Serko announces underwritten NZ$15m Placement

3577759 v8 1
7 August 2018

NOTICE PURSUANT TO CLAUSE 20(1)(a) OF SCHEDULE 8 TO THE FINANCIAL MARKETS CONDUCT
REGULATION 2014
1. Serko Limited ("Serko") today announced that it intends to undertake an offer of up to $15
million of fully paid ordinary shares of the same class as already quoted on the ASX and NZX
Main Board ("Offer"). The Offer opens today, 7 August 2018, and is being made in reliance
upon the exclusion in clause 19 of schedule 1 to the Financial Markets Conduct Act 2013
("Act").
2. This notice is provided under subclause 20(1)(a) of schedule 8 to the Financial Markets
Conduct Regulations 2014 ("Regulations") and under paragraph 708A(12G) of the
Corporations Act 2001 (Cth) (“Corporations Act”) as notionally inserted by ASIC Instrument
18-0299.
3. Serko will issue the relevant securities under the Offer without disclosure to investors
under Part 6D.2 of the Corporations Act.
4. As at the date of this notice:
(a) Serko is in compliance with the continuous disclosure obligations that apply to it
in relation to ordinary shares in Serko;
(b) Serko is in compliance with its financial reporting obligations (as defined in
subclause 20(5) of schedule 8 to the Regulations);
(c) Serko has complied with its obligations under Rule 1.15.2 of the ASX Listing Rules;
and
(d) there is no information that is "excluded information" (as defined in subclause
20(5) of schedule 8 to the Regulations) in respect of Serko.
5. The potential effects that the Offer of new shares is expected to have on the "control"
(within the meaning of clause 48 of schedule 1 to the Act) of Serko and the consequences
of those effects are as follows:
(a) As at the date of this notice, based on filings made by the relevant parties, the
substantial product holders in Serko are Darrin Grafton, Robert Shaw, Geoffrey
Hosking, Milford Asset Management Limited, First NZ Capital Group Limited and
Harbour Asset Management Limited. None of the substantial product holders
control Serko.
(b) Serko has not sought a waiver from NZX Main Board Listing Rule 7.5 (regulating
issues of shares which could affect the effective control of Serko), and the
Takeovers Code will also prevent any person and that person's associates from
holding or controlling, or increasing an existing holding of, 20% or more of the
voting securities in Serko as a result of the Offer.

3577759 v8 2
(c) Accordingly, the Offer is not expected to have any material effect or consequence
on the control of Serko within the meaning set out in clause 48 of Schedule 1 of
the Act.


On behalf of:
Susan Putt
Chief Financial Officer, Serko
Phone: +64 (09) 309 4754
investor.relations@serko.com

---

Serko Limited, Saatchi Building, Unit 14D 125 The Strand, Parnell, Auckland, New Zealand
T: +64 9 309 4754 investor.relations@serko.com
Incorporated in New Zealand ARBN 611 613 980
Market Release
7 August 2018
Serko announces an underwritten NZ$15m placement to provide greater
flexibility to accelerate growth opportunities

Serko Limited (NZX:SKO, ASX:SKO, “Serko”) is pleased to announce an underwritten placement to raise
approximately NZ$15 million (“Placement”). The Placement is underwritten by Deutsche Craigs Limited
i
.

The Placement is underwritten at a price of NZ$2.75 per share, reflecting a 3.2% discount to the last traded price
of NZ$2.84 on Monday, 6 August and a 5.6% discount to the 30-day VWAP of NZ$2.91.

The bookbuild will take place on Tuesday, 7 August 2018. Serko expects to be in a position to make an
announcement as to the outcome of the bookbuild prior to the commencement of trading on Wednesday, 8
August 2018. There will be no Share Purchase Plan in connection with the Placement, however certain NZX
participants will be invited to participate in the bookbuild on behalf of their New Zealand and Australian retail
shareholder clients.

