JCURVE SOLUTIONS LTD — AGM Information 2015

Nov 16, 2015

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2015 Annual General Meeting

17[th] November 2015 ASX:JCS

Chairman’s Address BRUCE HATCHMAN

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WHAT WE DO TODAY

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JCurve
Big software for
small business
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TEMS
Telecom Expense
Management
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• JCurve ERP is the economical all-in-one solution for SMEs

• Includes cloud accounting, CRM, inventory management and eCommerce capabilities

• Automates the administration of telecoms expenditure and improves visibility of usage

• Responding to bill shock caused by excess data and or voice charges

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2015 RECAP

Financials	– Year ended 30 June	– Year ended 30 June
	($ millions)
	2015	2014
Revenue	11.3	11.6
EBITDA loss	(6.1)	(1.2)
Impairment	5.2	0.5
Income tax*	0.6	(0.1)
Net loss (excl. impairment)	(0.3)	(0.8)
Cash at bank	2.0	2.8

Highlights

• Strong growth in JCurve revenue, up +89% to $4.1m driven by improved marketing, sales processes and customer retention

• TEMS revenue of $5.6m was impacted by a full year’s consolidation of Full Circle and significant pricing pressure

• Impairment included a $4m write off for goodwill recognised in the JCurve Business Software acquisition

• The company at year end held $2 million cash and was debt free

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• Includes rebate for research and development

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TRENDS IMPACTING THE BUSINESS

JCURVE TAILWINDS

Cloud technology adoption

Growing trade liberalisation driving an increase in the large market size of wholesale distributors

Supportive policy framework and political sentiment

Adoption and growth of NetSuite in the fast growing Asia Pac region

TEMS HEADWINDS

‘All you can eat’ and large buckets of included data and roaming from telecom carriers

Internet enabled communication tools such as Skype, Line, WhatsApp, Viber and Facetime bypassing telecom carriers Fewer complaints to the Telecommunications Industry Ombudsmen

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JCURVE’S COMPETITIVE ADVANTAGES

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LEADING
PRODUCT
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GREAT
SERVICE
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WORLD
CLASS
PARTNER
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• Scalable, all-in-one, designed for small business, at the right price point

• World class technology platform

• Training and culture

• Value add services incl. small business consulting

• Improving customer satisfaction results

• NetSuite Inc.

• Provider of the world’s #1 cloud ERP solution with more than 24k customers

• Strong balance sheet, NYSE listed

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OUR STRATEGY IS FOCUSED ON THREE OPPORTUNITIES

Strategic opportunities Objectives

Objectives Time frame • Maximising value from the Drive productivity Short term TEMs business • Harvest cash to fund growth in JCurve • Customer growth • Build a large and sustainable base of Investing to grow the JCurve Short to medium monthly recurring revenue business term • Consolidate the product offering under JCurve Pro, renaming to ‘JCurve’ • Diversify our product range Leveraging our core strengths Longer term • and capabilities Reinvest for further growth

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2016 OUTLOOK

		Measure		FY15		FY16		FY16
		($'s in	millions)			original outlook		updated outlook*
		JCurve Group
		•	Revenue	•	$11.3m	•	Range: $11m to $11.2m	•	Range: $10m to $10.5m*
		•	EBITDA#	•	($0.9m) loss	•	Range: ($1m to $0.8m) loss	•	Range: ($0.5m to $0.2m) loss*
		•	NPAT#	•	($0.3m) loss	•	Range: ($0.4m to $0.2m) loss	•	Range: ($0.2m) loss to $0.1m
		#	excl. Impairments						profit
		JCurve product
		•	Customers	•	560	•	Not provided	•	Strong growth
		•	Churn	•	10%	•	Not provided	•	Below 10%

Product revenue trends impacting FY16

• JCurve - strong double digit growth

• TEMS - continued weakness driven by structural headwinds

• South African telco - discontinued having contributed $0.7 million in FY15

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• Updated since August 2015 to include findings from the strategic review.

IN SUMMARY

JCurve Solutions has strong fundamentals

• Debt free with $2 million cash at bank at June 30 2015

• Large and growing base of monthly recurring revenues from the JCurve product

• Unique JCurve product capability

• Well positioned to drive growth from exposure to a growing SME business market

The changing business mix positions the company well for sustainable long term growth

• There is a positive and strong outlook for the JCurve business

• The structural headwinds facing the TEMS business have strengthened

We want to be regarded as a company that delivers on its commitments

• The Board and management refresh has provided the company and it’s shareholders with:

• An independent Chairman

• An experienced CEO and CFO

• FY15 results delivered in range or slightly ahead of guidance

• A considered strategic approach as demonstrated by this strategic review

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Investing to grow the JCurve business STEPHEN CANNING CEO JCurve Solutions

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“To be the leading enabler of small business growth in Australia and New Zealand through the delivery of Business Management Systems and Services”.

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“We help small businesses grow into big businesses, by delivering whole-of-business cloud-based Business Management solutions”

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JCURVE’S UNIQUE CAPABILITIES

There are no other cloud-based “all-in-one” business systems available at a similar price-point with the same depth of functionality and ability to scale

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COMPETITIVE ADVANTAGE

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JCURVE’S SIGNIFICANT OPPORTUNITY

JCurve ERP is the only small business cloud-based “all-in-one” system that can support a multi-channel sales for the Wholesale trade in Australia and New Zealand.

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WHO ARE WE SELLING TO?

Our target market is growing Wholesale & Distribution businesses in Australia and New Zealand, typically employing less that 20 employees. There are 79,000 such businesses. 5 to 20 employees 1 to 4 employees 58,000

1 to 4 employees 21,000

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IMPROVING TRENDS ACROSS IMPORTANT KPIs

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Annual contract value: Number of average users Total customers and
new sales $000's monthly churn
6
Total customers (LHS)
$120
% Churn (RHS)
3.0%
500
2.0%
3
$60
1.0%
$- 0 400 0.0%
Dec-14 Feb-15 Apr-15 Jun-15 2011 2013 2015 Dec-14 Sep-15
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JCURVE RECURRING REVENUE GROWTH

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$6,000,000 JCurve Recurring Revenue
$4,000,000
$2,000,000
$0
2009 2010 2011 2012 2013 2014 2015 2016
2009 2010 2011 2012 2013 2014 2015 2016 (forecast)
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• WE ARE SUPPORTED BY A COMMITTED, WORLD CLASS COMMERCIAL PARTNER

• We are the exclusive reseller of NetSuite’s SME edition in ANZ

• We sell JCurve ERP to small businesses

• Joint marketing and training support

• Targeting wholesale & distribution segment

• • NetSuite Direct Sales do not compete in JCurve’s market

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WE ARE FOCUSED ON CUSTOMER ACQUISTION AND RETENTION

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5,000
1,000
3,000
560
FY15 actual CY17 ambition FY15 actual CY17 ambition
Customers Individual users
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10%
7% to 9%
FY15 actual CY17 ambition
Customer churn
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CONCLUSION

JCurve exists to help small businesses grow

JCurve has improving operational trends on important KPIs

JCurve uses a cloud ERP as a platform for this growth

JCurve is well supported by a world class partner in NetSuite

JCurve provides a complete solution: systems, processes, coaching, training – not just technology

We have a plan to grow and are focused on customer acquisition and retention

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CONTACT DETAILS

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Stephen Canning
CEO JCurve Solutions
e.
stephen.canning@jcurve.com.au
www.jcurvesolutions.com
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