EXPERIENCE CO LIMITED — AGM Information 2018

Oct 25, 2018

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DISCLAIMER

This presentation has been prepared by Experience Co Limited ACN 167 320 470 (”EXP”)

Summary information

This presentation contains summary information about EXP and its related bodies corporate and their activities, current as at 26 October 2018. The information in this presentation is a general background and does not purport to be complete or comprise all the information that an investor should consider when making an investment decision. EXP, its Directors, Officers, Employees and advisers have used reasonable endeavours to ensure that the information contained in this presentation is not misleading but they make no representation or warranty in this regard and, to the extent permitted by law, disclaim all liability arising from any direct, special, indirect or consequential losses of any kind arising from any cause (including without limitation negligence) which any person may sustain as a result of reliance on this presentation. The information contained in this presentation has not been independently verified.

Not financial product or investment advice

This presentation is for information purposes only and is not a prospectus, product disclosure statement or other offer document under Australian law or the law of any other jurisdiction. This presentation is not financial product or investment advice, a recommendation to acquire EXP securities, or accounting, legal or tax advice. It has been prepared without taking into account the objectives, financial or tax situation or needs of individuals. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own objectives, financial and tax situation and needs, and seek appropriate professional advice. EXP is not licensed to provide financial product advice in respect of EXP securities. Cooling off rights do not apply to the acquisition of EXP securities.

Past performance

Past performance information given in this presentation is for illustrative purposes only and should not be relied upon as (and is not) an indication of EXP's views on its future financial performance or condition. Investors should note that past performance of EXP or any of its related bodies corporate or proposed acquisition targets cannot be relied upon as an indicator of future EXP performance including future share price performance.

Financial data

Investors should be aware that certain data included in this presentation may not have a standardised meaning prescribed by Australian Accounting Standards, and therefore may not be comparable to similarly titled measures presented by other entities, nor should they be construed as an alternative to other financial measures determined in accordance with Australian Accounting Standards. The proposed acquisition the subject of this presentation is subject to conditions. As a result, the transaction may not complete. Any pro forma information does not purport to present the results that would actually occur if the acquisition the subject of this presentation is completed on the assumed date.

Future performance

This presentation may contain certain forward-looking statements. Forward-looking statements, opinions and estimates provided in this presentation are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Forward-looking statements, including projections, indications or guidance on future earnings and financial positions, or expected synergies arising from the acquisition the subject of this presentation, including cost synergies, and estimates should not be relied upon as an indication, representation or guarantee of future performance. No representation, warranty or assurance (express or implied) is given or made in relation to any forward-looking statements by any person including EXP. Actual results, performance or achievements may vary materially from any projection and forward-looking statements and the assumptions on which those statements are based. EXP disclaims any obligation or undertaking to provide any updates or revision to any forward-looking statements in this presentation.

Investment risk

EXP does not represent or guarantee any particular rate of return or performance of EXP, nor does it represent or guarantee the repayment of capital from EXP or any particular tax treatment. This presentation is not and should not be considered an offer to sell, or an invitation or solicitation to buy, EXP securities and does not and will not form any part of any contract for the acquisition of EXP securities. Any investor in EXP will need to be persons in respect of whom disclosure is not required under Part 6D.2 of the Corporations Act 2001.

Not an offer in the United States

This presentation does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States. The distribution of this presentation in other jurisdictions outside Australia may also be restricted by law. Any failure to comply with such restrictions may constitute a violation of applicable securities law. By accepting or accessing this presentation you represent and warrant that you are entitled to receive such presentation in accordance with the above restrictions and agree to be bound by the representations, terms, limitations, indemnities and disclaimers contained herein.

© 2018 Experience Co Limited ACN 167 320 470

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John Diddams ACTING CHAIR

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Anthony Boucaut FOUNDER & MANAGING DIRECTOR

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Anthony Ritter CEO & EXECUTIVE DIRECTOR

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1. Chairman’s Address

1. MD & CEO Joint Address

2. Ordinary Business in accordance with Notice of Meeting

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Chairman’s AGM Address

The Company had a reasonably successful, albeit very challenging, year in FY18, growing Year on Year revenue and EBITDAI and achieving results in line with revised guidance.

During the year, integration of the businesses acquired in late FY17 was a key management focus to ensure the Group benefitted from the full year of those operations in FY18 and beyond.

In addition to organic growth, the Group made additional acquisitions during the period that align with the Group’s key strategy and vision to become a leading and well-respected adventure tourism and leisure business, providing world class adventure activities and experiences in key locations in Australia and New Zealand.

The North Queensland acquisitions facilitated consolidation of all operational, sales and administration functions in the region under one roof at “Adventure House”, aimed at achieving savings, synergies and efficiencies, as well as enhancing customer experiences, which is expected to grow our customer bases.

Notwithstanding a reduction in jump numbers in FY18, primarily due to unseasonable weather in H2 and the unfortunate fatalities, revenue from skydiving was slightly up when compared to FY17 as a result of an increase in revenue earned per jump. Our thoughts remain with the families and friends of those affected by those tragedies. Safety is and will continue to be of paramount importance to the Group.

