Melbourne IT Ltd

ABN 21 073 716 793 ACN 073 716 793 Level 4, 1-3 Smail Street Ultimo NSW 2007 Australia www.melbourneit.info

25 October 2017 Melbourne IT Ltd (ASX: MLB)

Emerging Leaders Conference Presentation Attached is a copy of the presentation to be delivered by Melbourne IT’s CEO & Managing Director, Martin Mercer, at the Bell Potter Emerging Leaders Conference in Sydney today. Drew Robinson Company Secretary E: drew.robinson@melbourneit.com.au T: +61 3 9628 3778 ENDS About Melbourne IT Melbourne IT Group is a publicly listed company with offices in Melbourne, Sydney, and Brisbane. Our purpose is to “fuel our customers’ success through the smart use of technology”. We aspire to be Australia’s most impactful digital technology partner. By 2020 we aim to have fuelled the success of over one million businesses. Our customers will love us, our people will be our most passionate advocates, and our investors will be rewarded. Melbourne IT operates two businesses marketed under 7 brands.

The SMB of Melbourne IT provides Australian small and medium businesses with online marketing solutions. It has over 450,000 direct customers, provides services to over 700,000 Australian businesses, and generates revenue over $90M. The SMB business operates under five brands: Melbourne IT, WebCentral, Netregistry, and TPP brands and Domainz.

The Enterprise Services Business (ES) of Melbourne IT is the leading end-to-end provider of digital solutions for the corporate and government market with revenues over $70M. ES have expertise in customer-focused design, software engineering, data analysis and management of flexible digital solutions across foundational technologies: Mobile, Data and Analytics, Cloud and Security. ES is based in Sydney, Melbourne and Brisbane and has a blue chip customer base. It operates under three brands, Melbourne IT, Infoready and Outware.

Visit: www.melbourneit.com.au

Transforming Melbourne ITBell Potter Emerging Leaders Conference

25 October 2017

Track record: consistently strong growth

2Underlying financial information presented excludes one-off and non-recurring expenses/ income, and includes the pro forma impacts of acquisitions/divestments made in the

financial period as if that acquisition/divestment had applied for the entire financial period.

H1

H2

4YR (H1)

CAGR

43%

4YR (H1)

CAGR

46%

4YR (H1)

CAGR

10%

4YR (H1)

CAGR

20%

3.7 3.6 5.2

11.2 15.3

2.1

9.2 11.3

17.0

0

10

20

30

2013 2014 2015 2016 2017

Reported EBITDA ($m)

5.8

12.8

16.5

28.2

3.9 3.1 4.6 4.6

8.0 2.3

5.8 6.1

9.7

0

10

20

2013 2014 2015 2016 2017

Underlying NPAT ($m)

6.2

8.910.7

14.3

3.7 6.1

10.0 10.6

16.8

2.1

10.2

12.0

17.8

0

10

20

30

2013 2014 2015 2016 2017

Underlying EBITDA ($m)

16.3

22.0

28.4

5.8

4.7 3.3 5.0 4.6

6.8

2.8 6.2

6.5 9.6

0

10

20

2013 2014 2015 2016 2017

Underlying EPS (cents)

7.59.5

11.5

14.2

3

Four major growth drivers

1 2

3 4 Growing market

share (SMB)

Enhancing cross-

sell (ES)

Growing market

share (ES)

Increasing solutions

ARPU (SMB)

Consistent Execution Against a Clearly

Defined Strategy Will Drive Strong Growth

4

Four major growth drivers: scorecard

1 2

3 4

Strong growth in customers

taking 2 or more services1;

• 2 services - +22%

• 2 or more - +43%

• 3 services - +80%

Cross sell contributed ~10% of

revenue growth

Growing share of enterprise

digital solutions market1;

• ES digital solutions revenue

grew 51% over the past year

• growing at ~ 5 x the rate of

the market

Strong growth in solutions

ARPU in SMB;

• increased from $1,680pa

to $5,400pa2

Growing share of SMB digital

solutions market1;

• SMB digital solutions revenue

grew 57% over the past year

• growing at ~ 6 x the rate of

the market

1. twelve months to 30 June 2017 (NB this is solutions revenue not total revenue, for ES solutions revenue as at 30/06/2017 was 51% higher than it was at 30/06/2016, the growth for SMB

solutions revenue over the same period was 57%)

2. the acquisition of WME had a material impact on SMB ARPU - $5,400 is at May (when the acquisition of WME was announced), $1,680 is the 3 month weighted average ARPU as at

30 June 2016

ES ES

SMB SMB

FY 2017 Outlook: guidance affirmed

5

Measure Range ⇳ %1 Comment

Underlying EBITDA $37.5M - $41.5M 39%

Guidance was revised up (original guidance range

was $31M - $34M) following the acquisition of WME

Group in May. There has been no change since then.

