IKEGPS GROUP LIMITED — AGM Information 2017

Aug 30, 2017

IKE FY17 Annual General Meeting. CEO presentation.

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Important notice

This presentation is given on behalf of ike[GPS] Group Limited (Company Number NZ 1292732, NZX:IKE, ASX:IKE)

Information in this Presentation:

• is for general information purposes only, and is not an offer or invitation for subscription, purchase, or recommendation of securities in ikeGPS Limited;

• may contain information from third parties believed to be reliable – however, no representations or warranties are made as to the accuracy or completeness of such information.

• should be read in conjunction with, and is subject to, ike’s FY17 financial statements, market releases, and information published on ike’s website (www.ikegps.com);

All information in this presentation is current at the date of this presentation, unless otherwise stated.

• includes forward-looking statements about ike and the environment in which ike operates, which are subject to uncertainties and contingencies outside of ike’s control – ike’s actual results or performance may differ materially from these statements;

All currency amounts are in NZ dollars unless stated otherwise.

Receipt of this Document and/or attendance at this presentation constitutes acceptance of the terms set out above in this Important Notice.

• includes statements relating to past performance, which should not be regarded as a reliable indicator of future performance; and

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Results

Result after tax

	YEAR ENDED	YEAR ENDED	YEAR ENDED	YEAR ENDED
	FY 14	FY 15	FY16	FY17
Revenue and other income Expenditure Loss before depreciation, amortisation, financing and tax Depreciation and amortisation Foreign exchange (losses) / gains Other expenses from IPO Loss before financing and tax Net finance income / (expenses) Income tax (expense) / benefit Loss attributable to owners of ikeGPS Group	Audited FY14A $'000's 1,884 (3,600) (1,716) (363) (158) - (2,237) (49) 24 (2,262)	Audited FY15A $'000's 4,026 (9,215) (5,189) (807) 625 (272) (5,643) 565 (3) (5,081)	Audited FY16A $'000's 9,214 (17,392) (8,178) (1,306) 280 - (9,204) 361 7 (8,836)	Audited FY17A $'000's 5,840 (14,385) (8,545) (1,972) (135) (134) (10,787) 69 (9) (10,727)

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Revenue momentum re-established 2H FY17 with new subscription products introduced

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1H 2H 1H 2H 1H 2H 1H 2H
FY 14 FY 15 FY 16 FY 17
Revenue
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Utilities and communications
Signage and construction
Contract revenue
Government grants
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Group operating results & net assets

	Total operating revenue & government grants Net loss before other comprehensive income Net assets	FY2014 $'000’s 1,834 (2,262) 3,949	FY2015 $'000’s 4,026 (5,081) 22,122	FY2016 $'000’s 9,214 (8,836) 13,241	FY2017 $'000’s 5,840 (10,727) 10,636

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FY18 outlook and progress update

A strong Q1 FY18

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Progress against KPI’s

Metric	Expectation at commencement of FY2018	Q1 update
Customer and	Greater than 40% growth in IKE new unit sales against FY17, with	On track: 70 systems shipped against full year guidance
market growth	additive revenue from existing IKE4 customers converting 2nd year	for >300 systems.
	cloud subscriptions.
	Greater than 50% growth in Spike new units sales against FY17, with	On track: 830 units ordered and 630 units shipped against
	additive revenue from new cloud subscriptions.	guidance for >3,000 units.
Cash	Transition to cash breakeven in FY18.	On track, higher revenue and lower opex against PCP.
Gross margins,	Gross margins on IKE-branded products improving by up to 5%	On track.
EBITDA, pricing &	margin points over FY17 actual of 69%.
business models
	EBITDA to improve significantly against FY17.	On track.
	IKE4 and Spike revenues continues to develop a higher bias to	On track.
	recurring revenue via cloud-based software subscriptions.
Operating	Operating costs will decrease in absolute dollar terms against FY17.	On track: Q1 opex 28% or c $1m lower than PCP.
expenditure
	Sales and marketing costs will be at a similar level to FY17 as	On track.
	investment toward acquiring customers and growing market share
	continues.
	Engineering and corporate costs will decrease.	On track.

IKE4: a closer look at new products and market development

The pole solution for electric utility, communications and engineering companies.

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IKE Analyze introduced launched and sold in Q1

     3. Convert data to Pole Load

  2. Input and process

1. Collect poles in

2. Analysis or Make Ready

3. the field pole data Engineering analysis

4. Old way

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IKE Analyze
IKE Analyze
Cloud
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IKE way
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1. Common output such as Pole Load Analysis

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= customer resource
= IKE resource
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IKE Analyze explained launched and sold in Q1

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1. A customer takes photos of assets in the

field, and uploads the photos to the IKE Cloud

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1. IKE Analyze dimensions the asset

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IKE Analyze explained cont. launched and sold in Q1

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1. IKE Analyze reports on the asset. In this case a completed pole loading analysis.

