Delivering Strong Performance & Growing Momentum to Market Leadership ALTIUM HALF YEAR INVESTOR PRESENTATION Aram Mirkazemi CEO 21-24 February 2017 Joe Bedewi CFO Sydney & Melbourne For personal use only Kim Besharati VP IR Disclaimer Future performance - Forward looking statements, opinions and estimates provided This presentation has been prepared by Altium Limited (ACN 009 568 772) in this presentation are based on assumptions and contingencies which are subject and is for information purposes only. It does not constitute financial product or investment advice or a recommendation to acquire Altium to change without notice, as are statements about market and industry trends, shares and has been prepared without taking into account the objectives, which are based on interpretations of current market conditions. Forward looking financial situation or needs of individuals. 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To the maximum extent Altium, Altium Designer, Altium Vault, Ciiva, Circuitmaker, Circuistudio, permitted by law, none of Altium employees, its directors, employees or agents, nor Octopart, PCBWorks, Protel and Tasking, and their respective logos, are any other person accepts any liability, including, without limitation, any liability trademarks or registered trademarks of Altium Limited, or its subsidiaries. arising out of fault or negligence, for any loss arising from the use of the information All other registered or unregistered trademarks mentioned in this presentation are the property of their respective owners, and no contained in this presentation. In particular, no representation or warranty, express trademark rights to the same are claimed or implied is given as to the accuracy, completeness or correctness, likelihood of achievement or reasonableness of any forecasts, prospects or returns contained in this Presentation nor is any obligation assumed to update such information. Such forecasts, prospects or returns are by their nature subject to significant uncertainties For personal use only Financial data and contingencies. Before making an investment decision, you should consider, with All dollar values are in US dollars (US$) unless as otherwise or without the assistance of a financial adviser, whether an investment is presented. appropriate in light of your particular investment needs, objectives and financial circumstances. 2 Agenda 1 Company Highlights & Significant Achievements 2 2017 Half Year Financial Performance & Metrics 3 Pursuing PCB Market Leadership & EDA Transformation 4 Appendix: Company Overview For personal use only Altium’s H1 FY17 Performance Highlights $100M 13% H1 $90M 16% $93,597 H1 $80M 11% H1 10% $80,216 $70M H1 20% $70,964 • Revenue growth of 14% $60M H1 14% $61,908 H1 • EBITDA Margin 25.8% $50M $55,072 • Achieved double digit sales growth and on- $40M $48,650 track to exceed $100M revenue in FY17 $42,594 $30M $37,599 • 4% increase in subscribed seats to 32,321 $32,295 $20M $29,036 $26,445 26.7% 25.0% 25.8% $48,342 18.4% $10M 9.6% For personal use only $0M -16.3% H1 FY H1 FY H1 FY H1 FY H1 FY H1 2012 2013 2014 2015 2016 2017 Revenue EBITDA Margin Revenue growth 4 Driving Performance from a Position of Strength Altium’s H1 FY17 Financial Metrics $36.3M AU11c $47.0M Sales 7.64c Cash Dividend (Up by 14%) EPS (Up by 10%) 32,321 (Up by 7%) Subscribers $48.6M Revenue (Up by 4%) A$1.1B 25.8% (Up by 14%) Market Cap EBITDA Margin (Up from 25.0%) Debt 13.7m Op Cash Flow 2,177 $12.5M $9.9M Altium Designer seats EBITDA NPAT Free (Up by 180%) (Up by 8%) (Up by 1%) * (Up by 18%) For personal use only * Seat count was impacted by 8% effective price increase. 5 Progress Update – First Half Significant Milestones Delivered major upgrade to Altium’s flagship product, Altium Designer 17, representing the fifth consecutive annual upgrade. Released new electronic/mechanical CAD product under OEM partnership with Dassault Systèmes SolidWorks. Expanded direct sales presence in Europe acquiring long-time resellers in the Netherlands and the United Kingdom. Began the modernization of our TASKING R&D and achieved highly-sought industry accreditation to support the sale of TASKING’s compiler technology in the automotive industry. For personal use only 6 Achieving Market Leadership by 2020 2020 Target Revenue Breakdown Acquisitions Octopart 10-15% 5-7.5% TASKING 7.5-10% $200M