Actual Experience : Preliminary results for the year ended 30 September 2021

3 February 2022

Actual Experience plc

(the "Company" or "Actual Experience" or "Actual")

Preliminary Results

Actual Experience plc (AIM: ACT), the analytics-as-a-service company, announces its preliminary results for the year ended 30 September 2021.

Financial highlights

• Group revenue of £1.74m (2020: £1.96m), primarily generated from sales to Channel Partners
• Gross profit decreased to £0.83m (2020: £1.02m) due to lower revenue
• Loss for the year increased to £5.85m (2020: £4.68m) due to lower revenues, lower tax credits, and an impairment charge of £0.8m
• Net cash at year end increased to £8.22m (2020: £2.75m) after the completion of an oversubscribed £10m (gross) equity placing in January 2021

Operational highlights

• Launched new Human Experience Management (HXM) service
• Developed a direct sales capability to complement our existing Channel Partner focus
• Completed our initial significant Business Impact Assessment (BIA) project with a major energy company, followed by our first direct sales success with a BIA order from a global FMCG company
• Received our first large multi-year Continuous Improvement (CI) order, with resulting recurring revenue commencing after year-end

Current trading and outlook

• Achieved two important contract wins post year-end:

1. BIA order to assist a Channel Partner with its hybrid workplace strategy

• 1. Further BIA contract win with a leading global food and beverages business through a Channel Partner
• As previously announced, received notice after year-end that a long-standing legacy contract will not renew in the 2022 fiscal year; this contract delivered revenue of £1.2m in 2021 and is expected to contribute £0.4m in the 2022 fiscal year
• Investment in direct sales and marketing is delivering a strong pipeline of large global blue-chip companies. While the length of sales cycles remains a challenge, the focus will be to convert many of these opportunities into significant recurring revenue streams

Dave Page, CEO of Actual Experience plc, commented:

"Our strategic pivot to focus on the people, planet and profit issues of hybrid working is strongly aligned with ongoing changes to global working practices. While this is gaining traction with clients, our sales cycle has been longer than expected, and efforts to reduce this have been hampered by the pandemic and the resultant elongation of procurement processes and decision making across many industries. We are making every effort to speed up this process.

"There is improving momentum in a growing pipeline of direct and Channel Partner sales opportunities, which also includes many large global blue-chip customers. We are expecting to grow the number of these opportunities, and with improving referenceability, convert them to BIA and ongoing CI customers.

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"Positively, the continued focus on hybrid working and a growing investor focus on ESG and diversity, equity and inclusion are external factors that are strongly aligned with our new offering. We believe this macro-economic situation will continue to help us to accelerate the number of opportunities in our pipeline and grow our business with our existing blue-chip BIA and CI customers."

Enquiries:
Actual Experience plc	Tel: [phone]
Dave Page, Chief Executive Officer
Steve Bennetts, Chief Financial Officer
Singer Capital Markets Advisory LLP	Tel: [phone]
Shaun Dobson
Will Goode
MHP Communications	Tel: [phone]
Reg Hoare
James Bavister

About Actual Experience

Actual Experience's goal is to make the digital world work for everyone, everywhere, all of the time. As the working world evolves post-pandemic, the global shift to a flexible hybrid model has brought with it a significant challenge; how do businesses create an environment that gives their people what they need to thrive, whilst protecting the commercial efficiency of the business and driving growth at the same time?

By underpinning their strategic decision making with our data-driven insights, our customers gain the clarity and confidence needed to build sustainable ecosystems within their organisations - delivering both a great employee experience and increasing the efficiency of the digital workplace. Powered by over 10 years of academic research, our service doesn't need any interaction with employees to provide a unique and highly actionable dataset that People, Technology and Finance leaders can rely upon to plan impactful projects against their most critical agenda items including wellbeing, profitability, DE&I and ESG initiatives.

Actual Experience is listed on the London Stock Exchange (AIM: ACT). Our corporate headquarters are in Bath, UK. Actual Experience's unique and patented digital analytics-as-a-service is founded on cutting-edge research from Queen Mary University of London.

