MOBILE EMBRACE - ASX · 11/24/2016 · REACH ENGAGE TRANSACT EMBRACE 1 For personal use only....
Transcript of MOBILE EMBRACE - ASX · 11/24/2016 · REACH ENGAGE TRANSACT EMBRACE 1 For personal use only....
ASX:MBE
MOBILE EMBRACE
Chris Thorpe 24 Nov 2016
2016 AGM – CEO ADDRESS
REACH ENGAGE TRANSACT EMBRACE
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TABLE OF CONTENTSREACH ENGAGE TRANSACT EMBRACE
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1. THE CHALLENGE AND GLOBAL OPPORTUNITY FOR MOBILE
2. MBE OVERVIEW
3. 2016 FINANCIAL REVIEW
4. GROWTH STRATEGY
5. OUTLOOK
APPENDICES
2016 FY RESULTS
P 3
P 6
P 14
P 20
P 27
P 29
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GLOBAL DIRECT
CARRIER BILLING
$16.6
bn
2015 2019
$25
bn
APP
DOWNLOADS
MOBILE
USAGE
2018
Check phone
85 times per day
=
Mobile Internet
and Apps
5 hours per day
SMARTPHONE
PURCHASES
CUSTOMER
CONVERSION
MBE 6 x
1 x
Carrier Billing
Credit Card
See Appendix for sources
MARKET
OPPORTUNITYPROJECTED INTERNET
ACCESS 2016
DESKTOP
1.2 BILLION
MOBILE
2 BILLION
44% of the world’s population
2015 2020
180 billion 284 billion 2015 $122 billion
2020 $319 billion
People (billion)
Nearly one in two
dollars of online
spend will stem from
mobile in 2020
THE GLOBAL OPPORTUNITY FOR MOBILE
High
concentration
in APAC
7.16.8
3.5
2.2
Worl
d P
op
ula
tio
n
Mo
bile
Ph
on
e A
ccts
Pe
op
le w
ith
Ba
nk A
ccts
Cre
dit C
ard
Accts
MBE’s
Opportunity
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THE SCARCEST COMMODITY FOR BUSINESSES
TODAY IS HUMAN ATTENTION
˃ People are captivated by their devices
˃ Consumers look at phone 85 times/day
and have short attention span
˃ Consumers expect to run their lives
through their phone, seamlessly
engaging and transacting
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REACHING CUSTOMERS PRESENTS A
HUGE CHALLENGE FOR BUSINESSES
FACT: Human attention span has dropped from
12 seconds in 2002 to only 8 seconds in 2013,
which is one second shorter than a goldfish.
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OUR OPPORTUNITY IS EVERY BUSINESSES CHALLENGE
To acquire customers, businesses must:
Reach and Transact with the growing volume of consumers who
prefer to engage on mobile devices and
Monetise the transactions
To do so you must:
Give consumers
relevant marketing and
easy payment options
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WHO WE ARE
MOBILE
EMBRACE
COMPANY
OVERVIEW
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GLOBAL MOBILE COMMERCE COMPANY
MOBILE MARKETING AND CARRIER BILLING
OUR TEAM
Digital and mobile specialists in
Sydney, Melbourne, NZ, UAE,
UK and Kuala Lumpur
LEADERSHIP
Led by founders (since 2005)
and managers holding
substantial equity in MBE
TECHNOLOGY
Global-leading technology
platforms
EXPERIENCE
Leaders have 70 years
combined mobile marketing &
carrier billing expertise
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Mobile Marketing
Carrier Billing
Any marketing activity that is designed to interact
with a consumer whilst they are using their mobile
phone or any other hand held device
A mobile payment
method that allows
a consumer to
purchase a
product from a
third party vendor
via their mobile
phone bill
WHAT WE DO
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Founded in 2005, MBE is operating across:
16 countries supported by
107 specialist staff with
a reputation for delivery…
and we are focused on our continued growth
We are strong in our experience, the quality of
our businesses and our infrastructure, our
determination to succeed and our dedicated
and talented people, our greatest strength
WE’VE COME FAR
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WE ARE MBE – OUR TRACK RECORDREACH ENGAGE TRANSACT EMBRACE
PROVEN
PROFITABLE
GROWING
STRAEGIC PLAN
• Consistent, successful business delivery to 200+ brands,
over 11+ years
• Global agreements with major telecommunications groups
• Five-year revenue 40%, EBITDA 100% and EPS CAGR 325%
• Revenue of $60.6 million up 83% YoY from $33 million
