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Preliminary Results for the year ended 30th June 2010
25 August 2010
George Osborne in India
Click to play 2
Agenda • Introduction
• Market update
• Company update
• Finance update
• Summary
Introduction
Multi state roll out during the tax season
The Network Effect
New Media Age winner ‘Best Use of Mobile 2010’ UK iPhone launch
Lloyds TSB “Say Hello” campaign
Page number
O2 16 apps press campaign
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Overview
• Mobile money market - large, validated and fast-growing global market
• Monitise platform established as a market leader
• Gaining significant traction
– Strong UK track record with platform already adopted by RBS Group, HSBC & Lloyds & available across all mobile phone networks
– Customer base growing rapidly
– International partners include Visa, SCB, Travelex & FIS
– JVs in place to access fast-growing markets of USA, Asia Pacific & India
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Overview Continued
• Strengthening of relationship with Visa
– Equity investment increases shareholding to 14.4%
– Extension of Global Alliance Agreement (GAA) and licensing of new strategic territories (Mexico and Russia)
• Cash raised provides funding for Group until cash generative
– UK operations expected to reach cash break-even by December 2010
– Current live operations expected to reach cash break-even during FY12
• Significant opportunity to cement leading international position
7
Market update
Mobile Money and the Opportunity
• Mobile Money is securely accessing your finances through your mobile phone
• Mobile Money gives you the freedom to bank and pay on the move– Direct connection to accounts– Ability to make payments/transfer funds
• The scale of the opportunity is enormous– There are 2.2 billion people using financial services in the world (Financial Access
Initiative, McKinsey 2009)
– There are 4.6 billion mobile phone users in the world (International Telecommunications Union, “Measuring the Information Society” 2010)
The number of people who will make payments by mobile phones in 2010 – up from 70.2m in 2009 (Gartner, June 2010)
The value of mobile payments by 2012, growing globally at 68% p.a. from 2008 (Arthur D Little, 2009)
The number of subscribers who will use their phones for mobile banking by 2013 (Juniper Research, 2010)
400m 108.6m $250bn
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Company update
Group Overview
Global opportunity
Blue chip business partners
Adopted by major UK and other
financial institutions
Wide platform applicability
Broad range of services
Banking & payments touch the lives of billions of consumers worldwide
From balance enquiry to instant paymentAccount management, payments, mCommerce
Any phone, any networkVia SMS, Java, Brew, Browser, iPhone, Blackberry, Android
Global opportunity
Blue chip business partners
Adopted by major UK and other
financial institutions
Global opportunity
Blue chip business partners
Wide platform applicability
Adopted by major UK and other
financial institutions
Global opportunity
Blue chip business partners
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- A Key Strategic Partner
Visa Inc.
• A global leader in payments
• A key strategic partner for Monitise
• Mobile channel is a major strategic imperative for Visa
Strengthening of Global Alliance Agreement (GAA)
• Equity investment increased to 14.4% in Monitise plc
• Extension of Global Alliance Agreement
• Term increased to 2015 , minimum fee commitment increases from $13m to $16m
• Monitise to grant Visa Inc. license for further deployment in Mexico and Russia – licence fee of $1.5m anticipated for FY10/11
• Appointment of Elizabeth Buse, Group Executive, International, for Visa Inc. to the Monitise Board
• 16,000 financial institution customers• 1.8 billion Visa cards (31 Dec 2009)
• 64 billion total transactions• $2.9 trillion payments volume
Source: Visa website. Figures as of 31 March 2010 unless stated otherwise
“Mobile – the next payments frontier”(Visa Inc.)
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Our managed services make the complex simple…
Patent Protected
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Monitise Customer Propositions
Customers who have multiple
services Customers who have
downloaded an app
Customers who have registered for text alerts services
Customers who have registered for account updates (via text)
Typically customers who have registered for our pre-paid
card and card activation services
Advanced28%
Essentials 24%
Feeder48%
(£7+ ARPU)
(£2-3 ARPU)
(<£1 ARPU)
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Typical Feeder Services
• Debit and credit card activation by text
• Pre pay card balance notification
• Update and event confirmation text messages
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Typical Essentials Services
• Pull an account Balance via text
• Weekly Text Update
• Low Balance Text Alerts
• Actionable Alerts
• Overdraft Sweep
• PayDay Sweep
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Advanced Services
• App Stores: Apple, RIM, Ovi, Android
• Secure Browser alternative
• Bank Accounts, Prepaid Cards, Credit Cards
• Account Management
• Set & Manage Alerts
• Lock/ Unlock Cards
• Branch/ATM Locator
• Bill Present & Pay
• Payments: Pay Anyone & P2P
• Reloads: Airtime top-up Transit, Prepaid
• Cross Sales/CRM Prompts
• Loyalty
• 2FA for secure log in
• Stock Trading
• Coupons & Vouchers
• Lottery
• NFC Ready
Live Future roadmap
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Emerging new customer behaviour
Advanced segment usage trends
•Banking channel of choice, with 16 transactions a month
•App usage highest between 7am and 9am (on the way into work)
•Usage peaks on Friday’s and Monday’s and at the end of the month (‘have I been paid yet?’)
