8COMMON LIMITED — Investor Presentation 2019

Nov 5, 2019

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• 8common (ASX:8CO)

• Marketeye Technology Conference

6 November 2019

Our platform

8common solutions deliver enterprise grade closed loop financial transaction processing

3 complementary fintech platforms

Leading end to end travel expense Closed loop Closed loop CARDHERO management software, procurement pre-paid card card application and payment platform platform management. Over three million $2.9b transaction transactions processed value processed by 8CO in FY19 since 2003, $600m+ in FY19

Its flagship Expense8 platform is a leading provider of end to end travel expense management software, card application and management. Scalable, government grade platforms improve organisation, 118,000 users productivity and compliance.

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118,000 platform users within large enterprise customers and over 120 state and federal government entities.

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2

8common

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

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Platform transactions (m)
$700 3.0
2.7
$2.9b
$600
2.5
transaction value 607
2.0
$500 managed through
the platform since 2.0
466
2003
$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 3
) )
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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

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CARDHERO
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8common

8common Limited (ASX:8CO)

Market opportunities

Payment and expense industry dynamics are changing driving opportunities

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

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Full automation of expense process

Prepaid cards and automation is 70% cheaper than procurement process

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

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$
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Instantaneous payment

Real time audit and expense tracking Increased data security and monitoring

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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

• Monthly recurring revenue

• Income generated through utilisation of our SaaS technology by our 118,000 users

• 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

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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

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41% 33% 26%
PCP revenue lift Increase in cash PCP SaaS revenue
receipts increase
3
$309k $20
on 118k users
Continuous quarters of Q1 FY20 ARPU with further
positive cash flow unaudited potential upside
EBITDA
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8common

• Includes R+D tax refund of $280k

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) revenue was $210K

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

Quarterly Recurring SaaS Revenue ($000)

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$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
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8common

Total revenue growth

• Total revenue growth of 40% vs Q1 FY19

• Implementation revenue up 65% vs Q1 FY19

• completed before the end of the financial year

Quarterly Total Revenue ($000)

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$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
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8common

8common Limited (ASX:8CO)

Cash receipts

• Three consecutive quarters of positive cashflow

• Cashflow positively impacted by R&D income

• legacy clients

Quarterly cash receipts ($000)

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$1,600
1,517
$1,400
$1,200
1,212
$1,000
1,060 1,066
1,015 995
$800 904
808
751
$600
393
$400
$200
60 55
$0
(170) (43)
(72) (212) (209)
-$200
(287)
-$400
Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20
Cash Receipts Net Operating Cash
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8common

Organic growth and partnership distribution

Federal Shared Services Contract delivers considerable growth opportunities

Implementation of Government entities under shared services will drive organic growth

Given shared services pipeline, focus of future growth shifts to other sectors such as Universities and large corporate entities

Federal Shared Services

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Access to more than $46 +50 $50,000 minimum average Revenue new Federal entities per User in Federal to onboard implementation cost 40,000 Government per entity new employees

Growth targets

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Corporate

Schools

Universities

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8common

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

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Expense Credit Card Corporate Management Application and Travel Maintenance $18 $12 $12 ARPU ARPU ARPU (114k users) (9k users) (17k users)

• 17k users with potential to deliver significant growth

• +50,000 potential in NSW

• +14,000 in Federal Government

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8common

8common Limited (ASX:8CO)

CardHERO

Closed loop fund disbursement platform

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

• 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

• Monthly Subscription Fee per card

• • % of load fee charged monthly

• 8common

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

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176.2k 86.7k
$4.9b
People have New users Funds paid under the
received registered in scheme in FY18
individual plans 2019
Existing Method CardHERO
Bank accounts created
Solution
Multiple debit cards issued vs
•
Prepaid Card issued
Limited transaction visibility
•
Full transaction visibility
Limited reporting capability
•
Full reporting and analysis
Manual reconciliation of spend
•
Compliance and fraud monitoring
•
Automated reconciliation of spend
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Existing Method

• Bank accounts created

• • Multiple debit cards issued

• • Limited transaction visibility

• • Limited reporting capability

• • Manual reconciliation of spend

8common Limited (ASX:8CO)

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

PayHERO

Closed loop payments platform

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

Example: Government Procurement

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

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$80b $24m
30bps
Procurement budget PayHERO potential
Average gross dollar
from State and Federal addressable market
volume fee
Governments
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PayHERO Solution
•
Full Integration into Expense8
vs •
Straight through processing
•
Compliance and fraud monitoring
•
Rich data integration
•
Automated reconciliation and
approval of spend
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Existing Method
•
Disparate systems
•
Multiple approvals
•
Rekeying of information
•
Limited data available
•
Manual reconciliation of spend
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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 Limited (ASX:8CO)

8common

The outlook

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

The focus of our business will be to:

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Grow organic revenue through new agency wins, uplift in users and increase of ARPU

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Leverage existing
relationships to
cross sell products
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Execute on strategy Expand Develop partner
to develop pre-paid PayHero ecosystem to scale
card market distribution to new
+
markets
Cardhero
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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.

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:

Disclaimer

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.

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. 16

8common

8common Limited (ASX:8CO)

Investor Relations Craig Sainsbury e: craig.sainsbury@marketeye.com.au

Stephanie Ottens e: stephanie.ottens@marketeye.com.au

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

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8common

8common Limited (ASX:8CO)