integrates with third
party printing and logistics providers, on which it will
typically earn a modest margin.
For these latter clients, the software charge and
print/logistics margins are typically aggregated
into an overall charge to the customer. This means
Software & Technology revenues are a mix of pure
software and software consulting revenues for
some clients, while others also include third party
printing and logistics revenues that are generated
from SDL’s software. The third-party printing and
logistics revenues are the larger proportion of total
Software & Technology revenue.
The following diagram is a simplified workflow
depiction. Data and assets that feed into content
creation can emanate from multiple sources and
often require manipulation or validation before use.
Content can be personalised as customers require,
and omni-channel output can then be delivered
across physical and digital channels.
DELIVERY
SMS
EMAIL
MAIL
AI POWERED
PERSONALIZATION
CONTENT CREATION
Translation
TextImage
ASSETS
ImageTextGlossary
DocumentVideo
DATA
6 Management Discussion and Analysis

The often complex nature of the data and assets
involved in content creation means SDL’s solutions
are typically highly modified for enterprise
customers and difficult to “shrink wrap” into a one-
size-fits-all software package.
The ongoing primary focus for most clients is digital
transformation of customer communications, while
improving the efficiency and effectiveness of printed
communications. The majority of SDL’s revenue in
FY2025 remains from printed communications, a
declining sector; growth, revenue generation and
differentiation globally are increasingly focused
around software and digital communications
transformation.
Total Software & Technology revenue (some of
which is revenue billed from New Zealand) as a
proportion of total revenue was around 58% in
FY2025 (FY2024 65%).
Description and Review of
Revenue Streams
Services
Services is the Company’s New Zealand operation
that provides mail house solutions to high-volume
postal mail users in the business-to-consumer
sector. Services operates leased, high-speed digital
colour and monochrome printers. In addition to
digital printing, Services also provides the ancillary
document handling operations such as automated
envelope inserting and flow-wrap.
Services now bases its sales approach around
digital transformation; some of the largest SDL
clients in New Zealand rely on SDL for digital
services from data quality and enhancement,
to digital channel distribution and closed loop
reporting.
Particularly in the Council market, SDL has seen high
success in helping Councils move their ratepayers
move from print to digital. SDL provides both
physical and digital communications from a single
integrated platform that has a high level of self-
service capability.
Services revenue also includes Outsourced Services,
which encompasses a variety of outsourced
functions or components such as postage, third
party offset printing, freight, paper and envelopes,
and digital channel delivery. The Company has an
access agreement with NZ Post and an alternative
carrier which provides wholesale rates and bulk
mail discounts off retail rates. The gross profit
margins on many of these outsourced components,
especially postage, are low but an important
component of the total solution.
In a declining overall mail market and despite
market share gains, SDL’s mail volumes fell around
7% on the prior year (FY2024 mail volumes fell
3%). The Company increased market share in New
Zealand, including ongoing wins in the Council
vertical.
SDL has a large and long-standing New Zealand
water utility customer. The Company is actively
engaged with a broad range of Councils that will
require water billing communications as sector
reforms (Local Water Done Well) require the
establishment of numerous council-controlled
organisations as separate entities. Assuming the
reforms continue as currently planned, SDL sees this
as an area of growth in the next several years.
The headwinds to physical transactional mail are
exacerbating as increasing postage rates accelerate
customers’ switch to digital. From 1 July 2025,
NZ Post increased its standard medium-sized
letter retail pricing by $0.60 to $2.90 a rise of 26%
(on top of a 15% increase the prior year). NZ Post
has stated that bulk mail prices will also change
although the level of increase is not yet known. SDL
holds a competitive cost position in the domestic
mail house market and has recently implemented a
further broad-based price increase.
On the digital communications side, SDL’s New
Zealand volume of customer emails rose about
12% (following a 19% increase in FY2024) largely
as a result of the continued switch from physical
to electronic communications. Email volumes are
now approaching the level of physical mail volumes
for SDL and on a run-rate basis had surpassed
print volumes at FY2025 year end. However, the
revenue and gross profit per item for an electronic
communication is significantly lower than for the
same physical print and mail item.
7 Solution Dynamics | 2025 Annual Report

SDL Services Revenue Breakdown
(all figures $000)
FY2025FY2024Percentage
Change
Digital Printing and Document Handling4,5124,4491.4%
Outsourced Services & Other12,6869,14238.8%
Total Services Revenue17,19813,59126.5%
Revenue growth of 26.5% in FY2025 was pleasing. While much of that related to low-margin pass through of
higher postage prices to customers, achieving growth in Digital Printing & Document Handling of 1.4% was
a good result in the context of the physical market continuing to decline. The postal market decline will be
an ongoing headwind that makes growth difficult to achieve, however, the annualised benefit from FY2025
gains and further price increases in July 2025, combined with sales pipeline opportunities, suggests growth is
possible in FY2026.
SDL Software & Technology
Software & Technology generated revenue of $24.1
million in FY2025, a decline of 3.8% on the prior
year’s revenue of $25.1 million.
SDL saw double digit growth in the UK market.
The Company’s largest customer, based in North
America, saw a decrease in revenue of around 15%
(due to outcome of RFP). Revenue in North America,
excluding the Company’s largest customer, saw
an overall revenue growth of 4% primarily due to
the successful onboarding of a marketing services
company in North America.
Software & Technology revenue is partly platform
based, typically under SaaS (Software as a Service)
arrangements, which can be priced as a monthly
subscription tiered base on volume or on a per
document basis. It also includes revenue where
SDL manages the total communications solution
including document printing and distribution for the
customer. The printing and distribution component
forms the larger part of Software & Technology’s
revenue and is lower margin.
SDL continues to streamline its global customer
communications platform, DMC, to improve the
ability for customers to access and self-serve. DMC
simplifies onboarding of customers and sending
and tracking of documents through physical and
digital channels. DMC integrates with other SDL
products including the document composition
platform, Composer, and the automation tool,
Autoprod, to enable creation of highly personalised
communications at scale. DMC integrates with
SDL’s print partner network through the Company’s
distributed print platform, Jupiter, to manage and
provide real time status updates on job completion
and mailing. SDL’s expertise in global postage
management delivers significant cost savings by
leveraging DMC to optimise production and delivery
logistics. The Company’s objective is to grow SaaS
platform revenue at a faster rate than print services
by focusing on digital transformation.
Communication channels are no longer a “one
size fits all”; customers now receive increasingly
personalised messaging through multi-media
channels. SDL’s software platforms enable one to
one personalisation of each form of communication
– whether a customer email, an invoice or account
statement, or a piece of marketing collateral – as a
means to enrich and deepen the relationships that
SDL’s customers have with their customers.
SDL excels at enabling organisations to drive
down the cost of customer communications while
improving client engagement. Leading global brands
rely on the Company’s software to simplify sending
of complex global customer communications
through print and digital channels. SDL’s global
network of mail service providers delivers significant
savings in print and postage costs. As the
secular decline in mail continues, SDL’s software
platforms provide an omni-channel bridge to digital
transformation.
For a more detailed view of SDL’s software
solutions, refer to the Company’s website at: https://
solutiondynamics.com/customer-solutions/
The International Growth Fund (“IGF”) co-funding
grant from NZ Trade and Enterprise (“NZTE”) that
supports a range of market development activities
in North America was in place for all of FY2025. The
IGF provides 50:50 co-funding for eligible project
costs up to a maximum of $0.6 million from NZTE
over a three-year period and expires in November
2025.
8 Management Discussion and Analysis

Financial Performance
SDL’s decline in FY2025 earnings was primarily the effect of lower Software & Technology/International revenue
from SDL’s major customer in 2H. A broadly-based price increase helped offset inflationary cost pressures
(although there are now fewer staff cost pressures).
Gross Profit declined 3.8% from pressure on Cost of Goods Sold. While SG&A costs saw a 6.8% increase in 1H,
the second half was down 10.0% from restructuring gains (after some one-off restructuring costs).
EBITDA reduced 8.0% to $4.45 million (FY2024 $4.84 million).
Summary Financial Performance
(all figures $000)
FY2025FY2024Percentage
Change
Total Revenue41,32438,6686.9%
Less: Cost of Goods Sold27,03823,82413.5%
Gross Profit14,28614,844-3.8%
Gross Margin (%)34.6%38.4%
Less: Selling, General & Admin (SG&A)9,84010,009-1.7%
EBITDA4,4464,835-8.0%
EBITDA margin (%)10.8%12.5%
Depreciation8618511.2%
Amortisation605411.1%
EBIT3,5253,930-10.3%
Net Interest-123-125-1.6%
Income Tax1,0291,236-16.7%
Net Profit after Tax2,6192,819-7.1%
Tax rate28.2%30.5%
SDL’s earnings in FY2025 benefitted from NZTE’s market development co-funding assistance, which totalled
$0.2 million pre-tax ($0.2 million in FY2024).
The following table highlights first and second half performance for the last two financial years. The timing of a
small number of particularly large customer jobs during the year can materially alter the split of first and second
half earnings, with one order slipping from late FY2024 into early FY2025 but that order not repeating in late
FY2025.
SDL Half Financial Years
(all figures $000)
2H
FY2025
2H
FY2024
Percent
Change
1H
FY2025
1H
FY2024
Percent
Change
Total Revenue15,23315,902-4.2%26,09122,76614.6%
EBITDA731834-12.4%3,7154,001-7.1%
EBITDA margin4.8%5.2%14.2%17.6%
Net Profit after Tax276346-20.2%2,3432,473-5.3%
9 Solution Dynamics | 2025 Annual Report

Balance Sheet, Liquidity and Debt
SDL closed the year with net cash (i.e. cash plus short-term deposits less interest-bearing debt) on hand of
$11.19 million (FY2024 $7.95 million) or around 76 cents per share. This net cash figure excludes debt liabilities
relating to Lease Liabilities arising from the Lease Accounting standard; these liabilities are approximately
offset by Right to Use Lease Liabilities.
The Directors intend to maintain a prudent approach to balance sheet management but have nevertheless
continued to review acquisition opportunities, including one particular opportunity late in 2H, although none
have progressed to date.
The Company maintains an overdraft arrangement from ANZ Bank with a $200,000 limit. This was unused
during FY2025.
Selected Balance Sheet and Cashflow Figures
(all figures $000)
FY2025FY2024Change
Net Cash/(Debt & Borrowings)11,1937,9503,243
Non-Current Assets1,6461,745-99
Right of Use Assets1,3541,795-441
Net Other Assets/(Liabilities)-1,490-673-817
Right of Use Liabilities-1,387-1,815428
Net Assets11,3169,0022,314
Cashflow from Trading3,5013,42972
Movement in Working Capital792-74866
Cash Inflow from Operations4,2933,355938
Capital expenditures for the year totalled around $0.1 million (FY2024 $0.2 million), largely relating to laptops
and IT hardware. The Company does not capitalise software development.
Net assets include intangible assets of around $1.1 million, which is all goodwill and subject to an annual
impairment test.
SDL operates with a largely neutral working capital balance, meaning growth typically does not require
additional investment of capital.
Taxation and Dividends
SDL pays full New Zealand tax on locally generated earnings and the Company’s overall tax rate in FY2025 was
28.2% (NZ statutory tax rate is 28%).
SDL pays dividends only to the extent that it can fully impute them and also subject to the Company not
experiencing any one-off requirements for abnormal capital expenditure or any significant acquisition or
investment activity. The Company did not pay an interim dividend following the result of its largest customer’s
RFP and consequent restructuring. SDL will be paying a FY2025 final dividend of 3.0 cents per share.
Earnings and Dividends per ShareFY2025FY2024Percentage Change
Closing Shares on Issue (‘000)14,70614,720-0.1%
Reported Earnings per Share (cents)17.819.2-7.0%
Dividend per Share (cents)3.09.5-68.4%
Dividend Proportion Imputed100.0%100.0%
Dividend Payout ratio16.8%49.6%
The final dividend of 3.0 cents per share will be fully imputed and paid on 26 September 2025.
10 Management Discussion and Analysis

The number of shares on issue was slightly down year-on-year as SDL commenced a share buyback during
FY2025, although this paused prior to year-end as the Company was holding material, non-public information. At
financial year end, the Company had outstanding ESOP rights to key staff members in the plan who collectively
hold rights to 0.59 million shares.
Risk Factors
Mail volume in New Zealand, in line with global
trends, continues to decline, particularly for
transactional mail. NZ Post standard-mail retail
postage rates increased 26% at end FY2025
(on top of a 15% increase at end FY2024). The
Company has several key domestic contracts
that, if lost, could place material pressure on local
profitability although much of this is under medium-
term contract. SDL reiterates its expectation that
consolidation in the New Zealand print market is
inevitable, with some current capacity rationalisation
underway as one sizeable digital printer has
indicated it is ceasing operations. The Company
emphasises it will not participate unless there is
clear value enhancement for shareholders.
SDL’s largest five customers accounted for 55% of
revenue (FY2024: 60%). This revenue concentration
includes the Company’s largest customer, which,
following its RFP during FY2025, appears likely to
contribute minimal revenue in FY2026. Loss of one
or more of the residual top five customers would
cause financial results to change materially.
The Company’s software provides critical document
management, distributed print, and storage
functions for its clients. SDL needs to ensure it
continues to maintain appropriate levels of software
development and quality control, along with well-
trained staff for software delivery and support.
Cyber and data security remains a known high-risk
area which, while difficult to mitigate, sees SDL
retaining ISO270001 certification and currently in
the process of obtaining SOC2 certification. The
Company regularly reviews its IT and data security
arrangements including using external consultants.
The Company operates a single site facility for its
New Zealand print and mail house production, with
an offsite for data and server backup. The Directors
are conscious of the operational risk a single
site implies for digital imaging and mail house
operations. SDL has a reciprocal disaster recovery
(“DR”) plan with another printer, as well as a degree
of backup capability with a division of its major print
equipment supplier.
The Company mainly relies on distribution channel
partners to market its software products into the UK,
Europe and the US. This means SDL has little or no
contact with many of the end user customers of its
products. While these channel partner arrangements
are currently stable there is no guarantee these
arrangements will continue. SDL does continue
to drive value for its channel partners and aims to
ensure its software meets ongoing channel partner
requirements.
While the risks noted represent ongoing challenges
and headwinds, the market opportunities to
help organisations with their global customer
communications digital transformation can be
significant. SDL holds a strong position in global
postage management and distributed print,
capturing significant savings as the first step in the
digital transformation journey.
Leading customers and channel partners rely on
SDL’s digital document management platform
and the Company’s sales and marketing efforts
enable growth in key vertical global markets and
offer longer term paybacks. Nevertheless, the
shorter-term headwinds in the global environment,
especially relating to macroeconomic conditions,
are producing significant uncertainty and this could
materially affect the Company’s results.
11 Solution Dynamics | 2025 Annual Report

FY2026 Outlook
SDL is continuing to grow market share in New
Zealand, although the overall decline in the print and
mail house market continues unabated, exacerbated
by further increases from postal operators globally,
including NZ Post, in postage rates. This is
inevitably hastening the migration from physical to
digital communications. As local councils roll out
their “water” initiatives, SDL will gain new business
from both new and existing customers. There is
recent evidence of market consolidation with the
withdrawal of a large mail production provider
in New Zealand. SDL continues to be committed
to an integrated digital plus print solution for its
customers and is making the necessary investments
in hardware and software required to support an
integrated omni-channel solution. The annualised
effect of wins in FY2025, along with a strong
pipeline of opportunities, should see SDL’s New
Zealand operations continue to deliver solid results.
International growth (outside the RFP by SDL’s major
customer) improved in FY2025. A key prospect
market, global charities, was historically a major
source of revenue and profit growth for SDL but has
been severely impacted by the loss of government
funding in both the US and UK. The earnings outlook
assumes that these challenges to global charities
funding will continue in FY2026.
Beyond global charities, there is, however, growing
momentum in revenue growth in North America
and the UK, albeit with pressure from customers to
reduce costs. The Company’s challenge, like many
smaller organisations, is to profitably scale the
international business and that remains the focus.
Key growth initiatives in FY2026 include:
1. Leverage SDL’s Campaign+ software with AI
enabled features to become global market
leader in dental sector Practice Marketing
Software, expanding reach within our largest
UK customer, and integrating into other dental
practice platforms. An executive with deep
dental sector domain expertise has been hired
in the UK to drive this growth initiative.
2. Build our brand as experts in digital deliverability
with “best in class” technology and know-how,
focused on improving client outcomes.
3. Expand penetration within SDL’s top 10 clients,
emphasising the Company’s domain and digital
deliverability expertise, AI value, high customer
service capability and ease of doing business.
4. Continue to evaluate synergistic bolt-on
acquisitions that would enable SDL to
scale quickly in digital-plus-print customer
communications.
SDL continues to invest in software development,
adding AI-enabled features that focus on improving
client outcomes. The rapidly developing and
changing AI (large language models – LLMs) field
is both a threat and opportunity in the customer
communications market. SDL has been enhancing
its digital offering by integrating AI into the
customer communications platform. Market trials
are underway with one of SDL’s larger UK customers
and we expect to fully launch AI enhancements in
FY2026.
In addition to the large customer risk, the Company
cautions that significant volatility in results is
possible and a number of factors, especially
macroeconomic headwinds, are outside the
Company’s control.
SDL is forecasting a net profit for FY2026, currently
in the range of $0.1 million to $0.6 million. The
predominant cause of the earnings change from
FY2025 is the effect of SDL’s largest customer
moving to a multi-vendor purchasing model in
mid-FY2025, partially offset by the subsequent
significant restructuring to lower the Company’s
cost base.
Global economic environment and political
instability remains elevated, which, along with
domestic New Zealand economic headwinds,
makes forecasting difficult.
12 Management Discussion and Analysis

