CLUEY LTD — Interim / Quarterly Report 2021

Jul 20, 2021

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CLUEY LTD (CLU)

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LIVE TUTOR
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JUNE 2021 QUARTERLY ACTIVITIES UPDATE

21 JULY 2021

OVERVIEW OF CLUEY

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Online learning support services includes:

• Live online 1-to-1 and small group tutoring, mapped to local curriculum

• A proprietary adaptive learning platform that supports each individual student’s needs and learning progression

• Full national coverage for school years 2-10 in Maths and English and 11-12 in Maths, English and Chemistry

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K-12 is the largest education segment in Australia (~4.0m students):

• The tutoring, test preparation and academic support markets are highly fragmented and traditional

• Parents and students are increasingly seeking outside-of-school support to supplement their learning

• There is a clear and accelerating shift to online learning

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Cluey is defining and leading this sector:

• Data and proprietary learning analytics used to optimise every interaction and the learning experience

• Continuous refinement and optimisation of existing services

• Designing, developing and testing new/adjacent service offerings

• NAPLAN and LANTITE test preparation & asynchronous online practice sets

CLUEY AUGMENTS TRADITIONAL SCHOOLING FOR YEAR 2-12 STUDENTS ACROSS AUSTRALIA WITH A RANGE OF COMPREHENSIVE ONLINE LEARNING SUPPORT SERVICES

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1

CLOSING THE GROWING EDUCATION GAP

SCHOOL EDUCATION HAS HARDLY PROGRESSED IN THE LAST 100 YEARS

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1920’s 1980’s TODAY
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DECLINING EDUCATIONAL OUTCOMES

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570
54.1
Top 5
550
46.7
41.8
39.8
530
510 Australia
490 Average
470
450
2009 2012 2015 2018 2009 2012 2015 2018
$bn
PISA scores
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PISA results show Australia is falling further behind the world’s top performers[1]

despite government expenditure on K-12 education increasing[2]

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2

Note: 1. OECD – PISA Mathematics data; 2. Australian Bureau of Statistics, Government school education expenditure;

THE EDUCATION GAP

The proportion of students performing far outside the median group increases each year level after Year 3 ( Equivalent year level grouping, numeracy, Australian students, 2014)[1]

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Year 3 Year 5 Year 7 Year 9
Higher
12
11
10
9 Median
8
7
6
5
4
3
2
Lower
20 40 20 40 20 40 20 40
PERCENTAGE
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DIFFERENT LEVELS OF ACHIEVEMENT ARE ALARMING

“The existing achievement gap is more than 10 times greater than the gap that will have developed during the COVID-19 disruptions.”[2]

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Note: 1. Grattan Institute - Widening gaps (2016); 2. Grattan Institute – COVID catch-up (2020)

OUT-OF-SCHOOL LEARNING SUPPORT MARKET IS LARGE AND GROWING

ESTIMATED AUSTRALIAN MARKET OPPORTUNITY

STUDENTS AND PARENTS SEEK ONE OF THE FOLLOWING[2] :

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8% 300k students [2] not likely to
consider any educational support
2 million students [2] use or are
42%
considering using paid (10%) or unpaid
(42%) educational support (e.g.,
learning apps, test preparation
10%
materials)
~1.6 million students [[2]] used tutoring in
40%
the past 12 months or are considering
using in the next 12 months
2
Estimated addressable market
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~1.6 million students[[2]] used tutoring in the past 12 months or are considering using in the next 12 months

~4 million school students in Australia[1]

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1 General academic improvement
2 Specific academic improvement and test preparation
3 Supervision and care
4 Skill or knowledge expansion
5 Learning support, confidence building and special needs
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Note: 1. ACARA; 2. Estimate based on Cluey Voice of the Customer Internal Research (2019), n=1,201

4

THE OUT-OF-SCHOOL LEARNING SUPPORT MARKET COVERS A NUMBER OF HIGHLY FRAGMENTED CATEGORIES

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Tutoring based learning support

Characterised by a small number of franchise brands and a high number of sub-scale individual operators

Other learning support options

Mix of online and offline resources available to Australian students to supplement school based learning

