September Quarter Market Update Mission: 14 November 2016 To be a leading player in the global online classifieds industry
Important Notice and Disclaimer This presentation includes forward-looking statements. These can be identified by words such as may, should, anticipate, believe, intend, estimate and expect. Statements which are not based on historic or current facts may be forward-looking statements. Forward-looking statements are based on assumptions regarding Mitula Group s financial position, business strategies, plans and objectives of management for future operations and development and the environment in which Mitula Group will operate. Forward-looking statements are based on current views, expectations and beliefs as at the date they are expressed and which are subject to various risks and uncertainties. Actual results, performance or achievements of Mitula Group could be materially different from those expressed in, or implied by, these forward-looking statements. The forward-looking statements contained in this presentation are not guarantees or assurances of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of Mitula Group, which may cause the actual results, performance or achievements of Mitula Group to differ materially from those expressed or implied by the forward-looking statements. For example, the factors that are likely to affect the results of Mitula Group include general economic conditions in Australia; exchange rates; competition in the markets in which Mitula Group does and will operate and the inherent regulatory risks in the businesses of Mitula Group. The forward-looking statements contained in this presentation should not be taken as implying that the assumptions on which the projections have been prepared are correct or exhaustive. Mitula Group disclaims any responsibility for the accuracy or completeness of any forward-looking statement. Mitula Group disclaims any responsibility to update or revise any forward-looking statement to reflect any change in Mitula Group s financial condition, status or affairs or any change in the events, conditions or circumstances on which a statement is based, except as required by law. The projections or forecasts included in this presentation have not been audited, examined or otherwise reviewed by the independent auditors of Mitula Group. Unless otherwise stated, all amounts are based on A-IFRS and are in Australian Dollars. Certain figures may be subject to rounding differences. Any market share information in this presentation is based on management estimates based on internally available information unless otherwise indicated. You must not place undue reliance on these forward-looking statements. This presentation is not an offer or invitation for subscription or purchase of, or a recommendation of securities. The securities referred to in these materials have not been and will not be registered under the United States Securities Act of 1933 (as amended) and may not be offered or sold in the United States absent registration or an exemption from registration. This presentation is unaudited. Page 1
Introducing Mitula Group High Growth Global Online Classifieds Company AUD Millions 45.0 40.0 35.0 30.0 $28.0m - $29.0m $38.0m - $41.0m Leading online classifieds company operating in 49 countries Diversified across four verticals: property, employment, motoring, fashion; generating more than 70 million monthly visits 25.0 20.0 $20.6m High calibre management and board with decades of online classifieds experience 15.0 10.0 5.0 0.0 $3.8m $5.3m $10.7m CY 2012 CY 2013 CY 2014 CY 2015 CY 2016 (fcst) CY 2017 (fcst) Consistent revenue growth, highmargin, generating strong positive cash flow (>A$1m/month) Significant opportunity for strong growth through launch of new products and synergistic M&A to increase yield per visit EBITDA 25.3% 35.2% 50.8% 46.8% 41.0% - 45.0% 42.0% - 46.0% Note: Prepared on a statutory basis. Lokku Limited acquired 8 May 2015, Nuroa acquired 28 February 2016, and DotProperty acquired 2 September 2016. Revenue projection does not include any M&A outcomes and EBITDA includes costs any associated with IPO, share based payments and M&A work. Source: Internal Management Reports. Page 2