Key Financial Trend Metrics
Revenue ($ 000)
Revenue CAGR (10 year) 12.2%
Software CAGR (9 year) 21.3%
Print/Mail CAGR (9 year) 6.0%
EBITDA ($ 000)
CAGR (10 year) 14.8%
EBITDA is as reported in financial
statements, noting this is affected by the
change of accounting standard to NZ
IFRS 16 (accounting for leases) in FY2020
(increases reported EBITDA) so FY2020
onwards is not comparable with prior years.
Net Profit ($ 000)
CAGR (10 year) 12.5%
Dividends (cents per share)
CAGR (10 year) 7.2%
Chart excludes imputation credits.
All dividends are fully imputed.
Total dividends last 10 years:
• 82 cents per share (cash)
113.9 cents per share (incl imputation)
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
FY 16FY 17FY 18FY 19FY 20FY 21FY 22FY 23FY 24FY 25
Orange bar is Software & Technology
Blue bar is Print/Mailhouse
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
0
1,000
2,000
3,000
4,000
5,000
6,000
FY 16FY 17FY 18FY 19FY 20FY 21FY 22FY 23FY 24FY 25
0
500
1,000
1,500
2,000
2,500
3,000
3,500
FY 16FY 17FY 18FY 19FY 20FY 21FY 22FY 23FY 24FY 25
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
FY 16FY 17FY 18FY 19FY 20FY 21FY 22FY 23FY 24FY 25
13 Solution Dynamics | 2025 Annual Report

Independent Auditor’s Report






Level 9, 45 Queen Street, Auckland 1010
PO Box 3899, Auckland 1140
New Zealand
T: +64 9 309 0463
F: +64 9 309 4544
E: auckland@bakertillysr.nz
W: www.bakertillysr.nz

INDEPENDENT AUDITOR’S REPORT
To the Shareholders of Solution Dynamics Limited

Opinion
We have audited the consolidated financial statements of Solution Dynamics Limited and its subsidiaries ('the Group')
on pages 20 to 46, which comprise the consolidated statement of financial position as at 30 June 2025, and the
consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated
statement of cash flows for the year then ended, and notes to the consolidated financial statements, including
material accounting policy information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the
consolidated financial position of the Group as at 30 June 2025, and its consolidated financial performance and its
consolidated cash flows for the year then ended in accordance with New Zealand Equivalents to International
Financial Reporting Standards ('NZ IFRS') and International Financial Reporting Standards ('IFRS').

Our report is made solely to the Shareholders of the Group. Our audit work has been undertaken so that we might
state to the Shareholders of the Group those matters we are required to state to them in an auditor’s report and for
no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other
than the Shareholders of the Group as a body, for our audit work, for our report or for the opinions we have formed.

Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) ('ISAs (NZ)'). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Consolidated Financial Statements section of our report. We are independent of the Group in accordance with
Professional and Ethical Standard 1 International Code of Ethics for Assurance Practitioners (including International
Independence Standards) (New Zealand) issued by the New Zealand Auditing and Assurance Standards Board and
the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants
(including International Independence Standards) (‘IESBA Code’), and we have fulfilled our other ethical responsibilities
in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.


Other than in our capacity as auditor we have no relationship with, or interests in, Solution Dynamics Limited or any
of its subsidiaries.


14 Independent Auditor’s Report

Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
consolidated financial statements of the current year. These matters were addressed in the context of our audit of
the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Key Audit Matter How our audit addressed the key audit matter
Revenue recognition
For the year ended 30 June 2025, the Group
recognised revenue of $40.92 million (2024:
$38.25 million), comprising the rendering of
services and sale of goods under contracts (refer
Note 3.1(a) to the consolidated financial
statements). The Group’s revenue is derived from
three key streams: digital printing and document
services, sourced services, and digital software
and technology services.

Revenue is recognised either:
• Over time, using the output method, as
services are delivered to customers; or
• At a point in time, when control of goods
transfers to the customer, typically upon
delivery.

Revenue recognition was considered a key audit
matter due to:
• The volume and complexity of the Group’s
customer contracts across multiple
service lines.
• The significance of revenue to the Group’s
financial performance and position.
• The degree of judgement and estimation
involved in identifying performance
obligations, determining the timing of
revenue recognition (over time vs point in
time), and assessing whether service
delivery had occurred at year-end.
Errors or misjudgements in revenue recognition—
whether premature or deferred—could result in
material misstatements in the financial
statements.


Our procedures, which addressed the risk of material misstatement due
to inappropriate revenue recognition, included among others:
• Understanding and evaluating the design and implementation
effectiveness of the Group’s controls over revenue recognition
across each business stream.
• Understanding and evaluating the appropriateness of the Group’s
revenue recognition policies for each business stream against the
requirements of NZ IFRS 15
Revenue from Contracts with
Customers and evaluating whether the policies were applied
consistently.
• Carrying out substantive testing and analytical review procedures
over Group’s revenue streams to assess whether the accounting
treatment is in line with the Group’s revenue recognition processes
and accounting policies.
o For revenue recognised at a point in time, we examined a
sample of invoices, delivery documents, and cash
receipts to verify the occurrence and timing of revenue
recognition.
o For revenue recognised over time, we assessed progress
toward satisfaction of performance obligations using the
output method. We tested key inputs (such as units
dispatched) to supporting documentation.
o We performed cut-off testing on revenue transactions
recorded near year-end to determine whether revenue
was recognised in the correct reporting period.
o
We performed analytical procedures, including cash
proofing by reconciling recorded revenue to cash receipts
per the general ledger and bank statements, to test
existence, completeness and accuracy of revenue.
•
Evaluating the related disclosures (including the material
accounting policy information and accounting estimates) in the
Group’s consolidated financial statements.
15 Solution Dynamics | 2025 Annual Report

Key Audit Matter How our audit addressed the key audit matter
Impairment assessment of goodwill and other
indefinite life intangible assets.
As disclosed in Note 4.5 of the Group’s
consolidated financial statements the Group has
goodwill of $1.06m allocated to its Electronic
Content Management cash-generating unit
(‘CGU’).

Goodwill and brand assets were significant to our
audit due to the size of the assets and the
subjectivity, complexity and uncertainty inherent
in the measurement of the recoverable amount of
the CGU for the purpose of the required annual
impairment test. The measurement of the CGU’s
recoverable amount includes the assessment
and calculation of its ‘value in-use’.

Management has completed the annual
impairment test of the CGU as at 30 June 2025.
This annual impairment test involves complex
and subjective estimation and judgement by
Management on the future performance of the
CGU, discount rates applied to the future cash
flow forecasts, the terminal growth rates, and
future market and economic conditions.

Our audit procedures among others included:
• Understanding and evaluating the Group’s internal controls relevant
to the accounting estimates used to determine the recoverable
amount of the Group’s CGU.
• Evaluating Management’s determination of the Group’s CGU based
on our understanding of the nature of the Group’s business and the
economic environment in which the segments operate. We also
analysed the internal reporting of the Group
to assess how
operations are monitored and reported.
• Challenging Management’s assumptions and estimates used to
determine the recoverable amount of the CGU, including those
relating to forecast free cash flows, growth rates and discount rates.
Procedures included:
o Evaluating the logic of the value-in-use calculation supporting
Management’s annual impairment test and testing the
mathematical accuracy of the calculation;
o Evaluating Management’s process regarding the preparation
and review of forecasts;
o Comparing forecasts to Board approved forecasts;
o Evaluating the historical accuracy of the Group ’s forecasting
to actual historical performance;
o Challenging and evaluating the forecast growth assumptions;
o Evaluating the inputs to the calculation of the discount rates
applied;
o Engaging our own internal valuation expert to evaluate the
logic of the value-in-use calculation and the inputs to the
calculation of the discount rates applied;
o Evaluating the forecasts, inputs and any underlying
assumptions with a view to identifying Management bias;
o Evaluating Management’s sensitivity analysis for reasonably
possible changes in key assumptions; and
o Performing our own sensitivity analyses for reasonably
possible changes in key assumptions, the two main
assumptions being: the discount rate and forecast growth
assumptions.
• Evaluating the related disclosures (including the material accounting
policy information and accounting estimates)
in the Group’s
consolidated financial statements.



16 Independent Auditor’s Report

Other Matter
The consolidated financial statements of Solution Dynamics Limited for the year ended 30 June 2024 were audited
by another auditor who expressed an unmodified opinion on those statements on 22 August 2024.

Responsibilities of the Directors for the Consolidated Financial Statements
The Directors are responsible on behalf of the Group for the preparation and fair presentation of the consolidated
financial statements in accordance with NZ IFRS and IFRS, and for such internal control as the Directors determine
is necessary to enable the preparation of the consolidated financial statements that are free from material
misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the Directors are responsible on behalf of the Group for assessing
the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the Directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs (NZ) will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these consolidated financial statements.


A further description of the auditor’s responsibilities for the audit of the consolidated financial statements is located
at the External Reporting Board’s website at:
https://www.xrb.govt.nz/standards/assurance-standards/auditors-responsibilities/audit-report-1-1/


The engagement partner on the audit resulting in this independent auditor’s report is J A Daubney.




BAKER TILLY STAPLES RODWAY AUCKLAND
Auckland, New Zealand

28 August 2025

17 Solution Dynamics | 2025 Annual Report

Consolidated
Financial
Statements

Consolidated Financial Statements
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2025
Note2025
$000
2024
$000
Revenue from contracts with customers3.1 (a)40,91938,252
Other income3.1 (a)405416
Total Revenue and Income41,32438,668
Changes in inventories of finished goods and work
in progress
3.1 (b)20,76618,954
Raw materials and consumables used 3.1 (b)6,2724,873
Employee benefit expenses 3.2 (a)6,9357,486
Other expenses 2,9052,520
Earnings before Interest, Tax, Depreciation &
Amortisation (EBITDA)
3.64,4464,835
Depreciation4.4, 4.7861851
Amortisation4.5 (b)6054
Finance costs5.494125
Finance income5.4(217)(250)
Net Finance costs/(income)(123)(125)
Profit before Income Tax3,6484,055
Income tax3.3 (a)1,0291,236
Net Profit after Income Tax2,6192,819
Other Comprehensive Income
Items that may be reclassified subsequently to
profit and loss:
Exchange (loss)/gain on translation of foreign
operations
8660
Other Comprehensive (Loss)/Gain Net of Tax8660
Total Comprehensive Income for the Year2,7052,879
Earnings per Share – Net Profit after TaxCentsCents
Basic earnings per share3.4 17.8 19.2
Diluted earnings per share3.417.819.2
The accompanying notes on pages 24–46 form part of the Consolidated Financial Statements.
20 Consolidated Financial Statements

Consolidated Statement of Changes in Equity
For the year ended 30 June 2025
Share
Capital
$000
Employee
Share
Option Plan
$000
Foreign Currency
Translation
Reserve
$000
Accumulated
Profit
$00
Total
Equity
$000
Balance 30 June 20235,574142(39)1,6747,351
Issue of share options to
employees
-24--24
Dividends paid---(1,252)(1,252)
Transactions with Owners-24-(1,252)(1,228)
Profit for the year after tax---2,8192,819
Other comprehensive income--60-60
Total Comprehensive Income--602,8192,879
Balance 30 June 20245,574166213,2419,002
Lapse of share options to
employees
(14)--(14)
Share Buybacks(9)---(9)
Dividends paid--(368)(368)
Transactions with Owners(9)(14)-(368)(391)
Profit for the year after tax2,6192,619
Other comprehensive income--86-86
Total Comprehensive Income--862,6192,705
Balance 30 June 20255,5651521075,49211,316
The accompanying notes on pages 24–46 form part of the Consolidated Financial Statements.
21 Solution Dynamics | 2025 Annual Report

Consolidated Statement of Financial Position
As at 30 June 2025
Note2025
$000
2024
$000
Current Assets
Cash and cash equivalents4.1 (a)6,6934,950
Short-term cash deposits4.1 (b)4,5003,000
Trade & other receivables4.23,7543,861
Inventories4.8329271
Prepayments578470
Total Current Assets15,85412,552
Current Liabilities
Trade and other payables4.34,1013,923
Provision for taxation682281
Deferred contract revenue407216
Lease liability5.2735735
Employee benefit liabilities4.6693689
Total Current Liabilities6,6185,844
Working Capital9,2366,708
Non-Current Assets
Property, plant & equipment4.7220278
Right of use assets4.41,3541,795
Goodwill & intangible assets4.51,1811,241
Deferred tax benefit3.3 (b)245226
Total Non-Current Assets3,0003,540
Non-Current Liabilities
Lease liability5.26521,080
Long-term employee benefit liabilities4.6268166
Total Non-Current Liabilities9201,246
Net Assets11,3169,002
Equity
Share capital5.15,5655,574
Employee share option reserve152166
Foreign currency translation reserve10721
Accumulated profit 5,492 3,241
Total Equity11,3169,002
For and on behalf of the Board who approved these financial statements for issue on 28 August 2025.
John McMahon – Director
(Chair)
Andy Preece – Director
(Chair Audit & Risk Management Committee)
The accompanying notes on pages 24–46 form part of the Consolidated Financial Statements.
22 Consolidated Financial Statements

Consolidated Statement of Cash Flows
For the year ended 30 June 2025
Note2025
$000
2024
$000
Cash Flows from Operating Activities
Cash was provided from:
Receipts from customers 44,911 41,565
Other income405416
45,31641,981
Cash was applied to:
Payments to suppliers and employees 39,989 37,167
Income tax paid6281,236
GST and VAT paid406223
41,02338,626
Net Cash Inflows from Operating Activities3.54,2933,355
Cash Flows from Investing Activities
Cash was applied to:
Transfer to short-term cash deposits 4,500 3,000
Purchase of property, plant and equipment & capital
works in progress
6564
Purchase of software & intangible assets-17
4,5653,081
Cash was provided from:
Interest received217250
Transfer in from Term Deposits3,000-
3,217250
Net Cash Outflows from Investing Activities(1,348)(2,831)
Cash Flows from Financing Activities
Cash was applied to:
Payment of dividends3681,252
Share buy backs9-
Interest paid94125
Lease liability payments731825
1,2022,202
Net Cash Outflows from Financing Activities(1,202)(2,202)
Net Change in Cash and Cash Equivalents1,743(1,678)
Add cash and cash equivalents held at beginning of year4,9506,628
Cash and Cash Equivalents at End of Year4.1(a)6,6934,950
The accompanying notes on pages 24–46 form part of the Consolidated Financial Statements.
23 Solution Dynamics | 2025 Annual Report

