ASXANNOUNCEMENT 18November2015 NorwoodSurpassesthe‘DoubleMillion’withWorldPhone Highlights: o WorldPhoneannualisedrevenuerunrateincreasedtomorethanA$1,300,000p.a.,a44%increase inrunratesincethepreviousannouncementonNovember5,2015afterastandingstartfromlaunch on31July2015. o WorldPhonefreedownloadshavenowsurpassed1,000,000worldwide,upby33%sincethe previousannouncement. o Enhancedinternallymanageddigitalmarketingeffortsleadingtoexceptionalresultsinbothimproved downloadrates,anddecliningcostsofacquisition. o Norwoodplanstoprovideregularrevenueupdatesduringthecurrentrampupphaseonafortnightly basisforthenextquarter. o Additional expertise added to the Norwood Board, with the appointment of Giles Everist as a NonExecutiveDirector “SharingEconomy”telecommunicationspioneerNorwoodSystemsLtd(“Norwood”or“theCompany”)(ASX: NOR) is pleased to announce that World Phone has now surpassed the “Double Million” – over a million downloadsoftheiOSAppandanannualisedrevenuerunrateaboveonemilliondollarsperannum. Thecostsofacquisitionfornewdownloadscontinuetoimprove,withadvertisingcostsnowrangingfrom50c to$1perdownload.ThisisadirectresultofNorwoodbeingabletoretainkeylearningsanditeratemarketing improvementsthroughtheCompany’sin-housedigitalmarketingteam. Revenues from World Phone are currently equivalent to a run rate of over A$1,300,000 per annum, an increaseof44%sincethelastannouncementonrevenuerunratedatedNovember5,2015.Revenuesplits across geographies remain in line with recent announcements, with approximately 50-60% coming from developedmarkets. WorldPhoneenablesuserstoconnecteasilywiththeircontactsforroamingorlong-distancecallsusinghighquality,low-costlocallandlinenetworks–makingiteasyandaffordabletomakeinternationalvoicecallsfrom amobiledevice,anywherearoundtheglobe.WorldPhonealsoallowsusersto“BeLocal™”whilsttravelling and effortlessly set up and subscribe for a nearby local number so that contacts can call users without the inconvenienceandcostofdiallingtheirinternationalnumber. Norwood continues to deliver on the growth strategy detailed in the ASX release on 23 September 2015, includingtheimpendingAndroidlaunchon30November2015.OtherWorldPhoneenhancementsdetailedin the aggressive growth strategy are near completion, with additional languages set to launch shortly, to be followedbyfreeApp-to-Appcalling.BothoftheseinitiativeswillexpandtheaddressablemarketforWorld Phone, and increase user engagement. The launch of World Phone onto the Android platform on 30 NovemberwillopenupanentirelynewmarketforWorldPhone. NorwoodSystemsCEOandFounder,PaulOstergaard,commented: “Wearehighlypleasedwiththeprogresswehavemadetowardstheambitiousgrowthgoalswesetoutless than eight weeks ago, and surpassing the ‘double million’ with over a million downloads and annualised revenues of over a million dollars is very significant. Downloads and Revenue both continue to increase, at rates of increase significantly above those recorded just a few weeks ago. Alongside this we have ongoing decliningcostsofacquisition.” “Fromthebeginningwehavebeenveryconcernedtofocusonsuccessfullymonetisingourinvestmentinboth theWorldPhoneandCORONAplatforms.BeyondourearlysuccessindrivingincreaseddownloadsofWorld Phone,oneofthemostpleasingaspectsofourrecentperformancehasbeentherelentlesslyincreasingtrendin daily revenue from World Phone. All of the downloads in the world are not useful if we cannot convince enoughofourusersthatourproductsareworthpayingfor,orthatourpartnerofferingsareworthwhile.” “Our continually decreasing costs of acquisition for new downloads will also greatly assist our monetisation efforts,asourinternallyrunandmanageddigitalmarketingeffortsnarrowinonthemosteffectivecampaigns