FRONTIER DIGITAL VENTURES LIMITED — Earnings Release 2018

Jan 29, 2019

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ASX Code: FDV

30 January 2019

Full year 2018 revenue and profitability guidance exceeded

Frontier Digital Ventures Limited (“FDV”, ASX: FDV) is pleased to announce its results for the 12 months ended 31 December 2018 (“FY18”).

• +57% increase in full year FY18 portfolio revenue to A$41.7m (100% basis), exceeding portfolio revenue guidance of A$40.0m

• +66% increase in FDV economic share of FY18 portfolio revenue to A$14.4m

• 4 operating companies traded profitably in Q4 2018, exceeding prior guidance of 3 by the end of 2018

• 7 companies recorded >A$1.0m annual revenue in 2018 (up from 4 in 2017)

• Operational results highlight the strength of FDV’s diversified portfolio of market leading classified businesses who continue to grow strongly through the market cycle

• Strong cash balance maintained with A$19.3m at 31 December 2018

FDV CONTINUES TO DELIVER ON ITS GUIDANCE

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Achieved > A$40.0m in portfolio revenues in line with guidance +84

4 operating companies traded profitably in Q4 2018

7 operating companies achieved greater than >A$1m in revenue in 2018

FDV’s Founder and CEO, Shaun Di Gregorio said:

“2018 has been a year of consistent strategy execution and strong operational growth for FDV and its portfolio of market leading operating companies.

Over 12 months ago we outlined a clear strategy to increase shareholder value as our portfolio advances towards monetisation. FDV has delivered on both our financial and operational guidance with the company achieving A$41.7m of revenue for the full year 2018 (100% basis). Our portfolio has grown exceptionally well since IPO, with a 5.6x increase in annual revenue (FDV basis) and 4 companies having traded profitably in Q4.”

Frontier Digital Ventures Ltd 39-8 The Boulevard, Mid Valley City, Lingkaran Syed Putra 59200 Kuala Lumpur, Malaysia 1 Tel: +60 3 2201 0790 www.frontierdv.com

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On 7 December 2018 FDV provided an update to investors on its strategy execution across 2018. FDV has successfully executed across 4 key areas of focus including:

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• Proportional property earnings have increased to 72% of total
✓ Property bias revenue in FY18 (up from 60% in FY17)
• Further investment in Zameen, Hoppler, LankaPropertyWeb
• Further investment in Pakistan (Zameen), Philippines (Hoppler,
✓ Geographic focus AutoDeal) and Myanmar (CarsDB)
• LankaPropertyWeb acquired its competitor Lamudi.lk
• Strong revenue growth of 57% (FY18 on pcp) to A$41.7m
✓ Portfolio revenue • Over A$40.0m portfolio revenue in FY18, up from FY17 (A$26.5m)
growth • 4 companies traded profitably in 4Q 2018
✓ Consolidate • All 14 operating companies in market leading positions
• Continued maturation with 7 out of 14 companies recording
market leaders
>A$1.0m revenue in 2018
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Based on the current market valuation, it appears that the consistent strategy execution and strong operational growth across FDV’s portfolio has been underappreciated, particularly given the growth in the FDV portfolio (ex. Zameen) as highlighted in the chart below.

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Figure 1: Illustrative valuation (A$m)
13 out of 14 operating companies (ex. Zameen)
have grown significantly and now account for:
• A$19.3m revenue in CY18 on 100% basis
118
− Compares with total portfolio revenue in
19 2016 of A$13.4m (incl. Zameen) [1]
• 260m website sessions
• 39m leads for customers
94
5
Market value Cash Zameen FDV Portfolio
….and
(Jan-19) (31-Dec-18) Valuation [1] (ex. Zameen) more
at A$0.48 (set in May 2018)
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Note:

1. Total portfolio revenue for full year 2016 of A$13.4m (100% basis) for 15 businesses at the time including Zameen

Frontier Digital Ventures Ltd

39-8 The Boulevard, Mid Valley City, Lingkaran Syed Putra 59200 Kuala Lumpur, Malaysia 2 Tel: +60 3 2201 0790 www.frontierdv.com

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FDV has grown significantly since IPO in August 2016 across key operating and financial metrics. The portfolio revenue growth continues to increase consistently and rapidly, with total growth in FDV portfolio revenue of 3.7x since IPO (100% basis) and 5.6x (FDV economic share).