Notes to the Consolidated Financial Statements
For the year ended 30 June 2025
The notes to the consolidated financial statements are presented as follows:
1. Corporate Information
2. Basis of preparation
2.1 Statement of compliance
2.2 Basis of measurement and consolidation
2.3 Changes to accounting policies
2.4  New Standards, Interpretations and
Amendments
3. Group performance
3.1 Revenue, Income, and Segment Reporting
3.2 Expenses
3.3 Income and deferred tax
3.4 Earnings per share
3.5 Reconciliation (operating cash flows)
3.6 Non-GAAP performance measures
4. Assets and liabilities
4.1 Cash and cash equivalents and short-term
deposits
4.2 Trade & other receivables
4.3 Trade & other payables
4.4 Right of use assets
4.5 Goodwill and intangible assets
4.6 Employee benefit liabilities
4.7 Property, Plant and Equipment
4.8 Inventories
5. Debt and Equity
5.1 Share capital
5.2 Lease liabilities
5.3 Employee share option plan
5.4  Net finance (income)/cost
6. Capital and financial risk
management
6.1 Capital management
6.2 Financial risk management
6.2 (a) Credit risk
6.2 (b) Market risk: Foreign currency risk
6.2 (c) Market risk: Interest rate risk
6.2 (d) Liquidity risk
6.3 Financial instruments by category
7. Other information
7.1 Related party transactions
7.2 Capital Commitments
7.3 Contingent liabilities
7.4 Events after the reporting date
24 Consolidated Financial Statements

1. Corporate Information
The consolidated financial statements including the Financial Statements of Solution Dynamics Limited (SDL or
Company) and its subsidiaries, collectively the Group for the year ended 30 June 2025 were authorised for issue
in accordance with a resolution of directors on 28 August 2025.
Solution Dynamics Limited 2025 is a public company incorporated and domiciled in New Zealand and is listed
on the New Zealand Stock Exchange (NZX). The registered office is located at 18 Canaveral Drive, Albany in
Auckland.
Details on subsidiaries is provided below:
Proportion of Ownership
Interests(%)
Entity name Country of Incorporation and Primary Place of Business20252024
Solution Dynamics International United Kingdom 100%100%
Solution Dynamics IncorporatedUnited States
of America
100%100%
Solution Dynamics Australia Pty LtdAustralia100%100%
Déjar International Limited New Zealand 100%100%
Nature of Operations
The Group offers a range of integrated solutions encompassing data management, electronic digital printing,
document distribution, web presentation and archiving, fulfilment, traditional print services, scanning, data entry
and document management.
Accounting Framework
The parent company, Solution Dynamics Limited, is a profit-oriented entity, domiciled in New Zealand, registered
under the Companies Act 1993 and listed on the New Zealand Stock Exchange. Solution Dynamics Limited is an
FMC Reporting Entity under the Financial Markets Conducts Act 2013 and the Financial Reporting Act 2013.
2. Basis of preparation
2.1 Statement of Compliance
The consolidated financial statements of the Group comply with New Zealand Equivalents to International
Financial Reporting Standards (NZ IFRS) and International Financial Reporting Standards (IFRS®) as
appropriate for a profit orientated entity.
Re- presentation
To improve disclosure effectiveness, the Group has made a number of representations to the Financial
Statements in the current year.
The previously separate Income Statement and Statement of Comprehensive Income have been combined
into the Statement of Profit or Loss and Other Comprehensive Income.
The simplifications have also resulted in a number of segregation and amendments where line items are
not material and affected comparatives have been restated for consistency. These restatements have not
had an impact on the Profit after tax or Total Comprehensive Income in the Statement of Profit or Loss
and Other Comprehensive Income, Net Assets in the Statement of Financial Position, or the Net increase/
(decrease) in cash presented in the Statement of Cash Flows.

25 Solution Dynamics | 2025 Annual Report

2.2 Basis of measurement and consolidation
(i)  Rounding and presentation
Items included in the consolidated financial
statements are measured using the currency
of the primary economic environment in which
the entity operates (the ‘functional currency’).
The consolidated financial statements are
presented in New Zealand dollars, which is the
Company’s functional currency and the Group’s
presentation currency and expressed in $000’s.
The consolidated financial statements have
been prepared under the assumption that the
Group operates as a going concern.
(ii) Measurement
The consolidated financial statements have
been prepared on the historical cost basis but
modified, where applicable, by the measurement
and/or disclosure of fair value of selected
financial assets and financial liabilities (refer
note 6.3).
(iii) Translation of the Financial Statements
into NZD
Transactions in foreign currencies are initially
recorded by the Group entities at the respective
functional currency using the monthly closing
rate at the date the transaction. The assets and
liabilities are translated at the closing rate at the
reporting year end. The revenue and expenses
are translated at exchange rates at the date
of the transactions or where appropiate with
average monthly rates. All resulting exchange
differences arising on this translation are
recognised in the foreign currency transalation
reserve.
(iv)  Group entities
All subsidiaries have a 30 June 2025 reporting
date and consistent accounting policies are
applied.
Accounting policies are selected and applied
in a manner which ensures that the resulting
financial information satisfies the concepts of
relevance and reliability, thereby ensuring that
the substance of the underlying transactions or
other events is reported.
(v) Material Accounting Policies and Critical
Accounting Judgements and Key Sources of
Estimation Uncertainty
The Group’s material accounting policy
information is provided in the relevant notes to
the financial statements.
In the application of the Group’s accounting
policies, the directors are required to make
judgements, estimates and assumptions about
the carrying amounts of assets and liabilities
that are not readily apparent from other sources.
The estimates and associated assumptions are
based on historical experience and other factors
that are considered to be relevant. Actual results
may differ from these estimates.
The estimates and underlying assumptions
are reviewed on an on-going basis. Revisions
to accounting estimates are recognised in the
period in which the estimate is revised if the
revision affects only that period, or in the period
of the revision and future periods if the revision
affects both current and future periods.
Information regarding the Group’s Critical
Accounting Judgements and Key Sources
of Estimation Uncertainty is provided in the
relevant notes to the financial statements,
including:
• Annual goodwill impairment testing (Note
4.5).
• Right-of-use assets (Note 4.4).
• Revenue from contracts with customers
(3.1)
2.3 Changes to Accounting Policies
The accounting policies and disclosures are
consistent with those of the previous year.
2.4  New Standards, Interpretations and
Amendments
(i) New standards mandatorily effective during
the period
No new or amended standards and
interpretations that became effective for the
year ended 30 June 2025 have had a material
impact to the Group.
(ii) Issued, but not yet effective
NZ IFRS 18 Presentation and Disclosure
in Financial Statements is effective for the
year ended 31 July 2028 and will impact the
presentation of the Statement of Profit or Loss
and Other comprehensive Income, with an
allocation of income and expenses between
operating, investing and financing categories,
and new sub-totals such as Operating profit.
Financial performance measures used to
explain the Group financial performance in
public communications outside the financial
statements will also be required to be disclosed,
and there is enhanced guidance on the
aggregation and disaggregation of information.
The Group is assessing the effect of applying
NZ IFRS 18.
Apart from the standards mentioned above, the
Group does not anticipate that any other newly
issued or amended IFRS standards, which are
26 Consolidated Financial Statements

not yet effective, will have a material impact
on the recongition or measurement of assets,
laibilities, income, or expenses in the Group’s
consolitated financial statements.
3. Group performance
This section of the notes to the consolidated
financial statements provides information on the
Group’s financial performance and the returns
provided to equity holders, including:
3.1 Revenue, Income, and Segment Reporting
3.2 Expenses
3.3 Income and deferred tax
3.4 Earnings per share
3.5 Reconciliation (operating cash flows)
3.6 Non-GAAP performance measures
3.1 Revenue, Income, and Segment Reporting
Accounting policy
Revenue is recognised when control of a
product or service, or a distinct performance
obligation is transferred to the customer. Where
multiple products or services are sold in a single
arrangement, revenue is recognised for each
distinct good or service. There is no financing
component/significant payment terms.
Digital Printing & Document Services revenue
Service revenue is earned from providing mail
house operations, high-volume postal business
and ancillary document handling operations
such as automated envelope inserting and
flow-wrap. The lodgement and distribution of
these documents is managed using a variety of
machines and processes.
Alongside our services, we offer Digital Mail
Centre (DMC) enabling customers/users to
generate print, email, or SMS communications
from pre-configured templates. Customer/users
manage and create their own templates using
template builders within the system.
Revenue is recognised over time using the
output method as the relevant services are
completed and delivered to the customer.
Outsourced Services revenue
Outsourced services revenue is earned on
combined functions or components such as
postage, third party offset printing, freight,
paper and envelopes. These are integrated
into the above service offerings. Long-term
arrangements have been established with key
suppliers such as NZ Post, for the provision of
these services.
For performance obligations involving the
delivery of goods (e.g., paper, envelopes),
revenue is recognised at the point in time when
control is transferred to the customer, usually
upon receipt of the goods.
For services where the customer benefits
from the service as it is performed, revenue is
recognised over time via the output method. The
measure of progress toward satisfying these
performance obligations is determined based
on the extent of services delivered or consumed
by the customer during the period.
Digital Software & Technology revenue
Software platforms are leveraged to onboard
customers, facilitate the sending and tracking
of documentation through physical and digital
channels and manage archiving and retrieval
processes using a SaaS model (software as
a service arrangement). Revenue earned from
the platform can be structured as a monthly
subscription or charged on a per-document
basis.
Revenue earned is recognised over-time via the
output method as customers simultaneously
and continuously derive the benefit from their
subscription rights or at a point in time on a per-
document basis as the performance obligation
is met instantly with a customer self-generated
digital print.
Segment Reporting
The Group operates in one business segment,
the supply of customer communication
solutions. These include a range of integrated
document management products and services
separated into three streams; Software &
Technology, Digital Printing & Document
Handling Services and Outsourced revenue.
An overhead structure including sales,
marketing and administration departments
provides services for all of the above revenue
streams.
This note does not contain reconciling items,
as the same accounting standards and policies
have been consisently applied in the preparation
of both and note as those used to prepare the
financial statements.
27 Solution Dynamics | 2025 Annual Report

3.1(a)  Revenue from contracts with customers
2025
$000
Digital Printing
& Document
Services
Outsourced
Services
Digital Software
& Technology
Total
Revenue recognised over time 4,512 11,483 23,085 39,080
Revenue recognised at a point
in time
- 798 1,041 1,839
Total 4,512 12,281 24,126 40,919
2024
$000
Digital Printing
& Document
Services
Outsourced
Services
Digital Software
& Technology
Total
Revenue recognised over time4,4497,70023,80335,952
Revenue recognised at a point
in time
-1,0261,2742,300
Total4,4498,72625,07738,252
Other income
2025
$000
2024
$000
Government grant income214199
Other income191217
Other Income405416
3.1(b) Segment Consolidated Statement of Profit or Loss
Note2025
$000
%2024
$000
%
Software & Technology24,12658%25,07765%
Digital Printing & Document Handling
Services
4,51211%4,44911%
Outsourced services12,28130%8,72623%
Other Income4051%4161%
Total Revenue and Income41,324100%38,668100%
Less: Changes in inventories of finished
goods and work in progress
20,76650% 18,954 50%
Raw materials and consumables used6,27215% 4,873 12%
Other expenses 9,84024% 10,006 26%
Earnings before Interest, Tax,
Depreciation & Amortisation
3.64,44611%4,83512%
Continued on next page ...
28 Consolidated Financial Statements

Note2025
$000
%2024
$000
%
Less:
Depreciation8613%8512%
Amortisation601%540%
Finance income (217)-1%(250)-2%
Finance cost941%1250%
Tax1,0293%1,2363%
Net Profit after Income tax2,6197%2,8197%
(ii)  Segment Assets
Assets are not segmented between service streams.
(iii)  Information about Top Five Customers
Included in revenues for the Group of $40.92 million (2024: $38.25 million) are revenues of $22.33
million (2024: $23.09 million) which arose from sales to the top five customers in the Group.
3.1(c) Geographical Information
The Group has customers in New Zealand, Australia, United States of America and Europe.
Revenue from External CustomersNon-Current Assets
2025
$000
%2024
$000
%2025
$000
%2024
$000
%
New Zealand19,77748.0%15,28840.0%2,99499.8%3,52999.7%
Australia1,1553.0%1,3333.0%-0.0%-0.0%
United States of America15,46738.0%18,36048.0%20.1%-0.0%
Europe4,52011.0%3,2719.0%40.1%110.3%
Total40,919100%38,252194%3,000100%3,540100%
3.2 Expenses
3.2 (a) Employee benefit expenses
2025
$000
2024
$000
Directors’ remuneration - directors fees228288
Short-term employee benefits6,3066,687
Defined contribution plans414487
Share-based payment expense(13)24
Total Employee benefit expenses 6,9357,486
3.1(b) Segment Consolidated Statement of Profit or Loss
29 Solution Dynamics | 2025 Annual Report

3.2 (b) Expenses
2025
$000
2024
$000
Freight, Print & Postage21,43318,376
Other Expenses7,5157,208
Research & development 873 654
Total29,82126,238
Auditor’s Remuneration
Audit fees – Audit of the Consolidated Financial
Statements, Grant Thornton
- 109
Audit fees –Audit of the Consolidated Financial
Statements, Baker Tilly Staples Rodway
122-
Total Auditors’ Remuneration122109
Total Expenses29,94326,347
Total Operating Expenses36,87833,833
3.3 Income and deferred tax
3.3(a) Current Tax
2025
$000
2024
$000
Income tax expense comprises:
Current tax expense1,0481,275
Deferred tax movement relating to the origination and
reversal of temporary differences
(19)(39)
Total Tax Expense1,0291,236
The total charge for the reporting period can be reconciled to the accounting profit as follows:
Net profit before income tax3,6484,055
Income tax at company tax rate (1)1,0191,135
Permanent differences1011
Under / (over) provision in prior years(102)31
Other10259
Income Tax Expense1,0291,236
(1) The Group tax rate of 28% (2024: 28%) has been used. This is the tax rate applicable to the country
where Solution Dynamics Limited, the primary tax paying entity, is domiciled.
At 30 June 2025 there are imputation credits available of $1,362,696 (2024: $597,176) for use in
subsequent reporting periods.
30 Consolidated Financial Statements

3.3(b) Deferred Tax Asset
2025
$000
2024
$000
Temporary Differences
Property, plant and equipment (9)(6)
Right-of-use assets(379)(503)
Lease liabilities 388508
Employee benefit liabilities 232221
Accruals and provisions136
Deferred Tax Asset on Temporary Differences
Recognised
245226
Deferred tax assets arising from deductible temporary differences are only recognised to the extent that
it is probable that taxable profits will be available against which the deductible temporary differences
can be utilised.
2025
$000
2024
$000
Deferred Tax Asset Movement
Balance at beginning of period226187
Current year movement through profit or loss1939
Balance at End of Year245226
3.3(c) Imputation Credit Balance
2025
$000
2024
$000
Balance at beginning of year597523
New Zealand Tax Payments, net of refunds*909561
Imputation credits attached to dividends paid(143)(487)
Balance at End of Year1,363597
* This includes the estimated tax payable for 2025 for the NZ entity.
3.4 Earnings Per Share (EPS)
20252024
Net Profit for the Year Attributable to Ordinary
Shareholders ($000)
2,6192,819
Basic
Weighted Average Number of Ordinary Shares
(000’s)
14,70614,720
Basic Earnings Per Share (Cents) 17.819.2
Basic earnings per share is calculated by dividing the net profit after tax attributable to equity holders
of the Company by the weighted average number of ordinary shares outstanding during the reporting
period, adjusted for bonus elements in ordinary shares issued during the reporting period.
31 Solution Dynamics | 2025 Annual Report

20252024
Diluted
Weighted average number of ordinary shares (000’s)14,70614,720
Adjustment for share options (000’s)--
Weighted Average14,70614,720
Diluted Earnings per Share (Cents) 17.819.2
Diluted earnings per share are calculated by adjusting the weighted average number of ordinary shares
outstanding to assume conversion of all potentially dilutive ordinary shares. Options are convertible into
the Company’s shares and are therefore considered dilutive securities for diluted earnings per share.
3.5 Reconciliation of net profit after income tax for year with net cash inflow from operating activities
2025
$000
2024
$000
Net profit after income tax2,6192,819
Adjustments:
Depreciation and amortisation of assets921905
Loss / (gain) on foreign exchange(191)(217)
Bad and doubtful debts--
Net Interest expense(123)(125)
Other non-cash items27547
Cash Flow from Trading3,5013,429
Add movements in working capital:
Increase / (decrease) in trade & other receivables107659
Decrease / (increase) in inventories (58)(92)
Decrease / (increase) in prepayments(114)(176)
Decrease / (increase) in trade creditors & other
current liabilities
770(666)
Increase/ (decrease) in other non-financial liabilities(19)177
Increase / (decrease) in employee benefit liabilities10624
Net Movement in Working Capital792(74)
Net Cash Flows from Operating Activities4,2933,355
3.6 Non-GAAP performance measures
The Group uses a non-GAAP performance measure, Earnings before Interest, Tax, Depreciation,
Amortisation (EBITDA), that does not have one standardised meaning prescribed by NZ GAAP. EBITDA is
included in the financial statements of the Group to provide useful information to readers in order to assist
in the understanding of the Group’s financial performance. EBITDA should not be viewed in isolation nor be
used as a substitute for measures reported in accordance with NZ GAAP.
The Group calculates EBITDA by adding back depreciation and amortisation, finance expense, tax expense
and subtracting finance income. A reconciliation of the Group’s EBITDA is provided below and based on
amounts taken from, and consistent with, those presented in these financial statements.
32 Consolidated Financial Statements

