DATA#3 LIMITED — Annual Report 2019

Aug 20, 2019

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FY19 Results Briefing

21[st] August, 2019

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Contents

FY19 Summary IT Sector Our Business Digital Transformation FY19 Financial Performance FY20 Looking Forward Q&A

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FY19 Summary

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“We are delighted with the performance of the consolidated Data[#] 3 business.

The full year result demonstrates the inherent strength and relevance of our solution offerings in a transforming market. Total revenue increased by 19.8%, and NPAT & EPS increased by 28.7% to record highs.

The board declared a final dividend of 7.1 cents per share, delivering a total fully franked dividend of 10.7 cents, up 30.5% on FY18, and representing a 91.0% payout ratio”

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IT Sector

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Australian IT market

spend $94Billion*

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• Gartner Forecasts IT Spending in Australia to Grow at 3.5 Percent in 2019

Global Cloud Deployment

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Public cloud revenue ($M)

DTL Cloud Growth Growth in Public Cloud 35% Growth in Private Cloud

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400
362.2
300
267.8
200 169.5
99.0
100
47.0
0
FY15 FY16 FY17 FY18 FY19
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Our Business

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Data[#] 3 in FY19

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1,200+ staff

Founded in 1977 Listed on the ASX in 1997

$1.4 Billion in revenue

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9 offices across Australia and Fiji

3 integration centres

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55% revenue under contract

4,933 enterprise and government customers

2.5M+ Office 365 licensed users

2,113 services projects

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Partnering with leading global suppliers

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1 or #2 in the Australian market

Many national and international awards Global Cisco software partner award

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Our vision is to harness the power of people and technology for a better future.

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Our Solutions

Cloud

Consulting

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Mobility
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Security

Project Services

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Data & Analytics IT Lifecycle Management

Support Services

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Digital Transformation

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Digital Transformation

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Data & Analytics

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Artificial Intelligence

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Internet of Things

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3D Printing

FOUNDATION LAYER

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Network Cloud Mobility Security Software
(Public & Private)
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FY19 Financial Performance

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FY19 Performance Summary

FY19 Performance Summary
Revenue	Up 19.8%	$1,415.6M
Product	Up 21.3%	$1,167.4M
Services	Up 13.3%	$246.9M
Public cloud (included in Product & Services above)	Up 35.3%	$362.2M
Other Revenue		$1.2M
Gross Profit (excluding Other Revenue)	Up 8.6%	$173.9M
Product	Up 17.2%	$90.2M
Services	Up 0.6%	$83.7M
Gross Margin	Down 1.3 pp	12.3%
EBITDA	Up 25.8%	$28.3M
EBIT	Up 32.1%	$25.8M
NPBT	Up 30.2%	$26.6M
NPAT (excluding minority interests)	Up 28.7%	$18.1M
Earnings per share	Up 28.7%	11.76 cents
Dividend per share	Up 30.5%	10.70 cents

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Sustained Revenue Growth

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Product revenue ($M) Services revenue ($M) Total revenue ($M)
1400 300 1600 1,415.6
1,167.4
1200 246.9 1400
218.0
208.1 1200
1000 190.0 983.2 [1,098.2 1,181.4 ]
800 697.3 709.2 [791.3 889.2 962.3 ] 200 160.2 1000 833.6 870.5
134.8 800
600
600
100
400
400
200 200
0 0 0
FY14 FY15 FY16 FY17 FY18 FY19 FY14 FY15 FY16 FY17 FY18 FY19 FY14 FY15 FY16 FY17 FY18 FY19
Infrastructure $378.8M + 24.3% Consulting $26.5M + 5.2%
Software Solutions $787.8M + 20.3% Project Services $54.8M + 14.2%
Discovery Technology $0.8M - 69.2% Support Services $108.4M + 24.5%
Recruitment $53.4M + 6.0%
Discovery Technology $3.8M - 26.1%
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Strong growth in product revenues and solid growth in services, fuelled by digital transformation projects.

Total revenue included $362.2M of public cloud-based revenues, up 35.3% on FY18.

