Minds + Machines Group Limited
Financial Results FY2016
Presentation – 25 April 2017
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Financial Results FY2016 Presentation 25 April 2017 http://mmx.co - - PowerPoint PPT Presentation
Minds + Machines Group Limited Financial Results FY2016 Presentation 25 April 2017 http://mmx.co Disclaimer The following is a presentation (the Presentation) relating to Minds + Machines Limited (MMX). The Presentation is being
Presentation – 25 April 2017
http://mmx.co
The following is a presentation (the “Presentation”) relating to Minds + Machines Limited (“MMX”). The Presentation is being communicated by MMX. It is confidential. Recipients may not provide, or otherwise make available, this Presentation to any person whatsoever and no part of it may be reproduced in any manner without the written permission of MMX. The information in the Presentation is subject to updating, revision and amendment. The Presentation does not constitute or form part of any offer or invitation to sell or any solicitation of any offer to purchase or subscribe for any shares in MMX. No reliance may be placed for any purpose whatsoever on the information contained in the Presentation or any assumptions made as to its completeness. No representation or warranty expressed or implied is given by MMX or any of their officers, employees or agents as to the accuracy of the information or opinions contained in the Presentation and no liability is accepted for any such information or opinions (which should not be relied upon) or for any loss howsoever arising directly or indirectly from any use of the Presentation or its contents. The actual results, performance or achievements of MMX may be materially different from the future results, performance or achievements expressed or implied by any opinions, estimates and projections included in the Presentation. This Presentation is exempt from the general restriction on communications contained in section 21 of the Financial Services and Markets Act 2000 (“FSMA”) on the grounds that it is being provided
net worth individual), Regulation 49 (being high net worth companies, trustees of high net worth trusts or unincorporated associations), Regulation 50 (being a sophisticated investor) or Regulation 50A (being a self-certified sophisticated investor) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Financial Promotion Order”) or to persons who are otherwise permitted by law to receive it. Any recipient of this Presentation who does not fall within Regulations 19, 48, 49, 50 or 50A of the Financial Promotion Order or as described above; or to whom distribution is otherwise not lawful may not rely on it, and should return the Presentation to MMX immediately. Neither any company nor any person involved in the preparation of the Presentation owes a duty of care to any person or any recipient. Each person or company must undertake such investigations as they see fit before entering into any contract of any kind. If you are in any doubt as to what action to take, you are recommended to seek your own financial advice from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorized under the FSMA immediately. Presentation to MMX immediately. Neither any company nor any person involved in the preparation of the Presentation owes a duty of care to any person or any recipient. Each person or company must undertake such investigations as they see fit before entering into any contract of any kind. If you are in any doubt as to what action to take, you are recommended to seek your own financial advice from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorized under the FSMA immediately.
Minds + Machines Group Limited | Financial Results FY2016
Slide 2
.vip
.casa
.beer
.work
.yoga .fashion
.boston .cooking
.law
Minds + Machines Group Limited | Financial Results FY2016
Domains under management
including committed orders, currently
up from 821,000 as of 31.12.16 (31.12.15: 289,000)
FY 2016 gross billings
(FY 2015: $7.9million)
FY 2016 billings operating EBITDA profit
before one-off restructuring costs,
(FY 2015 billings EBITDA loss of $6.6million – excluding one-off private auction proceeds)
Intangible assets
(still based on book value)
Cash and cash equivalents
as at 31.12.2016
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Minds + Machines Group Limited | Financial Results FY2016