•90% of customers who download it, go on to use the app regularly
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Unlocking the Potential
Time
UK 36m Consumers
USA 212mConsumers
India 230m+ Consumers
Asia Pac (Inc China) 400m+Consumers
In the developed world, factors that drive addressable market are:
Adult population% banked or with prepaid cards% pop with mobile phone
In the developing world, factors that drive addressable market are:
Adult population% pop with mobile phone% with banked or with prepaid cards but also offer an m-wallet for the unbanked if the regulations allow
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Finance update
TE
CH
NO
LO
GY
Business Evolution
Visa Global
UK
Americas
Asia Pacific
Africa
India
Liv
e O
pe
rati
on
sIn
ve
stm
en
t A
rea
s
2007
2008
2011
2009
2012
2010
Live
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Financial Summary
Revenues
• Revenues of £6m, up from £2.7m in FY09 (↑125%)
• H2: £4.3m, up from £1.6m in H2 FY09 (↑170%)
• Transactional revenues gaining traction (↑490%)
Live Operations
• Reducing losses from H1 to H2
• Driving towards profitability
• UK operation on track to cash break-even by Dec 2010
• Monitise Americas close to cash break-even
Investments
• Increase in investment spend H1 to H2
• Asia Pacific JV
• Enhancement of platform capability
• Growing appetite for mobile payments
• Retaining / extending our technological advantage
Cash
• Cash balance of £13.2m at 30 June 2010
• Cash balance, post fund-raising, in excess of £42m
FY08 to FY10 Revenues by Type
£m
£1.5m
£2.7m
£6.0m
H1 FY08 to H2 FY10 Transactional Revenues
£m
H1 FY 08
H2 FY 08
H1 FY 09
H2 FY 09
H1 FY 10
FY 08
H2 FY 10
FY 09 FY 10
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Segmental Performance – Year on Year
*Before Share Base Payments/Exceptionals
** Prior year loss for live ops includes 50% share of Monitise Europe. Like for like Group operating loss is broadly flat year on year
Revenue Revenue Op (loss)
£m £m £m
2.1 (2.0)**
0.6 (10.0)
Total 2.7 (12.0)**
Future Ops/Technology/Corporate 1.2 (11.8)
6.0 (14.3)
Op (loss)*
£m
Live operations 4.8 (2.5)
FY 10
Year
FY 09
Year
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Segmental Performance – FY10H1/H2 Revenue & Loss Trend
Op(loss) Revenue Op(loss) Revenue Op(loss)
£m £m £m £m £m
Live Operations 3.2 (0.9) 4.8 (2.5)
Future Ops/Technology/Corporate 1.1 (6.5) 1.2 (11.8)
1.7 4.3 (7.4) 6.0 (14.3)Total (6.9)
1.6 (1.6)
0.1 (5.3)
Year
Revenue
£m
H1 H2
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Segmental Performance – FY10H1/H2 Margin & Overhead Trend
H1 H2 Year
£m £m £m
Revenue 1.7 4.3 6.0
Gross Margin 0.9 2.9 3.8
Total Overheads (7.8) (10.3) (18.1)
Operating Loss (6.9) (7.4) (14.3)
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Key Milestones
Year to 30 June 2011
UK operation moves to cash break-even
Hong Kong launch
China pilot launch India launch First Monitise
enabled Visa product launch
First Visa transactional revenues
Year to 30 June 2012
All existing live operations at cash break-even (UK / N America / Visa)
First Indian transactional revenues
First deployment of live services in China
Further rollout within Asia Pacific region
2013 Onwards
Group cash generative
Major mCommerce launch
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Summary
• Fast growing demand for mobile money worldwide
• Established market leader with 8 years of investment in technology and relationships
• Highly motivated team supported by experienced Board, strengthened by new appointments
• Blue chip partners & strategic investors
– Facilitating global access
– Deepening relationship with Visa
• Transactional revenues growing rapidly
• UK operations expected to reach cash break-even by December 2010
• Fundraising enables Monitise to
– Retain and extend its technological advantage
– Fund new areas of operation
– Take the Group to cash generation
Right partners, right team, right technology, right time
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Appendix
Global Footprint
Monitise Americas Monitise Europe
Monitise Africa
Monitise Asia Pacific Monitise India• JV with FIS to tackle world’s
largest consumer markets
• Launched 2008
• Over 200 financial institutions signed up
• Launched in 2006
• UK as flagship home market before international roll out
• Significant customer growth in 2010
• >55% of UK retail banking market coverage
• Available through all mobile networks
• Development underway supported by grant funding (Africa Enterprise Challenge Fund)
• Recent JV formed with First Eastern
• Showcase launch planned for Hong Kong as springboard into China
• New JV formed with Visa Inc.
