JCURVE SOLUTIONS LTD — AGM Information 2017

Nov 21, 2017

JCurve Solutions Annual General Meeting

ASX: JCS

22 November 2017 9:30am AEDT

w w w . j c u r v e s o l u t i o n s . c o m

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Important Information

The information contained in this Presentation (“Presentation”) has been prepared by JCurve Solutions Limited (“the Company”) and is being delivered for informational purposes only.

The Company has prepared the Presentation Materials based on information available to it at the time of preparation. No attempt has been made to independently verify the information contained in this Presentation. The Presentation does not purport to contain all information that a prospective investor may require. While the information contained herein has been prepared in good faith, neither the Company nor its shareholders, directors, officers, agents, employees, or advisors give, has given or has the authority to give, any representations or warranties (express or implied) as to, or in relation to, the accuracy, reliability or completeness of the information in this Presentation, or any revision thereof, or of any other written or oral information made or to be made available to any interested party or its advisors (all such information being referred to as “information”) and liability therefore is expressively disclaimed. Accordingly, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisors take any responsibility for, or will accept any liability whether direct or indirect, express or implied, contractual, tortuous, statutory or otherwise, in respect of the accuracy or completeness of the information or for any of the opinions contained herein or for any errors, omissions or misstatements or for any loss howsoever arising from the use of this Presentation. In furnishing this Presentation, the Company does not undertake or agree to any obligation to provide the recipient with access to any additional information or to update this Presentation or to correct any inaccuracies in, or omissions from, this Presentation which may become apparent.

This Presentation should not be considered as the giving of investment advice or recommendations by the Company or any of its shareholders, directors, officers, agents, employees or advisors. Each party to whom this Presentation is made available must make its own independent assessment of the Company after making such investigations and taking such advice as may be deemed necessary. In particular, any estimates or projections or opinions contained herein necessarily involve significant elements of subjective judgement, analysis and assumption and each recipient should satisfy itself in relation to such matters.

This Presentation may contain “forward looking statements”. Where the Company expresses or implies an extension or belief as to future events or results such expectation or belief is expressed in good faith and believed to have reasonable basis. However, “forward looking statements” are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by such “forward looking statements”. The Company does not undertake any obligation to release publicly any revisions to any “forward looking statement” to reflect events or circumstances after the date of this Presentation or to reflect the occurrence of unanticipated events, except as may be required under applicable laws.

All forward looking statements contained in this Presentation is qualified by the foregoing cautionary statements. Recipients are cautioned that forward looking statements are not guarantees of future performance and accordingly recipients are cautioned not to put undue reliance on forward looking statements due to the inherent uncertainty therein.

1 | Annual General Meeting Presentation

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Chairman’s Address

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Bruce Hatchman

Chairman

2 | Annual General Meeting Presentation

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Strategic Direction

Purpose and Vision

Since FY2016, JCurve Solutions has embarked on a sustained period of ambitious business growth aiming to increase revenues, diversifying market offerings, expanding geographical territories and investing in our people to increase the value provided to customers and achieve an order of magnitude lift in long term shareholder value.

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Source:
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http://www.asx.com.au/prices/charting/?code=JCS&compareCode=&chartType=&priceMoving Average1=&priceMovingAverage2=&volumeIndicator=&volumeMovingAverage=&timeframe=

3 | Annual General Meeting Presentation

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Strategic Business Priorities

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Summary of Performance
More
MYOB customers
Advanced
Expense
partner New
management
products
GROWING More
revenue ENTERING
TEMS ERP
NEW
BUSINESS BUSINESS MARKETS
$1 MILLION
R&D investment Geography
More cash
4 | Annual General Meeting Presentation
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Strategic Business Priorities

JCS Strategy

1: Maximizing Value from the TEMS Business

2: Investing to Grow the ERP business including NetSuite, JCurve ERP and MYOB Advanced

3: Diversification by Leveraging our Core Strengths and Capabilities

$3.1m in TEMS revenue generated in FY2017 (28% decline) $1.8m profit generated by the TEMS business before the inclusion of any R&D expenditure

Success in locking in a number of our TEMS customers to multi year contracts

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$7.3m in ERP revenue generated in FY2017 (36% increase)

Upgraded 26 JCurveERP customers to NetSuite editions

Signed Solution Provider Agreement and became an MYOB Advanced Partner

Significant investment in the sales, marketing and service delivery capability

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New partnership agreements signed to expand cloud ERP offering

Investigated multiple acquisition targets both locally and in Asia

Incorporated Singapore subsidiary

MYOB Advanced partnership

$0.7m investment in R&D for TEMS and expense management

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5 | Annual General Meeting Presentation

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Financial Result 2017

Solid financial performance from organic recurring revenue growth from the ERP division and reduced TEMS customer churn

P&L Extract 2017 ($m) 2016 ($m)	P&L Extract 2017 ($m) 2016 ($m)	P&L Extract 2017 ($m) 2016 ($m)
Revenue	10.4	9.7
Operating Expenses	(9.7)	(9.6)
Impairment and Depreciation Expense	(0.1)	(3.0)
EBITDA	0.6	(2.9)
Add back Impairment Expense	-	3.0
Normalised EBITDA	0.6	0.1
Add back Research and Development Expense	0.7	0.2
Normalised EBITDA Excluding R&D	1.3	0.3

Summary

• 7% increase in consolidated revenue achieved through organic growth

• 36% increase in the revenue recognised from the ERP division through larger and longer term new business sales and emphasis on customer retention