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Global Registrants per Country
Minds + Machines Group Limited | Financial Results FY2016
Net Registrations
Net Growth 31 December 2015 31 December 2016
Verisign (.com, .net) 139.8m 142.2m 2.4m Country codes 138.1m 142.7m 4.6m New gTLDs 11.2m 27.6m 16.4m
Source: Verisign
China | 48.2%
13,937,779 Domains
Whois Proxy (Unknown Registrant) | 22.2%
6,424,270 Domains
USA | 10.81%
3,124,445 Domains
Other | 9.5%
2,756,676 Domains
Germany 2.16% Russian Federation 1.78% United Kingdom 1.49% Japan 1.27% France 1.00% India 0.76% New Zealand 0.76%
Global growth of SME’s Digital entrepreneurs Domain investors
Slide 6
Minds + Machines Group Limited | Financial Results FY2016
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In partnership On behalf of clients .abogado .bayern .beer .boston .budapest .casa .cooking .dds .fashion .fishing .fit .garden .horse .law .luxe .miami .nrw .rodeo .surf .vip .vodka .wedding .work .yoga .购物 .country .london .bradesco .gop
.cpa .gay .home .hotel .inc .llc In partnership .music
facing new gTLD .vip
through Chinese regulator, MIIT, approval process
gTLDs – 6 in Europe & US
generic TLDs
MMX REGISTRY
REGISTRARS
Minds + Machines Group Limited | Financial Results FY2016
Slide 8
management team during 2016
regions – US, Europe, Asia
in a stable state environment)
to deliver targeted gross margin >80%
network established REGISTRY SERVICE PROVIDER
END USERS
Minds + Machines Group Limited | Financial Results FY2016
Slide 9
North America 34 South America 1 UK 14 China 50 Rest of the world 7 Continental Europe 37 Japan 3 India/South East Asia 5
Munich (Germany) 1 London (UK) 2 Dublin (Ireland) 3 Xiamen (China) 2 Remote 5 Seattle 7
Office Locations
Headcount (includes Exec team) 20 Registrar partners per region
Minds + Machines Group Limited | Financial Results FY2016
Slide 10
Chief Executive Officer
Chief Operating Officer & Chief Financial Officer
Non-Executive Chairman
Non-Executive Director
Deep Shah
Financial Controller
Solomon Amoako
VP, Channel Management
Yuling Huang
General Manager, China
Caspar von Veltheim
Director of European Operations + Sales
Victor H. Pitts
Director Premium Sales, Americas
Lou Andreozzi
CEO, Dot Law Inc.
vertical sectors
entrepreneurs
investors
Minds + Machines Group Limited | Financial Results FY2016
Slide 11
First year premium name billings Standard name sales and ongoing renewals
1st Year 2nd Year 3rd Year 5th Year 4th Year
289,000 821,000 1,200,000
200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000
2015 2016 2017 - to date
Minds + Machines Group Limited | Financial Results FY2016
Slide 12
DUMs
7,922 15,800
2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000
2015 2016
Minds + Machines Group Limited | Financial Results FY2016
Slide 13
Annual gross billings $
Minds + Machines Group Limited | Financial Results FY2016
Slide 14
$’000
11,745 7,182 6,000
2,000 4,000 6,000 8,000 10,000 12,000 14,000
2015 2016 2017 - expected
148% 45%
0% 20% 40% 60% 80% 100% 120% 140% 160%
2015 2016 OPEX as a % of gross billings
84.04% 83.92%
80.00% 81.00% 82.00% 83.00% 84.00% 85.00% 86.00%
2015 2016
Minds + Machines Group Limited | Financial Results FY2016
Slide 15
Gross Margin %
4,209
2,000 4,000 6,000
2015 2016
Minds + Machines Group Limited | Financial Results FY2016
Slide 16
$’000
1.8m 3.8m
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
1,000 2,000 3,000 4,000 5,000 6,000
2015 2016 2017 - trend
Renewals - $ Annual renewals as a % of OPEX
Minds + Machines Group Limited | Financial Results FY2016
Slide 17
$’000 % of OPEX
Minds + Machines Group Limited | Financial Results FY2016
Slide 18
Billing operating EBITDA
FY 2016 $000’s FY 2015 $’000’s % Change Billings(1) 15,800 7,922 100% Partner payments (1,868) (1,487) 26% Revenue less partner payments 13,932 6,435 117% Cost of sales (2,541) (1,264) 101% Gross margin 11,391 5,171 120% Gross margin % 82% 80% Cash expenditure Operating expenses – ongoing (6,536) (11,745) (44%) Operating expenses – forfeited (646)
4,209 (6,574) (164%)
(1) Billings refer to total sales generated during the year (not deferred for accounting purposes) (2) Operating earnings before interest, tax, depreciation & amortization and other non-cash charges where earnings are calculated on the basis of billings as opposed to accounting revenue. It should be noted that for accounting purposes Operating EBITDA before restructuring was $3.6 million as highlighted in the Group’s 2016 Income Statement.
