Touchcorp Full Year Results 2016

28 February 2017

Mike JefferiesExecutive Chairman

Nadine LennieChief Financial Officer

Disclaimer

This presentation has been prepared by Touchcorp Limited ARBN 603 731 184 (Touchcorp 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 Company and does not

purport to be all inclusive or to contain all the information that a prospective investor may require in evaluating a possible investment. It is to be read in conjunction with the Company’s disclosures lodged with the Australian Securities Exchange, including the Company’s FY16 Annual Report lodged with the Australian Securities Exchange on 28 February 2017. The material contained in this presentation is not, and should not be considered as, financial product or investment advice. This presentation is not (and nothing in it should be construed as) an offer, invitation, solicitation or recommendation with respect to the subscription for, purchase or sale of any security in any jurisdiction.

This presentation is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor which need to be considered, with or without professional advice, when deciding whether or

not an investment is appropriate. This presentation contains information as to past performance of the Company for illustrative purposes only, and is not – and should not be relied upon as – an indication of future performance of the Company.

To the maximum extent permitted by law, Touchcorp makes no representation or warranty (express or implied) as to the accuracy, reliability or completeness of any information contained in this document. To the maximum extent permitted by law, Touchcorp will have no liability (including liability to any person by reason of negligence or negligent misrepresentation) for any statements, opinions or information (express or implied), arising out of, contained in or derived from, or for any omissions from this document.

Forward looking statements

This document contains certain “forward-looking statements”. The words “anticipate”, “believe”, “expect”, “project”, “forecast”, “estimate”, “outlook”, “upside”, “likely”, “intend”, “should”, “could”, “may”, “target”, “plan” and other similar expressions are intended to identify forward-looking statements. Indications of, and guidance on, future earnings and financial position and performance, including Touchcorp’s FY17 outlook, are also forward- looking statements, as are statements regarding Touchcorp’s plans and strategies and the development of the market. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of Touchcorp, which may cause actual results to differ materially from those expressed or implied in such statements. Touchcorp cannot give any assurance or guarantee that the assumptions upon which management based its forward-looking statements will prove to be correct or exhaustive, or that Touchcorp’s business and operations will not be affected by other factors not currently foreseeable by management or beyond its control. Such forward-looking statements only speak as at the date of this document and Touchcorp assumes no obligation to update such information.

Non-IFRS information

This presentation includes certain financial measures that are not recognised under Australian Accounting Standards (AAS) or International Financial Reporting Standards (IFRS). Such non-IFRS financial measures do not have a standardised meaning prescribed by AAS or IFRS and may not be comparable to similarly titled measures presented by other entities, and should not be construed as an alternative to other financial measures determined in accordance with AAS or IFRS. Recipients are cautioned not to place undue reliance on any non-IFRS financial measures included in this presentation. The non-IFRS information has not been subject to audit or review by Touchcorp’s external auditor.

All references to dollars are to Australian currency unless otherwise stated.

1Strategic Context

22016

Highlights

3Financial Results

4Outlook

Contents

3

Strategic Context

4

The market for secure

transaction processing

is growing rapidly

Retailers are

rapidly increasing their

on-line presence

Touch provides the payment solution

Strategic Context

5

Strategic Context

The ConsumerExperience

Who is Touchcorp?Touchcorp is an international

company that provides payment platform services

What are we about?

Why are we special?Our specialty is on-line fraud management and

payment protection

BusinessIntelligence

Strategic Context

Mobility andPayments

What are our business lines?

Health andGovernment

RetaileServices

Building Businesses and

Minimising Fraud

6

Strategic Context

21 3Our strategic priorities have been:

