rhipe Limited (ASX code RHP) FY16 Full Year Results ......1 rhipe Limited (ASX code RHP) FY16 Full Year Results Presentation & FY 2017 Outlook Dominic O’Hanlon, CEO & Managing Director

1

rhipe Limited (ASX code RHP)

FY16 Full Year Results Presentation& FY 2017 Outlook

Dominic O’Hanlon, CEO & Managing DirectorMike Hill, Executive Chairman

The Recipient, intending investors and respective advisers, should:

• conduct their own independent review, investigations andanalysis of RHP and of the information contained or referredto in this presentation;

• seek professional advice as to whether an investment in RHPis appropriate for them, having regard to their personalobjectives, risk profile, financial situation and needs; and/or

• nothing in this presentation is or is to be taken to be an offer,invitation or other proposal to subscribe for shares in RHP.

The Recipient specifically agrees, understands and acknowledges thatsome of the information contained herein has been provided by thirdparties (including all information regarding LiveTiles) and theBeneficiaries accept no responsibility for any inaccuracy,misstatement, misrepresentation or omission in relation to thatinformation.

Except insofar as liability under any law cannot be excluded, none ofthe Beneficiaries shall have any responsibility for the informationcontained in this presentation or in any other way for errors oromissions (including responsibility to any persons by reason ofnegligence).

This presentation has been prepared by rhipe Limited ACN 112 452 436(RHP). Each Recipient of this presentation is deemed to have agreed toaccept the qualifications, limitations and disclaimers set out below.

None of RHP and or its subsidiaries or their respective directors, officers,employees, advisers or representatives (Beneficiaries) make anyrepresentation or warranty, express or implied, as to the accuracy,reliability or completeness of the information contained in thispresentation, including any forecast or prospective information. Theforward looking statements included in this presentation involvesubjective judgment and analysis and are subject to significantuncertainties, risks and contingencies, many of which are outside thecontrol of, and are unknown to, the Beneficiaries. Actual future eventsmay vary materially from the forward looking statements and theassumptions on which those statements are based. Given theseuncertainties, you are cautioned to not place undue reliance on suchforward looking statements.

This presentation is a general overview only and does not purport tocontain all the information that may be required to evaluate aninvestment in RHP. The information in this presentation is providedpersonally to the Recipient as a matter of interest only. It does notamount to an express or implied recommendation with respect to anyinvestment in RHP nor does it constitute financial product advice.

RHP FY16 RESULTS PRESENTATION 2

1. summary

2. FY16 Financial Results

3. Growth In new investments

6. FY17 Outlook

7. Questions

4. Industry update

5. The rhipe value proposition

summary


rhipe drives this consumption with value-added enablement services: training, consulting, marketing, support, reporting

and subscription billing services

Channel First

CloudFirst

Cloud services are not ‘sold’ or ‘shipped’ in a traditional sense. They are ‘consumed’ on a subscription basis.


Cloud Operations

Cloud first, digital first marketing transformation to drive demand

for channel partners. Billing, software-asset management

& license optimization.

Cloud Solutions

Professional services and support people to help Service Providers with

technical needs.

Cloud Licensing

Software sold and implemented by service providers.

Users pay based on usage.

96% of Group revenues via channel B2B

4% of Group revenues from direct end user B2B customers

Support, IT and IP to support Licensing and Solutions

SupportServices and support to

position offerings for new licensing programs.

ValueAdd value with systems & ease

of trade for Cloud Service Providers.

LicensingBuild and expand on cloud licensing programs. Multi-vendor and multi

region.

Group Gross Margin $25.8m (+28%)

Group Gross Margin 18%

Licensing GM $20.0m (+21%)

Attractive GM % outside Top 10

customers

Operating leverage emerging

Management focus on sizing cost base

relative to opportunity

Underlying Licensing EBITDA up 40%

to $7.1m(1)


Group Revenue $143.0m (+32%)

Licensing Sales $129.4m (+38%)

96% subscription revenues

CSP ARR $8.4m+ (c.54K seats) (Aug-16)

SEA Revenue growth (+87%)

LSP profitable at 30 June 2016

LiveTiles partially monetised (profit of

$2.4m)

Note: ARR is Annual Run Rate1. Total Group based on audited financial statements. Divisional segmentation is unaudited.

