DATA#3 LIMITED — Annual Report 2009

Sep 3, 2009

…our vision is to be an exceptional company

2009 headlines

measure	2008	trend	2009
revenue	$363.7m	+ 46%	$530.5m
revenue under contract	57.0%	up	59.5%
internal expense as % gross margin $	83.3%	up	84.3%
ebitda	$12.9m	+ 12%	$14.5m
ebitda margin %	3.6%	down	2.7%
npat	$9.1m	+ 8%	$9.8m
npat margin %	2.5%	down	1.9%
eps	58.9 cents	+ 8%	63.8 cents
dps	46.0 cents	+ 9%	50.0 cents
payout ratio	78.0%	steady	78.4%
share price at june 30	$5.60	+ 7%	$6.00
returns to shareholders	1%	up	16%
net cash inflow from operations	$8.4m	up	$19.6m

….our vision is to be an exceptional company

2009 headlines

measure	2008	trend	2009
net assets	$21.3m	+ 9%	$23.3m
debt	nil	steady	nil
people numbers (permanent staff)	460	+ 2%	470
remuneration key management	$4.4m	- 5%	$4.2m
at risk remuneration for key management	37%	down	32%
activity	outcome
implemented new systems for workflow, performance management, CRM, financials, supply chain, Office 2007	continuing work on some systems in 2010
relocated data centre and increased communications bandwidth	secure operational environment with videoconferencing widely used
increased instructor led training time by 63% and online training time by 16%	‘best in class’ facility
invested in improving sales capability	tender win rates up to 53%
held customer satisfaction	95% expectations met or exceeded
held people satisfaction	93% recommend Data#3 to others

strong organic growth

Revenue

EBITDA

NPAT

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600
16.0 10.0
9.0
500 14.0
8.0
12.0
400 7.0
10.0
6.0
300 8.0 5.0
4.0
6.0
200 3.0
4.0
2.0
100 2.0
1.0
0.0 0.0
0
2005 2006 2007 2008 2009 2005 2006 2007 2008 2009
2005 2006 2007 2008 2009
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revenue up 46% to $530.5m with $81m from Govt Head Agreement and 59.5% under contract

ebitda up 12% to $14.5m

npat up 8% to $9.8m

( maroon = revenue under contract)

….our vision is to be an exceptional company

solid investment returns

eps and dps

payout %

share price

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70 80% 6.00
60 78%
5.00
76%
50
4.00
74%
40
72% 3.00
30
70%
2.00
20
68%
1.00
10 66%
0 64% 0.00
2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009
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eps up 8% to 63.8 cents and dps up 9% to 50 cents

payout ratio stable

at 78%

share price up 7% and performing well against market

….our vision is to be an exceptional company

conservative balance sheet

balance sheet item	2008 $m	2009 $m	Change $m
Current assets • cash • receivables • inventories	17.0 68.2 6.6	28.0 94.0 6.1	+ 11.0 + 25.8 - 0.5
Non-current assets • property and equipment • deferred tax • intangibles	1.7 1.2 5.3	1.3 1.2 5.4	- 0.4 nil + 0.1
Total assets	101.5	139.2	+ 37.7
Current liabilities • trade and other payables • tax • provisions and other	71.2 1.4 6.6	106.6 0.7 7.7	+ 35.4 - 0.7 + 1.1
Non-current liabilities • other payables (acquisition) • provisions and other	0.2 0.7	0.2 0.7	nil nil
Total liabilities	80.1	115.9	+ 35.8
Net assets	21.3	23.3	+ 2.0
Net tangible assets	16.0	17.9	+ 1.9

strong cash flows

• operating activities

• net inflow of $19.6m

• investment activities

• outflow of $0.8m

  • property & equipment $0.5m

  • software assets $0.3m

• financing activities

• outflow of $7.8m

  • dividends $7.4m

  • share buyback $0.4m

• cash balance at year end

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30
25
20
15
$m
10
5
0
2005 2006 2007 2008 2009
-5
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operating cash flow
net change in cash
closing cash balance
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• up from $17.0m to $28.0m

….our vision is to be an exceptional company

licensing solutions very strong

Licensing revenue

licensing solutions

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300.00
250.00
200.00
150.00
100.00
50.00
0.00
2005 2006 2007 2008 2009
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• revenue up 104% to $292.8m

