ADSLOT LTD. — Interim / Quarterly Report 2020

Feb 26, 2020

HALF-YEAR RESULTS.

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H1 FY20 EXECUTIVE SUMMARY.

Improved revenue performance in all strategic revenue segments compared to the previous half

• Growth in revenue from continuing operations up 6% HoH

• Licence Fee revenues up 10% HoH

• Trading Fee revenues up 7% HoH

Improved licence fee revenues and an ongoing focus on cost management saw significant improvement in EBITDA and NPAT (after adjusting for the 2016 R&D tax provision) performance vs Prior Corresponding Period (PCP)

• Adjusted EBITDA loss reduced by 53%

• Adjusted NPAT loss reduced by 41%

• Operating costs reduced by 9%

Note: Half on Half (HoH) growth rates referenced are calculated against the last 6 months, being 6 months to 30 June 2019 Prior Corresponding Period (PCP) growth rates referenced are calculated against the prior Half Year period, being 6 months to 31 December 2018. Note: Adjusted EBITDA and Adjusted NPAT is after adding back once off provision for FY16 R&D Claim.

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FY20 STRATEGIC OBJECTIVES.

ADSLOT MEDIA

• Secure MSAs with remaining agency holding companies

• Activate contracted agencies to drive growth in trading fees

• Secure additional premium publishers to grow the quality, quantity and variety of marketplace inventory

• Develop partnerships with key data providers

SYMPHONY

• Pursue further market deployments for Symphony with existing and prospective clients

OPERATIONS

• Maintain focus on cost base of the business

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STRATEGIC OBJECTIVES OUR PROGRESS.

AGENCY MSAs:

• ü Continued momentum with 2 x Agency Holding Companies ( Cadreon and Havas Media Group ) now signed and both anticipated to commence activation in the current quarter

• ü 2 x additional Agency Holding Company MSAs in legal review (1 in late stage of review)

• ü Commercial discussions progressing with remaining Agency Holding Companies

PUBLISHER INVENTORY:

• ü Prominent publishers continually added to the Adslot Media platform including recent examples: Vice Media, Frankly Media and Young Hollywood - strong sales pipeline with multiple Tier 1 publishers to be added to the platform in H2 FY2020

DATA PARTNERS:

• ü Partnership signed and activated with Oracle Data Cloud

• ü Partnership signed and activated with LiveRamp

• ü Ongoing discussions with further potential data partners

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STRATEGIC OBJECTIVES OUR PROGRESS.

SYMPHONY:

• ü Value of media traded via the Symphony platform now exceeds $7B annually

• ü Pre-deployment activities underway for additional markets expected to deploy in the next financial year

COST MANAGEMENT:

• ü Costs reduced by 9% vs the first half of FY2019

• ü Focus on cost management to continue as revenue growth occurs over remainder of financial year

EXPANSION INTO THE US:

• ü Adslot successfully completed a $6.4 million share placement in December to new and existing institutional and sophisticated investors and directors of the Company

• ü Funds raised are being used to continue execution of the Company’s strategy with a focus on the development of trading fees via the Adslot Media marketplace in the US

• ü Post H1, the Company hired experienced CEO and sales executive Chris Maher as President, North America, to drive this next stage of growth

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FINANCIAL PERFORMANCE.

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H1 FY20 SAW OVERALL REVENUE GROWTH FOR THE BUSINESS.

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Group Revenue from Trading Licence Fee Trading Fee
Revenue Continuing Technology Revenue Revenue
Operations Revenue
$5.342M $5.135M $4.207M $3.672M $0.535M
+ 2% + 2% Flat +11% - 39% vs PCP
Note: For the current period, Group Revenue includes Revenue from Continuing Operations ($5.135M) and Grant Proceeds ($0.207M)
Thousands
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REDUCED OPERATING COSTS, AND IMPROVED ADJUSTED EBITDA AND ADJUSTED NPAT.

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Operating Adjusted Adjusted
Costs EBITDA Loss NPAT Loss
$5.982M ($0.656M) ($2.579M)
-9% -53% - 41% vs PCP
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Note: Adjusted EBITDA and Adjusted NPAT is after adding back once off provision for FY16 R&D Claim of $1.5m. Unadjusted EBITDA for the period was $2.183M and Unadjusted NPAT was $4.107M.

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REVENUE SEGMENTS.

Three main revenue sources:

1. Licence Fees generated primarily from Symphony but also from Adslot Media ;

2. Trading Fees generated primarily from Adslot Media but also from Symphony ; and,

3. Services provided to Symphony customers as well as services provided to SME customers by the company’s Webfirm division.