Fy16 financial results

Revenue ($’000) FY14 FY15 1H FY16 2H FY16 FY16FY15/16

Change (%)

Revenue 74,548 108,769 69,505 73,538 143,043 +32%

Gross Margin 11,991 20,083 12,967 12,800 25,767 +28%

Gross Margin (%) 16.1% 18.5% 18.7% 17.4% 18.0% -

EBITDA Reported 1,468 (1,353) (254) 1,721 1,466 +208%

Profit/(loss) before tax 1,370 (1,535) (341) 1,509 1,168 +176%

Total comprehensive income/(loss) after tax 833 (2,255) 1,577 (1,448) 129 +106%


Refer to page 11 for further information on detailed break down to reported EBITDA and underlying EBITDA

1. Total Group based on audited financial statements. Divisional segmentation is unaudited

Reported EBITDA up 208% to $1.5m underpinned by:• Profit in Licensing division of +$2.4m(1) (up +72% pcp) and profit on sale of investment of +$2.4m

However impacted by:• Non cash costs of ($1.1m) and non recurring costs of ($0.3m) and loss in Solutions division of ($1.9m)(1)

• Solutions division costs reductions of $2m p.a. effective from Jun-16

+28%

(2)

(2)

(2)

1. Ex Top 10 is approximately 99% of total customers (or 1,840 of a total of approximately 1,850 customers)2. Total Group based on audited financial statements. Divisional segmentation is unaudited


1. Total Group based on audited financial statements. Divisional segmentation is unaudited2. FY16 non-recurring costs consists of $306k of cash costs and non-cash impairment on mine camp of $128k3. Underlying EBITDA (including growth investment). EBITDA after adding back non cash expenses and profit on sale of investment.4. Underlying EBITDA (excluding growth investment). EBITDA after adding back investment made in SEA and new programs net of GM contribution.

Underlying Group EBITDA ($'000) FY14 FY15 FY16

Reported EBITDA 1,468 (1,353) 1,466

Add back/(less):

Non cash share options expensed 310 1,787 963

Profit on Sale of Investment - - (2,384)

Non recurring costs(2)

54 788 434

Sub-total 364 2,575 (987)

Underlying EBITDA (incl. Growth costs)(3)

1,832 1,222 479

Add back:

Investment in SEA 1,500 2,459 3,031

Investment in new Programs - 1,215 1,650

Sub-total 1,500 3,674 4,681

Underlying EBITDA (ex. Growth costs)(4)

3,332 4,896 5,160

Reported P&L ($'000) FY14 FY15 FY16

Licensing Revenue 74,548 105,052 136,780

Solutions Revenue - 3,717 6,236

Total Revenue 74,548 108,769 143,043

Licensing Gross Margin 11,991 16,452 19,950

Solutions Gross Margin - 3,631 5,817

Total Gross Margin 11,991 20,083 25,767

Licensing Gross Margin (%) 16.1% 15.7% 14.6%

Solutions Gross Margin (%) - 97.7% 93.3%

Total Gross Margin (%) 16.1% 18.5% 18.0%

Licensing expenses (10,159) (15,065) (17,570)

Solutions expenses - (3,796) (7,718)

Total expenses(1) (10,159) (18,861) (25,288)

Other (364) (2,575) 987

Reported EBITDA 1,468 (1,353) 1,466

Profit/(Loss) before tax 1,370 (1,535) 1,168


Underlying Licensing EBITDA(1)

($'000) FY14 FY15 FY16

Licensing Reported EBITDA 1,832 1,387 2,380

% growth – (24.3%) 71.6%

Underlying Licensing EBITDA (ex. Growth costs) 3,332 5,061 7,061

% growth – 51.9% 39.5%

FY16 # Partners Margin ($m) % of Margin Margin (%)

Top 10 10 1.5 7.7% 3.6%

Rest (ex Top 10) c.1,840 18.4 92.3% 19.7%

Total c.1,850 20.0 100.0% 14.6%

Sales ($m) FY15 FY16 % Mix % Growth

Top 10 31.3 42.6 33.0% 36.1%

Rest (ex Top 10) 62.51 86.8 67.0% 38.9%

Sub-total 93.7 129.4 100% 38.1%

One-off & Other 4.2 – – NM

Rebates & Incentives 7.1 7.4 – 4.2%

Total 105.0 136.8 – 30.2%

5.0

7.5

10.0

Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16

($M)

