Dubber Corporation Limited · ASX:DUB
Dubber — Investor Presentation (April 2024)
61 slides from Dubber's investor presentation, Apr 10, 2024
Slide 1: Company Update and Capital Raising
Company Update and Capital Raising 10 April 2024 | dubber.net This investor presentation has been approved for release to ASX by the Dubber Board of Directors. Not for release on US News Wires.
Slide 2: Disclaimer
Disclaimer This investor presentation is dated 10 April 2024 and has been prepared by Dubber Corporation Limited (ACN 089 You should carefully read and consider the Prospectus in full and seek advice from your financial, tax, legal or other 145 424) (Dubber or the Company). By attending an investor
Slide 3: Disclaimer (cont.)
Disclaimer (cont.) Certain figures, amounts, percentages, estimates, calculations of value and fractions provided in this presentation Disclaimer are subject to the effect of rounding. Accordingly, the actual calculation of these figures may differ from the figures The Offer is fully underwritten by
Slide 4: Contents
Contents Disclaimer 2 Summary of recent events 5 Business and Company overview 9 H1 FY24 Financial Overview 22 FY24 and beyond 30 Capital Raise 34 Thorney Arrangements, control implications and capital structure 39 Key risks 43 Appendix 52
Slide 5: Summary of recent events
Summary of recent events On 27 February 2024 the Board uncovered that Company funds, which were supposed to have been held by a trustee in a term deposit on behalf of the Company, may have been misused by either or both the Company’s former Managing Director and CEO, Steve McGovern and the third par
Slide 6: Summary of recent events (cont.)
Summary of recent events (cont.) Results of the investigations The results of the Company’s investigation are set out below: • Funds were deposited with the third-party trustee within the parameters of the Company’s financial controls and procedures at the time deposits were made. • The alleged misu
Slide 7: Summary of recent events (cont.)
Summary of recent events (cont.) Limitations of the investigation The investigation undertaken was based on the information available to the Company at the time. The Company may ultimately be able to obtain further information as it undertakes further investigations, including if it institutes legal
Slide 8: Summary of recent events (cont.)
Summary of recent events (cont.) Improved governance and controls Since late 2022, the Company has implemented a number of improvements on governance and controls within the Group and its operations as set out below: • Experienced appointments to key roles across the Board and executive team have oc
Slide 9: Business and Company Overview
Business and Company Overview • Significant growth in products and revenue off a lower cost base compared to the prior corresponding period (pcp) • Key board and management changes over the past 2 years • 10 years building out hard to replicate channel to market through Communication Service Provide
Slide 10: Capital Raising and Investment Opportunity
Capital Raising and Investment Opportunity •Overview Fully Underwritten $24m Capital Raise • Director participation in the entitlement offer and sub-underwriting of the entitlement offer of approximately $500,000 • Major shareholder Thorney Investment Group support by providing a bridging loan alrea
Slide 11: First half FY24 significant improvement in key financial metrics
First half FY 24 significant improvement in key financial metrics H1 FY24 Revenue H1 FY24 Operating Costs Net operating cash outflows Gross Margin $18.7m $33.1m $11.4m 65% $5.0m ($12.5m) ($15.2m) Up from 47%* 37%* 27%* 57%* * Change on H1 FY23
Slide 12: Experienced board
Experienced board Neil Wilson Peter Pawlowitsch Sarah Diamond Gerard Bongornio BBA; FCPA and Member B.Comm; CPA MBA MA (MH); MA (IR) BEc (Acc) of the Australian FGIA Computer Society Non-Executive Executive Director Non- Executive Non- Executive Chairman and Acting CEO Director Director Tenure: 1 ye
Slide 13: Bringing new depth into the Leadership Team