• EBITDA of $9.5 million up 86% YoY from $5 million
• Basic EPS 1.26 cps up 57% YoY from 0.8
• International operating footprint tripled from FY15 to FY16
• Monthly transactions increased 50% from 2 to 3 million over
the year
• Carrier billing live 10 countries with capacity to expand into 10
more countries – new territories pending
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OUR GROWING GLOBAL FOOTPRINT
Australia
Bahrain
Egypt
France
Hong Kong
Malaysia
New Zealand
Norway
Pakistan
Qatar
Saudi Arabia
Singapore
Switzerland
Thailand
United Arab Emirates
United Kingdom
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ESTABLISHED AND PROVEN NETWORKSREACH ENGAGE TRANSACT EMBRACE
CARRIER PARTNERSIntegrating with the world’s largest carriers to
provide Carrier Billing to their customers
BRANDSDelivering customers for over 200
brands and agencies globally
PUBLISHERSHundreds of brands and agencies, delivering
incremental revenue to quality publishers
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QUALITY PRODUCTS
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A SELECTION OF OUR CARRIER BILLING PRODUCTS
Subscription services driving strong annuity revenue
EDUCATIONEducational games for students
MOBILE SECURITYVirus and malware protection on your mobile devices
SPORTSWatch some of your favourite sport at anytime
GAMESHuge selection of quality games
FITNESSManage your health and fitness with our fitness tracker
VIDEO-ON-DEMANDShort-form VOD content across multiple genres
Diverse portfolio. Content Providers partner with MBE to acquire, bill and manage
customers at scale.
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2016 REVIEW
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FINANCIAL RESULTS
REVENUE EBITDA
REACH ENGAGE TRANSACT EMBRACE
Exceeded
guidance
Exceeded
guidance
15
PROVEN PROFITABLE GROWING
0
10
20
30
40
50
60
FY11 FY12 FY13 FY14 FY15 FY16
$m
-1
1
3
5
7
9
FY11 FY12 FY13 FY14 FY15 FY16
$m
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REACH ENGAGE TRANSACT EMBRACEREVENUE BREAKDOWN BY TRANSACTION
0
5
10
15
20
25
30
35
FY14 FY15 FY16
$ m
DIRECT CARRIER BILLING
0
5
10
15
20
25
FY14 FY15 FY16
$ m
MOBILE MARKETING
PROVEN PROFITABLE GROWING F
or p
erso
nal u
se o
nly
BUSINESS SENSITIVITIES
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MARKET
Fluctuation in mobile
advertising spend, Effective
access to inventory,
business spend on mobile /
digital or consumer sentiment
Lumpiness that can come from
campaign sales or change in
spending patterns, changing
market conditions or
technologies that may impact
access
Forex Hedging Strategies in
place
Cash conservatively managed
TECHNOLOGY
Competitive technologies
Risk that new technologies
emerge that impact competitive
advantage or market
environment
Carrier support of billing
platforms
Carriers changing their support
for carrier billing of mobile
products and services
Programmatic Platforms
Use of platforms for
purchase/pricing of ad inventory
negatively impacting demand or
access for mobile advertising
COMPETITORS
New competitive market
entrants
Risk that new competitors enter
market with a similar business
Marketing channels, New
Product and Billing channel
performance
Non-performance of marketing
channels or disinterest in
products by consumers
REGULATION
Regulation
Changes in rules around the
regulation of mobile products
and services and digital
marketing
Restrictions in handset
platform access
e.g. Apple’s current ecosystem
Handset manufacturers or
mobile platform developers
restricting consumer access to
products and services
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HALF YEAR GUIDANCE
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PROVEN PROFITABLE GROWING
1H13
$M
1H14
$M
1H15
$M
1H16
$M
1H17
$M
Revenue 5.8 9.5 14.1 28 >28
EBITDA 0.3 1.8 1.7 4.1 >2
NPAT* 0.2 1.6 1.5 2.6 0.75
REACH ENGAGE TRANSACT EMBRACE
FULL YEAR GUIDANCE
Revenue >$70 m
EBITDA >$8 m
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REACH ENGAGE TRANSACT EMBRACE
INTERNATIONAL DIRECT CARRIER BILLING
