ADSLOT LTD. — Investor Presentation 2017

Aug 27, 2017

Adslot Ltd FY17 Results Presentation

28[th] August 2017 (ASX:ADJ)

FY17 - Executive Summary

• Trading Technology revenue increased by 27% YoY

• positioned for further growth:

• Groupm contract sign off (August 2016)

• $18m capital raising (October 2016)

• Successful execution of post investment operating plan (October ‘16 – June ‘17)

• Successful new market deployments of Symphony, improved deployment cadence, larger market deployments in prospect

• Data Integrations with Bluekai (Oracle) and Lotame launched

• Assembly of unique, premium ‘at scale’ marketplace continues with significant publishers secured in key markets

• Commitments from Symphony agencies to progressive adoption of Automated Guaranteed

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• Trading Fees are expected to emerge in 1H FY18 to make a more meaningful contribution

Highlights – Full Year to 30 June 2017

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Trading Group
NPAT
Technology Revenues Revenue
+ 27% + 6% - 6%
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Note: Growth rates referenced are calculated against the previous corresponding period, being 12 months to 30 June 2016.

Key Results – Full Year to 30 June 2017

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+6% +6% +10% -30% -6%
Revenue From Group Revenue Operating EBITDA NPAT
Continuing Operations Costs
$8.183m $9.007m ($12.922m) ($4.239m) ($8.630m)
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1. Growth rates referenced are calculated against the previous corresponding period, being 12 months to 30 June 2016.

2. Operating Costs are Total Expenses excluding Depreciation and Amortisation expenses.

FY17 – Strategic Revenue

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Year
on
+27%
•
Trading Technology revenue
Year
in FY17 grew by 27% versus
the year prior, the fifth
consecutive year of growth.
•
Trading
Growth in FY17 Trading
Technology
Technology revenue was
driven by Licence Fees,
attributable to the GroupM
$5.379m
global contract announced in
August 2016.
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YoY Trading Technology Revenues
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$-
FY13 FY14 FY15 FY16 FY17
+73% +69% +59% +27%
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FY17 – Strategic Revenue

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Year
on
+27%
Year
Trading
Technology
$5.379m
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YoY Licence Fees
$5,000,000
$4,000,000
$3,000,000
Licence Fees
$2,000,000
$1,000,000
$0
FY13 FY14 FY15 FY16 FY17
+56% +64% +75% +45%
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• Licence Fees grew 45% year on year, attributable to the GroupM global contract announced in August 2016

• • The full year impact in FY17 of revenue from GroupM is 63% year on year growth

FY17 – Strategic Revenue

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YoY Trading Technology Revenue
Year
$6,000,000
on
+27%
Year
$5,000,000
$4,000,000
Trading Fees
Trading $3,000,000 Licence Fees
Technology
$2,000,000
$5.379m
$1,000,000
$0
FY13 FY14 FY15 FY16 FY17
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• Expected levels of growth in Trading Fees have not materialised in the timeframe anticipated

• Trading Fees remain nascent and unpredictable, but not reflective of the broader market opportunity which remains material

• • The Company remains confident it will capture more meaningful Trading Fees over the first half of FY18 and beyond

FY17 – Non-Strategic Revenues

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Year
on
-26% -32%
Year
Services
Adserving
$1.871m $0.609m
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• Non strategic Services revenue of $1.871m represents a 26% or $0.661m decrease against the prior year.

• Non strategic Adserving revenue continues to decline in line with expectation, decreasing by 32% or $0.291m versus FY16.

FY17 – Operating Costs

• Total FY17 Operating costs of $12.922m compared to FY16 Operating costs of $11.699m, an increase of 10%.

• YoY Operating costs increased largely due to increased investment in R&D while other Operating costs remained flat.

• Operating costs are: Total Expenses excluding Depreciation and Amortisation, Share Based Payment and Taxes.

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+10%
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Operating Costs
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$12.922m

Year on Year

• Total Group Revenue for FY17 was $9.007m, an increase of 6% on FY16. • FY17 EBITDA loss of $4.239m increased by $0.979m or 30% against the prior year. • FY17 NPAT loss of $8.630m increased by $0.492m or 6% versus FY16.

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Year
on
+6% -30% -6%
Year
Group Revenue EBITDA (Loss) NPAT (Loss)
$9.007m ($4.239m) ($8.630m)
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1H FY17 – Cashflow

• Receipts from customers of $11.03m decreased by $0.298m or Year 3% as larger agencies move to on -3% +50% +202% manage billing off-platform. Year • Net Operating Cashflows saw an outflow of $4.122m, an increase of $1.369m or 50% versus FY16. Net • Operating Cash at the conclusion of FY17 of Cash Cash Receipts Cashflows $14.320m is an increase of 202% versus the year prior, due to the $11.030m ($4.122m) $14.320m capital raising completed in October 2016. • The Company continues to invest in its Technology Platforms. In October 2017 it expects to receive approximately $2.7m via the R&D grant scheme (which is not reflected in the Cash balance).

FY17 Significant Developments

1. GroupM Contract Signing

• Long term Symphony contract signed with GroupM - the world’s largest media buyer – in August 2016

• Global deal with immediate focus on new market deployments in Europe and APAC

• New market activations successfully completed in FY17 include Austria, Taiwan and Turkey

• Value of media traded via Symphony expected to more than double to circa $7 billion over the next 2 to 3 years, which more than doubles the available Trading Fees opportunity via the Adslot-Symphony integration

• A market-ready capability in each new country of deployment provides opportunity to sell Symphony into other agency groups

2. Capital Raising

• During September and October, the company successfully concluded an $18m Entitlement Offer and Placement. The capital raising was conducted in order to:

• Expand the R&D team in support of (a) Symphony deployments in new markets for GroupM, and (b) increase the velocity of new feature development.