The change of name of the company to Experience Co Limited in October 2017 has proven to more clearly identify the activities of the business, in particular in relation to the new businesses and adventure activities that joined the Group during 2017 and 2018.

The ongoing integration of those businesses acquired in FY18 is and will continue to be a key focus for the Group. Consolidation of marketing, sales, distribution and revenue under one reporting structure, to improve business performance and efficiencies, is expected to drive enhanced shareholder value.

www.experienceco.com info@experienceco.com T: 1300 601 899

Experience Co Limited ACN 167 320 470 ASX:EXP PO Box 5361 Wollongong NSW 2500

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The Directors are pleased to have delivered a fully franked dividend of 1 cent per share.

Before I close, as you are aware, I have held the role of Acting Chair of the Board since the resignation of Bill Beerworth in April of this year. As announced to market previously, subject to the re-election of Bob East as a Non-Executive Director at this AGM today, the Board has approved the appointment of Bob as Chair of the Board to take effect at the close of today’s meeting. I am delighted for Bob to be taking the reins and together with my fellow Directors am confident that his experience and proven strength in leadership and delivery of growth and development, should help deliver enhanced shareholder value into FY19 and beyond.

I would like to thank our loyal customers, business partners, and other stakeholders for their continued support of the Company and also thank my fellow Directors, Col, Bob, Bowie and Ant, our new Company Secretary, Fiona, the entire senior management team as well as the broader Experience Co team members, who now number over 700 full time and part time employees, for their continued and valued contribution and commitment to the business during the year.

I would also like to thank our loyal shareholders for their continued support and look forward to seeing them all at next year’s AGM, when I am certain the Company will be in an even better place than it is today.

John Diddams Acting Chairman

www.experienceco.com info@experienceco.com T: 1300 601 899

Experience Co Limited ACN 167 320 470 ASX:EXP PO Box 5361 Wollongong NSW 2500

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FINANCIAL PERFORMANCE – FY18

	FY18	FY17	FY18 VS FY17 (%)
Revenue ($m)	135.3	89.6	51.1%
EBITDAI * ($m)	27.4	21.0	30.6%
Normalised EBITDAI ** ($m)	30.2	22.4	34.8%
NPAT ($m)	6.8	9.5	(28.4%)
Normalised NPAT *** ($m)	14.5	11.2	29.5%

*Earnings before Interest, Tax, Depreciation, Amortisation and Impairment (EBITDAI) is a financial measure, which is not prescribed by Australian Accounting Standards (“AAS”) and represents the profit under AAS adjusted for specific amortisation and significant items. The directors consider EBITDAI to reflect the core earnings of the consolidated entity.

**Normalised EBITDAI excludes one-off expenses that are not considered to form the ordinary part of the business, and exclude business acquisition costs (due diligence etc) and other one-off items, and in FY18 excludes the impairment of property, plant and equipment (revaluation of aircraft)

***Normalised NPAT excludes one-off expenses that are not considered to form the ordinary part of the business, and exclude business acquisition costs (due diligence etc), and other one-off items, and in FY18 excludes the impairment of property, plant and equipment (re-valuation of aircraft) as well as the adding back of amortisation of Intangibles - customer relationships and amortisation of intangibles – lease and licences

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FINANCIAL PERFORMANCE – FY18 (CONT)

NORMALISED EBITDAI	FY18 ACTUAL	NORMALISED NPAT	FY18 ACTUAL
Revenue ($m)	135.3	Revenue ($m)	135.3
EBITDAI ($m)	27.4	NPAT ($m)	6.8
EBITDAI (%)	20.3%	NPAT (%)	6.5%
One-off items * ($m)	2.8	One-off items ** ($m)	7.7
Normalised EBITDAI	30.2	Normalised NPAT	14.5
Normalised EBITDAI (%)	22.3%	Normalised NPAT (%)	10.7%

*One-off expenses are those that are not considered to form the ordinary part of the business, and include business acquisition costs (due diligence etc) ($2.1m) and other one-off items ($0.7m)

**One-off expenses are those that are not considered to form the ordinary part of the business, and include business acquisition costs (due diligence etc) ($2.2m) and other one-off items ($0.6m), the impairment of property, plant and equipment (aircraft re-valuations) ($1.7m), as well as the adding back of amortisation of intangibles - customer relationships ($1.9m) and amortisation of intangibles - leases/licences ($1.3m).

