8COMMON LIMITED — AGM Information 2019

Nov 21, 2019

==> picture [262 x 262] intentionally omitted <==

8common (ASX:8CO) Annual General Meeting

22 November 2019

1. Welcome

2. Chairman’s Address

Items of Business

1. CEO Presentation

2. Formal Business 5. Questions and Answers

3. Conclusion and closing remarks

2

8common

8common Limited (ASX:8CO)

Welcome and Chairman’s Address

Executive Chairman – Nic Lim

3

8common

8common Limited (ASX:8CO)

CEO Presentation 8common

(ASX:8CO)

CEO – Andrew Bond

8common

8common Limited (ASX:8CO)

Our platform

8common solutions deliver enterprise grade closed loop financial transaction processing

3 complementary fintech platforms

Leading end to end Its flagship Expense8 platform is a travel expense Closed loop Closed loop preleading provider of end to end travel management software, procurement CARDHERO paid card platform expense management software, card card application and payment platform application and management. management. Scalable, government grade platforms Over three million $2.9b transaction improve organisation, productivity and 119,000 transactions processed by value processed users compliance. 8CO in FY19 since 2003, $600m+ in FY19

119,000 platform users within large enterprise customers and over 120 state and federal government entities.

==> picture [313 x 132] intentionally omitted <==

==> picture [115 x 98] intentionally omitted <==

==> picture [177 x 40] intentionally omitted <==

==> picture [169 x 42] intentionally omitted <==

==> picture [98 x 70] intentionally omitted <==

==> picture [162 x 28] intentionally omitted <==

==> picture [73 x 54] intentionally omitted <==

==> picture [128 x 44] intentionally omitted <==

5

8common

8common Limited (ASX:8CO)

Our business model

Our platforms manage closed loop financial transactions for our customers

Travel and Expense Management (TEM) is our core product offering

8CO is delivering new solutions for our customers

Our platforms integrate and reconcile with customers’ payroll and ERP software

==> picture [864 x 506] intentionally omitted <==

----- Start of picture text -----

CARDHERO
----- End of picture text -----

6

8common

8common Limited (ASX:8CO)

Revenue model

8CO generate revenues through:

1. Implementation revenues

$50k to $500k

One-off implementation revenue

• Initial implementation cost of adding our software

2. Monthly recurring revenue

• Income generated through utilisation of our SaaS technology by our 119,000 users

3. Ad hoc change requests

• Charges for specific alterations, additions, detail changes on transaction reports

Monthly Recurring Revenue

$0.25 – $12.00 $500 – $2,500 per transaction subscription

$5k to $50k*

Ad hoc change request revenue

*based on annual spend expected per agency

7

8common

8common Limited (ASX:8CO)

Summary Financials

	($’000) FY19 FY18 Change	($’000) FY19 FY18 Change	($’000) FY19 FY18 Change	($’000) FY19 FY18 Change
	Profit and Loss Revenue	3,474.2	2,638.4
				31.7%
	Normalised EBITDA*	(390.3)	(515.1)	(24.2%)
	EBITDA	(889.9)	(515.1)	72.8%
	Profit Before Tax	(1,224.9)	(1,153.9)	6.2%
	Net Profit / (Loss) After Tax	(1,239.0)	(1,290.5)	(4.0%)
	Cashflow
	Cash at end of year	1,033.4	533.6	93.7%
	Cash receipts (includes Realtors8)	4,142.1	4,190.9	(1.2%)
	Cash receipts (from continuing operations)	4,142.1	2,864.2	44.6%
	Cash flow from operating activities	(130.5)	(503.8)	(74.1%)
	Cash flow from investing activities	30.4	200.8	(84.9%)
	Cash flow from financing activities	599.9	469.6	27.7%
	Balance Sheet
	Cash	1,033.4	533.6	93.7%
	Current Assets	1,384.9	4,106.8	(66.3%)
	Current Liabilities	1,522.8	1,343.3	13.4%
	Shareholder Equity	6,161.1	6,040.3	2.0%

*Normalised EBITDA excludes impairment losses and non-cash share-based payments

8common

8common Limited (ASX:8CO)

Highlights

Strong corporate footprint and leading position in Government with strong order book

Compelling opportunities to leverage existing relationship to upsell products and lift ARPU

Strong multi-year revenue growth

Three consecutive quarters of positive cashflow

Revenue and cash receipt growth providing clear path towards positive EBITDA and profitability