Reconciliation of Net Profit before Tax to EBITDA
2025
$000
2024
$000
Net profit before income tax3,6484,055
Less: Interest income(217)(250)
Add back: Finance expense94125
Add back: Depreciation and amortisation expenses921905
Earnings before Other Income and Expense, Income
Tax, Depreciation and Amortisation (EBITDA)
4,4464,835
4. Assets and Liabilities
This section of the notes to the consolidated financial statements provides information on the Group’s short-
term assets and liabilities that impact the Group’s net operating cash flows, as well as long-term assets utilised
in business operations to generate returns to shareholders, including:
4.1  Cash and cash equivalents and short-term deposits
4.2  Trade & other receivables
4.3  Trade & other payables
4.4  Right of use assets
4.5  Goodwill and intangible assets
4.6  Employee benefit liabilities
4.7  Property, Plant and Equipment
4.8  Inventories
4.1 Cash & Cash Equivalents and Short-term deposits
4.1(a) Cash & Cash Equivalents
2025
$000
2024
$000
Cash at bank 6,6934,950
Total Cash and Cash Equivalents6,6934,950
Interest rates on cash and cash equivalents:
Cash at bank 3.75% -1.60% (2024: 3.65% - 4.80%)
Solution Dynamics has a $200,000 overdraft facility in place with the ANZ Bank at an interest rate
of 8.65% p.a. (2024: 15.70%). This facility, which was unused as at 30 June 2025, is to support the
operational requirements of the Group. It is interest only and is secured by first ranking debenture over
the assets of the Group.
33 Solution Dynamics | 2025 Annual Report

4.1(b) Short-term deposits
2025
$000
2024
$000
Short-term deposits (6 months maturity)4,5003,000
Total Short-Term Deposits4,5003,000
Interest rates on short-term deposits:
Short-term deposits 4.05% –4.18% (2024: 5.50% - 6.19%)
As at 30 June 2025 the ANZ Bank has imposed no financial covenants to secure the existing facilities.
The Group holds a net cash position with no bank debt (2024: $Nil).
As at 30 June 2025 SDL provided commercial guarantees totaling $115,500 (2024: $64,500) to the
Group’s suppliers.
4.2 Trade & Other Receivables
2025
$000
2024
$000
Trade receivables3,7583,892
Credit loss allowance(79)(79)
Total Trade Receivables3,6793,813
Sundry debtors7548
Total Trade and Other Receivables3,7543,861
Trading terms & aging of past due trade receivables
The Group’s trading terms require settlement by the 20th of the month following the date of invoice. At
the reporting date the Group had past due debtors of $218,000 (2024: $530,000) for which an allowance
of $79,000 (2024: $79,000) was made. With average receivables past due at 5.81% of total receivables
(2024: 13.62%) there has not been a significant change in credit quality, therefore the amounts are
considered recoverable. The Group does not hold any collateral over these balances.
2025
$000
2024
$000
30 – 60 days84371
60 – 90 days5274
90 – 120 days16
120 days plus8179
Total Overdue Trade Receivables218530
Movement in allowance for credit losses
2025
$000
2024
$000
Balance at the beginning of the reporting period7979
Accounts written off as uncollectable or
(recovered)
--
Total Allowance for Credit Losses7979
34 Consolidated Financial Statements

In assessing the recoverability of trade receivables, the Group considers any change in the quality of
the trade receivables from the date that the credit was initially granted up to the reporting date. The
concentration of credit risk is limited with the largest customer comprising 1.74% (2024: 18.6%) of the
gross trade receivable balance, as at 30 June 2025, 96.0% of the outstanding balance was less than 60
days old (2024: 92.0%). Accordingly, the directors believe that no further adjustments are required in
excess of the allowance for credit losses.
The directors do not consider there to be any expected credit loss in addition to the credit losses
recorded above.
4.3 Trade and other payables
Note2025
$000
2024
$000
Trade and other payables6.34,1013,923
Total Trade and Other Payables4,1013,923
Trade payables are unsecured and are usually paid within 60 days of recognition.
4.4 Right-of-use Asset
Accounting policy
The Group has elected to account for short-term leases and leases of low-value assets using the practical
expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to
these are recognised as an expense in profit or loss on a straight-line basis over the lease term. The Group
currently has no short-term or low value leases.
Critical Accounting Judgements and Key Sources of Estimation Uncertainty
At inception of a contract, SDL uses judgement in assessing whether a contract is, or contains, a lease. A
contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for
a period of time in exchange for consideration. To assess whether a contract conveys the right to control
the use of an identified asset, SDL assesses whether:
• The contract involves the use of an identified asset
• SDL has the right to obtain substantially all the economic benefits from use of the asset throughout the
period of use
• SDL has the right to direct the use of the asset
At inception or on reassessment of a contract that contains a lease component, SDL allocates the
consideration in the contract to each lease component on the basis of their relative stand- alone prices.
SDL recognises a right-of-use asset at the lease commencement date. The right-of-use asset is initially
measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments
made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs
to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is
located, less any lease incentives received. SDL determines the lease term as a non-cancellable lease term
including renewals that are reasonably assured.
In assessing the lease liability an incremental borrowing rate is applied to lease liabilities recognised under
NZ IFRS 16. This is 4.5% (2024: 4.5%) for property and 14.65% (2024: 14.65%) on plant & equipment. The
incremental borrowing rate is the estimated rate that SDL would have to pay to borrow the same amount
over a similar term, and with similar security to obtain an asset of equivalent value. The lease term is the
non-cancellable period of a lease, together with periods covered by an option (available to the lessee only)
to extend or terminate the lease if the lessee is reasonably certain to exercise/not to exercise that option.
The property lease is currently a five (5) year term lease and further rights of renewal options are currently
available, but not yet taken up. Rent increases are calculated on a fixed percentage basis, on renewal date.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement
date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The
estimated useful lives of right-of-use assets are determined on the same basis as those of property and
equipment. In addition, the right-of-use asset is periodically assessed for impairment losses and adjusted
for certain remeasurements of the lease liability.
35 Solution Dynamics | 2025 Annual Report

Right-of-use Assets
Property
$000
Plant
$000
Total
$000
Cost
Balance 1 July 20234,7407325,472
Additions-335335
Terminations-(732)-732
Balance 30 June 20244,7403355,075
Additions303303
Balance 30 June 20255,0433355,378
Accumulated Depreciation
Balance 1 July 20232,6806043,284
Depreciation expense492231723
Terminations-(732)(732)
Adjustments5-5
Balance 30 June 20243,1771033,280
Depreciation expense576168744
Adjustment5(5) -
Balance 30 June 20253,7582664,024
Carrying Amount
Balance 1 July 20232,0601282,188
Balance 30 June 20241,5632321,795
Balance 30 June 20251,285691,354
Refer to note 5.2 for further details on the Group’s leasing activity.
4.5 Goodwill and intangible assets
Critical Accounting Judgements and Key Sources of Estimation Uncertainty
For impairment testing purposes, goodwill is allocated to a single cash generating unit (“CGU”), SDL
Software (referred to as the Electronic Content Management CGU).
The Goodwill recognised by the Group has arisen previous businesses combinations from the acquisitions
of business from Déjar Holdings.
Previous Business Combinations
Scantech
$000
DTP
$000
Déjar
$000
Bremy
$000
Total
$000
Goodwill recognised66572157231,061
Determining whether goodwill is impaired requires the carrying amount of the SDL Software CGU,
including allocated goodwill, to be compared against its recoverable amount.
36 Consolidated Financial Statements

Recoverable amount is determined by calculating the SDL Software CGU’s value-in-use, via discounted
cash flow methodology, requiring the directors to estimate the future cash flows expected to arise based
on approved budgets and five-year forecasted cash flows (based on assessments of the current market
opportunities through existing distribution channels net of forecast costs), and a suitable discount rate
in order to calculate present value.
Cash flows beyond the five-year forecast period have been taken into account by the calculation of a
terminal value, by discounting the year-5 cashflows at a long-term growth rate of 1.0%.
At June 30, 2025:
• The carrying amount of SDL Software CGU’s was $1,410,752 (2024: $1,061,000).
• The recoverable amount of the SDL Software CGU was $9,804,337 (2024: $8,652,559)
Key assumptions and estimates used in determining recoverable value were:
Key Assumptions and Estimates20252024
Sales growth rate (beyond budget period)
1
1.00%1.00%
Discount rate post-tax13.00%13.00%
Pre-tax18.05%18.05%
Long-term growth rate1.00%1.00%
1 The assumptions are subject to inherent uncertainties, particularly those surrounding future license
sales which comprise a substantial portion of projected revenues and hence only inflationary growth rates
have been applied. Gross margin is forecast to be consistent through the budget and forecast period.
4.5(a) Goodwill (impairment)
No accumulated impairment losses have been recognised against goodwill (2024: $nil).
(i) Sensitivity to Changes in Assumptions
At 30 June 2025, the date of the Group’s annual impairment test, the estimated recoverable amount of the
SDL Software CGU exceeded its carrying amount by $8,393,000 (2024: $8,652,000).
No reasonably possible change in a key assumptions would cause the CGU's carrying amount to exceed its
recoverable amount.
37 Solution Dynamics | 2025 Annual Report

4.5(b) Intangible assets
Accounting policy
Intangible assets with a finite life are subsequently measured at cost less accumulated amortisation and
accumulated impairment losses.
Classes of intangible assets are amortised at the following rates:
Software: 3-5 years straight-line
Software -
Déjar
$000
Software -
Bremy
$000
Software

$000
Customer
Contracts
$000
Total

$000
Cost
Balance 1 July 20232,0901101,7384414,379
Additions--234-234
Balance 30 June 20242,0901101,9724414,613
Balance 30 June 20252,0901101,9724414,613
Accumulated Amortisation-----
Balance 1 July 20232,0901101,7384414,379
Amortisation expense--54-54
Balance 30 June 20242,0901101,7924414,433
Amortisation expense6060
Balance 30 June 20252,0901101,8524414,493
Carrying Amount
Balance 1 July 2023-----
Balance 30 June 2024--180-180
Balance 30 June 2025--120-120
4.6 Employee Benefit Liabilities
Critical Accounting Judgements and Key Sources of Estimation Uncertainty
Provisions for other long term employee benefits are based on the Group’s estimate of the present value of
future costs assuming payroll inflation rate of 2.00% (2024: 3.00%).
2025
$000
2024
$000
Short-term employee benefit liabilities693689
Total Employee Benefit Liabilities (Current) 693 689
Other long term employee benefits 268166
Total Employee Benefit Liabilities (Non-Current)268166
38 Consolidated Financial Statements

4.7 Property, Plant and Equipment
Accounting policy
Property, Plant and Equipment are subsequently measured at cost less accumulated depreciation and
accumulated impairment losses.
Classes of Property, Plant and Equipment are depreciated at the following rates:
• Plant and machinery: 7.0% – 30.0% diminishing value
• Furniture and fittings: 8.5% – 39.6% diminishing value
• Leasehold improvements: 7.8% – 25.0% diminishing value
Plant &
Machinery
$000
Furniture &
Fittings
$000
Leasehold
Improvements
$000
Total

$000
Cost
Balance 1 July 20232,4351267743,335
Additions69-473
Disposals(4)(4)-(8)
Balance 30 June 20242,5001227783,400
Additions62--62
Disposals(17)--(17)
Assets removed from use*(519)--(519)
Balance 30 June 20252,0261227782,926
Accumulated Depreciation
Balance 1 July 20232,299976002,996
Depreciation expense89-39128
Balance 30 June 20242,388976393,124
Depreciation expense79-38117
Disposals(16)--(16)
Assets removed from use*(519)--(519)
Balance 30 June 20251,932976772,706
Carrying Amount
Balance 1 July 202313629174339
Balance 30 June 202411225139276
Balance 30 June 20259425101220
* Assets removed from use represents the removal of assets from registry fully depreciated and with nil
book value.
39 Solution Dynamics | 2025 Annual Report

4.8 Inventories
Accounting policy
Inventories are stated at the lower of cost and net realisable value. Costs are assigned to inventories by the
method most appropriate to the particular class of inventory, with the majority being valued on a first-in-
first-out basis. Net realisable value represents the estimated selling price for inventories less all estimated
costs of completion and costs necessary to make the sale.
2025
$000
2024
$000
Work in Progress227108
Finished goods102163
Total Inventories329271
5. Debt and Equity
This section of the notes to the Consolidated Financial Statements provides information on the Group’s capital
structure and related costs, how funds are raised and how the Group manages capital, including
5.1 Share capital
5.2 Lease liabilities
5.3 Employee share option plan
5.4 Net finance cost
5.1 Share Capital
$000
2025
No. (000’s)$000
2024
No. (000’s)
Ordinary Shares
Balance at beginning of year5,57414,7205,57414,720
Exercise of employee share options----
Share Buyback(9)(14)--
Share Capital at End of Year5,56514,7065,57414,720
The Company had 14,706,443 (2024: 14,719,810) ordinary shares on issue at 30 June 2025. All ordinary
shares ranked equally with one vote attached to each fully paid ordinary share and share equally in
dividends and surplus on winding up.
5.2 Lease liabilities
Accounting policy
The Company uses its incremental borrowing rate at lease commencement to calculate the present value of
lease payments when the rate implicit in a lease is not known.
(i) Leasing activity
The Group has property leases for its Canaveral Drive office and production facility and leases of production
equipment.
The table below describes the nature of the Groups leasing activities by right of use asset type recognised
on the statement of financial position (refer note 4.4).
40 Consolidated Financial Statements

Right of use assets (ROU)No of ROU
assets leased
Range of
remaining term
Average
remaining term
Property1 2 years 2 years
Plant & equipment1 1 years 1 years
(ii) Future lease payments
Maturity analysis
Refer to note 6.2(d) for a presentation of the gross, undiscounted future lease payments of the Group’s
leases as lessee.
Lease payments not included in the measurement of lease liabilities
The Group’s leases typically include renewal options. The Group must assess whether it reasonably expects
(or not) to exercise these when determining the lease term.
There are 1 leases where the Group has assessed it does not reasonably expect to exercise all available
renewal options, resulting in potential future lease payments not currently being included in the lease
liability recognised for these leases of:
• Period: 1 – 3 years.
• Annual payments: $731,000 (based on current lease payments amount)
As standard industry practice, the Groups property leases are subject every two years to market rent review
in accordance with the lease terms . A 3% increase in these payments would result in an additional $26,000
(2024: 25,000) cash outflow compared to the current periods cash outflow.
(iii)  Lease payments recognised in profit or loss
The expense relating to payments not included in the measurement of the lease liability is as follows:
2025
$000
2024
$000
Variable lease payment204 214
204214
(iv) Reconciliation of lease liability
Reconciliation of Lease liabilities
2025
$000
2024
$000
Year Ended 30 June 2024
Opening Balance1,8152,250
Additions302335
Interest expense94111
Repayments(824)(881)
Balance 30 June 20251,3871,815
Leases
2025
$000
2024
$000
Current735735
Non-current6521,080
1,3871,815
41 Solution Dynamics | 2025 Annual Report

