Announcement PDF ASX:SPX Q3 FY24 Business Update Investor Webinar 7 May 2024 Spenda Limited (The Company) Disclaimer This presentation contains certain statements that may constitute forward looking information under applicable securities laws. All statements, other than those of historical fact, which address activities, events, outcomes, results, developments, performance or achievements that Spenda anticipates or expects may or will occur in the future (in whole or in part) should be considered forward looking information. In some cases, forward looking information is identified by the use of terms and phrases such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intent”, “may”, “plan”, “predict”, “project”, “will”, “would”, and similar terms and phrases, including references to assumptions. Such information may involve, but is not limited to comments with respect to expectations, planned operations or future actions. These forward-looking statements are based on currently available information as of the date of this presentation but are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those expressed or implied by such forward looking information. The forward-looking information contained in this presentation is expressly qualified by this cautionary statement. A number of risks, uncertainties and other factors could cause actual results to differ materially from the results discussed in the forward-looking information, including but not limited to, the following: • Risks associated with reliance on key personnel; • Financial health of Spenda and its related cash flows; general industry and market conditions and growth rates; legislative and regulatory developments; • General economic conditions and levels of economic activity; • Global financial conditions; • Financing risks; • Degree of competition in the industry; • Risks associated with the development of projects; and • Changes in employee relations; and control of costs and expenses. The material in this presentation is general information about Spenda’s activities current as at the date of the presentation. The presentation comprises information regarding Spenda that is given in summary form and does not purport to be complete. Nothing in this presentation should be construed as a recommendation by Spenda to purchase securities, or an offer for subscription or purchase of securities. Information in this presentation should not be considered advice and does not take into account the investment objectives, financial situation or needs of a particular investor. These matters should be considered with or without professional advice when deciding if an investment is appropriate. Forward looking information reflects Spenda’s current beliefs and is based on information currently available to Spenda and on assumptions it believes to be reasonable. The forwardlooking information is made as of the date of this presentation. Prospective investors should not read forward looking information as guarantees of future performance or results and should not place undue reliance on forward looking information. Nothing in this presentation is, or should be relied upon as, a promise or representation as to the future. All references to currency are in AUD unless otherwise specified. Key Highlights in Q3 FY24 Record Q3 cash receipts from customers of $1.45m, up 77% on pcp and up 5% qoq Pipeline of work at record highs, revenue ramp-up slower than expected, internal scale-up underway Initial roll-out of new AirPlus facility to an initial 10 customers Payment volumes up 140% on pcp, down 16% qoq. Q3 is seasonally weak for carpet sales Cornerstone investment from Capricorn has strengthened balance sheet and cash balance to $10.5m Clear pathway to revenue growth based on current pipeline of contracted work with existing partners UNIQUE CUSTOMER VALUE PROPOSITION Spenda is an innovative software company providing electronic payment solutions across supply chains and trading networks. Spenda is both a software solutions provider and a payment processor. Spenda's mission is to deliver customers the ultimate platform with an integrated set of capabilities that disrupt single product vendors and enable us to scale revenues whilst delivering a compelling ROI to our customers. Previous Acquisitions FY24 layering revenue across the supply chain in new verticals FY24: Layering revenue across the supply chain in new verticals FY24 FY22: Secured technology, people & capital FY22 FY23 FY23: New foundation customers to validate model Customers & Partnerships FY25 FY25: Sustainable recurring revenue & cash generation Spenda's Land and Expand Model Aggregated B2B Marketplace Customer Retailer Aggregator Supplier / Wholesaler Manufacturer Spenda's strategy is to disintermediate supply chains and aggregator networks with an ecosystem that solves problems throughout the whole supply chain or network. Spenda's business model is to offer bundled solutions across the network and generate revenue from a combination of SaaS, payments and lending. Benefits of Spenda’s unique business model Combines five vendors into one solution, leading to diversified revenue streams and de-risked overall implementation for a network of trading parties End-to-end software integration through the supply chain enables long term customer contracts with low customer churn and high barriers to entry Ledger-to-ledger integration reduces administration costs and improves operational efficiency for all trading clients Scalable solution with layered revenue streams over time, including from SaaS, both B2B and B2C payments and B2B supply chain finance Captures transactions and payments through the value chain, including new virtual card product, with the ability to retain the large payment flow of end-consumers at a low cost of acquisition Spenda's five core products generate revenue from SaaS, payments and lending Standard Operating Environment (SOE) Accounts Payable Accounts Receivable Marketplace Payment Widget • Set of capabilities than spans POS, service management and eCommerce • These solutions optimise the customers quote-topay flow • Revenue streams include SaaS, payments • Automation of the finance roles that process purchase invoice-to-pay workflows. • Recognised when the seller initiates the transaction • Revenue streams include SaaS, payments and lending • Automation of customer invoicing, dispute management and payment processing • Recognised when the buyer initiates the transaction and distributes and invoice to its customer • Revenue streams include SaaS, payments and lending • Automation of buying and procurement through eOrdering and eInvoicing • Includes early settlement discounts • Revenue streams include SaaS, payments and lending • Capability for ecommerce and marketplace to capture