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Page 1: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

Investor Day M2 Telecommunications Group Ltd

Geoff Horth, CEO

15 November 2012

Page 2: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

Investor Day, 15 November 2012, Slide 2

Investor Day Agenda

Speaker Time Topic

10.40am Geoff Horth

CEO

Welcome

10.50am Scott Carter

Business & Wholesale

Director

Core focus on SMB

11.20am Tea/Coffee Break

11.30am Tom Mazerski

Chief Customer Officer

Consumer Strategy

M2 is NBN ready

12 noon Geoff Horth

CEO

Closing Remarks

12.15 Panel Q&A

12.45pm Lunch

1.30pm Data Centre Tour Optional

Page 3: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

Executive Management Team

Vaughan Bowen, Executive Director Responsible for strategic acquisition opportunities and assists managing supplier

and market relationships

Co-founded M2 in 1999 and transitioned from MD into Executive Director in 2011

Previously responsible for managing the SE Asian operations of Secure Parking

Geoff Horth, Chief Executive Officer Responsible for the leadership of M2 and ensuring a structured approach to

acquisition assessment and integration

Joined M2 in 2009 and in current position since Oct-2011

20 years experience in vendor and service organisations in the telco industry

Darryl Inns, Chief Financial Officer Responsible for the company’s financial reporting, management accounting,

internal audit and credit management

Joined M2 in 2001 and current position since 2004

Previously held senior finance roles in tech & manufacturing in Aus and UK

Kellie Dean, Corporate Services, Company Secretary Responsible for legal and regulatory affairs, HR, IR and corporate comms

Joined M2 in Oct-2007

Previously worked as Company Secretary for Orion Telecom and has experience

in M&A, corporate governance, compliance and risk management 3

Page 4: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

Executive Management Team

Steve Wicks, Director New Markets Responsible for the sales and channel management for emerging markets in Fibre

and NBN

Joined M2 in 2000 and worked as GM of Retail and Group Sales Director

Previously worked in sales management for more than 15 years

Scott Carter, Business & Wholesale Director Responsible for retail sales channels and wholesale business unit

Joined M2 in Apr-2011

Previously held management positions with Hutchison, Request Broadband and

PowerTel, and most recently MD of Clever Communications

Tom Mazerski, Chief Customer Officer Responsible for contact centre operations and consumer business unit

Joined M2 in Jun-2012

Previously held the position of CEO at Primus Telecom

Michael Speglic, Commercial Director Responsible for carrier relationships and agreements, revenue assurance,

procurement and due diligence of M&A opportunities

Joined M2 in 2007 following the acquisition of Orion Telecom

Previously worked in roles across sales, billing and product development

4

Page 5: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

Executive Management Team

Alistair Carwardine, Technology Director Responsible for IT and Network division

Joined M2 in 2009 following the acquisition of Commander

Previously worked at Qantas, Peakhour, AOL7, News Ltd and Orion Telecom

Sarah Curtis, Product Marketing Director Responsible for product management, brand development, marketing

campaigns and customer life cycle management

Joined M2 in 2009 following the acquisition of People Telecom

Previously worked at Metro International, Macau China

Johnathan Eele, Managing Director/CEO – M2 NZ Responsible for NZ business

Joined M2 in 2010 following the acquisition of Black + White, NZ

Previously worked at Cable & Wireless, Hutchison Whampoa and Telecom NZ

5

Page 6: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

Market and Customer Characteristics

Business Segment Strategy

Implications of NBN for SMB

Scott Carter Business & Wholesale Director

Responsibilities:

SMB & Wholesale

Page 7: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

We understand SMB

Small Business Market: (2-20 employees)

Typically single site

Standard product offerings

Price sensitive

Value price certainty

735k business

Medium Business Market: (21-200 employees)