• Expand the Sales organisation

• Increase marketing activity and sales enablement .

3. Successful execution of post capital raising Operating Plan

• Additional product & development resources secured in the period October 2016 to June 2017

• Over this period the product & development team nearly doubled in size, with a corresponding threefold improvement in output as economies of scale were realised and processes refined

• Further output improvements are expected (from existing resources)

• Expansion of sales organisation in 2H FY17:

  • US market/sales lead

  • x2 new US sales hires

4. Successful new market deployments of Symphony for GroupM

• x3 additional markets activated for GroupM - Austria, Taiwan and Turkey – increasing the Symphony customer footprint from 9 to 12 countries

• Registered user base increased 11% year on year, from 10,604 to 11,727

• A further x3 market activations have commenced and are in various stages of deployment

	Installed	Installed	Current deployment pipeline
	July 2016	July 2017
Countries Deployed – All Clients	Australia New Zealand China Japan Hong Kong Malaysia Singapore Vietnam US	Australia New Zealand China Japan Hong Kong Malaysia Singapore Vietnam US Austria Taiwan Turkey	3 Markets: • x1 market fully scoped, in development • x1 market fully scoped, development yet to commence • x1 market partially scoped, development yet to commence
Number of Registered Users	10,604	11,727

5. Data integrations completed with Bluekai and Lotame

• Adslot launch its’ Guaranteed Audience feature via integrations with audience data from industry leaders Bluekai (Oracle) and Lotame, announced in April and May 2017 respectively.

• the catalogue of participating Adslot publishers

• market opportunity

• Underlines the Company’s ongoing focus to expand its audience driven media trading capabilities

6. Assembly of unique, premium ‘at scale’ marketplace continues - significant publishers secured … Some of the significant publishers secured in FY17

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7. Commitments secured from Symphony agencies to progressive adoption of Automated Guaranteed

• of Adslot’s Automated Guaranteed technology.

• The phased activation approach is different for each of the two agencies; one will be driven by progressively activating (advertiser) accounts, the other by progressively activating groups of publishers.

• In both cases agencies will use the integrated Symphony-Adslot interface.

• There are a number of contributing factors to the timeframe in which Trading Fees will materialise at scale

Future product enhancements to drive revenue growth

Future product enhancements to drive revenue growth

1. Further enhancements to audience targeting

• (Objective: ensure Adslot provides comparable audience targeting to RTB/programmatic technology)

• Support and productise all forms of audience trading

• Particular focus on productising the ability of an advertiser/ agency to target and trade an audience defined using their own data, across multiple publisher sites

2. Data informed media trading

• (Objective: provide a product experience that not only automates media trading but informs media trading decisions)

• Expand reporting and data insights for buyers and sellers

• Surface investment and performance history into Symphony and Adslot

Future product enhancements to drive revenue growth

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3. Complete the Symphony-Adslot integration

(Objective: migrate agency demand within Symphony to Adslot’s Automated Guaranteed technology)

• Integrate Symphony (workflow) and Adslot (trading) to automate the end-to-end campaign process within a singular product experience for both the buyer and the seller

• • Combine the expanding analytical capabilities of Symphony and Adslot

Outlook

Outlook

Trading Fees are expected to emerge in 1H FY18 to make a more meaningful contribution

• activation of Adslot’s Automated Guaranteed (AG) technology

• Major feature enhancements including the audience data integrations announced in April/May 2017, are resonating strongly with agencies and advertisers of all profiles, including non Symphony agencies

• Advertisers pushing agencies for greater transparency is translating to a renewed focus on buying higher quality inventory, which is Adslot’s core proposition

• Adslot’s Automated Guaranteed platform remains the leading technology of its kind globally

Market/Region	Driving adoption of AG via Symphony agency customers	Driving adoption of AG via direct sales to Agency/Advertiser
Australia	✔
Europe	✔
UK		✔
US		✔

As adoption of Automated Guaranteed builds and becomes more predictable in 1H FY18, the Company intends to commence releasing key business metrics to quantify its progress. A first release of these business metrics will be included in the September quarter Trading Update, and will include the quantum of advertising purchased via Adslot’s Automated Guaranteed technology.

Outlook

Licence Fees will continue to grow into FY18 and beyond

• Successful new market activations for GroupM in Austria, Taiwan and Turkey

• A further x3 new market activations are in various stages of scoping and development

• Larger markets are expected to be scheduled for activation for GroupM in FY18 and beyond

Further benefits from additional investment in R&D and sales/marketing will emerge

• Material increase already seen in product development velocity is expected to continue to improve

• By the end of FY18 the integration of Symphony and Adslot platforms will be close to reaching the single product experience objective

• Increased marketing activity in FY18 will expand market awareness

• conversion

Outlook

As revenue grows net cash outflows are expected to recede

• The FY18 Operating Plan does not contemplate additional growth in headcount

• The Company’s cost base is expected to remain flat (at similar levels to the June Quarter 2017)

• Trading Technology revenues

• Revenue growth will drive a corresponding reduction in cash burn and lift in net margin

Thank you @adslot investor.relations@adslot.com