payment and lending flow including private credit • Revenue streams include SaaS, payments and lending These five core products can be bundled in different combinations for different clients Q3 FY24 Update AirPlus gives Spenda a credit facility which is elastic and scalable without exposing the balance sheet • AirPlus International is a leading international provider of solutions in the corporate payment segment • Around 53,000 corporate customers rely on AirPlus when it comes to paying for and analysing their business travel and other purchasing activities • AirPlus is an issuer under the UATP and Mastercard card schemes • In November 2023, Spenda signed a payment processing agreement with AirPlus to jointly offer a virtual card product • The AirPlus facility enables Spenda's clients to access working capital funds with extended trade terms of up to 90 days • The AirPlus product can be bundled with either the Pay-Statement-ByLink (PSBL) or the Accounts Payment (AP) offering to replace traditional supply side credit. • Spenda has commenced rolling out the new AirPlus card facilities to an initial 10 customers, with approved limits of $3.3m and a further 10 customers are currently in the onboarding stage. • The product has been initially launched into current customer channels that include eBev and Carpet Court • The continued rollout of AirPlus facilities is expected to continue in Q4 FY24 and FY25. Spenda's products throughout the supply chain or network Customer Aggregated B2B Marketplace Retailer SOE Payment Widget Aggregator Accounts Receivable Accounts Payable Payment Widget Supplier / Wholesaler Manufacturer Accounts Receivable Accounts Payable Accounts Receivable Accounts Payable Payment Widget Marketplace Payment Widget Marketplace Spenda has bundled solutions for: • Network engagement – eInvoicing, dispute management, B2B payments • Demand side engagement – Standard Operating Environment (SOE) and B2C payments • Supply side engagement – Procurement and early settlement discounts Spenda's products throughout the Carpet Court network Aggregated B2B Marketplace Customer Aggregator Retailer SOE Point of Sale Accounts Receivable Accounts Payable Marketplace • In the Carpet Court supply chain, the supplier node has been removed as they manufacture and supply their own carpet • In the Carpet Court channel, Spenda generates revenue from SaaS, payments and lending Manufacturer Accounts Payable Marketplace Q3 FY24 Update Transforming Carpet Court's payments infrastructure from consumer to supplier • Carpet Court is the largest floor covering specialist in Australia, with a growing network of 205 franchised stores • Carpet Court has a presence in every State and Territory with annual retail sales of ~$500m. • Roll out of of Spenda's payments infrastructure between Head Office and the network of 205 franchise stores (buyers) • All of the payment flow from the 205 stores to Carpet Court’s National Support Centre is processed through the Spenda platform • Spenda's Accounts Receivable and PSBL solutions now deliver einvoicing, dispute management and B2B payments to the Carpet Court network • Spenda's payments infrastructure is saving each store up to 5 hour per week or 27 FTE across the network • Total payments volumes in Q3 FY24 of $54m, up 140% yoy and down 16% qoq reflecting a seasonally weak Q3 for carpet sales and payment flow through the network Programs of work currently underway Spenda is now the leading payments vendor to the Carpet Court store network with 16% market share acquired Carpet Court has nominated Spenda as the 'Franchise Supplier of the Year' 1. Pay-Statement-By-Link extensions – B2B Store to Head Office Engagement • Extended store credit • Adding AirPlus facilities to store network • Upgrading store network to Spenda AP 2. Store Solutions – B2C Engagement • SOE project to manage quote-to-install payment flow to be rolled out from June 2024 • Launched consumer payment services, includes digital payment options and POS terminals in-store. Expect to be fully rolled out by June 2025 and generate ~$4 in annual revenue. 3. Supplier Solutions – Manufacturer Engagement • Working on new marketplace product to digitise procurement Early days in the digital transformation of the Capricorn payments network Customer Retailer Aggregated B2B Marketplace Aggregator Supplier / Wholesaler Payment Widget Capricorn DSD project • There is significant scope for product expansion throughout Capricorn's network over time Manufacturer Q3 FY24 Update Early days in a long-term partnership with Capricorn • Capricorn's cornerstone investment of $7.175m in Spenda in January 2024 • Capricorn's digital transformation project will run over the next decade and incorporate multiple projects and revenue streams Current priorities include: • Capricorn is a member-based organisation established in 1974 to primarily support businesses in the automotive industry • The network consists of over 26,000 Members and more than 2,000 preferred Suppliers in every State and Territory in Australia and New Zealand • Capricorn's Members purchase ~$270m per month in parts from the approved Supplier network • BAU maintenance of Capricorn supplier network utilising CAPlink • Progressing the Capricorn Digital Services Delivery (DSD) project, which is expected to move into production in Q1 FY25, on-time and on-track • Developing innovative solutions to deliver PSBL into the Member network • Identification of new projects to further digitise and improve the Capricorn network engagement, wallet share and stickiness Recurring revenues from the Capricorn channel are expected to commence in Q1 FY25 (the September quarter). Upcoming operational milestones in Q4 FY24 Further penetration through Carpet Court supply chain Commercial launch with Capricorn Clear pathway to revenue growth • Ongoing roll out of B2C payments across Carpet Court store network • Continued work on DSD project, expected to move into production in Q1 FY25, on-time and on-track • Existing partnerships with Carpet Court, Capricorn, eBev and AirPlus remain on track • Identification of new projects • Strong revenue growth trajectory based on the current pipeline of contracted work Expansion of AirPlus Roll out with eBev FY25 revenue growth • Continued roll out of AirPlus facilities across new and existing customer networks • Integrating payments solutions into eBev platform • Multiple new revenue streams are expected to start in FY25 • Capture B2B payment flow and initial roll out of B2C payments • FY25 revenue is expected to be greater than FY24 • Working on SOE solution for store network and on new B2B suppliers Thank you. Approved by Adrian Floate, Managing Director spenda.co Spenda Limited 605, 275 Alfred Street, North Sydney, NSW 2060 1300 682 521 investors@spenda.co