Introducing Mitula Group Operating in 51 Countries EUROPE Spain, UK, Italy, France, Germany, Netherlands, Portugal, Belgium, Austria, Russia, Switzerland, Poland, Romania, Turkey, Ireland Denmark, Sweden, Ukraine AMERICAS US, Canada, Mexico, Chile, Brazil, Argentina, Colombia, Peru, Venezuela, Ecuador, Panama AFRICA Morocco, South Africa, Kenya, Tunisia, Nigeria APAC India, Hong Kong, Malaysia, Singapore, Philipines, China, Indonesia, Pakistan, UAE, Vietnam, Thailand, Cambodia, Laos, Myanmar, Australia, New Zealand, Japan Page 3
Business Overview Mission: To be a leading player in the global online classifieds industry mitulagroup.com
Business Overview Multiple Intermediaries in the Classifieds Transaction Traditional Focus of Mitula Group in Red Buyers General Search Vertical Search Portal + General Classifieds Sites (Sites with listings) Recruiter / Agent / Dealer / Project Marketer Sites Sellers of Cars / Jobs / Homes / Fashion Italian Real Estate Example <5 main vertical search sites ~100 portals / general classifieds / specialist sites ~20,000 agents / developers Page 5
Business Overview Revenue Generation in the Classifieds Transaction Traditional Focus of Mitula Group in Red Buyers General Search Vertical Search Portal + General Classifieds Sites (Sites with listings) Recruiter / Agent / Dealer / Project Marketer Sellers of Cars / Jobs / Homes / Fashion Revenue Streams Clicks CPC / AdSense Display Advertising Listings Display Advertising Software Transaction (Commission) Revenue Potential within a Given Market x1 x10+ x100+ ILLUSTRATIVE Page 6
Business Overview How Vertical Search Works 1 Listings from advertiser sent to Mitula 2 User makes a search request 3 User reviews search results and clicks AdSense or listing 5 User clicks on listing and redirected to source details 4 User clicks on AdSense Page 7
Business Overview Clicks Google AdSense The Mitula Group displays Google AdSense advertisements on its websites. Google AdSense advertisements are administered, sorted, and maintained by Google and are targeted to the website s content and audience. The Mitula Group and Google share in the revenue generated by users of website clicking on these advertisements. Google AdSense advertisements are usually displayed on Website at the top of the search results and on the right hand side of the search results. The Mitula Group has a Premium AdSense publisher account that enables it to customise the format and placement of the Google AdSense advertisements. Page 8 Page 8
Business Overview Clicks Cost per Click (CPC) The Mitula Group displays advertisers listings on its websites, initially free of charge. Those listings may only receive a limited number of click outs. If an advertiser would like to receive more click outs than the limited number provided free of charge, the advertiser must pay the Mitula Group, on a cost-per-click basis, to receive those additional click outs. This is referred to as Direct CPC Revenue, contributed by a paying advertiser. The amount paid per click out by a paying advertiser varies by vertical (real estate, employment, motoring) and by country. Page 9 Page 9
Business Overview Segmentation of Mitula Group Markets Yield per Visit for Mitula Group Tier 1 Established Markets Mature countries with clear online classifieds structure (portals and general classified sites) Major and minor players invest in marketing (brand building and traffic generation) Vertical search seen as a legitimate source of traffic Mitula monetising well with clear growth potential Example: UK, AU, UAE, DE, FR Tier 3 Early Stage Markets No clear online classifieds structure Rapid growth but off a low base Long term potential Mitula not monetising beyond AdSense Example: PK, NG, KE Tier 2 Emerging Markets Strong growth countries Online classifieds structure not settled Vertical search material source of traffic Mitula slow to monetise Example: MX, PH, CO, BR, ID Visits to Mitula Group Sites in the Country Page 10
Business Overview Value Creation by Segment (September Quarter) Visits (m) Clicks (m) % Tier Clicks Sold Revenue (AUD 000 s) Yield / Visit (c) Strategic Implications Stable driver of revenues Tier 1 Established Markets 56.1 78.7 65.7% 3,386 6.0 Focus on growing visitation as able to sell majority of clicks Roll out of additional products and services to existing customers Find ways of selling more clicks (up to around 80%) Tier 2 Emerging Markets 133.3 185.6 33.4% 3,529 2.6 Value being left of the table Low yield per visit driven by low number of clicks sold & lower CPC rate Look for new ways to monetise visitation and increase yield per visit Focus on driving new methods of increasing yield per visit primarily around greater sale of direct to end customer products Tier 3 Early Stage 12.2 14.8 27.0% 310 2.5 No real short term value for Mitula Group Allow to grow naturally and revisit if / when scale achieved Source: Internal Management Reports (Sep Quarter 2016) Page 11
