MACQUARIE TECHNOLOGY GROUP LIMITED — AGM Information 2007

Nov 26, 2007

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MACQUARIE TELECOM GROUP LIMITED

ANNUAL GENERAL MEETING

TUESDAY, 27 NOVEMBER 2007

CHAIRMAN’S ADDRESS

Ladies and gentlemen, good morning. I’m Robert Kaye, the Chairman of Macquarie Telecom Group Limited, and I would like to extend a warm welcome to shareholders to the Annual General Meeting for 2007.

INTRODUCTION OF BOARD

I would like to introduce you to the board members seated here with me this morning:

David Tudehope – David is co-founder and Chief Executive of Macquarie Telecom. In addition to supervising the general management and strategic direction of the company, David is also actively involved in Macquarie Telecom’s participation in regulatory issues.

Aidan Tudehope – Aidan is co-founder and Managing Director of our Hosting business. He has played a key role in establishing and growing Macquarie Telecom’s Singaporean, data networking and Intellicentre strategies. Prior to taking on the leadership of the Hosting business, Aidan was Chief Operating Officer responsible for the design and delivery of operational excellence within Macquarie Telecom.

John Palfreyman – John’s career spans more than 20 years in the IT industry. He was executive chairman of 90East Inc, an Australian supplier of managed security services to federal government agencies, until the company’s successful trade sale in early 2004. John joined the Board in July 2004 and is chairman of the Audit and Risk Management Committee and a member of the Corporate Governance, Nomination and Remuneration Committee.

Stephen Butler – Stephen is President - Telecom for S3 Matching Technologies, a telco billing systems and data quality management specialist based in Texas, USA. Prior to that he was chief executive officer of PowerTel Limited, a position he held for more than three years until 2003. He joined the Board in July 2004 and is a member of the Audit and Risk Management Committee and the Corporate Governance, Nomination and Remuneration Committee.

I’d also like to introduce Albert Koolmees, the Company Secretary.

BUSINESS OF MEETING

I’ll take a moment now to outline this morning’s agenda. First you will hear addresses from me and then from David. We’ll give you a brief overview of Macquarie Telecom’s recent performance and overall business strategy. Then we’ll proceed to the ordinary and special business of the meeting.

ORDINARY BUSINESS

We will consider three items of ordinary business today:

1. The receipt of the financial statements and reports;

2. The adoption of the remuneration report for the year ended 30 June 2007; and

3. The re-election of Robert Kaye as a Director.

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OTHER BUSINESS

There has been no notice of other business validly given by any member under the Corporations Act 2001.

NOTICE OF MEETING

The notice of meeting was sent to all members. Can I take it that the notice of meeting convening this meeting is to be taken as read? Thank you.

MINUTES OF THE PREVIOUS GENERAL MEETING

The minutes of the previous general meeting of members of the company, which was the Annual General Meeting held on 28 November 2006, have been approved by the Board and signed by the Chair. The original minutes are tabled and are available for inspection by any member wishing to see them.

And now the Chairman’s Address.

Once again, thank you for coming along today. This is my fourth AGM as Chairman, and I am pleased to report to you today that the past year was an important and exciting period for Macquarie Telecom, in which the benefits of our strategic investment program began to translate into strong profitable growth.

A year ago I told you that construction of our Metro Access Network, a new generation network that places the company at the cutting edge of IP-based voice and data services, had been completed. I am pleased to report today that we are now seeing the benefits of our investment flowing through to our company, its capability, its profit and our customers.

The Metro Access Network provides Macquarie Telecom users with leading edge managed security, lower support costs and enhanced management and diagnostic capabilities. More importantly, it has allowed us to become a more efficient, productive and customer-focused company.

Revenue for our Data & Hosting business continued to grow in 2007, reflecting the increasing importance of these services to our Australian corporate and government customers. Our investment in these higher margin businesses has enhanced the company’s ability to meet the increasingly sophisticated IP-based needs of our customers.

The management of information in a secure manner is vital to businesses, and Macquarie Telecom’s strength in Hosting and security is highly regarded and well recognized. Our accredited Hosting operation is proving to be a key differentiator for Macquarie Telecom. We are experiencing increasing recognition of the benefits of this dedicated world-class facility by our customers, which is helping us to win new clients such as Fairfax Business Media’s afr.com and PBL Media’s Trader Classifieds. And this is all part of our ongoing strategy to identify, target and win new customers, and then retain and build those customers by delivering exceptional value and service to them.

Shortly I will hand over to Chief Executive Officer, David Tudehope. But before I hand over to David, I would like to briefly review the past year and outline what the year ahead holds for the company.

As I have mentioned, our strategy to invest in higher margin businesses is having a positive impact on the company’s financial results, with the full-year result exceeding expectations and all lines of business being profitable on an earnings before interest, tax, depreciation and amortisation (EBITDA) basis.

• Total service revenue was $255 million, an increase of 2.3 per cent compared with the year ended 30 June 2006, delivering growth in the face of continuing downward competitive pressure on pricing across most of our product lines.

• Data & Hosting service revenue rose 8 per cent to $72.2 million, with the Hosting business performing strongly. I am particularly pleased that our highly accredited Hosting business has maintained momentum and won a number of important new clients during the period.

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• The revenue mix has continued to improve, with a bigger contribution from Data and Hosting, underlining Macquarie Telecom’s shift toward higher margin operations.

• Our voice business generated revenue of $145.1 million, down 2.8 per cent from the corresponding period, but it delivered a strong EBITDA profit increase of 32.2 per cent, up to $10.7 million. Our voice business performed well in a market that continues to be characterized by aggressive pricing. It’s significant that we are continuing to defend voice revenue as well as boost profitability in this business at the same time as we maintain our shift to higher margin businesses.

• Mobile service revenue was $26.4 million a significant increase of 25.5 per cent on the previous year.

• The data offering of the Asian business, including the design and management of IP data network solutions, is gaining traction, and complimenting the already established voice business. The Asian business adds a regional dimension to Macquarie’s business model.

• Overall, the company recorded a full-year EBITDA profit of $11.3 million – a 150 per cent improvement on the previous corresponding period.

Capital expenditure for the full year was $12.1 million, down from $14.8 million in 2006. We maintain a healthy balance sheet, with strong operating cash flows of $14.3 million, and cash and cash equivalents of $20 million as at June 30.

So ladies and gentlemen, the foundations to deliver future growth and profitability have now been completed and are being reflected in the company’s financial results. Profitability for the first half FY2008 is expected to improve on EBITDA for the previous corresponding half as Macquarie Telecom’s investments increasingly deliver profit benefits. Capital expenditure for the year is expected to be 5% of revenue.

To conclude ladies and gentlemen, Macquarie Telecom enters the current financial year in a strong position, having built the foundations to deliver future growth and profitability as well as offering our clients a high quality, bundled product range and service capability.

We will continue investing in our portfolio of security, hosting and IP based products to enhance our competitive position, whilst maintaining a disciplined approach to working smarter and increasing efficiency. In addition, we will remain focused on organic growth and attracting more business to our higher margin operations.

We have the expertise, the strategies and the momentum. We understand the needs of our customers and the requirement to work in partnership with them, delivering effective, innovative solutions on a day-to-day basis.

I will now hand over to the David Tudehope, Chief Executive of Macquarie Telecom.

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