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

1 May 2018 MELBOURNE IT LTD (ASX: MLB)

Macquarie Securities Australia Conference

Attached is a copy of the presentation to be delivered by Melbourne IT’s CEO & Managing Director, Martin Mercer, at the Macquarie Securities Australia Conference today in Sydney. For any enquiries, contact: Martin Mercer Chief Executive Officer Tel. No. (02) 9934 0555 ENDS. About Melbourne IT

Melbourne IT Group is a publicly listed company with offices in Melbourne, Sydney, Brisbane, and Auckland.

Melbourne IT has approximately 850 staff and operates two businesses marketed under 8 brands.

The Small and Medium Business Division (SMB) is Australia’s largest domains and hosting business with revenues of approximately $100m and 300 staff. The SMB business operates under the Melbourne IT, WebCentral, Netregistry, WME, Domainz and TPP brands.

The Enterprise Services Business (ES) is Australia’s leading provider of digital solutions to large enterprises and government organisations with revenues of approximately $95m and 430 staff. 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 ITMacquarie Securities Australia Conference

1-3 May 2018

4YR

CAGR

18%

Track record: consistent 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

CAGR

61%

4YR

CAGR

23%3YR

CAGR

30%

3.7 6.1 10.0 10.6 16.8

2.1

10.2 12.0

17.8

21.8

0

10

20

30

40

50

2013 2014 2015 2016 2017

Underlying EBITDA ($m)

16.3

22.0

28.4

5.8

38.6

4.7 3.3

5.0 4.6 6.8

2.8 6.2

6.5 9.6

10.2

0

10

20

2013 2014 2015 2016 2017

Underlying EPS (cents)

7.5

9.5

11.5

14.2

17.0

51.3 59.6 69.2 82.8 91.7

52.1 65.1

81.1 85.6

106.1

0

50

100

150

200

250

2013 2014 2015 2016 2017

Revenue ($m)

103.4

124.7

150.3168.4

197.8

- 1.0 1.0 2.0 3.5

-

4.0 4.0

6.0

7.5

0

10

20

2013 2014 2015 2016 2017

Dividend (cps)

5.0 5.0

8.0

11.0

1. A one-off special dividend of 25.0 cents per share was paid in 2013 following the divestment of the Group’s DBS business unit. No other dividend was paid to shareholders in that year.

1

3

Four major growth drivers: scorecard

1. a multi-practice customer is an ES customer who takes services from 2 or more of the practices (ie mobile, data and analytics, and cloud)

2. twelve months to 31 Dec 2017 (NB this is solutions revenue not total revenue, for ES solutions revenue as at 31/12/2017 was 34% higher than it was at 31/12/2016, the growth for SMB

solutions revenue over the same period was 194%)

3. the 3 month weighted average ARPU as at 31 December

1Strong growth in multi-practice

customers1;

• 66% revenue from multi-

practice customers

• multi-practice customers

represent 16% of total

customer base ES

2Growing share of enterprise

digital solutions market2;

• ES digital solutions revenue

grew 34%

• growing at ~ 3 x the rate of

the marketES

4SMB

Growing share of SMB digital

solutions market2;

• SMB digital solutions revenue

grew 194%

• growing at ~ 19x the rate of

the market

3Good growth in solutions

ARPU3;

• MLB up 10% to $2,120pa

• WME up 4% to $10,473pa

• Blended up 17% to $5,580

SMB

FY 2018 outlook: guidance affirmed

4

MeasureRange

(pre AASB15)1 ⇳ %2 Comment

Underlying

EBITDA ($M)2 $41.5 - $45.5 13%

Includes additional investment in occupancy costs of $2.7m

to support organic growth in headcount, as well as

additional headcount investment to ensure sustainable

growth in solutions businesses.

Underlying EPS

(cents per share)17.3 – 19.6 8.5%

Includes annualized impact of amortisation of acquired

WME intangible assets (0.3cps), plus additional depreciation

as a result of the planned investment in the fitout of new

office space in Sydney and Melbourne (0.7cps).

Dividend 55% - 75%Dividends in 2018 will be determined by reference to a

payout ratio in the range of 55% to 75% of underlying NPAT.

1. 2018 outlook is prepared using 2017 revenue recognition policies (i.e. AASB 118: Revenue). The Group is still finalising the projected impact of the adoption of AASB 15: Revenue from

Contracts with Customers and will provide an update when the projected impact is finalized.

2. Change on last year calculated from the mid-point of the guidance range (pre AASB 15) 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.

• FY18 has started well and we are trading in line with expectations, with pleasing year-on-year growth in

solutions across both ES and SMB.

• Over 2017 and 2018 we are making investments to maintain the strong growth of recent years. As a

result in FY18 we expect revenue to grow in line with last year but EBITDA and profit will temporarily grow

at a slower rate than recent years.

• Having absorbed these investments in FY18, EBITDA and profit growth will accelerate in FY19.

Hot topics: the FAQs

5

QuestionShort

AnswerComment

Can SMB generate

sustained organic

revenue growth?

YES

While the legacy revenues (ie domains and hosting) are declining at approx. 3% pa

the new services (ie digital marketing services, AKA “solutions”) are growing strongly.