==> picture [44 x 43] intentionally omitted <==

==> picture [88 x 35] intentionally omitted <==

----- Start of picture text -----

41%
----- End of picture text -----

PCP revenue lift

==> picture [67 x 52] intentionally omitted <==

3 Continuous quarters of positive cash flow

==> picture [52 x 52] intentionally omitted <==

==> picture [53 x 32] intentionally omitted <==

==> picture [368 x 35] intentionally omitted <==

----- Start of picture text -----

33% 26%
----- End of picture text -----

Increase in cash receipts

PCP SaaS revenue increase

==> picture [32 x 46] intentionally omitted <==

==> picture [430 x 185] intentionally omitted <==

----- Start of picture text -----

$309k $20
on 119k users
Q1 FY20 ARPU with further
unaudited potential upside
EBITDA
----- End of picture text -----*

9

8common

• Includes R+D tax refund of $280k

8common Limited (ASX:8CO)

Growth in user base

• 4x growth between 2016 to 2019 in value of expenses managed

• $2.9 billion in expenses managed since 2003, $607 million in the last 12 months

==> picture [1310 x 495] intentionally omitted <==

----- Start of picture text -----

Platform transactions (m)
$700 3.0
2.7
$600
$2.9b
2.5
607
transaction value
2.0
$500
managed through the
2.0
platform since 2003 466
$400
1.5
$300
1.1
1.0
252
0.8
$200 0.7 0.8 0.7
151
140 0.5
$100 126 126
$0 0.0
2013 2014 2015 2016 2017 2018 2019
$ Expenses (LHS) # Expenses (RHS)
----- End of picture text -----

10

8common

8common Limited (ASX:8CO)

Recurring revenue

• Q1 FY20 (unaudited) recurring revenue generated from our SaaS technology has grown 26% versus Q1 FY19

• October 2019 (unaudited) recurring revenue was $216K

• Annualised 12-month recurring revenue equates to ~$2.5 million

Quarterly Recurring SaaS Revenue ($000)

==> picture [1293 x 392] intentionally omitted <==

----- Start of picture text -----

$600
586
$500 518
465 464
442
436
$400
411
404
384
$300
312
279
259 256
$200
$100
$0
Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20
----- End of picture text -----

11

8common

8common Limited (ASX:8CO)

Total revenue growth

• Total revenue growth of 40% vs Q1 FY19

• Implementation revenue up 65% vs Q1 FY19

• First quarter is traditionally a seasonally weak period for implementation revenue as most work is completed before the end of the financial year

Quarterly Total Revenue ($000)

==> picture [1296 x 400] intentionally omitted <==

----- Start of picture text -----

$1,000
211
298 146
$800
338 247
305 163
$600 75
227
136
122
143 99
139 112
86 32
$400 13
584
518
465 464
436 442
$200 384 411 404
$0
Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20
Recurring Revenue Implementation Revenue Other Revenue
----- End of picture text -----

12

8common

8common Limited (ASX:8CO)

New and renewed contracts

8Common have announced three new contracts and four extended contracts since the beginning of CY19

Entity Type Date Value Term* Federal Prime Minister & Cabinet Extension 18 November 2019 ~150k 1 year Transport for NSW Extension 8 November 2019 ~750k 3 years NSW Audit Office New Contract 18 September 2019 ~150k 3 years NSW DPIE Extension 13 September 2019 ~237k 1 year Service Delivery Office New Contract 28 June 2019 ~216k 3 years DIIS New Contract 10 May 2019 ~544k 3 years Federal Department of Finance Extension 27 February 2019 ~640k 3 years NSW Department of Education Extension 22 January 2019 ~250k 1 year

• Values are GST inclusive

13

8common

8common Limited (ASX:8CO)

Market opportunities

Payment and expense industry dynamics are changing driving opportunities

==> picture [50 x 59] intentionally omitted <==

Full automation of expense process

$

Instantaneous payment

Key macro changes in the industry are focussed upon:

• Straight through processing

• Procure to pay

• Increasing compliance and audit oversight of government and enterprise spend

8CO platforms are set to benefit from continued change in Government and corporate expense and procurement policies

==> picture [56 x 40] intentionally omitted <==

==> picture [56 x 38] intentionally omitted <==

Prepaid cards and automation is 70% cheaper than procurement process

Growing card limits NSW PCard limit $5k in 2018 $10k in 2019

==> picture [60 x 58] intentionally omitted <==

==> picture [50 x 56] intentionally omitted <==

Real time audit and expense tracking

Increased data security and monitoring

14

8common

8common Limited (ASX:8CO)

Product leverage

Leverage existing relationships to introduce other 8CO products

Travel - Federal Government

• Only eight Agencies currently use corporate travel (8k people)