for World Phone and help refine our efforts over time – lowered costs of acquisition lead directly to higher returnsfromourmonetisationstrategies.” World Phone – Daily Units and Revenue World Phone – Cumulative Units (k) Revenue (USD) 60 $ 4,000 Revenue (USD) 1,600 $ 120,000 1,400 50 $ 3,000 40 $ 100,000 1,200 $ 80,000 1,000 30 $ 2,000 800 $ 60,000 600 20 $ 1,000 10 $ 40,000 400 $ 20,000 Daily Units Cum. Revenue (USD) 11-Nov 04-Nov 21-Oct 28-Oct 07-Oct 14-Oct 23-Sep 30-Sep 16-Sep 02-Sep Cum. Units 09-Sep 26-Aug 12-Aug 19-Aug 29-Jul 05-Aug - 15-Jul - 22-Jul 11-Nov 04-Nov 21-Oct Daily revenue (USD) 28-Oct 07-Oct 14-Oct 23-Sep 30-Sep 16-Sep 02-Sep 09-Sep 26-Aug 12-Aug 19-Aug 29-Jul 05-Aug 15-Jul 200 22-Jul - Units (k) - *AppleiTunesAppStoreanalyticsdata,16November2015 AsWorldPhonehasseenexceptionalearlygrowthratesintheinitialthreemonthsoflaunchandtheimpactof the growth strategy commenced in September, Norwood has been concerned to ensure that the market remains fully updated on revenue trends, with regular releases detailing revenue progress. As the growing revenue trend has become firmly established, the Company will now move to less frequent updates, commencingwithfortnightlyupdatesforthecomingmonthsahead.Ultimately,theCompanywillmovein line with the market standard of quarterly updates for revenue reporting, as per ASX Listing Rule requirements. AppointmentofNon-ExecutiveDirector,MrGilesEverist NorwoodisalsopleasedtoannouncethatMrGilesEveristhasacceptedaninvitationtojointheBoardasa Non-ExecutiveDirector.InlinewiththegrowthstrategydetailedintheASXreleaseon23September2015, NorwoodinitiatedaprocesstoexpandthecapabilityandskillsetofNorwood’sBoard. MrEveristhasextensivecorporateandfinancingexperience, havingheldexecutivefinancerolesatCoopers and Lybrand, Rio Tinto, Fluor Australia, and Monadelphous. Mr Everist has previously chaired ASX listed companies and brings outstanding corporate governance credentials and superb finance capabilities to the BoardofNorwood. MrEveristisacurrentDirectorofASXlistedcompaniesMacmahonHoldings,DecmilGroup,LogiCammsand Austal.MrEveristalsositsontheboardsofstartupfirmsAPEMobile,whichspecialisesinpaperlessappsfor the construction industry, and qodeo, which produces time and money saving tools, data & connectivity for theglobalventurecommunity. NorwoodSystemsCEOandFounder,PaulOstergaard,commented: “GilesisanexcellentappointmenttoourBoard,combiningastrongbackgroundinfinanceandextensiveASX listed corporate governance expertise with a recent deep understanding and involvement in successful tech focussedstart-upcompanies.Ilookforwardtothecontributionhewillmaketoourfuturesuccess.” -ENDS- ForFurtherinformation,pleasecontact: PaulOstergaard,CEO&Founder ShaneMurphy,FTIConsulting Office:+61892003500 Office:+6194858888 Web:www.norwoodsystems.com Direct:+61894858804 Twitter:@norwoodsystems,@paulostergaard Mobile:+61420945291 Twitter:@ShaneWMurphy Glossary: A number of consumer mobile App industry metrics are referred to in this release, alongside traditional financialmetrics.Forthebenefitofreaders,thesemetricsaredefinedfurtherbelow. Revenue for mobile apps refers to gross revenue earned from sale of the application to the consumer, i.e. prior to any commission, allocation, sales share or overhead etc. taken by an App store such as the Apple iTunes App Store for iOS or Google Play Store for Android. Typically, these App stores levy an overhand of circa30%ofrevenue. “One off” versus “Subscription” Revenue discusses the split between purchases that are one off in nature suchasadditionalcallingminutesinsideWorldPhone,orfuturebooking.comcommissionsandsubscription revenue