The Placement is expected to provide Serko with funds to bolster its working capital position and strengthen
its balance sheet, giving Serko greater flexibility to both accelerate organic growth opportunities and execute
potential acquisitions, including:

• Undertaking investments to drive revenue growth such as establishing sales and support functions in
new international markets;
• Accelerating product development and integration of local content and functionality in international
markets which are required in order to appeal to a wider range of Travel Management Companies
(TMCs) and corporate users; and
• Providing funding capacity for potential acquisitions that deliver additional customers, development
capability and in-market infrastructure, facilitating and enhancing the pace of Serko’s expansion into
new geographies.

Additionally, the Placement is expected to deliver a range of ancillary benefits such as increasing Serko's free
float, providing greater liquidity for investors and broadening the share register investor base by introducing
new shareholders.

Further details
Further details of the Placement are set out in the Investor Presentation lodged with NZX and ASX today.

Ends
Key dates
ii

Conduct bookbuild for underwritten placement Tuesday, 7 August 2018
Trading halt on NZX and ASX
iii
Tuesday, 7 August 2018
Announce placement completion and resume trading Wednesday, 8 August 2018
Settlement for placement shares on the ASX register Thursday, 9 August 2018
Settlement for placement shares on the NZX register Friday, 10 August 2018
Allotment and trading of placement shares on NZX and ASX Friday, 10 August 2018

Serko Limited, Saatchi Building, Unit 14D 125 The Strand, Parnell, Auckland, New Zealand
T: +64 9 309 4754 investor.relations@serko.com
Incorporated in New Zealand ARBN 611 613 980
For investor relations queries please contact:
Susan Putt
Chief Financial Officer, Serko
Phone: +64 9 309 4754
investor.relations@serko.com





i
Deutsche Craigs Limited is a wholly owned subsidiary of Craigs Investment Partners Limited (“CIP”). The role of
underwriter may be performed by Deutsche Craigs Limited or CIP (as the NZX Participant Firm) or any of their affiliates,
successors and assigns, as appropriate, and those entities shall have the rights and benefits of the underwriter.


ii
The timetable presented is indicative only and subject to change without notice (subject to applicable laws and the NZX
Listing Rules and ASX Listing Rules). All dates and times are New Zealand times (unless stated otherwise).


iii
Serko will apply to the NZX and ASX for Serko shares to be placed in a trading halt prior to the markets opening on
Tuesday, 7 August 2018.

---

1
Serko Limited$15m Equity Raising, 7 August 2018

2
DISCLAIMER
• This presentation has been prepared by Serko Limit
ed. All information is current at the date of this
presentation, unless stated otherwise. All currenc
y amounts are in NZ dollars
unless stated otherwise.
• Information in this presentation is for general in
formation purposes only, and does not constitute, o
r contain, an offer or invitation for subscription,
purchase, or recommendation
of securities in Serko Limited for the purposes of
the Financial Markets Conduct Act 2013 or otherwise
, or constitute legal, financial, tax, financial pr
oduct, or investment advice.
• The Information does not purport to contain all th
e information that an interested party may require.
An interested party should conduct its own analys
is of the Information and
should not rely on it without independent verificat
ion.
• The Information may include forward-looking statem
ents about Serko and the environment in which Serko
operates, which are subject to uncertainties and c
ontingencies outside
of Serko's control – Serko's actual results or perfo
rmance may differ materially from these statements.
Past performance information given in this prese
ntation is given for
illustrative purposes only and should not be relied
upon as (and is not) an indication of future perfo
rmance.
• Non-GAAP financial information does not have a sta
ndardised meaning prescribed by GAAP and therefore
may not be comparable to similar financial informat
ion presented by
other entities. The non-GAAP financial information
included in this release has not been subject to r
eview by auditors. Non-GAAP measures are used by m
anagement to
monitor the business and are useful to provide inve
stors to access business performance.
• To the maximum extent permitted by law, none of Se
rko, Deutsche Craigs Limited, Craigs Investment Par
tners Limited, Cameron Partners Limited, or any of
their respective
subsidiaries, related companies, shareholders, dire
ctors, officers or employees, or any other person,
makes any representation or warranty, or provides a
ny undertaking, in
relation to any information in this presentation an
d they shall have no liability (including for negli
gence) for: any errors or omissions in the informat
ion or failure to correct or
update the information, or any other written or ora
l communications provided in relation to the inform
ation in this presentation or any claim, loss or da
mage (whether foreseeable
or not) arising from the use of any of that informa
tion or otherwise arising in connection with that i
nformation.
• This presentation may not be distributed or releas
ed in the United States. The distribution of this
presentation in other jurisdictions outside Austral
ia and New Zealand may also
be restricted by law and any such restrictions shou
ld be observed. Any failure to comply with such re
strictions may constitute a violation of applicable
securities laws. None of
Serko, any person named in this presentation nor an
y of their affiliates accept or shall have any liab
ility to any person in relation to the distribution
or possession of this
presentation from or in any such jurisdiction.

