8COMMON LIMITED — Investor Presentation 2018

Sep 6, 2018

8common

(ASX:8CO)

8common

8common Limited (ASX:8CO)

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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.

This investor presentation is not an offer of securities, and does not form part of any prospectus that has or may be issued. 8common Limited 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

This presentation is intended to provide information only and does not constitute or form an offer of securities or a solicitation or invitation to 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.

The distribution of this presentation in jurisdictions outside of Australia may be restricted by law. This presentation has not been filed, lodged, 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.

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8common

8common Limited (ASX:8CO)

we help clients manage transactions…

via our platforms…

to reconcile with financial erp

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Card Procurement Cash Taxi Approval Cash Fleet Car Expenses Payments Payments Allowance Petrol Advance

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Expense Corporate Card PayHERO Management Travel Application & Payment Maintenance Gateway

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8common

8common Limited (ASX:8CO)

Leadership in Government

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▪ ▪ Department of the Premier & Office of the Director of Public Cabinet Prosecution ▪ ▪ Department of Education Office of the Environment & Heritage ▪ ▪ Department of Justice Rural Fire Service ▪ ▪ Department of Finance, Services Police Force ▪ and Innovation Roads and Maritime Services ▪ ▪ Legal Aid Transport for NSW ▪ Australian Electoral Commission ▪ Department of the Senate ▪ Department of Finance ▪ The Treasury ▪ Department of the Prime Minister ▪ Whole of Government

some of our clients…

Blue-Chip corporate customer base

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• 2 complementary B2B software businesses:

1. Expense8: leading cloud-based platform for employee expense management

2. PayHERO: payment gateway providing merchant account services

3. Strong and growing footprint of government and large corporate clients

4. $2.6m revenue in FY2018 (unaudited), transitioning from moderate to high growth:

5. +24% YoY revenue;

8common

  - +56% YoY Software as a Service (SaaS) revenue;

• Clear path to 2.8x lift in Expense8 ARPU through upselling new platforms.

• Integrating PayHERO and Expense8 creates a procurement approval, payment

• .

• gateway and expense reconciliation capability

• Comparable companies have been acquired at revenue multiples of 6-15x.

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8common

8common Limited (ASX:8CO)

Corporate Information

Capital Structure

Shareholdings

Share price (31-Aug-18)	A$0.04	Directors 30.6% Top 20 69.8%
Shares on issue	136,130,136
Listed Options at $0.035	47,882,263
Diluted Market Capitalisation	A$9.2m
Cash (30-June-18)	A$0.5m
Shares in Cloudaron Bhd Bloomberg (CLOUD:MK)	A$3.1m
Enterprise Value	A$7.3m

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8common

8common Limited (ASX:8CO)

FY2018 (unaudited) $1.6m revenue from 120,000 users in SaaS revenue. Upselling 120,000 users across all platforms at ARPU of $38 could deliver $4.5m , a 2.8x increase in revenue.

Expense8, clear path to 100-200% uplift in Existing Customer ARPU

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Expense8
Platforms
@
Expense Credit Card Corporate 100% Wallet
Management Application and Travel Capture Rate
Maintenance
120,000 Users 120,000 Users 120,000 Users 120,000 Users
$16 ARPU [1] $10 ARPU [2] $12 ARPU [3] $38 ARPU
$1.9m Revenue $1.2m Revenue $1.4m Revenue $4.5m Revenue
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1 Actual based on unaudited FY18 Expense8 June 2018 SaaS Revenue and Actual User Count

2 Company estimates based on client transaction patterns

3 Actual based on FY18 Corporate Travel revenue from existing customer base

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8common

8common Limited (ASX:8CO)

Transitioning from moderate to high growth

▪ $2.6m Expense8 Revenue in FY18 (unaudited).

▪ 29% YoY Growth in Expense8 Revenue from FY17 to FY18.

▪ Multiple substantial new clients onboarded in FY18, including the Federal Department of the Senate, NSW Department of the Premier and Cabinet and The NSW Treasury.

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8common

8common Limited (ASX:8CO)

Cash receipts +31% QvQ

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8common

8common Limited (ASX:8CO)

Revenue growth driven by our SaaS +56% YoY segment

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8common Limited (ASX:8CO)

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1,634,980
SaaS
1,106,539
376,471
Annual Licenses
429,786
+56% YoY
Revenue as a
179,153 result
Implementation
333,252 Higher Usage/
ARPU
Increased
304,473
User
Change Management on
Adoption
146,883 our Platforms
141,061
Others
92,303
FY18 FY17
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Revenue growth driven by our SaaS segment

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8common

8common Limited (ASX:8CO)

Travel Module revenue to fuel further growth

Federal Treasury and Dept of Prime Minister & Cabinet were early adopters

• 1[st] NSW Gov agency went live in September 2018

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8common

8common Limited (ASX:8CO)

Acquisition of PayHERO delivers blue-sky opportunity to deliver an Integrated Card, Expense and Payment Platforms

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VAULT

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• •
Identity Allowances, reimbursement
• •
Transaction Approval and P-Cards (e.g. Credit, Fuel):
Access –
Physical
•
–
Application Repository Virtual
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Wallet
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• Corporate Travel

• Card Application & Module

• Maintenance • • Application Fee Platform Fee

• • • Transaction Fee Transaction Fee

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• Expense Management System

• • Platform Fee

• • Per account/user Fee

• • Transaction Fee

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• PayHERO Payment Gateway

• • Token Fee

• • Transaction Fee

• • % of transaction value

• Payment Verification • Leveraging the Hyperledger Consortium 13 Blockchain Enablement

8common

8common Limited (ASX:8CO)

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PayHERO Payments Opportunity

30-100bps

• Processing Federal, NSW and Northern Territory Government procurement payments is a $80b total addressable market based on the FY2017 reported annual procurement spend.

$80b

• Industry GDV to revenue average of between

• .

• 30-100bps

• Annual Transaction Revenue opportunity of between

• $24-80m .

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

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 8com ~~mon~~

8common Limited (ASX:8CO)

Comparable ASX Companies

(16-7-18)

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Revenue Market Cap Price/Sales
Company Ticker EV/EBITDA
TTM (A$m) (TTM)
NOV 3.4 33 -6.1x 9.82
EML 63.4 368.8 49.5x 5.78
8CO 3.8 6.8 7.2x 1.79
8common
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Revenue at Time of Reported Acquisition
Revenue
Company Acquisition Amount
multiple
Precedent (Estimated A$m) (Reported A$m)
Competitor 700 8,300 11.9x
Transactions
32 262 8.2x
7 100 14.8x
20 93 4.7x
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8common

Recent Acquisitions by ASX-listed EML Payments

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Acquisition
Acquisition
Company Date Industry Vertical EBITDA
Price
Multiple
Store
Gift Card
Financial 2014 $24.9m 9.3x
Processor
Services
PRESEND
Prepaid Card
Prepaid February 2018 $11.1m 21x
Provider
Solutions
Expense
PerfectCard
July 2018 Management $9.6m 12x
DAC
Software
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8common

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

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8common

8common Limited (ASX:8CO)