MACQUARIE TECHNOLOGY GROUP LIMITED — AGM Information 2009

Nov 25, 2009

MACQUARIE TELECOM GROUP LIMITED

ANNUAL GENERAL MEETING

FRIDAY, 27 NOVEMBER 2009

CHAIRMAN’S ADDRESS

Ladies and gentlemen, good morning. My name is Robert Kaye, the Chairman of Macquarie Telecom Group Limited, and I would like to extend a warm welcome to shareholders at the Annual General Meeting for 2009.

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.

Stephen Butler – Stephen is currently a division director within the Infrastructure Technology Group of Macquarie Group Limited. He has held board positions with PowerTel and WilTel Communications Australia, and advisory board positions with Newbridge Networks, Argon Networks and Edge Broadband Ltd. 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.

Aidan Tudehope – Aidan is co-founder and Managing Director of our Hosting business with a focus on business growth, operational efficiency and customer satisfaction. He has played a key role in the development of Macquarie Telecom’s 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 25 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 Committeee.

I would also like to introduce Richard Lutterbeck, the Company Secretary, and Michael Simmonds our Chief Financial Officer.

BUSINESS OF MEETING

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

ORDINARY BUSINESS

We will consider five items of ordinary business:

1. The receipt of the financial statements and accompanying reports;

2. The adoption of the remuneration report for the year ended 30 June 2009; and

3. The re-election of John Palfreyman as a Director

4. The issue of options to John Palfreyman

5. The proposed Capital Reduction

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 2008, 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 sixth AGM as Chairman, and I am pleased to report to you today that the 2009 profit result gives clear guidance to the market that the consistent strategy Macquarie Telecom has implemented in recent years of driving a change in revenue mix towards higher margin services is working and continues to gain momentum.

Our results confirm that we are not only delivering on our strategy, but that it is successfully positioning the company for sustainable and profitable growth. This result is even more significant given that it has been achieved in what has been a challenging economic environment for all market participants.

Our Data and Hosting business again performed strongly in 2009 and now account for 38% of total service revenue. Voice revenue now comprises less than 50% of service revenue for the first time in the company’s history. This shift to the higher margin businesses of Data and Hosting has directly influenced our increased profitability in 2009. Profitability has also been enhanced by our investments in IP based data infrastructure and Secure Managed Hosting solutions which continue to deliver financial benefits to the company. Noticeably, our Hosting business strengthened its position as the market leader in mission critical application hosting during 2009.

In July 2009, we announced the sale of our wholly owned Singapore subsidiary to CITIC 1616 Holdings (CITIC) for a cash consideration of SGD10.5 million. CITIC is one of the leading wholesale voice service providers in Asia with points of presence worldwide for interconnection with over 350 telecom operators in 62 countries. Macquarie Telecom also became CITIC’s preferred partner for its Australian inbound and outbound Voice and Data traffic. Conversely CITIC became Macquarie Telecom’s preferred partner into Asia. This strategic partnership with CITIC allows Macquarie Telecom to expand its reach into the Asian region by leveraging CITIC’s extensive presence in that region. In addition, the sale provides Macquarie Telecom with additional capital with which to pursue growth opportunities.

In last years report I said we were committed to ensuring that we provide our customers with higher levels of service through personal accountability. During fiscal 2009 Macquarie Telecom was judged the best telecommunications provider for customer care in the World at the World Communication Awards in November 2008. Macquarie Telecom was honoured with this award because of our unique Personal Accountable Service program.

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 2009 full-year result being in line with expectations.

• Overall, the company recorded a full-year EBITDA profit of $25.0 million – an 81.9% improvement on the previous corresponding period.

• Our EBIT profit of $9.7 million was up $11.4 million on the prior corresponding period.

• In the 12 months to June 30 2009, Macquarie Telecom delivered revenue improvements, with total service revenue of $253.8 million being an increase of 3.6% compared to the corresponding period.

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

• Data and Hosting revenue grew by 17.6% and now represents 38% of Macquarie Telecom’s total service revenue. The Data & Hosting business generated an EBITDA profit of $ 11.0 million, up 17.1% on the corresponding period.

• Macquarie Telecom’s Voice business generated revenue of $118 million, down 5.7% from the corresponding period, and delivered an EBITDA profit of $16.0 million. The voice services market again came under industry wide price pressure, reinforcing Macquarie Telecom’s ongoing strategy to reduce reliance on voice service revenue and focus on higher margin businesses, such as data and hosting.

• Mobile revenue remained steady at $28.1 million with continued growth in sophisticated mobile data products. Mobiles are an important element of Macquarie Telecom’s strategy of offering bundled solutions to customers across all areas of telecommunications. Mobiles recorded an EBITDA profit of $2.1 million up from $1.6 million in the previous corresponding period.

Capital Expenditure for the full year was $13.0 million in line with 2008. We maintain a healthy balance sheet, with strong operating cash flows of $27.6 million, and cash and cash equivalents of $49 million as at 31 October 2009.

The improvement in EBITDA is illustrated by this graph showing Macquarie Telecom’s EBITDA is on a solid growth path.

Our return to EBIT profitability in FY09 is illustrated in this next graph which reflects a solid trend of profitability improvement.

So ladies and gentlemen, the foundations to deliver future growth and profitability have been completed and are being reflected in the company’s financial results. EBITDA profit for the first half FY2009 is expected to be between $11 and $13 million. Capital expenditure for the year is expected to increase slightly to approximately 6 to 7% of revenue, reflecting our investment in a world class Contact Centre facility in Sydney.

In the year ahead we will remain focused on the execution of our strategies to grow our higher margin Data and Hosting businesses and continue to deliver exceptional service to our customers.

To conclude ladies and gentlemen, we enter the new financial year confident that our strategies are working and that there is genuine momentum in place to grow Macquarie’s market share in the evolving and converging telecommunications market.

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