Company: Title: Aconex Limited Special Teleconference and Webcast Date: 17 March 2016 Time: 10:30 AEDT. Start of Transcript

Transcription

1 Company: Title: Aconex Limited Special Teleconference and Webcast Date: 17 March 2016 Time: Start of Transcript 10:30 AEDT Operator: Ladies and gentlemen, thank you for standing by and welcome to the Aconex Limited special teleconference and webcast on the acquisition of Conject. At this time, all participants are in a listen only mode. There will be a presentation followed by a question and answer session, at which time, if you wish to ask a question, you will need to press star one on your telephone. I must advise you that this call is being recorded today, Thursday 17 March I would now like to hand the conference over to your first speaker today, Global Communications and Investor Relations Senior Director Mr Tod Bottari. Thank you, please go ahead. Tod Bottari: Thank you. Good morning, this is Tod Bottari, Senior Director of Global Communications and Investor Relations at Aconex. I'd like to thank you for joining us on short notice and welcome you to the public teleconference and webcast on our agreement to acquire Conject Holding GmbH. With me here, Aconex Chief Executive Officer Leigh Jasper and Chief Financial Officer Steve Recht. We released the news of our intended acquisition of Conject to the market in an ASX announcement approximately two hours ago. Today, Leigh will present the strategic, operational and financial significance of the acquisition. Steve will follow with a brief overview of our equity capital raising to finance the acquisition, as well as a summary of our outlook for the Conject business over the next few years. After that, we'll open the floor for your questions. The presentation and Q&A session are being recorded. Before we start, I'd like to call your attention to the disclaimers that follow, as well as Appendix A of risk factors and Appendix B of international offer restrictions included at the end of our presentation. Our presentation materials regarding the Conject acquisition and associated equity capital raising have been lodged with the ASX. Now I'd like to introduce Aconex CEO Leigh Jasper. Leigh Jasper: Thanks, Tod. Welcome to all our investors and analysts on the call today. It is with great pleasure that I announce that Aconex has agreed to acquire Conject, a leading European construction collaboration service provider. This is a great transaction for Aconex and for Conject, bringing together two of the market leaders in construction collaboration, who are both transforming how construction project teams work together. Conject is an excellent fit with Aconex and reinforces our strategic focus. The acquisition will accelerate our global market leadership and add significant revenue and profit, while driving global scale and margins for the combined Company. The Conject business has significant revenue scale, at 24.5 million, or AUD36.1 million; an EBITDA of 0.8 million or AUD1.1 million. Aconex will pay a cash consideration of 65 million, $96 million. We expect to close the transaction on or about 31 March, subject to closing conditions. This transaction is exactly in line with our strategic direction of market consolidation. Conject is the primary consolidation opportunity in our market. We understand this business very well and Conject neatly complements our existing regional position. Combined, we are the market leader by revenue in Europe, with strong positions in Germany, the UK and France. The acquisition will further enhance our product and sales capabilities, giving us access to a team with deep industry experience, including significant expertise around cost control. Importantly, it will add significant scale and DISCLAIMER: This transcript has been prepared by a third party for Orient Capital Pty Ltd. It may not be accurate or complete and should be verified directly with the issuer. Orient Capital Pty Ltd is not responsible for any consequences of the use you make of the information contained in this transcript, including any loss or damage you or a third party might suffer as a result of that use.

2 operating leverage to the combined business, increasing our global footprint and economies of scale and accelerating profitability for the combined Company. The transaction is very attractive financially, with the acquisition price at enterprise value to calendar year 2015 trailing revenue multiple of 2.7 times. We expect it to be strongly accretive to revenue, EBITDA and earnings per share, excluding acquisition and integration costs and charges. We will fund this transaction with a $120 million fully underwritten placement at a floor price of $4.95 per share and with a share purchase plan for existing shareholders to follow. Conject is a leading provider of project collaboration solutions, serving the largest European construction markets of Germany, the UK, France and Russia. Conject also serves customers in the Middle East and in Asia and has 670 customers in 50 countries. There is significant enterprise contract penetration providing high certainty of revenue, in much the same way that Aconex has high forward revenue visibility. The business has 210 employees in 12 offices, with headquarters in Munich. As we have discussed previously with investors, Aconex has looked at M&A from two perspectives; bolt-on product opportunities and market consolidation opportunities. We believe that the acquisition of Conject represents the most attractive market consolidation opportunity available to Aconex. As I said before, it is a business that we understand and we can add significant value to the combined business moving forward. We have seen the positive effects of market consolidation through the INCITE Keystone acquisition from the CIMIC Group. We believe the positive impacts will be even more significant with an acquisition on the scale of Conject. The Conject acquisition is strongly accretive for Aconex, adding significant revenue and profit, driving global scale for the Company. Conject has grown at an average of 18% over the last two years to 36 million. Like Aconex, Conject has high forward revenue visibility. 