Announcement PDF Compliance. Simple. We are a 40+ person, Australian RegTech business. We simplify worker compliance from hire to retire for: 01 02 03 Advisors Financial Service Providers Suitable for every worker in every profession and industry. All sizes from freelancers to large Federal Government departments and all businesses in between. Professionals providing services; including tax, accounting and payroll Integrating and collaborating with leading payrolls, APRA funds, banks and payment gateways Australian Workers Employers 04 A fresh brand with a deep history solving compliance needs and processing payments We have been processing employee pay and super since 2009 (we’ve processed over $40bn in employee pay or super directly and a similar amount indirectly through our platform). We have one of the widest reaches in the RegTech space in Australia serving compliance moments for: We support an abundance of compliance moments across the hire to retire lifecycle and are ahead of market requirements for new regulated moments that will drive significant uptake over the next 12 months, and beyond such as: Today Rollovers 3.0 ATO requirements ~2.8 million working Australians Employers >100 employees diversity stats ~70,000 employers (via 29 payrolls across all industry sectors) SMSF ESA requirements compliance solutions for over 400 advisors and accounting firms including Tier 1 Your Future Your Super (Stapling) ~28,000 SMSFs STP 2.0 ATO requirements Serving 4 of Australia’s largest superannuation funds Super contribution for employees under $450 / week New maternity leave changes for Super We have a modern cloud software platform that enables us to rapidly respond to evolving compliance needs Our regulatory and compliance footprint allows us to participate across the full spectrum of employee compliance moments from hire to retire FY22 Performance & Outlook August 29, 2022 Authorised by: Trent Lund Chief Executive Officer trent.lund@wrkr.com.au Wrkr Ltd ACN 611 202 414 Level 24, 66 Goulburn Street Sydney NSW 2000 FY22 Income of $5.3 million * Revenue of $4.6m * R&D income FY21 576K; FY22 $206k Signed MSA & first project with Link Group FY22 Highlights * Licenses, Transactions and Services included * First statement of work underway Successfully launched 3 products * SMSF Hub * STP2 * Proof of Income & Employment Retained and grew 100% of contracts * Platform growth above forecast Cost-to-income ratio reduced by 59% * Reduced suppliers * Managed discretionary spend CEO Overview The market: The technology sector has seen considerable changes over the last twelve months, with a market reckoning for business trading at high ARR or with unreasonable growth aspirations. While this shift has seen pressure on the share prices of technology companies, we are now seeing initial benefits of higher availability of engineering talent. We expect to see an increased interest in companies with less exposure to consumer sentiment and discretionary spend such as Wrkr, where ALL income is linked to regulated requirements. The specific markets we serve of APRA Funds continue to go through mergers and consolidations and significant regulatory changes. This activity is providing a rare opportunity for technology upgrades and Wrkr is very well positioned to be the net winner across our target base. We have already seen significant pipeline growth and commercial activity. Our target markets of payroll providers continue to consolidate as evidenced by recent acquisitions from international players and Australian players seeking to consolidate costs post acquisition. This market is moving slower than expected, However, the breadth of Wrkr READY onboarding and payments has positioned us well. While this market remains on target, FY23 will see a greater emphasis on direct-to-employer for Wrkr, as decision cycles are shorter and margin per user is significantly higher. Australian employers remain under increasing pressure to meet compliance requirements across pay, STP2, superannuation, roles & entitlements, diversity statistics, staff identity, role certifications, visa requirements and many more. With COVID-19 measures and support easing, regulators are showing clear signs of action. Wrkr’s one-stop shop approach to compliance between employer, employees and third parties through onboarding will increasingly become a competitive advantage. CEO Overview Our financial strength: Wrkr balanced the availability of working capital and cash to drive revenue growth objectives and investments in product development and business operations to position the business for future scalability. ○ ○ ○ ○ ○ FY22 more than doubled revenue to $4.6m from $2.0m in FY21 Wrkr finished the year with $1.3m cash at bank and improved net operating cash outflows by 25% Wrkr delivered contracted income of $4.6m which will underpin growth targets for FY23 Revenue has diversified across Wrkr PLATFORM, PAY, SMSF, READY and BENEFITS New revenue streams are already contributing to organic growth, such as SMSF Hub which is now generating over $30K per month after only 6 months in market The business continues to balance its cash and working capital with growth opportunities. We are prioritising investments in activities that