DXN LIMITED — AGM Information 2023

Nov 19, 2023

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AGM PRESENTATION 20 November 2023

DXN Limited (ASX: DXN)

This document has been approved by the board of DXN Limited

Disclaimer

This presentation has been prepared by DXN Limited (ACN 620 888 548) ( DXN or Company ).

NOT AN OFFER

This presentation is for information purposes only. This presentation does not comprise a prospectus, product disclosure statement or other offering document under Australian law (and will not be lodged with the Australian Securities and Investments Commission) or any other law.

This presentation also does not constitute or form part of any invitation, offer for sale or subscription or any solicitation for any offer to buy or subscribe for any securities nor shall they or any part of them form the basis of or be relied upon in connection therewith or act as any inducement to enter into any contract or commitment with respect to securities. In particular, this presentation does not constitute an offer to sell or a solicitation to buy, securities in the United States of America.

NOT INVESTMENT ADVICE

This presentation is not investment or financial product advice (nor tax, accounting or legal advice) and are not intended to be used for the basis of making an investment decision. Recipients should obtain their own advice before making any investment decision.

SUMMARY INFORMATION

This presentation does not purport to be all inclusive or to contain all information about the Company or any of the assets, current or future, of the Company.

This presentation contains summary information about the Company and its activities which is current as at the date of the presentation. The information in this presentation is of a general nature and does not purport to contain all the information which a prospective investor may require in evaluating a possible investment in the Company or that would be required in a prospectus or product disclosure statement or other offering document prepared in accordance with the requirements of Australian law or the laws of any other jurisdiction, including the United States of America.

The Company does not undertake to provide any additional or updated information whether as a result of new information, future events or results or otherwise.

FORWARD LOOKING STATEMENTS

Certain statements contained in this presentation, including information as to the future financial or operating performance of the Company and its assets, are forward looking statements. Such forward looking statements:

• (a) are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant technical, business, economic, competitive, political and social uncertainties and contingencies;

• (b) involve known and unknown risks and uncertainties that could cause actual events or results to differ materially from estimated or anticipated events or results reflected in such forward looking statements; and

• (c) may include, among other things, statements regarding estimates and assumptions in respect of prices, costs, results and capital expenditure, and are or may be based on assumptions and estimates related to future technical, economic, market, political, social and other conditions.

The Company disclaims any intent or obligation to publicly update any forward looking statements, whether as a result of new information, future events or results or otherwise.

The words “believe”, “expect”, “anticipate”, “indicate”, “contemplate”, “target”, “plan”, “intends”, “continue”, “budget”, “estimate”, “may”, “will”, “schedule” and similar expressions identify forward looking statements.

All forward looking statements contained in this presentation are qualified by the foregoing cautionary statements. Recipients are cautioned that forward looking statements are not guarantees of future performance and accordingly recipients are cautioned not to put undue reliance on forward looking statements due to the inherent uncertainty therein.

NO LIABILITY

The Company has prepared this presentation based on information available to it at the time of preparation. No representation or warranty, express or implied, is made as to the fairness, accuracy or completeness of the information, opinions and conclusions contained in this presentation. To the maximum extent permitted by law, the Company, its related bodies corporate (as that term is defined in the Corporations Act 2001 (Cth) ( Corporations Act )) and the officers, directors, employees, advisers and agents of those entities do not accept any responsibility or liability including, without limitation, any liability arising from fault or negligence on the part of any person, for any loss arising from the use of this presentation or its contents or otherwise arising in connection with it.

DXN Limited | AGM Presentation 2023

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CEO ADDRESS

Ms. Shalini Lagrutta

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DXN Today

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DXN Limited’s core business is designing, engineering, manufacturing and supplying industry leading modular data centers.

We have a significant track record in delivering industry leading customized modular data centers in Australia and the Asia Pacific region.

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Modular Division

Design, manufacture and supply of industry leading Edge facilities across Asia Pacific.

Data Center Operations

Operates, maintains and markets data centers in Sydney, Hobart and Darwin.

Advanced plans to divest some or all of the data centres

DXN Limited | Investor Presentation 2023

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FY23 Key Results Summary

• FY23 Revenue at $6.5m - down from previous year mainly due to uncertainty around attempted third party bid for DXN. Recovery of customer demand is underway as Modular sales orders increasing in H2 FY23 and into FY24.

• Improved FY23 EBITDA (loss) and improvement on gross profit with key restructure initiatives underway

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FY23 Improvement in FY23
Revenue EBITDA
$6.5m Loss for FY23
improved 20% to
prior year
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FY23
Gross Profit
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Gross Profit $3.7m

GP Margin % up 86% to 56%

• EBITDA (underlying) excludes net interest, share issue, and non-cash LTIP costs, depreciation and amortisation, asset impairment

DXN Limited | AGM Presentation 2023

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FY23 Highlights

ACTION		IMPACT
Datacentre division
Actively seek the sale or divestment of one or more data	Well underway	Interest from different parties with discussions well
centre assets (Darwin and Tasmania) and exit of the		underway for the sale of the Darwin data centre. Heads
Sydney data centre		of agreement for exit of Sydney data centre site lease.
Cost reductions initiated		Approximately $0.8 million net savings per annum
We have reduced costs across the group.	Ongoing	were initiated in H2 FY23 and targeted during FY24,
		with meaningful impact commencing in late Q1.
Asset impairment
A material write-down of assets, particularly related to the	Complete	FY23 non-cash $4.1m asset impairment of fixed assets
Sydney (SYD01) data centre, which is being exited.		and receivables.
Cash management		Payables reduced 68% to <$1.0m and improved project
Considerable improvement in cash management and	Complete and	management terms on Modular contracts to match
cashflow forecasting	ongoing	design and build costs.
Modular Manufacturing division		Targeting initial 15% improvement in manufacturing
Enhancing operational processes to track and improve	Ongoing	gross margins.
gross margins. We have refined supply chain and
operational systems to improve manufacturing margins.
Flow Digital Infrastructure (Flow)	Ongoing	The first two quarters of FY23 were focussed on the
International distribution agreement.		potential sale of business assets to Flow which did not
		eventuate. However, DXN did negotiate an international
		distribution agreement which included licence fees
		payable to DXN and future module orders for resale by
		Flow into Asia Pacific.

