APPEN LIMITED — AGM Information 2015

May 21, 2015

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Global Leader in Language Technology Solutions

Annual
General
Mee1ng

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**Introduc3on

to
Appen**

Company
snapshot

History

Global
leader
in
language
technology solu3ons

• Provides
  language
  technology
  data and
  services.
  Customers
  include:

• nine
  of
  the
  ten
  largest informa1on
  technology

  • companies

• four
  of
  the
  top
  five
  largest internet
  companies.

• Coverage
  in
  over
  100
  markets
  and over
  140
  languages
  and
  dialects

• 150
  staff
  globally
  –
  based
  in
  North America,
  Philippines
  and
  Australia.

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IPO
Jan
2015
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• Ability
  to
  leverage
  a
  proprietary data
  base
  of
  150,000
  global independent
  contractors

2

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**Speech

and
Data
Collec3on**

Descrip1on: Data
and
Services
for
developing speech
and
other
linguis1c
technology

Customers:

• Speech
  synthesizers

• Speech
  recogni1on

• Machine
  Transla1on,
  Grammar
  Checkers, Content
  Analy1cs

Revenue
Drivers: Consumer
Electronics
(game and
TV
consoles),
in-­‐car
systems,
smart phones,
government

Revenue
Model:
Fixed
price
project
,
rate cards
and
license

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Revenue
Contribu1on
%
(2015
Est.)
3643 %
FY15
Est.
Revenue
Growth
[1%]
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FY15
Est.
Net
Opera1ng
margin
(pre
Corp overheads [30%]

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Revenues
(AUD)
25
20
15
10
5
0
2013
2014
2015
NOP
%
50.00%
40.00%
30.00%
20.00%
10.00%
2013
2014
2015
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**Content

Relevance**

Descrip1on: Data
and
services
ensuring
global search
technology
returns
the
most
relevant and
accurate
answers
for
each
market.

Content
Relevance
Customers:

• Web
  Search

• Social
  Media
  Search

• E-­‐commerce

Revenue
Drivers:
Clients
launch
new
features
or func1onality
enhancing
their
web
search
,
e-­‐commerce
and social
media
technology.
Addi1onally,
internet
content
and traffic
pacerns
change
requiring
maintenance
data.

Revenue
Model:
Time
and
material.
Generally
one-­‐year contracts
renewed
annually.

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Revenue
Contribu1on
%
(2015
Est.)
59%
57%
FY15
Est.
Revenue
Growth
[9%]
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FY15
Est.
Net
Opera1ng
margin
(pre
Corp overheads [16%]

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Revenue
(AUD)
40
20
0
2013
2014
2015
30.00%
NOP
%
20.00%
10.00%
0.00%
2013
2014
2015
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**Financial

Highlights**

FY2014
Pro-­‐Forma
Financial
Highlights

Appen
has
exceeded
FY14
prospectus
forecasts

• Revenue
  A$51.0m
  up
  4.0%
  vs
  prospectus
  forecast
  of
  A$49.1m
  ü

• EBITDA
  A$6.7m
  up
  15.2%
  vs
  prospectus
  forecast
  of
  A$5.8m

ü

• NPAT
  A$3.6m
  up
  5.4%
  vs
  prospectus
  forecast
  of
  A$3.4m

ü

• ASX
  Lis1ng
  in
  January
  2015
  ü

Appen
reaffirms
FY2015
prospectus
forecast

Appen
reaffirms
its
FY2015
prospectus
forecasts
–
Revenue
$53.6m
and
EBITDA
$6.8m
(pro-­‐forma)

• Current
  opera1ng
  results
  with
  revenue
  and
  business
  won
  thus
  far
  in
  FY2015
  is
  on
  track
  with
  forecast

• Pipeline
  strong
  and
  follow
  on
  engagements
  from
  pilots

• Prospectus
  AUD
  exchange
  rate
  is
  A$0.90

• Microsol
  renego1a1on
  due
  to
  be
  completed
  by
  June
  30

5

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**Growth

and
Outlook**

**Appen

2015
Focus**

**We

con3nue
to
implement
our
strategy**

• Reducing
  the
  cost
  structure
  through
  globaliza1on
  of
  our
  workforce
  and
  ongoing
  technology
  innova1on

• Expanding
  our
  client
  base
  and
  reducing
  customer
  concentra1on

• Pursuing
  opportuni1es
  for
  Content
  Relevance
  in
  social
  media
  and
  e-­‐commerce

• Conver1ng
  pilots
  to
  renewable
  revenue
  streams • Deep
  integra1on
  with
  clients’
  engineering
  process

• • Expanding
  offerings
  using
  our
  planorm • Configurable
  data
  collec1ons
  suppor1ng
  a
  broad
  range
  of
  data

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• Mobile

• Appen
  IP

6

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**Growth

and
Outlook**

**Strategic

Growth
Opportuni3es**

**Industry

drivers
are
posi3ve
across
all
segments**

• Search,
  social
  media,
  e-­‐commerce,
  automo1ve

**New

client
acquisi3on
in
Content
Relevance**

• Expansion
  of
  current
  offerings
  to
  new
  customers
  in
  social
  media
  and
  e-­‐commerce
  search

