TOUCHCORP 1H2015 RESULTS PRESENTATION DATED: THURSDAY, 27TH AUGUST 2015
DISCLAIMER The material in this presentation has been prepared by Touchcorp Limited ARBN 603 731 184 (Touchcorp) and is general background information about Touchcorp s activities current at the date of this presentation. The information is given in summary form and does not purport to be complete. Information in this presentation, including forecast financial information should not be considered as advice or a recommendation to investors or potential investors and does not take into account investment objectives, financial situation or needs of any particular investor. These should be considered, with or without professional advice when deciding if an investment is appropriate. Persons needing advice should consult their stockbroker, solicitor, accountant or other independent financial advisor. The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this presentation is released, published or distributed should inform themselves about and observe such restrictions. This presentation does not constitute, or form part of, an offer to sell or the solicitation of an offer to subscribe for or buy any securities, nor the solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issue or transfer of the securities referred to in this presentation in any jurisdiction in contravention of applicable law. This presentation may contain forward looking statements regarding the intentions or performance of Touchcorp, and these will be affected by many other factors beyond the control of Touchcorp. Such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. The forward looking statements made in this presentation relate only to events as Touchcorp the date on which the statements are made. Touchcorp will not undertake any obligation to release publicly any revisions or updates to these forward-looking statements to reflect events, circumstances or unanticipated events occurring after the date of this presentation except as required by law or by any appropriate regulatory authority. Percentages and figures in this document may include rounding differences. TOUCHCORP 1H2015 01
AGENDA - TOUCHCORP OVERVIEW - THE HALF YEAR IN REVIEW - FINANCIAL PERFORMANCE AND POSITION - KEY CUSTOMERS UPDATE - STRATEGY UPDATE - SUMMARY AND OUTLOOK TOUCHCORP 1H2015 02
TOUCHCORP OVERVIEW The Touch System, developed by Touchcorp, is used by blue-chip corporates in the convenience retail, healthcare, government and telecommunications sectors. Touchcorp is a technology-driven business with a strong focus on research and development. The Touch System provides an integrated, cloud-based, end-to-end electronic product delivery and payment platform that communicates across various interfaces, self-service channels and payment systems. TOUCHCORP 1H2015 03
THE HALF YEAR IN REVIEW Productive 1H2015 IPO successfully completed and on track to meet Prospectus Forecast for FY2015 AfterPay capital raising is complete Additional business development staff employed to service emerging opportunities eservices Platform (ESP) delivered Reitan Norway pilot complete, rollout underway in Denmark, Sweden and Norway TOUCHCORP 1H2015 04
FINANCIAL PERFORMANCE $ MILLION PRO FORMA PERCENTAGE 1H2015 1H2014 CHANGE Services revenue 18.4 10.9 69% Cost of sales (3.2) (2.3) 41% Gross Profit 15.2 8.6 76% EBITDA 1 4.6 2.7 73% EBIT 1 4.2 2.3 82% Profit before tax 4.2 2.3 85% Income tax expense - - Pro forma NPAT 1 4.2 2.3 85% Capital raising expenses (3.6) - Government grant 0.1 1.7 Statutory NPAT 0.8 3.9 1 Pro forma NPAT, EBITDA and EBIT follow the pro forma basis as set out in the prospectus and therefore exclude capital raising expenses and government grant income TOUCHCORP 1H2015 05
FINANCIAL PERFORMANCE (0.9) (2.8) 7.5 (1.3) (0.5) 4.6 2.7 EBITDA 1H 2014 REVENUE IMPACT COST OF SALES CUSTOMER DEVELOPMENT EXPENSE EMPLOYEE BENEFITS OTHER EXPENSES EBITDA 1H 2015* Significant growth in Gross Profit of 76%, resulting in EBITDA growth of 73% Offset by the factors identified in the prospectus: Customer development costs ($2.8m) Conversion of government grants ($1.7m) from cash to carry forward tax benefit Capitalised R&D in 1st half lower than forecast but expected to reach the forecast number ($5.5m) by year end due to nature of the work density required by projects *EBITDA bridge above is based on pro forma statement of financial position TOUCHCORP 1H2015 06
