MACQUARIE TECHNOLOGY GROUP LIMITED — AGM Information 2019

Nov 28, 2019

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. Annual General Meeting 2019 Peter James - Chairman

Key Business Highlights.

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6% 9% -3% -4%
Revenue EBITDA NPAT EPS
$246.6m $52.1m $16.5m 78.0ps
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• Ten consecutive halves of revenue and EBITDA growth

• EBITDA CAGR of 17.3% over the last three years

• Hosting revenue continued to grow on the back of strong sales and order implementation

• Telecom migrated thousands of services to the nbn network in line with plan

• Primary focus on customer service with an ASX leading net promoter score of +70

• Net profit after tax impacted by an increase in depreciation due to capex investment to drive future growth

Macquarie Telecom Group | Annual General Meeting 2019

3 Group Financial Performance.

Group Revenue ($m)

Group EBITDA ($m)

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125.6
121.0
118.6
115.0
113.1
107.1
1H17 2H17 1H18 2H18 1H19 2H19
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26.7
25.3 25.4
22.5
21.3
19.0
1H17 2H17 1H18 2H18 1H19 2H19
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• Over the last 3 years:

• Revenue CAGR of 6.7%

• EBITDA CAGR of 17.3%

• EBITDA margin for the full year improved from 20.5% to 21.1%

• Reflects strategic shift in 1H FY15 and the change in revenue mix to higher margin hosting business

Macquarie Telecom Group | Annual General Meeting 2019

4 Balance Sheet & Cash Flows.

• As at 30 June cash of $17.1m and an undrawn $100m bank syndicated debt facility.

• Commenced draw down in October 2019 to fund the build of IC3 data centre.

• Strong conversion of EBITDA to operating cash flows.

• FY19 capital spend of $46.1m:

• Growth Capex $14.8m;

• Customer Growth Capex $21.8m; and

• Maintenance Capex $9.5m.

• IC3 development expenditure will be maintained as WIP in the balance sheet until practical completion where it will form part of the development agreement with Keppel.

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Macquarie Telecom Group | Annual General Meeting 2019

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$m FY18 FY19
Cash and cash equivalents 30.3 17.1
Other current assets 21.4 29.5
Non-current assets 92.0 114.7
Total Assets 143.7 161.3
Creditors 33.4 34.1
Other Liabilities 16.9 20.4
Total Liabilities 50.3 54.5
Total Equity 93.4 106.8
$m FY18 FY19
Cash flows from Operating Activities 42.8 38.7
Cash flows from Investing Activities [1] (33.8) (45.8)
Cash flows from Financing Activities (10.5) (6.1)
Net increase/(decrease) in Cash Held (1.5) (13.2)
Opening Cash and cash equivalents 31.8 30.3
Closing Cash and cash equivalents 30.3 17.1
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1 Include 273k profit from sale of propery, plant and equipment

Outlook.

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• The Company’s EBITDA will continue to grow in FY20, with first half of fiscal year 2020 in the range of $27-28 million as a result of partially deferred investment in sales growth in our Hosting business. An update on full year performance in fiscal 2020 will be given with the half year results announcement.

• The company will add a public cloud capability to our current hybrid cloud offering.

• Continued demand from our Federal Government Agencies for secure Cloud gives great confidence for future growth in the Government Business. Accordingly, there will be further investment in expansion in Canberra and our Cloud platform.

• The Telecom business migrated thousands of customer services to the nbn in FY19 and this is expected to continue through to FY21.

• As previously announced, during this significant capital-intensive growth investment phase, the Company has ceased paying dividends.

Macquarie Telecom Group | Annual General Meeting 2019

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. Annual General Meeting 2019 David Tudehope – Chief Executive

Business Summary

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Macquarie Telecom Group

Macquarie Telecom

• 1 for SD WAN in Australia

• A third of nbn migration sites completed

• New Apple hardware partnership

• Upgrading core network capacity for future growth

Macquarie Cloud Services

• Benefiting from the hybrid IT megatrend

• Strong cross sell of Cloud solutions into Telecom’s customer base

• ● Dell EMC 2019 Rising Star award

• 2019 Best Places to Work award

Business Highlights Summary.

Macquarie Government

Macquarie Data Centres

• 42% of Australian Government

• ASD certified cloud for classified / protected workloads

• Cyber security services reinvestment planned

• 120+ NV1 cleared staff

• DA Approved for IC3

• IC3 East on track for practical completion by H2 CY20

• Stage 3 of our Fortune 100 customer completed in March 2019

• ● Significant demand from hyperscale customers

Macquarie Telecom Group

Macquarie Data Centres Intellicentre 3 East – Phase 1

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Intellicentre 3 East
Intellicentre 2
(existing)
Macquarie Telecom Group
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Intellicentre 3 East

• Initial build capex $75-80M

• Keppel contribution to core and shell build cost $26m$36m

• Initial MEP & Data hall fit out with initial capacity of 2.4MW

• Modular fit out based on customer demand

• Practical completion H2 calendar year 2020