Underlying EPS $0.17 - $0.19 27%

Guidance was revised up (original guidance range

was $0.15 - $0.17) following the acquisition of WME

Group in May. There has been no change since then.

Dividend 55% - 75%

Dividends in FY 2017 will be determined by reference

to a payout ratio in the range of 55% to 75% of

reported NPAT.

1. Change on last year calculated from the mid-point of the guidance range and last year’s actual result

NB. Figures throughout this document may not be exact due to rounding and include non-IFRS financial information that is relevant for users understanding the underlying

performance.

Strong Growth to Continue

ES: strategy and execution

6

ES: facts and figures

7

Successful reinvention. A provider of complete digital solutions with for large companies

and government agencies with more than 400 employees across Melbourne, Sydney,

and Brisbane.

Strong Growth, underlying EBITDA growing at +20%pa

Expertise: Outware founders retained; InfoReady founders retained; AWS Foundation

partner in Australia, with multiple AWS accreditations.

Culture of Innovation and Customer Excellence

Enterprise Grade. Blue Chip customer base – 40% of the ASX top 30 are customers.

Significant recurring revenues and repeatable project revenue. Governance and

balance sheet suitable for Enterprise & Government customer partnering.

1

2

3

4

5

ES Solutions Opportunity: $1.4b in Australia growing at 11.2%

8

Source: IBM 2017

Note: Data in charts represents ANZ. Australia is 88% of the total.

Execution: cross-sell contributed ~10% of revenue growth

9

June

2016

Data & Analytics

(Infoready)

Mobile

(Outware Mobile)

Cloud & Managed

Services

June

2017

ES Customers: marquee brands

SMB: strategy and execution

11

12

SMB: facts and figures

More than 400 employees with offices in Melbourne, Sydney, Brisbane and

Auckland

Largest Australian domain name and web hosting provider, with more than 40%

market share.

Rapidly growing digital solutions business – the key to revenue growth and value

creation. A market leader following the acquisition of WME.

We have helped fuel the success of more than 600,000 Australian SMB customers

A portfolio of SME brands:

1

2

3

4

5

13

SMB: growth from solutions

SOLUTIONS MARKET

• Customers prepared to pay for solutions that

meet a need or solve a problem

• Highly fragmented market with no major

competitor in Australia

• Market growing at 10%+ per annum

• Average revenue per user (ARPU) $100-$1,000pm

90%

COMPONENTS MARKET

• Domains, web hosting, and email are key

components for SMBs

• MIT No. 1 in the Australian market but highly

competitive with large competitors driving

commoditisation

• Market growing at low single digits

• Average revenue per user (ARPU) of $5-$50pm

10%

* Revised market size following independent

study from Growth Solutions Group, 2016.

Commissioned by Melbourne IT.

COMPONENTS

$200M 10%SOLUTIONS

$2B 90%

SMB Growth

from Solutions

TOTAL SMB DIGITAL SOLUTIONS

MARKET SIZE = $2.2B*

14

WME Group: facts and figures

Founded in 2008 WME Group is one of Australia’s leading providers of search

engine optimisation & digital marketing services for small to medium enterprises:

• Leading skills and competencies in the rapidly growing/lucrative digital advertising industry,

• Extensive expertise in search engine optimisation (SEO), search engine marketing (SEM), social media advertising & web design & development, a full service digital agency,

• Has experienced exceptional growth due to world-leading innovation. Highly systemized operation that has resulted in superior customer acquisition, outstanding client results and employee retention,

• Ongoing revenue, low customer churn, track record of successfully expanding customer base,

1

2

3

150 employees with offices in Melbourne and Auckland. Voted Top 100 Coolest

Places to work in Australia.

Impressive history of strong growth, EBITDA growing at >50% p.a. over recent

years. Numerous awards for growth and innovation.

