BEAM COMMUNICATIONS HOLDINGS LIMITED — AGM Information 2014

Nov 17, 2014

World Reach Limited ABN 39010 568 804

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5 / 8 Anzed Court, Mulgrave, Victoria, Australia 3170

T +61 3 8561 4200 F +61 3 9560 9055 E: info@worldreach.com.au

18 November 2014

The Manager Market Announcements Platform Australian Securities Exchange

Managing Directors Presentation to the Annual General Meeting

Enclosed is a copy of the presentation made to shareholders at the Annual General Meeting of the Company held today Tuesday 18 November 2014 beginning at 10.10am.

Yours faithfully

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Dennis Payne Company Secretary

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World Reach Limited (ASX:WRR) Annual General Meeting

World Reach Limited – AGM PRESENTATION 18 Nov 2014

November 18th 2014

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Company Overview

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World Reach Ltd
Beam SatPhone Rentals SatPhoneShop.com World Reach RFiD
Communications
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The Complete Solution

• Take customer needs or ideas that may develop satellite market

• Concept opportunities and commercialize into products & services

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• Commence product design through industrial, electronic and

• Design software design phases to proof of concept then into final product specification

• From the final product specification commercialize the features and

• Commercialize benefits of the product to ensure the operation meets the customer and market needs

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• Commence commercial production of product or execution of

• Manufacture firmware development to ensure a product is available for sale in the required volumes and at the target price

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• Develop sales and marketing strategies through new and existing

• Sales & Distribution channels to maximize the distribution of the product or service. • Commence sales activities • Develop and manage a suite of value added services that are

• Value Added Services complimentary to the product, service or distribution channel, including airtime services, track / trace services

WRR – Corporate Presentation

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World Reach Limited – AGM PRESENTATION 18 Nov 2014

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Delivering Shareholder Value

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• Satellite communication services continues to be a growth segment
Growing Markets • Disaster recovery, Anti Piracy, Emergency Communications, Global Travellers
• An estimated 90% of the World’s land and water mass has no Terrestrial coverage
• BEAM strategically aligned to Inmarsat & Iridium, two largest Mobile Satellite Co’s
Product Leadership • Widest range of products on offer, M2M , Transport, Maritime, In-building, Rural
• 10+ years of Know How and expertise meeting the needs of satellite applications
• BEAM recognized as a leader in the industry, with exciting new product ideas
•
Innovation Speed to market through early identification and development of product initiatives
• A history of many first to market product concepts
• Stabilized, consistent revenue base from core global distributors
Profitability • Increased profits from recurring airtime revenues
• Higher volume contracts as an OEM provide sustainable revenues and profit
• The cost base of the company can support sales revenues of three times the size
•
Scalable BEAM’s Contract Manufacturer has global presence and high capacity if required
• Products designed to industry standards enabling high volume lower cost production
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World Reach Limited – AGM PRESENTATION 18 Nov 2014

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Financial Performance – FY14

HIGHLIGHTS:

• Major turnaround in profitability in FY’14

• Profits up $1.27M on FY’13

• Full Year EBITDA $1.85M

• Full Year EBIT $1.08M

• Increased profit margins on sales

		FY ‘13	1H FY’14	2H FY’14	FY’14
	Revenue Operating	14,073,087	5,525,753	7,104,619	12,630,372
	EBITDA	872,543	711,379	1,135,180	1,846,559
	Operating
	EBIT	(178,363)	317,948	757,793	1,075,741
	Profit/Loss	(835,290)	(6,705)	446,154	439,449

• FY’14 Revenues down 11% on FY’13

• Attributed to higher margin but lower volume sales

• Higher Margin Sales / v’s China / Telstra

• Delayed delivery of planned new product into FY’15

• Growth in recurring revenues from airtime services

• Growth of the online SatPhoneShop business

• Consistent monthly performance from Core Distributors

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Revenue Analysis - Global Breakdown

• 13% Growth from Europe / UK

• 1% Growth in the Americas

• 3% decline in Asia

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Europe15%
Australia
37%
United Kingdom
19%
USA 9%
Japan 10%
China
5% Excludes OEM Sales
Canada 5%
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• ( Less China deals at very low margin )

• 10% decline in Australia

• ( Less Telstra Handset revenue at low margin )

• Higher Margin Sales outside Australia & Asia

# Based on delivery Destination

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Corporate Initiatives

Placement to Cornerstone Investor

• In February 2014 the Company welcomed a strategic new cornerstone investor through an issue of shares to Ample Skill Limited, a Hong Kong based private investment fund, which subscribed for a placement of 2,920,000 ordinary shares at an issue price of $0.15 per share to raise $438,000 for working capital purposes.

Renounceable Rights Issue

• On 1 July 2014 the company embarked upon an extensive capital restructuring initiative through a renounceable rights offer which allowed existing shareholders the right to purchase one new share per eligible share owned, at an issue price of $0.15 per share. The rights offer was partially underwritten to the value of $2,400,000 by existing WRR investors.

• On 28 July 2014, following the rights issue, 16,000,000 new Ordinary Shares were issued raising $2,400,000 in capital funds (before costs).

• The funds raised from the rights issue were sufficient to repay the majority of the Group's interest bearing debt, which has consequently provided a substantial improvement to the Group's balance sheet.

• The debt repayments included the redemption of the remaining convertible notes not converted of $500,000, the repayment of a shareholder loan of $300,000, repayment of the bank term loan of $275,000 and of US$600,000 of extended supplier credit.

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Corporate Update

Repayment / Conversion – Convertible Notes

• The Company had long standing convertible notes that were high interest. Following the Rights Issue, note holders were invited to either convert to shares or have their notes redeemed by cash.