which is primarily comprised of leasing local numbers, and plans such as the ultimate flat rate monthlyplanavailableonWorldPhone.Oneoffrevenue,suchaspurchasingadditionalcallingminutes,isstill classedasoneoffevenifthesameusermakesmultiplepurchasesinthesamemonth,orregularpurchases overanextendedperiodoftime. Revenue Annual Run Rate refers to the approximate Annual Revenues from World Phone that would be received, should the current weekly average revenue continue unchanged (along with similar Foreign Exchange Rates) for a full 12-month period. As World Phone has only been on sale since 31 July 2015, an annualfigureforsalesisnotyetavailable.ThismetricisNOTaforecastoffuturerevenues,butanillustration toassistinvestorsindeterminingthesignificanceofcurrentrunraterevenuefigures. AverageRevenueperUserorARPUissimplythetotalamountofrevenueearneddividedbythenumberof users over the relevant period, such as weekly or monthly. In the industry, a monthly period is most commonlyused.Giventhelargenumbersofnon-payinguserspresentinanyconsumermobileapp,average revenue figures will always be much lower than available spending options as the revenue from spending usersisaveragedoutacrosstheentireuserbase.Typically,onlyafewpercentofaconsumermobileAppuser basewillspendmoneyonamobileAppafterdownloadingtheAppforfree. EngagedUsersreferstouserswhohavedonemorethansimplydownloadamobileapp,i.e.theyhaveopened andusedtheAppontheirmobiledeviceatleast.EngagedUsersceasetobecountedasengagediftheyhave notinteractedwiththeAppforagiventimeperiod.Engagementsimilarlyreferstousersactuallyusingthe app,ratherthansimplydownloadingtheapp. Background Individual travellers, businesses and governments globally are incurring significant international call roaming charges. Informa Telecom estimates that mobile operators today bill more than US$55 billion annually in roamingcharges*,whichisforecasttogrowtomorethan$80billionby2018(source:JuniperResearchreport ontheMobileRoamingMarket,2014). Norwood Systems’ patent-pending cloud service platforms integrate the international fixed phone network with short-haul Voice over Internet Protocol (VoIP) technologies to optimise roaming business travellers’ telephonyexperiences. Australian businesses and individual business travellers are using Norwood’s services today on multiple continents.TheCompanyhasbuiltupasignificantpipelineofprospects,includingglobalplayersintheareas ofaviation,professionalservices,banking,telecommunications,engineeringandlegalservices. AboutNorwoodSystems Norwood Systems Ltd (ASX: NOR) is revolutionizing the ‘Sharing Economy’ delivery of high-quality telecommunications services for individual business travellers and organisations on a worldwide basis. The CompanylistedontheASXon16June2015. NorwoodSystemswasfoundedin2011todevelopandsupplythebestpossibleglobalmobilityandroaming solutions using Over The Top (OTT) technologies. The Company’s breakthrough offerings, CORONA™ and World Phone™, deliver the world’s most advanced international fixed-line roaming solutions addressing a broadspectrumofcustomers,fromindividualbusinesstravellersallthewaythroughtolargeenterpriseand governmentclients. CORONA is an award-winning, enterprise-class cloud services platform that integrates compatible mobile devices securely and seamlessly with the organisation’sexistingUnifiedCommunicationorPBXnetworks,independent oftheirlocation. World Phone is an award-winning, revolutionary communications App, delivering effortless ‘Sharing economy’ consumer access to leading fixed-line network service providers around the world, providing unparalleled local accesstohigh-qualityvoicenetworksinmorethan90countries. WorldPhone™