TOUCHCORP 1H2015
RESULTS PRESENTATION DATED: THURSDAY, 27TH AUGUST 2015
The material in this presentation has been prepared by Touchcorp Limited
ARBN 603 731 184 (Touchcorp) and is general background information
about Touchcorp’s activities current at the date of this presentation.
The information is given in summary form and does not purport to be
complete. Information in this presentation, including forecast financial
information should not be considered as advice or a recommendation to
investors or potential investors and does not take into account investment
objectives, financial situation or needs of any particular investor. These
should be considered, with or without professional advice when deciding if
an investment is appropriate. Persons needing advice should consult their
stockbroker, solicitor, accountant or other independent financial advisor.
The release, publication or distribution of this presentation in certain
jurisdictions may be restricted by law and therefore persons in such
jurisdictions into which this presentation is released, published or
distributed should inform themselves about and observe such restrictions.
This presentation does not constitute, or form part of, an offer to sell or
the solicitation of an offer to subscribe for or buy any securities, nor the
solicitation of any vote or approval in any jurisdiction, nor shall there be any
sale, issue or transfer of the securities referred to in this presentation in any
jurisdiction in contravention of applicable law.
This presentation may contain forward looking statements regarding the
intentions or performance of Touchcorp, and these will be affected by
many other factors beyond the control of Touchcorp. Such statements
involve risks and uncertainties and no assurance can be given that actual
results will be consistent with these forward-looking statements. The
forward looking statements made in this presentation relate only to events
as Touchcorp the date on which the statements are made. Touchcorp will
not undertake any obligation to release publicly any revisions or updates
to these forward-looking statements to reflect events, circumstances or
unanticipated events occurring after the date of this presentation except as
required by law or by any appropriate regulatory authority. Percentages and
figures in this document may include rounding differences.
DISCLAIMER
TOUCHCORP 1H2015 01
- TOUCHCORP OVERVIEW
- THE HALF YEAR IN REVIEW
- FINANCIAL PERFORMANCE AND POSITION
- KEY CUSTOMERS UPDATE
- STRATEGY UPDATE
- SUMMARY AND OUTLOOK
AGENDA
TOUCHCORP 1H2015 02
– The Touch System, developed by
Touchcorp, is used by blue-chip
corporates in the convenience
retail, healthcare, government and
telecommunications sectors.
– Touchcorp is a technology-driven
business with a strong focus on
research and development.
– The Touch System provides an
integrated, cloud-based, end-to-end
electronic product delivery and
payment platform that communicates
across various interfaces, self-service
channels and payment systems.
TOUCHCORP OVERVIEW
TOUCHCORP 1H2015 03
– Productive 1H2015
– IPO successfully completed and on track to meet Prospectus Forecast for FY2015
– AfterPay capital raising is complete
– Additional business development staff employed to service emerging opportunities
– eServices Platform (ESP) delivered
– Reitan Norway pilot complete, rollout underway in Denmark, Sweden and Norway
THE HALF YEAR IN REVIEW
TOUCHCORP 1H2015 04
1 Pro forma NPAT, EBITDA and EBIT follow the pro forma basis as set out in the prospectus and therefore exclude capital raising expenses and government grant income
FINANCIAL PERFORMANCE
TOUCHCORP 1H2015 05
$ MILLION PRO FORMA PERCENTAGE
1H2015 1H2014 CHANGE
Services revenue 18.4 10.9 69%
Cost of sales (3.2) (2.3) 41%
Gross Profit 15.2 8.6 76%
EBITDA1 4.6 2.7 73%
EBIT1 4.2 2.3 82%
Profit before tax 4.2 2.3 85%
Income tax expense - -
Pro forma NPAT1 4.2 2.3 85%
Capital raising expenses (3.6) -
Government grant 0.1 1.7
Statutory NPAT 0.8 3.9
– Significant growth in Gross Profit of 76%, resulting in EBITDA growth of 73%
– Offset by the factors identified in the prospectus:
– Customer development costs ($2.8m)
– Conversion of government grants ($1.7m) from cash to carry forward tax benefit
– Capitalised R&D in 1st half lower than forecast but expected to reach the forecast number ($5.5m) by year end due to nature of the work density required by projects
