COMMS GROUP LTD — Investor Presentation 2018

Aug 29, 2018

CommsChoice Group August 2018

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Disclaimer

The material in this presentation is a summary of Commschoice Group’s (CCG) activities and results, and is current at the date of preparation, 29 August 2018. Further details are provided in the Company’s full year accounts and results announcement released on 29 August 2018.

No representation, express or implied, is made as to the fairness, accuracy, completeness or correctness of information contained in this presentation, including the accuracy, likelihood of achievement or reasonableness of any forecasts, prospects, returns or statements in relation to future matters contained in the presentation (“forward- looking statements”). Such forward-looking statements are by their nature subject to significant uncertainties and contingencies and are based on a number of estimates and assumptions that are subject to change (and in many cases are outside the control of CCG and its Directors) which may cause the actual results or performance of CCG to be materially different from any future results or performance expressed or implied by such forward- looking statements. Undue reliance should not be placed on forward-looking statements and except as required by law or regulation, CCG assumes no obligation to update these forward-looking statements. To the maximum extent permitted by law, CCG and its related corporations, Directors, officers, employees and agents disclaim any obligations or undertaking to release any updates or revisions to the information in this presentation to reflect

any change in expectation or assumptions and disclaim all responsibility and liability for these forward-looking statements (including without limitation, liability for fault or negligence).

This presentation provides information in summary form only and is not intended to be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor.

Due care and consideration should be undertaken when considering and analysing CCG’s financial performance. All references to dollars are to Australian Dollars unless otherwise stated.

To the maximum extent permitted by law, neither CCG nor its related corporations, Directors, officers, employees or agents, nor any other person, accepts any liability, including, without limitation, any liability arising from

fault or negligence, for any loss arising from the use of this presentation or its contents or otherwise arising in connection with it.

Certain financial data included in this presentation may be “non-IFRS financial information” under Regulatory Guide 230 Disclosing nonIFRS financial information published by ASIC. [The non-IFRS financial information

in this presentation may include underlying profit after tax]. CCG believes this non-IFRS financial information,

where included, provides useful information to users in measuring the financial performance and conditions of CCG. The non-IFRS financial information measures do not have standardised meanings prescribed by International Financial Reporting Standards and, therefore, may not be comparable to similarly titled measures presented by other entities, nor should they be considered as an alternative to other financial measures determined

in accordance with International Financial Reporting Standards. Undue reliance should not be placed on any non-IFRS financial information.

This presentation is not and should not be considered as an offer or an invitation to acquire shares in CCG or any other financial product and does not and will not form any part of any contract for the acquisition of shares.

This presentation should be read in conjunction with other publicly available material. Further information including historical results and a description of the activities of CCG is available on our website, www.commschoice.com

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Agenda
Business overview	4
Business performance	8
Market conditions	12
Integration	13
Outlook and guidance	14
Appendices	15
CommsChoice– Simplify your journey to the cloud		3

Introduction

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5 ICT providers come together in 2017 to become Comms Choice Group (ASX:CCG)

Compelling market opportunity – Technology, Cloud, NBN

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Strong complementary skills and capabilities with well articulated value proposition

Sound platform for continued growth

VOICE MANAGED

DATA

NETWORK

NETWORK

SERVICES

• Replace legacy • Design ISDN & PABX • Deliver

• Multi-carrier

• Simplify networks

• Connect to the • Hosted voice cloud • Collaboration

• Support

• • Collaboration functionality

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Business Overview

Value Proposition

CommsChoice provides a fresh approach to innovative, vendor neutral managed network services and hosted voice for ANZ businesses to optimize costs and improve performance.

Our proven onboarding capability, experience and service delivery sets us apart.

Listed Headquarters 2017 MELB

We simplify your journey to the cloud

Employees Revenue 65 $21M

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Company History

In December 2017, CommsChoice Group brought together 5 complementary ICT businesses to solve the problems commonly experienced with traditional ICT providers.

2005

2008 2008

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2009

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2004
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FY18 Highlights

• Successful listing on ASX in December 2017

• Integration of 5 business well underway

• Best of breed capability brought together

• Strong value proposition

• Building strong pipeline of work

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Business Overview

Core Offerings

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Mobility

Hosted Voice

Internet & NBN

Cost effective, vendor neutral network access across the country

No Hardware. No Managed mobility to Software. Just Cloud secure your data and PABX. control costs.

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Collaboration

Managed Services

SD-WAN

Next generation WAN. Connect your teams to Focus on your core Ditch those dedicated improve productivity and business – let us manage private links. reduce travel cost. your network.

Core Competencies. Why CCG?

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Deployment

Customer Service

Our onboarding and project 24/7 professional support managers ensure deployed as keeps you operating. planned.

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Single Bill

Training

We make sure that you can Just plain convenient. And we use operate the things we deliver. check your first invoice with you to confirm accuracy.

