Slide 1: 1H17 Half Year Results
For personal use only 31 July 2017 Freelancer Limited 1H17 Half Year Results Matt Barrie Chief Executive Officer
Slide 2: 1H17 Freelancer Group Results
1H17 Freelancer Group Results For personal use only • GPV $291m, down 18% on pcp • Freelancer: $82m, up 1% • Escrow.com: $209m, down 24% • Net Revenue $26.3m, no change on pcp • Freelancer: $23.1m, up 6% • Escrow.com: $3.1m, down 28% • Gross margin >85% • Positive operating cashflow $1.5m • Operatin
Slide 3: 1H17 Freelancer Group Results
1H17 Freelancer Group Results For personal use only Despite an 18% drop in GPV ($64m) • The Freelancer Group had immaterial changes in Net Revenue, Gross Profit, Operating EBITDA & NPAT, and Cash in Bank due to operating improvements and cost control • NPAT improved slightly 1H17 ($0.71m) vs 1H16 ($
Slide 4: Million users and million projects
25 million users and 12 million projects 1.4 million new projects and contests posted in 1H17, with 1.4 million new users For personal use only Total Registered Users Total Jobs Posted (Filtered) 22,000,000 10,000,000 20,000,000 18,000,000 8,000,000 16,000,000 24,751,395 12,009,862 (as of 30 June 20
Slide 5: Key financial highlights 1H17
Key financial highlights 1H17 Freelancer is well positioned for significant operating leverage moving forward For personal use only A$m, 30 June half year end 1H17 1H16 Change Gross Payment Volume1,2 $291.1 $354.9m (18%) Net Revenue1 $26.3m $26.2m 0% Gross Profit $22.5m $22.7m (1)% Gross margin (%)
Slide 6: Gross payment volume
Gross payment volume Group GPV impacted by a lower contribution from Escrow during a period of re-engineering processes & systems For personal use only 354.9 Gross Payment Volume1 (A$m) 350.0 ● GPV of $291m down 18% on 1H16 291.1 ● Freelancer marketplace GPV $82m, up 1% on pcp 300.0 ● Escrow.com GPV
Slide 7: Freelancer Group GPV by quarter (AUD)
Freelancer Group GPV by quarter (AUD) Q2 on Q1 GPV growth of 13% after 2H16 fall in volume For personal use only 13% lift in group GPV 2Q/1Q17 Acquired Escrow.com 7
Slide 8: Escrow China Bubble GPV (USD)
Escrow China Bubble GPV (USD) China GPV contribution has halved from 1H16 (US$52m) to 1H17 ($25m), peaked in 2H15 ($89m) For personal use only China ROW 16.2% lift 2Q/1Q Escrow GPV 8
Slide 9: Freelancer marketplace GPV (AUD)
Freelancer marketplace GPV (AUD) 2Q17 on 1Q17 marketplace GPV trending again after 2H16 flat line in volume For personal use only On-trend in 2Q17 again 9
Slide 10: Net revenue
Net revenue Group revenue has been impacted by a drop in contribution from Escrow.com during a period of re-engineering For personal use only Net Revenue (A$m) and Gross Margin (%) 26.3 ● 1H17 Net Revenue of $26.3m, flat on 1H16 26.2 25.0 100% – Freelancer: $23.1m, up 6% on 1H16 87% 88% 88% 88% – Es
Slide 11: Group revenue by quarter (AUD)
Group revenue by quarter (AUD) Despite 18% drop in Group GPV on pcp ($64m), Group revenue is flat on pcp For personal use only 11
Slide 12: Cash flow profile 1H17
Cash flow profile 1H17 Freelancer continues to have a very strong balance sheet with ~$35 million of cash For personal use only Cash Balance (A$m) ● 31 December 2016 cash balance of $35.2m 0.2 (1.2) ● Positive operating cashflow of 1.5 0.3 (0.7) $1.5m (0.6) ● Benefit of $0.3m from re- measurement of
Slide 13: 1H17 Key Themes
1H17 Key Themes Freelancer – 1H17 growth tempered fixing funnel issues of 2H16 For personal use only • Issues are isolated to core desktop project funnel and are mostly fixed • FY16 major funnel changes tested well but had delayed 2nd order effects • Strong growth continues with mobile, contests and
Slide 14: Freelancer marketplace accepted projects
Freelancer marketplace accepted projects Accepted projects have bounced back as FY16 desktop project funnel issues are fixed For personal use only 14
Slide 15: Freelancer marketplace project fees (USD)
Freelancer marketplace project fees (USD) Overall project fees continue to grow strongly according to long term trend after 2H16 decline For personal use only 15
