FREELANCER LIMITED — AGM Information 2014

May 15, 2014

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Freelancer Limited Annual General Meeting

16 May 2014

Matt Barrie Executive Chairman

Ready to launch?

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Board of Directors

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• Matt Barrie, Executive Chairman

• Darren Williams, Executive Director

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• Simon Clausen, Non-Executive Director

• Neil Katz, Chief Financial Officer & Company Secretary

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Agenda

● Executive Chairman’s Address

● Formal Business

● Q&A

• Close of Business

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EXECUTIVE CHAIRMAN’S ADDRESS

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Marketplace growth

Exponential growth in registered users, projects and contests posted

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Total registered users [1] Total projects & contests posted [1]
9,000,000 5,000,000
(excludes Warrior Forum & Fantero)
8,000,000
4,000,000
7,000,000
As at 13 May 2014
As at 13 May 2014
6,000,000 11.8 million 5.9 million
(incl. Warrior Forum & Fantero)
3,000,000
5,000,000
4,000,000
2,000,000
3,000,000
2,000,000
1,000,000
1,000,000
- -
FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13
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1. Number of user accounts, and projects/contests posted in the Freelancer marketplace as at 31 December 2013. User, project and contest data includes all users and projects from acquired marketplaces including, but not limited to GetAFreelancer, EUFreelance, Scriptlance, LimeExchange, vWorker/RentACoder and zlecenia.przez.net. Prior to FY09, all data is from acquired marketplaces.

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Freelancer’s Online Economy

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Note: The pink lines indicate where projects are being posted by employers, and the blue lines indicate where the projects are being performed by freelancers. Thicker lines indicate a higher dollar volume of work. White dots indicate the location of Freelancer’s users. Edges are sampled data. Data as of 14 May 2014.

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FY13 highlights

Freelancer experienced tremendous growth in FY13

A$m, 31 Dec FYE	FY12	FY13	Growth Y/Y
Net Revenue	$10.6m	$18.8m	77%
Gross Payment Volume1	$50.8m	$84.4m	66%
Take rate2 (%)	20.9%	22.2%	6%
Gross margin (%)	87.4%	87.6%	0.3%
Operating EBITDA3	$0.8m	$1.2m	53%
Operating EBIT3	$0.7m	$1.0m	46%
Operating NPAT3	$0.7m	$1.1m	46%
New registered users	1.4m	2.9m	104%
Cash balance as at 31-Dec	$9.7m	$24.4m	152%

1. Gross Payment Volume (GPV) is calculated as the total payments to Freelancer users for products and services transacted through the Freelancer website plus total Freelancer revenue. Based on Freelancer’s unaudited management accounts for the years ended 31 December 2012 and 2013, which have not been subject to an auditors review.

2. Take rate is calculated as Net Revenue divided by Gross Payment Volume.

3. Exclusive of $394k of expensed IPO costs ($275k net of tax) and non-cash share based payments expense of $33k in FY13.

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Stellar revenue growth

Net revenue accelerated +77% in FY13, gross margin ahead of prospectus forecast

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Net Revenue (A$m) and Gross Margin (%)20 [1] 18.8
18 100.0%
86.7% 87.4% 87.6%
16 82.6%
80.0%
14 +77%
12
10.6 60.0%
10
Net Revenue
Gross margin8 +64%
40.0%
6.5
6
4.7
4
+37% 20.0%
2
0 0.0%
FY10 FY11 FY12 FY13
Revenue (A$m) 4.7 6.5 10.6 18.8
Y/Y growth - 37% 64% 77%
Gross margin 82.6% 86.7% 87.4% 87.6%
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• Year on year monotonic acceleration in revenue growth FY10-13

• Year on year monotonic improvement in gross margin FY10-13

• FY13 Revenue of $18.8m, ahead of prospectus forecast, +77% Y/Y

• FY13 Revenue growth drivers

  • GPV growth – user, project & contest acquisition and conversion rate improvements

  • Product development & increased take up of value-added services

• Based on Freelancer’s pro-forma historical financial results for the years ended 31 December 2010 and 2011, its historical financial results for the year ended 31 December 2012, and its audited consolidated financial results for the year ended 31 December 2013.

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Gross payment volume

Gross Payment Volume[1] (GPV) growth of +66% and improved take rate[2] in FY13

28.0 35.6 50.8 84.4 16.8% 18.1% 20.9% 22.2% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 0 10 20 30 40 50 60 70 80 90 FY10 FY11 FY12 FY13 Gross Payment Volume1 (A$m) and Take Rate2 (%) GPV Take rate +27% +43% +66%	28.0 35.6 50.8 84.4 16.8% 18.1% 20.9% 22.2% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 0 10 20 30 40 50 60 70 80 90 FY10 FY11 FY12 FY13 Gross Payment Volume1 (A$m) and Take Rate2 (%) GPV Take rate +27% +43% +66%
GPV (A$m)	28.0 35.6 50.8 84.4
Y/Y growth	- 27% 43% 66%
Take rate2(%)	16.8% 18.1% 20.9% 22.2%

• Year on year monotonic acceleration in GPV growth FY10-13

• Year on year monotonic improvement in take rate FY10-13

• FY13 GPV of $84.4m, ahead of prospectus forecast, +66% Y/Y

• FY13 GPV growth drivers

  • User, project & contest acquisition growth

  • Conversion rate improvements

• Take rate improvement drivers

  • Growth in non-commission based revenues

• Gross Payment Volume (GPV) is calculated as the total payments to Freelancer users for products and services transacted through the Freelancer website plus total Freelancer Revenue. Based on Freelancer’s unaudited management accounts for the years ended 31 December 2010, 2011, 2012 and 2013, which have not been subject to an auditors review.

