8COMMON LIMITED — Investor Presentation 2020

Aug 30, 2020

8common

(ASX:8CO)

FY20 Results Presentation August 2020

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 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

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.

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8common

8common Limited (ASX:8CO)

8common

8common’s technology solutions deliver enterprisegrade financial transaction processing for government entities and large enterprise businesses. Its flagship expense8 platform is a leading pureplay provider of end to end travel expense management software, card application and management. The CardHero (Employee Payments and Funds Disbursement) and PayHero (Procurement Payments) Platform Users Annual ARPU initiatives deliver fintech solutions and revenue 129 Gov Entities + Fed Gov ($48), State Gov models targeting the same clients as Expense8. Corporates ($13), Corporate ($35)

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Fully accredited Growing SaaS Recurring Government Data sovereignty Revenue supplier

Core Products

Core Customers

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Leading cloud-based platform for employee travel and expense management

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Digital pre-paid expense/disbursement cards

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Online payments and procurement payments

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8common

8common Limited (ASX:8CO)

3.0

2.5

2.0

1.5

1.0

Proven Performance

• 4.5x growth between 2016 to 2020 in value of transaction managed

• $2.1 billion in transactions managed since 2016, $616 million in the last 12 months

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$800
$700
$2.1b
$600 transaction value
managed through the
$500 platform since 2016 607
$400
$300
$200
$100
$0
FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20
$ Expenses (LHS) # Expenses (RHS)
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0.5
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0.0
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8common

8common Limited (ASX:8CO)

Financial overview 8common

8common Limited (ASX:8CO)

Record SaaS Revenue

8CO Investment Thesis

• Strong corporate footprint, 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

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

• Named a Major Player in the 2019 IDC MarketScape: Worldwide SaaS and CloudEnabled Travel and Expense Management Applications 2019 Vendor Assessment

• New channel growth opportunities with CardHERO

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$2.6m
FY20 SaaS recurring
revenue
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-$201k
FY20 operating cash
outflow
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+30%
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SaaS recurring revenue growth (FY20 vs FY19)

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$215k
FY20 adjusted net profit.
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$4.15m
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FY20 total cash receipts

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$1.8m
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Net Cash position
at 30 June 2020
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*Adjustments: $388,000 deferred consideration write-off from Realtors8, $293,273 depreciation & ammortisation, $309,060 of share-based payments

8common

8common Limited (ASX:8CO)

Strong financial performance in FY20

• Total Revenue $4.2 million up 13% vs FY19

• Total SaaS revenue $2.5 million up 30%

• Cash receipts $4.15 million up 3%

• EBITDA loss of $0.43 million (FY19: $0.66 million)

• Adjusted profit of $215k[1] (FY19 loss: $398k) Adjustments: $388,000 deferred consideration writeoff from Realtors8, $293,273 depreciation & ammortisation, $309,060 of share-based payments

• Net cash position of $1.84 million

• Total contracts signed in FY20 delivered $2.5 million in contracted revenue 8common

SUMMARY FINANCIAL RESULTS	**30 June 2020 **	30 June 2019	CHANGE
	$	$	$	%
Revenue from subscription and transactions	2,490,484	1,922,418	568,065	30
Other revenue from continuing operations	1,268,847	1,551,757	(282,910)	(18)
Total revenue from continuing operations	3,759,331	3,474,175	285,156	8
R&D grant	344,936	225,438	119,498	53
Total Revenue	4,168,349	3,700,922	467,426	13
EBITDA	(426,745)	(661,615)	234,870	36
Adjusted Profit*	215,508	(397,986)	613,494	154
Loss for the period	(804,089)	(1,356,222)	552,133	41
Operating cashflow	(201,086)	(130,498)	(70,588)	(54)
Cash and cash equivalents at period end	1,842,493	1,033,000	809,493	78
*Adjustments: $388,000 deferred consideration write-off from Realtors8, $293,273 depreciation & ammortisation, $309,060 of share-based				7