REVENUE $ MILLION PRO FORMA PERCENTAGE 1H2015 1H2014 CHANGE Services revenue Australia and Pacific revenue Retail Service 8.5 4.3 99% Health and Government 1.1 0.8 41% Mobility Services 7.6 4.7 63% Total Australia and Pacific revenue 17.2 9.7 77% International revenue Retail Services 1.3 1.2 4% Total International revenue 1.3 1.2 4% Total services revenue 18.4 10.9 69% Revenue run rate to increase through the remainder of the year Pilot approval for EU slower, but now gathering pace Expect full year revenue result to be in-line with the Prospectus TOUCHCORP 1H2015 07
FINANCIAL POSITION $ MILLION STATUTORY 1H2015 1H2014 Cash and cash equivalents 10.4 2.7 Receivables 13.9 9.7 Other assets 24.8 19.4 Total assets 49.1 31.7 Payables 12.6 17.3 Other liabilities 1.1 0.9 Total liabilities 13.7 18.2 Net Assets 35.4 13.5 Shareholders Equity 35.4 13.5 Debt free Strong cash position following the IPO with no expectation of significant cash requirements in the near term Increase in debtors due to AfterPay and generally increased revenue run rate Significant reduction (circa $5.0m) in unearned income liability TOUCHCORP 1H2015 08
CASHFLOW $ MILLION STATUTORY 1H2015 1H2014 Operating cashflow (7.3) 2.2 Capitalised R&D Expenses (1.6) (1.3) Fixed assets purchases (0.9) (0.9) Total investing cashflow (2.5) (2.2) Proceeds from issue of shares 20.0 - Capital raising expenses (3.6) - Proceeds from exercise of shares options 1.0 - Financing cashflow 17.5 - Net cashflow 7.7 (0.0) Operating cashflow affected by: Differences in timing of revenue recognition and cash receipts, such as 7-Eleven ESP fee ($2.5m) and AfterPay development fee ($3.0m) Prepayment of customer development expenses and security bonds with suppliers Lower capitalisation of R&D expenses for 1H2015 TOUCHCORP 1H2015 09
KEY CUSTOMER UPDATE CUSTOMER STATUS AUSTRALIA & PACIFIC RETAIL 7-Eleven ESP Delivered Expanded responsibility in payments both in-store and on mobile devices HEALTH & GOVERNMENT SERVICES NAB HICAPS Growing strongly MOBILITY Optus Continuing to expand services/volumes Telstra December 2014 Agreement implementation discussions progressing INTERNATIONAL RETAIL Reitan Norwegian pilot successful with deployments underway in Norway Sweden and Denmark Valora Deployment underway in Germany TOUCHCORP 1H2015 10
KEY CUSTOMER UPDATE - AFTERPAY Capital raising of $8m completed at $1 per share resulting in valuation of $28m post raising Development fee of $3.0m recognised by Touchcorp, with $1.5m received in July 2015 and the balance in December 2015 AfterPay product gaining acceptance in the Australian market place Now available through more than 20 merchant sites Sales growing strongly 10 million AfterPay shares to Touchcorp expected to be issued by the end of August, resulting in Touchcorp owning 35.7% of AfterPay TOUCHCORP 1H2015 11
STRATEGY UPDATE Company continues to focus on: > Expanded roles with existing customers > Broadened service offering (new Service Modules) > Engagement with new customers Mobility broadening: now targeting utilities, toll road operators and retail services Retail: in discussions with additional major retailers both in Australia and internationally Malaysian and Singaporean subsidiaries established TOUCHCORP 1H2015 12
SUMMARY AND OUTLOOK Successful 1H2015, including IPO Major customers providing additional opportunities New services have been delivered and more are scheduled for delivery in 2H2015 Management expects that the Company will report full year pro forma net profit after tax in line with the Prospectus Forecast of $7.4m New and expanded business opportunities have been identified Accelerated and focused program of business and product development activities to aid in the achievement of growth expected in FY2016 Increased global presence over the next several years TOUCHCORP 1H2015 13
GLOSSARY