• Take rate is calculated as Net Revenue divided by Gross Payment Volume.

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Group financial highlights

Focus on re-investment in product development, user experience, user/project acquisition and customer service

(A$m)	FY10	FY11	FY12	FY13
31 Dec y/e	Actual1	Actual1	Actual	Actual
Net Revenue	4.7	6.5	10.6	18.8
growth (%)	-	37.4%	64.5%	76.5%
Gross Profit	3.9	5.6	9.3	16.4
margin (%) Operating expenses2	82.6% (3.2)	86.7% (6.1)	87.4% (8.5)	87.6% (14.9)
FX gains / (losses) IPO costs	0.2 -	(0.1) -	0.0 -	(0.4) (0.4)
EBITDA	0.9	(0.6)	0.8	0.7
EBIT	0.9	(0.6)	0.7	0.6
NPAT	0.6	(0.5)	0.7	0.8
Excluding IPO and share based payments expenses3
EBITDA	0.9	(0.6)	0.8	1.2
EBIT	0.9	(0.6)	0.7	1.0
NPAT	0.6	(0.5)	0.7	1.1

• Strong track record of revenue growth

• Gross margins indicate scalable business model

• ● FX gains/(losses) relate to unrealised changes in AUD value of cash and user obligations

• Cost base has historically been managed to be marginally profitable – Re-investing for revenue growth through product development & customer service (employees) and increased sales & marketing (employees & SEM)

• Based on Freelancer’s pro-forma historical financial results for the years ended 31 December 2010 and 2011.

• Inclusive of non-cash share based payments expense of $33k in FY13.

• Exclusive of expensed IPO costs of $394k ($275k net of tax) and non-cash share based payments expense of $33k in FY13.

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FY14 update

“Every job, every country, every language, every currency, at any time”

• Operational updates for the start of FY14

• Commissioned engineering lab in Vancouver and regional office in London

• Significantly expanded campus office in Manila

• Acquired leading marketplace in Poland, zlecenia.przez.net

• Acquired leading virtual content marketplace, fantero.com

• Acquired the world’s largest Internet marketing marketplace & community, Warrior Forum

• Launched Freelancer Messenger for Android

• Added 1.1m users in Q1 and 0.35m projects/contests (Warrior +750k users).

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Key transaction highlights

In April 2014, Freelancer acquired Warrior Forum, the world’s largest Internet marketing marketplace & community (since 1997)

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• Transaction Details Freelancer acquired the website, related domain names and associated intellectual property assets of Warrior Forum (warriorforum.com)

• US$3.2 million cash acquisition price, funded by existing cash reserves

• Implied price/sales multiple of ~3x (based on normalised revenue run rate)

World’s largest Internet marketing marketplace & community

• Over 732,000 registered members, the largest online community of Internet marketing professionals globally (750,000 as of 13 May 2014)

• Ranked by Alexa in the top 250 websites globally, top 150 in the United States and United Kingdom, and top 100 in Australia by Internet traffic (ranked 225nd globally 12 April 2014)[1]

• Includes marketplaces for buying and selling products & services, websites, domain names, hiring freelancers and advertising freelance services. Also includes classified advertising and an affiliate program database

• Revenue model based on forum access fees, self-serve advertising and listing fees for marketplace items posted in the forum by registered users

Operational Strategy

• Freelancer will continue to operate Warrior Forum as a standalone website, which will continue to be community moderated

• Freelancer will leverage cross-site promotions and engagement to enhance marketplace growth

Strategic Rationale

• Warrior Forum is the largest Internet marketing marketplace in the world, with a complementary user base (Internet entrepreneurs & marketers)

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1. Based on Alexa Global Rank of 225 as at 12 April 2014.

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Overview of Warrior Forum

The World’s Largest Internet Marketing Marketplace & Community

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• Founded in 1997 by Clifton Allen Says, Jr.