5.3 Employee share option plan      
Accounting policy
Equity-settled share-based payments to employees are measured at the fair value of the equity instruments
at the grant date.
The fair value determined at the grant date of the equity settled share-based payments is expensed on a
straight-line basis over the vesting period, based on the Group’s estimate of equity instruments that will
eventually vest. On each reporting date, the Group revises its estimate of the number of equity instruments
expected to vest.
The impact of the revision of the original estimates, if any, is recognised in the consolidated statement of
profit or loss over the remaining period, with a corresponding adjustment to the equity-settled employee
benefits reserve.
Solution Dynamics Limited offers an equity settled employee share option plan. The general principles of
the scheme are:
• The maximum aggregate number of share options to be granted pursuant to the plan is 5% of the total
number of shares on issue at any one time.
• Options of no more than 1% of the total number of SDL’s shares on issue can be granted to an individual
staff member (the directors made an exception to this limit for the US-based CEO Patrick Brand)
• The exercise price will be determined by the Board based on the market price at the time of issue.
• The options may be exercised by the participant (in whole or part) after three years from the date that
they are granted. The key employees have 18 months from the date of eligibility and must be employed
by SDL at the date the option is exercised.
2025202520242024
Weighted
average Exercise
price ($ cents)
Number of
Shares
Weighted average
Exercise price
($ cents)
Number of
Shares
000’s000’s
Outstanding at 1 July 20252.565932.74373
Granted share options
during the year
--2.25220
Share options lapsed shares2.52(260)--
Unvested share options as
at 30 June 2025
2.593332.56593
Percentage of total ordinary
shares
2.26%3.90%
Grant DateOptions
Issued
Share Price
at Grant Date
Exercise
Price
Options ExpireOption Value
$
February 2022172,796$2.90$2.90August 2026$29,994
October 2022160,000$2.25$2.25October 2027$49,502
The fair value was determined using a Black-Scholes option pricing model that considers the exercise
price, the term of the option, the share price at grant date and expected price volatility of the underlying
share, the dividend yield and the risk-free interest rate for the term of the option.
42 Consolidated Financial Statements

In addition to the factors as noted in the table above further inputs for the model included:
• Standard deviation of stock returns 26.5%. This is based on an analysis of share price movements
over the 12 months prior to the issue of the options.
• Average dividend yield of 4.66%.
• Average annual risk-free rate of 4.63%.
5.4 Net finance (income)/cost
2025
$000
2024
$000
Interest expense – Lease liabilities on financing of right of use assets94111
Interest expense – Financial liabilities at amortised cost-14
Finance Costs94125
Finance Income: Interest income – financial assets at amortised cost(217)(250)
Net Finance Cost/(Income) (123)(125)
6. Capital and financial risk management
This section of the notes to the consolidated financial statements provides information on the Group’s exposure
to and management of capital and financial risks, including:
6.1 Capital management
6.2 Financial risk management
6.2 (a) Credit risk
6.2 (b) Market risk: Foreign currency
6.2 (c) Market risk: Interest rate risk
6.2 (d) Liquidity risk
6.3 Financial instruments by category
6.1 Capital Management
The Group manages its capital to ensure that the Group will be able to continue as a going concern while
maximising the return to shareholders through the optimisation of the debt and equity balances.
The Group is in a net cash position of $11.19 million (2024: $7.95 million) and cash inflow from operations
of $4.30 million (2024 $3.35 million). There was an operating profit of $2.62 million in the current year
(2024: $2.82 million). The Group has no externally imposed covenants to manage, the only debt on the
balance sheet relates to right of use assets.
2025
$000
2024
$000
Borrowings – Lease Liabilities (note 5.2)1,3871,815
Cash & short-term deposits (Note 4.1)11,1937,950
Net cash (debt)9,8066,135
Equity (all capital and reserves)11,3169,002
Net (cash) debt to equity ratio87%68%
During the year the finance facility was subject to certain conditions which are disclosed in Note 4.1.
43 Solution Dynamics | 2025 Annual Report

6.2 Financial Risk Management
6.2(a) Credit Risk
Financial instruments that potentially subject
the Group to concentrations of credit risk
consist principally of cash, short term deposits
and trade and other receivables. The maximum
credit risk is the carrying value of these financial
instruments; however, the Group does not
consider the risk of non-recovery of these
accounts to be material.
In the normal course of its business the Group
incurs credit risk from trade receivables and
transactions with financial institutions. The
Group has a credit policy, which is used to
manage this exposure to credit risk. As part of
this policy, credit evaluations are performed on
all customers requiring credit. The Group does
not have any significant concentrations of credit
risk. The Group does not require any collateral
or security to support financial instruments
as it only deposits with, or loans to banks and
other financial institutions with credit ratings
of no less than AA-. It does not expect the non-
performance of any obligations that are not
provided for at reporting date.
Accounting policy: Impairment of trade & other
receivables
The Group provides and allowance for
impairment on trade and other receivables by
applying the simplified method, that utilises a
provision matrix that is based on its historical
credit loss experience, adjusted for forward-
looking factors specific to the debtors and the
economic environment.
Accounting policy: Impairment of cash & cash
equivalents
The Group determines that there has been no
significant increase in credit risk where the
credit rating of the counterparty holding the
Group’s cash and cash equivalent balances is
considered to be “investment grade”.
6.2(b) Market risk: Foreign Currency Risk
Hosting and license sales linked to SDL
Software operations are denominated in foreign
currency and sold under standard terms and
conditions. Any variation in the exchange rate
between the date of sale and the date cash is
received is accounted for as a foreign exchange
gain/loss in the period in which it occurs.
In addition to the trade receivables denominated
in foreign currencies at the reporting period, the
impact of foreign exchange movements has been
assessed after offsetting related payables. A 10%
movement in exchange rates would affect net
profit before tax for foreign entities by $314,000
(2024: $389,000) and would impact on equity of
foreign entities of $226,000 (2024: $280,000).
Trading operations for the UK and Europe are
largely undertaken through SDL’s UK subsidiary
Solution Dynamics International Limited (SDIL).
For North America, operations are undertaken
through Solution Dynamics Incorporated. At
period end of the net assets for SDIL and SD
Inc., comprising largely working capital, was
a credit balance of NZ $5,511,572 (2024:
NZ $4,533,112) with cash and receivable
balances as noted above.
The Group has an Audit & Risk Management
Committee that monitors foreign exchange risk
as part of its wider duties.
Foreign Currency Receivables20252024
As at 30 June 2025NZD $000NZD$000
European Receivables645482
USA Receivables4901,217
AUD Receivables232153
Total Foreign Currency Receivables1,3671,852
NZD Receivables2,3672,040
Total Trade Receivables3,7343,892
Cash Held in Foreign Currency2,2882,649
Total Trade Receivables in Foreign Currency3,6554,501
Accounts payable516608
Net FX Asset 3,139 3,893
Fluctuation of 10%314389
Net Assets for SDIL & SDINC 5,511 4,533
44 Consolidated Financial Statements

6.2(c) Market risk: Interest Rate Risk
At 30 June 2025 the interest rate on the overdraft facility was 8.65% (2024: 15.70%). With a net cash
position of $11.19 million (2024: $7.95 million) at the end of the reporting period a material change in the
interest expense is not expected.
Profit or loss is sensitive to higher/lower interest income from cash and cash equivalents and short term
deposits as a result of changes in interest rates. A 100 basis point increase would benefit profit before tax
by $41,205 (2024 $43,082), while a 100 basis point decrease would reduce profit before tax by $41,205
(2024 $43,082).
6.2(d) Liquidity Risk
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an
appropriate liquidity risk management framework for the management of the Group’s short, medium and
long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining
adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast
and actual cash flows and matching the maturity profiles of financial assets and liabilities. With positive
cash inflows the Group’s liquidity risk is considered by the directors to be low.
The following table sets out the contractual maturities (representing undiscounted contractual cash-flows)
of financial liabilities.
Within 1-year1 – 2 years2 – 5 yearsAfter 5 yearsTotal
$000$000$000$000$000
30 June 2025
Trade and other payables4,101---4101
Lease liabilities6626131121387
Net Present Values4,763622620-6,005
30 June 2024
Trade and other payables3,923---3,923
Lease liabilities642574599-1,815
Net present values4,565622620-5,807
6.3 Financial Instruments by category
2025
$000
2024
$000
Financial Assets & liabilities
at Amortised Cost
Financial Assets & liabilities
at Amortised Cost
Financial Assets
Cash & cash equivalents (Note 4.1(a))6,6934,950
Short-term Deposits (Note 4.1(b))4,5003,000
Trade & other receivables (Note 4.2)3,7543,861
Total Financial Assets14,94711,811
Financial Liabilities
Trade and other payables (Note 4.3)4,1013,923
Total Financial Liabilities4,1013,923
The carrying values of the financial instruments above are equivalent to their fair values.
45 Solution Dynamics | 2025 Annual Report

7. Other information
This section of the notes to the Consolidated financial Statements provides other material information related
to the operations of the Group, including:
7.1  Related party transactions
7.2  Capital Commitments
7.3  Contingent liabilities
7.4  Events after reporting date
7.1 Related party transactions
7.1(a) Remuneration paid to key management personnel
Key management were paid $2,871,111 (as employees of Solution Dynamics Limited or its subsidiaries
and including the calculated benefit of the employee share option plan) during the reporting period (2024:
$2,875,829) and were owed $257,569 including annual leave at 30 June 2025 (2024: $206,467).
2025
$000
2024
$000
Short-term employee benefit liabilities2,7312,752
Defined contribution plan liabilities (Kiwisaver)119100
Share-based payment expense2124
Total Remuneration: Key management personnel2,8712,876
The following fees and salaries were paid to directors during the reporting period:
2025
$000
2024
$000
John McMahon (Chair)4080
Julian Beavis4550
Elmar Toime4550
Lee Eglinton4550
Andy Preece (Chair Audit & Risk Management
Committee)
5358
Total Directors’ Remuneration228288
7.1(b) Transactions with related parties
At 30 June 2025, payables to other related entities amounted to $17,312 (2024: $29,214).
7.2 Capital Commitments
The Group had no capital commitments at the reporting date for the Group (2024 $Nil).
7.3 Contingent Liabilities
There were no contingent liabilities at the reporting date for the Group (2024: $Nil).
7.4 Events after the reporting date
Subsequent to balance date, the group committed to the purchase of a new inserter machine estimated
cost of $1.3 million. The machine is expected to be operational in November 2025. On 28 August 2025,
the directors approved the payment of a fully imputed dividend of 3.0 cents per share (2024: 2.5 cents per
share) amounting to $441,185 to be paid on 26 September 2025.
46 Consolidated Financial Statements

Statutory
Information

Statutory Information
(I) Employee Remuneration
Remuneration includes salaries, bonuses and other benefits including non-cash benefits. The number of
employees with total remuneration exceeding $100,000 in each of the following bands was:
2025
$000
2024
$000
100,000 - 109,99963
110,000 - 119,99955
120,000 - 129,99936
130,000 - 139,99951
140,000 - 149,99924
150,000 - 159,99901
160,000 - 169,99931
170,000 - 179,99902
180,000 - 189,99911
190,000 - 199,99900
200,000 - 209,99900
210,000 - 219,99900
220,000 - 229,99900
230,000 - 239,99911
240,000 - 249,99914
250,000 - 259,99900
260,000 - 269,99900
270,000 - 279,99900
280,000 - 289,99910
290,000 - 299,99920
300,000 - 309,99911
310,000 - 319,99900
320,000 - 329,99911
350,000 - 359,99901
400,000 - 409,99910
450,000 - 459,99901
870,000 - 879,99910
1,020,000 - 1,020,99901
3434
48 Statutory Information

(II) Shareholders and Substantial Security Holders
(a) The 20 largest shareholders as at 30 June 2025 were:
% of totalShares
ASB NOMINEES LIMITED <574233 A/C>10.88%1,600,658
PHILIP HADFIELD HARDIE BOYS & KIRSTY MERRAN HARDIE
BOYS & SZIGETVARY TRUSTEE SERVCES LIMITED <P & K HARDIE
BOYS FAMILY A/C>
7.14%1,050,000
INDRAJIT NELSON SIVASUBRAMANIAM & TRACEY LEE
SIVASUBRAMANIAM & COMAC TRUSTEES LIMITED
6.05%890,000
JBWERE (NZ) NOMINEES LIMITED <NZ RESIDENT A/C>4.98%732,074
ACCIDENT COMPENSATION CORPORATION - NZCSD <ACCI40>4.75%698,234
CUSTODIAL SERVICES LIMITED <A/C 4>4.33%637,126
MICHAEL CHARLES HARE3.94%580,000
NEW ZEALAND DEPOSITORY NOMINEE LIMITED <A/C 1 CASH
ACCOUNT>
3.77%554,955
FORSYTH BARR CUSTODIANS LIMITED <1-CUSTODY>3.76%552,478
COLIN GLENN GIFFNEY3.54%520,000
JIMMY JINHUA DENG & SOPHIE SHUFEN LI3.33%489,782
KIRSTEN ROBERTS3.17%466,136
DEIRDRE ELIZABETH TALLOTT2.99%440,000
STEPHEN CHRISTOPHER MONTGOMERY2.89%425,000
JILLIAN BERNADETTE WINSTANLEY2.23%328,500
ROGER DIXON ARMSTRONG2.22%326,665
DON NOMINEES LIMITED1.60%234,944
PUBLIC TRUST - NZCSD <THE ASPIRING FUND>1.50%220,000
FNZ CUSTODIANS LIMITED <DRP NZ A/C>1.22%180,000
ANNA LAKE1.09%160,000
Grand Total75.38%11,086,552
A total of 14,706,443 shares were on issue (2024: 14,719,810).
49 Solution Dynamics | 2025 Annual Report

(b) Size of Shareholding as at 30 June 2025
HoldingsShareholdersShares Held% of total
1-99911429,7210.20%
1,000-4,99995207,1181.41%
5,000-9,99939247,3231.68%
10,000-49,999601,156,1467.86%
50,000-99,99914956,7406.51%
100,000 and over2912,109,39582.34%
Total35114,706,443100%
(c) Substantial Security Holders
According to notices given under the Financial Markets Conduct Act 2013, the following persons were
substantial shareholders in Solution Dynamics Limited at 30 June 2025:
ShareholderShares Held% of total
Meta Capital Limited (John McMahon) 1,600,65810.88%
Philip Hadfield Hardie Boys (P & K Hardie Boys Family A/C)1,050,0007.14%
Indrajit Nelson Sivasubramaniam + Tracey Lee
Sivasubramaniam + Comac Trustees Limited
890,000 6.05%
50 Statutory Information

Statement
of Corporate
Governance

Statement of Corporate Governance
The corporate governance processes set out in this
statement do not materially differ from the principles
set out in the New Zealand Stock Exchange
Corporate Governance Best Practice Code dated 31
January 2025.
The information in this report is current as at 28
August 2025 and has been approved by the Board.
SDL is listed on the NZX and is subject to regulatory
control and monitoring by both the NZX and the
Financial Markets Authority (FMA).
For the purposes of this Corporate Governance
Statement, SDL has continued to report against the
NZX Code published as at 31 January 2025.
An index setting out where each NZX Code Principle
and Recommendation is addressed is set out on
page 3.
The Board Charters and key policies are available
on the Company’s website: www.solutiondynamics.
com/investor-centre
Principle 1 – Code of Ethical
Behaviour
Directors should set high standards of ethical
behaviour, model this behaviour and hold
management accountable for these standards being
followed throughout the organisation.
Recognising that ethical behaviour is fundamental
to sound corporate governance, the Board endorses
the Group-wide implementation of the Code of
Business Conduct and Ethics. This Code, formally
adopted during the transition to the NZX Main
Board, outlines the principles and expectations
that guide the conduct of directors, employees, and
contractors of SDL and its related entities. The Code
of conduct is designed to support decision-making
that aligns with SDL’s values, strategic objectives,
and legal obligations, thereby contributing to
improved performance outcomes. All employees
are encouraged to report any breaches of the Code
of Conduct through the established reporting
channels. The Code is provided to all new employees
upon joining the Group and is accessible to all
staff. Any future amendments to the Code will be
communicated accordingly.
In addition, SDL has implemented a Share Trading
Policy to mitigate the risk of insider trading in SDL
securities. This Policy applies to Restricted Persons,
including directors and designated employees, and
is available alongside other governance policies on
the Company’s website.
Employees are expected to report any breaches
of the Code of Business Conduct and Ethics in
accordance with the procedures outlined within the
Code.
The Code of Business Conduct and Ethics is
provided to all new employees upon joining
the Group. Any future amendments will be
communicated promptly to ensure continued
awareness and compliance.
To mitigate the risk of insider trading, SDL has
established a Share Trading Policy applicable to
directors and designates employees classified as
Restricted Persons. This policy outlines trading
restrictions and is available alongside other
governance policies on the Company’s website.
Directors’ Share Dealings and Shareholding
Directors disclose the following relevant interests in shares in the Group at 30 June 2025 and transactions in
relevant interests in shares during the financial year ended 30 June 2025.
ShareholderBalance 30 June 2024AdditionsDisposalsBalance 30 June 2025
John McMahon1,600,658--1,600,658
Andy Preece53,000--53,000
Lee Eglinton18,000--18,000
52 Statement of Corporate Governance