• Repeatable
  revenue

• Appen’s
  growing
  strength
  across
  both
  speech
  and
  text
  aligns
  with
  industry
  convergence • Global
  workforce
  and
  opera1ons
  provides
  capability
  to
  benefit
  from
  the
  forecast
  growth
  in
  internet
  non-­‐ English
  languages

**Appen’s

new
technology
pla^orm
is
in
place**

• Facilitates
  scalable
  growth

• • Strong
  compe11ve
  advantage

• • Faster
  response
  to
  new
  customer
  needs

• Yields
  a
  reduc1on
  in
  unit
  costs
  as
  business
  volumes
  grow

7

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**Corporate

Responsibility**

Raffle
for World Wildlife Fund

High
Tea
for Habitat
for Humanity

Raffle
for Room
to
Read

Employee
run Appen
matches employee
dona3ons

Moustaches
for Movember

Bake
Sales for Red
Cross and
Oxfam

Lunch
for
Against Malaria
Founda3on

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**Important

No3ce
and
Disclaimer**

This
presenta3on
(“Presenta3on”)
has
been
prepared
by
Appen
Limited
ACN
138
878
298
(“Appen”)
in
connec3on
with
the
release
of
its financial
results
for
the
12
month
period
ending
on
31
December
2014.
The
material
in
this
Presenta3on
provides
general
informa3on
in summary
form
only
concerning
Appen.
It
presents
financial
informa3on
on
both
a
statutory
basis
(prepared
in
accordance
with
Australian accoun3ng
standards
that
comply
with
the
Interna3onal
Financial
Repor3ng
Standards
(IFRS)
as
well
as
informa3on
provided
on
a
non-­‐ IFRS
basis).
The
Presenta3on
should
be
read
in
conjunc3on
with
the
financial
results
for
the
12
month
period
ending
on
31
December 2014
lodged
by
Appen
with
the
Australian
Securi3es
Exchange
on
or
about
the
date
of
this
Presenta3on
and
available
on
Appen’s
website at
www.appen.com
.

This
Presenta1on
is
not
intended
to
be
investment,
legal
or
other
advice
and
should
not
be
relied
upon
as
such.
This
Presenta1on
does
not, and
is
not
intended
to,
cons1tute
an
offer
or
invita1on
or
a
recommenda1on
by
or
on
behalf
of
Appen
to
any
person
to
subscribe
for, purchase
or
otherwise
deal
in
any
securi1es
or
services
offered
by
Appen.

While
Appen
has
made
an
effort
to
provide
accurate
informa1on,
no
representa1on,
express
or
implied,
is
made
as
to
the
fairness,
accuracy, completeness
or
correctness
of
informa1on
contained
in
this
Presenta1on,
including
the
accuracy,
likelihood
of
achievement
or reasonableness
of
any
forecasts,
prospects,
returns
or
statements
in
rela1on
to
future
macers
contained
in
the
Presenta1on
(“ forward-­‐ looking
statements ").
Such
forward-­‐looking
statements
are
by
their
nature
subject
to
significant
uncertain1es
and
con1ngencies
and
are based
on
a
number
of
es1mates
and
assump1ons
that
are
subject
to
change
(and
in
many
cases
are
outside
the
control
of
Appen
and
its Directors)
which
may
cause
the
actual
results
or
performance
of
Appen
to
be
materially
different
from
any
future
results
or
performance express
or
implied
by
such
forward-­‐looking
statements.
Neither
Appen
nor
any
other
person
gives
any
representa1on,
assurance
or guarantee
that
the
occurrence
of
the
events
expressed
or
implied
in
any
forward-­‐looking
statements
in
this
Presenta1on
will
actually
occur. Past
performance
informa1on
is
not
a
reliable
indica1on
of
future
performance.

To
the
maximum
extent
permiced
by
law
neither
Appen
nor
any
other
person
(including
the
directors,
officers,
employees,
representa1ves, advisers
or
agents
of
Appen)
accepts
any
liability,
including,
without
limita1on,
any
liability
arising
from
fault
or
negligence,
for
any
loss arising
from
the
inadequacy,
incompleteness
or
inaccuracy
of
any
statement
or
informa1on
contained
in
this
Presenta1on
or
otherwise arising
in
connec1on
with
it.

This
Presenta1on
has
not
been
and
will
not
be
filed
with
or
approved
by
any
regulatory
authority
in
Australia
or
any
other
jurisdic1on.
The distribu1on
of
this
Presenta1on
in
jurisdic1ons
outside
Australia
may
be
restricted
by
law.
If
you
are
outside
Australia
you
should
seek
advice on
and
observe
any
such
restric1ons. All
references
to
dollars
are
to
Australian
Dollars
unless
otherwise
stated.

This
Presenta1on
may
not
be
reproduced
or
published,
in
whole
or
in
part,
for
any
purpose
without
the
prior
wricen
permission
of
Appen.

9

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Investor
Rela3ons
contact
details Mark
Byrne
(CFO
and
Joint
Company
Secretary) mbyrne@appen.com
+612
9468
6322 Leanne
Ralph
(Company
Secretary)
leanne.ralph@boardworx.net.au