Norwood Surpasses the 'Double Million' with World Phone

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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™
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