Minds + Machines Group Limited | Financial Results FY2016
Slide 19
2016 2015
Revenue 15.00 6.32 Less: Partner payments (1.52) (0.84) Revenue Less Partner Payments 13.48 5.48 Cost of Sales (2.54) (1.26) Gross Profit 10.94 4.22 gTLD applications (0.15) 7.79 OPEX: Ongoing (6.53) (11.74) Forfeited (0.65)
3.61 0.27
Other (F/X, etc) (0.53) (4.64) Restructuring - Operating (1.17)
(3.75)
(1.84) (4.37)
Other (Deprec, etc) (0.33) (0.30) Discontinued Ops (2.33) (4.68)
Net Profit / (Loss) for the year (4.50) (9.35)
Group Statement of Comprehensive Income
Accounting revenue more than doubled Gross margin exceeds 81% Net of one-time gTLD private auction revenue, 2015 had an Operating EBITDA loss of $7.67million
Reflects restructuring of challenging contract signed by previous management into structure that can now potentially deliver future economic interest Without these costs, 2016 would have delivered a net profit of $3.4 million – they will not occur in 2017
COMMENTS
Minds + Machines Group Limited | Financial Results FY2016
Slide 20
Group Statement of Financial Position COMMENTS
Non-current Assets 2016 2015
45.60 41.29
0.09 0.19
2.83 2.83
0.39 0.83
3.32 3.45 Total Non-current Assets 52.23 48.59 Current Assets
15.28 34.65
7.95 5.61 Total Current Assets 23.23 40.26 Total Assets 75.46 88.85 Liabilities
(14.98) (8.97)
(14.98) (8.97) NET ASSETS 60.48 79.88 Equity
60.06 73.82
0.74 1.40
0.01 4.99
(0.33) (0.33) TOTAL EQUITY 60.48 79.88
Assets in at book value. Change relates to .boston acquisition and value of restructured contract Company maintains a strong cash position even after net $13.5 million share buyback, acquisition of .boston and restructuring Primarily related to deferred revenue & accruals plus obligations from restructured contract Share capital reduced 8% to 699,857,562 (31.12.16), Warrants, options, and RSU’s reduced 41% to 42,809,590 (31.12.16).
Minds + Machines Group Limited | Financial Results FY2016
Slide 21
Group Cash Flow Statement COMMENTS
Includes Restructuring and Discontinued Operational costs of $2.5million Reflects net share buyback
2016 2015 Cash from Operating EBITDA 3.61 0.27 One-off Discontinued Ops
One-off Restructuring
0.82 Private auctions
Cash from Operating Activities
Cash from Investing Activities
8.7 Cash from Financing Activities
34.65 45.8
0.88 Cash at end of year 15.28 34.65
that has the potential to match .com/.net or the country codes within a 5-10 year time-frame
2016
name inventory as Company looks to transition into a highly predictable annuity based business
Minds + Machines Group Limited | Financial Results FY2016
Slide 22
Minds + Machines Group Limited | Financial Results FY2016
Slide 23
Holder Amount Percent
Lombard Odier Asset Management 140,344,766 20.05% London and Capital Asset Management Ltd 105,781,945 15.11% Hargreave Hale Limited 64,014,389 9.16% Oryx International Growth Fund Limited 52,550,000 6.94% Hony Capital 50,107,692 7.17% Guy Elliott * † 20,250,000 2.89% Michael Salazar * 1,975,050 0.28% Caspar von Veltheim ‡ 916,613 0.13% Toby Hall * 500,000 0.07%
The Company’s issued share capital consists of 699,857,562 Ordinary Shares of no par value. No Ordinary Shares are held in treasury. The total number of voting rights in the Company is 699,857,562. The percentage of Ordinary Shares not in public hands is 37.05% per cent. The Company has been notified, in accordance with the Disclosure and Transparency Rules, of the following directors’ holdings and shareholdings amounting to 3% or more of the issued capital with voting rights:
* Director † Includes the interest of the Elliott Family Irrevocable Trust ‡ Director of a subsidiary
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