Business Overview Strategic Approach for Mitula Group New Focus of Mitula Group in Red Buyers General Search Vertical Search Portal + General Classifieds Sites (Sites with listings) Recruiter / Agent / Dealer / Project Marketer Sellers of Cars / Jobs / Homes / Fashion Revenue Streams Clicks CPC/AdSense Display Advertising Tier 1 Listings Display Advertising Software Transaction (Commission) Tier 2 Markets Page 12
Business Overview New Revenue Streams Launched in Second Half Initiative Description 2 nd Half Progress Expected Revenue Impact Tier 1 Tier 2 CPC Self Service Platform Self service purchase of clicks Launching in second half November Increase in the clicks sold and thus increase CPC revenues Y Y Promotion Products Display advertising and edm products on Mitula Group sites for existing advertisers and new segments (e.g. banks) Launched in June 2016 and being rolled out progressively New revenue stream in both tier 1 and tier 2 markets Y Y Portals Leverage existing traffic to move closer to the recruiter / agents / dealer / project marketer and thus capture listing and advertising revenues Acquired DotProperty 2 Sept. Network of 10 property portals operating in 9 SE Asian Tier 2 emerging markets New listings and advertising revenue streams from selected Tier 2 markets Y New Verticals New vertical search categories that will leverage existing Mitula Group visits Fashion category identified as next vertical Launched Spain in September 2016 Open new revenue streams from existing visits plus attract new visits In case of fashion, capture transaction revenues (commission) Y Requires investment and this has resulted in increased 2nd half costs Page 13
September Quarter Performance Mission: To be a leading player in the global online classifieds industry mitulagroup.com
AUD Millions For personal use only September Quarter Performance Quarterly Revenue Growth 8.0 CPC AdSense New Products 20.5% Year on Year Revenue Growth 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 $6.0 m $7.2 m Note: Prepared on a statutory basis. Lokku Limited acquired on 8 May 2015, Nuroa on 28 February 2016 and DotProperty acquired 2 September 2016. Source: Internal Management Reports. Page 15
September Quarter Performance Quarterly Revenue by Product AUD 000 s Sep 2016 Quarter Sep 2015 Quarter Growth AdSense 2,643 1,992 32.7% Cost-per-Click 4,165 4,004 4.0% New Products (1) 417 0 n/a Tier 1 CPC revenues grew at 15.8% year on year Tier 2 CPC revenues decreased by 8.0% year on year due to a tightening of marketing spend by customers In addition, currency movements had a negative impact (see appendix p32) Totals 7,225 5,996 20.5% (1) New products commenced launch in June 2016. These include promotion products on Mitula Group sites, listings and promotion products on DotProperty sites, transaction revenue on the fashion vertical, and data products across the Group. Note: Prepared on a statutory basis. Lokku Limited acquired on 8 May 2015, Nuroa on 28 February 2016 and DotProperty on 2 September 2016. Source: Internal Management Reports. Page 16
September Quarter Performance Quarterly Revenue by Tier AUD 000 s Sep 2016 Quarter Sep 2015 Quarter Growth Tier 1 Established Markets 3,386 2,688 26.0% Tier 2 Emerging Markets 3,529 3,040 16.1% Revenue growth driven by movement from Tier 2 CPC revenues to new product revenues including DotProperty based display and listing revenues Tier 3 Early Stage Markets 310 268 15.6% Totals 7,225 5,996 20.5% Note: Prepared on a statutory basis. Currency impact is included in these numbers. Lokku Limited acquired on 8 May 2015, Nuroa on 28 February 2016 and DotProperty on 2 September 2016. Source: Internal management reports. Page 17