Altium Designer 2025 In Total Revenue 55-65% 2020 5-10% $150M In Pure PCB 2017 2015 ATINA 5-10% 3-5% For personal use only Strong Strategy, OEM $100 + Million PCB Market Transforming the Leading Technology Revenue & Expansion Leadership & Realization of & Revenue of Market Emerging Leader Electronic Design Momentum Data Opportunity in Systems Design Management 7 Agenda 1 Company Highlights & Significant Achievements 2 2017 Half Year Financial Performance & Metrics 3 Pursuing PCB Market Leadership & EDA Transformation 4 Appendix: Company Overview For personal use only Revenue Sources 1.0% Other Recurring ($0.5M) Vault Subscription and Term Based Licenses 1.0% ($0.5M) Transactional Tasking Term Based Licenses 0.4% ($0.2M) Revenue 44.2% 2.2% ($1.1M) ($21.5M – Altium Designer Term Based Licenses 3.7% up 15%) ($1.8M – up 6%) 7.2% ($3.5M – Tasking Maintenance up 150%) Altium Designer 33.1% Perpetual Licenses ($16.1M – up 14%) Octopart Search Altium Designer Subscriptions 40.2% 3.3% ($19.5M – ($1.6M – down up 9%) 5.8% 27%) Services ($2.8M – 2.0% up 47%) For personal use only ($1M) 55.8% Tasking Licenses ($27.1M Recurring – up 14%) Revenue Other Transactional 9 Revenue – Board and Systems BSD - Americas H1 Revenue: 5% 5 Yr Revenue CAGR: 15% BSD – EMEA USD H1 Revenue: 15% 5 Yr Revenue CAGR: 11% 5 Yr Recurring CAGR: 16% 5 Yr Recurring CAGR: 14% $40m $25m 11,159 12,463 $35m 10,015 10,865 17,973 $20m 8,468 14,253 17,177 7,961 $30m 10,146 10,931 8,927 $25m $15m $20m $15m $10m $10m $5m $5m H1 FY H1 FY H1 FY H1 FY H1 FY H1 H1 FY H1 FY H1 FY H1 FY H1 FY H1 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 Recurring Revenue BSD – Rest of World H1 Revenue: 17% 5 Yr Revenue CAGR: 8% BSD – Total H1 Revenue: 10% 5 Yr Revenue CAGR: 12% 5 Yr Recurring CAGR: 9% 5 Yr Recurring CAGR: 14% $17m $80m 8,135 8,950 39,386 $15m 7,267 7,285 7,631 35,673 28,231 33,547 6,712 25,881 $13m $60m 23,600 $11m $9m $40m $7m For personal use only $5m $20m $3m H1 FY H1 FY H1 FY H1 FY H1 FY H1 H1 FY H1 FY H1 FY H1 FY H1 FY H1 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 10 Revenue – TASKING and Octopart TASKING H1 Revenue: -5% 5 Yr Revenue CAGR: 10% Octopart Search 5 Yr Revenue CAGR: 34% 5 Yr Recurring CAGR: 8% H1 Revenue: 64% $10m $5m 5,425 3,485 5,158 $8m $4m 2,117 3,716 3,920 1,827 2,780 2,893 $6m $3m 1,020 856 826 $4m $2m $2m $1m H1 FY H1 FY H1 FY H1 FY H1 FY H1 H1 FY H1 FY H1 FY H1 FY H1 FY H1 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 For personal use only Recurring Revenue 11 Board and Systems – Underlying Metrics Altium Designer Seat Count Subscription Pool 32,321 6,000 (+1,187) 29,320 (+1,314) 6,363 (+152) 26,943 30,000 (+860) 5,000 24,821 (-222) 11,967 (+496) 25,000 4,000 2,177 20,000 (+ 15) 3,000 2,177 2,296 (+ 15) 2,162 15,000 13,991 (+539) 1,916 858 (+ 63) 2,000 1,756 10,000 672 (+ 25) 1,000 5,000 647 (- 73) - - For personal use only H1 FY H1 FY H1 FY H1 FY H1 H2 H1 H2 H1 H2 H1 H2 H1 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Americas EMEA Rest of World Americas EMEA Rest of World 12 Subscription Pool Lapse Rate (LR) +2,507 Non-renewals +1,247 (Up from 2,490) 2,567 (Up from 1,150) (Up from 2,330) New Subscriptions (NS) Re-join (RJ) Attached to New License Sales Lapsed Subscribers Re-joining and Upgrades Growth pool = ~86.5% of Constant pool = ~13.5% subscription pool of subscription pool H1 FY17 renewal rate of 86.2% H1 FY17 renewal rate of 36.4% Down from 86.6% in FY16 up from 30.3% in FY16 Subscription Pool (SP) For personal use only H1 FY17: 32,321 (up from 31,134 June 2016) Growth Equation = NS + RJ - (LR x SP) 13 Operating expenses $11,373 $35M $10,350 $7,095 $25M $15,709 R&D spend driven by capability acquisitions and product $14,083 investment. $13,670 Sales and Marketing gaining efficiency as we implement our “go- direct” strategy $15M G&A increases due to One-Time Charges and Key Hiring $9,021 $7,477 $6,520 $5M For personal use only H1 H1 H1 2015 2016 2017 R&D Sales & Marketing G&A 14 Operating expenses Operating Expenses as a % of Revenue 100% 80% 24.3% 23.4% 18.9% What Drives Altium’s Unique Operating Leverage? 60% 36.4% 33.1% 32.3% No Waste Culture – Every Dollar Counts 40% We support a Value-Based Market but, we service this market with a commodity selling model 20% 17.3% 17.6% 18.5% R&D is driven by a high product release rate 0% For personal use only H1 H1 H1 2015 2016 2017 R&D Sales