SERVICE STREAM LIMITED — Capital/Financing Update 2021

Jun 14, 2021

15 June 2021

Office of Company Secretary Level 4 357 Collins Street MELBOURNE VIC 3000 AUSTRALIA

Phone: (03) 9677 8888 Fax: (03) 9677 8877

Company Announcements Australian Securities Exchange Limited Level 4, 20 Bridge Street SYDNEY NSW 2000 AUSTRALIA

Dear Sir/Madam

RE: Service Stream Limited Business Update

In accordance with the Listing Rules, I attach a market release/announcement, for release to the market.

Yours faithfully,

Chris Chapman Company Secretary Service Stream Limited

ASX Announcement

15 June 2021

Service Stream Limited Business Update

Service Stream Limited (ASX: SSM) wishes to provide the following market update on its business and operations.

Background

The Company has recently received a significant number of enquiries, outside of normal custom, from its retail shareholders and institutional investors regarding organic and external growth opportunities, the Company's recent share price performance and FY21 full-year results outlook. Ahead of the Company entering into a blackout period which commences on 15 June 2021, the Board has decided to provide this update.

FY21 Financial Performance

• The Board confirms the guidance provided in the Company's 24 February 2021 H1 results announcement, that the Group's second-half EBITDA from Operations will be in-line with the first-half result.
• Further details on the Group's results and outlook will be provided in the Company's FY21 full-year results announcement to be released on 26 August 2021.

External Growth Opportunities

The Board is aware of an article that appeared in The Australian Financial Review on 10 June 2021 speculating about Service Stream's potential involvement in a sale process in relation to the services division of Lendlease Corporation Limited.

As has been previously advised to the market, the Company actively considers external growth opportunities from timeto-time having regard to alignment with its strategy and the value these opportunities may provide for its shareholders.

Service Stream will not comment on speculation, nor discuss the specific businesses which may be under assessment but will keep the market informed in compliance with its continuous disclosure obligations.

Share Price

The Board is acutely aware of the fall in the Company's share price. While the Board cannot control any external factors affecting the Company's share price, the Board believes the fundamentals of Service Stream's business model remain strong and reiterates that the Company's priorities remain focused on:

• maintaining the Group's position as a leading essential service provider across our chosen markets
• continuing to invest in solutions which further enhance customer experience, improve operational performance and support scalable growth
• diversifying Group revenues from a strong telecommunications bias across broader essential infrastructure markets
• growing and supporting a strong organic business development pipeline
• securing additional growth opportunities across the Group's core long-term contract base; and
• maintaining a flexible and scalable resourcing model, and proportionate Group cost base

Segment Update

The Company provides the following update on the business activities across each of its operating segments.

Utilities

• In FY21 Comdain is expected to deliver approximately 10% revenue growth, underpinned by significant contract wins. This is lower than the 15% guided at the half year, due to recent floods and continued wet weather along the east coast of Australia delaying some project works into FY22.
• Comdain has a strong backlog of secured work going into FY22 and is currently tendering on new contract opportunities across major jurisdictions, positioning the Comdain business unit to again achieve similar revenue growth in FY22.
• More broadly, there is a positive pipeline of new utility project opportunities continuing to present, consistent with industry forecasts across the sector.

Telecommunications

• As reported in Service Stream's announcement of 24 February 2021, the Telecommunications segment will deliver a lower contribution to Group results driven by the conclusion of nbn construction operations in FY20 and a step down in activation volumes.
• Importantly, Service Stream re-secured all major telecommunications agreements over multi-year terms during FY21, with Telecommunications' FY22 earnings to rebase lower in line with these contract renewals as announced.
• The transition from the existing OMMA agreement with nbn to the new Unify Services model is currently in progress.
• The Group's Fixed Communications and Network Construction divisions were restructured into a single business unit following the recent contract changes, to enhance customer experience and reduce the operating cost base.
• The business continues to progress through a number of business development opportunities across the telecommunications sector, including the multi-faceted nbn $4.5bn network upgrade program, as referenced in Service Stream's announcement of 24 February 2021. Should the business be successful in securing any of these opportunities, we anticipate that they would largely be relevant to the Group's second half of FY22.
• Service Stream will continue to focus on securing growth opportunities across fixed-line and wireless telecommunications infrastructure, aligned to our core strengths.

COVID-19

• Service Stream continues to experience some minor impacts from COVID-19, although these have been progressively abating.
• Key impacts that remain include reduced volume of energy disconnections (and subsequent reconnections) across particular clients, shortage of client supplied materials and minor impacts from State based short-term snap lockdowns.
• There have been no significant impacts across our Victorian operations, associated with the recent lockdown in early June, which would have a material impact on the Group's FY21 full-year results.

For further information on this announcement, please contact:

Service Stream Limited Service Stream Limited Leigh Mackender Linda Kow Managing Director Chief Financial Officer Tel: +61 3 9937 6350 Tel: +61 3 9937 6350 E: leigh.mackender@servicestream.com.au E: linda.kow@servicestream.com.au

This document has been authorised for release by the Board of Directors.

About Service Stream Limited:

Service Stream is a public company listed on the Australian Securities Exchange (Code: SSM). The Service Stream Group is a provider of essential network services to the telecommunications and utility sectors. Service Stream operates across all estates and territories, has a workforce in excess of 2,200 employees and access to a pool of over 3,000 specialist contractors. For more information visit www.servicestream.com.au