GLOSSARY TERM MEANING 1H or 1H2014 the six months ending 30 June 2014 1H or 1H2015 the six months ending 30 June 2015 2H or 2H2015 the six months ending 31 December 2015 AfterPay AfterPay Pty Ltd (ACN 169 342 947) B2B EBITDA EBIT Electronic Product eservices Platform or ESP Business-to-business earnings before interest, tax, depreciation and amortisation earnings before interest and tax non-physical products, services and entitlements a B2B technology platform to support the Retail Services, and Health and Government Services business units FY2015 the financial year ending 31 December 2015 FY2016 the financial year ending 31 December 2016 Gross Profit Health and Government Services IPO Gross Profit is calculated as services revenue less cost of sales the health and government business unit that enables processing and payment of health insurance claims by Consumers Touchcorp s initial public offering of shares under the Prospectus Mobility Services the mobility services business unit that enables the acceptance of payments and service requests from consumers by MNOs and MVNOs, and purchases of Electronic Products by consumers MNO Mobile network operator that owns and operates its own network MVNO Mobile virtual network operator that rents the network of a MNO to provide its services NPAT net profit after tax POS Device point-of-sale device POS-ECR point-of-sale electronic cash register PMS Infrastructure payment terminals or practice management systems used by Practitioners Practitioner medical or allied health practitioner that receive payments from Medicare Australia or private health funds for providing services Prospectus Forecast forecast financial information of Touchcorp, set out in section 4 of the Prospectus Prospectus Touchcorp s replacement prospectus dated 20 March 2015 R&D research and development Retail Services The retail services business unit that enables point-of-sale devices in retail premises to sell Electronic Products Service Module Touch System a service provided by Touchcorp to its customers Touchcorp s software and hardware network that includes the TouchPoint Technology, the ESP, the Mobility Platform, any associated hardware and the range of network capabilities TouchPoint Technology the suite of software technology developed by Touchcorp, through which Touchcorp integrates with existing POS Devices or PMS Infrastructure Touchcorp or the Company Touchcorp Limited ARBN 603 731 184 Retail Services The retail services business unit that enables point-of-sale devices in retail premises to sell Electronic Products TOUCHCORP 1H2015 15
APPENDIX: SHORT OVERVIEW OF TOUCHCORP
TOUCHCORP OVERVIEW Touchcorp has designed, built owns and operates the Touch System - a scalable software platform - that enables the electronic delivery of nonphysical products, services and entitlements to their end-users through multiple consumer service points, whether in-store or through self service methods. TOUCHCORP 1H2015 17
WELL ESTABLISHED SOFTWARE BUSINESS Facilitates the sale of Electronic Products (in-store or via self-service) Agnostic across interfaces, devices and payment systems MERCHANT INTERFACES Integrates with merchants and suppliers to link their systems Provides other value added services including inventory management, transaction reporting, transaction integrity, transaction invoicing and data analysis (each a Service Module) Touchcorp generates revenue from transaction and integration fees The Touch System owns develops and operates a scalable and globally accessible software platform TERMINAL KIOSK SELF-SERVICE INTERFACES/DEVICES POS-ECR MOBILE ATM MOBILE INTERNET PAYMENT INTERFACES IVR TABLET Examples of Electronic Products > Broad range of services > Compatible with a broad range of interfaces, devices and payment interfaces > Protected intellectual property TO U C H CO RP 1 H 2 01 5 18
SCALABLE AND FLEXIBLE TECHNOLOGY Payment Terminal POS-ECR Kiosk Internet IVR Merchant Merchant Merchant Self Service Self Service TOUCH POINT Small part of platform Unique integration for each customer Cloud updates FUNCTIONS TOUCH SYSTEM eservices Platform Mobility Platform Inventory Accounting Majority of platform Common across Customers Integration Platform Transaction integrity Invoicing Customers choose and use modules Highly scalable Touch data centres Reporting Cloud updates TOUCH POINT Supplier Supplier Supplier Supplier Supplier Small part of platform Unique integration for each customer Cloud updates TOUCHCORP 1H2015 19