Slide 16: Freelancer marketplace contests posted
Freelancer marketplace contests posted Contests in the Freelancer marketplace continue to grow at a strong pace For personal use only 16
Slide 17: Freelancer marketplace contest fees (USD)
Freelancer marketplace contest fees (USD) Contest fees are trending strongly upwards For personal use only 17
Slide 18: Freelancer marketplace mobile projects
Freelancer marketplace mobile projects Mobile projects continue to grow at exceptional pace For personal use only 18
Slide 19: Freelancer marketplace mobile bids
Freelancer marketplace mobile bids Bidding from mobile platforms continues to accelerate For personal use only 19
Slide 20: Escrow KYC / Anti-money Laundering Program
Escrow KYC / Anti-money Laundering Program (shipped 4Q16) Rollout of identity verification for individuals, corporations, etc. compliant with US Patriot Act, with real-time chat For personal use only • 86% of Tier-2 verification applications processed within 1 hour • Has churned volume (GPV) as some
Slide 21: Rebuilt Trust Accounting
Rebuilt Trust Accounting (shipped June 2017) Key item necessary before growth - replaced Legacy system with New Trust (complete) For personal use only Legacy: New Trust: • Monolithic DOS/Windows application, no source • Online, web-based, API enabled • Seven steps per transaction (1-2 minutes each)
Slide 22: Escrow key upcoming milestones in Q3
Escrow key upcoming milestones in Q3 Key infrastructure milestones to deliver to grow sales with integration partners For personal use only Key items: ● August Automation of core inbound payments backend ● August Launch of new API ● September Automation of outbound payments backend ● September Relea
Slide 23: Summary profit & loss statement
Summary profit & loss statement Operating expense results highlight significant operating leverage to future revenue growth For personal use only (A$m) 1H16 1H17 Change ● 1H17 Net Revenue of $26.3m, flat on 1H16 Half-year to 30 June Actual Actual – Freelancer contribution: $23.1m, up 6% on 1H16 Net
Slide 24: Summary balance sheet
Summary balance sheet Freelancer continues to have a very strong balance sheet with $35 million cash in bank and $22 million held in trust For personal use only (A$m) FY16 1H17 Change ● Total cash of $34.7m on balance sheet as at 30 June 2017 Actual Actual ● Additional $21.7m of cash held off balanc
Slide 25: Outlook statement FY17
Outlook statement FY17 Freelancer is continuing its path to profitability For personal use only ● Freelancer expects to generate positive Operating Cashflow, Operating EBITDA & Operating NPAT (excluding share based payments expenses) through FY17 ● Freelancer – desktop funnel issues are mostly fixed
Slide 26: Freelancer Limited: Company
For personal use only Freelancer Limited COMPANY 26
Slide 27: Freelancer.com and Escrow.com
Freelancer.com Escrow.com For personal use only Freelancer.com Escrow.com #1 Online Services Marketplace #1 for Secure Online Payments Over US$3 billion in Over US$3 billion in projects posted escrow transactions 27
Slide 28: Freelancer.com is changing the global dynamics in the marketplace for people
For personal use only Freelancer.com is changing the global dynamics in the marketplace for people 28
Slide 29: In a trillion dollar market
in a trillion dollar market For personal use only 29
Slide 30: We help entrepreneurs build the future
For personal use only We help entrepreneurs build the future. We help small businesses, startups and entrepreneurs turn that spark of an idea into reality. Wrreelancer
Slide 31: We are changing the developing world
For personal use only 31 We are changing the developing providing oppo and income. “Thanks to Freelancer.com, | am able t which allows me to spend quality time while making money to meet househol Kelvin Otieno Graphic Designer Nairobi, Kenya kkk kk 4.9/5.0 rating, 44 reviews.
