OnMobile Global Ltd. — Investor Presentation 2020

Jun 22, 2020

June 22, 2020

onmobile

ON MOBILE GLOBAL LIMITED Tower #1, 94/1 C & 94/2, Veerasandra Village, Attibele Hobli, Anekal Taluk, Electronic City Phase-1, Bangalore - 560100, Karnataka, India P: +91 80 4009 6000 IF: +91 80 4009 6009 CIN - L64202KA2000PLC027860 Email - investors@onmobile.com

www.onmobile.com

To, The Secretary BSE Limited Phiroze Jeejeebhoy Towers Dalal Street, Fort Mumbai-400 001 BSE Symbol: 532944

The Secretary National Stock Exchange of India Limited Bandra Kurla Complex Bandra East Mumbai - 400 051 NSE Symbol : ONMOBILE

Dear Sir/Madam,

Sub: Investor Presentation- 04 FY 2019-20

Pursuant to Regulation 30 & 46 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we are enclosing herewith a copy of the Investor Presentation on the Financial Results of the Company for the quarter ended March 31, 2020, which is made available on Company's website: www.onmobile.com.

Request you to kindly take the same on record.

Thanking you,

Yours sincerely, For OnMobile Global Limited P.V. Varaprasad Company Secretary Encl: a/a

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Investor presentation June 2020

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Cautionary statement

This presentation may contain statements that contain “forward looking statements” including, but without limitation, statements relating to the implementation of strategic initiatives, and other statements relating to OnMobile Global Limited’s (OnMobile Global or the Company) future business developments and economic performance.

While these forward looking statements indicate our assessment and future expectations concerning the development of our business, a number of risks, uncertainties and other unknown factors could cause actual developments and results to differ materially from our expectations.

These factors include, but are not limited to, general market, macro-economic, governmental and regulatory trends, movements in currency exchange and interest rates, competitive pressures, technological developments, changes in the financial conditions of third parties dealing with us, legislative developments, and other key factors that could affect our business and financial performance.

OnMobile Global undertakes no obligation to publicly revise any forward looking statements to reflect future / likely events or circumstances.

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Proprietary & Confidential

Agenda

• History and milestones

• Product portfolio

• Strategy FY20

• Financials Q4 and FY20

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Proprietary & Confidential

The Global Leader in Mobile Entertainment

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Global presence

1.68 BILLION CONSUMER REACH

81 CUSTOMERS ACROSS THE GLOBE

900 MILLION DIGITAL REACH

100+ MILLION MONTHLY ACTIVE USERS ACROSS ALL PRODUCTS

10+ MILLION

APP INSTALLS

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Proprietary & Confidential

History and milestones

Name changed to OnMobile Global Limited

1:1 Bonus Issue of shares

Acquisition of Vox Mobili, France Amount: Rs 1,431 Mn

Buyback of 4,000,000 equity shares. Amount Spent: Rs 238 Mn, Avg. Price: Rs 59

Purchase of Intellectual Property of Music On, India for Rs 43 Mn

Incorporated as Onscan Technologies India

12: 1 Bonus Issue of shares

2000

2007

2009

2011

2006

2008

2013

2010

Public Issue: 10,900,545

Rs 1,300 Mn investment by Deutsche Bank AG, Jade Dragon (Mauritius), and Kings Road Investments (Mauritius)

Registration under Special Economic Zone, Bangalore

Acquisition of Live Wire, USA for Rs 1,007 Mn

shares, Rs 4,796 Mn

@ Rs 440 per share

Acquisition of assets of Dilithium Technologies, USA for Rs 146 Mn

Acquisition of Telisma, France Amount: Rs 801 Mn

Acquisition of IT Finity, India for Rs 419 Mn

Proprietary & Confidential

Voluntary open offer by Promoter, No of Shares:11,900,000. Amount Spent: Rs 476 Mn, Price: Rs 40/-