Strong growth across all customers• Ex Top 10 higher growth, higher margin, lower churn

Margin $ in ex Top 10 92.3% of Licensing GM

Vendor incentives focus on public cloud programs (e.g. CSP)


1. Excludes one-off back report of $2.1m not repeated in FY16

Licensing expenses includes all investment in new regions and teams

Expense Growth plateaued in FY16

$14

$15

$16

$17

$18

$19

$20

Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16

Expenses $m FY15 FY16 FY17

Licensing 15.1 17.6 20.4

Solutions 3.8 7.7 5.4

Total Expenses 18.8 25.3 25.8

Other Abnormal items 2.6 (1.0) n/a

Total Cost 21.4 24.3 25.8

1. Budgeted expenses based on no new regions and programs added in FY172. Cost reductions made of approximately $2.0m3. Total Group based on audited financial statements. Divisional segmentation is unaudited4. Abnormal items include non cash, non recurring expenses and profit on sale of investment per page 11

(1)

(2)

(4)

Group FY17 expenses reflective of 2H FY16 run-rate which has been flat since Nov-15

($M)


(3)

Full year positive operational cashflow at EBITDA levelWorking capital improvements made in 2H FY16

Operational cashflow positive in 2H FY16rhipe has $13.8m Cash on Hand and no debt

$m FY16

Trading

Licensing EBITDA 2.4

Solutions EBITDA (1.9)

Non-recurring cash costs (0.3)

Total cashflow from trading 0.2

Other cash items

Tax paid (1.9)

Capital expenditure (0.4)

Proceeds on sale of investment 4.5

Subsidiary costs associated with investment (1.1)

Total other cashflow 1.1

Net increase in cash +1.3

$m Jun-15 Jun-16 ChangeCash on Hand 12.4 13.8 1.3Trade Receivables 27.3 28.8 1.4Other Current Assets 3.6 3.6 –Total Current Assets 43.4 46.1 2.7

Investments - LVT 2.5 0.8 (1.7)Goodwill 23.1 21.1 (2.0)Other 1.3 1.6 0.3Total Assets 70.2 69.6 -0.6

Trade Payables 23.9 25.3 1.4Other Current Liabilities 7.3 3.5 (3.8)Total Current Liabilities 31.2 28.8 (2.4)

Other Non Current Liabilities 0.6 0.8 0.2Total Liabilities 31.8 29.6 (2.2)

Net Assets 38.5 40.0 1.5


Growth in new

investments

0

100

200

300

400

500

600

700 Quarterly Cumulative partner agreements in SEA

FY13 FY14 FY15 FY16

IndonesiaMalaysia

PhilippinesSingapore Thailand

ThailandApr 2013Malaysia

Feb 2014Singapore

since 2012

Indonesia Jul 2014

PhilippinesSep 2013

$M

Total: $143.0m

Australia and New Zealand

419

3240

25

38

48

55

103

0

20

40

60

80

100

120

140

160

FY11 FY12 FY13 FY14 FY15 FY16

South East Asia(1)

Long history of strong growth delivered via new customers, new programs and new regions

c.600 partner agreements from c.400 partners now in South East Asia, growing strongly

77

RHP FY16 RESULTS PRESENTATION 161. SEA revenue inclusive of ANZ arbitrage customers (large customers in ANZ procuring software through SEA)

SEA opportunity remains attractive delivering circa 87% YOY sales growth in FY16

Vendor mix strong across all key categories as markets adopt cloud solutions

0% 50% 100% 150% 200% 250%Singapore Philippines Thailand Malaysia Indonesia

FY15 FY16

+46% +62% +148%

+92%

+85%


rhipe’s combined Cloud business continues to grow in all countries

Asia Ranked #1

Global by Company #7

Global by Territory #11

442signed and now

transacting(Activation ratio 67%)