For further information please visit www.actual-experience.com

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Chair's Statement

Introduction

Transitioning to effective hybrid home and office working practices has become a priority for most enterprises and our AaaS service delivers a much-needed new source of actionable data and insights that helps companies to achieve their people, planet, and profit goals.

2021 has been a pivotal year for Actual Experience as the pandemic emphasised the significant digital inequalities in the UK and globally. A priority has been to work with our large partners to enable them to develop the capability to market our Hybrid Workplace Management System to their customer base. Equally important has been our focus on building a direct sales capability. As noted more fully in the Chief Executive's Statement, an important early success has been the adoption by a leading global energy supplier of our Continuous Improvement (CI) service. At the time of writing, three other customers have completed their initial Business Impact Assessment (BIA) and we are in discussions with them regarding a transition to CI engagements. The Company is currently focused on a significant number of other commercial opportunities with very large enterprises.

As noted in the Financial Review, an impairment charge of £820,110 has been recorded in the Financial Information for the year. This charge primarily arises from the decision to refocus the business on the delivery of the Company's Hybrid Workplace Management System. A consequence of this decision has been to de-emphasise several software development projects. While it is possible that there will be future sales from this technology it is not currently being actively marketed and, accordingly, it has been decided to fully expense this previously capitalised expenditure.

As previously announced, a long-standing contract that relies on our legacy offering, will not renew in the 2022 fiscal year due to a change in customer strategy. This contract delivered revenues of £1.2m in the year just ended and is expected to contribute £0.4m in the 2022 fiscal year.

Equity placing

The £10m placing in January 2021 has enabled the Company to develop a direct sales capability to augment our existing Partner channels. In addition, we are investing in the further development of our cloud infrastructure to enable it to scale to meet the demands of the world's largest organisations. A further priority is to increase the automation of customer reports; in this way, we will be able to increase the number of customers that the Company is able to service concurrently.

I would like to thank all shareholders for their support. Our year-end net cash stood at £8.2m (30 September 2020: £2.7m).

People

In April, we announced my decision to retire from my role as Chair by the time of our Annual General Meeting to be held in March 2022, with the intention of remaining a Non-executive Director for a further year.

As announced in September 2021, Kirsten English, a current Non-executive Director, will become our next Chair. Kirsten has extensive, relevant experience and I am confident she will be a strong successor. Kirsten was appointed to Actual Experience's Board in January 2020.

In March 2021, we welcomed Sandy Sadhra as General Counsel and Investor Relations Director to the senior leadership team, and in October 2021, Scarlet Jeffers as Chief Product Officer.

On behalf of the Board, I would like to take the opportunity to thank all our employees for their dedication, commitment, and achievements in what has been for many people a personally challenging time.

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Outlook

As noted above, our sales team are engaged, directly or with partners, in multiple sales opportunities. Our clear focus in the coming months is to convert these opportunities to recurring Continuous Improvement revenue streams. Notwithstanding this, we are aware that shareholders have been frustrated with the rate of progress to date. Management is making every effort to accelerate the development of the prospect pipeline by assimilating lessons learned from initial sales engagements and is seeking to optimise current and future sales cycles. However, one of these lessons is that sales cycles will typically be longer than initially expected and therefore our planning has been adjusted to accommodate this timing. Further details of our operational and financial considerations in this regard are outlined in Note 1 to the financial information.

Our innovative technology has been validated by early customers and, as large enterprises increasingly recognise the need for actionable data and insights, I remain excited by the very significant addressable opportunity and the prospects for the Company.

Stephen Davidson

Chair

Chief Executive's Statement

As noted in the Chair's statement, the workplace has become far more digital for the vast majority of people. Two years ago our work with customers assumed that people spent 25-30% of their time working and interacting with each other digitally. Following the impact of the pandemic, and the global transition to hybrid working, our customers now tell us that their people spend 60-90% of their time working digitally.

It is therefore critical that the digital workplace works properly for everyone, everywhere, all the time. If it does, we know that efficiency increases and employee experience improves. If it doesn't, stress levels increase, trust evaporates and output declines.