Slide 32: Your idea, brought to life in stunning visuals
32 Your idea, brought to life in stunning visuals. We can make your dreams a reality, no matter how large or small your ambition or budget. a ‘WY freelancer
Slide 33: Freelancer's Online Economy in 2016
Freelancer’s Online Economy in 2016 For personal use only Note: Sample of projects awarded in 2016. The pink lines indicate where projects are being posted by employers, and the blue lines indicate where the projects are being performed by 33 freelancers. Thicker lines indicate a higher volume of wo
Slide 34: Global, Multilingual, Multicurrency
Global, Multilingual, Multicurrency For personal use only 53 Regional Websites 34 Supported Languages 28 Supported Currencies Languages Currencies Afrikaans Norsk-Bokmål USD JMD VND Bahasa Indonesia Nederlands NZD CLP AED Bahasa Malaysia Polski AUD MXN ARS বাংলা Português GBP IDR BDT Català Română H
Slide 35: Marketplace dynamics 1H17
Marketplace dynamics 1H17 “Every job, every country, every language, every currency, at any time” For personal use only Top country sources for completed projects in 1H171 ● ~1,000 job categories as diverse as Aerospace Engineering, Biotechnology, Sales, Manufacturing, Mechanical Engineering 28% Uni
Slide 36: Revenue Model
Revenue Model Freelancer’s revenue is driven by users posting jobs – as a project or a contest For personal use only ● For employers it’s free to post a project, free to review bids, free to talk and review samples – 3% project commissions paid by employers when a project is awarded and accepted ● F
Slide 37: 3D rendering of a villa from 2D floor plan for $100
3D rendering of a villa from 2D floor plan for $100 For personal use only 37
Slide 38: Chocolate package (front) design contest
‘WY freelancer Hire Freelancers ~ Work~ MyProjects- Help~ | Q Searc Home > My Projects Chocolate package (front) design Description Entries €100 EUR 54 total envies COCONUT louisecurtis AlamgirBhuiyan Entry #49 ghielzact Entry #41 Entry #38 mikeBq ghielzact Entry #35 kelvinngrh Entry #43 Entry #40 3
Slide 39: Packaging Design example
Woreelancer This Packaging Design wast ( €100 ;
Slide 40: Logo Design example
rN 8 CHROMOSOLE | | a et enka’ SLsaisonesrtnesennattcincme en rest _ CHROMOSOLE ) freelancer This Logo Design cost 210)
Slide 41: Label Design example
BEARDS BARAKAH DIRECTIONS: 1. AGE ROS OF THE OIL ONTO YOUR. i “HAND oe > freelancer’ This Label Design cost
Slide 42: Wall Menu Design example
| FRESH MENU SELECTION BREAKFAST ‘SERVED 11AM -7:50PM, SERVED 7AM - 10:50AM ( For pers Wreelancer pS This Wall Menu Design cost $250
Slide 43: For personal use only
For personal use only
Slide 44: For personal use only
For personal use only
Slide 45: For personal use only
onaluse-enty FOr pers % ville lemental vi EVERYTHING YOU NEED, NOTHING you DON'T.PARADIS!