*Adjustments: $388,000 deferred consideration write-off from Realtors8, $293,273 depreciation & ammortisation, $309,060 of share-based payments

8common Limited (ASX:8CO)

Total revenue growth

• Total revenue growth of 13% vs FY19

• Increased level of change request fees of $890k vs $315k in FY19 (183% increase YoY)

• Implementation revenue remained in line with prior period. FY21 has begun strongly with 6 new Federal Government agencies signing up for Expense8

• COVID-19 impacted Q4 FY20 with a drop in Recurring SaaS Revenue to $545k (historically the strongest quarter)

• Quarterly Total Revenue ($000)

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$1,000
211
373
137
298
$800 146
315
338 247 40
305 163 34
$600 75
227 29
136
122
143 99
139 112
86 32
$400 13
685
656
599
545
518
465 464
436 442
$200 384 411 404
$0
Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20
Recurring Revenue Implementation Revenue Other Revenue
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8common

8common Limited (ASX:8CO)

Recurring revenue

• FY20 recurring SaaS revenue of $2.5m has grown 29.5% versus FY19

• COVID-19 impacted Q4 FY20 with a drop in Recurring SaaS Revenue to $545k (historically the strongest quarter)

• • New clients and recovery of activity will drive SaaS Revenue growth in FY21

Quarterly Recurring SaaS Revenue ($000)

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$700
685
656
$600
599
$500 545
518
465 464
$400 436 442
411 404
384
$300
312
279
259 256
$200
$100
$0
Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20
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8common

8common Limited (ASX:8CO)

Operational overview

8common

8common Limited (ASX:8CO)

Well positioned in a growing space

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Full automation of expense process

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Increased data security and monitoring

Globally recognised as Market Leader by IDC in its 2019 MarketScape Enterprise Travel & Expense Management Report

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70% cheaper than Purchase Order process

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Real time audit and expense tracking

Federal Shared Services Mandates

Department of Department of Industry, Innovation Finance & Science

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Growing card limits NSW Purchase Card limit $5k in 2018 $70k in 2019

Significant investments in $ system upgrades towards best of breed providers

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8common

8common Limited (ASX:8CO)

Fed Gov focus

Federal Shared Services

• Highly valuable and sizeable revenue base

• Global peers who succeed in gov, succeed elsewhere

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Why we win
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• Accredited Government Supplier

• High performance and well integrated

• Data sovereignty + Australian based Support and Implementation

• Significant portion of team has Department of Defence baseline clearance

• Recent 5 agency win from the DoF (Service Delivery Office)

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Department of Department of
Industry, Innovation Finance
& Science
+40 Access to more than
$48
$50,000
new Federal entities
minimum average revenue per
35,000
to onboard over next user in Federal
implementation cost
new employees
2 years Government
per entity
+$2m $1.6m
implementation potential pipeline of Annual
revenue potential Recurring Revenue
pipeline
Growth targets
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Schools
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Corporate
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Universities
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8common

8common Limited (ASX:8CO)

8common

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8common Limited (ASX:8CO)

CardHero & EML

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• 8common has signed a 3-year agreement with EML Payments Limited to issue prepaid Mastercard’s through the company’s CardHero platform

• The agreement with EML enables the launch of 8common’s CardHero solution via two products: CardHero and CardHero+

• The core product CardHero, will be released as both a virtual and physical prepaid card combined with travel and expense management solutions. CardHero is targeted at government entities and large enterprise clients

• CardHero+ provides an additional fund disbursement platform which aims to support not for profit organisations and educational institutions

8common

8common Limited (ASX:8CO)

Simple Applications

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8common
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Effective Reporting

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8common Limited (ASX:8CO)

Employee Purchasing

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Employees will be able to transact on their card with the CardHero smartphone application providing access to information such as available funds, past transactions and recent top-ups. Authorised decision makers/Client Administrators, though unable to transact, will be able to view this same information.