3
• Company snapshot• Equity raising overview• Appendix: FY18 result
AGENDA

4
COMPANY SNAPSHOT

5
For further information refer to Serko’s website
www.serko.com
and its 2018 Annual Report which can be found under
Investor Centre.
ABOUT SERKO•
Serko provides innovative cloud based corporate travel and
expense technology solutions.
•
Founded in 2007 by Darrin Grafton and Robert Shaw,
Serko listed on the New Zealand stock exchange in June 201
4, and
more recently in June 2018, has listed as a foreign exemp
t listing on the Australian Securities Exchange. Serko re
mains
founder led. Serko trades under the ticker ‘SKO’.
•
Serko is a leading supplier of technology solutions for
Travel Management Companies (TMCs) in Australasia and is
now
expanding into Northern Hemisphere markets with signed g
lobal supply arrangements.
•
The majority of Serko’s revenue comes from TMCs who provi
de our solution to their corporate customers.
•
Serko is head quartered in New Zealand and employs mo
re than 120 people worldwide including offices in Austr
alia, United
States and China and India.

6
OUR PRODUCT SUITE
6

7
OURSTRATEGY
ARPB : Average Revenue Per Booking is a non-GAAP measure
.

8
STRATEGIC UPDATE•
Agreements have been entered into that enable ~65% o
f current transactional volume (based on 30 June 2018 qua
rter
transactions) to switch from Serko Online to Zeno.
•
Serko announced Orbit World Travel (House of Travel) as
a new TMC reseller on 4
th
July 2018.
•
ATPI UK is now operational with first transactions occurr
ing in July 2018. ATPI plan to continue to their roll
out to further
countries within Europe as their next priority.
•
North America expansion continues with the signing of Cu
stom Travel Solutions and Voyages Travel Encore, both hea
d
quartered in Canada. We have also recently announced F
light Centre’s intention to extend its Serko offering t
o include
Canada, United States and Mexico.
•
In May 2018, Serko announced that through a strategic
partnership with Qantas, Serko has achieved level 3 NDC
certification.

9
STRONG TRACK RECORD OF GROWTH
Total revenue growth (%) Revenue growth – Serko Online (%)Operating costs (excl depreciation & amortisation) (% chang
e)
No of transactions (indexed, where FY13=100)Transaction growth (%)Recurring product revenue as % total revenue Employees (number at end of year) Average revenue per FTE (NZ$000)Research & development costs - expense and capex (NZ$000)Annualised transactional monthly revenue (ATMR) (NZ$m
)
Selected Operational Metrics
27%41%35%
100
35%84%
47
119
2,340
*
FY13
39%12%62%
123
23%71%
87
100
3,387
*
FY14
55%62%
105%
179
45%80%
133
94
5,762
*
FY15
27%49%13%
275
54%93%
127101
6,268
11.2
FY16
9%8%
(10%)
326
18%91%
108122
5,836
15.
3
FY17
28%23%
(
5%
)
390
20%90%
106170
4,906
18.4
FY18
* indicates not previous measured or reported.