75% of the next 12 months revenue is already locked in, very similar to our 78% of revenue contracted for calendar year We see very strong alignment between the Conject business model and the Aconex business model, with high forward revenue visibility giving management and investors high confidence in the performance of the business. The company has strong diversity of revenue across Europe, with Germany and the UK being the leading markets, followed by France and Russia. I'd now like to go into detail on the excellent strategic fit of Conject and Aconex. Conject's position, capabilities and scale significantly reinforce our strategic focus, firstly growing the network, secondly expanding product breadth, and thirdly driving scale. Specifically, Conject consolidates the global market leadership of Aconex. Together, we extend our market leadership in Europe. Aconex will gain a wide and influential customer base in Germany, the UK and France and strengthen our top 500 owner and contractor network, which contributes to the overall expansion of our global user network. Also, the Conject acquisition will enhance our product and sales capabilities. We will bring into our European business an experienced local leadership team and strong local sales and support teams, which add deep industry experience in cost control. This will support the roll-out of our cost control functionality globally, after the Worksite cost acquisition. With the Conject acquisition, we continue to extend the breadth and depth of our product and intellectual property within the business. Importantly, we will be able to leverage our BIM - Building Information Modelling - penetration within the UK and other European markets which have been the early adopters and leaders in the introduction and use of BIM. Finally, this acquisition adds significant scale and operating leverage to the combined Company. We will be able to consolidate our leadership position in the Middle East and Asia, bringing together the Aconex and Conject teams in those respective geographies. We will be able to leverage our products and operational synergies across a broader market footprint, ultimately driving harder margins. We will also be able to upsell the Aconex platform more broadly, for example connected BIM and Aconex Field. Overall we see [inaudible] as an almost perfect fit between the Conject business and the Aconex strategy and we believe this fit will both accelerate and de-risk the execution of our strategy. 2

3 The acquisition of Conject extends our market leadership throughout Europe. The combined business will be the market leader in the second largest construction market in the world, after Asia. Aconex will have a strong footprint across Germany, the UK, France and Russia; the world's 5 th, 7 th, 8 th and 10 th largest construction markets in These are all bigger construction markets than Australia. The European market is also a key construction market influencer, with European contractors accounting for 50% of the top 250 global contractor revenue. Conject also provides market consolidation opportunities and the catalyst for accelerated growth and scale, with leading positions in Germany and the UK; both developed, early-adopting and influential markets in Europe and globally. We also have strong entry positions in France and Russia; both large construction markets and emerging collaboration markets showing increasing levels of collaboration adoption. Combined with the Aconex footprint across the UK and Southern Europe, this provides significant opportunity for the Company to accelerate growth in the future. Aside from the market consolidation benefits of this acquisition, Conject extends penetration and our user network, bringing an exceptional customer base to further build our global user network. Conject has over 670 customers, both owners and operators and contractors, similar to the Aconex model. Many of these European customers have international projects. Conject has been used in over 50 countries, and we believe this reinforces network effects globally for Aconex. Examples of projects that Conject has served includes airports in the UK and [Germany - sic, see slide 12 Singapore], gas power plants in Germany and the US, real estate infrastructure across the UK and the UAE, local government infrastructure in Russia, energy infrastructure in the UK, and retail properties in both Japan and the US. The customer base is high profile, including Nippon Steel Corporation, Bank of Austria, Groupe Vinci, Changi Airport, University of Manchester, Mace and BNP. We believe the combined customer network of Aconex and Conject will be unparalleled globally, and we look forward to deepening these customer relationships together. The Conject acquisition also provides strategic value for our product rollout throughout the world. Two specific examples are BIM's uptake around the world and our upcoming cost control launch. The European region has been a strong early adopter of BIM, opening up an opportunity for Aconex to further extend its BIM penetration around the world. One deep capability we have seen within the Conject team is cost control sales and support. This will help the combined Company maximise the value of the Worksite cost control acquisition, enabling us to accelerate the rollout and improve the quality of support to our customers. As part of this acquisition, we have put together a detailed plan to fully integrate Conject and the Aconex business, driving overall profit growth for the combined entity. We have factored in a one-time operational integration investment to bring Conject up to Aconex operating standards, which will ultimately drive more efficiency and productivity into the team. We will leverage synergy to improve operating performance and increase global economies of scale. We will consolidate the platforms in much the same way that we have consolidated the INCITE Keystone platform; continuing to operate the Conject platform in the near term, but then fully aligning customers and integrating the platforms over the long term, ultimately resulting in one platform for all customers on the Aconex network. The success of the INCITE Keystone acquisition has provided a strong template for how this can work with the Conject-Aconex integration. The resulting operational impact will be very positive for the Aconex business. We expect synergies and improved operating performance to drive EBITDA growth. We will invest in the product and integration of the platform. We will leverage the global infrastructures of the respective businesses for economies of scale, and we will consolidate sales and service operations around the world. We believe that the overall scale benefits to this acquisition will be significant for the combined businesses. Now I'll hand over to Steve to run through the equity capital raising and the financial impact of the acquisition. 3