Bringing new depth into the Leadership Team David Coventry Andrew Demery Kimberley Axon Steve Willson BA BSc; CA BPsych Honours; HRMD; BSc Computer Science Certificate in Coaching Deputy CEO Chief Financial Chief People Chief Technical Officer Officer Officer New Tenure: 1 year Tenure: 1.5 years Ten
Slide 14: Part of the AI Mega Trend with first Dubber products in market
Part of the AI Mega Trend with first Dubber products in market Dubber Moments: Delivering Immediate and Continuous Value for Users Today • Immediate Value Delivery: Dubber Moments begins delivering from launch for businesses being able to provide value through our ready- Generative to-deploy solutio
Slide 15: Dubber Platform: Providing Value to Communication Service Providers for Over 10 Years
Dubber Platform: Providing Value to Communication Service Providers for Over 10 Years For over 10 years, Dubber has delivered a platform used by some of the world’s largest communication networks by unlocking the potential value in every conversation. The ability to turn every conversation into imme
Slide 16: How CSPs can provide scale
How CSPs can provide scale Immediate Access Connect the network once and immediately available for all users on network. Partnering with CSPs enables Dubber to activate the general attributes of their organisations to drive growth, with specific benefits to them by: • Product differentiation and new
Slide 17: Powering Partner Revenue Growth
Powering Partner Revenue Growth Every aspect of our operations is geared towards empowering our partners to stand out, achieved Our Partner: through: 1. Enabling out-of-the-box solutions that harness conversation capture and AI powered conversation 2 Scale intelligence, 2. Scalable solutions deliver
Slide 18: Existing Call Recording Customers
Existing Call Recording Customers Dubber Call Recording serves a diverse range of industries, providing solutions to meet the broad needs of businesses within each industry: Financial Services Energy Industry Legal A major Swiss private bank needed a South America's premier petroleum A legal firm re
Slide 19: Solution evolution
Solution evolution Communication service providers (CSP) aredriving the centre of our revenue growth universe and everything with we do is designed to helpCSPs them differentiate their market offering, augment product functionality, increase ARPU and deliver more value to their customers.This in tur
Slide 20: AI Moments product has won multiple Awards
AI Moments product has won multiple Awards Best in AI Product Most Innovative Best AI Product in Telecom Product of the In AI Year - Enterprise
Slide 21: Early adopters of Dubber Moments
Early adopters of Dubber Moments Industries where Dubber Moments is already delivering AI insights to businesses today, providing value through our ready-to- deploy conversation intelligence solutions Local Government Automotive Retail Enhancing customer service support, Improving sales performance
Slide 22: H1 FY24 Financial Overview
H1 FY24 Financial Overview
Slide 23: 37% revenue growth on pcp with operating costs reduced by 27%
37% revenue growth on pcp with operating costs reduced by 27% Consolidated Profit & Loss H1 FY23 • Revenue growth of 37% on H1 FY23, and up 15% AU$m H1 FY24 % Change (Restated)1 on H2 FY23. Revenue 18.7 13.7 37% • Broad base for revenue growth with growth in Direct costs (6.5) (7.3) 10% accounts, en
Slide 24: Europe and Americas driving the growth
Europe and Americas driving the growth Europe Americas Rest of world1 Total $12.7m $4.5m $1.5m 37% 43% 19% Europe Revenues grew 37% reflecting Americas Revenues grew 43% in the Rest of world Revenues were up 19% $18.7m strong volume growth in end user half, with growth coming across both on pcp. Dub
Slide 25: Growing quarterly revenue with improving GP margins
Growing quarterly revenue with improving GP margins Consistent track record of revenue growth – up 37% for H1 FY24 on Revenue: pcp and Q2 FY24 up 50% on Q4 FY22 (18 months). H1 FY24 H1 FY23 AU$ $11,000,000 AU$m $10,000,000 Gross Margin 65% 47% $9,000,000 Revenue 18.7 13.7 $8,000,000 Direct costs (6.
