MACQUARIE TECHNOLOGY GROUP LIMITED — AGM Information 2020

Nov 24, 2020

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. Annual General Meeting 2020 Peter James - Chairman

2

Key Business Highlights.

Revenue

Revenue EBITDA $266.2m $65.2m

• Six consecutive years of revenue and EBITDA growth

EPS

NPAT

$13.5m

63.6 ps

• Increased syndicated debt facility to fund the build of IC3 data centre and undrawn balance of $92m

• EBITDA CAGR of 16.8% over 3 years (pre-AASB16 9.5%)

• Resilient during COVID-19 pandemic

• Strong growth in Cloud and Government business units

• Agreement with ATO to provide Secure Internet Gateway (SIG) and cyber security services

• Construction of Intellicentre 3 East (IC3 East) is advanced and on track to accept sales from late 2020

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

• Telecom continue to build fibre networks and migrate services to the nbn in line with plan

• Primary focus on customer service with an ASX leading net promoter score of +72

• NPAT reduced by higher depreciation from capex investment driving future growth

Macquarie Telecom Group | Annual General Meeting 2020

3

Group Financial Performance.

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Group Revenue ($m)
134.3
131.9
125.6
121
118.6
115
1H18 2H18 1H19 2H19 1H20 2H20
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Group EBITDA ($m)

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33.6
31.6
29.6
25.3 25.4 26.7 27.6
22.5
1 H 1 8 2 H 1 8 1 H 1 9 2 H 1 9 1 H 2 0 2 H 2 0
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• Over the last 3 years:

• Revenue CAGR of 6.8%

• EBITDA CAGR of 16.8% (excluding AASB16, 9.5%)

• EBITDA margin 24.5% (excluding AASB16, 21.5%)

• Impact of AASB16 increases EBITDA by $8.0m (as per graph)

COVID-19 Impact

• Performance has been resilient to the external business and economic pressures arising from the measures to control the COVID-19 pandemic

• No government subsidies or other incentives received as a result of COVID-19

Macquarie Telecom Group | Annual General Meeting 2020

4

Balance Sheet & Cash Flows.

• Cash and cash equivalents of $37.9m. Negotiated increase to syndicated debt facility with undrawn portion of $92m available for investment and build of IC3 & IC5 data centres

• FY20 capital spend of $65.9m ex IC3

• Growth Capex $14.8m

• Customer Growth Capex $38.8m

• Maintenance Capex $12.3m

• IC3 building development expenditure is either classified as Other Receivables for the core & shell or as WIP. Upon practical completion Other Receivables will form part of the development agreement with Keppel

• Key impact of AASB16 has been to:

• recognise $76.1m of Right-of-use assets (non-current) offset by $75.8m of lease liabilities on the balance sheet at 30 June 2020

• $7.9m of interest and lease payments in financing activities in the cash flow (with nil cash impact)

Macquarie Telecom Group | Annual General Meeting 2020

	$m Cash & Cash Equivalents Current Assets Non Current Assets	FY19 FY20 (Pre AASB16) FY20 (Post AASB16) 17.1 37.9 37.9 29.5 44.5 44.0 114.7 165.9 242.4
		29.5		44.0
		114.7		242.4
	Total Assets Creditors Other Liabilities Total Liabilities Total Equity	161.3 34.1 20.4	248.3 57.4 67.0	324.3 57.4 144.8 202.2 122.1
		54.5 106.8	124.4 123.9
	$m	FY19 FY20 (Pre AASB16) FY20 (Post AASB16)
	Cash Flows from Operating Activities	38.6	38.0	45.9
	Cash Flows from Investing Activities	(45.8)	(64.1)	(64.1)
	Cash Flows from Financing Activities	(6.1)	47.0	39.1
	Net increase /(decrease) in cash	(13.3)	20.8	20.8
	Opening Cash and Cash Equivalents	30.3	17.1	17.1
	Closing Cash and Cash Equivalents	17.1	37.9	37.9

5

Outlook.

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• The Company’s EBITDA will continue to grow in FY21. However, 2H FY21 will be relatively flat compared to 1H FY21 driven by investment in sales and operational resources to support continued growth

• There are ongoing opportunities in the Telecom business as customers look to strengthen online footprints and their customer facing options through demand for new technologies, including SDWAN and business nbnTM

• We will continue to develop public cloud capability to enhance the current hybrid cloud offering

• The Macquarie Park Data Centre Campus will provide 43MW in total load on completion. Development of Macquarie Intellicentre 3 (IC3) East, expands the Group’s data centre capacity from a total load of 10MW to 28MW and is progressing to plan. The campus is designed to meet the growing needs of global hyperscalers and cloud, enterprise and government customers

• Continued demand from Federal Government Agencies gives great confidence for future growth in the Government Business. The further investments to expand capacity in IC5 Bunker in Canberra will provide capability and scope to meet this demand

Macquarie Telecom Group | Annual General Meeting 2020

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. Annual General Meeting 2020 David Tudehope – Chief Executive

Business Summary

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Macquarie Telecom Group

Macquarie Telecom

• 1 in Asia Pacific for SDWAN

• 2/3 of Macquarie customers successfully migrated to NBN

• Strong cross sell of Cloud Services solutions into Telecom’s customers

Macquarie Cloud Services

• Continues to grow successfully leveraging the Hybrid IT megatrend

• Managed Azure Practice, a pathway to public cloud

• 2019 Dell EMC Rising Star award

• 2020 Great Place To Work for 2[nd] consecutive year in top 20

• Launch of SIP Voice for Teams

Business Highlights Summary.

Macquarie Government

Macquarie Data Centres

• 42% of Australian Government agencies

• ASD certified cloud for classified / protected workloads

• ATO cyber security contract, $20m over the initial 3 year term

• Upgrades to Government Secure Internet Gateway, across our data centres

• Construction of IC3 East on track

• Macquarie Park Data Centre Campus expansion to 43 MW

• Canberra DC development of IC5 on track

• 2H FY20 includes full year impact of Stage 3 of Fortune 100 customer

• Significant demand from hyperscale customers

Macquarie Telecom Group

IC3 East Update.

MDC announces long term contract with new customer for approx. 10MW at IC3E.

IC3 East build is progressing well and we continue to expect completion in February 2021, on time and on budget.

Approx 10 MW IT load sold on 2 floors of IC3E.

1 MW of wholesale / corporate capacity remains available on 1 floor.

Exploring options to expand past the 11MW of IT load which is equivalent to the 18 MW of Total Load previously announced. IC3W remains available for growth options in the future.

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Intellicentre 3 East &
West
Intellicentre 2
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Macquarie Telecom Group | Annual General Meeting 2020

IC5 South Bunker Canberra.

• Construction due to complete by December 2020

• Built to Federal Government security standards (SCEC Zone 5 ready) and redundancy (Tier IV)

• Stage 1 investment of $17m

• Campus Total Load 4MW comprising:

• Existing IC4 Bunker 1MW

• IC5 South Bunker (Stage 1) 1.5MW

• IC5 North Bunker (Stage 2) 1.5MW

• Plus additional capacity to expand

• Australian Sovereign data centres to support expected growth in Federal Government business

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Macquarie Telecom Group

| Annual General Meeting 2020