40/Promoter OnMobile takes active Global Buyback of 5,800,000 role. Limited equity shares, Françoisrenews its Amount Spent: Rs Charles Sirois contract with 442 Mn takes over as Telefónica Avg. Price: Rs 76 CEO España

2014

2017

2019

2016

2018

Buyback of 5,600,000 equity shares. Amount Spent: Rs 538 Mn. Avg. Price: Rs 96

Acquisition of Appland AB – a leader in games and kids apps

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Investor Highlights

• Global Reach

• Dominating market share in Tones business

• Investment in growth products

• Emerging turnaround story

• Big Investments and focus on cloud and social gaming

• Solid cash position

• Healthy cash flow from operations

• Debt free

• High dividend yield

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Proprietary & Confidential

Suite of products

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Proprietary & Confidential

Strategy FY20

• Grow Videos

• Expand Games

• Leverage Tones

• Digitize contests

• Beyond operator wallet

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Proprietary & Confidential

Financials

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Q4 FY2020 Key Highlights

Revenue : Revenue remains stable despite Covid-19 outbreak impacting global economy.

Manpower cost : Our rationalization efforts continue to yield savings with a 9.2% reduction QoQ in manpower costs with an exit headcount of 702.

EBITDA : Increase by 8.4% from INR 110.7 Mn in Q3 to INR 120.0 Mn in Q4; achieved mainly through rightsizing our manpower and optimizing our costs. We believe these trends will continue in future quarters too and the benefits are here to stay.

Operating Profit : Increase by 13.0% from INR 75.2 Mn in Q3 to INR 85.0 Mn in Q4 with the abovementioned benefits percolating down to margins.

Profit Before Tax: PBT at INR 234.7 Mn has grown by 138.8% from last quarter. Out of this, INR 82.0 is due one-time reversal in the current quarter and the next major reason is appreciation in Euro and USD.

Tax: ETR down to 24% in the current quarter from 34% in the last quarter due to increase in Deferred tax liability.

Cash balance: Increase in cash balance from INR 2,525.3 Mn to INR 2,744.8 Mn due to increased cash from operations and favorable forex fluctuations in USD and Euro.

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Proprietary & Confidential

P&L Q4 FY2020 (QoQ)

P&L(INR Mn)	Q4 FY20	Q3 FY20 % Growth
Gross Revenue	1,517	1,488 1.9%
Less Customer acquisition cost as per the new contract	(57)	(57) 0.4%
Net Revenue	1,460	1,432 2.0%
Content	697	636 9.6%
Other COGS	52	58 -11.4%
Gross Profit	712	737 -3.5%
Margin (%) Manpower Cost Severance cost Marketing Cost Other Opex	48.7% 362 1 65 164	51.5% 390 -7.3% 9 -93.7% 77 -15.7% 151 8.9%
EBITDA	120	111 8.4%
Margin (%) Depreciation	8.2% 35	7.7% 36 -1.4%
Operating Profit	85	75 13.0%
Margin (%) Other Income Exchange gain (Loss) Exceptional items - Gains / (Loss)	5.8% 18 50 82	5.3% 20 -8.9% 3 1393% - 100%
Profit before Tax	235	98 138.8%
Tax	56	33 68.5%
Profit After Tax	179	65 174.5%
Margin (%)	12.3%	4.6%

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Proprietary & Confidential

P&L Q4 FY2020 (YoY)

P&L(INR Mn)	Q4 FY20	Q4 FY19 % Growth
Gross Revenue	1,517	1,433 5.9%
Less Customer acquisition cost as per the new contract	(57)	(32) 78.8%
Net Revenue	1,460	1,401 4.2%
Content	697	589 18.4%
Other COGS	52	74 -29.8%
Gross Profit	712	739 -3.7%
Margin (%) Manpower Cost Severance cost Marketing Cost Other Opex	48.7% 362 1 65 164	52.7% 399 -9.3% 11 -95.1% 85 -23.9% 191 -14.0%
EBITDA	120	53 128.3%
Margin (%) Depreciation	8.2% 35	3.8% 26 35.7%
Operating Profit	85	27 217.7%
Margin (%) Other Income Exchange gain (Loss) Exceptional items - Gains / (Loss)	5.8% 18 50 82	1.9% 36 -49.7% (17) -391% - 100%
Profit before Tax	235	45 416.3%
Tax	56	23 142.0%
Profit After Tax	179	22 698.7%
Margin (%)	12.3%	1.6%

