EXPERIENCE CO LIMITED — Investor Presentation 2016

Jun 19, 2016

==> picture [520 x 795] intentionally omitted <==

Skydive Wanaka Acquisition June 2016

1

==> picture [46 x 1080] intentionally omitted <==

LEAVE YOUR WORLD BEHIND

DISCLAIMER

Important Notice and Disclaimer: This presentation has been prepared by Skydive the Beach Group Limited ACN 167 320 470 ("SKB”)

Summary information

This presentation contains summary information about SKB and its related bodies corporate and their activities, current as at 15 June 2016. 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. SKB, 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 SKB 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. SKB is not licensed to provide financial product advice in respect of SKB securities. Cooling off rights do not apply to the acquisition of SKB securities.

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. Forwardlooking 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 SKB. Actual results, performance or achievements may vary materially from any projection and forward-looking statements and the assumptions on which those statements are based. SKB disclaims any obligation or undertaking to provide any updates or revision to any forward-looking statements in this presentation.

Investment risk

SKB does not represent or guarantee any particular rate of return or performance of SKB, nor does it represent or guarantee the repayment of capital from SKB 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, SKB securities and does not and will not form any part of any contract for the acquisition of SKB securities. Any investor in SKB 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.

© 2016 Skydive the Beach Group Limited ACN 167 320 470

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 SKB's views on its future financial performance or condition. Investors should note that past performance of SKB or any of its related bodies corporate or proposed acquisition targets cannot be relied upon as an indicator of future SKB performance including future share price performance.

==> picture [117 x 52] intentionally omitted <==

2

LEAVE YOUR WORLD BEHIND

AGENDA

1. Acquisition Summary

2. Acquisition Rationale

3. Impact of Acquisition Transaction Overview

==> picture [117 x 52] intentionally omitted <==

3

LEAVE YOUR WORLD BEHIND

1. Acquisition Summary

==> picture [117 x 52] intentionally omitted <==

4

LEAVE YOUR WORLD BEHIND

ACQUISITION SUMMARY

• SKB has entered into an agreement to acquire Skydive Wanaka Limited (“Skydive Wanaka”)

• Transaction ¤ SKB to acquire Skydive Wanaka Overview ¤ 1 dropzone located in Wanaka New Zealand, 1 hour drive from Queenstown NZ ¤ Operates under the brand of Skydive Wanaka ¤ Acquisition cost of NZ$10.4m (A$9.7m)* funded via cash, including an escrow amount

• Compelling ¤ Expected to be materially EPS accretive to SKB shareholders on an annualised basis Strategic ¤ Adds to the company’s international portfolio of assets and drop zones

• Rationale ¤ Skydive Wanaka site is growing strongly (24% 2 year CAGR of tandem skydives), adding in excess of 17,000** tandem skydives to SKB in FY17

• ¤ Executes on SKB’s growth strategy of acquisitions, diversification (geographically and seasonally) and efficiencies.

• Exchange rate of AUDNZD 1.07 used throughout the presentation ** Skydive Wanaka delivered 14,511 tandem skydives in FY16, 10,274 in FY15

==> picture [117 x 52] intentionally omitted <==

5

LEAVE YOUR WORLD BEHIND

ACQUISITION SUMMARY

Transaction ¤ A$15m institutional placement, to be used in the following manner: Funding Ø A$9.7m acquisition of Skydive Wanaka Ø A$2.4m acquisition of 1 new aircraft Ø A$1.1m acquisition of 3 coaches (bus transport) Ø A$1.8m costs of placement, Due Diligence and Working Capital Attractive ¤ Wanaka acquisition multiple 4.5x on FY16 () EBITDA Financial EPS accretive in FY17 ¤ Rationale ¤ Additional A$2.6m () EBITDA in FY17 Strate ic advanta es and s ner ies for NZ o erations ¤ g g y g p Timetable ¤ Completion date of Skydive Wanaka acquisition 1 July 2016 * Skydive Wanaka’s FY16 financial year end is 31 March 2016 ** Less any one-off Due Diligence costs expensed in the year relating to the Skydive Wanaka acquisition LEAVE YOUR WORLD BEHIND 6*