4 Steve Recht: Thanks, Leigh. Today we launched a fully underwritten institutional placement of newly issued, fully paid ordinary shares to finance the acquisition of Conject and related transaction costs, and to provide additional working capital. We are issuing approximately 24.2 million new shares and placing them with investors through a variable-price book build at a floor price of $4.95 per new share, to raise approximately $120 million before placement costs. The share price represents a 7.8% discount to the last closing share price of $5.37 on 16 March The placement shares will represent approximately 14.5% of our issued share capital after the placement has been completed. The new shares will rank equally with the existing shares of Aconex. The placement is expected to settle on 22 March 2016 and the placement shares will be allotted on the following business day. No shareholder approval is required for the placement as we will utilise a portion of our existing placement capacity under ASX Listing Rule 7.1. The underwriters and joint lead managers of the institutional placement are UBS AG Australia Branch and Macquarie Capital Australia Limited. Trading in Aconex shares was halted before market opening this morning and is expected to resume following the completion of the placement tomorrow. We also plan to offer a non-underwritten share purchase plan, or SPP, to allow eligible shareholders with registered addresses in Australia or New Zealand to acquire up to $15,000 of additional Aconex shares per shareholder. Details of the SPP will be mailed to eligible shareholder shortly. As we have discussed with you previously, our financial strategy is to balance investments and continued growth, particularly in the areas of research and development and sales and marketing, with increasing profitability. For the acquisition announced today, we expect a benefit from an immediate increase in revenue, as well as long term network effects generated by the Conject network of customers, project partners and users. We expect R&D spending in line with our current spending as a percentage of revenue as we integrate Conject's product and engineering teams with our own. In sales and marketing, we expect to realise synergies with our existing teams across the UK, the Middle East and Asia. As a result of revenue growth outpacing the additional R&D and sales and marketing expenses, we expect the Conject acquisition to be accretive to EBITDA and earnings per share on a pro forma basis, excluding one-time acquisition and integration costs. Over time, we anticipate that the acquisition will fully reinforce our strategy of growing the network, expanding product breadth, and driving scale, resulting in strong accretion to earnings. We believe that successful execution of this strategy will deliver balanced growth and profitability, with both revenue and earnings growing over time. We believe that today's acquisition will enable us to leverage the growth of Conject, our global infrastructure and product and operational synergies to improve the profitability of the business following its integration with Aconex. For calendar year 2013 to 2015, Conject recorded compound annual revenue growth of 18%, gross margin of 73% and pro forma EBITDA margin of 3%. We believe that under Aconex ownership, revenue growth will increase to 15% to 20% for the next four years, we expect gross margin in the range of 70% to 72% in the near and medium terms, and pro forma EBITDA margin, excluding one-time acquisition and integration costs, of 11% to 16% in the near term and 20% to 25% in the medium term. We anticipate that Conject's historical earnings margins will improve with the benefit of our platform, operating experience and synergies. Excluding the amortisation of intangible assets and one-time transaction and restructuring costs, and including the benefit of existing tax losses, the acquisition is expected to be significantly accretive to EPS in fiscal year 2017, yielding a percentage in the high teens. We also anticipate opportunities to drive higher revenue growth from the Conject business over time. I want to emphasise that all of these numbers are estimates based on the best information available to us as of this date. These estimates exclude the impact of foreign currency exchange movements, which we can't forecast. Overall, we are very pleased with the Conject acquisition from a financial perspective, in terms of both the trailing enterprise value to revenue multiple and the prospects for future growth and profitability, as well as expanded market leadership. 4

5 Now I'll turn it back to Leigh for closing remarks. Leigh Jasper: Thanks, Steve. In closing, we expect this acquisition to deliver significant long term benefits to Aconex shareholders. The market opportunity for cloud collaboration is massive, with USD5.6 billion in total available market. The Conject acquisition adds benefits of scale and network effects to accelerate our leadership and penetrate that USD5.6 billion opportunity more rapidly. In summary, the acquisition significantly increases our revenue and profit, as well as our substantial customer base and user network. It expands the Company's global market leadership and scale, provides synergies, leveraging our existing global infrastructure, and gives us real opportunities to improve operating performance and drive margin expansion for the combined business. This is a great acquisition for Aconex shareholders, consolidating our global market leadership position, reinforcing our strategic focus, and being financially accretive to revenue, EBITDA and earnings per share. We will be now happy to take questions. Thank you all. Tod Bottari: Thanks, Leigh. That concludes our formal remarks today. Operator, please begin the question and answer session. Operator: Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, just press the pound or hash key. Your first question comes from the line of Jack Briggs