DXN LIMITED — AGM Information 2019

Nov 27, 2019

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GIVING YOU THE EDGE At DXN we believe in challenging the status quo of how modern data centres enable the edge

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Annual General Meeting CEO Update

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28 November 2019

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Disclaimer

Important

This presentation has ben prepared by DXN Limited ACN 620 888 548 (DXN or the Company). Each recipient of this presentation is deemed to have agreed to accept it is subject to the qualifications, limitations and disclaimers set out below.

By accepting receipt of this document, you (Recipient) agree to be bound by the following terms and conditions, including any modifications to them.

None of DXN and/or their respective directors, officers, employees, advisers or representatives (Beneficiaries) make any representation or warranty, express or implied, as to the accuracy, reliability or completeness of the information contained in this presentation, including any forecasts or prospective information.

The forward looking statements included in this presentation involve subjective judgement and analysis and are subject to significant uncertainties, risks and contingencies, many of which are outside the control of, and are unknown to, the Beneficiaries. Actual future events may vary materially from the forward looking statements and the assumptions on which those statements are based. Given these uncertainties, you are cautioned to not place undue reliance on such forward looing statements.

The Recipients, intending investors and respective advisers, should:

• a) Conduct their own independent review, investigations and analysis of DXN and of the information contained or referred to in this presentation;

• b) Seek professional advice as to whether an investment in DXN is appropriate for them, having regard to their personal objectives, risk profile, financial situation and needs; and/or

• c) Nothing in this presentation is or is to be taken to be an offer, invitation or other proposal to subscribe for shares in DXN.

The Recipient specifically agrees, understands and acknowledges that some of the information contained herein has been provided by third parties and the Beneficiaries accept no responsibility for any inaccuracy, misstatement, misrepresentation or omission in relation to that information.

Except insofar as liability under any law cannot be excluded, none of the Beneficiaries shall have any responsibility for the information contained in this presentation or in any other way for errors or omissions (including responsibility to any persons by reason of negligence). This document is dated28 November 2019.

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DXN Limited (ASX: DXN) designs,
Who DXN has become the first modular data centre
builds, owns and operates data
developer in the world to receive both TIER-Ready III
centres.
we are and TIER-Ready IV design review awards.
Our modular approach provides agile, rapid DXN has also been awarded Tier III TCCF on its
and flexible DC’s built to global best practice Sydney Data Centre a world first for a containerised
standards. DC
It establishes DXN as the only developer (modular or
We can deploy customised DC capacity to
traditional) currently capable of offering a blended
meet any technical specifications in our
Tier-III and Tier-IV modular environment within a
colocation facilities or deliver our DC
single data centre facility
solutions and services to sites globally.
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DXN Business Overview

Two Core Business Streams

DXN designs, builds, owns and operates data centres and our modular approach provides agile, rapid and flexible DC’s built to global best practice standards. Tier III and Tier IV

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DXN Modules

• Pre-fabricated modular design allows for personalisation of data centre requirements in a scalable cost-effective way.

• Current annual build capacity is 7MW or 35-50 modules

• Rapid build

• Turnkey deployment

• Attached maintenance

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DXN Data Centres

• Capital Efficient – scalable capex closely matching sales

• Predictable per MW build cost lowest in the Australian Market

• Rapid Deployment –3 months for additional capacity

• Secure network fabric connecting to cloud marketplace of over 100 providers

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Vision for the next 12 months

Focus on sales

• Complete sales of 1MW in DXN-SYD01

• Modules sales of >$12M

Market Development

• Edge DC Design and Build

• SE Asia, Pacific and Australia

• First Edge DC Development in regional Australia

Melbourne DC

• Development and capital expenditure put on hold until Power Capacity is resolved.

• Assess early stage interest from a number of large international businesses.

• Short Term sublease being explored to reduce lease expenditure whilst power capacity and anchor tenancy is resolved

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Market Growth driving DXN Module sales:

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Australian
Data Centre Market Colocation Market
estimated grow to estimated to be a
50 bi lion Do lars Billion Dollar
industry by 2023by 2025
20% Compound 9% Compound
annual growth rate
increase estimated in Australia
increase from b tw en
2017 - 20235
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Global Market Insights

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Edge and Modular DC Market

Market Proof Points

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19%
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Edge market CAGR of 19% to 2024. Driven by 5G and the IOT market. Edge DC and Modular DC go hand in glove.

DXN Current capacity to construct is 7MW PA

Regional DC NSW Government deployments announced a $100M expected to increase investment strategy throughout Australia into Regional NSW for and SE Asia Edge DC deployments

DXN currently in discussions with a number of Edge deployments in SE Asia

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Market growth driving DXN Data Centre sales:

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Australian
Colocation Market
estimated to be a
Billion Dollar
industry by 2023
9% Compound
annual growth rate
in Australia
increase from
2017 - 2023
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Frost and Sullivan

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Location	Sydney Olympic Park
Tier	III(Design and Build)& IV(Design)
Size of Facility	4600 Sqm
Technical Area	3500 Sqm
Capacity	6MW
Initial Fit Out	1MW
Live	19 Aug 2019

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DXN-SYD01

Sales

• Contract negotiations continue with Three (3) new customers

• Channel Partners signed six (6) with an additional four (4) before the end of Q2.