Slide 26: Significant reduction in costs delivered
Significant reduction in costs delivered Other Costs H1 FY23 AU$m H1 FY24 % Change (Restated)1 • Salaries and related expenses reduced significantly on H1 FY23 due to implementing restructuring programme in H2 Operating Costs FY23 that reduced headcount and related overhead costs. Direct Costs (6.5)
Slide 27: Costs tracking in line with full year guidance
Costs tracking in line with full year guidance AU$m H1 FY24 • Cash based costs of $65m1 expected in FY24, down from $88m Operating Costs in FY23. This excludes share-based payment expenses, FX gains and losses, impairment, and non-recurring costs associated with Direct Costs (6.5) the investigation
Slide 28: H1 FY24 Cash and cashflow
H1 FY24 Cash and cashflow Cashflow • Receipts from customers consistent with pcp largely H1 FY23 AU$m H1 FY24 (Restate % reflecting the timing of customer receipts that were due Change to be received in December 2023 but were received in d) January 2024, as well as the unwind of advanced Receipts fr
Slide 29: H1 FY24 Statement of financial position
H1 FY24 Statement of financial position 30 June 2023 Consolidated Statement of financial position 31 Dec 2023 % Change (Restated)1 Cash and cash equivalents 1.5 2.9 (48) • Reduction in trade and other receivables of Trade and other receivables 7.9 9.4 (16) 16% principally reflects improved cash Tota
Slide 30: FY24 and beyond
FY24 and beyond
Slide 31: Stability and Growth
Stability and Growth • Recapitalise the business to maintain Company performance momentum. • Recruitment of new permanent CEO. • Focus on partners that are committing resources for the delivery of their products including Dubber's products to drive growth in recurring revenue. • The Company’s primar
Slide 32: Revenue Reforecast
Revenue Reforecast June FY24 June FY24 MRR1 Forecast: MRR1 Forecast: $3.2m $4.5m FY25 Run Rate FY25 Run Rate Forecast: Forecast: $38.3m $53.4m 1 2 3 4 5 6 1. Previously advised guidance considered on track prior to the issues 4. Currently contracted revenue run-rate for FY24 is $38.1m and bottom ass
Slide 33: Renewed focus on cost control
Renewed focus on cost control • The Company still expects to incur $65m of cash based costs in FY24 (excluding costs of the offer; costs associated with the investigation/due diligence due to the alleged misappropriation of funds and potential recoupment; excluding share-based payment expenses; FX g
Slide 34: Capital Raising
Capital Raising
Slide 35: Offer details
Offer details Offer size and structure Capital raising of approximately $24.06 million comprising: • A fully underwritten1 placement of approximately 62.76 million shares to institutional and sophisticated investors to raise approximately $3.14 million undertaken in reliance of a standard ASX Listin
Slide 36: Sources & use of funds
Sources & use of funds Sources of Funds A$M Uses of Funds A$M Capital Raising 24.1 Additional working capital 5.2 Bringing ordinary business creditors including the 10.6 ATO/SRO’s back into normal payment terms1 Repayment of bridging loan2 5.0 Costs associated with the Company’s financial investigat
Slide 37: Pro-forma Balance Sheet
Pro-forma Balance Sheet1 Proforma Balance Loan Receipt from Loan Repayment Transaction Costs 31 December 2023 Capital Raised sheet as at Thorney Group to Thorney Group2 of the Offer 31 December 2023 Consolidated Statement of Financial $m $m $m $m $m $m Position Cash and cash equivalents 1.5 5.0 24.1
Slide 38: Timetable
Timetable EVENT1 DATE Announcement of Placement and Entitlement Offer 10 April 2024 Entitlement Offer Record Date 7:00pm 12 April 2024 Placement and Institutional Entitlement Offer Placement and Institutional Entitlement Offer opens 10 April 2024 Placement and Institutional Entitlement Offer closes
Slide 39: Thorney Arrangements, control implications and capital structure
Thorney Arrangements, control implications and capital structure
Slide 40: Thorney arrangements and potential control implications
Thorney arrangements and potential control implications • Thorney bridge financing loan announced to ASX on 15 March 2024 included establishment fee of 27 million Shares (which were issued on 18 March 2024) and obligation to offer 31,706,541 options over unissued Shares in the Company. • In addition
Slide 41: Thorney arrangements and potential control implications (cont.)
Thorney arrangements and potential control implications (cont.) Shortfall allocated Amount of debt Amount of cash Percentage Offset Shares to Amount of Loan Percentage Percentage to Thorney under exchanged for received by the Shareholding of be issued to repayable to Shareholding of Shareholding of
Slide 42: Securities on issue following completion of the Offer
Securities on issue following completion of the Offer Shares Number Ordinary shares on issue pre-Offer 418,376,941 New Shares to be issued pursuant to the Placement 62,756,541 New Shares to be issued pursuant to the Entitlement Offer 418,376,941 Total Shares on issue after completion of the Offer 89
Slide 43: Key Risks
Key Risks
Slide 44: Key Risks
Key Risks This section includes details of the key risks attaching to an investment in shares in the The misappropriation of funds has, and may continue to have created a perception of Company. These risks may affect the future operating and financial performance of the instability or other reputati
Slide 45: Key Risks (cont.)