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Proprietary & Confidential

P&L FY2020

P&L(INR Mn)	FY20	FY19 % Growth
Gross Revenue	5,884	5,939 -0.9%
Less Customer acquisition cost as per the new contract	(160)	(127) 25.4%
Net Revenue	5,724	5,812 -1.5%
Content	2,547	2,442 4.3%
Other COGS	236	277 -14.8%
Gross Profit	2,941	3,092 -4.9%
Margin (%) Manpower Cost Severance cost Marketing Cost Other Opex	51.4% 1,572 45 296 618	53.2% 1,709 -8.0% 62 -27.1% 339 -12.6% 752 -17.8%
EBITDA	409	230 77.6%
Margin (%) Depreciation	7.1% 185	4.0% 144 28.5%
Operating Profit	224	86 160.0%
Margin (%) Other Income Exchange gain (Loss) Exceptional items - Gains / (Loss)	3.9% 90 39 82	5.3% 96 -6.4% 131 -70.0% - 100%
Profit before Tax	435	313 38.8%
Tax	159	124 27.8%
Profit After Tax	276	189 46.0%
Margin (%)	4.8%	3.3%

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Proprietary & Confidential

Balance sheet

	As at	As at	As at
INR Mn	Mar 31st, 2020	Dec 31st, 2019	Mar 31st, 2019
Shareholders’ Funds	5,900	5,635	5658
Non-Current Liabilities	229	80	39
Trade Payables	2,242	2,111	2117
Current Liabilities	486	998	912
Total Liabilities	8,857	8,825	8726
Fixed Assets	354	352	437
Goodwill	534	783	763
Right to use Assets	136	148	0
Financial Assets	60	64	65
Deferred Tax Assets	621	527	522
Non-Current Assets	1,366	1,396	1432
Cash and Cash Equivalents	2,745	2,525	2723
Trade Receivables	2,368	2,300	2266
Other Current Assets	674	730	518
Total Assets	8,857	8,825	8726

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Proprietary & Confidential

P&L (Excluding Games & LatAm- YoY)

P&L(INR Mn)	FY20	FY19 % Growth
Net Revenues	5,724	5,812 -1.5%
EBITDA	409	230 77.6%
Add back: Gaming EBITDA (Loss)	(125)	(92) 35.4%
Add back: Latam EBITDA (Loss)	(117)	(180) -35.0%
Profit from Operations	651	503 29.5%
EBITDA Margin (%)*	13.2%	10.4%

• EBITDA Margin % on Net revenues (Excluding LatAm and Games Revenues)

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Proprietary & Confidential

India tax one time adjustments FY’20

Sr. No	Particulars	Tax Impact (in Million INR)
	One-time adjustments
1	Tax impact on re-statement of opening deferred tax asset owing to revision in corporate tax rate from 34.94% to 29.12%	42.18
2	Tax impact on disallowance of provision for impairment in equity investments in foreign subsidiaries	10.66
3	Tax provision created for prior periods' in Bangladesh branch	47.80

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Proprietary & Confidential

Revenue by geography – FY 20 vs FY 19

FY‘20

FY‘19

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India
17%
ME&A
Europe
16%
59%
Asia
5%
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India
17%
ME&A
16%
Europe
57%
Asia
5%
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Proprietary & Confidential

Revenue by products – FY 20 vs FY 19

FY‘20

FY‘19

INR Mn

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Infotainment
Games 4%
11% 264 Tones
646
37%
2,186
Videos
44% Contest
2,557 4%
231
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Infotainment
Games 5%
11% 320
Tones
672
39%
2,280
Videos
40% Contest
2,386 5%
281
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Proprietary & Confidential