September Quarter Performance September Quarter 2016 KPI s Sep Qtr. 2016 Sep Qtr. 2015 Growth Yield / Visit 3.6 cents 3.7 cents (2.7%) Visits (m) 201.6 159.6 26.3% Visits from Organic Search (%) 66.5% 71.7% - Email Alert Subscribers (m) (qtr. end) 10.7 8.9 20.2% Click Outs (m) 279.2 212.1 25.3% Click Outs Sold (m) 117.7 114.3 (3.6%) Yield / Click Out Sold 3.6 cents 3.5 cents 2.9% Note: Prepared on a statutory basis. Revenues and KPI s from Nestoria included from acquisition on 8 May 2015, Nuroa from acquisition on 28 February 2016 and DotProperty from acquisition on 2 September 2016. Will vary from historically published KPI s that were prepared on a pro-forma basis. Source: Internal Management Reports. Page 18
September Quarter Performance Yield per Visit (Quarterly) AUD Millions 8.0 7.0 6.0 5.0 Revenue AUD cents 0.045 0.040 0.035 0.030 Yield per visit 4.0 3.0 2.0 1.0 0.0 0.025 0.020 0.015 0.010 0.005 millions 200.0 180.0 160.0 140.0 Visits 0.000 120.0 100.0 80.0 60.0 40.0 20.0 0.0 Note: Prepared on a statutory basis. Revenues and visits from Nestoria included from acquisition on 8 May 2015, Nuroa from acquisition on 28 February 2016 and DotProperty from acquisition on 2 September 2016. Source: Internal Management Reports. Page 19
September Quarter Performance Source of Visits Sep Quarter 2016 Sep Quarter 2015 6.1% 1.7% 6.5% 0.0% 21.8% 25.6% 66.5% 71.7% Organic Search Direct Paid Search Apps Organic Search Direct Paid Search Apps Source: Google Analytics Page 20
September Quarter Performance Relationship Between Traffic Growth and AdSense Index 3.0 2.5 2.0 1.5 1.0 0.5 AdSense revenue growth is tied to the growth in traffic Click through rates on AdSense ads remain constant Slight outperformance of AdSense revenue is due to higher amounts being paid for Google AdWords and thus higher revenue per click for Mitula 0.0 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Indexed Traffic Growth Indexed AdSense Revenue Growth Note: Google AdSense is not included on all Mitula Group sites. Source: Internal Management Reports. Page 21
Click Outs Generated and Sold (Quarterly) millions 300.0 250.0 31.6% vs PCP Growth For personal use only September Quarter Performance Click Outs Generated Click Outs Sold millions 140.0 120.0 3.1% vs PCP Growth 200.0 100.0 80.0 150.0 60.0 100.0 40.0 50.0 20.0 0.0 0.0 Sep 15 3.5 cents per click sold 2.9% Growth Sep 16 3.6 cents per click sold Note: All numbers prepared on a statutory basis. Clicks generated and sold from Nestoria included from acquisition on 8 May 2015 and Nuroa from acquisition on 28 February 2016. Source: Internal Management Reports. Page 22
September Quarter Performance New Revenue Streams Progress and Impact on Business Initiative Progress September Quarter Impact CPC Self Service Platform Promotion Products DotProperty Acquisition Expected to launch in second half November Initial products launched in June and being refined Sales and marketing approach being rolled out DotProperty growing inline with business plan Mitula implementing traffic sharing initiatives to help accelerate growth Fashion Vertical Launched Spain in September 2016 Commencing cross platform marketing Initial revenue streams emerging Additional costs incurred by the business during the build out of the self service platform No revenues generated as not launched in September quarter Generated approximately 50% of the new product revenues in the September quarter Additional costs (vs first half) were incurred as product development continued and promotion was rolled out Generated approximately 50% of the new product revenues in September quarter Added additional costs to the business as it operated at an EBTIDA loss in September Initial, but small, revenues generated in September quarter Costs being incurred as still in the set up phase Overall impact has been an increase in operating costs to fund new revenue stream development and thus a reduction in EBITDA margin from the first half. This will continue into the December quarter. Page 23
Outlook Mission: To be a leading player in the global online classifieds industry mitulagroup.com
Outlook CY 2016 Revenue Forecast AUD 000 s CY16 1 st Half (Actual) CY16 2 nd Half (Forecast) CY16 Total (Forecast) CY15 Total (Actual) Annual Growth (Forecast) CY15 2 nd Half (Actual) Half Year Growth (Forecast) Revenue (High) 13,587 15,413 29,000 20,568 41.0% 11,670 32.1% Revenue (Low) 13,587 14,413 28,000 20,568 36.1% 11,670 23.5% Source: Internal Management Reports Page 25