Partnering with our customers for

growth, driving future transaction volumes

Investing in our product suite and service capability

Developing internal

capability

7

8

Creating Investor ValueStrategic Context

Growth in transaction

numbers

Growth in customer volumes, new customers

and new markets

Product Development

Continual product review and innovation

Growth in investment

values

Growth in value of fees taken

as equity

Investor Value

2016 Highlights

9

10

2016 Highlights2016 Highlights

We supported the integration of

more than 2,000 MERCHANTS

for Afterpay

Renewed our health

claiming contract with

the Commonwealth

Bank for THREE

YEARS

Touchcorp

signed a new

FIVE-YEAR

agreement with

Optus to 2021

We nurtured

another

NEW START-UP

investment in

Change Up

3YEARS5YEAR

2000AFTERPAY MERCHANTS

11

2016 Highlights2016 Highlights

Touchcorp was appointed the

SOLE PROVIDER of payments

processing for ConnectEast

The market value of our

investment in Afterpay

INCREASED BY $116M

during the year

We deployed a pilot for

ONCE Group in Spain to

help provision eServices

products at 300 locations

for SIGHT IMPAIRED

STAFF

Launched our FIRST

SELF-SERVICE PAYMENT

PROCESSING in Europe with

Switzerland’s Cornèr Bank,

allowing payments via Apple

Pay and Swatch smartwatches

Employee numbers grew

from 95 at the beginning of

the year to 133 at year end

Transurban (CityLink, Roam, Roam Express) selected Touchcorp

as the NETWORK TO PROCESS TRANSURBAN trip passes,

account top-ups and invoice payments via our retail network

$116m

12

72.8mRecurring Transaction Numbers

up

8%(2015: 67.4m)

Recurring Transaction Revenues

22.2mup 16% (2015: $19.2m)

NPBT

15.1mup 78% (2015: $8.5m)

Total Revenue

36.8mdown 13% (2015: $42.3m)

Cashflow from Operations

3.2mup from 2015 ($3.4m)

EBITDA

4.5mdown 66% (2015: $13.3m)

Value of Equity Interests

131mup 1210% (2015: $10m)

2016 Highlights

$ $

$$ $

$

2016 Highlights

13

Recurring Transaction Numbers

NET NET 2016 2015 CHANGE CHANGE BUSINESS LINE m m m %

Mobility and Payments 23.6 20.8 2.8 13%

Health and Government 13.8 13.2 0.6 4%

Retail eServices 35.4 33.4 2.0 6%

Grand Total 72.8 67.4 5.4 8%

40m

35m

30m

25m

20m

15m

10m

5m

0

Health and

Government

Mobilityand

Payments

Retail eServices

2016 Highlights

2016

2015

2016

2016

2015

2015

Financial Results

14

15

Summary Income Statement

2016 2015 NET CHANGE

$m $m $m

Total Revenue 36.82 42.30 (5.5)

Cost of Sales (10.82) (6.99) (3.8)

Gross Profit 26.00 35.31 (9.3)

Other Income 0.46 0.16 0.3

Customer Development Expense (5.65) (5.65) -

Operating Expenses (16.30) (16.48) 0.2

EBITDA 4.51 13.34 (8.8)

Depreciation and Amortisation (3.85) (1.22) (2.6)

Interest Income 0.15 0.16 (0.0)

Share of gain (loss) from an associate 14.26 (3.77) 18.0

Income Tax (Expense) Benefit (3.50) 0.88 (4.4)

NPAT 11.57 9.39 2.2

Transactional revenue $2.2m

Integrations revenue $(7.7)m

Deemed disposal of

Afterpay $15.1m

Share of Afterpay

result $2.9m

Financial Results

Revenue mix and Optus

contract renewal

16

Revenue by Business Unit

Business Line 2016 HighlightsRevenue 2016

$m%

Contribution%

Growth

Mobility and Payments • Continued growth from core transactional business

• Change Up fees of $11.05m were less than Afterpay fees of $13.0m in 2015

27.53 75% (3%)

Health and Government • Renewed health claiming contract with CBA for 3 years

• Revenue growth from NAB HICAPS agreement renewed in 20152.05 6% 1%

Retail eServices • Appointed exclusive payment processor for Transurban and ConnectEast tollway operators

• Reduction in integration revenues from prior year

4.16 11% (53%)

International Retail eServices • Growth in Valora core transactional business 3.08 8% 7%

Total 36.82 100% (13%)

27.5m Mobility and Payments

2.0m Health and Government

4.2m Retail eServices

3.1m International Retail eServices

Mobility and Payments 28.5m

Recurring Transactions 19.2m

Integrations and Infrastructure 23.1m

22.2m Recurring Transactions

14.6m Integrations and Infrastructure

Health and Government 2.0m

International Retail eServices 2.9m

Retail eServices 8.9m

Revenue2016

36.8m

Revenue2016

36.8m

Revenue2015

42.3m

Revenue2015

42.3m

Financial Results

17

Revenue by Service

Business Line 2016 HighlightsRevenue 2016

$m%

Contribution%

Growth

Recurring Transactions • Volume growth from our key customers, including Optus and 7-Eleven

• Renewed Optus contract for 5 years

22.18 60% 15.7%

Integration Work • Afterpay, Optus and 7-Eleven continue to drive strong integration revenue

• In 2015 there were a significant number of projects which drove $10m of integration revenue (excluding Afterpay)

3.59 10% (64.6%)