LEAVE YOUR WORLD BEHIND

ACQUISITION

ü On 11 May 2016, SKB executed a confidential, non-binding MOU with Skydive Wanaka Limited trading as Skydive Wanaka so the parties could negotiate a potential transaction ü Under the terms of the Sales and Purchase Agreement signed on 15 June 2016 , SKB will acquire all of the shares in Skydive Wanaka for a consideration of NZ$10.4m (circa A$9.7m). The consideration is to be paid as follows: ü Non-refundable deposit of NZ$250,000 paid to Skydive Wanaka Legal Representative trust account ü Cash settlement of NZ$8,750,000 to be paid on completion ü Cash amount of NZ$1,400,000 to be placed into escrow to support warranties, and will be released in the following manner: § NZ$500,000 will be released to the vendors on successful agreement of the completion accounts;

• § NZ$500,000 will be released at 12 months; § NZ$400,000 will be paid upon the business successfully conducting 17,000 tandem skydives

==> picture [117 x 52] intentionally omitted <==

7

LEAVE YOUR WORLD BEHIND

OVERVIEW OF SKYDIVE WANAKA

==> picture [421 x 539] intentionally omitted <==

Key Facts

• ¤ The closest skydive player to NZone Skydive

• ¤ Founded in August 1995 and headquartered in Wanaka ¤ Skydive Wanaka has conducted more than 100,000 tandem jumps

¤ Circa 45 employees

• ¤ Long term leases in place for airfield and hangar/office (total 22 years)

• ¤ Premium aircraft owned outright ¤ No company debt

• ¤ Strong market position, reputation and brand

• ¤ Strong operating culture with established quality systems and procedures

• ¤ Strong growth from current owners who have operated the business since July 2013

8

LEAVE YOUR WORLD BEHIND

SKYDIVE WANAKA

==> picture [117 x 52] intentionally omitted <==

9

LEAVE YOUR WORLD BEHIND

SKYDIVE WANAKA

==> picture [117 x 52] intentionally omitted <==

10

LEAVE YOUR WORLD BEHIND

2. Acquisition Rationale

==> picture [117 x 52] intentionally omitted <==

11

LEAVE YOUR WORLD BEHIND

• STRATEGIC RATIONALE FOR SKYDIVE WANAKA ACQUISITION − HIGHLIGHTS

• Recent years of delivering growth

• Strong position in NZ’s growing tourism region

• Supports and complements NZone Skydive acquisition 4. Strong strategic fit with SKB

==> picture [117 x 52] intentionally omitted <==

12

LEAVE YOUR WORLD BEHIND

1. SKYDIVE WANAKA GROWTH IN RECENT YEARS

NZD	FY14 (*)	FY15	FY16
Tandems	6,263	10,274	14,511
Revenue (NZ$000’s)	2,696	4,564	6,526
Normalised EBITDA (NZ$000’s)	859	1,462	2,289
Normalised EBITDA Margin (%)	31.87%	32.0%	35.1%
Average transaction value (NZ$)	431	444	449

• Not a full financial year

==> picture [117 x 52] intentionally omitted <==

13

LEAVE YOUR WORLD BEHIND

2. STRONG GROWTH IN SOUTH ISLAND TOURISM

==> picture [1826 x 766] intentionally omitted <==

==> picture [117 x 52] intentionally omitted <==

Source: Queenstown Airport arrivals, www.queenstownairport.co.nz

14

LEAVE YOUR WORLD BEHIND

2. STRONG GROWTH IN SOUTH ISLAND TOURISM

==> picture [1826 x 766] intentionally omitted <==

Source: Queenstown Airport arrivals, www.queenstownairport.co.nz

==> picture [117 x 52] intentionally omitted <==

15

LEAVE YOUR WORLD BEHIND

3. SUPPORTS & COMPLEMENTS NZONE SKYDIVE ACQUISITION

¤ Processing Synergy ¤ The acquisition increases flexibility, enabling a significant portion of the uncompleted jumps at NZone (Queenstown) to be transferred to Wanaka (Wanaka’s processing rates at 83% against NZone’s processing rate that was less than 70% for FY16) ¤ Coaches (Buses) will be acquired to allow for such transporting of passengers, and will also allow for transferring from Wanaka to Queenstown when required ¤ Bookings Synergy ¤ Where NZone previously stopped taking bookings due to operational or regulatory requirements, customers were lost; however now customers can book and jump at Wanaka as an alternative ¤ Aircraft Upgrade ¤ With the acquisition of the more efficient aircraft the processing rate can increase even further, with the ability to increase lifts from 2.2 per hour to 4 per hour, ensuring more availability for customers to jump