from Credit Suisse. Please ask your question. Jack Briggs: (Credit Suisse, Analyst) G'day, guys, just a couple of questions from me. Just starting off on the integration and managing the transition between parallel platforms front. I know, you know, over the last couple of years as a listed company, you've steered away from acquisitive consolidation to some extent. I just want to understand how you're planning to do the integration. Is it going to be a three or four year story as all the projects roll off and you roll the customers onto Aconex? How are you going to think about customer churn, in terms of are you incentivising the customers to re-tender and re-evaluate the broader market opportunity? Leigh Jasper: I think the first point is that we've had some experience, obviously, in doing this with the acquisition of INCITE Keystone from the CIMIC Group, and see how that can operate for the business in terms of market consolidation. We'll of course support existing customers' projects on the existing platforms, and again, we've seen how we can do that with the Keystone platform. Over time, we will essentially align the platforms in terms of functionality and we expect customers to migrate across to the Aconex platform over time. The incentive, of course, for customers is that they're accessing a broader product suite and much greater development capacity, moving forward. So we think that customers will move across quite readily. We of course haven't assumed every last customer moves across, but we think we have a strong story, and certainly the feedback we've had from Conject, from their sales teams, and from customers we've spoken to is that we think that will be manageable and be a net positive for customers that are on the Conject platform today. Jack Briggs: (Credit Suisse, Analyst) Okay. In terms of thinking about 15% to 20% growth, then, does that assume a level of customer churn within those numbers kind of netted off on the new business? Leigh Jasper: We've assume - that's right, so we haven't assumed that every last customer comes across, we've allowed for some churn. But again, we think that there's a very strong and compelling reason why customers would move across onto the Aconex platform. Again, to make very clear, customers will continue to run out their existing projects on the Conject platform, and then over time migrate new projects across onto Aconex. 5

6 Jack Briggs: (Credit Suisse, Analyst) Yep, and - sorry. Leigh Jasper: [Unclear] in the future and we will have one platform aligning all of our customers on the same technology. Jack Briggs: (Credit Suisse, Analyst) So you don't see that taking up material management resources over the next three to four years as all those projects finish? Leigh Jasper: No, we see that as part of our ongoing sales effort. Clearly, we have - we also get benefits and synergies between respective sales teams, so we think that more than offsets any additional sales efforts that may be required. But again, we see it as a strong positive for our customers to move onto a broader, more functional platform, that meets their existing requirements plus provides a range of new functionality for them as well. Jack Briggs: (Credit Suisse, Analyst) Okay, perfect. Just on the revenue growth front, quickly. The 15% to 20%, obviously, as you said, that has some churn in it. Is that kind of the market growth rate through Europe? Secondly, is there any real difference between the product growth, in that SaaS is growing much faster than on-premise, or the collaboration is growing much faster than the facilities management? Or is it all kind of - can we assume it's pretty similar? Leigh Jasper: I think what we see on a blended basis, it's been 18% on a compound annual growth rate for the last two years. We would see that we can maintain that growth rate, and potentially even over time look to step that up. In the shorter term, we're confident that we'll maintain similar growth rates. It is true that the - there's parts of the business that are growing faster than others. For example, regionally, we're seeing quite strong growth in the Conject business, and frankly the Aconex business as well, because we operate in the UK, in that UK market, that's been a good market for growth. We see that while Europe has been somewhat weaker over the last few years, we see that we can maintain the current growth rates. If that economy steps up, there's clearly opportunities to step up with further projects in the market. Jack Briggs: (Credit Suisse, Analyst) Okay, perfect. Thanks, guys. Leigh Jasper: Thanks, Jack. Operator: Your next question comes from the line of Michael Higgins from Macquarie. Please ask your question. Michael Higgins: (Macquarie, Analyst) Hi guys, just a couple of quick questions from me. The first is regarding the price model of Conject. Do they charge a similar - do they operate a similar revenue model as Aconex, in terms of basis points on contract value? Leigh Jasper: Yes, essentially it's very similar. Obviously there's a spread across different customers in the same way that we do. But the overall averages, based on what we're seeing, look to be very similar to what we're getting at Aconex, around that 0.1% of project value. Michael Higgins: (Macquarie, Analyst) Okay, great. Leigh Jasper: I should also say that the contracts are very similar. They have a lot of - I mean, it's a very similar business model, they have a lot of enterprise customers in the same way that we do. That's, I think, one of the key strengths, is we understand the business, we understand how they operate, and there's a very neat alignment between how they sell to their customers, the types of contracts they have with their customers, and how Aconex is sold and supports its customers as well. 6