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Driving Transactions in a Mobile World
Bank Accounts, Savings Accounts, Credit Card and other Accounts
FinancialTransactionProcessors
Consumer interface
EnquiriesPaymentsInformation
FISVISA
Payments VocaLink Payments
Cheques POS
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The Mobile Evolution If you don’t establish the secure link now it is lost
Foundation for driving asset value
Mass market self service channelCost reduction & service enhancement
Leverage payment infrastructureDefend payment position
Phase 1 mCommerceExtend payment reach
Network extension of A2ACheque replacement
Phase 2 mCommerce Mass market payments
Importance of mobile commerce to the Banking industry
Account information/money management
DatabaseMSISDN - PAN
Account to account payment
person to person payment “text money”
mCommerce – Remote “text to buy”Vouchers & offers (add revenue)
mCommerce - Proximity “NFC”
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The number of mobile subscribers who use their phones for mobile banking will exceed 400m globally by 2013, according to a new in depth study by Juniper Research. This equates to double the number of users this year. Juniper Research, July 2010
'The number of people using their mobile phones to make payments is set to grow from 70.2 million in 2009 to 108.6 million this year, a 54.5% rise. Gartner, June 2010
'New types of SMS mobile banking alerts will help to treble the volume of mobile banking messages to almost 90 billion per annum by 2015, equating to one message every two days for every mobile banking user. Juniper Research, August 2010
Mobile Money will be a massive market
‘‘‘‘
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Emerging new behaviors
%
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Understanding their finances sets them up for a day
34
Appealing to a mass market
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NatWest iPhone Proposition
Q2 16 apps press campaign App store home page
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August Lloyds TSB collateral
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Example live apps.
CSB Mobile Money
PyraMax
AmBank Mobi - ABT
Health Mobile – Wealthcare
HIB Mobile – Highlands
Magna Mobile
Stoneham bank Avidia Bank
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Recent milestones
October 2008: 1st 1 million
transaction month
June 2009: Visa 5 year
global alliance signed
Aug 2009: Monitise breaks 750,000 customer barrier and takes 100%
control of UK joint venture
Dec 2009: Monitise breaks 1.5 million customer barrier
March/April 2010: Monitise
hits 2 million customers and JV in Asia Pacific agreed with First Eastern
June 2010: Agreement signed with VISA for India
JV
Q2 ‘08 Q4 ‘08 Q1 ‘09 Q4 ‘09 Q1 ‘10 Q2 ‘10
July 2010: Further £32m raised on capital markets
Q3 ‘10Q2 ‘09
Nov 2009: Monitise launches
Smartphone platform
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Financial Results: Summary Cashflow
Year ended
30-Jun 30-Jun2010 2009
£'m £'m
Opening cash balance 10.1 9.7
Cash utilised in operations (13.9) (11.4)
Fixed asset purchases (1.1) (0.3)
Cash from fundraising 17.9 11.5
Other movements 0.2 0.6
Increase in cash in the year 3.1 0.4
Closing cash balance 13.2 10.1
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Leadership Team
Alastair Lukies CEO • Co-founder of Monitise; co-founder of Epolitix.com (portal for Westminster, Whitehall and devolved institutions)
John Brougham CFO • Formerly FD of BT Transformation and BT Global Services
Executive Team
Duncan McIntyre NED • Formerly CEO of Morse plc
David Dey NED • Founder of Energis, formerly BT PLC board member
Colin Tucker NED • Formerly Deputy Chair Hutchison 3G & Technical Director Orange
Peter Radcliffe NED • Formerly MD First Data Asia Pacific
Elizabeth Buse NED • Group Executive, international, for Visa Inc
Jan Verplancke NED • CIO of Standard Chartered Bank
Non-Executive Directors
Other Advisors : Lord Mervyn Davies, Lord Digby Jones, Christopher Rodrigues (ex President Visa International), Andrew Harrison (UK CEO The Carphone Warehouse )
Remove detail
Lee Cameron CCO • Formerly General Counsel of Morse PLC
Tom Spurgeon Co Sec • Formerly FD of Morse UK
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Monitise: Investor Centre
• Share price 22p (23 Aug 10)
• Market AIM
• Ticker MONI.L
• Market cap. £151m (23 Aug 10)
• Ord. shares in issue 692,727,757 (23 Aug 10)
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Jun-07
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Pric
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Sub 3% holdings reflect increased base of institutional shareholders following recent placing (Standard Life, Fidelity, Schroders etc)
*Shareholders as at 23rd Aug 2010
Profile of major Shareholders (% held)*
14%
5%
6%
6%
7%
7%
55%
Visa 14.4% 3i Group 4.6% UBS Global 6.0%Standard Chartered 5.5% First Eastern 6.8% Norges Bank 6.7%Other 56%
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