HARRIS TECHNOLOGY GROUP LIMITED — AGM Information 2014

Dec 2, 2014

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Shoply – AGM presentation 3 December 2014

Homewares and Domestic Appliances | Computers and Electronic Goods | Recreational Goods

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Disclaimer

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The material in this presentation has been prepared by Shoply Limited ACN 085 545 973 (Shoply) and is general background information about Shoply’s activities current at the date of this presentation. The information is given in summary form and does not purport to be complete. Information in this presentation, including forecast financial information should not be considered as advice or a recommendation to investors or potential investors and does not take into account investment objectives, financial situation or needs of any particular investor. These should be considered, with or without professional advice when deciding if an investment is appropriate. Persons needing advice should consult their stockbroker, solicitor, accountant or other independent financial advisor.

The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this presentation is released, published or distributed should inform themselves about and observe such restrictions.

This presentation does not constitute, or form part of, an offer to sell or the solicitation of an offer to subscribe for or buy any securities, nor the solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issue or transfer of the securities referred to in this presentation in any jurisdiction in contravention of applicable law.

Certain statements made in this presentation are forward-looking statements. These forward-looking statements are not historical facts but rather are based on Shoply’s current expectations, estimates and projections about the industry in which Shoply operates, and beliefs and assumptions. Words such as "anticipates”, "expects”, "intends,", "plans”, "believes”, "seeks”, "estimates”, and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors, some of which are beyond the control of Shoply, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward- looking statements. Shoply cautions investors and potential investors not to place undue reliance on these forward-looking statements, which reflect the view of Shoply only as of the date of this presentation. The forwardlooking statements made in this presentation relate only to events as Shoply the date on which the statements are made. Shoply will not undertake any obligation to release publicly any revisions or updates to these forward-looking statements to reflect events, circumstances or unanticipated events occurring after the date of this presentation except as required by law or by any appropriate regulatory authority.

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Agenda

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A transformational year

Financial summary FY14

Shoply strategy

Online shopping growth Scalable platform in place

Shoply vision

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A transformational year

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• Repositioned as pure play online shopping company

• Yahoo ceased its search engine media business earlier than anticipated which ceased all revenue in the Online Media division

• Successfully executed and integrated 4 shopping site acquisitions

• Strong revenue growth as acquisitions came online

• Commenced building online shopping scalable platform and framework

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Financial summary FY14

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Shoply Ltd financial summary:

 s

Revenue $1.7M

Net Loss $1.5M

• First year of Online Shopping revenue

• Includes less than 3 weeks contribution from Your Home Depot and Warcom sites

• • Expected revenue of $18m in FY 2015

• Investment in Online Shopping

• Online Advertising ceased

• Commenced building online shopping scalable platform and framework

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Shoply history and short-term objectives FY 2014 H2 2015 H1 2015 Transition Growth Foundation Transition from Integration of Increase revenue Online Your Home through organic Advertising to Depot and and acquisitive Online Shopping Warcom growth

Low volume high margin business to low margin high volume

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Strong revenue growth More than doubled revenue in the last four quarters

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• Key focus over last 12 months:

Online Shopping Sales

• building online presence through acquisitions

$4,000,000

$3,500,000

$3,500,000

• integrating the new businesses

$3,000,000

$2,500,000

• removing duplication to lower costs

$2,000,000 $1,500,000

• building a scalable platform to allow future growth

$930,000 $1,000,000 $460,000 $500,000 $190,000 $- Q2 2014 Q3 2014 Q4 2014 Q1 2015

• Significant opportunities for further growth:

• further acquisition opportunities

• additional scale benefits

• increase marketing to build brand awareness and organic growth

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Christmas quarter Expected 20% growth in FY Q2 2015

• Focus over Christmas period for consumer stores:

• Defend market position in kitchenware and home appliances through peak demand period

• Increased awareness of Your Home Depot through TV advertising in eastern states

• Increased product range to capitalise on customer key trends and drive customer traffic

• Increased email marketing to existing customers

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Online Shopping Sales

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$4,500 $4,200
$4,000
$3,500
$3,500
$3,000
$2,500
$2,000
$1,500
$930
$1,000
$460
$500 $190
$-
Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2
Forcast
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Shoply’s strategy Premium brands at great prices…all online

 Shoply is a pure online retailer

• positioned to capitalise on ecommerce growth fundamentals

• Shoply offers only leading consumer brands

• brands bring customers to the site

• brands already have a high level of customer trust

• fosters strong supplier relationships

• reduced risk to Shoply’s brand and balance sheet for any product faults

 Hybrid inventory model

• higher turnover and higher margin products purchased and warehoused – this offers speed and reliability of delivery

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• ‘drop shipping’ for remaining products to allow a wide breadth and depth range

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Online shopping growth drivers

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• Consumers seeking convenience and value for money

• Increasing level of sophistication and comfort amongst consumers

• Continued growth in consumers using mobile devices to browse and purchase products

• The entry of more online retailers and proliferation of group buying sites

Source: IBISWorld & Price Waterhouse Coopers (PWC)

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Moving up the conversion funnel Reaching new customers and activating existing customers

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Awareness
Interest
Preference
Purchase
Reach
Customer
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Shoply has traditionally captured customers at the purchase end of the funnel.

• Shoply is increasing awareness and interest by continuing online acquisition activities and in addition utilising targeted TV advertising starting with Your Home Depot

• Shoply provides quality branded products and a superior experience

• Marketing investment will translate into new customer purchases and revenues for Shoply

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Scalable platform in place

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Consolidated Back Office

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Customer Support
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Technology Platform
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Marketing
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Supplier Management
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Logistics
Management
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• Proven ability to acquire and absorb businesses

• Warehousing and distribution facilities in Melbourne and Sydney – 2 largest online retail markets

• Platform capable of supporting sales growth without further investment

• Castle Hill, NSW

• 2,300 m2, 80% utilisation

• Brunswick, VIC

• 220 m2, 65% utilisation

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Path to profitability

Organic and acquisitive growth with a goal to reach ≈$30m in turnover creating economies of scale

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≈$30M
FY 2015
$18M
FY 2014
$1.7M
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Organic growth

Acquisitive growth

• Increasing traffic and reaching new customers through new marketing channels

• Optimising conversion rate through A/B testing

• Increasing depth in kitchenware and office technology Continuing to pursue acquisitions in other attractive online retail categories

• Expanding into new product categories

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Shoply vision

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To become a leading ASX-listed online shopping company, via organic growth and consolidation across targeted market segments

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AGM presentation December 3, 2014

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