EBITDA 1H 2014
EBITDA 1H 2015*
REVENUEIMPACT
COST OFSALES
CUSTOMERDEVELOPMENT
EXPENSE
EMPLOYEEBENEFITS
OTHEREXPENSES
FINANCIAL PERFORMANCE
TOUCHCORP 1H2015 06
2.7
7.5
(0.9)
(2.8)
(1.3)
4.6
(0.5)
*EBITDA bridge above is based on pro forma statement of financial position
– Revenue run rate to increase through the remainder of the year
– Pilot approval for EU slower, but now gathering pace
– Expect full year revenue result to be in-line with the Prospectus
REVENUE
TOUCHCORP 1H2015 07
$ MILLION PRO FORMA PERCENTAGE
1H2015 1H2014 CHANGE
Services revenue
Australia and Pacific revenue
Retail Service 8.5 4.3 99%
Health and Government 1.1 0.8 41%
Mobility Services 7.6 4.7 63%
Total Australia and Pacific revenue 17.2 9.7 77%
International revenue
Retail Services 1.3 1.2 4%
Total International revenue 1.3 1.2 4%
Total services revenue 18.4 10.9 69%
– Debt free
– Strong cash position following the IPO with no expectation of significant cash
requirements in the near term
– Increase in debtors due to AfterPay and generally increased revenue run rate
– Significant reduction (circa $5.0m) in unearned income liability
FINANCIAL POSITION
TOUCHCORP 1H2015 08
$ MILLION STATUTORY
1H2015 1H2014
Cash and cash equivalents 10.4 2.7
Receivables 13.9 9.7
Other assets 24.8 19.4
Total assets 49.1 31.7
Payables 12.6 17.3
Other liabilities 1.1 0.9
Total liabilities 13.7 18.2
Net Assets 35.4 13.5
Shareholders Equity 35.4 13.5
Operating cashflow affected by:
– Differences in timing of revenue recognition and cash receipts, such as 7-Eleven ESP fee
($2.5m) and AfterPay development fee ($3.0m)
– Prepayment of customer development expenses and security bonds with suppliers
– Lower capitalisation of R&D expenses for 1H2015
CASHFLOW
TOUCHCORP 1H2015 09
$ MILLION STATUTORY
1H2015 1H2014
Operating cashflow (7.3) 2.2
Capitalised R&D Expenses (1.6) (1.3)
Fixed assets purchases (0.9) (0.9)
Total investing cashflow (2.5) (2.2)
Proceeds from issue of shares 20.0 -
Capital raising expenses (3.6) -
Proceeds from exercise of shares options 1.0 -
Financing cashflow 17.5 -
Net cashflow 7.7 (0.0)
CUSTOMER STATUS
AUSTRALIA & PACIFIC
RETAIL
– 7-Eleven ESP Delivered
Expanded responsibility in payments both
in-store and on mobile devices
HEALTH & GOVERNMENT SERVICES
– NAB HICAPS Growing strongly
MOBILITY
– Optus Continuing to expand services/volumes
– Telstra December 2014 Agreement implementation
discussions progressing
INTERNATIONAL
RETAIL
– Reitan Norwegian pilot successful with deployments underway
in Norway Sweden and Denmark
– Valora Deployment underway in Germany
KEY CUSTOMER UPDATE
TOUCHCORP 1H2015 10
– Capital raising of $8m completed at $1 per share
resulting in valuation of $28m post raising
– Development fee of $3.0m recognised by Touchcorp,
with $1.5m received in July 2015 and the balance in
December 2015
– AfterPay product gaining acceptance in the Australian
market place
– Now available through more than 20 merchant sites
– Sales growing strongly
– 10 million AfterPay shares to Touchcorp expected to
be issued by the end of August, resulting in Touchcorp
owning 35.7% of AfterPay
KEY CUSTOMER UPDATE - AFTERPAY
TOUCHCORP 1H2015 11
– Company continues to focus on:
> Expanded roles with existing customers
> Broadened service offering (new Service Modules)
> Engagement with new customers
– Mobility broadening: now targeting utilities, toll road operators and retail services
– Retail: in discussions with additional major retailers both in Australia and internationally
– Malaysian and Singaporean subsidiaries established
STRATEGY UPDATE
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– Successful 1H2015, including IPO
– Major customers providing additional opportunities
– New services have been delivered and more are scheduled for delivery in 2H2015
– Management expects that the Company will report full year pro forma net profit after
tax in line with the Prospectus Forecast of $7.4m
– New and expanded business opportunities have been identified
– Accelerated and focused program of business and product development activities to
aid in the achievement of growth expected in FY2016
– Increased global presence over the next several years
SUMMARY AND OUTLOOK
TOUCHCORP 1H2015 13
GLOSSARY
GLOSSARY
1H or 1H2014 the six months ending 30 June 2014
1H or 1H2015 the six months ending 30 June 2015
2H or 2H2015 the six months ending 31 December 2015