Typically multiple site

Bespoke enterprise grade solutions

Low in-house IT resources

Value managed network solutions

80k businesses

7

Page 8: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

Market and Customer Characteristics

Business Segment Strategy

Implications of NBN for SMB

Page 9: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

Uniquely positioned in Small Business

Objective

To be recognised as the trusted partner in the Small Business market;

better at accessing and servicing the segment than any other provider

Path to market Value proposition

Indirect channel approach

100+ Commander dealers

inclusive of over 500 sales

resources

Supported by Qld centre setting

appointments

Inside Sales teams providing

account management and

improving product penetration

Easy to understand bundled

offerings

Fixed , Mobile , Data

Phone Rental, Maintenance

Commander Holiday Rewards

Every customer allocated an

Account Manager

Australian-based service

Trusted partner for all business

communication needs

Page 10: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

Trusted partner to Medium Business

Objective

To be the trusted partner to mid size businesses for managed

communication and cloud services

Path to market Value proposition

National direct sales team

Alliance partner program

Dedicated presales team

Dedicated onshore operations and

customer support teams

Tailored bespoke solutions for

delivering managed voice, data,

mobile & cloud services

Enterprise grade solutions

Integrated sales and service

organisation delivering the best

sales, account management and

service experience in the segment

Customer speak – not technology!

Page 11: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

Brand with long & trusted history

Dominance associated with 70’s & 80’s

Data integral to daily operations –

exasperated in NBN world of ‘ones &

zeros’

To re-create brand personality to ensure

relevance in today’s market whilst

respecting trusted brand image

Commander will be known for providing

simple, integrated solutions – we control

the chaos so our customers can take

command of their business

Our platform will actively engage with

decision makers of the future (NBN)

Challenge

Now

Future

Positioned to become the preeminent SMB

challenger on NBN

Take Command

Page 12: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

Take Command

Investor Day, 15 November 2012, Slide 12

http://www.commander.com/why-commander

Page 13: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

Take Command

Investor Day, 15 November 2012, Slide 13

Page 14: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

Market and Customer Characteristics

Business Segment Strategy

Implications of NBN for SMB

Page 15: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

Opportunities for SMB and M2

Investor Day, 15 November 2012, Slide 15

NBN is a great opportunity for SMB:

A significant customer upgrade event

Online ubiquity, more bandwidth, more options

Access to enterprise grade services for SMB’s

Improved access to Cloud services

Dispersed workforce + remote specialist workers

M2 is well positioned for NBN

Commander is a trusted SMB brand

Scalable national distribution network to access customers

as geographic areas activate NBN

Full range of IP voice, data and cloud services to bundle

with NBN access

Page 16: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

Consumer Strategy

#1 in Customer Satisfaction

M2 is NBN ready

Tom Mazerski Chief Customer Officer

Responsibilities: Customer

experience, Consumer earnings

and NBN

Page 17: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

Protecting Copper, growing fibre

Objective To maintain current revenue and grow EBITDA

To be a market leader in fibre growth segments

Path to market Value proposition

Targeted Marketing

Laser Marketing

Community Focus

Online (Self Service)

Consumer Friendly Channels

Public Relations

Use “Free Media to

communicate Brand, New

Products & Key Wins

Focused cross sell

“No Worries” Product & Service

Bundles To Meet Individual Needs

“Why Wait?” Move Services Now,

iPrimus Has NBN/FTTH Know-how

& Seamless Conversion To Fibre

“Value Versus Price”

Best Value Bundles/Contracts

Singles Competitive Pricing

“Service Excellence” First Call

Resolution In Seconds/Minutes

Versus Hours/Days

Page 18: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

Protecting Copper – targeted marketing

Page 19: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

Protecting Copper – product penetration

Page 20: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

Fibre Ready

Page 21: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

Consumer Strategy

#1 in Customer Satisfaction

M2 is NBN Ready

Page 22: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

Similar Product Constructs 3 Technologies New Markets

M2 is NBN Ready

Page 23: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

Fibre Market Leader

Skilled team members in fibre connectivity

Established facility based “Voice & Broadband” provider

Scalable operational business processes

Eclectic network platform

Certified & connected to available POI’s

First to receive NBN Co’s B2B interoperability certification

Lead participant UNI-V enhancement program (Voice Over

NBN)

