MACQUARIE TECHNOLOGY GROUP LIMITED — AGM Information 2011

Nov 23, 2011

MACQUARIE TELECOM GROUP LIMITED

ANNUAL GENERAL MEETING

FRIDAY, 25 NOVEMBER 2011

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 2011.

INTRODUCTION OF BOARD

I would like to introduce you to the Board Members 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 of Macquarie Telecom, 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 Committee.

I would like to acknowledge Stephen Butler who has resigned from the Board four weeks ago after over 7 years of service. Stephen has made a significant contribution to Macquarie Telecom’s success over this time.

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 three 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 2011; and

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

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 26 November 2010, 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 to the Chairman’s Address:-

Once again, thank you for coming today. This is my eighth AGM as Chairman, and I am pleased to report to you today that Macquarie Telecom continued on its journey of profitable growth during the past financial year. We delivered another strong profit result and generated solid operational cash flows, whilst expanding our market leadership position in the provision of mission critical application hosting to Australian business and government customers.

Macquarie Telecom is experiencing increased demand for its hosting services due to the growing trend of selective outsourcing of internal Information Technology. We believe this trend of outsourcing is accelerating due to higher speed internet connectivity driving new web technology, and the associated demand for managed hosting.

In January we launched our Enterprise Managed and Self-Managed Infrastructure-As-A- Service (known as IAAS) Cloud Computing offerings. In 2012 we will continue to invest in developing our Cloud Computing offerings, as we believe the emergence of Cloud Computing, which is a natural extension of managed hosting, will increase the trend of selective outsourcing of internal information technology, and provide new market opportunities for Macquarie Telecom.

In order to take full advantage of future growth opportunities, and capitalise on the increasing demand for our Hosting services, we are investing significantly to expand our Hosting capacity by completing the construction of our second Sydney data centre, Intellicentre 2 in the first quarter of calendar 2012.

This facility, being built on a 20,000 sqm site in Macquarie Park, near North Ryde Sydney, will be accredited to global security standards to support the data management needs of both corporate and government customers. The data centre will also utilise state-of-the-art energy, cooling and management technologies to drive down power consumption to world-class levels.

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 of investing in high margin businesses is having a positive impact on the company’s financial results, with the 2011 full-year result ending in line with expectations.

• Overall, the company delivered a net profit after tax from continuing operations of $17.7 million, up 70% on the previous corresponding period.

• We declared a fully franked final dividend of 12.0 cents per share, with the total dividend for fiscal 2011 being 22.0 cents per share fully franked.

• Our EBITDA profit from continuing operations was $37.2 million, an increase of 28% on the previous corresponding period.

• Our EBIT profit from continuing operations, of $21.8 million, was up 64% on last year.

• We continued the transition to higher-margin revenue with Hosting revenue rising 20.7% to $53.7 million, with this Division now being a major earnings contributor to business.

• Our Telco EBITDA rose to $28.6 million, up 40.4% on the previous corresponding period.

• Capital expenditure on customer equipment, network and facility maintenance and support, for the full year was $18.0 million. In addition $10.8 million was spent on the purchase of land and existing building to accommodate Intellicentre 2. A further $1.8 million was spent on design and the commencement of construction of the data centre.

We exited the year in a strong financial position, with a robust balance sheet and $53.5 million in cash and cash equivalents. In addition, a $30 million undrawn working capital facility has been put in place to support our growth. Combined with our strong operating cash flows Macquarie Telecom is well positioned to take advantage of future organic and inorganic growth opportunities as they emerge.

Macquarie Telecom’s improving EBITDA and operating cash flows are illustrated by the graphs on this slide.

EBITDA profit for the full year is expected to be between $36 and $38 million which includes operating investments in both Intellicentre 2 and Cloud Computing. This compares to the previous year’s adjusted EBITDA result of $35.7 million, which is calculated after removing the impact of a one-off prior year dispute settlement benefit of $1.5 million.

In fiscal 2012 we expect to complete the construction of the Intellicentre 2 data centre and continue to invest in our Cloud Computing capabilities, to position Macquarie Telecom for strong future growth.

Phase one of the Intellicentre 2 development will see $47.4 million invested into building construction, mechanical and electrical needs. Approximately $40 million of this investment is expected to be made in fiscal 2012. In addition, business as usual capital expenditure for fiscal 2012 is expected to be approximately $22 million to $24 million, driven by strong Hosting demand.

We will remain focused in the year ahead on being Australia’s number one Managed Hosting and integrated Telco provider to business and government customers through the delivery of service excellence

To conclude ladies and gentlemen, Macquarie Telecom has a highly skilled and experienced management team that is executing effectively on the company’s growth strategy. We enter the new financial year confident that our strategies are working, and that our significant new investments in data centre capacity and Cloud Computing, will provide the platform for continued growth in the future.

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