Investor Presentation Full Year 2017 Results Presentation August 2017 Leading Managed Telco, IT and Cloud provider to SMEs, corporates and consumer brands across Australia. We invest in our people, products and automation to make it easy for our customers to do business.
Disclaimer Some of the statements in this presentation constitute “forward‑looking statements” that do not directly or exclusively relate to historical facts. These forward‑looking statements refmect Inabox Group Limited’s current intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors, many of which are outside Inabox Group Limited’s control. Important factors that could cause actual results to difger materially from the expectations expressed or implied in the forward‑looking statements include known and unknown risks. Because actual results could difger materially from Inabox Group Limited’s current intentions, plans, expectations, assumptions and beliefs about the future, you are urged to view all forward‑looking statements contained in this presentation with caution. This investor presentation may not be copied or otherwise reproduced. 1 Inabox Group Limited I 2017 Results Presentation I August 2017
Contents Our Business FY17 Financial Results Snapshot Investing for the Future Financial Results – Channel Highlights – Strategic Initiatives Driving Profjtable Growth – Improving Business Mix – Financial Summary – Reconciliation of Reported to Underlying Results – Balance Sheet – Cash Flow – Acquisition Update Outlook 2 Inabox Group Limited I 2017 Results Presentation I August 2017
Our business Indirect Enablement Direct Supplying and supporting Providing white labelled Enabling large retail bespoke IT and telecommunications brands to provide connectivity solutions solutions to over 440 retail telecommunications for large SMEs, corporate service providers (RSP) services to their customers and Government clients 3 Inabox Group Limited I 2017 Results Presentation I August 2017
FY17 Financial Results Snapshot Revenue Underlying Underlying $4.5m cash $90.1m EBITDA 1 $6.1m NPAT 1 $1.1m received up 2.4% on FY16 up 12% on FY16 up 27% on FY16 and $2.5m debt retired 76% recurring Reported EBITDA of $4.6m following sale of HCS Business assets 1. Underlying EBITDA and underlying NPAT includes contribution from the HCS business, but excludes one‑ofg transaction and restructuring costs of $1.5m, 4 relating to the acquisition of Hostworks and Logic Communications, the sale of HCS and the fjxed access determination benefjt related to FY16. Inabox Group Limited I 2017 Results Presentation I August 2017
Investing for the Future Investment in FY17 will drive strong organic growth in FY18 Infrastructure and capabilities in Platform-as-a-service place to support market enables national brands shift from traditional to ofger white-label telco to provision of telco services higher margin next generation services New cloud products Telstra Wholesale 4G launched and more and NBN capabilities under development, driving Indirect channel leveraging Hostworks growth infrastructure and capabilities Strong Recent acquisitions Strong cross-selling providing additional opportunities across organic growth infrastructure Direct and Indirect and capabilities channels in FY18 5 Inabox Group Limited I 2017 Results Presentation I August 2017
Financial Results 6 Inabox Group Limited I 2017 Results Presentation I August 2017
Channel Highlights Direct Indirect Enablement – Contributed $41.0m of revenue, – Contributed $44.1m of revenue, – Contributed $4.9m of revenue, up 23% on FY16 a decrease of 10% on FY16 a decrease of 14% on FY16 – Margin contribution $8.8m, up 34% on FY16 – Margin contribution $8.5m down 7% on – Margin contribution of $2.8m up FY16, 3% due to customer loss 3% due to 19% on FY16 – Shift towards higher margin revenues, as margin reclassifjed to Direct company evolves to increase managed – Revenue reduction due to the reduction IT, cloud and communication services and – Revenue decline ($1.9m) partly due to in sales of lower margin network away from lower margin product sales migrating two unprofjtable customers equipment ofgset by an increase in to Optus with no impact to margin higher margin enablement services – $6.3m of revenue contributed by leading to higher overall margins Hostworks (4 months of the year) – A customer loss in July 2016 also adversely impacted revenue ($1.5m) — Growing on average 5,000 supported – $1.1m of revenue reclassifjed from the services a month, services increased Indirect channel – Indirect revenue also impacted by during FY17 from 85,000 to 145,000 $1.1m of revenue reclassifjed to the Direct channel – Innovative and unique turnkey white label solution developed – Strong pipeline of opportunities being pursued with large national brands 7 Inabox Group Limited I 2017 Results Presentation I August 2017