Private tutors Learning centres Online tutoring Highly fragmented Emerging segment of Opaque market market consisting of the market, with consisting of individual multiple operators; significant success tutors; users of mainly brick-and-mortar internationally

Opaque market consisting of individual tutors; users of ‘marketplace solutions’

High

Low

Ability to deliver services at scale, using technology

Learning content Classroom resources Apps and games Range of formats, Often supplementary, Focused on younger both physical and used by students at children; self-directed digital; textbooks, home, school-funded, and task based, study guides etc. used for schoolwork asynchronous solution Low Ability to deliver services at scale, using technology High

High

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5

SERVICE OFFERING

COMPREHENSIVE LEARNING PLAN FOCUSED ON STUDENTS’ SPECIFIC NEEDS

LIVE 1-TO-1 OR GROUP LEARNING SESSIONS WITH AN EXPERT TUTOR VIA CLUEY’S ONLINE LEARNING PLATFORM

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Skilled tutors are recruited
Fully mapped to the syllabus
in each Australian state and trained by Cluey
Enabling students to address 100% online fully interactive
their individual needs learning environment
Data analytics to
understand student and Relevant and engaging revision
tutor performance between tutoring sessions
Comprehensive two-way Sessions recorded for
feedback after every session student/parent review and tutor
quality assurance
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DETAILED CAPTURE OF LEARNING DATA AND FEEDBACK TO INFORM REGULAR REPORTING AND ENHANCE FUTURE LEARNING

INDEPENDENT PRACTICE AND REVIEW ACTIVITIES ALIGNED TO THE LEARNING PLAN ARE AVAILABLE FOR STUDENTS ON THE CLUEY PLATFORM, UPDATED AFTER EVERY SESSION

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TECHNOLOGY AT OUR CORE

CLUEY’S PURPOSE-BUILT LEARNING PLATFORMS HAVE BEEN DEVELOPED TO SUPPORT TARGETED LEARNING AT SCALE

LIVE LEARNING AND PRACTICE ENVIRONMENTS

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ENTERPRISE LEVEL PLATFORMS
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Supporting both 1:1 and Small Group learning:

• Live synchronous video, audio and text-based chat

• Fully integrated learning programs and content

• Fully transparent collaborative workspaces and content tools

• Session guidance and notifications

• Full integration with practice content and activities accessible at any time

• Pre-session preparation

• Post-session feedback and reporting

• Browser-based for easy access

End-to-end integrated Enterprise systems:

• Student management system designed and developed on Salesforce

• Fully integrated with learning environment and customer portal

• Customer portal facilitates with fully automated self-help options:

• Student and tutor scheduling

• Account management

• Service configuration

• Real-time cross-platform management KPI’s

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HOW CLUEY TURNS DATA INTO INSIGHT

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WE MAP ALL SESSION ACTIVITY DATA TO ITS CONTEXT

WE SUMMARISE SESSION PERFORMANCE FROM THE TUTOR PERSPECTIVE

We capture 100,000 data points per hour of learning, including video, audio, content, activity and duration. We map this to topics, concepts, and content.

We use a range of data points to evaluate tutor performance, guiding further development and improvements.

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Above are actual examples of Cluey Learning Data Hub dashboards and outputs

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HOW CLUEY TURNS INSIGHTS INTO OUTCOMES

WE AUTOMATICALLY ANALYSE WHAT AND HOW A STUDENT IS LEARNING IN EVERY SESSION AND GENERATE A MODEL OF THEIR SUBJECT PERFORMANCE AND “MASTERY”

STUDENT SESSIONS

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STUDENT MASTERY

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We do this for every student. We are able to see what and how thousands of students are learning and growing. This enables us to understand both how to support individual student learning needs and how to improve learning for all Cluey students, based on what actually helps students progress.

