APPEN LIMITED — Investor Presentation 2021

May 18, 2021

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Appen Limited Level 6, 9 Help Street Chatswood NSW 2067

Tel : 02 9468 6300 www.appen.com

ASX ANNOUNCEMENT

19 May 2021

BUSINESS AND TRADING UPDATE PRESENTATION

Appen Limited ( Appen ) (ASX:APX) will be holding an investor and analyst conference call and an audio webcast at 11.00am AEST on Wednesday 19 May 2021. It was be hosted by Mark Brayan, CEO and Kevin Levine, CFO.

Register for the conference call: https://s1.c-conf.com/diamondpass/10014117-m2nbd4.html

Join the audio webcast: http://www.openbriefing.com/OB/4252.aspx

A replay will be made available after the event on Appen’s Investor Centre.

Please find attached the presentation to be delivered to investors and analysts this morning on the conference call and audio webcast.

Authorised for release by the Board of Appen Limited.

Please contact for more information:

Linda Carroll Investor Relations +61 2 9468 6300 investorrelations@appen.com www.appen.com/investors

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Business and trading update May 2021

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Disclaimer

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The forward-looking statements included in these materials involve subjective judgement and analysis and are subject to significant uncertainties, risks, contingencies, many of which are outside the control of, and are unknown to Appen Limited. In particular, they speak only as of the date of these materials, they are based on particular events, conditions or circumstances stated in the materials, they assume the success of Appen Limited’s business strategies, and they are subject to significant regulatory, business, competitive, currency and economic uncertainties and risks.

Appen Limited disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements in these materials to reflect any change in expectations in relation to any forward-looking statements or any change in events, conditions or circumstances on which any such statement is based. You should monitor any announcements by the company lodged with the ASX. Nothing in these materials shall under any circumstances create an implication that there has been no change in the affairs of Appen Limited since the date of these materials. Organisation structure is subject to change.

No representation, warranty or assurance (express or implied) is given or made in relation to any forward-looking statement by any person (including Appen Limited). In particular, no representation, warranty or assurance (express or implied) is given in relation to any underlying assumption or that any forward-looking statement will be achieved. Actual future events and conditions may vary materially from the forward-looking statements and the assumptions on which the forward-looking statements are based. Given these uncertainties, readers are cautioned to not place undue reliance on such forward-looking statements. To the maximum extent permitted by law, Appen disclaims all liability and responsibility (including without limitation, any liability arising from fault or negligence) for any direct or indirect loss or damage which may arise or be suffered through use or reliance on anything contained in, or omitted from, this presentation.

Information in this presentation should be read in conjunction with Appen’s latest and prior interim and annual reports, and Appen’s announcements via the ASX.

All amounts are in USD unless otherwise stated.

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Agenda

• Evolution from services to product

• Enhanced segment reporting

• Trading update

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Appen continues to evolve

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	From	To
Data type	Language data	AI data
Delivery model	Service led	Product led
Revenue	Project based	Committed
Customer	Concentration	Diversification
Org structure	Functional alignment	Customer alignment
Reporting	Data modality, AUD	Strategy led, USD

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Phase 1: Dominate the AI data annotation services market

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Leading provider of AI data annotation services

• Acquired Butler Hill 2010

• Acquired Leapforce 2017

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Global
(Leading US Tech
Companies)
Enterprise
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1. Appen Connect included in Leapforce acquisition. Built on existing capabilities to manage crowd workforce.

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Phase 2: Build leading data annotation products

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Leading provider of AI data annotation services

• Acquired Butler Hill 2010

• Acquired Leapforce 2017

Acquired market leading technology platforms and tools Acquired Figure Eight 2019

• Ongoing product investment

• New Enterprise customer base

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Global
Enterprise
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1. Appen Connect included in Leapforce acquisition. Built on existing capabilities to manage crowd workforce. 2. Appen training data products include Figure Eight annotation platform and tools.

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Phase 3: Product led expansion

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Leading provider of AI data annotation services

• Acquired Butler Hill 2010

• Acquired Leapforce 2017

Acquired market leading technology platforms and tools

• Acquired Figure Eight 2019

• Ongoing product investment

• New Enterprise customer base

Expanded into new customer and market segments

• Increased sales and marketing

• China and Govt BUs established

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Enterprise
Govt
Global
China
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• Global customers on Appen

products

1. Appen Connect included in Leapforce acquisition. Built on existing capabilities to manage crowd workforce. 2. Appen training data products include Figure Eight annotation platform and tools.

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Appen is accelerating its transformation into an AI powered provider of AI data and solutions

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Our areas of focus

Our future is product led, enabling us to deliver high-quality Product training data, faster, at larger scale, with improved unit Led economics, and is a foundation for future capabilities

Customer We are aligning our operations to better support the needs Centric of our target customer cohorts

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Our product suite is a foundation of the business

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~~New products~~

•	Appen Connect Match our global crowd workforce to annotation tasks Assigns tasks to our	Appen Data Annotation Platform Collect and annotate training data • Full suite of data	Appen Intelligence Empower Appen products with proprietary machine learning models • Over 20 proprietary	Appen In-Platform Audit Organise and analyse training data to identify quality, distribution & bias • Enables our customers	Appen Mobile Engages, enables and expands crowd • Simple and intuitive user
	global workforce of 1m+	collection and	models to improve crowd	to navigate and	experience
	working in 170+ countries and 235 languages	annotation tools • AI-enabled/automation	productivity and data labelling quality	troubleshoot training data	• Crowd can interact with Appen anywhere and
•	Pays 70k+ crowd	capabilities	• Used extensively to		anytime
•	workers per month Quality management	• Ability to support complex, multi-step	automate internal crowd management tasks		• Reaches people who don’t have access to a
	and fraud detection	annotations			desktop or prefer mobile
		• Wide array of data			• Enables location-based
		security options			data collection