Key Risks (cont.) • Dubber grew its revenue by 37% in the half year ended 31 December 2023 compared to the prior corresponding period and it is expected that revenue will continue to grow, In particular, the investigation undertaken by the Company with the assistance of external although not necessa
Slide 46: Key Risks (cont.)
Key Risks (cont.) A failure in the continued delivery of products and services (whether, among other events, Reliance on third party platforms and operating systems because of a disaster, failure of the Company’s technology, disruptions caused by The Company’s products and services are intended for
Slide 47: Key Risks (cont.)
Key Risks (cont.) The Company is required to be in compliance with a number of regulatory requirements, including with respect to financial reporting, tax, work health and safety, environmental, Data loss, theft or corruption workplace industrial relations, public and product liability, modern slave
Slide 48: Key Risks (cont.)
Key Risks (cont.) Potential future funding issues Taxation risk Dubber’s ability to effectively implement its business strategy over time may also depend in part on its ability to raise additional funds. There can be no assurance that any equity or As at the date of this document, the Company is ove
Slide 49: Key Risks (cont.)
Key Risks (cont.) Further, as announced on 15 March 2024, the Company will issue 31,706,541 options to International business risks subscribe for fully paid ordinary shares pursuant to the terms of the bridging loan facility The Company has operations internationally, notably in the USA, UK, Europe,
Slide 50: Key Risks (cont.)
Key Risks (cont.) Additionally, in 2023 the Company and former CEO and founder, Steve McGovern, Whilst the Company is currently considering the implications of this, it may have received letters of demand from Peter Slaney and Lillian Slaney, who were former resulted in the Company being technically
Slide 51: Key Risks (cont.)
Key Risks (cont.) Key general and share related risks The Company may also elect to issue new shares in the future. While the Company will be Risks associated with an investment in shares subject to the constraints of the ASX Listing Rules regarding the percentage of its equity capital it is able to
Slide 52: Appendix
APPENDIX
Slide 53: FY23 financial report restatements
FY23 financial report restatements Consolidated Statement of profit/loss Originally reported ($m) Adjustment ($m) Restated ($m) $1m of Interest income on Term Deposits Revenue 30.0 30.0 has been reclassified as return of Term Direct costs (13.7) (13.7) deposit principal in FY23. Revenue less Direct
Slide 54: FY23 financial report restatements
FY23 financial report restatements Originally reported Consolidated Statement of financial position Adjustment ($m) Restated ($m) ($m) Cash and cash equivalents 2.9 2.9 Trade and other Receivables has been restated by Trade and other receivables 37.0 (27.6) 9.4 $27.6m for the amount of principal of
Slide 55: H1 FY23 financial report restatements
H1 FY23 financial report restatements Consolidated Statement of profit/loss Originally reported ($m) Adjustment ($m) Restated ($m) $0.2m of Interest income on Term Deposits Revenue 13.7 13.7 has been reclassified as return of Term (7.3) deposit principal in H1 FY23. Direct costs (7.3) Revenue less D
Slide 56: Underwriting agreement summary
Underwriting agreement summary The Company has entered into an underwriting agreement with Morgans Corporate Limited (Morgans) and Unified Capital • the Company ceases to be admitted to the official list of ASX or the Shares (or interests in them) remain suspended from Partners Pty Ltd (UCP) (togeth
Slide 57: Underwriting agreement summary (cont.)
Underwriting agreement summary (cont.) • any of the following occurs: (i) legal proceedings are commenced against the Company or any other group • there is introduced or there is a public announcement of a proposal to introduce, into the Parliament of member; (ii) the Company becomes aware of any pe
Slide 58: International offer restrictions
International offer restrictions This document does not constitute an offer of new ordinary shares registered addresses in New Zealand to whom the offer of these restrictions in Singapore may be applicable to investors who acquire (New Shares) of the Company in any jurisdiction in which it would be
Slide 59: Revenue Forecast Information
Revenue Forecast Information Forecast financial information in this document is based on a number of assumptions, Specific assumptions both general and specific in nature. Key assumptions are set out below. The revenue forecast has been prepared as a range for the financial year ending 30 June Gener
Slide 60: Cost Forecast Information
Cost Forecast Information Forecast costs are based on the following key assumptions: Salaries and related expenses: • A net increase in Dubber’s headcount to fill existing vacancies in the sales team compared to the first half of FY24. • No significant changes to average employee benefit fixed costs
Slide 61: Q&A
Q&A