663signed partners

275partners on-

boarding to CSP

Launched Feb 16

AU since 1 July 2015SEA launched Oct 2015

Launched Q2 FY16

48%Net-new partners to

rhipe

23-Aug-1654,215

Average revenue: c.$13 per seat per month

0

10

20

30

40

50

Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16

000’s


279 at 3-Jun-16 543 at 3-Jun-16 332 at 3-Jun-16 45% at 3-Jun-16

38,289 at 3-Jun-16

11,510 at 26-Nov-15

Strong financial year end close to 30 June

Investment success with LSP division profitable and growing

184 LSP contracts YTD to 30 June 16

Cloud LSP launched in OCT 14

$m

0

40

80

120

160

200

Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16


0.0

0.4

0.8

1.2

1.6

2.0

FY15 FY16

Q1 Q2 Q3 Q4

Industry update

USD195 BillionGlobal Public Cloud Market size by 2020

rhipe is well-positioned to capture this Cloud opportunity. We have the programs, people and systems today to deliver

on the Public, Hybrid or “Whole of Cloud” future

1. Reference - IDC Worldwide Public Cloud Services Spending Guide August 2016


0

200

400

600

800

1,000

1,200

2013 2014 2015 2016 2017 2018 2019

Singapore Thailand Malaysia Indonesia Philippines

Source: IDC #AP250885

Overall = 35%

187

291

421

573

743

935

1,142

34%

41%

42%

39%

31%

CAGRUS$m


CAGR = 24%CAGR = 38%

IDC – #US40709515, Dec 2015IDC – #259066, Sept 2015

884 1,335 1,750 2,195 2,595 3,0417761,363

2,063

2,925

3,991

5,289

2014 2015 2016 2017 2018 2019

APEJ - ODHPC APEJ - DHPC

APEJ hosted private cloud Services (On demand & dedicated), revenue usdm’s

1,660

2,698

3,813

5,120

6,586

8,330

1,909 2,288 2,713 3,208 3,762 4,387222293

357438

534646

1,4852,161

2,905

3,748

4,663

5,617

2014 2015 2016 2017 2018 2019

SaaS PaaS IaaS2

APEJ PUBLIC CLOUD(BY SERVICE MODEL), revenue usdm’s

3,616

4,742

5,975

7,394

8,959

10,650

rhipe existing core revenue opportunity rhipe new revenue opportunity


The rhipevalue

proposition


Business model leverages the channel

Early Adopters

Main stream

Service Products

Software Licensing

Data Centres

Telcos

SI/VAR’s

ISV’s

MSP’s

Enterprise

SAAS

Cloud

others

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others

rhipe’s business model has been built and refined for over a decade to drive the consumption of subscription services

Strategy & Competitive

InsightsChannel

Representation & Awards

Marketing Services (e.g.

MaaS)

Representing vendors with subscription

servicesCompli-mentaryVendor

Programs

Events, Training @ Know How(Business & Technical)

Reporting & Management

Portals

Billing & Collection Services

License Optimisation &

Compliance

Professional Services

(Deployment Acceleration)

Partner to Partner

Engagement

From linear to sophisticated multidimensional relationships

Next generation aggregator facilitates these interactions

16 APAC countries


• rhipe’s platform provides vendor usage reporting, provisioning and subscription billing services

• Significant value–add to service providers but also to vendors in driving the consumption and billing of their services

• An extensive API set–allowing partners to integrate rhipe’s platform with their own systems:

o Access to products and pricingo Provision new tenantso Manage existing tenantso Transition existing O365 customer

from another program into Microsoft CSP

o Purchase Add-ons for CSP customers

Search

Find

Qualify

Try

Order

Activate & Fulfill

Manage

Support

Up-sell

Refer

Acquire

Onboard

Engage


Fy17 outlook

CAGR FY14 – FY16 39%, target FY17 growth greater than +30%

Target Licensing gross margin 14–16%, gross margin $ growth expected to continue

Growth continues into SEA region as cloud adoption grows in each country 9 smaller SEA countries added to CSP + SPLA Program in Q4 FY16

Continued strong growth expected into FY17

Licensing costs up marginally on run rate basis relative to revenue growthFocus Solutions towards providing channel services with lower cost base

Target Underlying EBITDA of +$8mTarget Reported EBITDA of +$5m

Board will implement dividend policy on after tax profits after taking into account growth opportunities

SEA

Revenue

GM

Expenses

EBITDA

Dividend

Microsoft CSP


Total Group expenses $26m

Questions

Documents

rhipe Limited (ASX code RHP) FY16 Full Year Results ......1 rhipe Limited (ASX code RHP) FY16 Full Year Results Presentation & FY 2017 Outlook Dominic O’Hanlon, CEO & Managing Director