Slide 46: App Design example
This App Design cost eelancer’ ‘ow pn | AjUO SSN jfeuosied JOS
Slide 47: For personal use only
47 47 For personal use only
Slide 48: 3D Handrail for an EVA spacewalk
y freelancer’ — Hire Freelancers © Work © Manage Help = Q Ap $356 A 3D Handrail for an EVA spacewalk Entries 121 Totat Entries View: (121) All Entries + Sortby:Relevance + | i | HE | — by Miguel3D by BlackRiddles by Electrojesus by Jeffersonben tr ti Entry #28 Entry #15 by speedmaster96 by gmidelhi
Slide 49: NASA got this 3D CAD modelling
NASA got this 3D CAD modelling for | )
Slide 50: 2017 NASA Origami Contest
Ea For personal use onl 2017 NASA ORIGAMI CONTEST — a Crowdsourcing NE the potential of | human ingenuity. We challenged our freelancers to design origami folding concepts for space radiation shielding - helping to make space travel safer
Slide 51: >82% of projects get bid within 60s
>82% of projects get bid within 60s Number of bids on projects1 Average number of bids in 1 hour Number of entries in contests For personal use only Actual completed projects Actual contest entries 3D Interior Design 3D Helmet Design 3D Growler Mobile App Mockup Music Album Cover Healthy Chips Packa
Slide 52: Contests
Contests For personal use only 75 entries per contest ~1,700,000 contest entries New 1H17 - easily buy all on average (up 5.6%) per month from freelancers your favourite entries in 184 countries (multi-award) 52
Slide 53: Mobile
For personal use only Mobile Over 1 million downloads of the Android app. Over 79% of projects touch mobile during the project lifecycle. Payments have now been added to the apps.
Slide 54: Local Jobs
Local Jobs For personal use only 60% of jobs receive a Average time to first bid Local jobs on average quote in less than has been reduced to 15 receive 7 bids. one hour. Globally. minutes. Globally. Globally. 54
Slide 55: Collaboration
For personal use only Collaboration Project Collaboration launched - allowing employers to share their projects with collaborators. Number of users sharing projects is currently growing 150% month on month. 50% of all messages are responded to within 30 minutes, and 85% within 6 hours.
Slide 56: Million users have transacted over US$3 billion through Escrow.com
For personal use only 1 million users have transacted over US$3 billion securely through Escrow.com Licensed, audited & bonded = 0% chargebacks 56
Slide 57: Winner of the 2017 BBB Torch Award
Winner of the 2017 BBB Torch Award for Silicon Valley, San Francisco & Bay Area For personal use only This award is presented to a business that goes above and beyond in their business dealings with customers, other businesses and the community, and we are proud that our team’s hard work has been re
Slide 58: You wouldn't sell your car with PayPal
You wouldn’t sell your car with PayPal For personal use only 58
Slide 59: eBay: Only use Escrow.com
In fact, eBay doesn’t think so either: “Important: Only use Escrow.com” For personal use only 59
Slide 60: Escrow.com is used to secure a wide range of transaction types
Escrow.com is used to secure a wide range For personal use only of transaction types 60
Slide 61: Where the Internet is bought and sold
Where the Internet is bought and sold For personal use only 61
Slide 62: Escrow.com is the most trusted and licensed online escrow provider
Escrow.com is the most trusted and licensed online escrow provider For personal use only California Iowa Montana Oklahoma California Department of Iowa Division of Banking Montana Division of Oklahoma Banking Business Oversight Banking and Financial Department Institutions Arizona Kansas New Mexico
Slide 63: The #1 Internet Marketing Forum Since 1997
For personal use only The #1 Internet Marketing Forum Since 1997 1,267,433+ 10,146,899+ 988,244+ USERS POSTS DISCUSSIONS 63
Slide 64: Australia's Largest Startup & Growth Conference
Australia’s Largest Startup & Growth Conference
Slide 65: Board of Directors
Board of Directors Technology focused entrepreneurial board with successful exits to major global corporations. For personal use only Matt Barrie Darren Williams Simon Clausen Chief Executive Officer & Chairman Non-Executive Director Non-Executive Director BE (Hons I) BSc (Hons I) GDipAppFin MAppFin
Slide 66: Senior management team
Senior management team Specialists in growth, finance, operations, infrastructure, international execution, compliance and engineering For personal use only Neil Katz Christopher Koch Peter Phillips Amir Massoudi Greg Robinson Sarah Tang Adam Byrnes Sebastián Siseles Chief Financial Deputy Chief Vic
Slide 67: Awards in 2017
67 For personal use only Awards in 2017