Entries in the Interests Register
In addition to the disclosure relating to interests and
related party transactions presented in Note 7.1 to the
Financial Statements and the director remuneration
outlined under Principle 5, the following interests
were formally recorded in the interests register for the
financial year ended 30 June 2025:
• Indemnification of Officers and Directors: The
Company indemnifies directors and executive
officers of the Group against liabilities incurred in
the course of performing their official duties.
• Directors’ & Officers’ insurance: In conjunction
with the indemnity provision, the Group maintains
Directors & Officers’ liability insurance. The total
premium expensed for this coverage during
the year ended 30 June 2025 was $30,000
(2024:$34,500).
Conflicts of Interest and Related Parties
All directors are required to disclose any general and
specific interests that could be in conflict with their
obligations to the Group. Transactions with related
parties and balances outstanding relating to the year
ended 30 June 2025 are disclosed in Note 7.1 to the
Financial Statements.
Principle 2 – Board
Composition & Performance
To ensure an effective Board, there should be a
balance of independence, skills, knowledge, experience
and perspectives.
The Board’s primary responsibilities include:
• Establishing the Group’s vision and long-term
strategic objectives
• Approving annual and half-year financial reports
• Endorsing annual budgets and corporate policies
• Ensuring the adequacy of internal controls and
record keeping
• Overseeing compliance with applicable legislation
• Monitoring the performance of executive
management
• Facilitating transparent communication with
stakeholders
Board procedures are governed by the Company’s
Constitution. The Board is responsible for setting the
strategic direction of the Group, overseeing financial
and operational controls, implementing appropriate
risk management frameworks, and enhancing
shareholder value in accordance with sound corporate
governance principles.
In addition to the Code of Business Conduct and
Ethics, the Board operates under a formal Board
Charter. This Charter defines the Board’s composition,
the roles and responsibilities of directors, and sets
procedures for director nomination, resignation
and removal . It also ensures Board meetings and
are conducted efficiently and that each director is
empowered to discharge their duties effectively and
participate fully in Board deliberations.
The day-to-day management of the Group is
delegated to SDL’s senior management team, led
by the CEO. Management operates under a defined
set of delegated authorities and is subject to annual
performance reviews.
Directors are provided with access to the essential
resources to fulfil their responsibilities, including
access to financial and operational information, as well
as professional advice provided by external advisers.
Directors also have the right, with the approval of
the Chair or by resolution of the Board, to seek
independent legal or financial advice at the Company’s
expense for the proper performance of their duties.
Board Composition and Appointment
The Company’s constitution specifies the number
of elected directors and outlines the procedure for
their retirement and re-election at Annual Shareholder
Meetings.
SDL believes that the nomination process for new
director appointments is the responsibility of the
entire Board and thus does not have a separate
Nomination Committee.
The Board takes into consideration tenure, capability,
diversity and skills when reviewing Board composition
and new appointments.
At each Annual Meeting, at least every three years as
required by NZX Listing Rules, current directors retire
by rotation and are eligible for re-election.
Additionally, any directors appointed since the
previous Annual Meeting must also retire and are
eligible for election.
When a new director is appointed, SDL will enter into
a written appointment letter setting out the terms of
their appointment. The Board supports the separation
of the roles of Chair and CEO. As of 28 August 2025,
the chair of SDL is non-executive director, John
McMahon, who has (through a related party) a 10.87%
shareholding in SDL and is therefore not considered
independent under the NZX Listing Rules.
53 Solution Dynamics | 2025 Annual Report

Director independence is an important consideration
and is determined in accordance with the NZX Listing
Rules and the NZX Corporate Governance Code.
The Board views John’s shareholding as aligning his
interests closely with those of Solution Dynamics’
shareholders. The directors believe that John’s
extensive analytical and commercial expertise,
including his directorship in other NZX-listed
companies, coupled with his deep understanding of
the Company’s products, markets and strategy, make
him the ideal candidate to lead the Board.
The Board currently consists of five directors
(2024: five directors), a non-executive Chair (non-
independent, see note above) and four non- executive
directors (independent). Each director is elected based
on the value they contribute to the Board.
To maintain the integrity of governance , the Board
requires that directors are independent and are not an
executive of SDL and do not hold any 'Disqualifying
Relationships’. The Board adheres to the NZX Listing
Rules (and NZX guidance on the application of those
requirements). Further details on each director are
available at https://www.solutiondynamics.com/about/
our-leadership-team, and disclosure of directors ‘interest
are provided in Note 7.1 to the Financial Statements.
SDL encourages all directors to undertake ongoing
training and professional development to support the
effective discharge of duties. This includes attending
presentations on governance presentation, legal and
regulatory updates, technical briefings, and industry-
specific education. Directors also receive regular
updates on relevant Company and sector developments
and engage in briefings with key executives.
The Board is committed to evaluating both individual
and collective performance on a regular basis. These
assessments inform the prioritisation of training and
development initiatives and support the Board’s ability to
govern the Group’s business effectively and strategically.
Diversity
SDL is committed to fostering a workplace culture
that actively supports diversity and inclusiveness and
that seeks to prevent and eliminate discrimination in
all its forms. SDL recognises that embracing diversity
enables SDL to respond more effectively to the dynamic
environment in which it operates and to better serve its
diverse customer and stakeholder base.
Diversity at SDL encompasses, but is not limited to
gender, race, ethnicity ,cultural background, physical
capability, age, sexual orientation, and religious or
political beliefs.
While SDL does not have a formal diversity policy or
publish diversity targets, its commitment is embedded
in the Code of Business Conduct and Ethics. The
Code affirms SDL’s values for the varied skills, values,
backgrounds, ethnicity and experience of its workforce,
and acknowledges that such diversity contributes
meaningfully to innovation and the achievement
of organisational objectives. SDL’s employment
practices are governed by an Equal Opportunity Policy,
which ensures that all staff- regardless of personal
characteristics, have access to equitable employment
opportunities. This policy applies across recruitment,
training, performance, and workplace conditions, and
is complemented by initiatives aimed at cultivating a
positive and inclusive workplace.
As at 30 June 2025, the Board is yet to consider
whether it requires management to provide regular
reporting and monitoring on diversity within SDL’s
workforce.
As at 30 June 2025, the gender balance of SDL’s
directors and people was as follows:
30 June
2025
30 June
2024
Directors
Females11
Males44
Management Team
Females11
Males56
All Employees
Females2334
Males3947
The Management team is defined as being the CEO and senior leaders with reporting lines direct to the CEO.
54 Statement of Corporate Governance

Board Meetings and Attendance
The Board has 11 scheduled meetings a year.
During the period 1 July 2024 to 30 June 2025 attendance at Board and Committee meetings was:
Board Meetings Audit & Risk Committee
HeldAttendedHeldAttended
John McMahon (Chair)
1
121222
Julian Beavis1210n/an/a
Elmar Toime1212n/an/a
Andy Preece
2
12722
Lee Eglinton121122
1
John McMahon is the Board Chair.
2
Andy Preece is the Chair of the Audit & Risk Management committee.
Principle 3 – Committees
The Board should use committees where this will
enhance its effectiveness ln key areas, while still
retaining Board responsibility.
The Board has constituted one standing Committee,
the Audit and Risk Committee. Given the Board’s
size, matters typically handled by remuneration and
nominations committees are dealt with by the entire
Board.
Committees enable issues that require in-depth
consideration to be addressed separately by the
Board members possessing specialist knowledge
and experience, thereby improving the efficiency
and effectiveness of the Board. However, the Board
maintains ultimate responsibility for the functions of
its committees and defines their responsibilities.
The Audit and Risk Committee convenes as
necessary and operates under specific terms of
terms of reference outlined in its Charter. A copy of
the Audit and Risk Committee Charter is available on
the Company’s website within the Board Governance
section.
Minutes of each Committee meeting are distributed
to all members of the Board. The Audit and
Risk Committee is authorised to request any
information necessary from employees to fulfil its
responsibilities and may obtain independent legal or
other professional advice as needed.
The membership and performance of the
Committee is reviewed annually.
From time to time, special purpose committees
may be established to oversee specific projects in
collaboration with senior management.
As the Board believes that matters of remuneration
and nominations are the responsibility of the entire
Board, SDL does not deem it necessary to comply
with recommendations 3.3 and 3.4 of the NZX
Corporate Governance Code. Therefore, SDL does
not maintain separate remuneration or nomination
committee.
The Board will continue to monitor governance best
practice and update SDL’s policies to uphold the
highest standards as appropriate.
Audit and Risk Committee
The Audit and Risk Committee plays a critical
role in supporting the Board’s responsibilities
under the Companies Act 1993 and the Financial
Reporting Act 2013. Its mandate includes oversight
of the Company’s accounting practices, financial
policies and internal controls. The Committee also
undertakes comprehensive reviews of the audit
of the Company’s financial statements, providing
the Board with additional assurance regarding
the accuracy and reliability of publicly disclosed
financial information. All matters within the
Committee’s scope were appropriately addressed
during the 2025 financial year.
The Committee operates under a written charter
that defines it’s delegated authority, duties,
responsibilities and relationship with the Board.
The Charter is publicly available on the Company’s
website.
55 Solution Dynamics | 2025 Annual Report

In accordance with the Charter, the Committee
comprises only directors of SDL, with a minimum
of three members. A majority must be independent
directors and at least one director with an
accounting or financial expertise. The current
composition meets these requirements. Importantly
the chair of the Committee cannot be Chair of the
Board.
Members at 30 June 2025 were Andy Preece (Chair),
Lee Eglinton and John McMahon. The Audit and
Risk Committee met twice during the financial year.
Attendance at Committee meetings by management
and employees is by invitation only. The Committee
also regularly meets with external auditors in the
absence of management to ensure independent
oversight.
Takeovers
The Board has not yet established protocols or
procedures for a takeover scenario. However, the
Board acknowledges that any such protocol would
likely involve SDL forming an independent takeover
committee. This committee would be responsible
for overseeing disclosure and response strategies
and would engage expert legal and financial
advisors to provide guidance on procedural matters
related to any potential takeover.
Principle 4 – Disclosure
and Financial Reporting
The Board should demand integrity in financial and
non-financial reporting, and in the timeliness and
balance of corporate disclosures.
The Board is committed to upholding the highest
standards of integrity in both in financial and non-
financial reporting. It ensures that all corporate
disclosures are timely, balanced, and accurate
and in accordance with the Companies Act 1993,
and the Financial Reporting Act 2013, and the NZX
Listing Rules.
Material information is released in line with the NZX
Listing Rules and associated guidance. In addition
to meeting it's legal obligations, SDL aims to provide
stakeholders and investors with comprehensive
and meaningful disclosures, encompassing both
financial and non-financial information.
Financial Statements
The directors are responsible for ensuring that the
financial statements present a true and fair view of
the financial position of the Group as at the end of
the financial year as well as the results of operations
and cash flows for the year. The external auditors
are responsible for providing an independent opinion
on the financial statements.
The consolidated financial statements set out in
this report have been prepared by management in
accordance with generally accepted accounting
practice in New Zealand. They are based on
appropriate accounting policies which have been
consistently applied and which are supported by
reasonable judgements and estimates.
For the financial year ended 30 June 2025, the
directors believe that proper accounting records
have been kept which enable, with reasonable
accuracy, the determination of the financial position
of SDL and the Group and facilitate compliance of
the financial statements with the Companies Act
1993 and the Financial Reporting Act 2013.
After reviewing internal management financial
reports and budgets the directors are confident
that the Group will remain a going concern in the
foreseeable future. Therefore, they continue to adopt
the going concern basis in preparing the financial
statements.
The CEO and CFO have provided written
confirmation to the Board that SDL’s external
financial reports accurately present a true and fair
view in all material aspects.
SDL’s full and half year financial statements are
available on the Company's website at: www.
solutiondynamics.com/investor-centre/.
Non-financial information
SDL is not a climate reporting entity under Part 7A
of the Financial Markets Conduct Act 2013 and is
therefore not required to prepare a climate-related
disclosure statement.
The Board recognises the importance of non-
financial disclosure. Given SDL’s size the Board has
elected not to comply with recommendation 4.3
of the NZX Corporate Governance Code and has
not adopted a formal environmental, social and
governance (ESG) framework.
56 Statement of Corporate Governance

SDL discusses its strategic objectives and its
progress against these in the Management
Discussion and Analysis section of this annual
report and at the Annual Meeting.
SDL is dedicated to using its resources and
collaborates closely with its supply chain partners
to identify opportunities for minimizing any adverse
environmental risks or impacts from its business
operations, products and services.
The Board encourages diversity and commits to
ensuring that SDL does not knowingly engage
in business activities that could involve SDL in
complicity with human rights abuses or violations of
labour standards.
Principle 5 – Remuneration
The remuneration of directors and executives should
be transparent, fair and reasonable.
The Board emphasises aligning the interests of
the directors, the CEO and management with the
long-term interests of shareholders. Remuneration
policies and structures undergo regular review
to ensure that remuneration for management
and directors remains fair and competitive within
the market, reflecting the skills, knowledge and
experience essential for the Group.
The Board recognises that it is desirable that
management (including that for any executive
director) remuneration should include an element
dependent upon the performance of both the Group
and the individual and should be clearly differentiated
from non-executive director remuneration.
Details of directors and management remuneration
and entitlements for the 2025 financial year are set
out in Note 7.1 to the Financial Statements.
SDL does not have a Remuneration
Committee and matters relating to
remuneration are dealt with by the
full Board.
Directors’ Remuneration
The total remuneration pool available
for directors is established by
shareholders and remains fixed.
The Board determines the level
of remuneration paid to directors
from the approved collective pool.
Directors also receive reimbursement
for reasonable travelling, accommodation and other
expenses incurred during the course of performing
their duties.
Executive Remuneration
Executive remuneration at SDL comprises a fixed
base salary, incentives and participation in a Share
Option Plan. The incentives are awarded based on
targets agreed upon with the management team
at the beginning of the year, focusing on achieving
specified earnings and sales targets. ESOP share
options totaling 172,796 expire in August 2026. (Note
5.3).
Executives’ remuneration exceeding $100,000
annually, received in their role as employees during
the year, is disclosed on page 46 of this annual report.
Details of the SDL Share Option Plan are detailed in
Note 5.3 of the 2025 Financial Statements.
Chief Executive Officer Remuneration
The review and approval of the CEO’s remuneration
is the responsibility of the Board. The CEO’s
remuneration comprises a fixed base salary and an
annual bonus that is structured based on meeting
various tiers of EBITDA.
The CEO’s remuneration for FY 2025 can be
summarised as follows:
Description(USD000’s)
Base salary$312
Maximum incentive
1
$202
Total on Target Earnings$514
1
This includes an assessed share option cost (refer
note 5.3) and a performance incentive based on
Company earnings paid annually in arrears.
As at 30 June 2025, Directors are paid on a per Director rate as follows:
Chair (Currently nil)$60,000
Non-executive Director$40,000
Audit & Risk Committee Chair$7,500
Hourly rates for abnormal/particularly time intensive
projects or transactions outside the scope of typical
board work
$250/Hour
Directors’ remuneration during the year is disclosed in Note 7.1 to the
Financial Statements.
57 Solution Dynamics | 2025 Annual Report