Employees will be able to transact on an unrestricted basis, though their transactions will be assessed by a ‘fraud detection’ process.

8common

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Fund Disbursement

Social service clients will be able to transact on their card with the CardHero smartphone application providing access to information such as available funds, past transactions and recent top-ups. Authorised decision makers/Client Administrators, though unable to transact, will be able to view this same information.

Clients will be able to transact on an unrestricted basis, though their transactions will be assessed by a ‘fraud detection’ process.

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+
8common Limited (ASX:8CO)
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The outlook

8CO will consolidate and secure its position in large enterprise financial transaction management

A clear focus on:

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Grow organic revenue Leverage existing through new agency relationships to cross wins, uplift in users sell products and increase of ARPU

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Execute on strategy to Expand direct Develop partner
deliver Cardhero and client footprint ecosystem to scale
Payhero distribution to new
markets
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8common

8common Limited (ASX:8CO)

Appendices 8common

8common Limited (ASX:8CO)

Corporate Information

Capital Structure

Share price (28-Aug-20) A$0.115 Shares on issue 182,917,118 Market Capitalisation A$21.95m Cash (30-June-20) A$1.8m

Shareholdings

Directors 34.42% Top 20 67.35%

Shares in Cloudaron Bhd A$1.3m Bloomberg (CLOUD:MK)

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8common

8common Limited (ASX:8CO)

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Revenue at Time of Reported
Revenue
Company Acquisition Acquisition Amount
Precedent
multiple [+]
(Estimated A$m) (Reported A$m)
Competitor
Transactions 700 8,300 11.9x
32 262 8.2x
7 100 14.8x
3.7 21.95 [#] 5.9x
8common
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Precedent Competitor Transactions

• • multiples do not take into account net cash(debt) or surplus assets

• FY20 operational revenue for 8CO

20

• Market Cap as at 28/08/20

8common

8common Limited (ASX:8CO)

Board & Management

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Nic Lim

Founder & Executive Chairman

Founder, investor and Board member of various technology companies over the last 21 years.

Co-Founded Catcha.com in 1999. Since 2007, Catcha has since spun out various Public Listed companies including iProperty (ASX:IPP), iCarAsia (ASX:ICQ) and Rev Asia (BURSA:REV). Prior to founding 8common, Nic had a career in finance with UBS, Credit Suisse and Morgan Stanley

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John Du Bois

Independent, Non-Executive Director

Mr John Du Bois has had a very accomplished career. This includes 9 years at SAP culminating in the role of EVP and Managing Director South West Asia which was extended to Australia and New Zealand (AsiaPacific and Japan) and more than 6 years at Senetas Limited (SEN:ASX) as Chairman and CEO, a leading Security Software company with a strong Federal Government client footprint

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Adrian Bunter

Independent, Non-Executive Director

Adrian is an executive director of Venture Advisory, a specialist telecommunications, media and technology (TMT) financial advisory firm operating out of Australia and Asia. He has over 25 years’ experience in accounting, audit, and finance, as well as a broad range of corporate advisory roles ranging from debt/equity raisings, mergers and acquisitions, divestments of business and strategy development and execution, including over 16 years with PricewaterhouseCoopers

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Larry Gan Non-independent, Non-Executive Director

Larry has built a reputation based on extraordinary work ethic, strategic thinking and visionary ability. During his 26 years with Accenture, he held many global leadership roles. Since 2013, Larry been the Group Chief Executive Officer and Managing Director of Formis Resources Berhad. He is a Fellow of Association of Certified Chartered Accountants and Certified Management Consultant.

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Andrew Bond

Chief Executive Officer

Andrew joined 8common in August 2015 and is a highly regarded and well respected leader. Prior to 8common, Andrew has held several roles in Woolworths Limited, Satori Group and AMP Limited. Andrew brings over 10 years’ experience in the technology sector leading sales and marketing and technology teams.

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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)