HIPAGES GROUP HOLDINGS LTD — Earnings Release 2021

Aug 25, 2021

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FY21 Result

26 August 2021

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1. Software-as-a-Service (SaaS)
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Australia’s largest online tradie marketplace and SaaS[1] provider, creating effortless solutions that help tradies streamline and grow their business and delight their customers.

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Agenda

1. FY21 overview & opportunity 2. Strategy 3. Financial & operational update 4. FY22 outlook

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FY21 overview & opportunity

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ROBY SHARON-ZIPSER Chief Executive Officer & Co-Founder

FY21 business highlights

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Strong performance in all key metrics as hipages achieves upgraded guidance for revenue, EBITDA and NPAT Awarded #2 Best Place to Work in Australia in the WRK+ 2021 Best Places to Work study Product enhancements and transition to subscription-only model drive higher ARPU and recurring revenue growth Consumer trust and brand awareness drive flywheel effect, increasing jobs from repeat consumers and unpaid channels Successful launch of Tradiecore field service software the next step in evolution to full-service SaaS model hipages uniquely positioned to benefit from structural tailwinds driving buoyant home improvement market Actively pursuing job channel expansion and ancillary revenue opportunities

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FY21 overview

Revenue $5.2m MRR[1] Up 27%

$52.7m Recurring revenue[2 ] Up 25% $55.8m Total revenue Up 19%

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Profitability 85% Gross margin[3] (FY20: 79%) $11.7m EBITDA[4] Up 91% EBITDA margin 21% $1.2m NPAT[5] Up 128%

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Key drivers 31.2k Subscription tradies Up 12% $1,536 Total Tradie ARPU[6] Up 29% 1.53m Job volume Up 12%

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1. Gross profit margin includes total revenue less cost of sales (consumer and tradie SEM spend and merchant fees).

2. Monthly Recurring Revenue @ June 2021 (includes GST). 2. FY21 revenue represents Statutory and Pro Forma revenue. FY20 Statutory revenue includes discontinued operations.

3. Pro Forma EBITDA before significant items 5. Pro Forma NPAT 6. Average Annual Revenue per Tradie (“Total Tradie ARPU”) is the annual operating revenue divided by the average of the opening and closing number of total tradies for the period.

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Australia’s largest online tradie platform

	Evolvingto
Large and growing addressable market	SaaS model and expanding into ancillary opportunities	Subscription-only product with94% recurring revenue
Over 31k subscription	Strong brand awareness of55%	3.5m usershave posted jobs
tradies

1. Gross Merchandise Value (GMV) in 2021 based on the average value of the 1.5m jobs posted on the hipages platform that are estimated to be completed . 2. Take rate is hipages’ revenue share of GMV

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Large addressable market with small market share

Total Addressable Market

Tradie advertising spend

# Trade Businesses

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hipages GMV [1] $110bn [2]
$2.6bn,
2.1% take rate
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hipages $1bn [2] hipages
share tradies 34.5k
5%
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257k [3]
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~2.4% of TAM

Lead sourcing highest ROI[2]

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~13% of TAM
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Large opportunity to increase our share of TAM and take rate beyond 2.1%

Estimated Gross Merchandise Value (GMV) in 2020 based on the value of the 1.1m claimed jobs on HPG platform. Expected spend on home improvement services in 2021 (Publicis Sapient, August 2021).

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FY21 FINANCIAL RESULTS | AUGUST 2021

Residential Trades Market (Publicis Sapient, September 2020); hipages Group Prospectus 2020, pp.28-31.

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Strategy

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ROBY SHARON-ZIPSER Chief Executive Officer & Co-Founder

Why we do what we do

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Purpose Transforming the trade industry, building better lives for everyone

Vision To be the most trusted partner in the trade industry

To win the tradie economy

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Overall strategic opportunity

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Value of the total addressable market

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Trade business spend

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Strategy Execution

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Grow core
category
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Expand category channels / partnerships

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New category
adjacencies
Inorganic
growth
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FY20-21 FY22-23 FY24+
Marketing effectiveness
Subscription product
Operational excellence
Tradiecore will optimise experience for tradies and consumers
Enhance product features
Medium to large Tradies
On-demand booking and fixed-price services
Retail
Community
New channel partners
Payments
Financial Services
New adjacencies
Marketing and media / data
Pursue inorganic opportunities that accelerate growth in a disciplined way
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~~Data innovation supporting key business growth drivers~~

