DATA#3 LIMITED — Annual Report 2006

Oct 3, 2006

Content

· Positioning our business

. Enancial performance

• « Customer I Cr Spond
• · Markot assumptions in 2007
• · Outlook for 2007

Positioning our business Customer I CT investment

Content

• Financial performance

. Participant of the state of the state of the state of the state of the state of the state of the state of th

• · Customar ICI Spond
• · Markot assumptions in 2007
• · Outlook for 2007

Financial performance - 2006

• 2006 Market buoyant but competitive
• Revenues up 22%
• Services up 42%
• Product up 17%
• 'Cross-sell' index increased by 45%
• Gross margins held
• Expenses declined as % GM
• NPAT of \$5.7M exceeded market guidance
• Dividend 28 cps fully franked up 47%
• Total shareholder returns of 33%
• Strong cashflow; no debt
• Staff and customer satisfaction targets achieved

Historical performance Revenue and profit

Net profit after tax up 37% to \$5.7 million

Historical performance Earnings, dividends and share price

• Customer ICT Spend
• · Markot assumptions in 2007
• · Outlook for 2007

Customer ICT Spend - Analysts

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IT Spending Survey: Late-year spending looks to be

NIMERING I

Spending expectations from our latest survey remain firm for the year. adding confidence in typical end-of-year spending strength. An early read on 2007 suggests IT spending growth in line with 2006.

Firm spending expectations bolster our confidence in year-end strength i Our latest survey results on forward spending intentions (taken in mid- to late August) were firm and stronger than a year ago, again suggesting that end-of-year spending strength does not corrently appear to be at risk, which should enable the tech tape to continue to make up ground BERGERS

Very early read on 2007 spending expectations looks familiar

In our first reading on 2007 spending expectations, the outlook for spending growth annears consistent with 2006, which we view in the 5%-7% range. We expect to get a clearer picture of $2007$ spending plans as we get into "budgeting season" over our next two survey

Vendors highlighted in our survey include NetApp. Citrix, and Cisco

Vendors that showed notable results in our survey include Network Appliance, with an improving customer perception in high-end storage; Citrix Systems, with signs of robust spending plans among customers for its core virtualization franchise; and Cisco, with building montainn for customt vorning tyrathione,

Customer 1 CT Spend - Analysts

Exhibit 5: Which of the following best characterizes your company's IT spending as a proportion of total revenues/expenses?

	Aug-06	Aug-05
$\therefore$ Our IT budget is under pressure and is falling as a proportion of our $\therefore$ company's total revenues/expenses	27%	20%
$\pm$ Our IT budget is generally keeping pace with the size of our company and is: stable as a proportion of our company's total revenues/expenses	64%	71%
Our IT budget is growing faster than our overall business and is expanding as a proportion of our company's total revenues/expenses	9%	9%

Source: Goldman Sachs IT Spending Survey.

"Incremental cost control assisted by 'hottest' tech trends e.g. consolidation and virtualisation"

Customer I CT Spend - Analysts

Exhibit 6: Which enterprise server/systems providers are gaining or losing share of your IT spending dollars?

Losing

Gaining

1. IBM $2.$ HP

$3.$ Dell

1. Sun Microsystems

Source: Goldman Sachs IT Spending Survey.

"Strong position in 'blade' technology helps IBM and HP

move to the top"

Source: Goldman Sachs IT Spending Survey.

"IBM strength in mid-range and HP improving with better

technology and go to market"

Customer | CT Spend - Analysts

"Share gainers in (virtualisation) software and security remain VMWare and Cisco"

Customer ICT Spend - Analysts

Exhibit 14: Relative to prior new versions of Microsoft's deaktop operating system, how quickly do you plan to move to Microsoft's Vista operating system?

	Aug-06	Apr-06,
More quickly than prior versions.	9%	9%.
More slowly than prior versions	23%	21%.
About the same .	52%	54%.
Don't know / Not applicable	16%	16%

Source: Goldman Sachs IT Spending Survey.

"Incremental upgrade revenue from corporates should build starting 2 years after launch "

Customer ICT Spend - Analysts

Source: Goldman Sachs IT Spending Survey.