• Under shared services potential to add a further +50 agencies and +40k people into travel module

Travel - NSW State Government

• One entity at present with potential to deliver a further six entities and +60k people

Card application – State and Federal

==> picture [54 x 64] intentionally omitted <==

==> picture [70 x 49] intentionally omitted <==

==> picture [35 x 41] intentionally omitted <==

Expense Credit Card Application Corporate Management and Maintenance Travel $18 $12 $12 ARPU ARPU ARPU (119k users) (17k users) (9k users)

• 17k users with potential to deliver significant growth

• +50,000 potential in NSW

• +14,000 in Federal Government

15

8common

8common Limited (ASX:8CO)

CardHERO

Closed loop fund disbursement platform

Example: National Disability Insurance Scheme

Largest provider of not for profit funds in Australia and a perfect potential client for 8CO given our technology and strong Government relationship

1[st] Client has signed a paid pre-implementation product discovery phase

Target Use Cases:

• Disbursement of Grants

• Payment of Allowances

Delivering:

• Card Application and Maintenance (Physical or Digital)

• Transaction Reconciliation

• Fraud and Compliance Monitoring

• Australian based implementation and support

==> picture [67 x 51] intentionally omitted <==

==> picture [64 x 46] intentionally omitted <==

==> picture [688 x 181] intentionally omitted <==

----- Start of picture text -----

176.2k 86.7k
$4.9b
People have New users Funds paid under the
received registered in 2019 scheme in FY18
individual plans
----- End of picture text -----

Prepaid Cards will:

• Replace existing debit of funds into accounts

• Provide transparency and reporting

• Reduce the processing cost of funds disbursement

Revenue Model:

• Implementation Fee

• Monthly Platform Fee

Existing Method

• Bank accounts created

• • Multiple debit cards issued

• • Limited transaction visibility

• • Limited reporting capability

• • Manual reconciliation of spend

• CardHERO Solution

• • Prepaid Card issued

• •

• vs Full transaction visibility • Full reporting and analysis

• • Compliance and fraud monitoring

• • Automated reconciliation of spend

• Monthly Subscription Fee per card

• % of load fee charged monthly

16

8common

8common Limited (ASX:8CO)

Source: NDIS, https://www.ndis.gov.au/media/431/download

PayHERO

Closed loop payments platform

Example: Government Procurement

Federal, NSW & NT Government Annual Procurement Budget and RBA Benchmark Transaction Fee

Target Use Cases:

• Large enterprise procurement marketplaces

• Grant disbursement programs

Delivering:

• Tokenised Credit Card and User Management

• Supplier on-boarding & management

• Transaction Reconciliation to ERP

• Fraud and Compliance Monitoring

• Australian based implementation and support

PayHERO’s Payment Gateway will:

• Replace existing supplier payment gateway provider

• Facilitate straight through financial ERP processing

• Revenue Model:

• Implementation Fee

• Monthly platform fee

• Monthly subscription fee per card

• % of transaction value & per transaction fee

==> picture [67 x 52] intentionally omitted <==

==> picture [31 x 46] intentionally omitted <==

==> picture [64 x 46] intentionally omitted <==

==> picture [103 x 45] intentionally omitted <==

----- Start of picture text -----

$80b
----- End of picture text -----

==> picture [447 x 156] intentionally omitted <==

----- Start of picture text -----

30bps $24m
PayHERO potential
Average gross dollar
addressable market
volume fee
----- End of picture text -----

==> picture [209 x 69] intentionally omitted <==

----- Start of picture text -----

Procurement budget
from State and Federal
Governments
----- End of picture text -----

==> picture [450 x 214] intentionally omitted <==

----- Start of picture text -----

PayHERO Solution
•
Full Integration into Expense8
vs • Straight through processing
•
Compliance and fraud monitoring
•
Rich data integration
•
Automated reconciliation and
approval of spend
----- End of picture text -----

• Existing Method

• • Disparate systems

• • Multiple approvals

• • Rekeying of information

• • Limited data available

• • Manual reconciliation of spend

17

Source:

https://www.afr.com/technology/nsw-government-looks-to-microsoft-artificial-intelligence-to-cut-10m-costs-20180607-h112nu https://www.finance.gov.au/procurement/statistics-on-commonwealth-purchasing-contracts/ https://nt.gov.au/industry/government/sell-my-goods-and-services-to-government/buy-local-plan

8common

8common Limited (ASX:8CO)

The outlook

8CO’s industry leading position amongst our foundation partners provides a platform for growth