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https://www.youtube.com/watch?v=j06K-p1TPGE
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FY21 financial & operational update

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MELISSA FAHEY Chief Finance & Operations Officer

Delivering sustainable growth

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MRR
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Total Revenue

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Operating cash flow

EBITDA

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$12.7m
$9.2m
($3.1m) FY19 FY20 FY21
($0.5m)
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1. Pro Forma Revenue, EBITDA and Operating Cash Flow. Pro Forma EBITDA is before significant items.

FY21 financial highlights

Revenue

MRR[1] up 27% drives recurring revenue growth of 25%

29% Total Tradie ARPU growth as we attract higher value subscribers

Operating Leverage

Gross margin[2] of 85%

Marketing efficiencies drive Opex as a % of revenue down to 79%

LTV/CAC improvement showcases attractive unit economics

Profitability

Pro forma EBITDA[3] of $11.7m and Pro Forma OCF of $12.7m

EBITDA margin expands to 21% NPAT[4] of $1.2m

Strong total revenue growth of 19% driven by business model transformation

Strong balance sheet with closing cash and funds on deposit of $32.6m and no debt

1. Gross margin is total revenue less cost of sales (consumer and tradie SEM spend and merchant fees). 3. Pro Forma EBITDA before Significant Items.

2. Monthly recurring revenue (MRR) @ June 2021 inclusive of GST.

Pro Forma Net Profit after Tax. Refer to Slide 34 for reconciliation to Statutory Profit.

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FY21 result summary Strong performance across all key metrics

Pro forma financial and operating metrics	FY21 FY20	FY21 FY20	FY21 FY20	Var (%) FY21F Upgrade Var (%)4	Var (%) FY21F Upgrade Var (%)4	Var (%) FY21F Upgrade Var (%)4
Financial Summary
Total revenue ($m)	55.8 46.9			19%	55.7 -
Recurring revenue ($m)	52.7 42.2			25%	52.6 -
Recurring revenue % Total	94% 90%			4pts 94%
Operating expenses1 ($m)	(44.3) (40.8)			9% (44.4) -
EBITDA2 ($m)		11.7	6.1	91% 11.5 2%
EBITDA2 margin		21%	13%	8pts 21% -
NPAT ($m)		1.2	(4.2)	128%	0.3	285%
Key Operational Metrics
MRR3 ($m)	5.2 4.1			27%	5.3 -1%
Job volume (m)	1.53 1.37			12% 1.55 -1%
Subscription tradies (‘000s)	31.2 27.9			12% 31.2 -
Total Tradie ARPU4 ($)	1,536 1,194			29% 1,525 1%

• Achieved upgraded FY21 revenue, EBITDA[2] and NPAT guidance

• 27% growth in MRR @ June 2021 driving recurring revenue growth of 25%

• Total revenue growth of 19%; 94% recurring

• Exit Q4 FY21 total revenue growth of 20%

• Strong revenue growth driven by:

• Subscription tradies up 12% on pcp

• Total Tradie ARPU up 29% on pcp

• Gross margin[5] of 85%

• EBITDA of $11.7m and EBITDA margin of 21%

• NPAT ahead of Prospectus forecast due to EBITDA outperformance, reduced finance costs and lower amortisation charge

• Average Annual Revenue Per Tradie (Total Tradie ARPU) is the annual operating revenue divided by the average of the opening and closing number of total tradies for the period.

• Pro Forma operating expenses

• Pro Forma EBITDA before significant items.

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1. Monthly recurring revenue (MRR) @ June 2021 inclusive of GST.

