Delivering Strong Performance & Furthering Momentum for Market Leadership Altium Half Year Investor Presentation 17-18 February 2016 (Sydney) 22 February 2016 (Melbourne) Aram Mirkazemi - CEO Martin Ive - VP Finance Kim Besharati - VP IR Disclaimer This presentation has been prepared by Altium Limited (ACN 009 568 772) and Future performance - Forward looking statements, opinions and estimates is for information purposes only. It does not constitute financial product or provided in this presentation are based on assumptions and contingencies which investment advice or a recommendation to acquire Altium shares and has been are subject to change without notice, as are statements about market and prepared without taking into account the objectives, financial situation or needs industry trends, which are based on interpretations of current market conditions. of individuals. 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Before making an investment decision, you Financial data should consider, with or without the assistance of a financial adviser, whether an All dollar values are in US dollars (US$) unless as otherwise investment is appropriate in light of your particular investment needs, objectives presented. and financial circumstances. 2 Agenda 1 Company Highlights & Successful Execution 2 2016 Half Year Financial Performance 3 Pursuing Market Leadership in PCB Design Software 4 Appendix: Company Overview & Long–Term Outlook First Half Financial Highlights and Long Term Outlook $100M • Sales growth of 22% 50M • Revenue growth of 13% Revenue • On-track to reach $100M in Sales > 30% revenue for 2017 40M EBITDA • 27.5% EBITDA margin for existing business up from 26.7% (excludes revenue and 30M Expense costs from acquisitions) • 23% increase in number of new AD licenses sold 20M • Increase in renewal rate to H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 2017 87% from 84% in developed 2011 2012 2013 2014 2015 2016 regions 4 DrivingIntroduction Performance from a Position of Financial Strength Altium’s H1 FY16 Financial Metrics $46.4M $9.1M EBIT NPAT $41.1M Sales $9.7M Cash (up 22% pcp) (up 35% pcp) 29,300 (up 1% pcp) Subscribers A$748M $10.7M Revenue (42% of Revenue) 7.12 $42.6M Market EBITDA (up 13% pcp) EPS CAP (up 6% pcp) (up 26%) $5.7M AU 10c EBIT 438 13% Debt Margin 23% Dividend Employees CAGR Free Op Cash Flow (down from (up 25% pcp) (down 22% pcp) 26%) * * Includes revenue and costs from acquisitions INVESTOR PRESENTATION 5 Operating Expenses Expenses for the existing business for Acquired Entities the full year is expected Operating Costs to be less than 10%. Organic Cost Growth 16% 5% Existing Business 5% Acquisition Growth in Expenses 8% Operating Expenses 8% Expenses 2% 3% Though it remains a 1% challenge, we hope to Rebuilding US Sales to achieve our aspirational Full Strength One-off Costs goal of 30% EBITDA One-off Costs (Professional Fees margin for fiscal year 2016. (Relocation of associated with Business to US) Acquisition) 6 Progress Update – First Half Significant Milestones America delivered a record breaking first half (25% revenue growth and 40% sales growth) EMEA is back on track delivering a solid performance (19% revenue growth and 24% sales growth in local currency) Partnered with Dassault Systemes SOLIDWORKS to introduce a new line of electronic CAD products reinforcing Altium’s bid for market leadership Released our fourth consecutive annual update to our flagship product Altium Designer 16 Successfully completed and integrated our first acquisitions (Octopart and Ciiva) Closed the largest multi-year TASKING deal with a tier 1 automotive supplier ($2.7 million) 7 Achieving Market Leadership by 2020 Altium’s strategy to maintain mainstream price leadership through At the current CAGR a transactional sales model while $150M revenue for Altium’s PCB delivering capabilities that rival high- In Pure PCB product line will approach end tools’ is fundamental to Altium’s Revenue $150M in revenue by 2020. bid for market leadership. 