DXN Limited | AGM Presentation 2023

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Modular Data Centres What is a prefabricated modular data centre?

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Prefabricated data centre, designed in-house by DXN and built at our in-house manufacturing facility in Perth, WA

DXN maintains full control over the design and manufacturing process, ensuring the highest standards of quality and reliability.

DXN’s modular design means the data centres can be deployed to any location and easily customised.

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FY23 Key Highlights

Key Projects Delivered

DXN completed delivery of the following modular data centre projects in FY23:

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Edge Module – Mining

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CLS - Timor Leste Submarine Cable

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Edge Module - Mining

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Centre of National Resilience (Perth) - main data centre and communication modules

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Edge Module – First Module

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Second and third edge data centre deployment

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Palau Cable Landing Station

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Global Deployment Locations

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Wingu Africa
Edge DC and CLS *
DXN Module Customers
AGIG
4
Teletok
5
SpeedCast
6
Telcom Niue
7
Avaroa Cable
Limited
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Southern Cross
Cable Network
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SES | Networks
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Speedcast
_Project 2 _
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Synergy
12
Resolute *
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SES | Networks
_Project 2 _
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Venues West
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AHG
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SubCo
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Boeing *
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Covalent Lithium
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Streamline Connect
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Newcrest Mining *
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SISCC
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BSCC Palau *
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Multiplex *
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AngloAmerican
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Pilbara Minerals
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Timor-Leste
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Represents a module built and deployed for the customer
Mawson
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DXN Limited | AGM Presentation 2023

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DXN Customers and Market Segments

Mining Energy & Gas Construction CLS* Defence Telco Government Edge DC

* Cable Landing Station – the landing point for an international cable

DXN Limited | AGM Presentation 2023

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Outlook – Key Strategic Initiatives

DXN has four key initiatives underway to put DXN on the best footing for future stability, profitability and growth.

CASH & CAPITAL MANAGEMENT

• Focus on cash, generating positive cash flow and capital management - to ensure appropriate funding for the future is in place.

TURNAROUND

• Focus on DXN turnaround to profitable growth and cash generation. Includes initiatives for cost reduction and margin improvement.

• Sydney Data Centre lease exit - which has severely impacted DXN’s cash and EBITDA performance historically.

REBUILD

• Rebuild and grow module business.

EXIT NON-CORE ASSETS

• Strategic sale of assets/ centres that no longer fit the business model.

DXN Limited | AGM Presentation 2023

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Outlook – Exiting Sydney Data Centre Lease

Exiting Sydney Data Centre Lease at 5 Parkview Drive, Sydney Olympic Park

• DXN are in the process of arranging the surrender of the Sydney Data Centre lease which is due to end in approximately 9 years, releasing DXN from the lease liability.

• Exit has been agreed as at the end of February 2024.

• With an agreed payment equivalent to approximately 6 months lease, but payable over an agreed longer period

• Existing customers will be re-located to another data centre

• DXN will undertake to decommission its Sydney equipment at the site between now and exit in February 2024.

DXN Limited | AGM Presentation 2023

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Outlook - Rebuild and Grow Modular Business

Rebuild Modular Business

• The DXN team has secured 42 module sales within the last three years.

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New Revenue Wins (by month)
$5.0m
$4.0m
$3.0m
$2.0m
$1.0m
$0.0m
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Rebuilding the pipeline
$14.0m New Wins - trailing 12mths (by quarter)
$12.0m
$10.0m
$8.0m
$6.0m
$4.0m
$2.0m
$0.0m
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 The win gap (between May 2022 and Jan 2023) shows the normally consistent modular win rate dropped off during that period. It was the same period that DXN announced to the market that it is being acquired by Flow Digital infrastructure; that deal was subsequently aborted due to regulatory issues.

 Demand for modular cable landing stations and data centres enabling Edge computing is enjoying strong structural demand and will continue to do so.

• The new customer pipeline has been materially expanded and additional new orders are expected during the remainder of FY24

DXN Limited | AGM Presentation 2023

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Outlook – Exit Non-Core Assets

Exit Non-Core Assets

• DXN’s data centres (in Darwin and Tasmania) continue to be profitable.

• However, as previously announced, the Company will continue to explore the sale of assets deemed non- core to DXN’s business model going forward.

• Discussions with interested parties continue.

• All options are being explored including special purpose vehicles (SPV).

DXN Limited | AGM Presentation 2023

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Outlook Target – Bridge to Profitability

Finalise key restructure initiatives in FY24:

• Sale/divestment of data centre asset(s) - this will provide cash to further invest in the modular data centre business.

• Exit Sydney site lease

Achieve positive cash flow and underlying EBITDA for 2H FY24 and ongoing

Grow modules business with focus on pipeline growth with both work in hand and new pipeline work, improving margins, project disciplines and efficiencies – together with and strong pipeline growth in primary targeted sectors

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• including lease expense; ** based on current strong pipeline; *** prior to sale/ divestment of Data Centre(s)

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THANK YOU

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