Figure 2: Portfolio revenue since IPO (A$m, pro- forma unaudited)

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+3.7x +5.6x
23.5
growth on growth for FDV 8.1
100% basis economic share
18.2
6.3
15.2 5.1
11.4
3.5
8.6
6.4 2.4
1.4
H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018
Share price comparison:
IPO price (Aug-2016) = A$0.50 Current price = A$0.480
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7 out of 14 operating companies in the FDV portfolio generated >A$1.0m of revenue by the full year 2018. The A$1.0m annual revenue milestone is significant as it demonstrates the maturation of the FDV portfolio and lays out a strong foundation for the business to realise significant value in the future.

Table 1: Annual revenues by business (pro-forma unaudited, standalone basis)

			FDV ownership (%) FY 2017 Revenue A$ (100% basis) FY 2018 Revenue A$ (100% basis)	FDV ownership (%) FY 2017 Revenue A$ (100% basis) FY 2018 Revenue A$ (100% basis)	Growth (% in A$)
Consolidated investments
AutoDeal			37% 884,940 1,063,713		+20%
CarsDB			65% 296,785 720,605		+143%
Encuentra24			42% 6,617,180 7,474,347		+13%
Hoppler			40% 388,207 868,150		+124%
iMyanmar			43% 929,069 1,378,363		+48%
LankaPropertyWeb			48% 284,142 466,103		+64%
Meqasa			81% 86,292 200,607		+132%
TechAfrica			75% 1,982 141,453		+7,037%
ToLet			39% 348,415 450,725		+29%
Associates
Zameen			30% 12,366,561 22,405,297		+81%
Pakwheels			37% 1,847,756 2,034,576		+10%
Infocasas			31% 1,356,652 2,812,271		+107%
Propzy			20% 925,587 1,287,290		+39%
Moteur			56% 200,051 373,572		+87%
Total revenue			26,533,573 41,677,070		+57%
		*Greater than >A$1m in annual rev	enue

Frontier Digital Ventures Ltd 39-8 The Boulevard, Mid Valley City, Lingkaran Syed Putra 59200 Kuala Lumpur, Malaysia 3 Tel: +60 3 2201 0790 www.frontierdv.com

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Table 2: Annual revenues by business (pro-forma unaudited, FDV economic share)

FDV ownership (%)	FY 2017 Revenue A$ (FDV basis) FY 2018 Revenue A$ (FDV basis)	Growth (% in A$)
Consolidated investments
AutoDeal 37%	182,040 381,466	+110%
CarsDB 65%	226,992 549,966	+142%
Encuentra24 42%	2,696,390 3,144,380	+17%
Hoppler 40%	12,036 203,347	+1,589%
iMyanmar 43%	396,102 587,654	+48%
LankaPropertyWeb 48%	130,605 222,588	+70%
Meqasa 81%	60,644 172,696	+185%
TechAfrica 75%	1,487 106,089	+7,037%
ToLet 39%	137,542 177,931	+29%
Associates
Zameen 30%	3,709,969 6,721,591	+81%
Pakwheels 37%	680,750 749,578	+10%
Infocasas 31%	178,261 881,130	+394%
Propzy 20%	153,455 271,293	+77%
Moteur 56%	97,356 200,271	+106%
Total revenue	8,663,627 14,396,981	+66%

FDV’s consistent revenue growth since IPO continues to reduce the relative EBITDA loss. Given the scalable nature of online classifieds investments, FDV expects the relative EBITDA loss to continue to reduce and subsequently turn positive as revenue expands.

Figure 3: Portfolio EBITDA as a % of revenue (FDV equity basis)[1]

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H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018
(24.7%)
(27.3%)
(35.6%)
(52.3%)
(67.8%)
(114.7%)
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Note:

1. EBITDA as a % of revenue based on pro-forma unaudited figures for entities with continuing operations

Frontier Digital Ventures Ltd 39-8 The Boulevard, Mid Valley City, Lingkaran Syed Putra 59200 Kuala Lumpur, Malaysia 4 Tel: +60 3 2201 0790 www.frontierdv.com

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PORTFOLIO OPTIMISATION

FDV has undergone a period of significant portfolio optimisation since IPO, with a number of portfolio upgrades, tier 1 acquisitions and exits of underperforming assets.