2015 2017 2020 2025 Strong Strategy, $100 Million PCB Market Emerging as a Global Strong Balance Revenue & Further Leadership Leader in System Sheet & Revenue Acquisitions Design Automation Momentum 8 ANSYS – A Case Study for Achieving Market Leadership Delivering Market-Leadership through Focus, 1BN in Fiscal Discipline and a Well-Executed M&A Revenue • High calibre team delivering on a 314M singular business focus. • Innovative business model to 834M capture opportunities that evolve within the industry. 565M • Strong and very consistent fiscal management to drive organic growth. • Acquisition of complementary 50M in technology businesses. Revenue • Achieving EBITDA margin of 48% at 1BN revenue. 1995 2005 2015 Revenue Operating Cash Flow 9 Agenda 1 Company Highlights & Successful Execution 2 2016 Half Year Financial Performance 3 Pursuing Market Leadership in PCB Design Software 4 Appendix: Company Overview & Long–Term Outlook Revenue by Region Americas – US$M EMEA - US$M 20 20 CAGR 17% CAGR 12% 15 15 10 10 5 YEAR 5 5 CAGR 13% - - Across All Regions China - US$M APAC - US$M PCB – First Half 20 20 PCB - Second Half CAGR 11% CAGR 2% 15 15 TASKING 10 10 Recurring revenue 5 5 - - 11 Altium’s Revenue Sources Vault Subscriptions Attached Products to New Licenses 3M 0.8M Altium Term Based Licenses 0.7M Lapsed Subscriptions Rejoining and upgrades 1.6M Altium PCB Altium PCB Subscription 42% 38% Software 17.8M (New and Upgrades) 15.8M Subscription Renewals 13.2M TASKING 3% Licenses 3.4M Other TASKING Octopart 2.4M Maintenance 1.5M 1.7M 12 Revenue - Board and Systems BSD – Americas (US$M) BSD - Rest of World (US$M) 20 10 8 CAGR 7% 15 CAGR 17% 6 10 4 5 2 - - H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 FY11 FY11 FY12 FY12 FY13 FY13 FY14 FY14 FY15 FY15 FY16 FY11 FY11 FY12 FY12 FY13 FY13 FY14 FY14 FY15 FY15 FY16 BSD – EMEA (€M) 5 YEAR 12 10 CAGR 14.3% Globally CAGR 17% 8 6 Total revenue – First Half 4 Total revenue – Second Half 2 Recurring revenue - H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 FY11 FY11 FY12 FY12 FY13 FY13 FY14 FY14 FY15 FY15 FY16 13 Revenue - TASKING & Octopart TASKING (US$M) Octopart (US$M) 6 6 5 5 CAGR 15% 4 4 3 3 2 2 1 1 - - H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 FY11 FY11 FY12 FY12 FY13 FY13 FY14 FY14 FY15 FY15 FY16 FY11 FY11 FY12 FY12 FY13 FY13 FY14 FY14 FY15 FY15 FY16 TASKING – First Half` Octopart – First Half TASKING – Second Half Octopart – Second Half Recurring revenue 14 Board and Systems – Underlying Metrics Altium Designer Seat Count PCB Subscription Pool 3,000 30,000 2,500 25,000 2,000 20,000 1,500 15,000 1,000 10,000 500 5,000 - - H1 FY13 H2 FY13 H1 FY14 H2 FY14 H1 FY15 H2 FY15 H1 FY16 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Americas EMEA Rest of World 15 Altium’s Subscription Pool Lapse Rate (LR) Non-renewals 2,330 +2,490 +1,150 New Subscriptions (NS) Re-join (RJ) Lapsed Subscribers Re- Attached to New License Sales joining and Upgrades Constant pool = ~15% of subscription pool. Growth pool = ~85% of subscription pool. (comprised mainly of China, Russia & Latin America) H1 FY16 Renewal rate of 87.0% H1 FY16 Renewal rate of 32.7% (up from 83.9% FY15) (up from 30.7% FY15) Subscription Pool (SP) ~ 29,310 at Dec 15 Growth Equation = NS + RJ – (LR x SP) 16 Seasonality Curves - Revenue: Sales: Operating costs Seasonality of Sales: Revenue: Operating costs 55,000 $100m 50,000 45,000 40,000 30% 35,000 30,000 25,000 20,000 15,000 10,000 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 FY11 FY11 FY12 FY12 FY13 FY13 FY14 FY14 FY15 FY15 FY16 FY16 FY17 FY17 Sales Organic revenue Revenue Organic expenses Expenses Recurring