2. Gross margin includes total revenue less cost of sales being consumer and tradie SEM spend and merchant fees

Strong growth in MRR[1] Acceleration in MRR as more tradies subscribe and ascend to higher price points

MRR[1]

27%

• MRR[1] of $5.2m @ June 2021, up 27% vs pcp, underpins strong recurring revenue growth

• Driven by growth in subscription tradies, jobs and APRU

• Flywheel effect of double-sided marketplace

• MRR 1% behind upgraded FY21 guidance due to impact of COVID-19 in June

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1. Monthly Recurring revenue (“MRR”) is the monthly amount of cash revenue recognised from subscription-based agreements (inclusive of GST)

Subscription-only model drives ARPU growth of 29%

Pre November 2019

• Transactional product – small annual listing fee and tradie would pay each time they claimed a job lead

• Subscription product - monthly subscription product with contract terms of 6-12 months

Post November 2019

• Moved to a subscription-only product offering for new tradies

• New version of subscription package with new, improved features

• Removed lower price tier (< $69)

• Automatic 12-month renewal

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Starter Advanced Premium Premium Plus
Packages Packages Packages Packages
$69 or $99 $199 or $299 $399 or $499 $599+
Monthly Subscription Monthly Subscription Monthly Subscription Monthly Subscription Fee
Fee Fee Fee
$90/$125 $250/$375 $500/$625 $750+
Standard Lead Credit Allowance Standard Lead Credit Allowance Standard Lead Credit Allowance Standard Lead Credit Allowance
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New subscribers joining platform at higher price points and existing subscribers upgrading to higher price tiers

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Subscription model drives growth in Total Tradie ARPU[1] Business model transition and platform enhancements deliver higher value tradies

Total Tradie ARPU

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29%
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• Total Tradie ARPU[1] of $1,536 up 29% on pcp

• ● Outperformed FY21 Upgrade ● Driven by:

• Move to subscription-only product

• New and improved features

• New subscribers joining at higher price points

• Existing subscribers upgrading to higher price tiers

• Successful program targeting mediumsized tradies in H2 joining platform at average yields of ~$600 (vs. total avg of ~$130)

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1. Average Annual Revenue per Tradie (“Total Tradie ARPU”) is the annual operating revenue divided by the average of the opening and closing number of total tradies for the period.

Subscription tradie base continues to expand Brand awareness drives increased subscriptions

Total subscription tradies

12%

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● Total subscription tradies up 12% in FY21 to 31.2k ● In line with FY21 Upgrade ● Successful brand campaign targeting tradie customers resulted in increased registrations and brand awareness

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Lifetime Transaction Value / Customer Acquisition Costs[1] Significant improvement in unit economics

Annualised LTV/CAC

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• LTV vs CAC ratio increasing as a result of improved unit economics

• ~60% increase in ARPU and ~40% reduction in CAC from FY19-FY21

• FY21 outperformed Prospectus forecast

• LTV/CAC is calculated as LTV of total tradie ARPU over the CAC per Tradie over the period. Lifetime years using an annualised churn rate of 35%in FY21 (i.e. (1-(1-monthly counter churn)^12)). CAC allocates a portion of sales, marketing and Operations and Administration costs to tradie acquisition. CAC for FY21 represents ~17% of total operating expenses

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Flywheel effect driven by growth on both sides of marketplace

Subscription tradies

Users

Subscription tradies increased from 77% to 90% of customer base

3.5m unique users posted a job to hipages platform to end FY21

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12%
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6–12-month contracts, automatic renewal
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15%
3.5m
3.1m
2.6m
FY19 FY20 FY21
Lifetime cumulative unique consumers
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FY21 subscription revenue bridge

New tradies and ascensions drive subscription revenue higher

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• FY21 subscription revenue growth driven by:

o Strong demand from new subscribers joining the platform

o Net ascensions as tradies moved to higher tier subscription products

• Total monthly churn 3.5%[1] in line with Upgrade forecast and better than FY21 Prospectus of 3.8%. Annualised churn as % revenue 25%.

• Reported churn inflated as 10-15% of new tradies are returning customers

• Successfully targeting higher value tradies with inherently lower churn. In FY21 average price point for new tradies was $125 and in Q4 FY21 $131 with the average price point for all subscription tradies at $161.

• Successfully launched Hunter program targeting medium to large-sized tradie businesses, joining at average price points of $600 in Q4 FY21

• Moving up the price curve and launching Tradiecore solutions expected to drive further improvements in retention and customer stickiness

o 2.6% for tradies on packages >$129 pm

• 2.2% for tradies on packages >$299 pm

Tradies on packages >$129 represent ~40% of tradie base but 75% of MRR @ June 2021

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1. Churn is defined as tradie counter churn and is calculated as the total churned tradies divided by the average number of tradies over the period.