Licence Fees and Trading Fees combine to form Trading Technology Revenue . This is the strategic revenue that the business is focussed on.

Strategic Revenue

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Licence Trading
Fee Fee
Revenue Revenue
Trading
Technology
Revenue
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Ancillary Revenue
Services
Revenue
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LICENCE FEE REVENUE GROWTH.

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+10% HoH
Licence
Fees
$3.672M
+11% vs PCP
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• Licence Fees grew 10% half-on-half (HoH) and 11% on prior corresponding period (PCP)

• Growth due to full impact of newly deployed Symphony markets and growth in existing markets

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CAGR
22%
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TRADING FEE REVENUES IMPROVED FROM THE PRIOR HALF.

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+7% HoH
Trading
Fees
$0.535M
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• Trading Fee revenue grew 7% half-on-half (HOH)

• Strong growth in Adslot Media booking seen in Europe and the UK during the half.

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HOWEVER, THESE WERE REDUCED FROM THE PRIOR CORRESPONDING PERIOD.

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Trading
Fees
$0.535M
-39% vs PCP
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• The December 2018 half included two record bookings on platform quarters that were not repeated in the half to December 2019

• Expected activation of newly signed agency Master Service Agreements were delayed until the second half of the financial year

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TRADING TECHNOLOGY REVENUE OVERALL WAS MAINTAINED.

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9% HoH
Trading
Technology
$4.207M
0% vs PCP
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• Trading Technology revenue grew by 9% half-on-half (HoH) and 0.4% on prior corresponding period (PCP)

• Activation of agency MSAs is expected to see growth in Trading Fees in H2 FY20

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CAGR
16%
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SERVICES REVENUE GREW FROM THE PRIOR CORRESPONDING PERIOD.

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-6% HoH
Services
$0.912M
9% vs PCP
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• Services revenue is ancillary and includes statement of works for Adslot Media and Symphony clients as well as the company’s Webfirm services division

• Ancillary Services revenue of $0.912M represents a -6% decrease half-on-half (HoH) and a 9% growth on prior corresponding period (PCP)

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H1 FY19 OPERATING COSTS REDUCED.

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-5% HoH
Operating
Costs
$5.982M
vs PCP
-9%
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• Total Operating costs of $5.982M for the half were 5% lower half on half (HoH), and 9% lower on prior corresponding period (PCP).

• Operating Costs are Total Expenses excluding Depreciation and Amortisation, Interest Expenses, once off R&D Provision and Taxes.

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IMPROVED ADJUSTED EBITDA.

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-47% HoH
Adjusted
EBITDA
Loss
($0.656M)
-53% vs PCP
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• Adjusted EBITDA loss for the half of $0.656M decreased by 47% half on half (HoH) and 53% on prior corresponding period (PCP).

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• Adjusted EBITDA is after adding back once off provision for FY16 R&D Claim. Unadjusted EBITDA for the period was a loss of $2.183M.

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IMPROVED ADJUSTED NPAT.

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-4% HoH
Adjusted
NPAT
Loss
($2.579M)
-41% vs PCP
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• Adjusted NPAT loss for the half of $2.579M decreased by 4% half on half (HoH) and 41% on prior corresponding period (PCP).

• Adjusted NPAT is after adding back once off provision for FY16 R&D Claim. Unadjusted NPAT for the period was a loss of $4.107M.

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CASH RECEIPTS AND NET OPERATING CASH FLOWS.

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Net
Cash Receipts Operating Cash
Cashflows
$ 9.544M $9.166M
($1.513M)
+44% -74% +90% vs PCP
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• Higher net cash operating outflows due to increased payments to Adslot Media publishers during the period

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DISCLAIMER.

The information contained in this presentation is given in good faith and has been prepared from information believed to be accurate and reliable. The information presented does not take into account your individual financial circumstances and it is not designed to be a substitute for specific financial or investment advice or recommendations and should be relied upon as such. You should consider talking to your financial adviser before making an investment decision. So far as the law allows, Adslot Ltd excludes all liability for any loss or damage whether direct, indirect or consequential. This presentation includes forward-looking statements that are based on information and assumptions known to date and are subject to various risks and uncertainties. Actual results, performance or achievements could be significantly different from those expressed in, or implied by, these forward-looking statements. Such forward-looking statements are not guarantees of future performance. They involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of Adslot Ltd, and which may cause actual results to differ materially from those expressed in this presentation.

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