REVENUE GROWTH
GLOBAL CUSTOMER
ACQUISITIONModel proven in multiple territories
in line with stated strategy
INTERNATIONAL
TERRITORIESExisting agreements provide
scope for expansion of carrier
billing operations into multiple
countries – new agreements in
the pipeline
PROVEN PROFITABLE GROWING
0
0.5
1
1.5
2
2.5
Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17
$ M
illio
n
Forecast
GLOBAL ORGANIC
GROWTHStrong global organic growth in
2.5 years
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GROWTH
STRATEGY
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REACH ENGAGE TRANSACT EMBRACE
3. TECHNOLOGY1. INTERNATIONAL
GROWTH
2. PROPRIETARY
DATA ASSETS
THREE YEAR GROWTH STRATEGY
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REACH ENGAGE TRANSACT EMBRACE
1. INTERNATIONAL GROWTH
THREE YEAR STRATEGY
STRATEGYBuild expansive MBE global operational footprint and
financial performance
GROUP PROGRESSJune 2015, 5 countries
November 2016, 16 countries
COMMERCIAL BENEFITSDiversification
Strengthened partner relationships
Scalable model – stable fixed costs
CARRIER BILLING BY THE NUMBERS
2014 2016 2019
Countries 3 11 >30
Telcos 5 24 >50
Addressable
Market30 m 340 m >1.0 bn
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INTERNATIONAL REVENUE
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0
5
10
15
20
25
FY15 FY16 FY17
$m
783%
136%
25
14.4
GROUP INTERNATIONAL REVENUE GROWTHInternational revenue forecast to grow > $25m (up 140%)
from $10.6m in FY16
INTERNATIONAL CUSTOMER BASE
Experiencing strong growth across multiple territories
International Transactions have grown 100% since
June 2016
1.29.4
10.6
THREE YEAR STRATEGY
REACH ENGAGE TRANSACT EMBRACE
1. INTERNATIONAL GROWTH
Forecast
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REACH ENGAGE TRANSACT EMBRACE
2. PROPRIETARY DATA ASSETS
THREE YEAR STRATEGY
STRATEGYGrow our proprietary data assets to enable targeted
acquisition of valuable customers at massive scale
PROGRESSo Average monthly transactions increased 50% from
2 million FY15 to 3 million FY16
o Data assets growing in multiple territories expanding
targeting capabilities and delivering strong annuity
revenues
COMMERCIAL BENEFITSo Higher quality data drives ability to turn consumers into
customers through targeted marketing
o Businesses pay more for delivery of quality customers
o Loyal business partners and recurring spendFor
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PROPRIETARY MARKETING AND BILLING PLATFORMS
STRATEGYContinue to enhance MBE technology platform assets to
further strengthen competitive advantage and scalability
PROGRESSo MOBIPAY NINJA new proprietary Billing and Customer
Management platform is being rolled out
o New Automation features are now live on Mobile
Marketing Platform
o New business product launches on Mobile Marketing
Platform
COMMERCIAL BENEFITSo Faster, more cost effective global carrier integration
o Better customer conversion rates and diversity
o Marketing spend efficiency
o Mobile digital marketing platforms generating new
parallel revenue streams
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3. TECHNOLOGY
THREE YEAR STRATEGY
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ADDING VALUE TO OUR
CLIPP INVESTMENT
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USER STATS
> 200,000 downloads
> 98,000 registered consumers
o 750 venues live
o 250 on Last Minute Deals
o Focus 2016 has been on growing
Last Minute deals to increase
usage at each venue
o FY17 focus is venue growth, usage
and major brand partnership
BRAND PARTNERSHIPS
o Partnership opportunity with major breweries
o They promote Clipp and offer a free drink
o Proven results from test campaigns
CLIPP FOR BUSINESS –
CORPORATE
o Enables venues to ‘white label’ a
domain and provide discounts to
staff of nearby offices
o Corporates already enabled:
Macquarie Bank, AMP
KPMG, EY, Ch7
WHAT WE OWN
o MBE currently owns 31% of Clipp
o $2.95m of a $3.5m drawdown
facility has been fulfilled
o If converted today MBE would own
72% of Clipp