• 28% decline in revenue recognised from the TEMS product division

• 365% increase in normalised EBITDA in FY2017

6 | Annual General Meeting Presentation

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June 2017 Financial Position

Improving financial stability achieved through process improvements and improving financial performance

June 2017 Financial Position Improving financial stability achieved through process improvements and improving financial performance	June 2017 Financial Position Improving financial stability achieved through process improvements and improving financial performance
Balance Sheet Extract June 2017 ($m) June 2016 ($m) Cash at Bank 3.5 2.4 Deferred Expenditure 0.3 0.4 Total Assets 8.9 7.0 Unearned Income 2.2 1.4 Total Liabilities 4.9 3.5 Net Assets 4.0 3.5 Net Tangible Assets 1.7 1.2 Summary • $3.5m of cash held as at 30 June 2017 • Debt free • $1.1m cash flow positive for FY2017 • Increasing net asset basis • Increasing net tangible asset balances • Strong growth in the ERP division defe balance ($1.4m to $2.2m) which will be as projects “Go Live” over the next 3-6
Cash at Bank	3.5
Deferred Expenditure	0.3
Total Assets	8.9
Unearned Income	2.2
Total Liabilities	4.9
Net Assets	4.0
Net Tangible Assets	1.7

• Strong growth in the ERP division deferred revenue balance ($1.4m to $2.2m) which will be recognised as projects “Go Live” over the next 3-6 months

7 | Annual General Meeting Presentation

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CEO Address

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Stephen Canning

8 | Annual General Meeting Presentation

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Our FY2017 Highlights

#1

Strong Financial Performance

• 7% growth in revenue

• $0.6m EBITDA

• • $1.1m cash flow positive • $3.5m cash balance and debt free

#5

Achieved Oracle + NetSuite 5 Star Status for 2017

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#2

Early Adoption of AASB 15

• JCS was one of the first ASX listed entities to adopt the new revenue accounting standard

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#6

Geographical Diversification

Establishment of a Singapore subsidiary

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Progressing geographical diversification

#3

Enhanced Capabilities

Recruitment and training to expand the capabilities of the ERP Sales, Marketing and Professional Service Teams

#7

Product Expansion: Became a MYOB Advanced Partner

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#4

Signed New NetSuite Solution Provider Agreement

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#8

We were Award Winning!

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9 | Annual General Meeting Presentation

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We have been investing in our team

Significant investment in the sales, marketing and service delivery capability over the past year

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Net change in headcount by functional division over the past 12 months

54 JCS employees as at 21 November 2017:

10 | Annual General Meeting Presentation

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Financials – Trends

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JCurveERP New Business Revenue JCurveERP License Subscriptions Revenue by Product Division
Per Customer 3,000 $12,000,000 ERP TEMS
2,500 $10,000,000
$25,000
$8,000,000
2,000
$20,000
$6,000,000
1,500
$15,000
$4,000,000
$10,000 1,000
$2,000,000
$5,000 500
$0
2016 2017
$- -
2014 2015 2016 2017 2015 2016 2017 As reported under AASB 15 so only a single year comparative
has been shown
600 Number of ERP Customers 16% JCurveERP Churn by Contract Value Net Cash Flow
$1,000,000
14%
550 12%
$500,000
10%
500 8%
$-
6% 2014 2015 2016 2017
450 4%
-$500,000
2%
400 0%
2014 2015 2016 2017 2014 2015 2016 2017 -$1,000,000 11 | Annual General Meeting Presentation
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Financials – Detailed Analysis Continued

Growth in recurring revenue FY2013 to FY2017 ERP recurring revenue CAGR of +14%

12 | Annual General Meeting Presentation

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FY2018 Market Guidance and Progress

Forecasting a sustained increase in the annuity revenue streams from solutions sold by the ERP Division combined with reduced customer churn from the TEMS division following increased levels of research and development

Measure FY2017 Actual FY2018 Guidance % Increase from FY2017 Actual	Measure FY2017 Actual FY2018 Guidance % Increase from FY2017 Actual	Measure FY2017 Actual FY2018 Guidance % Increase from FY2017 Actual	Measure FY2017 Actual FY2018 Guidance % Increase from FY2017 Actual
Sales Income	$11.1 M	Range: $13.5 M to $15 M	22 – 35 %
Revenue	$10.4 M	Range: $12.5 M to $14 M	20 – 35 %
EBITDA (*)	$0.6 M	Range: $1.0 M to $1.2 M	67 – 100 %
NPBT (*)	$0.6 M	Range: $0.9 M to $1.1 M	50 – 83 %

(*) R&D is expensed as incurred under the Company’s accounting policies. The above FY2018 guidance includes $1m of expensed R&D ($0.7m in FY2017).

The Growing ERP division’s revenue profile is heavily weighted towards the second half of the year particularly Q4.

13 | Annual General Meeting Presentation

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Overall Summary

• Strong Financial Growth Strong Operational Foundations Fundamentals

• • $3.5m cash at bank as at 30 • Continued organic revenue and • Growing customer base June 2017 profit growth • ‘All in one’ unique product

• • Debt free • Market trend towards cloud capability adoption

• • • Recurring ERP revenue base Strategic relationship with #1 of $5.6m as at 30 June 2017 • Primarily competing in the large vendor of cloud ERP software and growing SME sector • Expanding list of additional

• • Cash flow positive business • Industry leading products solutions • Product diversification • We have a proven track record • M&A opportunities continue to be evaluated

14 | Annual General Meeting Presentation