7 Michael Higgins: (Macquarie, Analyst) If you were to split the revenues by project and enterprise, what sort of percentages are we talking when you are looking at the complete revenue base? Leigh Jasper: The thing is, too, it's similar to Aconex, similar sort of levels. Obviously one of the things we'll be looking to do with the business is what we've been doing with Aconex, is to drive expansion of those enterprise accounts. We see that as obviously a key long term driver of growth for Aconex, and we think we can apply that same model of driving up enterprise customer relationships within the Conject business. Michael Higgins: (Macquarie, Analyst) Okay. Thanks, guys. Operator: Your next question comes from the line of Martin Byers from UBS. Please ask your question. Martin Byers: (UBS, Analyst) Hi guys. Just with respect to the existing customer base within Conject, do you have any assessment of the revenue opportunity uplift within that existing customer base, as people migrate onto the Aconex platform? Leigh Jasper: Clearly, as part of the acquisition process, we looked at opportunities to extend - where we can extend customer relationships. I think the key point there is that in Europe, you've got, of the top 250 contractors, about half of the revenue of those 250 contractors is with European contractors. So we see it both would be an opportunity to extend customer relationships with Conject itself, but also for Aconex to extend customer relationships. There are a number of European contractors that we already work with across other markets, like the Middle East and Asia. So we see it as not just an opportunity to step up the customer relationships with the Conject business, but also to step up our customer relationships as we consolidate more and more of the network onto a common platform. It works both ways, of course, so not only are we able to sell - going to extend our relationships, we're also able to sell more product to those customers, from the Aconex product set. The flipside of that is also use the expertise and skills of the Conject business in driving our product faster. I mentioned during the presentation that the Worksite acquisition and the roll out of cost management we see as a key area where Conject's expertise and skills that they have within the business can help us drive that. We've been selling a cost product into Europe, particularly the UK, and into the Middle East for some time. We think by bringing in that skill base will help us drive up the yield even on existing [inaudible]. Martin Byers: (UBS, Analyst) Steve, just a question for you. You mentioned to generate the EPS accretion that you've calculated in the high teens, you're including the benefit of existing tax losses. What sort of effective tax rates should we be assuming through the income statement in FY17? Steve Recht: Well, with respect to the Conject acquisition, they have a substantial amount of operating losses that we'll be able to apply. So we wouldn't expect from the Conject acquisition that there would be much, if anything, in terms of tax expense. So that'll be - that should end up weighting down or reducing the overall tax rate for the consolidated Aconex Group. Martin Byers: (UBS, Analyst) Okay, great. Thanks, guys. Operator: Your next question comes from the line of Paul Mason from RBC. Please ask your question. Paul Mason: (RBC, Analyst) Hi guys, a couple of questions. The first one, I was just wondering if you could give us the actual Euro earnings in Conject over the last three years, instead of Australian Dollar earnings. Because there's been a bit of a [de-rate] on the Australian Dollar, so I'd just like to get an idea of what the currency impact on the historical growth Leigh Jasper: Sorry, I just lost you on the end there, what was the last part of the question? 7

8 Paul Mason: (RBC, Analyst) Hi. I'd like to get an idea of what the currency impact on the historical growth in Australian Dollar terms has been. Leigh Jasper: In terms of apply - particularly on the page where we showed the revenue over time, we've applied the current exchange rate back, so it essentially strips out any movement in currency over that period. There was a 3% EBITDA margin there last year and it's been positive, but obviously modest. One of the things we believe we'll be able to do to drive operational efficiencies is to drive up that margin once we've acquired the business. Paul Mason: (RBC, Analyst) Oh, so maybe I've - okay, I was just wondering if you could give us an idea of how much the 18% growth is impacted by currency. So it was [Over speaking] Leigh Jasper: There's no currency effects in that. Paul Mason: (RBC, Analyst) Right, okay. Leigh Jasper: That currency growth is worked out on the Euro basis. Paul Mason: (RBC, Analyst) All right, okay. That's great, sorry. Second one, just on your slide in terms of the sources and uses of funds from the transaction. There's a note that both yourself, Leigh, and Rob are going to do a small selldown of your [stakes]. But it doesn't seem to be reconciled in the acquisition raising funds versus - so are you guys raising more than $120 million in total to fund that extra $15 million of sell-down? How do we look at that [Over speaking] Leigh Jasper: Yes, that's over and above the placement. Paul Mason: (RBC, Analyst) Okay. So that's meant to be coming from the SPP? Leigh Jasper: No, it's coming from a - essentially a secondary component of it, we've done it as a block trade. Paul Mason: (RBC, Analyst) Okay, right. Okay, great. The last question from me, then, is, in terms of your existing EMEA business, how should we think about the growth rate of your existing business excluding today's acquisition? Would growth there have been previously coming from poaching clients from Conject, or were these businesses not really going head-to-head in the past and therefore there's not really any cannibalisation of growth opportunities? Leigh Jasper: Certainly we don't see much in the way - we don't see any cannibalisation of opportunities. I think in terms of how the Middle East particularly has operated, Conject has been a competitor in that market for many years. We do compete with them from time to time. Obviously we're very, very strong in the Middle East, they've got a smaller operation there. But of course, when you are competing with somebody, it can be - yes, you can lose the odd deal, there can be price pressure. So we see it as a net positive for our position in the Middle East market, and more broadly of course across other markets as well. We will get some synergies in terms of pulling together our Middle East team, and also our Asia operation, Conject has an operation in Singapore, and also our UK operations. Of course, with continental Europe, it's a straight add. Paul Mason: (RBC, Analyst) Okay, great. That's all from me, thanks for that. Operator: Your next question comes from the line of Siraj Ahmed from Citigroup. Please ask your question. 8

