DATA#3 LIMITED — Annual Report 2008

Sep 14, 2008

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fy2008 results and fy2009 outlook

John Grant - managing director Brem Hill - chief financial officer Laurence Baynham - group general manager

fy2008 results

fy2008 headlines

measure	2007	trend	2008
revenue	$285m	+ 27.6%	$363.7m
revenue under contract	55.4%	+ 1.6%	57.0%
internal expense as % gross margin $	83%	steady	83.3%
ebitda	$10.5m	+ 23%	$12.9m
ebitda margin %	3.7%	- 0.1%	3.6%
npat	$7.2m	+ 26%	$9.1m
npat margin %	2.5%	steady	2.5%
eps	46.1 cents	+ 26.9%	58.5 cents
dps	36.0 cents	+ 27.8%	46.0 cents
payout ratio	78.1%	+ 0.5%	78.6%
share price at june 30	$6.00	- 6.7%	$5.60
returns to shareholders	72%	down	1%
net cash inflow from operations	$8.1m	steady	$8.4m

fy2008 headlines

measure	2007	trend	2008
net assets	$19.1m	+ 11.4%	$21.3m
debt	nil	steady	nil
people numbers	354	+ 30%	460
remunerationgrowth for keymanagement	$3.6m	+ 21%	$4.4m
at risk remuneration for keymanagement	36%	steady	36%
activity	outcome
completed integration of a net 110 people including48 ex cdr	exceeded ‘break-even’ objective in 2h 2008
opened or upgraded 7 new locations	offices in all states excl NT
opened new integration centre in brisbane	‘best in class’ facility
completed fingerprint acquisition	positive contribution in 2h 2008
completedphase 1 of systems refresh	phase 2 targeted for completion 2009
improved customer satisfaction all categories	96% expectations met or exceeded
improvedpeople satisfaction all categories	95.9% recommend Data#3 to others

strong growth - revenue & profit

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strong b/sheet solid investment returns

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conservative balance sheet

balance sheet item	2007 $m	2008 $m	Change $m
Current assets • cash • receivables • inventories	17.4 51.4 5.0	17.0 68.2 6.6	-0.4 +16.8 +1.6
Non-current assets • property and equipment • deferred tax • intangibles	1.1 1.1 4.5	1.7 1.1 6.9	+0.6 nil +2.4
Total assets	82.0	103.0	+21.0
Current liabilities • trade and other payables • tax • provisions and other	53.7 1.4 7.0	71.5 1.4 6.6	+17.8 nil -0.4
Non-current liabilities • other payables (acquisition) • provisions and other	0 0.8	1.4 0.7	+1.4 -0.1
Total liabilities	62.9	81.7	+18.8
Net assets	19.1	21.3	+2.2
Net tangible assets	14.6	14.3	-0.3

strong cash flows

• operating activities

• net inflow of $8.4m

• investment activities

• outflow of $1.8m

  • property & equipment $1.2m

  • acquisition $0.6m

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20
15
10
$m
5
0
2005 2006 2007 2008
-5
operating cash flow
net change in cash
closing cash balance
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• financing activities

• outflow of $6.9m

  • dividends $6.2m

  • share buyback $0.7m

• cash balance at year end

• down from $17.4m to $17.0m

software solutions very strong

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• revenue up 46% to $143.3m

• expansion into SA and WA

• people numbers up from 43 to 65

• added 145 new customers

• acknowledgement by key partners – Microsoft/Sophos

infrastructure solutions solid

infrastructure solutions

• revenue up 18% to $174.9m

• enterprise $43.4m

• professional services $15.1m

• managed services $17.8m

• product solutions $98.6m

• under contract $61.7m

• expansion into SA

• people numbers up from 256 to 327

• acknowledgement by key partners

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people solutions steady

people solutions

• revenue up 17% to $44.7m

• below expectations

• reduction by largest customer

• little growth outside Qld

• lack of success with PerForm performance management

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• placement rate of 48% up from 34%

• fingerprint acquisition in 2h

• new management team

scale in all businesses

# people

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13
67
23 65
37
108
85
97
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managed accounts licensing solutions enterprise solutions professional services managed services product solutions people solutions corporate

building scale in all locations

# people

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16 [5 10]
25
46
regional qld
se qld
90
nsw
vic
300
sa
wa
new caledonia
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strategic performance

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strategic performance

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customers in good shape

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97
96
95
94
%
93
92
91
90
2005 2006 2007 2008
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96% met or exceeded expectations

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3
2.5
2
1.5
1
0.5
0
2005 2006 2007 2008
250
200
150
$M
100
50
0
2005 2006 2007 2008
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cross sell index up to 2.4

revenue from top 100 down slightly

customers with csi > 4

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people in good shape

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500
400
300
200
100
0
2005 2006 2007 2008
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permanents up 28% to 460 casuals steady at 35 contractors steady at 360

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95.1% satisfied with data[#] 3

95.9% recommend data[#] 3 to others

partner relationships in good shape

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retained gold certification # 6 in australia increasing investment in new locations

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increased business partner certifications # 1 partner in q4 2008 increasing investment in new locations