CLIPP FOR BUSINESS –
HOSPITALITY
o Launched August 2016
o Enables staff discounts for major hospitality
chains (avg 900+ staff per chain)
o Venues direct all staff to use Clipp to
receive discounts up to 50% off food and
drink in their venue
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REACH ENGAGE TRANSACT EMBRACE
OUTLOOK
MARKET COMPETITIVEContinued development of MBE proprietary technology platforms and
datasets is building competitive strength, commercial robustness and
marketing channel diversity
OPERATIONAL DIVERSITYContinued rollout of MBE mobile marketing and carrier billing
capabilities into international markets is driving growth and
diversifying revenue
SUPPORTED MODELSubscription billing, recurring revenue, business
model is growing in popularity
MOBILE SECTOR STRONGFundamentals for the mobile marketing and carrier billing
sectors are sound. Industry tail winds are strong
CONSUMER ENGAGEMENTThe way consumers transact through their
mobile devices is evolving at rapid pace
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REACH ENGAGE TRANSACT EMBRACE
SUMMARY
Mobile Embrace was established 11 years ago and is now a market leader
We have a strong track record of growing earnings and revenue
We are focused on growing the business
We have a diversified business model which is Internationally proven
We continue to expand in new territories
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APPENDIX
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Product partner works
with Mobile Embrace
to take FiTTR to
consumers
Mobile Embrace
trading desk engages
with consumers on
multiple digital
channels & platforms
Individual becomes a
customer by:
Marketing
transactions:
1. Agreeing to
subscription
Billing Transaction:
2. Agreeing to be billed
Mobile Embrace
manages users on an
ongoing basis
throughout their
lifetime, optimising
customer lifetime value
Due to sophisticated
customer experience
and care, customers
continue to use product
week after week via
subscription model
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CASE STUDIES: SUCCESS WITH MBEREACH ENGAGE TRANSACT EMBRACE
CASE STUDY 1: Carrier Billing (UK)
PARTNER BUSINESS PROBLEM: Our business
objective is to grow the membership numbers and
revenue of our product, but how do we get it to
mobile consumers?
REACH ENGAGE TRANSACT EMBRACE
Weber works with
Mobile Embrace to
utilise specific datasets
to target and reach
interested consumers
Mobile Embrace
engages with
consumers on multiple
digital platforms
Mobile Embrace adds
value by generating
quality leads
Marketing
Transaction:
Interested consumers
agree to be
communicated to by
Weber
Weber uses Mobile
Embrace’s quality
leads to drive high
customer conversion
REACH ENGAGE TRANSACT EMBRACE
CASE STUDY 1: Mobile Marketing (UAE)
PARTNER BUSINESS PROBLEM: Our business
objective is to grow the sales of BBQs but how can we
target consumers on mobile that will convert to
valuable customers?
DemographicsFemale (72%)
18-35
Active / Health
enthusiasts /
Foodie / Travel
Celebrity culture /
Lifestyle
DemographicsMale
25-65
English & Arabic
speaking / Foodie /
Outdoors / Sports /
Travel
Week
1
Week
2
Week
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THE FUTURE IS SUBSCRIPTIONREACH ENGAGE TRANSACT EMBRACE
DELIVERS GLOBAL SCALEScalable, repeatable, transportable. Leverage cloud
based technology to drive global recurring revenues
THE MODEL WORKSSpotify, Netflix, Foxtel, SMH, News Ltd, Premier
League, Apple and Google App Stores
SUBSCRIPTION BILLING PLATFORMS SUPPORT
A DIVERSE SET OF MONITESATION MODELS 1
BILLING MADE EASYSubscription payment made seamless with direct
carrier billing straight to customers mobile phone bill
DIGITAL SUBSCRIPTIONS Consumers are willing to pay regularly for quality
mobile digital products and content
RIGHT PLACE, RIGHT TIMEMBE is strongly positioned to grow subscription-
based business globally via DCB with expanding
major Telco partners
1The Forrester Wave: Subscription
Billing Platforms, Q4 2015: November
11, 2015.