9 Siraj Ahmed: (Citigroup, Analyst) Hi guys, just a few questions from me. Thinking of the Worksite acquisition timing and this acquisition, I just want to understand how the Worksite platform - [is it rudimental a] platform [unclear] I get that Conject has got a good project controls support team and solutions team. I just want to understand, is any [unclear] came from a product offering perspective? Leigh Jasper: Certainly not from the Worksite perspective. We think the Worksite product is the best cost management cost control product on the market. We think it's - certainly it's been written in a way that we think is best in class. But what we'll be doing is essentially working with the UK team of the Conject business to pull in some extra functionality into Worksite, specifically around supporting particular requirements in the UK market. For example, NEC3 is a particular requirement there that's around cost management. So we think we'll be able to leverage the IP and the functionality that's in that - in the Conject product to extend out the Worksite product. But then over time, of course, we get the product synergy benefit of not having those two products. But ultimately, what this - the other thing I should say is this enables us, we think, to roll out the Worksite cost control product more effectively, with a team that understands cost control complementing our team and helping us sell and support the system more aggressively around the world. Siraj Ahmed: (Citigroup, Analyst) Thanks, Leigh. Would - does that delay the rollout of the Worksite solution, or is that still on track [Over speaking] Leigh Jasper: No, that's very much on track. I think as we mentioned in our results, we had a number of customers on the Worksite product, on the cost control product, and using that today, and we're having a formal launch of that towards the end of the year. So it certainly doesn't slow it down; if anything, it allows us to move - not necessarily accelerate the launch, but we think to accelerate the adoption of that product over time, with that additional capability we're bringing into the business. Siraj Ahmed: (Citigroup, Analyst) Right, thanks. Also the Conject leadership, I think you mentioned the European leadership - what's the plan for the Conject leadership, is there any [unclear] Leigh Jasper: Yes, sure. One of the key [inaudible] in the acquisition, and looking at the business, was the strength of the management team. We think it's a great management team, a very strong management team, and also is a very good fit. One of the processes we went through as part of looking at this acquisition was spending a lot of time with their management, a lot of trips to Europe. We think it's a really strong team, we're going to bring across essentially the senior leadership team of that business to run our European operation with us. That's, we think, one of the strengths of bringing the two businesses together, we get that very strong capability in Europe, both from the leadership perspective but also from the sales and support perspective. Siraj Ahmed: (Citigroup, Analyst) Okay. Just a couple questions more around Conject. I think it's mentioned that they have SaaS and an on-premise solution, so is there a split on the SaaS or non-saas revenues for them? Leigh Jasper: We [unclear] a specific split but it's nearly all - the vast majority is SaaS. They're aligned to our revenue model and there's a small component of on-premise there. Siraj Ahmed: (Citigroup, Analyst) Okay. From an industry exposure perspective, oil and gas versus commercial and residential? Leigh Jasper: Yes, good question. There's very little oil and gas, it's mostly industrial, commercial, infrastructure. Essentially residential, commercial, government infrastructure sectors that we target as well, they have the majority of their business there. A small amount of oil and gas, but even less than Aconex has in oil and gas. 9

10 Siraj Ahmed: (Citigroup, Analyst) Okay, great. Just a couple of questions for Steve from a financials perspective. The amortisation costs, can you give us an idea of how much the customer contract amortisation should be - we should think about? Steve Recht: We've made some estimates, but the reality is once we've completed the transaction we will [inaudible] and do a fair value, actually get an appraisal done to [inaudible] breakdown between how much is customer contracts, how much is intellectual property and how much is goodwill. So we don't have an accurate number on that at this point in time. Siraj Ahmed: (Citigroup, Analyst) Okay. All right, thanks. From a gross margin perspective, the near term guidance seems to be a bit lower than what Conject has done historically, I mean last year, 73%. Any reasons for the lower margin? Steve Recht: Yes, one of the things that we have in there is - it's a very similar model to Aconex, so we understand it and you can see that the numbers are actually fairly close to Aconex, four or five points lower. The two major components, of course, in cost to revenues are hosting and then client services costs. The hosting contracts that Conject has are slightly higher than what we have typically seen for the Aconex business. So we think in the near term that there'll be - that they'll still be able to deliver the 70% to 72% gross margins. In the longer run, we do think we'll trend towards the Aconex level of gross margin. Siraj Ahmed: (Citigroup, Analyst) Thanks Leigh, thanks Steve. Operator: Your next question comes from the line of James Bales from Morgan Stanley. Please ask your question. James Bales: (Morgan Stanley, Analyst) Thanks, guys. Just on the transition of Conject's model, it should follow a similar path to Keystone. Can you give us any metrics on how that's transitioning so far, what sort of proportion of users have transferred to your core product? Leigh Jasper: I think the key point there is what we're able to do with the team. We factored in essentially a build-out of some additional functionality to - every system has certain functionality that is different from other systems. In the case of the Keystone platform, it had some functionality that the Aconex platform didn't have, so we've been building that across into the platform. The important thing is that very quickly we