JCURVE SOLUTIONS LTD — Interim / Quarterly Report 2017

Feb 21, 2017

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Half Year Results
Period: 31 December 2016
Date of Release : 22 February 2017
ASX: JCS
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www.jcurvesolutions.com

02 Disclaimer

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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.

03

Table of Contents

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Summary	04
Solutions Portfolio	05
Half Year Highlights	06
Strategic Priorities	07
1HY2017 Financial Summary	11
Continued Growth in ERP Recurring Revenue	12
FY2017 Market Guidance	13
Value Proposition	14

04

Summary

On track to meet FY2017 Market Guidance

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Substantial investment in Operating cash ERP business flow positive and increased cash flow from Decreased sales – 1HY2017 operating v 1HY2016 expenditure

05 JCURVE Solutions offers a Portfolio of Solutions

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BUSINESS MANAGEMENT / ERP

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• § Software to help businesses grow

• § NetSuite is the #1 in cloud ERP, including the small business JCurve ERP edition

• § Over 30,000 customers globally run on NetSuite

• § Includes financials, CRM, inventory management and eCommerce capabilities

• § Partnerships with a growing list of third party integrations

TELECOM EXPENSE MANAGEMENT (TEMS)

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• § Simplifying telecom management

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

• § Optus TEM is a white labelled edition of JTel

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

06 Half Year Highlights

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Signed new NetSuite Entered into 6 new Maintained strong Focus on multi year Growing Market
Solution Provider partnerships financial position renewals and new Profile
Agreement (September 2016) business
(August 2016) o Operating cash transactions
flow positive in
1HY17 o
Growing
o $2.4m cash deferred
balance and revenue balance
debt free
Recruitment and Geographical Product Expansion
Achieved NetSuite training to expand Diversification Award Winning
5 Star Status for the capabilities of
2017 the ERP Sales (100% Establishment of a
increase in Singapore 2016 Business Leader
headcount) and Subsidiary CEO Stephen Canning
Professional
Services Teams
Finalist in multiple awards
(71% increase in
headcount)
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07

Strategic Priorities

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Strategic Priority
Strategic Priority
Diversification by
Maximising value leveraging our core
from the TEMS strengths and
business capabilities
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Strategic Priority Investing to grow the ERP business including NetSuite, JCurve ERP and MYOB Advanced

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08

Achievement of Strategic Priority

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Strategic Objectives opportunities

Progress

o Drive productivity

Maximising value o from the Harvest cash to fund product IP TEMS business development opportunities and business expansion

o $1.6m of TEMS revenue generated in 1HY2017. o $0.9m profit generated in 1HY2017.

o Maintaining key customer relationships through multi year contract arrangements and continuing channel partner arrangements.

09

Achievement of Strategic Priority

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• Strategic Objectives Progress

• opportunities o Continued to increase net customer numbers. o Upgraded 10 JCurve ERP customers to the NetSuite mid market edition.

• o $2.6m of ERP revenue generated in 1HY2017.

• o Customer growth o Increased the JCurve ERP deferred revenue balance from $2.6m to $3.3m.

• Investing to grow the o

• o Signed a Solution Provider Partner agreement with NetSuite Build a large,

• ERP business including sustainable and allowing JCurve to target businesses of all sizes across

• NetSuite, JCurve ERP Australia and New Zealand creating a larger addressable

• and MYOB Advanced growing base of market.

• monthly recurring revenue o Focus on the recruitment and training of sales and professional services team members to enable the implementation of the NetSuite edition and rapid expansion of the ERP division. 100% increase in the number of business development managers and 71% increase in the number of professional services consultants since June 2016.

10

Achievement of Strategic Priority

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• Strategic Objectives Progress

• opportunities o Six new partnership agreements signed in September 2016 to expand our cloud ERP offering with new integrated functionality and capability.

• o Incorporation of 100% owned Singapore subsidiary.

• o Diversify our product o Preliminary investigation of multiple acquisition targets in

• range Asia remains ongoing.

• Diversification by o Expand our o

• leveraging our core geographical footprint Partnership with MYOB announced in February 2017 into Asia (following discussions during 1HY2017) to expand ERP

• strengths and capabilities portfolio to enable JCurve Solutions to sell, implement and

• o Reinvest for further support MYOB Advanced cloud ERP software for larger

• growth businesses as an accredited MYOB partner.

• Continued investment in research and development supporting the ongoing maximisation of value from the TEMS business.

11 1HY2017 Financial Summary

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P&L Extract			Balance Sheet Extract
	1HY2017 ($m)	1HY2016 ($m)	Dec	2016 ($m)	June 2016 ($m)
Revenue	4.2	4.9	Cash at Bank	2.4	2.4
EBITDA loss (*)	(0.2)	(0.2)	Total Assets	7.4	7.4
Impairment expense	-	(3.0)	Deferred Expenditure	0.9	0.9
Add back: Income tax credit	-	0.4	Unearned Income Total Liabilities	3.3 4.9	3.0 4.6
Net loss after tax	(0.2)	(2.8)	Net Assets	2.5	2.8
* Excluding impairment and	income tax credit		Net Tangible Assets	0.2	0.5

Summary

• 2% decrease in recognised JCurve ERP product division revenue (**).

• 27% decline in revenue recognised from the TEMS product division.

• 10% reduction in operating expenses.

• o 92% decrease in after tax loss for 1HY2017 v 1HY2016.

Summary

• $2.4m of cash held as at 31 December 2016 and debt free.

• Operating cash flow positive for 1HY2017.

• o Strong growth in the JCurve ERP product division deferred revenue balance ($2.6m to $3.3m).

(**) Revenue recognised under the NetSuite SP Agreement at 50% of transaction value in accordance with AASB 118. Impact on 1HY2017 revenue result was ($0.1m). No EBITDA or NPAT impact.

12 Continued Growth in ERP Recurring Revenue

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$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$-
2009 2010 2011 2012 2013 2014 2015 2016 2017
2009 2010 2011 2012 2013 2014 2015 2016 1HY2017 New Business 2HY2017 Forecast New Business ()
Assumes the JCurve Solutions forecast for the remainder of the year is met. Does not include customer churn for 2HY2017.
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13

FY2017 Market Guidance

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Year ended 30 June 2017

FY2017 Market Guidance – Issued June 2016

Revenue Range: $10m to $11m EBITDA Range: $0.0m to $0.2m profit NPAT Range: $0.3m to $0.5m profit

We remain on track towards the achievement of our market guidance for FY2017. JCurve Solutions historically achieves stronger growth and profitability in the second half of each financial and has invested in 1HY2017 to increase the number and of year strongly capabilities the ERP sales and professional services team members.

14

Value Proposition

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SOLID FINANCIAL FOUNDATIONS

• $2.4m cash at bank as at 31 December 2016

• Debt free

• Recurring revenue base of $5.8m as at 31 December

• 2016 and growing

• • Operating cash flow positive business

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STRONG EXPOSURE OPERATING TO GROWING FUNDAMENTALS MARKETS

• ‘All in one’ unique product capability

• Cloud adoption

• Growing customer base

• SME sector

• Strategic relationship with #1 vendor of cloud ERP software

• Organic growth

• Diversification of revenue streams

• Expanding list of additional solutions

• Targeted acquisitions

• Geographical expansion