One-time transactionsIn-app purchasesMicro-transactionsOne-time add-ons
Usage / Consumption
Min UseQuarterlyAnnually
ThresholdsRollover
SubscriptionsMonthly
QuarterlyAnnually
Custom Timeframe
MERCHANDISING
Family Plans
Pricing Tiers
Freemium
/ Trial
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REACH ENGAGE TRANSACT EMBRACESTATISTICS SOURCES
The global population vs: mobile phone vs bank account vs credit card
Source: Ovum Report, 2016
App download growth from 180 billion times in 2015 to 284 billion times in 2020
Source: Wired 2015, International Business Times 2016
Carrier Billing in 2015 worth $16.6 billion, will be $25.3 billion in 2019
Source: Ovum Report 2016
Mobile usage - 85 times a day/5 hours a day: Nottingham Trent University (https://www.ntu.ac.uk/apps/news/180892-
15/People_check_their_smartphones_85_times_a_day_(and_they_dont_even_know_theyre_doing_it).aspx)
More information and numbers on the m-commerce stat from Goldman Sachs: $204 billion in 2014 to $626
billion in 2018 (https://www.internetretailer.com/2014/03/10/mobile-commerce-will-be-nearly-half-e-commerce-2018)
Smartphone purchases 2015 $122 billion, $319 billion in 2020
Source: Javelin Report 2016
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DISCLAIMER
• This presentation has been prepared by Mobile Embrace Limited (ABN 24 089 805 416) (MBE). Each recipient of this presentation (Recipient) is deemed to have
agreed to accept the qualifications, limitations and disclaimers set out below.
• MBE and its subsidiaries, directors, officers, employees, advisers or representatives (together, Beneficiaries) make no representation or warranty, express or implied,
as to the accuracy, reliability or completeness of any information contained in this presentation, including any forecast or prospective information. Past performance
information given in this presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance. The
historical information in this presentation is, or is based upon, information that has been released to the market. For further information, please see past announcements
released by MBE to ASX.
•The forward-looking statements included in this presentation involve subjective judgment and analysis and are subject to significant uncertainties, risks and
contingencies, many of which are outside the control of, and are unknown to, the Beneficiaries. Actual future events may vary materially from the forward looking
statements and the assumptions on which those statements are based. Given these uncertainties, you are cautioned not to place undue reliance on such forward-looking
statements. Similarly, statements about market and industry trends, which are based on interpretations of current market conditions, should be treated with caution. Such
statements may cause the actual results or performance of MBE to be materially different from any future results or performance expressed or implied by forward-looking
statements. Forward-looking statements including projections, guidance on future earnings and estimates are provided as a general guide only and should not be relied
upon as an indication or guarantee of future performance. Such forward-looking statements speak only as of the date of this presentation.
•MBE disclaims any intent to, and does not promise or undertake to, update publicly any forward-looking statements or any other content of this presentation, whether as
a result of new information, future events or results or otherwise.
•This presentation is a general overview only, it does not take into account the individual investment objectives, financial situation or particular needs of any person, and
it does not purport to contain all the information that may be required to evaluate an investment in MBE. The information in this presentation is provided personally to the
Recipient as a matter of interest only. It does not amount to an express or implied recommendation with respect to any investment in MBE, nor does it constitute
investment, legal, tax or other advice. The Recipient, intending investors and their respective advisers, should: (a) conduct their own independent review, investigations
and analysis of MBE, and of the information contained or referred to in this presentation; and (b) seek professional advice as to whether an investment in the securities of
MBE is appropriate for them, having regard to their personal objectives, risk profile, financial situation and needs.
•Nothing in this presentation is or is to be taken to be a solicitation, offer, invitation or other proposal to subscribe for MBE securities. This presentation does not and will
not form part of any contract for the acquisition of MBE securities. The distribution of this presentation in jurisdictions outside Australia may be restricted by law and
persons who come into possession of this presentation in such jurisdictions should seek advice on and observe any such restrictions.
•Except insofar as liability under any law cannot be excluded, none of the Beneficiaries shall have any responsibility or liability for any information contained in this
presentation or in any other way for errors or omissions (including responsibility to any persons by reason of negligence).
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