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FINANCIAL PERFORMANCE – FY18 (CONT)

NORMALISED CASHFLOW	FY18 ACTUAL	FY17 ACTUAL
Net cash provided by Operating activities per 4E	14.8	12.6
Finance Costs paid	1.7	1.2
Tax Paid	4.6	5.4
Sub-total	21.1	19.2
Movements in working capital from completion date to end of financial period for acquired companies*	1.9	-
Business acquisition costs and other one-off items	2.8	1.4
Normalised Net Cash provided by Operating activities	25.8	20.6
As a % of revenue	19.1%	22.9%

*This relates to the payment of suppliers invoices that existed on completion date of EXP’s acquisition

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FINANCIAL REPORTING OF OPERATING SEGMENTS

	SKYDIVING AUS	SKYDIVING NZ	OTHER ADVENTURE EXPERIENCES	SUB-TOTAL	SHARED SERVICES	TOTAL
Revenue ($m) FY18	52.2	29.1	53.9	135.3	-	135.3
Revenue ($m) FY17	51.7	26.6	11.3	89.6	-	89.6
Growth (%)	0.9%	9.4%	376.9%	51.0%	-	51.0%
Normalised ** EBITDAI * ($m) FY18	16.7	9.8	14.8	41.3	(11.1)	30.2
Normalised ** EBITDAI * (%) FY18	31.9%	33.7%	23.0%	30.5%	-	22.3%
Normalised ** EBITDAI * ($m) FY17	20.0	8.9	2.8	31.7	(9.3)	22.4
Normalised ** EBITDAI * (%) FY17	38.6%	33.5	24.7%	35.4%	-	25.0%
Growth (%) FY18 to FY17	(16.5%)	10.1%	342.9%	30.2%	19.3%	34.8%

*EBITDAI is a financial measure, which is not prescribed by Australian Accounting Standards (“AAS”) and represents the profit under AAS adjusted for specific non-cash and significant items. The directors consider EBITDAI to reflect the core earnings of the consolidated entity.

**Normalised EBITDAI excludes one-off expenses that are not considered to form the ordinary part of the business, and exclude business acquisition costs (due diligence etc) and other one-off items, and in FY18 excludes the impairment of property, plant and equipment (revaluation of aircraft)

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SPECIFIC HIGHLIGHTS FOR 1H18

• Changed company name to Experience Co Limited and launched the parent company brand into the marketplace

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Experience Co Headquarters in Cairns, North Queensland which houses all of FNQ experiences

Experience Co retail shop in Cairns, North Queensland

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HIGHLIGHTS FOR FY18 (CONT)

• Successful completion and integration of Byron Bay Ballooning (Byron Bay, NSW)

• Acquisition completed 21 July 2017

• Successful completion and integration of Wine Country Ballooning (Hunter Valley, NSW)

• Acquisition completed 18 September 2017

• Successful completion and integration of Great Barrier Reef Helicopters (Cairns and Port Douglas, Far North Queensland)

• Acquisition completed 1 November 2017

• Raised $20m through institutional investor base to complete Great Barrier Reef Helicopters acquisition

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HIGHLIGHTS FOR FY18 (CONT)

• Successful completion and integration of Blue Ocean Productions (Cairns, Far North Queensland) • Acquisition completed 28 November 2017

• Raised $60.9m through an Accelerated Non-Renounceable Entitlement Offer, oversubscribed by a strong investor base

• Successful completion of Big Cat Green Island Cruises (Cairns, North Queensland), integration commenced and continuing

• Acquisition completed 13 December 2017

• Successful completion of Tropical Journeys (Port Douglas, North Queensland), integration commenced and continuing

• Acquisition completed 19 December 2017

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FY19 OUTLOOK AND GUIDANCE

Experience Co Limited reaffirm the FY19 guidance is as follows:

	FY19 GUIDANCE
Revenue ($Am)	165 – 175
Normalised EBITDAI ($Am)	37 - 41
CAPEX	FY19 GUIDANCE
Sustaining Capex ($Am)	9
Growth Capex ($Am)	7
Total ($Am)	16

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FY19 1[st] QUARTER UPDATE

Experience Co Limited advise the following update for the period 1 July 2018 to 30 September 2018:

Passenger numbers:

• Skydive (Australia and New Zealand) passengers are down 1.4% on same period last year (LFL)

• Other Adventure passengers are up 1.6% on same period last year (LFL)

Based on the passenger numbers for the 1[st] quarter, together with the passenger bookings and processing during October to date, the business is tracking in line with management expectations and accordingly reaffirm FY19 guidance.

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FY19 1[st] QUARTER UPDATE (CONT)

Office of the CFO

• A contract Chief Financial Officer has been engaged for a 3-month term with possible extension of 3 months, commenced 10[th] October 2018

• Recruitment firm Johnson Partners (Sydney) have been engaged to recruit a permanent Chief Financial Officer; interviews with a short list of 3 candidates were conducted on 23[rd] October 2018 with the Chief Executive Officer and the Acting Chair.

Systems

• A 3[rd] party has been engaged to assist with the final stages of the integration of SAP Business One throughout the entire business, with all entities expected to be using the system by 1[st] December 2018;

• 3[rd] parties have been engaged and have commenced the implementation and integration of other .

• accounting and finance functions

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THANK YOU

I’d like to finish off by thanking a number of people for the FY18 year, I’d like to thank the Board of Directors, I’d like to thank the shareholders and also all stakeholders associated with Experience Co.

The main thanks I would like to offer today is for our team for their continued enthusiasm and efforts … ranging from the office staff to our pilots, from the bus drivers to our boat skippers, and from the call centre to the river guides I’d like to say thanks to them on behalf of Bowie and I and the entire Board. Without these people, Experience Co doesn’t exist. Experience Co is all about customer service and delivering the world’s best adventure tourism experiences, and our people are the best in the industry.

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