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Above are actual examples of Cluey Learning Data Hub dashboards and outputs

UNDERPINS OUR SCALABLE SERVICE MODEL, ENABLING US TO PROVIDE CONSISTENTLY HIGH QUALITY LEARNING AS WE GROW

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Alternate tutor recommendations and matches, based on:

• Engagement with current or previous tutor(s)

• Tutor match to student goals, level and performance

Adaptive task / question sequences, based on:

• Level of question performance

• Level of interaction and support

Automated program recommendations, based on:

• Current competence / performance / mastery

• Student goals and rates of progress

Real-time guidance for tutors in session, to lift the level of service quality for students, based on:

• Interactivity (e.g. tutors talking too much; students not sufficiently engaged)

• Curriculum and content (e.g. suggesting what topics to work on based on current goals, engagement and performance)

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FY21 SNAPSHOT

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CLUEY CONTINUES TO BENEFIT FROM THE ACCELERATED TAKE-UP OF ONLINE TUTORING AS A RESULT OF THE SHIFT TO ONLINE LEARNING IN AUSTRALIAN SCHOOLS

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2.3x
>380,000
increase in
Student
New students
sessions [1]
in FY2021 (vs 3.0x
1,114
FY2020) increase in number
active tutors in June
of sessions in
2021
FY2021 (vs FY2020)
$2,100/$1,100
3.3x
Life-time revenue increase in
(LTR) and life-time revenue [2] in
value (LTV) per new FY2021 (vs.
student consistent FY2020)
for last 12 months
$563
3.7x
Variable CAC in increase in
FY2021, down gross profit [2]
28% from $787 in in FY2021
FY2020 (vs. FY2020)
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Note: 1. Cumulative Student sessions from inception to 30 June 2021; 2. FY21 Revenue and gross profit result is preliminary and remains subject to completion of the FY21 audit.

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Q4FY2021 KEY OPERATING METRICS

CONTINUING TO SCALE RAPIDLY. RECORD QUARTERLY REVENUE, NEW STUDENTS AND STUDENT SESSIONS

KEY OPERATING METRICS – Q4FY2021

	Revenue1	New Students2
	$5.6m	5.8k
	+135% PCP3	+105% PCP
	Student Sessions	Variable CAC4 / New Student
	88k +135% PCP	$552 +7% PCP	CAC FOR FY21 IN LINE WITH PROSPECTUS FORECAST

Variable CAC per New Student $552, an increase of 7% on the PCP, was in line with forecast[5] , notwithstanding the 135% increase in the number of new students and 250% increase on brand investment in PCP. This quarter, 14% of the overall media spend was on brand activity compared to 4% in the PCP.

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Note: 1. FY21 Revenue result is preliminary and remains subject to completion of the FY21 audit. The financial year end audit of the FY21 results is underway and the audited financial statements will be released in August 2021. 2. New Students that completed a paid session in the period. 3. Prior corresponding period (“Q4 FY2020”) 4. Variable CAC (customer acquisition costs) per student is a non-IFRS measure used for management purposes which represents variable acquisition expenditure for a period divided by new students with a session in the same period. Variable acquisition expenditure is calculated based on total marketing expenses, plus learning advisor (sales) employment costs and commission (included in employee benefits expense). 5. Q4FY2021 component of the annual forecast provided in the Prospectus.

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KEY OPERATING METRICS

ACTIVE STUDENTS[1]

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18,000
15,543
16,000
14,000
12,000
10,311
10,000
8,000
6,722
6,000
4,000 3,174
1,621
2,000
618
0
H1 H2 H1 H2 H1 H2
FY19 FY20 FY21
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STRONG AND CONTINUING INCREASE IN ACTIVE STUDENTS

• In H2FY2021, 15,543 students completed paid tutoring sessions with Cluey

• H2FY2021 Active Students was an increase of 131% on the PCP

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Note: 1. Students that completed a paid session in the period

CASHFLOW

Cash balance bridge – Prospectus Forecast[1] to Actual

Cash balance of $28m as at 30 June 2021

• Reduction in • Investment in media in FY2021 due to additional volume in the accounts payable market at or below forecast variable CAC per new student and accrual • Investment in brand in FY2021, the majority spent in H2FY2021 to balances

• Investment in brand in FY2021, the majority spent in H2FY2021 to develop Cluey’s brand equity

• CAC per new student (includes media, brand and sales) and LTV per new student remain in line with forecast