The focus of our business will be to:

==> picture [1337 x 314] intentionally omitted <==

----- Start of picture text -----

Grow organic revenue Leverage existing Execute on strategy to Expand Develop partner
through new agency relationships to cross develop pre-paid card PayHero ecosystem to scale
wins, uplift in users sell products market + distribution to new
and increase of ARPU markets
Cardhero
----- End of picture text -----

18

8common

8common Limited (ASX:8CO)

Formal Business Executive Chairman – Nic Lim

19

8common

8common Limited (ASX:8CO)

Consideration of financial reports

Items of Business

“To receive and to consider the Annual Financial Report of the Company for the financial year ended 30 June 2019 together with the declaration of the Directors, the Directors’ Report, the Remuneration Report and the Auditor’s Report for that financial year.” Note: This item of ordinary business is for discussion only and is not a resolution

8common

20

8common Limited (ASX:8CO)

Items of Business

Resolution 1: Adoption of Remuneration Report To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution: “That, for the purpose of Section 250R(2) of the Corporations Act and for all other purposes, approval is given for the adoption of the Remuneration Report as contained in the Company’s Annual Financial Report for the financial year ended 30 June 2019.” Note: The vote on this Resolution is advisory only and does not bind the Directors or the Company

8common

21

8common Limited (ASX:8CO)

Resolution 2: Re-election of Adrian Bunter as Director

Items of Business

To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution: “That Mr Adrian Bunter, a Director who retires by rotation in accordance with the Company’s Constitution and ASX Listing Rule 14.5, and being eligible offers himself for reelection as a Director of the Company, effective immediately.”

8common

22

8common Limited (ASX:8CO)

Resolution 3: ASX Listing Rule 7.1A Approval of Future Issue of Securities

Items of Business

To consider and, if thought fit, to pass the following resolution as a Special Resolution: “That, for the purposes of ASX Listing Rule 7.1A and for all other purposes, the Shareholders approve the issue of equity securities up to 10% of the issued capital of the Company (at the time of issue) calculated in accordance with the formula prescribed in ASX Listing Rule 7.1A.2 and otherwise on the terms and conditions set out in the Explanatory Statement which accompanies and forms part of this Notice of Meeting.”

8common

23

8common Limited (ASX:8CO)

8common Q&A (ASX:8CO)

8common

8common Limited (ASX:8CO)

This presentation has been produced by 8common Limited and may contain forward looking statements that are based on Management’s current expectations, beliefs and assumptions and are subject to a number of risks and uncertainties. Forward looking statements contained in this presentation are not guarantees of future performance and involve risks and uncertainties that are difficult to predict, and are based upon assumptions as to future events that may not prove accurate. Therefore, the actual outcomes and results may differ from those described.

In any forward-looking statement in which 8common Limited expresses an expectation or belief such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement or expectation or belief will result or be achieved or accomplished. We are not under any duty to update forward-looking statements unless required to by law.

and its directors, employees, associates, affiliates and agents, make no:

a. Representations or warranties, expressed or implied, in relationship to this presentation or the accuracy, reliability or completeness of any information in it or the performance of 8common Limited; and

b. Accept no responsibility for the accuracy or completeness of this presentation.

Disclaimer

buy or apply for securities, nor it or any part of it form the basis of, or be relied upon in any connection with any contracts or commitment whatsoever. The information in this presentation does not take into account the objectives, financial situation or particular needs of any person. Nothing in this presentation constitutes investment, legal, tax or other advice.

This presentation does not, nor does it purport to, contain all the information prospective investors in 8common Limited would desire or require in reaching an investment decision. To the maximum extent permitted by law, 8common Limited, their officers, directors, employees, associates, affiliates or agents, nor any other person accepts any liability for any loss, claim, damages, costs or expenses of any nature (whether foreseeable or not), including, without limitation, any liability arising from fault or negligence on the part of any of them or any other person, for any loss arising from the use of this presentation or its content or otherwise arising in connection with it or any errors or omissions in it.

registered or approved in any jurisdiction and recipients of this presentation should keep themselves informed of and comply with and observe all applicable legal and regulatory requirements. In Australia, this presentation is made only to sophisticated or professional investors under the Corporations Act, but will be released on the ASX.

25

8common

8common Limited (ASX:8CO)

Investor Relations Craig Sainsbury Stephanie Ottens e: craig.sainsbury@marketeye.com.au e: stephanie.ottens@marketeye.com.au 8common

Nic Lim Executive Chairman e: nic@8common.com

8common Limited (ASX:8CO)