were able to bring their software development team across onto building forward Aconex product. That happened much faster than expected, so we were essentially getting that product synergy much earlier than we expected, which has been a real positive. Then over - I'm not sure of the exact numbers of customers, but of course projects will start to migrate across - when I say migrate across, I mean new projects that come up that are won by those customers will go across onto the combined - the Aconex platform with that combined functionality, moving forward. James Bales: (Morgan Stanley, Analyst) Yes, okay. Then you've outlined - I think it was slide 18 - what the impact of this business combination means on the revenue growth and margin profile for Conject. But if there are network synergies both ways, should we be rethinking the metrics you've previously given on sales growth and margin profile for the core business? Leigh Jasper: Actually, James, I just want to drop back to the last answer I gave as well, if that's okay. The best example for the Keystone migration is that John Holland was previously on that platform and they've moved across all their projects - forward projects onto the Aconex platform. So it just shows you how quickly we can close that gap and move people across onto a new platform. The feedback from John Holland and the other customers that moved across is very positive. 10

11 Going to your second question on the margin. The way we see this is additive. Over time, clearly there may be further benefits, but I think we need to pull the businesses together and work through that before we start to forecast any additional synergy benefits, in terms of revenue and margin growth. But the way we're looking at it in the near term is as an additive set of numbers. Essentially you're bringing in a business that gives us more scale, where we can drive the EBITDA much faster over time and take that up even before Aconex EBITDA in the medium term. So as an incremental business that's able to leverage our global infrastructure, we believe that part of the business will operate on a higher margin. In essentially the same way as Australia is able to lead with that global infrastructure, good penetration drives a higher margin in the Australian business. We see that particularly the German and the UK businesses would operate quite high EBITDA margins into the future. So [unclear]. James Bales: (Morgan Stanley, Analyst) Are you able to give any breakdown of the growth that Conject has been able to achieve, in terms of customer count versus their ability to cross-sell and their revenue retention metrics? How do you see the lifetime value of their customers versus what you've got in the core business? Leigh Jasper: We won't yet provide metrics on specific customer uptake or changes in customer numbers. What we are, of course, seeing and what we understand, given it's very similar to our model, is that the lifetime value of the customer is very similar. You invest in the customer upfront, you get them onto the platform, and as they start to roll more and more projects across the platform, of course the margins from those customers goes up. We see that same profile playing out with their larger customers, they're of course profitable customers for them. Where they're winning new customers and entering new markets, for example Russia, that's a less profitable customer set because they're still pushing into that market and in an early adoption phase. So again, we see very similar parallels to the Aconex business. James Bales: (Morgan Stanley, Analyst) Are you able to give any colour on the split of their revenue growth between customer count versus upselling and the natural growth within their customer base? Leigh Jasper: Again, I think it's very similar to Aconex, and we don't provide specific numbers on that for Aconex either. But what we do see is that they're doing very similar to what we've done in Australia in their German and their UK businesses, where they're selling more product, extending those relationships into enterprise relationships. Within their markets like France and Russia and Eastern Europe, which are more market entries, look a lot more like our Asia business, for example, in terms of entering new markets and building out those positions. Again, when we look through their numbers, what we see is a very close matching to how we look at our business and different adoption rates and different markets and different maturities. So it confirms our thinking about the Aconex business and maps very neatly to those different markets. James Bales: (Morgan Stanley, Analyst) Right. Thanks, guys. Operator: Your next question comes from the line of Raju Ahmed from CCZ Equities. Please ask your question. Raju Ahmed: (CCZ Equities, Analyst) Hi guys. I might be covering a bit of old ground in terms of the questions asked. But if we look at slide 18, that revenue growth near term and medium term of 15% to 20%, can I just clarify that this is [new] revenue on the Conject platform, or there's new revenue that you get on the Aconex platform as a result of acquiring Conject? Leigh Jasper: This is Conject's financials. Again, the way to think about it is as an additive piece on top of the base business. As Steve mentioned in his presentation, we maintain our view on the Aconex business that we've presented to the market, and this is additive on top of that. So this is for the Conject business as acquired by Aconex. 11