• Govt Head Agreement revenue $81m

• leader in all regions

• added 350 new customers

• acknowledgement by key partners – Microsoft/Sophos/Symantec

2009 result excluding Govt HA revenue shown in maroon

….our vision is to be an exceptional company

infrastructure solutions solid

infrastructure solutions

Infrastructure revenue

• revenue up 13% to $197.6m

• enterprise $34.1m

• professional services $15.1m

• managed services $22.3m

• product solutions $126.1m

• under contract $62.5m

• people numbers up from 327 to 347

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200.00
180.00
160.00
140.00
120.00
100.00
80.00
60.00
40.00
20.00
0.00
2005 2006 2007 2008 2009
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• acknowledgement by key partners

• Microsoft

• IBM

• HP

• Cisco

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Enterprise Infrastructure
Solutions
Managed Services
Professional Services
Product Solutions
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• ….our vision is to be an exceptional company

people solutions under pressure

people solutions

People Solns revenue

• revenue declined 12% to $39.2m

• strong performance in Qld

• overall contribution to profit declined by $1.5m

• contribution from Fingerprint acquisition improved in 2H

• placement rate of 44%

• administration centralised

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45.00
40.00
35.00
30.00
25.00
20.00
15.00
10.00
5.00
0.00
2005 2006 2007 2008 2009
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….our vision is to be an exceptional company

scale in all businesses

529 up from 495

# people

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14
74
23 69
28
114 86
121
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managed accounts licensing solutions enterprise solutions professional services managed services product solutions people solutions corporate

….our vision is to be an exceptional company

building scale in all locations

# people

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18 7 7
71
53
national
qld
95
nsw
vic
sa
278
wa
new caledonia
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….our vision is to be an exceptional company

customers in good shape

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97
96
95
94
93
92
91
90
2006 2007 2008 2009
2.5
2.4
2.3
2.2
2.1
2
1.9
1.8
2006 2007 2008 2009
350
300
250
200
150
100
50
0
2006 2007 2008 2009
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95% met or exceeded expectations

cross sell index down to 2.05

revenue from top 100 increased significantly

….our vision is to be an exceptional company

customers with csi > 3

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….our vision is to be an exceptional company

people in good shape

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500
400
300
200
100
0
2006 2007 2008 2009
96%
94%
92%
90%
88%
86%
84%
2006 2007 2008 2009
98%
96%
94%
92%
90%
88%
86%
2006 2007 2008 2009
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permanents up 2% to 470 casuals up 71% to 60 contractors down 25% to 270

95% satisfied with data[#] 3

93% recommend data[#] 3 to others

….our vision is to be an exceptional company

partner relationships in good shape

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retained gold certification #6 in australia significant contract wins nationally

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increased business partner certifications #1 partner in q4 2009 increasing market penetration - WoG contract in Victoria

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first partner to included in the Hall of Fame #1 enterprise partner major data centre infrastructure provider

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finalist in 4 partner of the year award categories #1 partner in australia for licensing and security worldwide security partner of the year 2009

….our vision is to be an exceptional company

fy2010 outlook

….our vision is to be an exceptional company

challenging environment continues

• 2010 budgets set in context of 2009 difficulties

customers

• consolidating and want short term ROI

• government investment under serious pressure

labour

• more stable but competitive for best skills

• workloads and demands creating stress

• cost increases minimal

technology

• consolidation & virtualisation; ‘cloud’

• Unifies communications

• ‘new age’ data centres; outsourcing

• Downsizing and more reliant on channel

partners

• Channel strength and stability vital

• Looking to resellers to create customer value

competitors

• ‘cracks’ appearing in poorly capitalised

• consolidation / people flight to ‘safer havens’ likely

• forsaking margin for revenue

• ….our vision is to be an exceptional company

focus through strategy

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people

expertise, culture, performance & career plans; satisfaction; opportunity to acquire the best

solutions

solutions framework and (pdo)[2] ; winning in the market; extend offerings to access

excellence

efficiency & productivity; return on new systems’ investment; IP; lower ‘cost ratio’

customers

satisfaction breadth and depth of our engagement

performance

financial & investment performance; market share gain; revenue under contract

….our vision is to be an exceptional company

clarity in offerings

Area of specialisation	Solution Set
~~licensing solutions~~ Licensing Solutions	Software licensing Software asset management
Infrastructure Solutions	Strategic ICT and business analysis Network platforms Identity management Systems management Managed operating environment Unified communications and collaboration Business productivity and knowledge management Consolidation and virtualisation Disaster recovery Data management and archiving
Managed Services	Outsourcing solutions ICT hardware maintenance services
Product Solutions	ICT product procurement
People Solutions	Workforce recruitment and consulting