Principle 6 – Risk
Management
Directors should have a sound understanding of the
material risks faced by the issuer and how to manage
them. The Board should regularly verify that the
issuer has appropriate processes that identify and
manage potential and material risks.
SDL remains is committed to proactive and effective
risk management. While the entire Board remains
ultimate responsibility for overseeing risk and
the Group’s internal control system, the Audit and
Risk Committee provides additional oversight
and supports the Board in monitoring the risk
management framework and ensuring majority
compliance with it.
The Board monitors the operational and financial
performance of the Group and considers
recommendations from external auditors and
advisors regarding the risks that the Group faces.
The Board is committed to ensuring that all
recommendations made are assessed and
appropriate action is taken to effectively manage risk.
The Board’s approach to risk management is
embedded within the Audit and Risk Committee
Charter, which is publicly accessible under the Board
Governance on the Company’s website.
Responsibility of the day-to-day management of risk
is delegated to the CEO. SDL’s management team is
accountable for the ongoing identification of risks
impacting SDL’s operations and for implementing
appropriate structures, practices and processes to
monitor and mitigate these risks.
The directors are responsible for ensuring that
adequate accounting records are maintained and
for overseeing the Group’s internal controls and
financial reporting systems.
Internal financial controls have been implemented to
reduce the risk of material misstatement.
SDL has implemented internal financial controls to
reduce the risk of material misstatements . These
controls are intended to provide reasonable, though
not absolute, assurance against the occurrence of
material misstatements or financial loss.
No major breakdowns of internal controls were
identified during the year.
The Board is satisfied that SDL has established a
robust and effective risk management framework
to identify, manage and monitor SDL’s principal risks
effectively.
In addition, SDL maintains insurance policies
considered adequate to cover its insurable exposure.
An overview of key financial and non-financial risks
is detailed in Note 6 to the Financial Statements.
Health and Safety
The Board recognises that effective management of
health and safety is a fundamental to the success
of the business. Its objective is to prevent harm
and enhance the wellbeing of SDL’s employees and
contractors. The Board is responsible for ensuring
that the systems used to identify and manage
health and safety risks are appropriate, effectively
implemented, regularly reviewed and continuously
improved.
SDL operates under a Health and Safety Charter
which is actively monitored by the management
team. Health and Safety reports, including incident
summaries, are presented to the Board as part of
the compliance section in regular Board papers.
Principle 7 – Auditors
The Board should ensure the quality and
independence of the external audit process.
The Board’s method for appointing and overseeing
the external auditor is outlined in SDL’s Audit and
Risk Committee Charter, available on the Company’s
website. The Charter is designed to uphold audit
independence is maintained, both in fact and
appearance, ensuring SDL’s external financial
reporting is viewed as being highly reliable and
credible.
The Audit and Risk Committee provides additional
oversight of the external auditor, reviews the quality
and cost of the audit conducted by external auditors
and serves as a formal communication between the
Board, the management team and the
external auditors. The Committee also assesses the
auditor’s independence on an annual basis. These
requirements are detailed in the Audit and Risk
Committee Charter.
58 Statement of Corporate Governance

During the year, Solution Dynamics changed its
auditor from Grant Thorton to Baker Tillly Staples
Rodway (“BTSR”). The change was made solely for
goverance reasons as Grant Thorton had served as
SDL’s auditor for well beyond the recommended 10
year maximum tenure. For the financial year ended
30 June 2025 the Group's Financial Statements have
been audited by BTSR, which issued an unqualified
audit opinion. The company remains committed
to maintaining the highest standards of corporate
goverance and transparency.
All audit activities at SDL are completely segregated
from any non-audit services, to uphold proper
independence. The fees paid to BTSR for audit are
disclosed in Note 3.2 of the Financial Statements.
All audit activities at SDL are completely segregated
from any non-audit services, to uphold proper
independence. The fees paid to BTSR for audit are
disclosed in Note 3.2 of the Financial Statements.
BTSR has provided the Board with written
confirmation that, in their view, they were able to
operate independently during the financial year.
Additionally, BTSR will attend the Annual Meeting,
and the lead audit partner will be available to answer
questions from shareholders at that meeting. In this
capacity, BTSR will attend the 2025 annual meeting.
SDL’s Audit and Risk Committee oversees various
internal controls including those for computerised
information systems, security, business continuity
management, insurance, health and safety, conflicts
of interest, and fraud prevention and detection. SDL
does not have a dedicated Group internal auditor
role.
Principle 8 – Shareholder
Rights & Relations
The Board should respect the rights of shareholders
and foster constructive relationships with shareholders
that encourage them to engage with the issuer.
The Board is committed to open and transparent
communications with shareholders through
a structure calendar of communications for
shareholders, including but not limited to:
• Annual and Half-Yearly Reports
• Market announcements
• Annual Meeting
• Access to information through the SDL website
www.solutiondynamics.com
SDL maintains a comprehensive website which
provides access to key corporate governance
documents, and Company reports.
Shareholders are encouraged to attend the Annual
Meeting and may raise matters for discussion at
the meeting. In accordance with NZX Corporate
Governance Code, the Board should ensure that
the notice of the Annual Meeting is posted to SDL’s
website as soon as possible and at least 20 working
days prior to the meeting.
Shareholders are encouraged to attend the Annual
Meeting and may raise matters for discussion at
the meeting. In accordance with NZX Corporate
Governance Code, the Board should ensure that
the notice of the Annual Meeting is posted to
SDL’s website as soon as possible and at least 20
working days prior to the meeting. None the less, the
Board acknowledges that, due to an administrative
oversight, it was late in doing so in 2023.
Shareholders have the ultimate control in corporate
governance by voting directors on or off the Board.
Voting is by poll, upholding the ‘one share, one vote’
philosophy.
In accordance with the Companies Act 1993, SDL’s
constitution and the NZX Listing Rules, SDL refers
major decisions which may change the nature of
SDL’s business to shareholders for approval.
All shareholders are given the option to elect to
receive electronic communications from SDL. In
addition to shareholders, SDL has a wide range
of stakeholders and maintains open channels
of communication for all audiences, including
shareholders, brokers and the investing community,
as well as our staff, suppliers and customers.
59 Solution Dynamics | 2025 Annual Report

Leadership Team
Patrick Brand
Chief Executive Officer
Pat was appointed Chief Executive Officer of Solution Dynamics in November 2021. He
was previously President of Solution Dynamics US and International businesses since
joining the company in September 2019, driving record growth in revenue and profitability.
Suzanne (Susie) Watts
Chief Financial Officer, Company Secretary & Chief Operating Officer NZ
Suzanne is a proven software executive who helped grow a start-up into a global company.
She has led transformative growth across NZ, Australia, the UK, UAE, Oman, the US, and
Japan, and successfully consolidated multiple finance functions into a global center of
excellence.
Nick Williams
Chief Product Officer
Nick began his 30-year career at a global printing company, progressing through Developer,
IT Manager, and Solutions Manager roles across Asia Pacific. He then served as CIO at
Ford, PMP, and Geon Group, leading Australasian IT from Sydney. In 2006, he became GM
NZ at Bremy, playing a key role in its acquisition by Solution Dynamics.
Jeff Knight
Vice President – Global Sales & Digital First Solutions
Jeff’s 25-year career spans business development and operations across Financial
Services, Digital Auto Retail, BPO, and IT. He led Pitney Bowes NZ, joined Datamail, and
later transformed Dataprint, driving rapid digital growth before its successful acquisition by
NZX-listed Freightways.
Brian Snider
Chief Marketing Officer and Enterprise Sales Director N.A.
Brian’s career spans more than 38 years of sales and marketing leadership roles within
Fortune 500 and startup firms. He has successfully built long-term relationships and
provided services that increase revenue in both B2B and B2C markets.
Hash Valabh
Vice President – Global Product Development
Hash is a software developer with 25+ years’ experience across multinationals and start-
ups, including launching a network management system in Europe. His deep business and
operations insight enables him to deliver innovative, client-focused technical solutions.

Company Directory
Nature of Business
Data management, electronic digital printing,
document distribution, web presentment and
archiving, fulfilment, print services, scanning, data
entry and document management.
Directors
John McMahon – Non-independent Chair
Elmar Toime – Independent
Julian Beavis - Independent
Andy Preece – Independent
Lee Eglinton - Independent
Company Executives
Patrick Brand – CEO
Suzanne Watts – CFO & Company Secretary
Auditors
Baker Tilly Staples Rodway Auckland
Level 9/45 Queen Street, AUCKLAND
Bankers
ANZ National Bank Limited
9-11 Corinthian Drive, Albany, AUCKLAND
Legal Representative
Stephen Layburn Commercial Barrister
Level 3, 175 Queen Street, AUCKLAND
Share Registry
Computershare Investor Services
Level 2, 159 Hurstmere Rd, Takapuna
Private Bag 92119, Auckland Mail Centre
AUCKLAND 1142
Registered Office and
Address for Service
18 Canaveral Drive, Albany AUCKLAND
PO Box 301248, Albany AUCKLAND 0752
Tel +64 9 970 7700
Solution Dynamics (International)
Limited
Dobson House, Regent Centre, Gosforth,
Newcastle Upon Tyne, NE3 3PF
UNITED KINGDOM
Tel +44 1489 668219
Solution Dynamics Incorporated
260 Madison Avenue, 8th floor New York,
New York 10016
UNITED STATES OF AMERICA
Tel: +1 (917) 319 5625
Déjar International Limited (non-trading)
18 Canaveral Drive, Albany AUCKLAND
PO Box 301248, Albany AUCKLAND 0752
Tel +64 9 970 7700Ins
61 Solution Dynamics | 2025 Annual Report

Solution Dynamics | 2025 Annual Report

PO BOX 137182, PARNELL 1151, AUCKLAND
LEVEL 11, 11 BRITOMART PLACE, AUCKLAND CBD, AUCKLAND 1010
0800 366 275 · WWW.TOITU.CO.NZ

Toitū Enviromark Certification Programme
Solution Dynamics Limited
Gold
Address: 18 Canaveral Drive, Rosedale, Auckland 0632, New Zealand

Lead Auditor: Kelly Taylor
Verification Organisation: Kelly Taylor Consulting
Contact Details: kellytaylor.consulting@gmail.com
021 259 4709

Client Contact: Peter Graham
Contact Details: peter.graham@k30management.nz
+64 27 489 5452

Report Date: 13 August 2024 & 18 September 2024 (Gold upgrade)
Technical Reviewer: Annie Lloyd-Jones

Close Out Due Date – CARs only: 31 October 2024

Certified Date: 28 August 2024 – Bronze, 16 December 2024 - Gold
Certifier: Annie Lloyd-Jones

NEW ZEALAND | UNITED KINGDOM | UNITED STATES OF AMERICA
www.solutiondynamics.com

---

Postal Address
Solution Dynamics Limited
PO Box 301248, Albany
Auckland 0752, New Zealand
Physical Address
18 Canaveral Drive
Albany
Auckland 0632
Contact
Phone: +64 9 970 7700
Email: info@solutiondynamics.com
Web: www.solutiondynamics.com
Management Discussion
and Analysis
FY2025 Result Overview
Solution Dynamics Limited (“SDL” or “Company”)
recorded a net profit after tax of $2.62 million for
FY2025. This was 7.1% lower than the profit of $2.82
million the prior financial year. FY2025 earnings per
share was 17.8 cents, down 7.0% from 19.2 cents in
FY2024.
The Company’s revenue rose to $41.3 million (up
6.9% from $38.7 million). Some of the increase was
the result of a pass through of (very low margin)
higher postage charges while the Company’s largest
customer saw little business in 2H and its revenue
contribution was down 15% overall for the year. The
revenue highlight was that the other nine of of SDL’s
top ten customers saw strong growth of 21% for the
year.
SDL’s New Zealand operations again gained market
share in a (still) falling local print and mail market,
marked by a continuation of the FY2024 trend of
securing ongoing new work from local councils in
particular. Some of this is from council customers
new to SDL, some is the increasing trend amongst
larger councils to outsource print work previously
undertaken in-house.
SDL’s International operations generated new
business from new accounts following the
successful onboarding of a marketing services
company in North America. There was also success
with new products in the dental market from
an existing customer who has embedded SDL’s
software in its software solutions. However, this
growth was overshadowed by the decline in our
largest customer revenue contribution. This resulted
in a 3.8% overall reduction of SDL’s total Software &
Technology revenue to $24.1 million.
Following the reduction in our largest customer’s
revenue the Company swiftly enacted a significant
cost restructuring. This started in late 1H and
continued through 3Q with the benefits fully seen
in the final quarter of FY2025 and it will annualise
across FY2026.
Earnings before interest, tax, depreciation and
amortisation (“EBITDA”) declined 8.0% to $4.45
million (FY2024 $4.84 million). Gross Profit was
3.8% lower, helped by a general price increase at the
start of FY2025. Selling, General and Administration
(“SG&A”) expenses were effectively controlled,
declining 1.7% over the full year. SG&A was
noticeably split over FY2025, rising 6.8% year-on-
year in 1H, but then aggressively declining 10.0%
year-on-year in 2H following SDL’s restructuring that
commenced in late 1H.
Cash flow from operations improved to $4.30 million
(FY2024 $3.36 million) and the net cash and short-
term deposit position at year end was $11.19 million
(FY2024 $7.95 million). Normalising this for year-end
accruals plus adjusting for around $1.3 million of
capital expenditure (print inserter equipment) in early
FY2026, the current cash position is around $9 – 10
million (about 61 – 68 cents per share).
The directors have declared a final dividend of 3.0
cents per share (FY2024 2.5 cents), bringing total
cash dividends for FY2025 of 3.0 cents per share
(FY2024 9.5 cents) with all dividends fully imputed.
The total FY2025 dividend of 3.0 cents brings the
FY2025 payout ratio to 16.8%.
The directors are conscious of the current share
price and note it is presently less than the current
cash backing per share. The Company is unable to
undertake share buybacks when it is in possession
of potentially material, non-public information or
during the “black out” period between year end (30
June) and reporting the annual result. Should the
share price remain around or near current levels and
there is no material, non-public information, share
buybacks will be undertaken.

Major Customer Update
The most significant factor in FY2025 was SDL’s
largest customer advising it would transition from a
single supplier (SDL) model to a multi-vendor (SDL
and one other) model, with the full profitability impact
to only be fully felt in FY2026. SDL was advised it
will remain a supplier to the customer and that the
customer now expects to tender its communications
programme services (software/professional services
and print/logistics) on a project by project basis.
Subsequently, that customer has seen its funding
reduced as a result of both American (closure of US
Aid) and British government policy changes. Whether
this affects the customer’s future communications
activity levels remains unclear; SDL is forecasting
only minor future revenue.
The Company appropriately moved forward with
a comprehensive restructure, affecting both New
Zealand and international operations. This resulted
in a material level of cost reduction and a focus
on reducing costs wherever possible will remain.
Additionally, from 1 January 2025 the Directors
reduced Board fees to the level prior to the last
fee increase in 2022 with the Chair no longer
receiving fees entirely.
FY2025 Business
Performance
FY2025 was a challenging year for the SDL team,
who demonstrated resilience while navigating the
impact of the major customer RFP and resulting
business restructure. Despite what was a highly
disrupted period of operations, revenue growth
was achieved in all regions, a commendable
achievement. The Company considers the
FY2025 result was a solid outcome given those
circumstances, but remains cognisant of the
challenges ahead.
The New Zealand operation’s ongoing focus
on new business activity – needed to offset
overall mail market declines – has continued
to deliver wins primarily in the Councils market,
with growth in digital transactions, cross selling
of SDL Postage, and market share gains. Overall
volumes of physical mail in New Zealand continue
their multi-year decline – NZ Post’s FY2024
annual report noted a 15% mail volume reduction,
indicating SDL’s 7% decline in mail lodgements was
a reasonable result. New Zealand revenues also
benefited from 12% growth in digital volumes, which
is a key area of focus.
A continued focus on operational efficiency has led
to notable improvements in internal systems with
successful implementation of a new ERP system,
a print job management system and increased
emphasis on workflow automation, reducing
operational costs and enabling further headcount
reductions, although much remains to be done.
International operations made good progress over
the year, despite the effect of SDL’s major customer
RFP.
The North American market is back to profitable
growth for SDL, with revenue up 4% for the year,
27% in 2H, partly driven by the addition of the GRI
marketing services business we acquired late in 1H
resulting in gross profit for that market growing 34%
in the second half. GRI brings valuable new marketing
services capability to SDL that complements the
Company’s software, as well as a range of clients
including The Hartford Insurance Group.
Renewal of ISO 27001:2022 certification
This internationally recognised standard verifies our
robust Information Security Management System (ISMS),
which safeguards both company and client data through
comprehensive security protocols. Our risk management
framework encompasses all aspects of our operations—
from organisational policies and business processes to IT
infrastructure.
At the heart of our ISMS is a commitment to continuous
improvement. This enables us to adapt to our evolving
business needs, counter emerging cybersecurity threats
and strengthen previously identified vulnerabilities.
The renewal of this certification reinforces our dedication
to maintaining the highest standards of information
security for us and our customers.
2