• Investment in remote • Learning Advisor and working capability Customer Support (technology and resources to support software licenses) growth in students and

• • Investment in new in anticipation of step product development change in students and and technology to roll sessions in FY22 out new services (Schools and New Zealand)

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Note: 1. The forecast provided in the Prospectus

REVENUE[1]

REVENUES EXCEEDED PROSPECTUS FORECAST DELIVERING $15.9M IN FY2021

18,000 ANNUAL REVENUES ($’000) 15,870 16,000 14,000 12,000 10,000 8,000 6,000 4,869 4,000 2,000 901 -

FY2021 revenue of $15.9m, an increase of 226% on FY2020, exceeding forecast[2] of $15.5m by $400k (3%)

CAGR of 320% since FY2019

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FY19 FY20 FY21
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Note: 1 FY21 Revenue result is preliminary and remains subject to completion of the FY21 audit. The financial year end audit of the FY21 result is underway and the audited financial statements will be released in August 2021. 2. The annual forecast provided in the Prospectus

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H2 FY2021 – WHERE WE FOCUSSED OUR TIME, EFFORT AND INVESTMENT

SCALING THE CORE AND NEW SERVICES

In H2 FY2021, our focus was on scaling our active students and investing in new products/services:

• Continuing optimisation through service and configuration improvements

• Defining and developing new product and service options

• B2B (Schools contract with NSW DOE)

• New Zealand

M&A AND INTERNATIONAL EXPANSION

In H2 FY2021, we investigated domestic and international M&A and offshore expansion opportunities:

• Completed market scoping for US and UK

• Evaluating M&A domestic and international opportunities that drive growth, increase product range and breadth, and expand reach

• Considering targets that meet our criteria

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KEY INVESTMENT HIGHLIGHTS

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EXCEEDED PROSPECTUS REVENUE FORECAST

Delivered revenue of $15.9m v forecast of $15.5m

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SCALABLE, QUALITY EDUCATION

Proven ability to scale personalised high quality education with multiple service offerings

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GROWTH AND RETURNS IN THE CORE BUSINESS

Strong growth trajectory, unit economics and operating leverage

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NEW SERVICES COMPLEMENTING ORGANIC GROWTH IN FY2022

New products & services to complement the core

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TECHNOLOGY ADVANTAGE

Enterprise platforms, data and learning analytics driving competitive advantage

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STRATEGIC M&A

A range of complementary strategic M&A opportunities identified

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DISCLAIMER

This presentation

• is not an offer, invitation, inducement or recommendation to purchase or subscribe for any securities in Cluey Ltd ("Cluey") or to retain any securities currently held;

• is for information purposes only, is in summary form and does not purport to be complete;

• is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor, potential investor or any other person. Such persons should consider seeking independent financial advice depending on their specific investment objectives, financial situation or needs when deciding if an investment is appropriate or varying any investment; and

• contains forward looking statements. These statements reflect the current views, expectations and assumptions of the board of directors of Cluey and are based on information currently available, involve risks and uncertainties and do not guarantee future results, performance or events. Any forward looking statements have been prepared on the basis of a number of assumptions which may prove to be incorrect or involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of Cluey, which may cause actual results, performance or achievements to differ materially from those expressed or implied in the statements.

No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation and any oral presentation accompanying it.

To the maximum extent permitted by law, Cluey and its related bodies corporate, and their respective directors, officers, employees, agents and advisers, will not be liable for any loss, damage, claim, demand, cost and expense of whatever nature arising in any way out of or in connection with this presentation, including any error or omission therefrom, or otherwise arising in connection with any reliance by any person on any part of this presentation.

NON-IFRS FINANCIAL INFORMATION

The Cluey Ltd Group results are prepared under Australian Accounting Standards, and also comply with International Financial Reporting Standards (‘IFRS’). This presentation includes certain non-IFRS measures. These measures are used internally by management to assess the performance of the business, make decisions on the allocation of resources and assess operational performance. Non-IFRS measures have not been subject to audit or review, however, all items used to calculate these non-IFRS measures have been derived from information used in the preparation of the reviewed financial statements.

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CLUEY LTD (CLU)

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