COMMS GROUP LTD — Investor Presentation 2023

Jun 20, 2023

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Market Guidance & Strategic Review

21 June 2023

COMMS GROUP LIMITED (ASX: CCG)

https://commsgroup.limited

1 This document has been approved by the Board of Comms Group Ltd

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Agenda

Agenda
Introduction to Comms Group	3
Business Update	5
Recent Vodafone Announcement	6
Strategic Review	11
Updated Guidance	12

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COMMS GROUP | 2

Introduction to Comms Group Limited

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• Comms Group Limited is a global telco service provider and IT services provider, headquartered in Sydney Australia.

• Established in 2008 and listed on the Australian Stock Exchange (ASX:CCG) in 2017.

• We provide services to businesses, Enterprise, Government and international telcos and IT services companies.

• We have 3 key divisions:

1. Comms Group Global (Global telco business, voice specialist & leading Microsoft Teams Calling provider in multiple countries)

2. Next Telecom (domestic Australian telco business, extensive product offering); and

3. onPlatinum ICT (domestic Australian IT managed services provider or MSP)

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COMMS GROUP | 3

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Business Update

COMMS GROUP | 4

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Business Update

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• Continuing strong new sales levels in the business across the Board.

Strong New Sales Level Continues

• New sales contracts signed for 9 mths to end Mar-23 of $7.2m ARR (annual recurring revenue).

• The sales cycle on key Global deals is proving quite long (6+ mths). Notwithstanding, the qualified pipeline has some significant opportunities.

• FY23 revenue is expected to exceed $51m.

• Majority of targeted synergies in the SME & ICT businesses have been delivered over the last 2 years.

Synergies Delivered

• Circa 40% of the expected $300k annualised network & COGs savings with the ICT business have been delivered. We expect to get to ~50% delivered by 30 June with the remainder in FY24. The delay in delivering these synergies has resulted in lower margins in ICT for FY23.

• Cross sell opportunity of IT services to wider customer base emerging with some key opportunities live.

Recent Restructure Completed Successfully

• The recent restructure (announced 4 April) has been completed and has resulted in a reduction in opex costs of ~$2m pa, predominantly in the SME & ICT business units.

• Post the restructure, the business continues to perform well across the board with strong levels of performance in sales and customer service.

Margins and Cost Inputs

• Gross margins are continuing to hold up in the business at or similar to recent historical levels.

• There has not been any major key supplier cost increases impacting the business.

Business Unit Performance

• Expected run rate EBITDA[1] for SME by year end FY23[1] is $4.5m to $5.0m annualised and for ICT $2.0m to $2.5m annualised, depending upon the level of new sales contracts provisioned and synergies delivered.

• Expected run rate EBITDA for Global, around $1.0m annualised as we continue to add additional resources to support key growth prospects.

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COMMS GROUP | 5

1 Expected run-rate EBITDA excludes head office costs of circa $2m.

Recent Vodafone Announcement

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New Agreement

• Comms Group announced on 15 June 23 that it has signed a further agreement with Vodafone Business (via Vodafone Procurement Company SARL) to provide a range of advanced unified communications services.

• New agreement is supplemental to agreement for Teams Calling Direct Routing announced 15 March 2022.

Key Services to be Provided

• Core service is the provision of Microsoft Operator Connect for Vodafone globally across multiple geographies.

• Advanced automation, self service and provisioning tools to automate and streamline many manual processes.

• State-of-the-art portal platform with API integration and other platforms delivered - to assist with fast turn-up of services.

Agreement Term

• The new supply agreement is for a minimum commitment period of five years.

• • After which the services will be provided on a month-to-month basis and may be terminated by either party with a minimum notice period of 12 months.

Deployment

• The initial deployment of the service has commenced and is expected to be completed by June 23 with user onboarding to commence thereafter.

• To be provided initially to the Enterprise Team UK, Vodafone UK and Germany.

• Comms Group anticipates that other operating entities will come on board with the solution over time.

Financials

• Vodafone Business have committed to a minimum monthly charge of ~A$30k per month from 1 Oct 2023 in relation to this new agreement. We expect the monthly revenues to grow significantly over time.

• This is in addition to existing revenues of circa $20k to $30k pcm from Vodafone which are growing at around 10% month-on-month currently.

• Comms Group has a strong pipeline of opportunities it is assisting Vodafone with.

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COMMS GROUP | 6

What is Operator Connect?

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Operator Connect (OC) is a comprehensive customer experience platform with network and technology standards that gives the power back to end customers to research, build and deploy their chosen Microsoft Teams calling solution for PSTN (public switched telephone network) calling/integration.

Buying Journey (Click, Select, Deploy)

Using the OC marketplace , existing and prospective customers can Click on an approved participating Carrier, Select the calling plan that is suited for their business and Deploy numbers (inc porting their existing PSTN numbers in countries that support this) and calling capabilities within seconds. Operators (suppliers) enjoy a simple go-to-market offering that can be sold to customers zero-touch.

Simplified Setup and Management

Potential for customers to self-manage their Teams tenancy or use a wide range of automated deployment tools to enable Teams calling, manage telephone numbers and configure user profiles.

Enhanced Support and Reliability

The OC Carrier and Microsoft form a “team” to provide customers with a seamless support experience and through direct-peering and mandatory SLAs and KPIs, ensure enhanced uptime, availability and high call quality.

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COMMS GROUP | 7

Market Opportunity

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How do we position OC against TDR?