10
ATMR: Annualised Transactional Monthly Revenue is a non-
GAAP measure. Refer to definitions as per slide 20. M
ay 2018 being the most
recent non-seasonal month for which data was available at
the time of writing this presentation.
OUTLOOK FOR FY19
Growth in Operating Revenue expected to be in 20% - 30%
range
May ATMR was $18.8m

11
EQUITY RAISING OVERVIEW

12
Note 1: The equity raising will be an offer of fina
ncial products that are the same class as SKO's ordi
nary shares. SKO will make the offer to investors in
reliance on the exclusion in clause 19 of schedule
1 to the
Financial Markets Conduct Act 2013 Note 2: Deutsche Craigs is a wholly owned subsidiar
y of Craigs Investment Partners. The role of the un
derwriter may be performed by Deutsche Craigs or Cra
igs Investment Partners (as the NZX Participant fir
m)
and those entities shall have the rights and benefi
ts of the underwriter
OVERVIEW•
Serko is undertaking an underwritten NZ$15m equity ra
ise via a Placement
1.
•
Approximately 5.5 million shares to be issued (approxima
tely 7.3% of current issued capital) ("New Shares").
•
New Shares will rank equally in all respects with SKO's
existing ordinary shares from allotment.
•
The Placement has been underwritten at NZ$2.75 per sh
are, equating to a:
•
3.2% discount to last traded price of NZ$2.84 on Monda
y, 6 August 2018; and
•
5.6% discount to 30-day VWAP of NZ$2.91 up to Monday
, 6 August 2018.
•
Deutsche Craigs
2
is acting as the underwriter.

13
USE OF PROCEEDSThe equity raising is expected to provide Serko with fund
s to bolster its working capital position and strengthen i
ts balance sheet,
giving greater flexibility to both accelerate organic gr
owth opportunities and execute potential acquisitions incl
uding:
•
Undertaking investments to drive revenue growth such as esta
blishing sales and support functions in new international

markets;
•
Accelerating product development and integration of lo
cal content and functionality in international markets w
hich are
required in order to appeal to a wider range of tra
vel management companies (TMCs) and corporate users; and
•
Providing funding capacity for potential acquisitions th
at deliver additional customers, development capability a
nd in-market
infrastructure, facilitating and enhancing the pace of S
erko’s expansion into new geographies.
Additionally, the equity raising is expected to deliver
a range of ancillary benefits such as increasing Serko's fre
e float, providing
greater liquidity for investors and broadening the shar
e register investor base by introducing new shareholders.

14
TIMETABLEEquity raising announcement Conduct underwritten placementTrading halt on NZX and ASXAnnounce completion and resume tradingSettlement on the ASXSettlement on the NZXAllotment and trading of shares on NZX and ASXKey Dates
Tuesday, 7 AugustTuesday, 7 AugustTuesday, 7 AugustWednesday, 8 AugustThursday, 9 August Friday, 10 AugustFriday, 10 August

15
APPENDIX: FY18 RESULTS

16

17
17

18

19

20
DEFINITIONS
• ATMR (Annualised Transactional Monthly Revenue) is a n
on-GAAP measure. Serko uses this as a useful indicator of
recurring revenues from Serko
products. It is calculated by annualising the combination
travel and expense platform monthly revenues for the
most recent non-seasonal month. The
travel platform revenue is annualised by taking the m
onthly online booking transactions divided by the numb
er of weekdays for that month multiplied by
the average year to date ARPB and multiplied by 260
days. The expense platform revenue is based on the mo
nthly revenue from active users multiplied
by 12 months.
• ARPB (Average Revenue Per Booking) is a non-GAAP me
asure. Serko uses this as a useful indicator of the combined
value from transactional booking
fees and the supplier commissions earned from the travel
platform. It is calculated by taking total travel pla
tform booking revenue and supplier
commission revenue divided by the total number of book
ings.
• Recurring product revenue (a non-GAAP measure) is the
recurring revenue derived from transactions and usage of
Serko products by contracted
customers. It excludes revenues from customised software deve
lopment.
• R&D (Research & Development) costs is a non-GAAP measure
representing the internal and external costs related to
R&D both expensed and
capitalised.
• Operating Costs is a non-GAAP measure which excludes costs r
elating to taxation, interest, depreciation, and amor
tisation charges.
• EBITDA is a non-GAAP measure representing Earnings Bef
ore the deduction of costs relating to Interest, Taxatio
n, Depreciation and Amortisation.
• FTE = Full time equivalent employee .