• On 25 August 2014 the Company received conversion notices seeking to convert certain convertible notes into ordinary fully paid shares. The Company issued 5,916,658 ordinary fully paid shares, to satisfy the conversion of 29 convertible notes with a total face value of $725,000.

• On 26 August 2014 the Company redeemed by cash payment, 20 convertible notes on issue for total consideration of $500,000. The Company now has no convertible notes on issue.

Improved Balance sheet

• Following the Rights Issue and the repayment of convertible notes and other loan facilities the net effect on the balance sheet was an improvement of just over $3.7M.

R & D Grant

• The Company received $471,395 on 13 June 2014 from the ATO under the Federal Government’s R&D Tax Incentive Scheme. The refund relates to the costs of research and development conducted by the Company in the twelve months to 30 June 2013 (FY13) and profit-wise is amortized against the useful life of the developed product.

• The company plans to apply for an additional grant for FY’14

Retiring Chairman – Trevor Moyle

• The Company would like to recognize the support of Trevor Moyle as Chairman over the past two and a half years, transitioning the Company through the major debt restructuring process to the position the Company is in today. Trevor retires from the Board following the AGM and will be replaced by David Dawson who brings a great deal of experience from a private equity background. WRR – Corporate Presentation

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Financial Performance – Outlook FY’15

• The new financial year will provide a new set of challenges for the Company to ensure the continuance of consistently profitable trading performances, however, as at the end of Q1, the year is looking to be in line with the Company’s budget expectations.

• The increase in the value of the USD will continue to have a positive effect on Revenues and Profit as the majority of Revenues and Cost of Goods expenses are in USD.

• The Company will still continue to invest heavily in Research and Development as it looks to new product initiatives in the satellite broadband terminal market.

• A detailed Budget for FY’15 has been prepared and the Group is confident of strong growth in revenues over FY’14. The expected results are particularly supported by:

• Major savings from the removal of high interest debt facilities

• The new OEM product developed has committed orders that will be delivered during the FY’15 year in excess of USD4M

• The emerging performances of SatPhone Shop and Short Burst Data airtime services in Australia are forecast to contribute in excess of $1.8M in revenues in FY’14 with continued growth.

• Opportunities for growth in key strategic markets in conjunction with Inmarsat & Iridium

• Growth in Japan, Russia & China following the improvement in regulatory environment

• Introduction of Pre-paid satellite services into the SatPhoneShop business.

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Company Well Positioned For Growth

• The Core business has stabilized and continues to demonstrate consistent performance from core distributors through the world.

• Profitability continues to increase through higher margin sales to core distributors in place of higher volume very lower margin deals, particularly in China & Australia.

• Lowering of the AUD against the USD increases profitability as revenues and product costs are fixed, predominately in USD.

• Opportunity for exponential growth in revenues from the OEM ( Original Equipment Manufacturer ) product developed by Beam and now selling commercially.

• The initial OEM product order of US$3M will be fulfilled by end of 2H FY14.

• Additional US$3M order for the OEM product received and will commence delivery also 2H FY’14.

• New IsatDock for the new Inmarsat IsatPhone 2 will commence shipping in December.

• The Introduction of M2M and Prepaid Services into the SatPhoneShop business will provide new recurring revenues for the Company

• Following the release of the first OEM product there is an increased awareness of the Company’s capabilities as an OEM presenting solid opportunities for growth.

• Negotiations are currently underway on further OEM development opportunities.

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Endless Possibilities, Applications & Uses

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Real customers in real situations going about their business thanks to a product designed and distributed by Beam Communications……..

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Commercial Applications;

• Maritime

• M2M

• Tracking / Duress / Lone Worker

• Emergency Communications

• Rural & Remote Communities / Workers WRR – Corporate Presentation

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Disclaimer

This document has been prepared by World Reach Limited and comprises written material/slides for a presentation concerning World Reach Limited and its subsidiaries

The presentation is for information purposes only and does not constitute or form part of any offer or invitation to acquire, sell or otherwise dispose of, or issue, or any solicitation of any offer to sell or otherwise dispose of, purchase, or subscribe for, any securities, nor does it constitute investment advice, nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision.

Certain statements in this presentation are forward looking statements. You can identify these statements by the fact that they use words such as “anticipate”, “estimate”, “expect”, “project”, “intend”, “plan”, “believe”, “target”, “may”, “assume” and words of similar import. These forward looking statements speak only as at the date of this presentation. These statements are based on current expectations and beliefs and, by their nature, are subject to a number of known and unknown risks and uncertainties that could cause the actual results, performances and achievements to differ materially from any expected future results, performance or achievements expressed or implied by such forward looking statements.

No representation, warranty or assurance (express or implied) is given or made by World Reach Limited that the forward looking statements contained in this presentation are accurate, complete, reliable or adequate or that they will be achieved or prove to be correct. Except for any statutory liability which cannot be excluded, WRR and its respective officers, employees and advisers expressly disclaim any responsibility for the accuracy or completeness of the forward looking statements and exclude all liability whatsoever (including negligence) for any direct or indirect loss of damage which may be suffered by any person as a consequence of any information in this presentation or any error or omission therefrom.

Subject to any continuing obligation under applicable law or any relevant listing rules of the ASX, World Reach 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 of events, conditions, or circumstances on which any statement is based. Nothing in these materials shall under any circumstances create an implication that there has been no change in the affairs of World Reach Limited since the date of this presentation.

World Reach Limited – AGM PRESENTATION 18 Nov 2014