CLUEY LTD — AGM Information 2023

Nov 8, 2023

==> picture [129 x 54] intentionally omitted <==

ASX Announcement

9 November 2023

Chairman’s Address to the Annual General Meeting of Shareholders

Cluey Ltd (ASX: CLU) (“Cluey” or the “Company”) is pleased to release the attached transcript of the Chairman’s address to the Annual General Meeting of Shareholders being held today, 9 November 2023 at 11:00am (AEST).

---

ENDS

Authorised for release to the ASX by the Company Secretary.

For enquiries please contact:

Investors

Mark Rohald Greg Fordred Executive Deputy Chairman CFO & Company Secretary investor.relations@clueylearning.com investor.relations@clueylearning.com

ABOUT CLUEY

• Cluey is an innovative, ASX-listed Edtech company that combines education and technology to deliver quality education outcomes and an enhanced experience for students. Cluey provides curriculum aligned academic support for students in Australia and New Zealand. In addition, Cluey delivers co-curricular online, holiday camps and after-school programs in Australia and the United Kingdom through its wholly owned subsidiary, Code Camp. Cluey has a highly experienced management team and Board with a track record of building successful education businesses. Cluey is headquartered in Sydney.

• Cluey has been recognised in the prestigious HolonIQ inaugural list of most innovative Edtech companies in Australia. Cluey was also the winner of the 2022 Australian Growth Company Awards - Technology Growth Company of the Year; 2021 Technology Scale-up Edtech of the Year Award,and recognised as the 5th fastest growing technology company in Australia in the Deloitte Technology Fast 50 2021 Awards.

Cluey Ltd ABN: 65 644 675 909 Suite 2, Level 2, 117 Clarence Street Sydney NSW 2000

Chairman’s address to the Annual General Meeting of Shareholders, Thursday 9 November 2023

Fellow shareholders, we are pleased to meet today in person, at our third AGM since listing on the ASX in December 2020. Cluey continued to experience growth and achieve several significant milestones. This past year, however, has been demanding given market conditions generally, and specifically given inflationary and cost of living pressures.

During my brief remarks, I will reiterate some key financial highlights and initiatives we have undertaken in the past year.

FY23 Highlights

• Revenue of $39.4 million an increase of 15% on FY22 revenue of $34.3 million

• 599,474 student sessions delivered, an increase of 11% on FY22

• Variable customer acquisition cost of $352, a reduction of 18% on FY22

• 20% improvement in Underlying EBITDA loss of $14.2 million compared to $17.7 million loss in FY22

• 8% improvement in Gross Profit Margin in FY23, to 57.3%

Key Initiatives

The market conditions in play during FY23 has led Cluey to reset its immediate strategic goals and, most importantly, focus on achieving profitability.

Cluey is Australia’s largest online school tutoring and education support company. It augments traditional schooling for K-12 students across Australia and New Zealand with a comprehensive range of learning services. In addition, through its wholly owned subsidiary, Code Camp, Cluey provides co/extracurricular learning in the coding and digital skills space in Australia and the United Kingdom, primarily through after-school and holiday programs.

Cluey is passionate about understanding its customers and designing its products and services to meet their needs.

As a result, Cluey invests in in-house consumer research and analytics. The company’s internal “Voice of the Customer” team leads the ongoing analysis of attitudes and priorities. Based on internal research, Australia has approximately four million school students and an addressable market of some 90%. It is disconcerting that, in recent years, academic performance among Australian school students has stagnated, and the productivity of schools has been declining. It is also noteworthy that since 2003, Australia’s PISA results in maths have declined further than any country other than Finland. The NAPLAN results, released in August this year, reveal that one in four students fell below expectations for minimum literacy and numeracy standards and that one in 10 require “additional support”. The Federal Minister of Education, Jason Clare, recently said that funding should be allocated to services such as catch-up tutoring.

The Board and Management are acutely aware of the imperative to reduce cash burn and drive to profitability as soon as possible. To this end, we have implemented significant cost cuts and reduced marketing spend at the expense of top-line growth. In March of this year, we completed a capital raise of $9.5 million.

We made significant product and technology enhancements to the learning environment to deliver operating efficiencies and improve the user experience.

Cluey Ltd

These initiatives have already yielded positive results, and on current indications, Cluey should be profitable in Q4 FY24.

In Q1 FY24 Cluey reported on the following financial highlights:

• Group Underlying EBITDA loss improved 42% compared to the prior corresponding period (Q1 FY23) (‘PCP’), to $2.0 million from $3.4 million; and improved 21% compared to the prior quarter (Q4 FY23) of $2.5 million

• 3% improvement in Group Gross Profit Margin in Q1 FY24 to 57.5% compared to PCP

• $2.8 million reduction in Cluey Learning’s operating costs in Q1 FY24 compared to PCP as a result of cost saving initiatives implemented in FY23

Needless to say, our focus creates strains within the organisation. I am proud to share with stakeholders that our executive team of Matteo Trinca, Trevor McDougall, Greg Fordred and Hayley Markham have performed and supported the company so positively. Each one has taken on additional responsibilities willingly and unconditionally. In FY23, we successfully transitioned to our new Joint CEO structure, and this is functioning exceptionally well. Mark Rohald, our Executive Deputy Chairman, has also been a pillar of strength to the team and leaned in wherever needed. We are fortunate to have executives of this calibre. I thank them and the entire staff for their commitment and hard work.

Despite the challenging and uncertain times, I am confident that the company has the foundation to be a dominant player in the Ed-Tech sector.

Cluey has many specific opportunities ahead of it. To mention a few - Cluey has an enviable infrastructure, including its platforms, systems, technology, and data, to enable it to scale the core and rollout in different jurisdictions. Code Camp is poised to expand its footprint in Australia and the United Kingdom. A broader portfolio of learning programs will complement this expansion to meet the high demand for coding and digital skills education. Cluey is advanced in developing its AI capability, further enhancing its tutoring services, and optimising the student, parent, and teacher/tutor experience.

In general, the learning support market remains highly fragmented, creating the underlying opportunity for Cluey to accelerate its growth and capture market share and share of wallet. I reiterate, however, our main aim right now is to reach profitability. Management is exploring all options and working assiduously to achieve this aim.

Once again, my fellow directors have provided me with valuable support and played an important role in refining Cluey’s strategy. Each director has given input with their special expertise. I express my gratitude to them.

Finally, I thank all stakeholders for their continued support and trust.

Robert Gavshon AM Chairman

Cluey Ltd