bring forward transaction volumes & revenue and position us with the goal of sustained revenue growth and profitability. CEO Overview Our Brand and Customers: Having launched our new brand in December of 2021, Wrkr has transitioned its brand and significantly increased sales and marketing activity particularly across the superannuation, SMSF and direct to employers. The feedback on our brand and mission have been very positive with a notable increase in commercial activity and collaboration opportunities in the super fund sector. Our pipeline has continued to grow with minimal to no losses. Wrkr has a balance between large strategic deals and run-rate business to maintain consistent growth. Above Forecast Notably; Wrkr has seen 100% retention and revenue growth across ALL existing contracts in Wrkr PLATFORM & PAY 1.25m ○ ○ ○ ○ 1.8m This trend is expected to continue into FY23. Our large multi-year Platform as a Service (PaaS) contracts have grown above forecast as funds seek compliance and competitive advantage under the new Stapling regulations The merger of funds and consolidation of payrolls represents further growth opportunity in FY23 & FY24 Our early release of an STP2 upgrade will enable additional Wrkr PAY growth in FY23 as many organisations struggle with the new compliance requirements. CEO Overview Our Business Operations: Wrkr continues to streamline operations and has reduced our cost-to-income ratio significantly through supplier reductions and managing discretionary spend. There are significant costs associated with being ASX listed and meeting compliance obligations. We expect these costs to remain static as revenue grows in forward years. Wrkr will continue to invest in technology build to underpin our market opportunities, particularly as we scale Wrkr READY and deliver on new MSAs. A key priority of FY23 is to bring annuity revenue volumes forward. The Wrkr team have systematically driven improvements across the business ,enabling the consolidation of the merged entities and legacy business processes. Work is a modern technology business with continuous compliance and DevOps product improvement philosophies at our core. This year has seen an investment in compliance across: ○ ASIC Australian Financial Services License overhaul ○ ATO Tier 1 Digital Service Provider status ○ SOCII continuous compliance ○ GNGB Gateway Certification ○ ISO27001 overhaul ahead of FY23 Audit ○ Cyber posture ongoing enhancements. Our continued focus on quality will prove critical as we continue to engage positively with some of Australia's largest APRA regulated entities and iconic businesses. CEO Overview The Opportunity: The retention of our current direct Wrkr PAY customers and Wrkr PLATFORM customers sees a base of 2.8m Australian workers served. This base, combined with our investment in building strategic alliances (e.g. its MSA with Link Group) exposes us to the largest cohorts of workers across some of Australia’s largest industry funds and employer segments. By building a strong base and becoming integrated into the super, pay and stapling moments, Wrkr is well positioned to capitalise on its initial investment in compliance and the strength of our platform technology. The opportunity to grow Wrkr’s compliance moments and value beyond pay and super events is on track. Wrkr has leveraged its existing investments in traditional pay compliance moments and diversified its products. Wrkr’s footprint now includes; identity, right to work, super stapling, role classification, credentials, certifications and contract acceptance. Wrkr is already seeing appetite for the new compliance moments ranging from $10 - $150 for specific transactions and $2-15 per employee per month for SaaS licensing. Our base customers, trusted relationships with APRA Funds and payrolls position Wrkr to scale through unique partnerships and licensing models. Mission Make compliance simple Vision & Purpose To be the infrastructure for Employer to Employee compliance Our goal right now To become the ‘Pay’ & ‘Compliance’ rails for working Australians. Making it easier for employers to hire, onboard and compensate their employees. Set the payment standard. Thank you & Questions Wrkr.com.au Executive Team Trent Lund Karen Gilmour Joe Brasacchio Jean-Paul Seow Greg Tonner CEO and Executive Director CFO CTO (Comply Path Founder) Head of Commercial and Alliances Head of Growth Trent has over 25 years experience in technology and innovation. Trent is also CEO of Unlocked Ventures and holds numerous advisory board roles in technology & business. Karen has over 15 years experience in senior finance management positions across banking & finance, commodities and construction across Australia and UK. Joe has over 20 years of experience in leading high profile digital transformations, co-design in open Data Standards development, building RegTech platforms and venturing. Jean-Paul has over 15 years experience covering commercial, strategy and venturing. Worked across FS, Telco, Retail and Postal industries across AU, Asia and US. Greg is a strong leader with over 25 years in executing growth strategies in the software and technology sectors across Asia and the UK. Greg was CEO and led the transformation of