Pro Forma Operating Expenses Marketing efficiency drives increased operating leverage

Expenses as a % revenue1	FY19	FY20	FY21	FY21F Prospectus
Operations and administration	39%	34%	35%	35%
Technology Development	4%	3%	4%	3%
Marketing	51%	39%	32%	33%
Sales	13%	11%	9%	10%
Total	107%	87%	79%	82%

• Expenses as % of revenue were 79% of revenue in FY21 after reinvestment in growth in H2.

• Sales, service and marketing efficiencies driving operating leverage for the business following efficiencies and automation implemented in FY20 Efficiencies for Growth project

Marketing

Ongoing reduction in total expenses as % revenue

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• Reduced reliance on SEM spend due to shift from paid to unpaid channels and increase in customer and consumer brand awareness

Technology development

• Investment in technology team to drive growth, $1m increase in costs, 14%

• 76% of technology development costs capitalised and amortised over 3 years

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1. Pro Forma Historical Information –FY19 and FY20. FY21 Pro Forma Prospectus Forecasts

Effective investment driving increased brand awareness

• Consumer brand awareness remains strong at 55%

• Market leader for top-of-mind awareness at 20% vs. nearest competitor at 12%

• Successful brand campaign across radio and digital increased tradie customer brand awareness from 35% to 49%

• Sponsorships of The Block and Better Homes & Gardens

• Jobs from paid channels now only 23% of total jobs

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1. Top-of-mind awareness for websites that connect consumers with tradespeople

Building consumer trust and brand awareness

14% increase in job volume, strong growth in jobs from repeat consumers and unpaid channels[1]

64% of jobs from repeat consumers

77% of jobs from unpaid channels

3.5m unique users posted a job to hipages platform as at FY21

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22% increase in jobs from repeat consumers[1]

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25% increase in jobs from unpaid channels[1]

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1. FY21 on pcp

FY21 Pro Forma Financial Summary

$m FY21 FY20	$ Var % Var
Recurring 52.7 42.2	10.5 25%
Transactional 1.7 3.4	(1.7) (50%)
Operating Revenue 54.4 45.6	8.8 19%
Other 1.4 1.3	0.0 3%
Total Revenue1 55.8 46.9	8.9 19%
Sales (5.0) (5.0)	0.1 (1%)
Marketing (17.8) (18.4)	0.5 (3%)
Technology and Development (2.1) (1.5)	(0.7) 46%
Operations and Administration (19.4) (16.0)	(3.4) 22%
Total Operating Expenses (44.3) (40.8)	(3.5) (9%)
Other Income and Expenses 0.2 0.0	0.2
EBITDA before significant items 11.7 6.1	5.6 91%
Significant Items (1.2) (0.1)	(1.1)
EBITDA after significant items 10.5 6.0	4.5 74%
Depreciation & Amortization (8.6) (9.0)	0.4 (5%)
EBIT 1.9 (3.0)	4.9 165%
Net Finance Costs (0.8) (1.2)	0.4 (36%)
NPAT 1.2 (4.2)	5.3 128%

• Strong revenue growth in FY21

• ● Recurring revenue growth of 25%, total revenue up 19% on pcp

• 94% of total revenue was recurring

• ● Gross margin[2] of 85% (FY20:79%)

• Total operating expenses 9% lower on pcp due to sales and marketing efficiencies net of investment in growth

• EBITDA before significant items of $11.7m (FY20: $6.1m)

• EBITDA margin of 21% (FY20: 13%)

• ● NPAT of $1.2m vs net loss of ($4.2m) in FY20

• FY21 Statutory revenue is the same as Pro Forma revenue. FY20 Statutory revenue includes discontinued operations.

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1. Gross margin includes statutory total revenue less cost of sales (consumer and tradie SEM spend and merchant fees). 3. Numbers may not add due to rounding.