Infrastructure - New businesses • Cash (Change Up $6.0m)

• Equity (Change Up $5.0m)11.05 30% (15.0%)

Total 36.82 100% (13%)

27.5m Mobility and Payments

2.0m Health and Government

4.2m Retail eServices

3.1m International Retail eServices

Mobility and Payments 28.5m

Recurring Transactions 19.2m

Integrations and Infrastructure 23.1m

22.2m Recurring Transactions

14.6m Integrations and Infrastructure

Health and Government 2.0m

International Retail eServices 2.9m

Retail eServices 8.9m

Revenue2016

36.8m

Revenue2016

36.8m

Revenue2015

42.3m

Revenue2015

42.3m

Financial Results

18

Revenue Growth

$50m

$40m

$30m

$20m

$10m

$0

Financial Results

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Revenue Detail 2015 Revenue Detail 2016Revenue 2012 - 2016

1H 2015 1H 20162H 2015 2H 2016

CAGR 20% pa

Growing

fundamentals

19

Operating Costs

$30m

$25m

$20m

$15m

$10m

$5m

$0

2015 2016Capital

Raising

Employee

Cost

Share

Based

Payments

General

and

Administration

Depreciation

and

Amortisation

Other

Increasing costs

Decreasing Costs

23.325.8

3.6

0.91.6

1.2

2.6 0.2

Financial Results

20

Balance Sheet

Up $38.1m

Issued capital and reserves $26.6m

Retained earnings $11.6m

Financial Results

Zero Debt

Up $19.0m

Change Up investment $5.0m

Change in Afterpay investment $14.3m

Up $18.2m

Operating cashflows $3.2m

Financing cashflow from share issue $24.9m

Long-term asset investment $9.8m

2016 2015 $m $m

Cash and cash equivalents 27.75 9.50

Trade and other receivables 11.87 13.10

Other current assets 9.47 9.57

Total Current Assets 49.09 32.17

Deferred tax asset 4.22 7.72

Long-term assets 19.03 12.90

Investments 25.49 6.23

Prepayments 1.63 -

Total Non-current Assets 50.37 26.85

TOTAL ASSETS 99.46 59.02

Trade and other payables 16.08 13.80

Employee provisions 1.15 1.14

Total current liabilities 17.23 14.94

Long service leave provision 0.10 0.07

Total Non-current Liabilities 0.10 0.07

TOTAL LIABILITIES 17.33 15.01

NET ASSETS 82.13 44.01

21

Profit to Cashflow Reconciliation

Financial Results

Capitalised costs, infrastructure and

equipment purchases

2016 2015 $m $m

Profit before tax 15.07 8.51

Adjustments for:

Depreciation and amortisation 3.85 1.22

Share based payment expense 1.63 0.05

Interest Income (0.15) (0.16)

Capital raising expenses - 3.60

Shares received as consideration for services performed (5.00) (10.00)

Share of loss from an associate 0.89 3.77

Gain on deemed disposal of an associate (15.15) -

Changes in assets and liabilities 2.04 (10.34)

Net cash from / (used in) operating activities 3.18 (3.35)

Net cash used in investing activities (9.84) (7.26)

Net cash from financing activities 24.90 17.46

Net increase in cash equivalents 18.24 6.85

In 2015 $10m for equity in Afterpay

In 2016 $5m for equity in Change Up

Outlook

22

23

Strategic PrioritiesOutlook

We are excited by a strong pipeline of opportunities

Refocus on core recurring transaction revenue with a focus on enterprise clients

Develop relationships to promote core business unit competencies

Manage our cost base and cashflow outcomes

Pursue potential merger

The market for secure payment services is growing fast and we are uniquely placed

Strategic priorities are to:

24

Potential MergerOutlook

Strong commercial and sales track record to combine with

leading edge technical capability

Revenue growth opportunities from the combination of complementary product

offerings

Develop synergistic annuity style revenue streams

Opportunity to create greater scale than the two companies

can create alone

This potential merger would be a natural evolution of

the existing relationship between the two businesses,

given the rapid growth in the Afterpay platform and the

importance of Touchcorp technology to this.

Anthony Eisen, Afterpay Executive Chairman

The potential merger represents a unique opportunity

to combine the outstanding technology set from

Touchcorp with the strong sales focus and brand

recognition of Afterpay.

Mike Jefferies, Touchcorp Executive Chairman

Benefits of scale with input cost synergies and process

efficiencies

Enhanced IP - Business analytics of consumer behaviour will generate powerful business

intelligence

Thank You

Outlook

25