12 Raju Ahmed: (CCZ Equities, Analyst) No, no, no, I understand that. If you think about the next one to two years, the additional revenue that you're going to generate in terms of growth, let's say 20%, so $6 million to $7 million, are you going to recognise that revenue or those customers on the Aconex platform or on the Conject platform? Leigh Jasper: Essentially it'll - yes, it's going to be both, in the sense that we're going to have customers growing on Aconex. The way we'll look at it moving forward is one business, so we won't be - we'll look at the overall grow to the business. Clearly, if it's in Europe, it would be considered to be growth of that former Conject business, but we won't be thinking about it as two businesses. We'll be integrating into one business, one global platform, as we have with our other markets. Does that answer your question? Raju Ahmed: (CCZ Equities, Analyst) Yes, okay, sort of. No, it clarifies it. If you look at the pro forma EBITDA margin going from, let's say the indicated 3% to 11%, I'm just trying to picture in my head, then, you've got some pretty decent revenue growth from Conject going forward. So that margin uplift, is it predominantly scale in the new term, or is it [inaudible] driven by cost out? Leigh Jasper: It's predominantly the former, so predominantly scale. There's obviously some synergies we'll have by bringing the businesses together, but it's really around the scale we get as we continue to grow the business. So as we drive revenue growth, that in turn, as we're able to operate and leverage our existing infrastructure across the combined businesses, that will drive margin growth over time. Raju Ahmed: (CCZ Equities, Analyst) Sure. So when you look at a couple of lines below, the restructure costs and transaction costs of $6 million, what is the restructure cost relating to? Is it getting rid of people, or other changes in the business in the near term? Leigh Jasper: It's really three components. There's obviously a little bit of restructuring costs, that's part of it. But the other two buckets are alignment of systems and infrastructure across the businesses. We're essentially going to lift Conject onto our operating standards, for example in sales using Salesforce, lift everybody onto a common platform there. So there's some integration costs of integrating their systems into our platforms. Then the third component is around retention and incentivisation of key staff, we see that as being critical to bringing that team across. So the three buckets again are; some restructuring costs, platform alignment and operational alignment and investment in that, and then incentives and staff retention. Raju Ahmed: (CCZ Equities, Analyst) Okay. All right, very good, those are all my questions. Thank you. Operator: Your next question comes from the line of William Morgan from Intrinsic Investment. Please ask your question. William Morgan: (Intrinsic Investment, Analyst) Congratulations, Leigh and others, great deal. Leigh, just the motivation of the vendors, it's entertaining to see revenue multiples being talked of again. I appreciate the mix between long term synergy, getting a platform, but you're saying you're getting great staff but they're not going to have [scrip] in the new deal. Can you just - there are some conflicting things and some obvious things there, can you just talk about that a little bit, please? Leigh Jasper: As I mentioned on the restructuring cost or the costs of integration we will be looking at obviously incentivising key staff moving forward. The ownership, there was a couple of private equity groups that owned the business, they held the majority of the stock anyway, frankly. For management and others, we think we can create attractive plans for them. These are also people that - frankly, one of the great alignments with this business was that their people that have been out there, as we have, driving a transformation in the market. It's as much that as anything, that they're out, they enjoy what they're doing and they're driving on that. 12

13 I think ultimately we see that we will be able to bring the staff across that we need to. Clearly we're getting the other benefits, in terms of the capabilities of those staff, but also the other benefits in terms of the customer base and the network effects that we get by pulling in more scale and a broader customer base. William Morgan: (Intrinsic Investment, Analyst) Okay, thank you. Just on the pricing experience that Conject have been having, is there anything that you learnt from that, or is it that it really just gives you confirmation of your own pricing model? Leigh Jasper: Yes, I think what we see - obviously we have competed against Conject, so in a sense there's been some alignment of pricing anyway that naturally happens, because we have operated in some similar markets, such as the UK, such as the Middle East and Singapore. We see it as pretty close alignment in terms of pricing today. Obviously into the future there are potentially opportunities there, but today we see a pretty close alignment on price. William Morgan: (Intrinsic Investment, Analyst) Okay. Then you've touched on service offering, the service suite, in past presentations and through the industry there's some knowledge of it. But can you sort of do a bit of - go back and do a bit of a 101 on service offering. You've mentioned the cost control module, they've got a competitive one. But just speak about the other product suites. Leigh Jasper: There was a page in the presentation, which I think you'll be able to see online, page 13, which has the product suite for Aconex. We saw quite an alignment, we have a broader product [unclear] deeper functional product in some areas. Obviously there's a few areas where they have functionality, I mentioned before around the cost control piece on this NEC3 piece, which we'll look to pull into the Aconex platform. But we see pretty close alignment between that broader product suite being, of course, your document control, all your correspondence, your [RFIs], submit all of those sorts of things, BIM collaboration, workflows approvals, bidding and tenders, cost management [inaudible], building inspections and then handovers. We see that suite is similar and there's obviously quite a lot of overlap between the suites, given they have a very similar model to us and we've been playing in similar markets. The benefit we have here, of course, is the product synergy of being able to shift that development resource onto forward products so we combine that with the aligned platform. William Morgan: (Intrinsic Investment, Analyst) Okay, that's it for me, thanks. Leigh Jasper: Thanks, Will. Operator: There are no further questions at this time, Tod. Please continue. Tod Bottari: Thank you, Operator. We'd like to thank all of you for joining us today, again on very short notice. A replay of the webcast will be available at this same site which will be linked from the Aconex Investor Centre website. We look forward to speaking with you again soon. Good morning. Operator: Ladies and gentlemen, that does conclude our conference for today. Thank you for participating, you may all disconnect. End of Transcript 13