==> picture [117 x 52] intentionally omitted <==

16

LEAVE YOUR WORLD BEHIND

4. STRONG STRATEGIC FIT WITH SKB

• ¤ Executes on SKB’s growth strategy ¤ Enhances SKB’s market leading position with established growth business ¤ Increases international operational footprint across the business

• ¤ Increases expertise and skills ¤ Synergies – economies of scale with potential significant cost savings

==> picture [117 x 52] intentionally omitted <==

17

LEAVE YOUR WORLD BEHIND

• 4.Impact of Acquisition

==> picture [117 x 52] intentionally omitted <==

18

LEAVE YOUR WORLD BEHIND

REAFFIRM FY16 OUTLOOK AND GUIDANCE

• ¤ FY16 guidance reaffirmed: • 130,381 tandem jumps

• • $54.9m revenue

• • $13.5m EBITDA

• Intention to maintain dividend

• ¤ of circa 1 cent per share per annum going forward

Tandems (#) 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 2011
2012
2013
2014
2015
2016

==> picture [509 x 310] intentionally omitted <==

----- Start of picture text -----

Revenue ($)
60,000,000
50,000,000
40,000,000
30,000,000
20,000,000
10,000,000
0
2011
2012
2013
2014
2015
2016
----- End of picture text -----

EBITDA ($) 15,000,000 12,000,000

==> picture [479 x 215] intentionally omitted <==

----- Start of picture text -----

12,000,000
9,000,000
6,000,000
3,000,000
0
2011
2012
2013
2014
2015
2016
----- End of picture text -----

==> picture [117 x 52] intentionally omitted <==

19

LEAVE YOUR WORLD BEHIND

EXPECTED FINANCIAL IMPACT ON FY17 OF THE ACQUISITION

• ¤ Expected to increase FY17 tandem jumps by 17,000

• ¤ Expected to increase FY17 revenue by A$7.1m

• ¤ Expected to increase FY17 EBITDA by A$2.6m (*)

• ¤ Strong business momentum expected to continue in FY18

• • Less any one-off Due Diligence costs expensed in the year relating to the Skydive Wanaka acquisition

==> picture [117 x 52] intentionally omitted <==

20

LEAVE YOUR WORLD BEHIND

• 4.Transaction Overview

==> picture [117 x 52] intentionally omitted <==

21

LEAVE YOUR WORLD BEHIND

INSTITUTIONAL PLACEMENT OVERVIEW

¤ Institutional placement to raise A$15.0m ¤ 35.7m New SKB ordinary shares to be issued (9.0% of issued capital) Offer size ¤ New Total Issued Capital 396.3m ordinary shares ¤ Market cap at offer price $166m ¤ A$0.42 per share, representing: Offer Price 9.6% discount to the 4 week VWAP ¤ ¤ 12.5% discount to last closing price on 15[th] June 2016 of $0.48 per share ¤ New shares will rank equally in all respects with existing shares from the date of Dividends allotment

==> picture [117 x 52] intentionally omitted <==

22

LEAVE YOUR WORLD BEHIND

USE OF FUNDS

Use of funds:

• ¤ Acquisition of SW for cash consideration on settlement of NZ$10.4m (A$9.7m) ¤ Purchase of 1 new aircraft circa A$2.4m ¤ Purchase 3 new coaches (bus transport) A$1.1m ¤ Costs of offer, Due Diligence & Working Capital $A1.8m

==> picture [117 x 52] intentionally omitted <==

23

LEAVE YOUR WORLD BEHIND