15

MLB1 WME Group Combined

Customer Metrics

Customers ~3,5002 ~1,9002 ~5,400

ARPU ~$1,800pa ~$12,000pa ~$5,400pa

Capabilities

Web Design

SEO

PPC

Social

Account

Management

WME & MLB: a powerful combination

The acquisition of WME Group

accelerates the transformation of

MLB’s SMB division to a

leading provider of managed marketing solutions

1. Solutions customers only, MLB has another ~500K legacy domains and hosting customers (“Components” customers) who could in the future become solutions customers.

2. Active customers.

16

85%

15%

FY15

Transformation: WME accelerates the transition of SMB to a solutions business

80%

20%

REVENUE SPLIT BY SEGMENT

SOLUTIONS

COMPONENTS

FY16

MLB SMB Direct

MLB SMB Direct

with WME Group1

67%

33%

MLB SMB Direct

FY16

1. Proforma revenue for FY16

90%

10%

H1 2016

85%

15%

H1

2017

17

Execution: revenue growth

REVENUE SPLIT BY SEGMENT

SOLUTIONS

COMPONENTS

Notes:

1. Solutions revenue for prior periods has been restated to ensure consistency with revenue classification for WME – results in a decrease in reported solutions revenue for prior

periods and a corresponding increase in components revenue. No impact on overall revenue.

2. H1 2017 result includes one month of WME revenue.

0

5

10

15

20

25

30

35

40

H1 2014 H2 2014 H1 2015 H2 2015 H1 2016 H2 2016 H1 2017

$m

Direct Revenue

Components vs Solutions (HY)

Solutions Components

Acquisition of

Netregistry

Acquisition of UberGlobal

Acquisition of WME2

1

Rapidly Growing Solutions Revenue Driving Growth

Summary

18

1. Strong H1 2017 result reinforces growing momentum;

• revenue up 11%

• underlying EBITDA up 58%

• underlying EPS up 48%

2. Continuation of strong growth expected over remainder of 2017;

• underlying EBITDA of $37.5m - $41.5M, up 39% YoY

• underlying EPS of 17c – 19c, up 27% YoY

3. Solutions strategy is driving real growth;

• Strong growth (pcp) in solutions revenue;

• 48% in ES and 66% in SMB

• Translating to strong growth in EBITDA;

• 22% in ES and 39% in SMB

Growth in Solutions to Drive Strong Growth in

Both ES and SMB

H1 2017 Result: highlights

• Strong organic growth in Enterprise Services (ES);

• revenue up 43% on pcp (28% after normalising for Infoready acquisition)

• acquired businesses continue to grow strongly under MLB ownership

• Substantial improvement in profitability of Small to Medium Business (SMB);

• EBITDA up 39% on pcp – first material period-on-period growth since 20081

• EBITDA margin at 19.4% (cf 12.9% pcp)

• Solutions strategy is driving strong growth;

• solutions revenue up 48% in ES and 66% in SMB

• Interim dividend increases by 75% to 3.5c

• Full year FY17 guidance re-affirmed.

191. after normalising for the impact of acquisitions

Consistent Execution Against a Clearly Defined Strategy

Continues to Drive Strong Growth

H1 2017 Result: snapshot

Half Year Ended H1 2017 H1 2016 ⇳ %

30 June 2017

Revenue $91.7m $82.8m[2] 11%

Reported EBITDA $15.3m $11.2m 37%

Underlying EBITDA[1] $16.8m $10.6m 58%

Underlying EPS[1] 6.8c 4.6c 48%

20NB. Figures throughout this document may not be exact due to rounding and include non-IFRS financial information that is relevant for users

understanding the underlying performance.

Growing Strongly and Meeting Our Commitments

1. Underlying EBITDA and EPS excludes one-off and non-recurring expenses/ income, and includes the pro forma impacts of acquisitions/divestments made in the

financial period as if that acquisition/divestment had applied for the entire financial period.

2. In the prior year half year financial statements and investor presentation, ES segment revenue was presented on a provisional basis in line with pre-acquisition

revenue recognition policies, as the alignment to MIT Group policy was not yet finalised. The prior year comparative presented above has been aligned with

MIT Group policy, resulting in a reduction in both gross revenue and cost of goods sold of $2.2m. This has no net impact on gross margin or EBITDA.