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Change in Gross Profit mix

Product gross profit ($M)

Services gross profit ($M)

Total gross profit ($M)

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100 90.2 100
86.3 83.1 83.7 200 173.9
77.0 76.0 158.9 160.1
80 70.5 72.5 80 146.6
66.2 160
62.0 63.3 129.5
56.8 118.9
60 60 120
40 40 80
20 20 40
0 0 0
FY14 FY15 FY16 FY17 FY18 FY19 FY14 FY15 FY16 FY17 FY18 FY19 FY14 FY15 FY16 FY17 FY18 FY19
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Product gross profit increased by 17.2% and gross margin decreased from 8.0% to 7.7%.

Services gross profit increased by 0.6% and gross margin decreased from 38.1% to 33.9%, reflecting the change in Support Services mix due to decommissioning of the Data[#] 3 Cloud in FY18 & FY19.

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Return to trend growth

NPBT ($M)

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30 26.6
25 22.4
20.4
19.5
20
15.2
15 10.9
10
5
0
FY14 FY15 FY16 FY17 FY18 FY19
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NPAT ($M) excluding minority interests

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20 18.1
15.4
13.8 14.1
15
10.6
10 7.5
5
0
FY14 FY15 FY16 FY17 FY18 FY19
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EPS (cents)

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14
11.76
12
9.99
10 8.98 9.14
8 6.89
4.89
6
4
2
0
FY14 FY15 FY16 FY17 FY18 FY19
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DPS (cents)

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12 10.70
10 8.90
8.00 8.20
8
6.30
6 4.50
4
2
0
FY14 FY15 FY16 FY17 FY18 FY19
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Solid Balance Sheet & Cash Flow

• Strong balance sheet with no material borrowings

• Any borrowings are back-to-back with customer contracts

• Cash flow ‘seasonality’ consistent with previous years

• Average DSOS of 28.7 days – ahead of target and industry best practice

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FY20 Looking Forward

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Market Trends

Digital transformation is a high priority in business strategy

The overall IT market growth is fuelled by digital transformation

A convergence of Information Technology (IT) & Operational Technology

(OT) is creating opportunity

Cybersecurity poses increasingly larger threats and continues to grow

Artificial intelligence & robotics are in early adoption phase

Data analytics are increasingly mainstream

Superior customer service remains a key differentiator

Attracting and retaining skilled resources is increasingly competitive

Vendor channel models are changing with a greater emphasis on adoption and customer experience

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Key Priorities in FY20

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– Services improving margins

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– Digital Enablement helping our customers succeed in their digital transformation

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– Customer Experience unifying every customer touchpoint across our company to improve the overall customer experience

– Vendor Relationships investing with the right vendors, and working their channel plans to our mutual benefit

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FY20 Outlook

We see ongoing growth in the Australian IT market, with digital technologies leading business transformation in both the commercial and public sectors, and we believe we remain well positioned to capitalise on these opportunities.

We will continue to build on our strengths and enhance shareholder value.

Our overall financial goal remains to deliver sustainable earnings growth.

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Q&A

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Appendix 1 – Financial Summary

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Disclaimer

This presentation has been prepared by Data[#] 3 Limited (“the Company”). It contains general background information about the Company’s activities current as at the date of the presentation. It is information given in summary form and does not purport to be complete. The distribution of this presentation in jurisdictions outside Australia may be restricted by law and you should observe any such restrictions.

This presentation is not (and nothing in it should be construed as) an offer, invitation, solicitation or recommendation with respect to the subscription for, purchase or sale of any security in any jurisdiction, and neither this document nor anything in it shall form the basis of any contract or commitment. The presentation 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. These should be considered, with or without professional advice, when deciding if an investment is appropriate.

The Company has prepared this presentation based on information available to it, including information derived from publicly available sources that have not been independently verified. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, correctness or reliability of the information, opinions and conclusions expressed.

Any statements or assumptions in this presentation as to future matters may prove to be incorrect and differences may be material. To the maximum extent permitted by law, none of the Company, its directors, employees or agents, nor any other person accepts any liability, including, without limitation, any liability arising from fault or negligence on the part of any of them or any other person, for any loss arising from the use of this presentation or its contents or otherwise arising in connection with it.

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www.data3.com.au 1300 23 28 23 Linkedin.com/company/data3 Twitter.com/data3limited Facebook.com/data3limited YouTube.com/data3limited

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