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Financial Performance

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Market Guidance FY18
Managed
(May 2018)
10%
Revenue 20.4 20.7 Data
14%
Revenue
Cost of Sales 11.1 11.7
streams
Voice
Gross Margin 9.3 9.0 76%
Opex 7.5 7.2
EBITDA 1.8 1.8
Managed Data Voice
EBITDA % 8.8% 8.7%
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Revenue streams for the period since list are:

• Managed services income $2.0m (annualised) .

• Proforma revenue ahead trading update.

• EBITDA of $1.8m in line with trading update.

• Data Networks $2.8m (annualised) .

• Voice networks $15.7m (annualised)

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Cash Flow

$m Group	H2 2018
	Reported
Operating cash flow	(1.0)
Investing cash flow	(4.3)
Financing cash flow	6.9
Net cash flow	1.6
Cash at 31 December	1.7

• Operating cash outflow reflects the initial working capital needs of the business following the acquisitions.

• Investing cash flows represent the cash element of the acquisition consideration together with the investment in ACaaS.

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Balance Sheet

$m Group	At 31/12/17	At 30/6/18
Cash Total assets	3.7 36.5	1.7 34.9
Borrrowings	(0.1)	-
Total liabilities	(6.8)	(6.4)
Net assets	29.6	28.5
Equity attributable to members of the	29.6	28.5
parent

• Net cash of $1.7m

• Debt free

• Strong balance sheet

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Investor Metrics

Metric	Value
Number of shares	108.7m
Share Price 29 August 2018	$0.15
Market Capitalisation	$16.3m
Net (debt)/cash	$ 1.7m
Enterprise Value	$14.6m

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Favorable Market Conditions

CCG Capability

Customers needing data networks to connect all offices securely and reliable to the cloud

Legacy customer PABX need replacement, customers looking for opex models

NBN replacing ISDN creates an opportunity for CCG

CCG ready to capitalise on NBN availability

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Data Managed
Voice Managed
Data Voice
Data
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Public Cloud
Providers
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Integration Update

Mar 18

Sep 18

Mar 19

• New customers added to single billing system (Octane)

• Org structure and team creation

• Internal business systems implemented

• Oracle/Telaustralia/2Easy/Woffle • Support and back office in Manila integrated for billing (Octane)

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• Integration of CRM, ERP and billing (Celigo)

• Common service delivery/project management (netSuite)

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30 30 30 30 31
2018 March June September December March 2019
2018
Jun 18 Dec 18
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• Common CRM (SalesForce)

• Common ERP (NetSuite)

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• Company intranet and collaboration
tools (Office365)
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• Telegate integrated for billing

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Outlook & Guidance

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Integration of CCG businesses continues with uniform operations and improving customer experience Strong financial position to pursue both organic and inorganic growth CCG is well position to take advantage of favourable market conditions Aiming for double digit growth in FY19

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14

Appendices

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Appendix 1 - Product Overview

Customer Challenge	Customer Challenge	CCG Core Competencies	Benefits to Customer
Data	Single-sourcing of data network limits capability and reach and quality	SD-WAN is to lower WAN costs using more affordable and commercially available data services	Cost savings vs MPLS
	Managing a global networks not possible with one carrier	Connecting customers to the cloud	One supplier
	Costly and complex carrier MPLS/IPWAN network and leverage transition to NBN	Multi-sourcing Internet and Network Access from many suppliers globally	Enable shift to cloud applications
Voice	Inconsistent user experience across global sites with mix of technology/legacy equipment	Hosted voice platform	Location flexibility, one number any device Scalability and standard feature set globally
	Multiple suppliers - video/voice conferencing, messaging, etc	SIP (Replace legacy ISDN)	Presence, integrated messaging, video complement voice and improve internal communications and productivity
	Internally managing ageing, costly on-premises PABX network. Limited capability and scalability.	Wholesale Voice	Transition to SIP as a first step to hosted voice as ISDN/PSTN becomes obsolete
	Network cost & complexity (small IT Teams)	Managed Services (light)	Focus on core business (CCG manage communications and keep your business online)
Manage	Managing multiple global providers is a challenge.	Architecture (Professional Service)	One contract, once number to call, one invoice
	Service level inconsistency	Delivery (project management)	Access to experts when you need them, no need to keep on team

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Appendix 2 – SD WAN SCHEMATIC

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Connect
Cloud Firewall
Hosted Voice
Cloud Orchestrator
Dynamic Multi-Path Cloud
Optimization Gateways
SaaS
INTERNET
Intelligent Bonding
Private /
MPLS
Branch Offices
Intelligent
Bonding Enterprise Data
Centre
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• Leverage simple, ubiquitous, competitive internet for rapid deployment

• Deploy carrier redundancy for high availability

• Intelligent traffic management ensures voice and video are prioritised over less important workloads

• Eliminate unnecessary hardware and support contracts

CommsChoice – Simplify your journey to the cloud

CommsChoice Group August 2018

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