• Warrior Special Offers (WSOs): the largest online marketing marketplace globally, including marketplaces for buying and selling products & services, websites, domain names, hiring freelancers and advertising freelance services. It also includes classified advertising and an affiliate program database

• Warrior Forum areas include Internet Marketing, Social Media, eCommerce, Offline Marketing, Dropshipping, Mobile Marketing, Ad Networks (CPA, CPM, CPL), Adsense, PPC, Search Engine Optimisation, Product Reviews, Articles, Copywriting, Viral Networks, Programming, Website Design, Blogs and Joint Ventures

• The War Room : an elite private discussion group where the world’s best marketers share their experiences and learnings

• Current revenue model includes listing fees (US$20-40 per item/bump), private forum access fees (US$22-40 for long term access), banner advertising and revenue sharing with certain joint venture promotions on the site

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User demographics

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Freelancer Android Messenger App

Stay in touch with your projects while you’re on the go

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FY14 outlook

“Every job, every country, every language, every currency, at any time”

• Operational and product development outlook for FY14

• Execution is key

• Continued focus on platform scalability

• Product & user experience to drive engagement

• Build out a world class team

• Increased focus on acquisition channels

• Expand global presence

• Launch mobile offerings, Android Messenger live

• Continually assess opportunities

“160 million jobs, or about 11% of the

projected 1.46 billion services jobs worldwide, could in theory be carried out remotely, barring any constraints in supply”

McKinsey Global Institute[1]

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1. McKinsey Global Institute, The Emerging Global Labor Market 2005, Part I: The Demand for Offshore Talent in Services.

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BUSINESS OF THE MEETING

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Item 1: Financial Statements and Reports

• To receive and consider the Annual Financial Report of Freelancer Limited and the Directors’ Report, Remuneration Report and Independent Auditor’s Report for the year ended 31 December 2013.

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Item 2: Adoption of Remuneration Report

● To adopt the Remuneration Report for the year ended 31 December 2013.

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- Item 3: Re election of Director

• Mr Darren Williams retires by rotation in accordance with rule 6.7 of the Company’s Constitution and, being eligible, offers himself for re-election.

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Questions

● Any final questions?

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Important notice and disclaimer

This presentation has been prepared by Freelancer Limited (ACN 141 959 042) ( Freelancer or the Company ). The information contained in this presentation is current at the date of this presentation. The information is a summary overview of the current activities of the Company and does not purport to be all inclusive or to contain all the information that a prospective investor may require in evaluating a possible investment. This presentation is for general information purposes and is not intended to be and does not constitute a prospectus, product disclosure statement, pathfinder document or other disclosure document for the purposes of the Corporations Act 2001 (Cth) ( Corporations Act ) and has not been, and is not required to be, lodged with the Australian Securities & Investments Commission. It is to be read in conjunction with the Company’s disclosures lodged with the Australian Securities Exchange, including the Company’s full year results lodged with the Australian Securities Exchange on 27 February 2014.

The material contained in this presentation is not, and should not be considered as, financial product or investment advice. This presentation is not (and nothing in it should be construed as) an offer, invitation, solicitation or recommendation with respect to the subscription for, purchase or sale of any security in any jurisdiction, and neither this document nor anything in it shall form the basis of any contract or commitment. This presentation 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 which need to be considered, with or without professional advice, when deciding whether or not an investment is appropriate.

This presentation contains information as to past performance of the Company. Such information is given for illustrative purposes only, and is not – and should not be relied upon as – an indication of future performance of the Company. The historical information in this presentation is, or is based upon, information contained in previous announcements made by the Company to the market.

Forward looking statements

This document contains certain "forward-looking statements". The words "anticipate", "believe", "expect", "project", "forecast", "estimate", “outlook”, “upside”, "likely", "intend", "should", "could", "may", "target", "plan" and other similar expressions are intended to identify forward-looking statements. Indications of, and guidance on, future earnings and financial position and performance, including Freelancer’s FY14 outlook, are also forward-looking statements, as are statements regarding Freelancer’s plans and strategies and the development of the market.

Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of Freelancer, which may cause actual results to differ materially from those expressed or implied in such statements.

Freelancer cannot give any assurance or guarantee that the assumptions upon which management based its forward-looking statements will prove to be correct or exhaustive beyond the date of its making, or that Freelancer 's business and operations will not be affected by other factors not currently foreseeable by management or beyond its control. Such forward-looking statements only speak as at the date of this announcement and Freelancer assumes no obligation to update such information. The release, publication or distribution of this presentation in jurisdictions outside Australia may be restricted by law. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

Non-IFRS information

This presentation includes certain financial measures that are not recognised under Australian Accounting Standards ( AAS ) or International Financial Reporting Standards ( IFRS ). Such non-IFRS financial measures do not have a standardised meaning prescribed by AAS or IFRS and may not be comparable to similarly titled measures presented by other entities, and should not be construed as an alternative to other financial measures determined in accordance with AAS or IFRS. The information is presented to assist in making appropriate comparisons with prior periods and to assess the operating performance of the business. Freelancer uses these measures to assess the performance of the business and believes that information is useful to investors. Gross Payment Volume, EBITDA, and EBIT have not been audited or reviewed. Recipients are cautioned not to place undue reliance on any non-IFRS financial measures included in this presentation.

All references to dollars are to Australian currency unless otherwise stated.

To the maximum extent permitted by law, Freelancer makes no representation or warranty (express or implied) as to the accuracy, reliability or completeness of any information contained in this document. To the maximum extent permitted by law, Freelancer shall have no liability (including liability to any person by reason of negligence or negligent misrepresentation) for any statements, opinions or information (express or implied), arising out of, contained in or derived from, or for any omissions from this document, except liability under statute that cannot be excluded.

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