Cash position

INR Mn	Q1 FY19	Q2 FY19	Q3 FY19 Q4 FY19	Q1 FY20 Q2 FY20	Q3 FY20 Q4 FY20
Gross Cash	3,169	3,486	2,672 2,723	2,510 2,344	2,525 2,745
Less: Total Debt	-	-	- -	- -	- -
Net Cash	3,169	3,486	2,672 2,723	2,510 2,344	2,525 2,745
			Net Cash decreased by INR 814 Mn in Q3 FY 19 due to:- a) Acquisition of Appland INR 410 Mn b) Dividend payout for FY’18 INR 191 Mn	Contract acquisition cost paid in Q2 FY’20: INR 323 Mn	Dividend payout for FY’19: INR 191 Mn

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Proprietary & Confidential

Cash flow FY’20

Particulars	Q4 FY‘20	FY 19-20
Opening Cash balance	2,525	2,723
Net Cashgenerated from operatingactivities(Post tax)	223	176
Net cash from investingactivities	(16)	44
Net cash from Financing activities	(10)	(241)
Fx Impact on Cash balances	23	43
Net Increase/(Decrease) in cash/cash equivalents	220	22
Closing Cash balance	2,745	2,745

FY’20

• a) Financing activities :Dividend paid – INR 191 Mn paid in Q3 impacting FY20 cash balance

• b) Net cash generated from operating activities: include Contract acquisition cost paid in the full year numbers –INR 323 Mn in July impacting full year cashflow

• c) Investing activities : Payment to capex creditors in Q4 FY’20 INR 40 Mn

Proprietary & Confidential

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Ratio Analysis – Financial Performance

Ratio Analysis	Q4 FY18	Q1 FY19	Q2 FY19	Q3 FY19	Q4 FY19	Q1 FY20	Q2 FY20	Q3 FY20	Q4 FY20
Profit and Loss
Export revenue / revenue	78%	81%	83%	84%	83%	84%	85%	84%	84%
Gross profit / revenue	54%	55%	54%	54%	54%	53%	52%	52%	49%
Aggregate employee costs /	29%	31%	28%	29%	28%	31%	29%	28%	25%
revenue
Operating profit / revenue	0%	1%	3%	1%	2%	0%	4%	5%	6%
Profit before tax (PBT) / revenue	6%	2%	16%	0%	3%	2%	5%	7%	16%
Effective tax rate- Tax / PBT	49%	91%	20%	nm	51%	30%	85%	34%	24%
Balance sheet
Current ratio	2.43	2.46	2.38	1.86	1.82	1.85	1.84	1.79	2.12
Day’s sales outstanding (Days)	140	140	151	141	139	143	155	140	144
Liquid assets / total assets (%)	58%	57%	61%	51%	50%	55%	53%	55%	58%

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Proprietary & Confidential

Dividend & buyback history

(INR Mn)	Mar'15	Mar'16	Mar'17	Mar'18	Mar'19	Mar'20
Dividend Payout ( Incl. Tax)	197	195	188	190	191	159
Dividend %	15%	15%	15%	15%	15%	15%
Buyback (shares in Mn)	5.8	-	5.6	-	-	-
Buyback amount utilized	442	-	538	-	-	-

Pursuant to the resolution passed by Board of Directors in the meeting held on April 09, 2020 has approved proposal for Buyback of fully paid up Equity shares of face value of INR 10 each not exceeding 19,321,429 Equity shares for an aggregate amount not exceeding INR 541 Mn for the price not exceeding INR 28 per share.

Further Board of Directors in the meeting held on June 22, 2020 has recommended Dividend of Rs. 1.5 per equity share of Rs. 10/- each for the financial year ended March 31, 2020 subject to approval of shareholders at AGM.

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Proprietary & Confidential

Onmobile vs Nifty 50 Share Price Movement

Stock Price As on 19[th] Jun 2020

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Proprietary & Confidential

For any queries mail us at:

investors@onmobile.com

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