Outlook Quarterly Revenue Growth December Quarter Forecast AUD Millions 9.0 8.0 7.0 6.0 CPC AdSense Advertising/Listing Forecast 19.3% - 36.8% PCP Revenue Growth Driven by a combination of new promotion revenues on Mitula Group sites + DotProperty Group revenues 5.0 4.0 3.0 2.0 1.0 Expected CPC revenues to return to previous levels driven by launch of self service platform and a strengthening of the CPC market 0.0 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 (fcst) For display purposes, uses mid point data for Dec 2016 quarter forecast of between $6.8 m and $7.8 m in revenues. Source: Internal Management Reports. $5.7m $6.8m- $7.8m Page 26
Outlook CY 2016 EBITDA Forecast AUD 000 s CY16 1 st Half Actual CY16 2 nd Half Forecast CY16 Total (Forecast) CY15 Total (Actual) Annual Growth (Forecast) CY15 2 nd Half (Actual) Half Year Growth (Forecast) EBITDA (High) 6,565 6,435 13,000 7,545 72.2% 4,539 41.2% EBITDA (Low) 6,565 5,435 12,000 7,545 59.0% 4,539 19.7% During second half of CY 2016, there will be an increase of $1.7m in operating expenses over first half. These expenses are primarily associated with new revenue streams: ~$1.0 m in DotProperty opex ~$0.4 m in additional salaries (new and existing business) ~$0.3 m in other expenses Note: EBITDA is the statutory EBITDA and includes all cash and non cash based costs including any related to the IPO, share based payments and M&A initiatives. Source: Internal Management Reports Page 27
Outlook AUD Millions For personal use only Annual Revenue Growth CY 2017 Guidance 45.0 40.0 35.0 30.0 $28.0m - $29.0m $38.0m - $41.0m EBITDA expected to be between $17.0m and $19.0m for CY 2017 25.0 $20.6m 20.0 15.0 $10.7m 10.0 5.0 $3.8m $5.3m 0.0 CY 2012 CY 2013 CY 2014 CY 2015 CY 2016 (fcst) CY 2017 (fcst) Note: Prepared on a statutory basis. Lokku Limited acquired 8 May 2015, Nuroa acquired 28 February 2016, and DotProperty acquired 2 September 2016. Revenue projection does not include any M&A outcomes and EBITDA includes any costs associated with IPO, share based payments and M&A initiatives. Source: Internal Management Reports. Page 28
Mission: Appendix To be a leading player in the global online classifieds industry mitulagroup.com
Appendix Vertical Search Display Advertising Products Display / Banners Special Branding Options 300x600 300x250 Page 30
Appendix DotProperty Group Overview Launched in 2013 DotProperty Group operates 10 property portals covering nine South East Asian markets Thailand (2 sites) Philippines Indonesia Malaysia Singapore Laos Cambodia Myanmar Vietnam Head quarters is based in Bangkok with an office in Philippines Monetises sites through a combination of pay to list products for agents and developers primarily in Thailand and the Philippines Total of 50 employees KPI August 2016 Agents (Paying / Trial) 20,207 Developers 1,278 Listings 568,821 Visits 825,043 Page Views 2,690,009 Key Financials Revenue y/e 30 June 2016 $1.7m Growth rate vs pcp (y/e 30 June 16) 123% Revenue run rate (Jul/Aug x 6) $2.6m Forecast EBITDA break even Dec 2016 Source: DotProperty management reports Page 31
Appendix Currency Impact on Revenues AUD 000 s Sep 2016 Quarter Sep 2015 Quarter Growth Revenues (Actual Currency) 7,225 5,996 20.5% Revenues (Constant Currency) 7,560 5,996 26.1% Negative exchange rate movements resulted in a decrease in year on year growth of 5.6 percentage points Note: Constant currency approach based on using a constant set of currency exchange rates for the complete period rather than monthly average exchange rates. The Mitula Group does not undertake any currency hedging Source: Internal Management Information. Page 32
Appendix Revenue Comparison of Next Group Japan and Mitula AUD Thousands 12,000 10,000 8,000 6,000 Revenue for Next Group Japan s Overseas Operations Trovit, Lilfull Indonesia and Lifull Australia Vast majority from Trovit (est. >95%) For 6 months to 30 Sept., segment contribution margin was 16.8% c.f. Mitula Group s first half EBITDA margin of 48% 4,000 2,000 0 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Next Group Japan Overseas Mitula Group Note: Revenue from Next Group Japan sourced from public financial statements and converted to AUS at average quarterly foreign exchange rates Source: Internal Management Information; Next Group Japan Financial Statements Page 33
Contact us Gonzalo del Pozo CEO gonzalo@mitulagroup.com Simon Baker Chairman simon@mitulagroup.com HQ: Mitula Group Ltd. Enrique Granados 6, edif. B 28224 Pozuelo de Alarcón Madrid, Spain +34 917 082 147