the Queensland Cowboys. Board Emma Dobson Paul Collins Randolf Clinton Jillian McGregor Non-Executive Chair Non-Executive Director Non-Executive Director Company Secretary Summary information Financial data This presentation contains summary information about Wrkr Ltd (Company) (ASX: WRK) and its activities as at the date of the presentation. The information in this presentation is of a general nature and does not purport to be complete or contain all information that a prospective investor should consider when evaluating an investment decision in the Company or that would be required in a prospectus or product disclosure statement prepared in accordance with the requirements of the Corporations Act 2001 (Cth) (Corporations Act). This presentation should be read in conjunction with the Company's other periodic news releases or ASX disclosure documents as available from time to time. All financial information in this presentation is in Australian dollars ($ or AUD) unless otherwise stated. Investors should note that this presentation may contain pro forma historical and forward looking financial information. The pro forma and forward looking financial information and the historical information, provided in this presentation is for illustrative purposes only and is not represented as being indicative of the Company’s views on its future financial condition and/or performance. Forward looking statements This presentation contains forward-looking statements and information that are necessarily subject to risks, uncertainties and assumptions. Many factors could cause actual results, performance or achievements of the Company to be materially different from those expressed or implied in this release including, amongst others, changes in general economic and business conditions, regulatory environment, results of advertising and sales activities, competition, and the availability of resources. Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this presentation. Except as required by law, the Company assumes no obligation to update or correct the information in this presentation. To the maximum extent permitted by law, the Company and its subsidiaries and officers do not make any representation or warranty as to the likelihood of fulfilment of any forward-looking statements and disclaim responsibility and liability for any forward-looking statements or other information in this presentation. Not an offer of securities or financial products This presentation is not a prospectus, product disclosure statement or other offering document under Australian law (and will not be lodged with ASIC) or any other law. This presentation does not constitute an offer, invitation, solicitation or recommendation with respect to the purchase or sale of any securities or any financial product nor does it constitute financial product or investment advice nor take into account your investment objectives, taxation situation, financial situation or needs. An investor must not act on the basis of any matter contained in this presentation but must make its own assessment of the Company and conduct its own investigations and analysis. Before making an investment in the Company, a prospective investor should consider whether such an investment is appropriate to their particular investment objectives and financial situation and seek appropriate advice, including legal, taxation and financial advice appropriate to their jurisdiction and circumstances. The pro forma financial information has been prepared by the Company in accordance with the recognition and measurement principles of Australian Accounting Standards (AAS) and the Company’s adopted accounting policies of applicable accounting standards and other mandatory reporting requirements in Australia. Investors should also note that any pro forma financial information does not purport to be in compliance with Article 11 of Regulation S-X of the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Such information does not purport to comply with Article 3-05 of Regulation S-X. Investors should be aware that certain financial measures included in this presentation are ‘non-IFRS financial information’ under ASIC Regulatory Guide 230: ‘Disclosing non-IFRS financial information’ published by ASIC and also ‘non-GAAP financial measures’ within the meaning of Regulation G under the U.S. Securities Exchange Act of 1934, as amended, and are not recognised under AAS and International Financial Reporting Standards (IFRS). The non-IFRS financial information / non-GAAP financial measures include EBITDA and EBIT. The Company believes the non-IFRS financial information / non-GAAP measures provide useful information to users in measuring the financial performance and conditions of the Company. The non-IFRS financial information / non-GAAP financial measures do not have a standardised meaning prescribed by AAS or IFRS. Therefore, the non-IFRS financial information is not a measure of financial performance, liquidity or value under the 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. Investors are cautioned, therefore, not to place undue reliance on any non-IFRS financial information / non-GAAP financial measures included in this presentation. Compliance. Simple. Solutions 