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A focus on the pole owners on the west coast of USA

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• “IKE4 is today in all of the Investor Owned Utilities in the State of California and State of Washington.”

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With numerous IKE4 target accounts developing positively

3,200

300 U.S. customers using the IKE3 or IKE4 platform every day to measure and manage their pole data

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U.S. Electric Utilities

Target accounts engaged around the IKE4 platform with the potential to grow to more than $1m revenue

1,000 U.S. Engineering Firms

Many thousands of new pole records are being added, analysed and managed in the IKE Cloud, every day.

500 U.S. Communications Firms

Update on example Target Account referenced in FY17 Results briefing

In the FY17 result announcement an example target account was described as:

• A national communications company deploying mobile & fibre services using aerial infrastructure.

• With >300 regional engineering offices and >200 engineering firms contracting to it to deliver pole services.

IKE’s objective is to become the defined pole standard for the Group nationally.

Update:

The IKE4 pilot project has been completed. Report completed July 2017. Four regional offices trialled IKE4, testing for value, benefits and deployment scalability.

The engineering offices hosting the pilot project have adopted or purchased IKE4 since the completion of the trial. The summary report has recommended corporate IKE4 adoption:

• Citing >50% productivity & cost benefits over existing work practices

• The potential for this account is for initial higher volume purchases from 2H FY18

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The IKE4 Cloud is managing more & more asset records

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“Ingesting and processing thousands of new pole records every day, and growing exponentially. More than 1m assets are expected to be IKE’d in the coming 12 months.”

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New IKE4 products & business models Expanding revenue and service models to support every type of pole customer

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Spike: a closer look at new products and market development Spike for the AEC market via product integration with AutoCAD. Spike for the Geospatial market via product integrations with Esri.

Introducing Spike-for-uniVERSE

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Growing proof points across targeted industries

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Defense and intel agencies, such as the Defense Intelligence Agency and Special Forces

>4,000 Sign & Graphics businesses. Using Spike everyday for estimates, quotes and design. TAM of 150k businesses

Transportation. >40% of U.S. State Department of Transportation. Driving to Esri mobile integration.

Tens of thousands contractors

and construction groups via the Stanley Smart Measure Pro

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Law Enforcement, for accident investigation.

Local government and city councils for asset management.

Insurance.

Hundreds of Real Estate and Appraisal companies.

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Introduced scaled and perspective-corrected images …straight from Spike to AutoCAD, for design processes in the AEC market

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“Today over 200 million customers use Autodesk® software. AutoCAD is their flagship software product for 2D and 3D design, and is used by more AEC professionals globally than any other CAD package.”

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IKE is initially targeting the >25,000 architecture companies in the U.S. market.

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Introduced Spike-for-ArcGIS

…..Carbon County, Utah realise >500% ROI in a month with Spike-for-Collector (by Esri) for asset inspection & sign inventory program

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“What used to take five weeks to inventory 1,500 signage, with Spike-for-Collector we were able to collect 322 signs/day or 1,620 signs/week. This reduced our overall cost from $50,000 to $5,000 - a staggering 568% ROI on Carbon County’s investment” .

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Daniel Campbell, Road Shop Supervisor, and Mellissa Lasslo, GIS Department, Carbon County, Utah.

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Introduced Spike-for-uniVERSE

…hardware integration, bundling and co-marketing with OtterBox Inc.

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Joining forces with the largest smartphone protection and case-maker in the U.S., OtterBox Inc., to bring users a new version of Spike that integrates with the OtterBox uniVERSE Case System.

The uniVERSE case features a slotted rail that allows users to attach their Spike interchangeably to an iPhone or iPad without removing the case, making it quicker and easier to attach Spike in the field.

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The Spike-for-uniVERSE bundle provides an enhanced out-of-box user experience, a more consistent measurement experience in the field, and a higher sales ASP and margin profile for IKE against other Spike SKU’s.

Further product recognition from industry & customers

“ Spike won the Pinnacle Award at the National Hardware Show, the largest global event for the building and home improvement industry.” 1[st] Place Winner 23 A focus on translating this to the expansion of the Spike channel and partner footprint.

Placement concluded to support working capital requirement

A working capital requirement driven by various growth factors

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Alongside a focus on working capital efficiencies

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Stanley Black & Decker Invoice Financing Facility for
Cost of Goods reductions some IKE4 product sales
Leveraging SBD’s Invoice Financing
IKE has materially lowered the cost of Facility for Stanley Smart Measure In Q1 IKE established a small
goods on the hardware component of Pro product shipped. receivables financing facility for some
US receivables.
As an example, over the past 18
months the cost of goods per Spike
This was via design-for-manufacture
processes and the outsourcing of
Lean Balance Sheet
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Thank you

Glenn Milnes, CEO glenn.milnes@ikegps.com +1 720-418-1936

Chris Birkett, CFO chris.birkett@ikegps.com +64 21-442-127

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