Page 24: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

Easy to Choose, Easy to Use

Seamless Copper to Fibre Transfers

“Plug & Play” Set Up

Trusted brands and advice

One Stop Shopping

Simplicity & Ease of Use

Page 25: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

State Total POI's Suburb Count

Premises in Rollout

Through July 2013

Tasmania 2 13 26,706

Victoria 2 4 24,514

New South Wales & ACT 7 30 102,315

QLD 3 9 46,452

Western Australia 3 11 39,100

South Australia 3 10 5,481

Northern Territory 1 3 13,400

21 80 271,368

Preparing for the Future

Page 26: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

Same approach, new technology

Page 27: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

Consumer Strategy

#1 in Customer Satisfaction

M2 is NBN ready

Page 28: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

Simple approach, make it easy

Offer Products Customers Understand

Value Pricing

Installations On Time, clear

communication/expectations

“Plug & Play” Devices

Self Service Via Online Tools

If/When Things Break Fix In Seconds/Minutes

Engineer Processes For First Call Resolution

“Treat Every Customer As They Are The

Only One We Have”

Page 29: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

Measuring Success

Approach Activity/Measure

Leverage combined capability of

centres

Identify and use “Best-Of-Breed”

Processes

Scale common functions

Understand why customers call Daily Feedback Loops

Reengineer For Customer

Satisfaction

Constant daily appraisal against

key metrics

Percentage Calls With First Call

Resolution

Churn “Same Location/Same

customer

Measure v. Peers for “Best-In-

Class”

Roy Morgan Monthly Surveys

Page 30: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

Protecting Copper, Growing Fibre

M2 is NBN ready

Simple approach – make it easy

Overview

Page 31: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

Closing Remarks

Geoff Horth Chief Executive Officer

Page 32: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

Investor Day, 15 November 2012, Slide 32

Q1 Update

Primus integration on track, earnings contribution

in line with expectations

Premise consolidation complete

Customer office delivering improvements in

customer experience

Network and IT system consolidation programs

well advanced

Synergy realisation activities on track

Page 33: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

Five Strategic Pillars

1. Invest in small business segment, grow share of

market and wallet

2. Focus direct sales organisation on medium

business segment (20-200 seats), drive managed

voice and data services

3. Maintain consumer earnings and look for growth

in new markets (NBN)

4. Be Number 1 in customer satisfaction

5. Continue to pursue synergies and operational

efficiency

Investor Day, 15 November 2012, Slide 33

Page 34: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

FY13 Guidance

$m FY12(a) FY13

Guidance

% Change

(from midpoint)

Revenue 393.5 610-650 Up 60%

EBITDA 60.1 108-118 Up 88%

EBITDA margin 15.3% 17.9% Up 17%

NPAT 33.0 43-48 Up 38%

NPAT (underlying*) 38.1 55-60 Up 52%

EPS (cents per share) 25.8 27-30 Up 13%

EPS (cents per share,

underlying*)

29.8 35-38 Up 24%

Capex (as % of revenue) 1.3% 3.0% Up 131%

Free Cash Flow 36 51-56 Up 53%

Investor Day, 15 November 2012, Slide 34

* Underlying NPAT and EPS figures each include an add-back of a non-cash cost of $5.1 million (FY12) and $12.4 million (FY13) for amortisation

associated with customer contracts acquired in the relevant period (in accordance with Australian Accounting Standards)

Page 35: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor

Contacts

Name Position Phone / Email

_____________________________________________________________________

Geoff Horth Chief Executive Officer 03 9674 6469 / [email protected]

Darryl Inns Chief Financial Officer 03 9674 6520 / [email protected]

Kellie Dean Company Secretary 03 9674 6577 / [email protected]

www.m2.com.au

Investor Day, 15 November 2012, Slide 35

Page 36: Investor Day - Dodom2.com.au/media/2654/Investor-Presentation-Investor-Day-Presentat… · Investor Day M2 Telecommunications Group Ltd Geoff Horth, CEO 15 November 2012 . Investor