AfterPay AfterPay Pty Ltd (ACN 169 342 947)
B2B Business-to-business
EBITDA earnings before interest, tax, depreciation and amortisation
EBIT earnings before interest and tax
Electronic Product non-physical products, services and entitlements
eServices Platform or ESP a B2B technology platform to support the Retail Services, and Health and Government Services business units
FY2015 the financial year ending 31 December 2015
FY2016 the financial year ending 31 December 2016
Gross Profit Gross Profit is calculated as services revenue less cost of sales
Health and Government Services the health and government business unit that enables processing and payment of health insurance claims by Consumers
IPO Touchcorp’s initial public offering of shares under the Prospectus
Mobility Services the mobility services business unit that enables the acceptance of payments and service requests from consumers by MNOs and MVNOs, and purchases of Electronic Products by consumers
MNO Mobile network operator that owns and operates its own network
MVNO Mobile virtual network operator that rents the network of a MNO to provide its services
NPAT net profit after tax
POS Device point-of-sale device
POS-ECR point-of-sale electronic cash register
PMS Infrastructure payment terminals or practice management systems used by Practitioners
Practitioner medical or allied health practitioner that receive payments from Medicare Australia or private health funds for providing services
Prospectus Forecast forecast financial information of Touchcorp, set out in section 4 of the Prospectus
Prospectus Touchcorp’s replacement prospectus dated 20 March 2015
R&D research and development
Retail Services The retail services business unit that enables point-of-sale devices in retail premises to sell Electronic Products
Service Module a service provided by Touchcorp to its customers
Touch System Touchcorp’s software and hardware network that includes the TouchPoint Technology, the ESP, the Mobility Platform, any associated hardware and the range of network capabilities
TouchPoint Technology the suite of software technology developed by Touchcorp, through which Touchcorp integrates with existing POS Devices or PMS Infrastructure
Touchcorp or the Company Touchcorp Limited ARBN 603 731 184
Retail Services The retail services business unit that enables point-of-sale devices in retail premises to sell Electronic Products
TERM MEANING
TOUCHCORP 1H2015 15
APPENDIX: SHORT OVERVIEW O F TO U C H C O R P
Touchcorp has designed, built
owns and operates the Touch
System - a scalable software
platform - that enables the
electronic delivery of non-
physical products, services
and entitlements to their
end-users through multiple
consumer service points,
whether in-store or through
self service methods.
TOUCHCORP OVERVIEW
TOUCHCORP 1H2015 17
– Facilitates the sale of Electronic
Products (in-store or via self-service)
– Integrates with merchants and suppliers
to link their systems
– Provides other value added services
including inventory management,
transaction reporting, transaction
integrity, transaction invoicing and data
analysis (each a Service Module)
– Touchcorp generates revenue from
transaction and integration fees
– The Touch System owns develops
and operates a scalable and globally
accessible software platform
> Broad range of services
> Compatible with a broad range of
interfaces, devices and payment
interfaces
> Protected intellectual property
MERCHANT INTERFACES
SELF-SERVICE INTERFACES/DEVICES
PAYMENT INTERFACES
WELL ESTABLISHED SOFTWARE BUSINESS
TERMINAL
KIOSK MOBILE ATM
POS-ECRIVRMOBILE
INTERNET TABLET
Examples of Electronic Products
Agnostic across interfaces, devices and payment systems
TOUCHCORP 1H2015 18
SCALABLE AND FLEXIBLE TECHNOLOGY
Integration Platform
PaymentTerminal
KioskPOS-ECR IVRInternet
Merchant
Touch data centres
MerchantMerchant SelfService
SelfService
Supplier Supplier Supplier SupplierSupplier
eServices Platform Mobility Platform
TOUCH POINT
– Small part of platform
– Unique integration for each customer
– Cloud updates
TOUCH SYSTEM
– Majority of platform
– Common across Customers
– Customers choose and use modules
– Highly scalable
– Cloud updates
TOUCH POINT
– Small part of platform
– Unique integration for each customer
– Cloud updates
FUNCTIONS
Inventory
Accounting
Transaction integrity
Invoicing
Reporting
TOUCHCORP 1H2015 19