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Value created from our products

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New products
Appen Appen Data Appen Appen Appen
Connect Annotation Platform Intelligence In-Platform Audit Mobile
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AI-augmented AI-enabled crowd data collection management and labelling increases internal improves speed, productivity and quality, scale and crowd experience unit economics

Embedded expertise delivers high quality annotation

In-built crowd Native integration management with our large features create crowd creates low risk approach competitive for customers differentiation

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Customer-centric org structure

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• Four customer focused business units with end-to-end operational and P&L accountability

• Respond quickly to changing customer needs and market trends

• We are optimising resources to align with the new operating model and technologydriven productivity benefits

• Reduced delivery resource requirements will deliver benefits from 2H21

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Enterprise
Govt
Global
China
Crowd and
Product Engineering Corporate
HR
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We are aligning our segment reporting to our product-focused strategy

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New reporting segments: Global Services and New Markets

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Customer tools				Appen training	data products	data products
Global (Leading US Tech Companies)				Enterprise		Govt		China

Global Services

New Markets

• Services provided to leading US tech companies utilising their data annotation tools

• New Markets reflects progress against our Product Led strategy, includes Global customer revenue through Appen products and Enterprise, Government and China

• Includes large relevance programs

• Appen Connect is critical to provide crowd resources at scale

• Our products are delivering growth today

  • 300+ customers currently use our products, including our global customers

  • Wide variety of industries and use cases

• Potential to utilise Appen training data products

• We continue to focus on automating internal and crowd processes to deliver larger volumes of higher-quality training data with improved unit economics

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Reporting change to USD commencing with 2021 interim result

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Restated 2020 P&L in US dollars

• Reflects business, >90% of revenue and assets are in US dollars

• Removes volatility in translation of US$ into A$

• Enables easier comparison of performance over time

US$	FY2020	vs FY2019
Group revenue	$413.0M	+11%
Global Services	$328.1M	+6%
New Markets	$84.5M	+34%
Underlying EBITDA1	$75.4M	+8%
Underlying EBITDA margin	18.3%	vs 18.9%

Note: See the Appendices to the ASX Announcement dated 19 May 2021 for the new segment reporting and restatement of historical financial information in US dollars. 1. Underlying EBITDA excludes transaction costs, acquisition related share-based payment expenses and fair value adjustments (consideration adjustments) for the Figure Eight acquisition.

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Segment revenue by service and product led offering

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Customer tools Appen training data products Global Enterprise Govt China

Global Services

New Markets

Includes Global customer revenue through Appen products and Enterprise, Govt, and China

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200 9% [1]
165 164 164
144
150
100
50
0
H1 2019 H2 2019 H1 2020 H2 2020
Revenue (US$M)
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50 48
41% [1]
40 36
34
29
30
20
10
0
H1 2019 H2 2019 H1 2020 H2 2020
Revenue (US$M)
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Note: All figures in US$M. 1. Annualised CAGR from H1 2019 to H2 2020.

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New Markets revenue breakdown

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Customer tools Appen training data products
Global Global Enterprise Govt China
Global Product Enterprise, China, Govt
30 30
27
26
25 60% [1] 25 25% [1] 22
19
20 20
17
16
15 13 15
10 7 10
5 5
0 0
H1 2019 H2 2019 H1 2020 H2 2020 H1 2019 H2 2019 H1 2020 H2 2020
Revenue (US$M) Revenue (US$M)
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Note: All figures revenue in US$M. 1. Annual CAGR from H1 2019 to H2 2020.

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Segment EBITDA by service and product led offering

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Customer tools Appen training data products Global Enterprise Govt China

Global Services

New Markets

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1%
26% 2
50 46.0
0.4
42.3
0
40
H1 2020 H2 2020
-2
30
-4
20
-6
10
-8
-7.9
0
-10 -22%
H1 2020 H2 2020
EBITDA (US$M) EBITDA (US$M)
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Note: All figures in US$M. EBITDA includes all corporate costs excluding share-based payment and FX gains and losses.

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Revenue by customer-focused business units

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Customer tools Appen training data products Global Enterprise Govt China

Global

Enterprise, Govt, China

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14% [1]
200 183 190
172
157
160
120
80
40
0
H1 2019 H2 2019 H1 2020 H2 2020
Revenue (US$M)
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30
27
25% [1]
25
22
20
17
16
15
10
5
0
H1 2019 H2 2019 H1 2020 H2 2020
Revenue (US$M)
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Note: All figures in US$M. 1. Annualised CAGR from H1 2019 to H2 2020.

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2021 outlook

2021 revenue growth outlook

• Global Services skewed to H2; full-year mid to high single-digit growth

• New Markets expected growth circa 25%, in line with broader AI market

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Resource optimisation

• Restructure and tech-enabled productivity allow resource optimisation, mainly in delivery resources

• Restructuring costs in H1 2021, partial benefits to be realised in H2 2021

• Full year gross cost savings (before reinvestment) of US$15M expected in 2022

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Trading update

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• Year-to-date revenue plus orders in hand of ~US$260M[1] at end of April 2021, consistent with prior methodology[2]

• Heavy weighting to underlying EBITDA in 2H21 due to:

• Key projects that were delayed in late 2020 are returning with a skew to delivery in 2H21

• 1H21 cost base reflects full year cost of 2020 hiring

• Resource optimisation benefits to flow 2H21

• Full year underlying EBITDA guidance of US$83M - US$90M is maintained

1. ~AU$340M at AUD/USD FX rate of 77c. 2. Year-to-date revenue and orders in hand at the same time in 2020 was approximately US$240 million.

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Questions

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