FY21 Cash Flow

$’000s Pro forma FY211 Statutory FY21 Statutory FY202	$ Var
Receipts from customers (inclusive of GST) 60,346 60,346 52,168	8,178
Payments to suppliers and employees (inclusive of GST) (47,857) (47,857) (40,449)	(7,407)
Transaction costs in relation to secondary raise - (4,771) -	(4,771)
Interest received 231 231 158	73
Interestpaid (31) (1,088) (1,805)	717
Net cash flows from operating activities 12,690 6,862 10,072	(3,021)
Payments for purchase of business (88) (88) (175)	87
Payments for property, plant and equipment (368) (368) (191)	177
Payments for intangible assets (6,806) (6,806) (6,666)	(140)
Proceeds from funds on deposit - - 1,018	(169)
Proceeds from divestments 121 121 289	(169)
Net cash flows used in investing activities (7,141) (7,141) (5,725)	(1,416)
Proceeds from issue of shares - 40,300 -	40,300
Proceeds from borrowings - 3,000 3,500	(500)
Repayment of borrowings - (16,002) (1,443)	(14,559)
Payment of principle portion of lease liabilities (2,733) (2,733) (2,869)	136
Payment of transaction costs on issue of new shares - (2,805) -	(2,805)
Net cash flows from financing activities (2,733) 21,760 (812)	22,572
Net increase /(decrease) in cash and cash equivalents 2,816 21,481 3,535	17,946
Cash and cash equivalents at the beginningof theperiod 8,822 5,287	3,535
Cash and cash equivalents at end of theperiod 30,303 8,822	21,481

• Strong FY21 Pro Forma operating cash flow (OCF) of $12.7m with Pro Forma EBITDA to OCF conversion of 109%

• Receipts from customers of $60.3m up 20% on a Pro Forma basis

• Strong Statutory FY21 net cash inflow of $21.5m driven by:

• IPO proceeds of $40.3m used to pay $2.7m of IPO offer costs in relation to primary raise and $16.0m in repayment of borrowings

• Positive Statutory operating cash flow of $6.9m after one-off IPO transaction costs in relation to secondary raise of $4.8m and nonrecurring interest costs of $1.1m in relation to debt retired on IPO

• Pro Forma operating cashflow normalised for IPO transaction costs ($4.6m) and non-recurring interest ($1.1m). Financing cashflow is normalised for proceeds from issues of shares , convertible note raise, repayment of borrowings and IPO transaction costs. 2. FY20 Statutory includes receipts from customers from discontinued operations

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FY21 Statutory Balance Sheet

$’000s	30 Jun 21 30 Jun 20	30 Jun 21 30 Jun 20	30 Jun 21 30 Jun 20	$ Var
Cash and cash equivalents		30,303	8,822	21,481
Funds on deposit	2,271 2,271			-
Trade and other receivables	1,461 1,426			35
Otherassets	1,976 1,086			890
Total current assets	36,011 13,605			22,406
Other assets	639 922			(283)
Financial assets at fair value through other comprehensive income	800 800			-
Property, plant and equipment	1,868 2,323			(455)
Right-of-use asset	6,370 6,979			(609)
Intangible assets	11,596 10,726			870
Total non-current assets	21,273 21,750			(477)
Total assets	57,284 35,355			21,929
Trade and other payables	7,235 6,720			515
Contract liabilities	3,715 3,510			205
Borrowings	- 1,795			(1,795)
Provisions	1,461 1,547			(86)
Lease liabilities	3,086 2,283			803
Total current liabilities	15,497 15,855			(358)
Borrowings	- 12,118			(12,118)
Provisions	552 397			154
Lease liabilities	5,495 7,384			(1,889)
Other	- 221			(221)
Total non-current liabilities	6,047 20,120			(14,074)
Total liabilities	21,544 35,975			(14,432)
Net assets	35,740 (620)			36,360
Issued capital	315,775 48,087			267,688
Reserves	(220,443) 4,017			(224,460)
Accumulated losses	(59,592) (52,724)			(6,868)
Total equity		35,740	(620)	36,360

• Strong FY21 total equity position of $35.7m, an increase of $36.4m driven by:

• Increase in total assets of $21.9m primarily due to increased in cash balance

• Reduction in total liabilities of $14.4m due to repayment of borrowings, no debt

• Strong cash balance of $30.3m provides financial flexibility to execute the strategic plan for growth – organic and inorganic