280 million

Teams Direct Routing (TDR)

• Multi-National with more sophisticated needs

• Complex Call Flows

• Customised Deployment

• 1000+ Seats

• Requires technical knowledge

• Custom Devices, Professional Services

Operator Connect (OC)

• SME & Multi-National with simpler requirements

• Standard Call Flows

• Standardised Turnkey Deployment (Hours/Days)

• 1 to 1000+ Seats

• No/Minimal technical knowledge

• Competes with the legacy ‘Teams Calling Plans’

Teams monthly active users

80 million Teams Phone monthly active users

1 billion Calls in a single month

12 million Teams Phone PSTN users[3]

Leader in Gartner’s 2022 UCaaS Magic Quadrant report

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COMMS GROUP | 8

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Strategic Review & Guidance

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Strategic Review Commenced

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The Board is of the view that the current market valuation does not reflect the strong profitability and market position of the SME & ICT businesses or the inherent value and market position of the Global business.

It is the Board’s view that the sum of the parts is worth significantly more than the market’s current valuation of the Company.

The strategic review will consider all options available to the Board including a potential sale of one or more of Comms Group’s businesses in order to maximise shareholder value.

Comms Group has retained Latimer Partners as financial advisers to assist in the review.

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COMMS GROUP | 10

Updated Guidance

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FY23 Revenue is expected to exceed

$51m

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Gross margin performance strong with expectation of 47% gross margins or around $24m in Gross Profit

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FY23 Underlying EBITDA[1,2] is expected to be in the range $4.8m to $5.0m

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Preliminary guidance for FY24, is for underlying EBITDA[1,2] of circa $7m

1 Underlying EBITDA excludes net interest, tax, non-cash share LTIP costs, rent, depreciation, amortisation, business acquisition, integration, restructuring and non-recurring costs.

2 Underlying EBITDA is after head office costs of circa $2m.

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COMMS GROUP | 11

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Glossar y

Term	Definition
Cloud Communications	The provision of key communications services from cloud servers based in data centres and over high speed internet connections.
Cloud PBX, Cloud Phone, Hosted PABX	A cloud PBX functions the same as an in office PABX but is hosted in a cloud server accessed via the internet. This is becoming the preferred option for providers and customers today. Comms Group operates a global Cloud Phone network.
Corporate mid-market	For Comms Group, this is larger organisations with typically 500+ employees and monthly spend (MRR) of typically > $5,000.
CPaaS	Communications Platform as a Service is a cloud-based platform that enables developers to add real-time communications features to their own applications without needing to build backend infrastructure and interfaces. Comms Group provides call termination (SIP Trunks), telephone numbers and management across multiple geographies.
CTS	Call Termination Services – provision of a service by wholesale service providers to terminate voice calls in different markets or countries and on to different networks such as mobile and fixed voice networks.
Data Service	A broadband service that delivers voice, video and data over a private network or the Internet. NBN and fibre optic services are the most common forms of data services in the SME and corporate mid-market. Comms Group operates a domestic Layer 2 (data) and Layer 3 (internet) network with key Points of Presence (PoPs) in Sydney, Melbourne & Brisbane and aggregates a range of layer 2 wholesale access services.
Enterprise	For Comms Group, this is organisations with typically > 1,000 employees and operating multi-nationally as an MNC.
Fibre (optic)	Use of fibre optic networks to carry digital signals (data) via light transmission at very high speeds, transforming the telco and cloud services market globally.
ICT	Information Communication Technology is an umbrella term that covers the wide range of IT services and Communications services provided to businesses.
MNC	Multi-national corporate whereby the corporation has offices, facilities and assets in multiple countries.
MRR	Monthly recurring revenue is the monthly recurring annuity style revenue received from customers.
NBN	Australia’s national broadband network, which is a wholesale open access data network, replacing older copper and cable broadband with optic fibre networks, high speed switches and other technologies.
PABX	A typically in-house telephone switching system that interconnects telephone extensions to each other as well as the outside telephone network known as the public switched telephone network (PSTN).
SD-WAN	A software-defined wide-area network (SD-WAN) uses software-defined network technology, such as communicating over the Internet with encryption between an organisation's locations. Allow companies to build higher-performance WANs using lower-cost and commercially available Internet access. SD-WAN is replacing traditional data networks such as MPLS.
SIP	Session Initiation Protocol - being the standard IP telephony signalling protocol used to manage voice calls over the internet.
SME	For Comms Group, this is small to medium enterprise typically up to 500 employees.
Unified Communications (UCaaS)	A communications delivery model based on the cloud, providing key communications services including telephony (voice), video, messaging, chat, collaboration, document storage supporting teamwork, agility, mobility and work from anywhere. Comms Group is a leading provider of MS Teams calling with a global network and offering.

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COMMS GROUP | 12

Disclaimer

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The material in this presentation is a summary of Comms Group Ltd’s (CCG) activities and results, and is current at the date of preparation, 21 June 2023. Further details are provided in the Company’s full and half year accounts and results announcements released to the ASX.

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 forwardlooking 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.

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 non-IFRS financial information published by ASIC. The non-IFRS financial information in this presentation may include underlying profit. 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 https://commsgroup.limited

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Due care and consideration should be undertaken when considering and analysing

COMMS GROUP | 13

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COMMS GROUP LIMITED (ASX: CCG)

This document has been approved by the Board of Directors