"The 12 month outlook for corporate network spending with Cisco looks positive"

Customer I CT Spend - Analysts

Gartner's CIO survey indicates a shift in the role of IS over the next 3 years:

Enabling better business processes

Strategic use of IT and business intelligence

Creating new products and services

Cutting business costs

Percentage of responses

$0\%$

47 VIII R Tin 179

$30%$

$40%$

50%

"..from operational to strategic"

20%

$10%$

Customer ICT Spend - Customers

Data#3 Customer top priorities remain:

My current ICT (Information Communication Technology) priorities are

TTT BREEKER THE REPORT

$N = 246$

$|Priority 1 = low, 5 = high, NA = not applicable$

Description	'N.	÷% ∴	- 36 in y Mi	296 (N na mi	-96 ∴ $\sim$ 4 $^{-1}$	ੋਸ਼ ਅ	ISD.	Avg now.
Business Continuity and Disaster recovery 306				1999 4.08 20.92 44.90 30 10 0.8 $(4.01)$
Business Intelligence				181 28 16.02 34.81 33.15 13.26 1.00 3.38
Custom application development				170 1900 18.24 31.76 27.06 12.94 1.16 3.15
fEnhancing Security				$\bigtriangledown$ 1 $\bigtriangledown$ 5.24 26.18 $\bigtriangleup$ 90 23.56 0.8 $\bigtriangleup$ 3.84
IP Telephony				$174$ 49 $19.54$ 26.44 29.89 12.64 1.21 3.13
IT as a Utility				169 168 11.24 34.32 28.99 14.79 1.17 3.26
Linux				145 35 36 21.38 20.69 13 79 8 28 1.32 2.37
Mobile devices				176 396 12.50 23.30 36.36 23.86 1.10 3.64
$\overline{\text{N}}$ etwork upgrade and enhancement				380 586 6.67 22.22 41.67 23.89 1.0 3.72
Selective Sourcing of Technology Services				165 22 10.91 30.91 31.52 19.39 1.14 3.45
Packaged application deployment				168 3 8 8 8 9 29 76 28 57 20 24 1.25 3.35
Storage networking				174 3 3.05 25.86 39.08.21.84 1.07 3.64
$\overline{\mathbb{S}}$ ystem consolidation and optim isation.				$1.10$ 3.30 25.27 3.41 26.92 0.8 3.92
Web services				178 3 3 12.36 25.84 35.39 18.54 1.16 3.44
Wireless LAN				176 15.34 31.82 28.41 15.9 1.16 3.28

Customer | CT Spend - Customers

Data# 3's Customers are increasing focus on:

Data#3 Cust Sat 2005 Data#3 Cust Sat 2006 4.01 3.38 1 3.15 3.84 3.13
3.26
2.37
3.64
3.72
3.45
3.35
3,64
3.92
3,44
3.26

"..from operational to strategic"

Customer | CT Spend - Conclusion

• ICT spending grow th in range $5\% 7\%$
• . Increasing shift to 'strategic' spend • Continuing focus on cost control • Strong vendors
• · Cisco
• $\cdot$ | BM
• VMWare
• $·$ $HP$
• · Strong technologies
• Business continuity / Disaster Recovery
• Virtualisation and consolidation
• Security
• Mobility

• Market assumptions in 2007
• · Outlook for 2007

Market assumptions in 2007

The economy

. Will remain positive if contracting somewhat

Our customers

· ICT solutions viewed as strategic tools and will maintain a positive view of ICT investment

Our people

• Will be able to recruit and retain the right people and deploy them to deliver revenue growth

Competitors

· Will be able to retain differentiation and maintain or improve current win rates

Our Vendors

• Will drive growth and technology leadership and our partnerships will be maintained or strengthened

Technology

• Will be able to predict the impact of emerging technologies and adapt accordingly

• · Strategic Positioning
• Outlook for 2007

Outlook for 2007

Licensing Solutions Strong revenue growth; maintain market leadership; maintain margins ICT Services Moderate revenue growth; higher people costs offset by

increased scale

Enterprise Infrastructure Solutions

Moderate revenue growth; pressure on margins; annuity revenue around management and support

ICT Product Solutions

Low revenue growth; risks with vendor direct and consolidated purchasing in Govt; focus on comms products, telesales and solutions 'bundling

Recruitment Solutions^: Strong revenue growth at lower margin offset by lower costs

Outlook for 2007

L.we believe we can improve

financial performance over the

record 2006 result and deliver

dividend yields at the top of the

sector...