1H16	Current
Tier 1–monetising companies 6	12
Tier 2–pre-monetisation stage 4	2
Tier 3–growing operating metrics 5	Nil

During the quarter, FDV increased its equity interest in Hoppler from 20.6% to 40.2% through a milestone payment and acquisition of vendor shares after the business achieved its pre-agreed revenue target. Hoppler (www.hoppler.com.ph) is an innovative online property platform used by vendors, buyers and real estate agents in the Philippines to facilitate property transaction.

In addition, FDV consolidated its market presence in Sri Lanka through its LankaPropertyWeb business which acquired of Lamudi.lk, the second largest property portfolio in Sri Lanka. The acquisition further consolidates LankaPropertyWeb’s position as the leading real estate platform in Sri Lanka.

OPERATIONAL HIGHLIGHTS

Despite some of the challenges and headwinds faced by many of FDV’s peers who are operating in the emerging and frontier markets, FDV continues to perform strongly across its portfolio.

The challenging market highlights the benefits of having a diversified portfolio which can been seen through some of the key investments below. Some key performance metrics for Infocasas, Hoppler and CarsDB are listed below:

Infocasas, the #1 property platform in Uraguay and Paraguay and the fastest growing property portfolio in Bolivia, continues to demonstrate strong revenue growth as leverages its market leadership. Infocasas grew strongly reporting $955k for the quarter up +102% vs the pcp.

The business continues to implement its best-practice strategies in conjunction with FDV’s management team which has seen the business achieve strong revenue growth in recent times

Quarterly revenue (A$000, 100% basis unaudited)

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955
771
594
472 492
4Q 2017 1Q 2018 2Q 2018 3Q 2018 4Q 2018
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Frontier Digital Ventures Ltd 39-8 The Boulevard, Mid Valley City, Lingkaran Syed Putra 59200 Kuala Lumpur, Malaysia 5 Tel: +60 3 2201 0790 www.frontierdv.com

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Hoppler, is an innovative online platform used by vendors, buyers and agents in the Philippines to facilitate property transactions. It reported a strong quarter with revenue of A$313k for the quarter up +279% vs the pcp.

Hoppler’s results highlight the strong traction that the business has made in the region as the business continues to roll-out its transaction focussed model.

Quarterly revenue (A$000, 100% basis unaudited)

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313
223
205
127
83
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4Q 2017 1Q 2018 2Q 2018 3Q 2018 4Q 2018
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CarsDB, the leading automotive classifieds platform in Myanmar reported a strong quarter reporting A$372k for the quarter up 105% vs the pcp.

The business has grown rapidly on the back of a surge in the number of internet users in Myanmar and also due to recent changes in the way consumers are buying cars in Myanmar.

Quarterly revenue (A$000, 100% basis unaudited)

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372
181
167
127
56
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4Q 2017 1Q 2018 2Q 2018 3Q 2018 4Q 2018
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- ENDS -

For more information, please contact:

Shaun Di Gregorio

Chief Executive Officer Tel: +60 17 207 6221 Email: shaundig@frontierdv.com

About FDV Limited

FDV is a leading operator of online classifieds businesses in underdeveloped, emerging countries or regions. With a track record of building and supporting market leading online businesses, FDV are experts in the online classifieds space with a particular focus on property and automotive verticals and general classifieds websites. Its portfolio currently consists of 14 market leading companies, operating businesses across 14 markets. With the extensive support offered to the local operating companies, coupled with their own energy and work ethic, FDV is bringing outstanding companies of global significance to their full potential and setting a new global standard of excellence in the field.

Frontier Digital Ventures Ltd 39-8 The Boulevard, Mid Valley City, Lingkaran Syed Putra 59200 Kuala Lumpur, Malaysia 6 Tel: +60 3 2201 0790 www.frontierdv.com