Strategic initiatives driving profjtable growth Strategy FY17 FY18 New — Productise and cross‑sell cloud‑ — Microsoft Offjce 365 Fast Lane — Re-launch Managed IT with new cloud products products leveraging Hostworks launched, winning 2017 ACCOM backup service award for Cloud Sales Assist service — Build own‑infrastructure, leading — Productise SME/mid‑market focused ‘cloud to higher margins and extended — Telstra Wholesale 4G & NBN in a box’ product capabilities capabilities drove record customer growth: 440 RSPs — ‘ConnectYou’ Hosted Voice relaunched, on own‑infrastructure, driving higher margins Sales — Enhance existing sales — New Cloud dedicated sales stafg — Sales Propeller Program providing dedicated capabilities capabilities to drive strong on eastern seaboard Indirect sales stafg focused on cross selling IT growth across all channels and telco — Marketing program leading to record — Support and promote cross‑ number of new retail service providers — Pipeline of Enablement customers extending selling between channels will drive further organic growth their brand to telecommunications, with a number at contract stage — Promote organic growth with existing customers — Investment in sales capabilities, productivity and enhanced commissions structure Productivity — Increase productivity with — Implementation of enterprise wide ITSM platform – streamlining product support and initiatives implementation of enterprise ticketing and case management by combining 7 existing platforms into 1 wide systems and platforms — Implementation of new Business Intelligence platform, providing better insights into — Increased capabilities driven by product performance increased effjciency 8 Inabox Group Limited I 2017 Results Presentation I August 2017
Improving business mix Revenue mix continues to shift towards higher margin, services revenue Strong recurring revenues of 76% Contribution by Channel Recurring Revenue Shifting Revenue Mix Traditional Telco v higher margin growth products 76% 100% 44% 14% 39% 33% 75 46% 53% 24% 50 67% 61% 47% 54% 25 42% 0 2015 2016 2017 2018 forecast Growth Products Traditional Telco Direct Indirect Enablement Recurring Non-recurring 9 Inabox Group Limited I 2017 Results Presentation I August 2017
Financial Summary $’000 $’000 % Revenue marginally up 2.4% on FY16 Year ended 30 June 2017 2016 Change – Revenue impacted by the exit of two unprofjtable customers and a reduction Revenue from continuing operations 90,105 88,005 2.4% in low margin product resale Net contribution 20,087 18,038 11.4% – 76% of revenue is recurring Net contribution % 22.3% 20.5% 1.8% Net contribution up 11.4% on FY16 — Continued shift towards higher margin products EBITDA 4,562 5,465 ‑16.5% and services Underlying EBITDA 1 6,098 5,465 11.6% Underlying EBITDA, up 12% on FY16 Net Profjt After Tax (NPAT) 86 859 ‑90.0% – Increased margin contribution was driven by higher Underlying Net Profjt After Tax (NPAT) 1 1,091 859 27 .0% margin product sales, ofgset in part by the investment in customer care, sales and product development Underlying NPATA 2 2,630 1,573 67 .2% resources to drive future growth Underlying NPAT up 27%, on FY16 – Underlying NPATA up 67% on FY16, and excludes the amortisation of customer contracts related to acquisitions 1. Underlying EBITDA and underlying NPAT includes contribution from the HCS business, but excludes one‑ofg transaction and restructuring costs of $1.5m, relating to the acquisition of Hostworks and Logic Communications, the sale of HCS and the FAD (fjxed access determination) benefjt related to FY16 10 2. Underlying NPATA – NPAT excluding one ofg acquisition and divestment costs and amortisation related to acquired customer contract values Inabox Group Limited I 2017 Results Presentation I August 2017
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