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Investor Day M2 Telecommunications Group Ltd
Geoff Horth, CEO
15 November 2012
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
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
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
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
Market and Customer Characteristics
Business Segment Strategy
Implications of NBN for SMB
Scott Carter Business & Wholesale Director
Responsibilities:
SMB & Wholesale
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
Market and Customer Characteristics
Business Segment Strategy
Implications of NBN for SMB
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
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!
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
Take Command
Investor Day, 15 November 2012, Slide 12
http://www.commander.com/why-commander
Take Command
Investor Day, 15 November 2012, Slide 13
Market and Customer Characteristics
Business Segment Strategy
Implications of NBN for SMB
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
Consumer Strategy
#1 in Customer Satisfaction
M2 is NBN ready
Tom Mazerski Chief Customer Officer
Responsibilities: Customer
experience, Consumer earnings
and NBN
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
Protecting Copper – targeted marketing
Protecting Copper – product penetration
Fibre Ready
Consumer Strategy
#1 in Customer Satisfaction
M2 is NBN Ready
Similar Product Constructs 3 Technologies New Markets
M2 is NBN Ready
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)
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
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
Same approach, new technology
Consumer Strategy
#1 in Customer Satisfaction
M2 is NBN ready
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”
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
Protecting Copper, Growing Fibre
M2 is NBN ready
Simple approach – make it easy
Overview
Closing Remarks
Geoff Horth Chief Executive Officer
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
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
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)
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