Europe/UK grew 33% largely due to one customer in
the dental software sector, following an RFP that saw
SDL successfully retain and grow the Company’s
share of their business. SDL continued to benefit
with our software supporting the growth of our major
North American partner, Pitney Bowes, across the
US, UK, France, and Japan.
As noted earlier, SDL implemented broad-based
price increases across the customer base during
the year, although at lower levels than in FY2024
and focused on mitigating ongoing supply chain and
inflation pressures in both NZ and internationally.
The labour market remains noticeably soft and staff
cost pressures have somewhat abated compared to
recent years.
With the restructure completed, the business is now
appropriately resourced and well-aligned to execute
its strategic objectives. We remain committed to
refining and improving processes while ensuring that
exceptional delivery for our customers is our highest
priority.
Business Description
SDL operates in the global Customer
Communications market, providing a comprehensive
suite of software technology, professional services,
and managed services to facilitate the digital
transformation of global customer communications.
SDL operates primarily in New Zealand, North
America and the UK. The Company’s products and
services are represented by two revenue streams:
• Services (split into Digital Print & Document
Handling, and Outsourced Services); and,
• Software & Technology.
Services reflects the New Zealand business where
SDL owns and operates mail house activities.
Within Services, Digital Print & Document Handling
revenues are generated from digital printing and mail
house processing for two categories of mail items:
transactional mail, such as invoices and statements,
direct marketing and promotional mail. Outsourced
Services such as envelope printing and postage are
typically bundled as part of the total solution albeit
generally at much lower margins.
Software & Technology, reflecting the International
business principally in North America and the UK,
provides a comprehensive suite of global customer
communications cloud solutions. This cloud service
provides a complete global solution while the DMC
(Digital Mail Centre) leverages and extends the
capabilities of the SDL cloud to the desktop through
a simple yet powerful user experience. Primary
components of the SDL technology stack include:
• complex digital document management,
workflow and integration;
• complete digital and print multi-channel
distribution;
• global distributed print integration in over 50
countries;
• digital asset management;
• digital and print campaign optimisation and
management;
• document scanning, workflow and archiving;
• artificial intelligence applied to document
enhancement;
• document composition and hyper-
personalisation;
• desktop digital mail centre User Interface (UI);
• data quality and enhancement; and,
• dashboards and analytics.
SDL has several different business models for
international clients. For some, the Company
provides only software and related consulting
services, but for others it also integrates with third
party printing and logistics providers, on which it will
typically earn a modest margin.
For these latter clients, the software charge and
print/logistics margins are typically aggregated
into an overall charge to the customer. This means
Software & Technology revenues are a mix of pure
software and software consulting revenues for some
clients, while others also include third party printing
and logistics revenues that are generated from
SDL’s software. The third-party printing and logistics
revenues are the larger proportion of total Software
& Technology revenue.
The following diagram is a simplified workflow
depiction. Data and assets that feed into content
creation can emanate from multiple sources and
often require manipulation or validation before use.
Content can be personalised as customers require,
and omni-channel output can then be delivered
across physical and digital channels.
3

The often complex nature of the data and assets
involved in content creation means SDL’s solutions
are typically highly modified for enterprise customers
and difficult to “shrink wrap” into a one-size-fits-all
software package.
The ongoing primary focus for most clients is digital
transformation of customer communications, while
improving the efficiency and effectiveness of printed
communications. The majority of SDL’s revenue in
FY2025 remains from printed communications, a
declining sector; growth, revenue generation and
differentiation globally are increasingly focused
around software and digital communications
transformation.
Total Software & Technology revenue (some of
which is revenue billed from New Zealand) as a
proportion of total revenue was around 58% in
FY2025 (FY2024 65%).
Description and Review of
Revenue Streams
Services
Services is the Company’s New Zealand operation
that provides mail house solutions to high-volume
postal mail users in the business-to-consumer
sector. Services operates leased, high-speed digital
colour and monochrome printers. In addition to
digital printing, Services also provides the ancillary
document handling operations such as automated
envelope inserting and flow-wrap.
Services now bases its sales approach around digital
transformation; some of the largest SDL clients in
New Zealand rely on SDL for digital services from
data quality and enhancement, to digital channel
distribution and closed loop reporting.
Particularly in the Council market, SDL has seen high
success in helping Councils move their ratepayers
move from print to digital. SDL provides both
physical and digital communications from a single
integrated platform that has a high level of self-
service capability.
Services revenue also includes Outsourced Services,
which encompasses a variety of outsourced
functions or components such as postage, third
party offset printing, freight, paper and envelopes,
and digital channel delivery. The Company has an
access agreement with NZ Post and an alternative
carrier which provides wholesale rates and bulk mail
discounts off retail rates. The gross profit margins on
many of these outsourced components, especially
postage, are low but an important component of the
total solution.
In a declining overall mail market and despite market
share gains, SDL’s mail volumes fell around 7% on
the prior year (FY2024 mail volumes fell 3%). The
Company increased market share in New Zealand,
including ongoing wins in the Council vertical.
SDL has a large and long-standing New Zealand
water utility customer. The Company is actively
engaged with a broad range of Councils that will
require water billing communications as sector
reforms (Local Water Done Well) require the
establishment of numerous council-controlled
organisations as separate entities. Assuming the
reforms continue as currently planned, SDL sees this
as an area of growth in the next several years.
The headwinds to physical transactional mail are
exacerbating as increasing postage rates accelerate
customers’ switch to digital. From 1 July 2025, NZ
Post increased its standard medium-sized letter
retail pricing by $0.60 to $2.90 a rise of 26% (on
top of a 15% increase the prior year). NZ Post has
stated that bulk mail prices will also change although
the level of increase is not yet known. SDL holds a
competitive cost position in the domestic mail house
market and has recently implemented a further
broad-based price increase.
DELIVERY
SMS
EMAIL
MAIL
AI POWERED
PERSONALIZATION
CONTENT CREATION
Translation
TextImage
ASSETS
ImageTextGlossary
DocumentVideo
DATA
4

On the digital communications side, SDL’s New Zealand volume of customer emails rose about 12% (following a
19% increase in FY2024) largely as a result of the continued switch from physical to electronic communications.
Email volumes are now approaching the level of physical mail volumes for SDL and on a run-rate basis had
surpassed print volumes at FY2025 year end. However, the revenue and gross profit per item for an electronic
communication is significantly lower than for the same physical print and mail item.
SDL Services Revenue Breakdown
(all figures $000)
FY2025FY2024Percentage
Change
Digital Printing and Document Handling4,5124,4491.4%
Outsourced Services & Other12,6869,14238.8%
Total Services Revenue17,19813,59126.5%
Revenue growth of 26.5% in FY2025 was pleasing. While much of that related to low-margin pass through of
higher postage prices to customers, achieving growth in Digital Printing & Document Handling of 1.4% was a
good result in the context of the physical market continuing to decline. The postal market decline will be an
ongoing headwind that makes growth difficult to achieve, however, the annualised benefit from FY2025 gains
and further price increases in July 2025, combined with sales pipeline opportunities, suggests growth is possible
in FY2026.
SDL Software & Technology
Software & Technology generated revenue of $24.1
million in FY2025, a decline of 3.8% on the prior
year’s revenue of $25.1 million.
SDL saw double digit growth in the UK market.
The Company’s largest customer, based in North
America, saw a decrease in revenue of around 15%
(due to outcome of RFP). Revenue in North America,
excluding the Company’s largest customer, saw
an overall revenue growth of 4% primarily due to
the successful onboarding of a marketing services
company in North America.
Software & Technology revenue is partly platform
based, typically under SaaS (Software as a Service)
arrangements, which can be priced as a monthly
subscription tiered base on volume or on a per
document basis. It also includes revenue where
SDL manages the total communications solution
including document printing and distribution for the
customer. The printing and distribution component
forms the larger part of Software & Technology’s
revenue and is lower margin.
SDL continues to streamline its global customer
communications platform, DMC, to improve the
ability for customers to access and self-serve. DMC
simplifies onboarding of customers and sending
and tracking of documents through physical and
digital channels. DMC integrates with other SDL
products including the document composition
platform, Composer, and the automation tool,
Autoprod, to enable creation of highly personalised
communications at scale. DMC integrates with
SDL’s print partner network through the Company’s
distributed print platform, Jupiter, to manage and
provide real time status updates on job completion
and mailing. SDL’s expertise in global postage
management delivers significant cost savings by
leveraging DMC to optimise production and delivery
logistics. The Company’s objective is to grow SaaS
platform revenue at a faster rate than print services
by focusing on digital transformation.
Communication channels are no longer a “one
size fits all”; customers now receive increasingly
personalised messaging through multi-media
channels. SDL’s software platforms enable one to
one personalisation of each form of communication
– whether a customer email, an invoice or account
statement, or a piece of marketing collateral – as a
means to enrich and deepen the relationships that
SDL’s customers have with their customers.
SDL excels at enabling organisations to drive
down the cost of customer communications while
improving client engagement. Leading global brands
rely on the Company’s software to simplify sending
of complex global customer communications
through print and digital channels. SDL’s global
network of mail service providers delivers significant
savings in print and postage costs. As the
secular decline in mail continues, SDL’s software
platforms provide an omni-channel bridge to digital
transformation.
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For a more detailed view of SDL’s software
solutions, refer to the Company’s website at: https://
solutiondynamics.com/customer-solutions/
The International Growth Fund (“IGF”) co-funding
grant from NZ Trade and Enterprise (“NZTE”) that
supports a range of market development activities
in North America was in place for all of FY2025.
The IGF provides 50:50 co-funding for eligible project
costs up to a maximum of $0.6 million from NZTE
over a three-year period and expires in November
2025.
Financial Performance
SDL’s decline in FY2025 earnings was primarily the effect of lower Software & Technology/International revenue
from SDL’s major customer in 2H. A broadly-based price increase helped offset inflationary cost pressures
(although there are now fewer staff cost pressures).
Gross Profit declined 3.8% from pressure on Cost of Goods Sold. While SG&A costs saw a 6.8% increase in 1H,
the second half was down 10.0% from restructuring gains (after some one-off restructuring costs).
EBITDA reduced 8.0% to $4.45 million (FY2024 $4.84 million).
Summary Financial Performance
(all figures $000)
FY2025FY2024Percentage
Change
Total Revenue41,32438,6686.9%
Less: Cost of Goods Sold27,03823,82413.5%
Gross Profit14,28614,844-3.8%
Gross Margin (%)34.6%38.4%
Less: Selling, General & Admin (SG&A)9,84010,009-1.7%
EBITDA4,4464,835-8.0%
EBITDA margin (%)10.8%12.5%
Depreciation8618511.2%
Amortisation605411.1%
EBIT3,5253,930-10.3%
Net Interest-123-125-1.6%
Income Tax1,0291,236-16.7%
Net Profit after Tax2,6192,819-7.1%
Tax rate28.2%30.5%
SDL’s earnings in FY2025 benefitted from NZTE’s market development co-funding assistance, which totalled $0.2
million pre-tax ($0.2 million in FY2024).
The following table highlights first and second half performance for the last two financial years. The timing of a
small number of particularly large customer jobs during the year can materially alter the split of first and second
half earnings, with one order slipping from late FY2024 into early FY2025 but that order not repeating in late
FY2025.
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SDL Half Financial Years
(all figures $000)
2H
FY2025
2H
FY2024
Percent
Change
1H
FY2025
1H
FY2024
Percent
Change
Total Revenue15,23315,902-4.2%26,09122,76614.6%
EBITDA731834-12.4%3,7154,001-7.1%
EBITDA margin4.8%5.2%14.2%17.6%
Net Profit after Tax276346-20.2%2,3432,473-5.3%
Balance Sheet, Liquidity and Debt
SDL closed the year with net cash (i.e. cash plus short-term deposits less interest-bearing debt) on hand of
$11.19 million (FY2024 $7.95 million) or around 76 cents per share. This net cash figure excludes debt liabilities
relating to Lease Liabilities arising from the Lease Accounting standard; these liabilities are approximately offset
by Right to Use Lease Liabilities.
The Directors intend to maintain a prudent approach to balance sheet management but have nevertheless
continued to review acquisition opportunities, including one particular opportunity late in 2H, although none have
progressed to date.
The Company maintains an overdraft arrangement from ANZ Bank with a $200,000 limit. This was unused during
FY2025.
Selected Balance Sheet and Cashflow Figures
(all figures $000)
FY2025FY2024Change
Net Cash/(Debt & Borrowings)11,1937,9503,243
Non-Current Assets1,6461,745-99
Right of Use Assets1,3541,795-441
Net Other Assets/(Liabilities)-1,490-673-817
Right of Use Liabilities-1,387-1,815428
Net Assets11,3169,0022,314
Cashflow from Trading3,5013,42972
Movement in Working Capital792-74866
Cash Inflow from Operations4,2933,355938
Capital expenditures for the year totalled around $0.1 million (FY2024 $0.2 million), largely relating to laptops
and IT hardware. The Company does not capitalise software development.
Net assets include intangible assets of around $1.1 million, which is all goodwill and subject to an annual
impairment test.
SDL operates with a largely neutral working capital balance, meaning growth typically does not require additional
investment of capital.
Taxation and Dividends
SDL pays full New Zealand tax on locally generated earnings and the Company’s overall tax rate in FY2025 was
28.2% (NZ statutory tax rate is 28%).
SDL pays dividends only to the extent that it can fully impute them and also subject to the Company not
experiencing any one-off requirements for abnormal capital expenditure or any significant acquisition or
investment activity. The Company did not pay an interim dividend following the result of its largest customer’s
RFP and consequent restructuring. SDL will be paying a FY2025 final dividend of 3.0 cents per share.
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Earnings and Dividends per ShareFY2025FY2024Percentage Change
Closing Shares on Issue (‘000)14,70614,720-0.1%
Reported Earnings per Share (cents)17.819.2-7.0%
Dividend per Share (cents)3.09.5-68.4%
Dividend Proportion Imputed100.0%100.0%
Dividend Payout ratio16.8%49.6%
The final dividend of 3.0 cents per share will be fully imputed and paid on 26 September 2025.
The number of shares on issue was slightly down year-on-year as SDL commenced a share buyback during
FY2025, although this paused prior to year-end as the Company was holding material, non-public information. At
financial year end, the Company had outstanding ESOP rights to key staff members in the plan who collectively
hold rights to 0.59 million shares.
Risk Factors
Mail volume in New Zealand, in line with global
trends, continues to decline, particularly for
transactional mail. NZ Post standard-mail retail
postage rates increased 26% at end FY2025 (on top
of a 15% increase at end FY2024). The Company has
several key domestic contracts that, if lost, could
place material pressure on local profitability although
much of this is under medium-term contract. SDL
reiterates its expectation that consolidation in the
New Zealand print market is inevitable, with some
current capacity rationalisation underway as one
sizeable digital printer has indicated it is ceasing
operations. The Company emphasises it will not
participate unless there is clear value enhancement
for shareholders.
SDL’s largest five customers accounted for 55% of
revenue (FY2024: 60%). This revenue concentration
includes the Company’s largest customer, which,
following its RFP during FY2025, appears likely to
contribute minimal revenue in FY2026. Loss of one
or more of the residual top five customers would
cause financial results to change materially.
The Company’s software provides critical document
management, distributed print, and storage functions
for its clients. SDL needs to ensure it continues to
maintain appropriate levels of software development
and quality control, along with well-trained staff
for software delivery and support. Cyber and data
security remains a known high-risk area which, while
difficult to mitigate, sees SDL retaining ISO270001
certification and currently in the process of obtaining
SOC2 certification. The Company regularly reviews
its IT and data security arrangements including using
external consultants.
The Company operates a single site facility for
its New Zealand print and mail house production,
with an offsite for data and server backup. The
Directors are conscious of the operational risk a
single site implies for digital imaging and mail house
operations. SDL has a reciprocal disaster recovery
(“DR”) plan with another printer, as well as a degree
of backup capability with a division of its major print
equipment supplier.
The Company mainly relies on distribution channel
partners to market its software products into the UK,
Europe and the US. This means SDL has little or no
contact with many of the end user customers of its
products. While these channel partner arrangements
are currently stable there is no guarantee these
arrangements will continue. SDL does continue
to drive value for its channel partners and aims to
ensure its software meets ongoing channel partner
requirements.
While the risks noted represent ongoing challenges
and headwinds, the market opportunities to
help organisations with their global customer
communications digital transformation can be
significant. SDL holds a strong position in global
postage management and distributed print,
capturing significant savings as the first step in the
digital transformation journey.
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