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Profit Reconciliation

Profit Reconciliation
	$’000s
Reported EBITDA (from continuing operations)	5,603
Transaction costs related to IPO	4,784
Non-recurring remuneration	1,166
Net loss on conversion of convertible notes	467
Public companycosts	(345)
Pro forma EBITDA before significant items	11,675

	$’000s
Reported NPAT (from continuing operations)	(6,199)
Non-recurring interest and gain / losses on debt repaid on IPO	2,932
Public company costs	(345)
Transaction costs related to IPO	4,784
Pro forma NPAT	1,172

• Pro forma EBITDA of $11.7m after:

• Removal of IPO transaction costs in relation to the secondary raise ($4.8m)

• Non-recurring remuneration and conversion loss on convertible note retired on IPO

• Pro-forma adjustment to reflect public company costs as if incurred for the full period

• Pro forma NPAT of $1.2m after:

• Adjustments noted above

• Non-recurring interest and other gain/ losses on debt repaid on IPO

FY21 FINANCIAL RESULTS | AUGUST 2021

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FY22 outlook

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ROBY SHARON-ZIPSER Chief Executive Officer & Co-Founder

Managing COVID-19

Near-term volatility, long-term opportunity

• Supporting our tradie customers:

• Short-term discounts and lead credit extension

• Temporary contract pause

• COVID safe badge for fully vaccinated tradies

• Moderate impact on revenue growth rate expected for duration of lockdown (Q4 FY21: marginal)

Victoria marketplace activity 2020

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Victoria
National
lockdown
lockdown
Restrictions
Restrictions lifted
lifted
Registrations
Jobs
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• Subscription model highly resilient in previous lockdowns

• Strong rebound expected when lockdowns ease

• Australian home improvement market remains very buoyant, longterm opportunity as attractive as ever

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FY22 outlook

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Continue to successfully navigate the impacts of COVID-19 and support our tradie customers

Migrate remainder of transactional tradies onto subscription product by end FY22

Evolution to SaaS model continues, with Tradiecore to offer expanded functionality

Expand into new job channels and opening ancillary revenue opportunities

Pursue growth opportunities to strengthen market leadership and win the tradie economy

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Q&A

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Disclaimer

Important notice

The material in this presentation has been prepared by hipages Group Holdings Limited (ASX: HPG) ABN67 644 430 839(“hipages” or the Company") and is general background information about hipages’ activities current as at the date of this presentation. The information is given in summary form and does not purport to be complete in every aspect. In particular you are cautioned not to place undue reliance on any forward looking statements regarding our belief, intent or expectations with respect to hipages’ businesses, market conditions and/or results of operations, as although due care has been used in the preparation of such statements, actual results may vary in a material manner. Information in this presentation or subsequently provided to the recipient of this information, whether orally or in writing, including forecast financial information, should not be considered advice or a recommendation to investors or potential investors in relation to holding, purchasing or selling securities in the Company. Before acting on any information you should consider the appropriateness of the information having regard to these matters, any relevant offer document and in particular, you should seek independent financial advice.

The financial information should be read in conjunction with the basis of preparation set out in Note 1 of the Company’s accounts.

Forward-looking statements

This presentation may contain forward-looking statements which are statements that may be identified by words such as “may”, “will”, “would”, “could”, “expects”, “intends”, “anticipates”, and other similar words that involve risks and uncertainties. These statements are based on an assessment of present economic and operating conditions and on a number of best estimate assumptions regarding future events and actions that, at the date of this document, are expected to take place. No person who has made any forward-looking statements in this document has any intention to update or revise forward-looking statements, or to publish prospective financial information in the future, regardless of whether new information, future events or any other factors affect the information contained in this document, other than to the extent required by law. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of the Company.

This presentation also contains references to certain intentions, expectations and plans of the Company. These intentions, expectations and plans may or may not be achieved. They are based on certain assumptions which may not be met or on which views may differ.

To the maximum extent permitted by law none of hipages, its subsidiaries, or its respective officers, employees, agents or consultants nor any other person accepts any liability, including, without limitation, any liability arising out of negligence, for any loss arising from the use of the information.

FY21 FINANCIAL RESULTS | AUGUST 2021

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