Creating a more efficient workplace that supports better mental health and work-life balance sits at the heart of what our technology does. It helps our customers achieve digital equality for all employees and a digital workplace so reliable that business travel, and CO2 emissions, can be sustainably replaced by virtual meetings.

We have been working with global blue-chip organisations to provide a Hybrid Workplace Management System that prepares the digital workplace for new ways of working. It brings a fundamental new source of actionable data and intelligent visibility that helps our customers achieve their people goals, whilst benefiting the planet and enhancing their profitability ('people, planet and profit' as we have termed it).

Performance Review

Our strategic pivot to focus on the people, planet and profit issues of hybrid working is strongly aligned with ongoing changes to global working practices. While this is gaining traction with clients, our sales cycle has been longer than expected, and efforts to reduce this have been hampered by the pandemic and the resultant elongation of procurement processes and decision-making across many industries.

Nevertheless, we achieved a notable initial success with one of the world's largest energy suppliers. In early 2021 our Business Impact Assessment (BIA) identified significant people, planet and profit benefits that would result from specified improvements to their digital workplace. In August 2021, the customer awarded us a three-year Continuous Improvement (CI) contract worth £1m, with the potential for subsequent extensions. The CI programme will provide the energy supplier with actionable data on an ongoing basis to achieve and then maintain the identified people, planet and profit benefits.

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In addition, we announced a BIA with a leading FMCG company in July 2021, our first major new business win from our direct sales team. Towards the end of the year, we were delighted to announce two further BIA contracts. The first of these was a sale to one of our Channel Partners to assist them with their own hybrid workplace strategy; this also provides their sales team with the ability to reference their own use of our offering to their customers. The second contract was with a leading global food and beverages business through one of our Channel Partners.

As previously announced, a long-standing contract that relies on our legacy offering will not renew in the 2022 fiscal year due to a change in customer strategy. This contract delivered revenues of £1.2m in the year just ended and is expected to contribute £0.4m in the 2022 fiscal year.

As noted in the Financial Review, an impairment charge has been recorded in the Financial Information for the year. This charge primarily arises from the decision to pivot the business to the delivery of our Hybrid Workplace Management System, as discussed above. A consequence of this decision has been to de-emphasise several software development projects. While it is possible that there will be future sales from this technology it is not currently being actively marketed and, accordingly, it has been decided to fully expense this previously capitalised expenditure.

People

Our people have been remarkably resilient over the last two years. Strong teamwork has enabled us to secure new business and grow our company in an environment that is both challenging and exciting.

We initiated our direct sales strategy early in 2021. It is intended to 'get out ahead' of our partners, generating demand for our new offering and creating compelling reference deployments. We expect many of these deals to be supported by our partners in terms of fulfilment.

We now have four talented direct sales people, while our expanded marketing team has leveraged social media channels to raise awareness of our hybrid workplace offering. This has included some highly insightful work with high-profile human resources (HR) thought leaders.

In parallel, our Channel Partners are improving their execution. They are placing more focus on accessing the right people for us to sell to, such as senior human resources executives.

Hybrid Future

Businesses, and their employees, particularly 'white-collar' workers, have enthusiastically embraced the myriad benefits of digitally-enabled hybrid working.

However, not all companies have realised how fundamentally hybrid working changes their organisation, and consequently they don't yet understand the impact the digital workplace is having on their people or their business. We seek to work with companies that have embraced this new paradigm and who recognise that we are able to provide the necessary new insights, visibility and actionable data. In this way, they are able to manage their evolving hybrid workplace to ensure that their people have the digital resources necessary to improve the efficiency of their business.

Opportunities

We have a land-and-expand sales model, and are focused on developing and growing our business with the blue-chip organisations that have undertaken their initial BIA projects or are already in Continuous Improvement.

There is improving momentum in a growing pipeline of direct and Channel Partner sales opportunities, which also includes many large global blue-chip customers. We are expecting to grow the number of these opportunities, and with improving referenceability, convert them to BIA and ongoing CI customers.

Investing in our Capability

We are investing to scale our business. As our commercial sales activities increase, a priority for us is to further develop the scalability of our data centres so that they are able to meet the demands of the

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