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x-series partner of the year #1 enterprise partner major data centre infrastructure provider microsoft anz partner of the year licence delivery software asset management and security

improved communications

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people

customers

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investors

fy2009 outlook

more difficult environment ahead

• demanding greater return; price pressure

customers

• levels on investment maintained

• • government investment delayed

labour

• more stable but competitive for best skills

• costs increase ahead of cpi

technology

• consolidation & virtualisation

• ‘new age’ data centres; outsourcing

competition

• aggressive and expected to impact margins

• consolidation; new business models

focus through strategy

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people

performance & career plans leadership, expertise & culture

solutions

adapt offerings to technology adoption trend solutions framework and (pdo)[2]

excellence

efficiency & productivity; risk management; customer experience; social responsibility

customers

satisfaction and engagement value us and our services

performance

financial & investment performance; market share gain; people and customer satisfaction

responsibility through structure

Brad Colledge 13 years

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Laurence Baynham 14 years

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Lindy MacPherson 7 years Paul Crouch 5 years

Richard Anderson 11 years John Grant 26 years Terry Powell 30 years Ian Johnston 1 year

Brem Hill 17 years

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Mike John Mark Bowser Rackham Phillips 21 years 2 years 5 years Bruce Crouch Mark Esler Pat Murphy 13 years 25 years 8 years

market positioning & growth

Service	SMX	OKN	DTL	DTL approach
Corporate strategic consulting
Operational business & change consulting				Partner
IT strategy and architecture				Organic, partner
Portfolio and program services				Partner
Systems integration & project management				Partner for applications
Information and data management				Partner
Application development				Organic, partner, acquire
Packaged applications (ERP) implementation				Partner
Managed application services				Partner
Business process outsourcing
Software licensing and asset management				Organic
Infrastructure consulting, design & implementation				Organic or acquire
Infrastructure maintenance and outsourcing				Organic or acquire
Hosting and data centre provision				Partner or acquire
Software and infrastructure products				Organic or acquire
Permanent and contract recruitment				Organic or acquire

outlook

software licensing

• market leadership; solid revenue growth

• competitive pressure on margins

enterprise infrastructure

• moderate organic growth

• move inside the data centre

• professional key, expensive and scarce skill sets • services some revenue growth with margins holding

managed services

• moderate revenue growth positioned for 2010

• • build on success in Qld

product solutions

• strong revenue growth driven by HP

• • lower margins from contracts

• labour market to stabilise and opportunity ease

• people solutions • targeting stronger growth than the sector

outlook

With another best ever in 2008 we are as performance well positioned as we can be to handle and find opportunity in a difficult environment. With the increased access to market that came with our geographic expansion in 2008, we are targeting to gain market share to deliver organic growth in all areas of the business. In addition we will remain watchful for partnering and acquisition opportunities mindful of the cultural and financial issues that accompany them. We believe we are well positioned to improve performance over the 2008 result.

….focus on infrastructure solutions

focus on infrastructure solutions

• definition

• why is it important

• strategic positioning

• data[#] 3 investments

• customer examples

• fy09 outlook

….definition

• solutions offer

• cost effective design, deployment and operation of desktop, network and data centre hardware and software

• though 4 areas of specialisation

• enterprise infrastructure solutions – design and deployment of infrastructure for the data centre

• product solutions – cost effective technology procurement, and supply chain and roll-out solutions

• professional services – design and deployment of infrastructure for the network and desktop

• managed services – outsourced solutions for infrastructure support and operations

…why is it important

• core of our business

• impact on the economy via increased productivity

• largest part of data[#] 3

the largest of our businesses

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people
37
enterprise
108 solutions
85 professional
services
97 managed
services
product
solutions
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….strategic positioning

• market is for organisations 500-5000 users with horizontal technology solutions

• solutions framework that links customers business objectives with the technology solutions we provide

• few strategic partners that drive the industry globally

• provide best customer solution across multiple vendors

strategic partner relationships

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gold certification –external audit data centre specialisation first in australia increasing investment in new locations increased business partner certifications # 1 partner in q4 2008 increasing investment in new locations

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x-series partner of the year 2008 #1 enterprise partner major data centre infrastructure provider microsoft anz partner of the year 2008 licencing and software asset management security and advanced infrastructure

infrastructure solutions

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Service	SMX	OKN	DTL	DTL approach
Corporate strategic consulting
Operational business & change consulting				Partner
IT strategy and architecture				Organic, partner
Portfolio and program services				Partner
Systems integration & project management				Partner for applications
Information and data management				Partner
Application development				Organic, partner, acquire
Packaged applications (ERP) implementation				Partner
Managed application services				Partner
Business process outsourcing
Software licensing and asset management				Organic
Infrastructure consulting, design & implementation				Organic or acquire
Infrastructure maintenance and outsourcing				Organic or acquire
Hosting and data centre provision				Partner or acquire
Software and infrastructure products				Organic or acquire
Permanent and contract recruitment				Organic or acquire

….investment

managed support centre

cisco solutions laboratory

….investment

integration centre

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technology and storage solutions centre

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customers by area of specialisation

• enterprise infrastructure

• connell wagner

• product solutions

• qld government qp707

• professional services

• department of emergency services qld

• managed services

• vale inco

fy09 outlook

enterprise

• moderate organic growth

• grow geographic footprint

• increase consulting services

product

• strong revenue growth

• leverage fixed cost base (integration centre)

• margin pressure

professional services managed services

• attract and retain highest level skills

• organic and geographic growth

• margins steady

• growth outside queensland

• greater emphasis through sales targets

• leverage our excellent reference sites

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© 2008 Data[#] 3 Limited ABN 31 010 545 267 The material contained in this document, including all attachments, is confidential and the copyright Data[#] 3 Limited. No part may be reproduced, used or distributed for any purpose other than the purpose for which it is issued, without the prior written consent of Data[#] 3 Limited.