….our vision is to be an exceptional company

responsibility through structure

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Richard Anderson 12 years
Brad John Grant 27 years
Colledge Terry Powell 31 years
Data#3 Group
14 years Ian Johnston 2 years
Laurence
Areas of Brem Hill Corporate
Baynham
Specialisation 18 years Services
15 years
Licensing Infrastructure People Business Finance and
States
Solutions Solutions Solutions Services Legal
Integrated Mike Marketing & Human
Solutions Alliances Resources
Bowser
22 years
Product Operations & Organisational
Solutions Bruce Crouch Logistics Excellence
Paul Lindy
14 years
Crouch MacPherson
Mark Esler Managed 6 years Vendor 8 years
Services Management
26 years
Pat Murphy John
9 years Rackham
3 years
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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				Organic and partner
Business process outsourcing
Software licensing and asset management				Organic
Infrastructure consulting, design & implementation				Organic
Infrastructure maintenance and outsourcing				Organic or acquire
Hosting and data centre provision				Partner
Product provisioning				Organic or acquire
Permanent and contract recruitment				Organic
….our vision is to be an exceptional company

outlook

software licensing

• market leadership; slower organic growth; spread

• mid-market focus (<2000 seats); competitive on margins

integrated • better than market organic growth via marketshare gain solutions • sales capability and enablement

managed services

• solid revenue growth

• tailored solutions to meet specific customer requirements

product solutions

• solid revenue growth driven from all regions

• lower margins from contracts

people solutions

• little to no growth; expanded HR services offerings

• competition from outsourcing

….our vision is to be an exceptional company

outlook

While we see many positive signs of recovery, we believe government and business IT budgets for 2010 will reflect the restraint implemented in 2009 and expect overall market conditions to remain tight. Our overall financial objective is to at least maintain the performance of 2009.

….our vision is to be an exceptional company

….focus on managed services

….our vision is to be an exceptional company

managed services provides...

• Service Desk

• full incident management through level 1, 2, 3 and escalation to 3[rd] parties including Data[#] 3’s Essential Support Centre, IS, Outsourcing or a vendor

• Maintenance Solutions

• repackages and resells vendor maintenance agreements and Data[#] 3 essential support agreements

• Outsourcing Solutions

• onsite services for service desk, desktop support, server, network and application support

• Essential Support Centre

• the full escape solution providing reactive and proactive remote management and hosting of infrastructure and applications

….our vision is to be an exceptional company

…why is managed services important

• growth opportunity as customers focus on their core business

• long term annuity revenue

• offers long term value to our customers

• opportunity for other areas of specialisation i.e. cross sell

….our vision is to be an exceptional company

...historically solid growth with little focus

Managed Services revenue

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25.00
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15.00
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5.00
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2005 2006 2007 2008 2009
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….our vision is to be an exceptional company

….strategic positioning

• Customer segment

• 200 – 2000 seat organisations

• global companies looking for local partner

• sub contract to Tier 1 outsourcer where niche or local skills

  • required

• Offering a flexible solution and flexible partner

• fix first and worry about contracts and variations separately

• consolidation of vendor maintenance and support agreements

• day 2 support for our Integrated Solutions projects

….our vision is to be an exceptional company

managed services 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				Organic and partner
Business process outsourcing
Software licensing and asset management				Organic
Infrastructure consulting, design & implementation				Organic
Infrastructure maintenance and outsourcing				Organic or acquire
Hosting and data centre provision				Partner
Software and infrastructure products				Organic or acquire
Permanent and contract recruitment				Organic

….our vision is to be an exceptional company

managed services customers

• Service desk

• Sparq – (Ergon Energy + Energex)

• Johnson & Johnson

• Maintenance solutions

• Allens Arthur Robinson (Cisco + HP)

• WebCentral

• Outsourcing services

• QGC

• Vale

• Transport Infrastructure Development Corp (NSW)

• Hutchison 3 retail

• Essential Support Centre

• QGC

• Axo Nobel

….our vision is to be an exceptional company

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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.