Bango Regulatory News (BGO)

28 May 2014

Embargoed until 07:00

BANGO PLC

("Bango")

AGM Statement

Bango (AIM: BGO), the mobile payments company, will hold its Annual General Meeting at 2pm today, 28 May 2014, at Bango's headquarters at 5 Westbrook Centre, Milton Road, Cambridge, CB4 1YG. At the AGM Ray Anderson, CEO of Bango, will provide the following update:

Expansion of commercial partnerships with MNOs

At the time of the Group's 2013 full year results in March 2014 Bango announced an excellent start to the current year. Bango is pleased with the continued progress of the business, key customers and with Mobile Network Operators (MNOs).

Bango has signed agreements to provide mobile payments for the majority of the world's leading app stores, including BlackBerry World, Google Play, Windows Phone Store, Firefox Marketplace, Amazon and Facebook. Bango's focus is now on increasing the number of MNOs integrated into the Bango Platform for operator billing, so that its app store partners can bill more of their customers through Bango's expanding global network. Bango has made significant progress with a number of Google Play and other integrations and will update the market further when appropriate.

Bango is making good progress expanding its commercial partnerships with MNOs around the world and during 2014 so far, has integrated 12 new MNOs with the Bango Platform. MNO integrations completed to date total 137. Bango has grown its MNO integration pipeline to a level that now represents over 50 additional MNO integrations, with more than 30 of these already underway.

Successful entry into high growth emerging markets

Bango outlined in 2013 that it intended to develop opportunities in emerging markets and has made significant progress. There is strong interest from both app store partners and MNOs to use the Bango Platform to increase the sales of digital content into these regions. Since the beginning of 2014, Bango has launched additional operator billing integrations for its app store partners with Saudi Telecom and Mobily in Saudi Arabia, Mobinil in Egypt, Telkom in South Africa, Telefónica in Mexico, Telefónica in Chile and Telenor in Hungary. In many cases these are the first time these operators have enabled charge-to-bill for app stores.

Bango has developed a strong presence in the Middle East, where despite high levels of credit card ownership, cards are not widely used for online payments. Bango is similarly strong in Asia where Thailand, Malaysia, Singapore, Philippines and Indonesia are already highly active carrier billing markets for Bango's app store partners. New Asian markets range from developed Taiwan to emerging Vietnam. Bango is also extending coverage across Latin America, including in Brazil, Chile, Colombia and Venezuela, in addition to Mexico.

The Bango payments platform enables the provision of other means of payment where operator billing is not yet available or where the operators do not yet have sufficiently robust infrastructures to support app stores. During 2014, ahead of mobile operator billing deployments Bango completed several credit card integrations into its platform and these have been deployed in six countries for the Mozilla App Store.

End User Spend

Bango has a pay per transaction business model for the Bango Payments product and either operates on a principal or an agency basis on behalf of its app store and digital merchant partners. End User Spend is the value of all payments made by users for content or services less taxes through the Bango Payments systems, and is therefore the most meaningful measure of growth.

Bango is pleased to report that the month-on-month increase in End User Spend has continued since Bango last updated the market in March 2014. The rate of growth of End User Spend will accelerate as transaction volumes are driven upwards as more MNOs are integrated, as more app stores use those integrations and as smartphone app and content sales grow within those app stores.

Bango also generates revenue by charging fees for MNO integrations to the Bango Platform and for analytics services. During 2014, platform fees are continuing to rise, generated from activities related to MNO integrations and analytics products.

Gross Profit margin on End User Spend continues to remain stable, within the 2-5% medium term target range. Bango operates a business model with fixed operating costs, therefore, as End User Spend increases and Platform fees rise, Bango will move to a profitable and cash flow positive position.

Market evolution

Bango continues to consolidate its strong position in developed smartphone markets, and in parallel is focusing sales and marketing efforts in emerging markets. In parts of South East Asia, the Middle East, Africa and Latin America, Bango partners with operators to develop their technical and operational capabilities, so they can offer direct operator billing for app stores. 'Bango Nexus' seminars in Manila, Hong Kong, Taipei, Bangkok, Dubai, Mexico City and Johannesburg have been attended by over 30 MNOs. These events bring Bango's technical and operational expertise to accelerate the launch of operator billing in new markets and provide MNO's with tools and information to plan the deployment of their billing systems. The next Bango Nexus event will be in Shanghai on 11th June. More information can be found at: www.bango.com/nexus.

There has been a shift in the competitive environment, driven by consumer trends, industry business models and regulatory changes.

App stores have raised customer expectations for the simplicity and security of mobile payments. Meanwhile many operators have regulated the old premium SMS model out of existence for mobile billing. While these pressures have obsoleted many of the original mobile payments "aggregator" businesses, Bango has been able to capitalize on its direct operator billing technology to develop a strong competitive advantage in these evolving market conditions.

Ready for scale

During 2013 Bango made substantial investments in capacity, security and resilience, enabling Bango to capture business from the largest app stores, ahead of a ramp up in transaction volumes as these app stores begin to integrate with Bango's base of MNOs. These investments included a major operations center, data center and platform upgrade, and a number of key hires. A further key hire made in January 2014 was a Chief Information Security Officer.

The upgrades are now complete and as outlined in the results statement in March 2014, Bango increased its annual operating expenditure by approximately £1m in FY13 to a level which it expects to maintain, providing the ability to enhance the power of the platform and sustain its technology and service leadership as operations continue to scale.

The new Bango Dashboard product was launched in February 2014. It is an operator-focused evolution of Bango Analytics that enables operators to see real-time data on app store sales, billing activity, and monitor billing platform performance. A new release was made of the Dashboard product in May 2014 to provide additional capabilities.

Bango is uniquely positioned to capitalize on the extraordinary consumer appetite for smartphones and continuing growth of digital content and services.

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About Bango

In the era of mobile technology, collecting payments has emerged as a central and complex challenge. Bango (AIM: BGO) powers payment and analytics on the mobile web, providing users with a massively smooth payment experience.

Bango's pervasive presence across the web creates a platform effect for partners, identifying hundreds of millions of users and maximizing the number of one-click payments. Global leaders plugging into Bango include Amazon (NASDAQ: AMZN), BlackBerry World (NASDAQ: BBRY), Facebook (NASDAQ: FB), Firefox Marketplace, Google Play, Windows Phone Store (NASDAQ: MSFT) and other major mobile brands. Visit: bango.com