• Q3 Sales from Channel partners expected

Pipeline

• Pipeline value remains unchanged at present going into the Christmas period

• Weighted Pipeline Value unchanged at $3m

• Strong growth in pipeline expected in Q3 from channel partners

Site Visits by Customers

• c10 site visits per week which is a strong indicator of interest in the DC

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Utilities
16%
DXN-SYD01
Telco Channel
Unweighted
25% 44%
Pipeline
$13m
Realestate
9%
DC Operator
Manufacturing Education 4%
2% 0%
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• Repeat Visits 2-3 per week - strong intention of commitment

• Early stage Channel activity of 1 DC Tour per week

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Modules Market for DXN

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Hyperscale and Edge

Telco and Government

Cable Landing Stations

Mining

Micro DC

• 1-10Mw Deployment

• 200-2000 Racks

• Modular Solution that allows scale

• 6 Month Build to any Tier

• Co Own and Operate Options

• Edge Deployment

• 20kW to 1MW

• 5-200 Rack

• 16 Week Build

• Co Own and

• Operate

• Pre Fabricate specific for submarine cable Industry

• Rapid Deployment 90 days

• Highest Quality factory built Surface Protection C4 Standard

• Seismic Rating Zone 4

• • Cyclone 5 Rating

• •

• Purpose Built Plug and play, fully

• • High Quality integrated solution •

• Australian design Combining UPS,

• Australian design Combining UPS, and build cooling, security,

• • Dark Site monitoring and Management HMI.

• ideal for enterprise

• Rugged and Resilient

• 5G telco sites where there is a need for solutions closer to the end user.

• Custom Designed

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Subsea Cable
Operators
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Modules

Work in Hand $6.2m

• SES $250k (Repeat Customer)

• Southern Cross $2.4m

• Additional contracts expected in Q2/Q3 >$4m

Pipeline

• Creating a large sales pipeline ie >$500m which should create a sustainable >$25M reported revenue per year

• Module Sales Pipeline has grown by 343% since August in line with strong market focus and an increase in demand from SE Asia and the Pacific

• The closure of FlexEnclosure has increased the pipeline growth for DXN

• Australian Modular DC growth slower but expected to increase off the back of the NSW Government RFP release in Q2/Q3 for regional DC and recent announcements around 5G roll out and capacity increases for Telstra and Optus expected to drive activity

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10%
Mining
2%
Government/ Utilities
1% Telco
21%
Unweighted
Module
Pipeline
$377m
DC Operator
66%
Modules Pipeline
$400,000,000
$350,000,000
343%
Growth
$300,000,000
$250,000,000
$200,000,000
$150,000,000
$100,000,000
$50,000,000
$0
August September October November
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Southern Cross Cable – recent contract signed

• Southern Cross owns and operates a TransPacific submarine cable network connecting Australia, New Zealand, Fiji, Hawaii to the internet backbone on the United States West Coast

• Southern Cross cable is a world leader on reliability and performance and today still carries 95% of Australia and New Zealand's Internet every year.

• DXN was chosen because our product provides a quality outcome at the right price. Attached to this is an option for Southern Cross to take up a maintenance contract with DXN for 25 Years

• $4bn in capital deployed in new cable systems in 2019. Significant growth in the Asia Pacific region is expected through to 2022 and DXN is well positioned to secure more regional cable landing stations

• Industry practice is that Edge Data Centres are usually deployed alongside Cable Landing Stations and DXN is well positioned to win this contract expansion

• DXN is focussed on ensuring long term maintenance contracts are built into all its modular construction contracts

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DXN is building a strong reputation in this market with key cable operators a direct quote on linked in from the CEO of Cook Islands endorsing the decision of Southern Cross.

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FY20 Trading Update

• DXN currently has $6.2m work in hand (WIH) for FY20 - 435% above FY19

• Contracts currently in various stages of production:

• Synergy $580k

• Radlink $1m

• Niue $600K

• Cook Islands $1.44m

• SES $250K

• Southern Cross $2.4m

• DXN continues to negotiate additional contracts through its modules division in an effort to grow WIH

• New revenue stream – Maintenance contract on modular sales. Ongoing maintenance on module sales expected to be material by FY21/22

• Sydney DC colocation client pipeline is building strongly. Contracts are expected once stage 2 construction is completed by end CY19.

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$7,000,000
$6,000,000
$5,000,000 435%
Growth
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$0
2018 2019 2020
Customer revenue
Work in hand to be completed by June 30 2020
Note : Total reported revenues for fy19 was $2.8m which included $1.4m revenue from an
R&D grant ,export grant and bank Intrest
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