Slide 68: Unique investment thematics
Unique investment thematics Freelancer Limited (ASX:FLN) is a unique exposure to: For personal use only ● Massive market: $5 trillion TAM ● The on-demand and crowdsourced economy ● Increasing internet penetration of emerging markets ● Rising sophistication in emerging markets labour ● Software & mob
Slide 69: Industry Drivers
For personal use only Freelancer Limited INDUSTRY DRIVERS 69
Slide 70: The other 50% of the world's population are about to join the Internet
For personal use only The other 50% of the world’s population are about to join the Internet. 70
Slide 71: It's 2017
It’s 2017 The other four billion are connecting to the Internet at a tremendous pace For personal use only ● World population1: 7,340,159,492 Internet Users by Development Level 2005-2015E2 Number on the Internet: 3,675,824,813 (50.1%) North America Europe 320 million users 615 million users 89% pen
Slide 72: Developing world self-educating to raise socio-economic status
Developing world self-educating to raise socio-economic status The wealth of human knowledge is available online For personal use only 86% of users of top 10 US sites are already foreign1 ● Five billion people live on $10 a day or less ● The first thing they are looking to do online is raise their s
Slide 73: Freelancer profile example
Witreelancer Login Sign Up Gajendra D | MechRobust 3D CAD Modeling | Product Design | Manufacturing $20 uso/nr 1am a skilled and experienced freelance industrial product designer, | can help you design products from the idea and rough sketches and make mechanical 3D models , and | can prepare Design
Slide 74: Software is eating the world
Software is eating the world “We are in the middle of a dramatic and broad technological and economic shift in which software companies are poised to take over large swathes of the economy”1 For personal use only ● Every industry is being disrupted rapidly, and becoming Advertising dominated by soft
Slide 75: The world is repeating itself years later
For personal use only The world is repeating itself 20 years later 75
Slide 76: How big is the market?
For personal use only Freelancer Limited HOW BIG IS THE MARKET? 76
Slide 77: 160 million jobs could be carried out remotely
For personal use only “160 million jobs, or about 11% of the projected 1.46 billion services jobs worldwide, could in theory be carried out remotely, barring any constraints in supply” * 77 * McKinsey Global Institute, The Emerging Global Labor Market, Part I: The Demand for Offshore Talent in Servi
Slide 78: Estimated demand for Web Design services
Estimated demand for Web Design services (mid-high OECD) Freelancer’s global web design revenue opportunity estimated as $2.7 billion per annum ($10.5b GPV) For personal use only ● Freelancer’s estimated global web design revenue opportunity at c.$2.7 billion ($10.5b GPV). ● This is as a replacement
Slide 79: Estimated demand from mid-high income OECD SMEs
Estimated demand from mid-high income OECD SMEs Global small business revenue opportunity estimated as $38 billion per annum (602 million projects, $135 billion GPV) For personal use only ● There are about 28 million small businesses in the US 420-510 million – 22 million of these are informal non-e
Slide 80: Estimated demand from Consumers
Estimated demand from Consumers Engaged active users on major product marketplaces are low hanging fruit for online services. Major product marketplaces as a proxy of consumer demand indicates TAM of A$50 billion (835 million projects, $180 billion GPV) For personal use only GPV of Taking A$180 bill
Slide 81: Estimated supply of professional labour in the developing world
Estimated supply of professional labour in the developing world 370 million people, or 10% of the 3.7 billion working age population in the developing world have a tertiary qualification For personal use only ● 2010 global working age population: 3.7 billion, labour force: 2.9 billion1 Educational a
Slide 82: Estimated demand from Local Jobs in the US
Estimated demand from Local Jobs in the US Freelancer’s expansion into 100 categories of Local Jobs expands the total addressable market by up to $800 billion For personal use only ● Online services is already a huge market, with enormous future potential – McKinsey Global Institute has estimated th
Slide 83: Important notice and disclaimer
Important notice and disclaimer This presentation has been prepared by Freelancer Limited (ACN 141 959 042) (Freelancer or the Company). The information contained in this presentation is current at the date of this presentation. The information is a summary overview of the current activities of the