01 02 03 Ensure your workforce is always ready to work. Wrkr takes care of your compliance obligations in real-time whilst delighting workers with a digital-first experience which saves money, time and reduces risk. Get the right entitlements to the right place at the right time. Pay wages, superannuation and disbursements flexibly and accurately whilst fulfilling your regulatory reporting obligations. Enable your worker’s financial wellness through secure access to a range of benefits and service providers. Served through one comprehensive platform Employers Workers Secure Message Transport Open Super HR Flexible Payments Open Tax Payrolls ERPs Flexible Workflows Identity Super Funds Business Rules Notification Engine Background Checks Rights To Work Banks Advisors Data Analytics & Insights Open Invoicing Accountants Document Generator Other Ensure your workforce is always ready to work. Wrkr takes care of your compliance obligations in real-time whilst delighting workers with a digital-first experience which saves money, time and reduces risk. Wrkr Ready is delivered as a SaaS solution (monthly fees in advance per worker) paid by the employer for fully compliant onboarding and ongoing verification with some additional transaction fees for specific checks. We service iconic customers like Consortio who onboard contractors for marquee firms to avoid the risk of sham contracting through to direct employer onboarding. We cover: ● ● ● ● ● ● ● ● ● Identity checks - Dept Home Affairs: Document Verification Service (DVS) Australian Tax Office setup and checks (TFN) Credentials Certifications Work Rights (Visa) Background checks (WWC, Police Checks, Bankruptcy) Contractor Entity checks (ASIC, Insurance, Bank) Super Fund connection (Lost Super and Rollovers 3.0, SMSF ESA and compliance) Pay in Bank account connection Reduction in costs to manage contractor onboarding Hours saved per new full-time employee onboarded Our target market is high turnover industries (Retail, Tourism and Hospitality, Transport & Construction). We have active go to market models supported by digital marketing (direct sales to priority sector businesses with over 10,000 employees, as a revenue share model with Payroll provider companies and also through HR Advisors). Get the right entitlements to the right place at the right time. Pay wages, superannuation and disbursements flexibly and accurately whilst fulfilling your regulatory reporting obligations. Delivered through a transaction fee model (monthly in arrears per transaction) paid by the Employer directly or via the managed payroll provider. We offer the complete transaction required to pay employees, make super contributions and comply with the ATO information requirements. This is delivered under our ClickSuper AFSL and ATO Compliant GNGB Gateway. In addition, we leverage unique payment patents. We deliver and support: ● ● ● ● ● ● ● ● Real-time payments Direct debit ABA and SAFS formats Payment processing (Pay, disbursements, Super contribution) SMSF ESA and Rollovers SuperStream Compliance STP 1.0 and 2.0 Compliance wrkr Wallet and payslip notifications We serve 28 Payrolls such as PayGroup, Aurion, ReadyTech (HR3) and many businesses from Federal Government departments to large Retailers, Health Care groups to small businesses. Our target clients are large employers (direct integration to Payroll), Cloud Payroll providers and Payroll Outsourcing companies. We have a direct go to market model with a large established base. Enable your worker’s financial wellness through secure access to a range of benefits and service providers. This is our future growth engine and is a commission and trailing fee model for connecting wrkr’s to benefits using a unique data rights and consent management capability. Benefits are delivered through a partnering model and cover services such as: ● ● ● ● ● ● ● Budgeting and financial planning tools Benefit searching and matches Salary Packaging Loan compliance Health benefits Loyalty and marketing offers workforce-related) And more… Our target market is direct to the employee and through employer managed schemes. The growth of this business is a build off the base of users of our wrkr Ready and wrkr Pay solutions. All of our market-facing solutions are supported by our wkr platform which is offered to HR software providers, Payroll software providers, Advisors and APRA Funds as a PaaS solution. The platform and service offering is flexible to meet APRA Funds' needs where they can host the solution in a PaaS arrangement with annual license, support and bespoke development costs. Modular Platform The platform itself is modular and provides full support for compliance moments across: Clients The platform supports iconic Australian super funds, accounting firms and businesses. Our technology and engineering underpin one of the most awarded platforms in the Australian market, SunSuper / Precision’s Beam. ● ● ● ● ● ● Open Super (SuperStream and member services) Open Tax (connectors for SBR ATO messages and protocols) Open Banking Data Rights and Consent Analytics (direct, anonymised and encrypted) Support for Wallet with full hash encryption with Android and iOS compatibility Modular Platform Wrkr.com.au