In 2017, solutions revenue accounted for ~20% of total SMB revenue and is expected

to grow at 15%pa to 20%pa for the foreseeable future. The combination of declining

legacy revenues and growing solutions revenues should translate into overall growth.

As the solutions revenue becomes a progressively larger proportion of total SMB

revenue, the overall revenue growth rate will accelerate.

Can ES continue

to grow strongly?YES

In 2017 ES grew revenue at 29%1, up from 14%2 in 2016. ES is the market leader in the

rapidly growing digital solutions market. ES currently has ~ 7% share of a $1.4B market

that is growing at ~10%pa. In 2017 ES grew at three times the rate of the market. We

believe that growth in the order of 20% pa is sustainable for the foreseeable future.

Will you be making

more acquisitions

and if so what size

will they be?

Likely

It is likely that acquisitions will continue to play a part in our growth. Acquisitions have

served us well and we have a track record of buying and integrating well. Future

acquisitions are likely to be targeted at key capability gaps and will meet the criteria

we have published for acquisitions.

Can MLB drive

operational

gearing and

margin expansion?

Partial

The underlying EBITDA margins1 in our two operating divisions (ie ES and SMB) have

almost doubled over the past four years (to 18% and 24% respectively). We expect

the margin in SMB to settle in the range of 22%-24%. Margins in ES are expected to

improve to 20% by 2020 (after digesting the impact of investment in 2017/2018 to

support the rapid growth of that business) and to settle at that level.

1. These underlying EBITDA margins for the two operating divisions are after allocated costs but exclude ~$7.8m of unallocated corporate overheads.

Hot topics: the big deliverables

6

QuestionShort

AnswerComment

Is the re-branding on

track?YES

The Melbourne IT of today is almost unrecognizable from the Melbourne IT of 4

short years ago. The job we do today for our customers has changed

fundamentally. We are now Australia’s leading digital partner for businesses, big

and small. A new business requires a new name and a new visual identity, one

that speaks to the future, not to the past.

Shareholders are being asked to approve the change of company name at the

AGM on May 28. The formal brand launch will take place the following day on the

29th. The project is on-track and on budget1.

How are the office re-

locations going?WELL

In 2016 headcount grew by ~260 people and in 2017 we expect another net ~270

people to join our business. As a result of this growth we have outgrown our offices

in Sydney and Melbourne and are moving to new, larger premises. Work has

commenced in Melbourne, with work commencing in Sydney before the end of

the month. We begin moving in Melbourne in mid-May, and in Sydney at the end

of May. The project is on track and on-budget2.

You have to recruit

~400 people this year

(for a net growth of

~270). This is a key

dependency. How is

this going?

WELL

We grew by 260 people in 2017 with 130 of them joining us via the acquisition of

WME. This year we will add another net 270 heads driven by pure organic growth.

Over the course of 2017 we expanded our internal recruitment team to ensure that

we had the capacity to recruit the number and mix of skills required this year. In

fact, in the final months of last year we were bringing people on at the rate we

need to sustain throughout this year. As at the end of the first quarter we have

been meeting our strategic recruitment plan.

1. The indicative budget for the re-branding is $4.4M. This will be included in statutory EBITDA but will be backed out in the calculation of 2018 underlying EBITDA.

2. The indicative capital cost in 2018 of the relocation is $8.2M.

Welcome to…

We unleash the

possibilities between

business and people.

ES: strategy and execution

9

ES: facts and figures

10

Early market leader - developer and “ever-greener” of digital products and

services for corporate and government customers with large consumer customer

bases.

Strong Growth - underlying EBITDA growing at ~20%pa.

Expertise - more than 450 design, digital, analytics and engineering professionals

across Sydney, Melbourne and Brisbane.

Culture of Innovation and Customer Excellence.

Enterprise Grade - blue Chip customer base, partnerships with 50% of the ASX top

20. Significant recurring revenues and repeatable project revenue. Governance

and balance sheet suitable for Enterprise & Government engagement.

1

2

3

4

5

2018 Asia Pacific Innovation Partner

Market Facing

Advisory Led Tech Led

Business Facing 11

ES: where do we play?

Big 4 Traditional “Consulting Firms”

Traditional IT services firms, predominantly

internally focused

Digital Agencies expanding into tech

solutions

ES solutions opportunity: $1.4b market in 2017 growing at ~ 10%pa

12

Source: IBM 2017

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

13

ES Customers: marquee brands

SMB: strategy and execution

14

15

SMB: facts and figures

Approximately 300 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 recognizable SME brands.

1

2

3

4

5

16

SMB solutions opportunity: ~$2B market growing at 10% pa

SOLUTIONS MARKET

• Customers prepared to pay for digital marketing

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) $200-$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

MARKET SIZE = $2.2B*

0

5

10

15

20

25

30

35

40

45

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

$M

Direct Revenue - Components vs

Solutions (HY)

Solutions Components

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. FY 2017 result includes seven months of WME revenue.

Acquisition of

Netregistry

Acquisition of UberGlobal

Acquisition of WME2

1

rapidly growing solutions revenue driving growth

75%

25%

FY 201790%

10%

FY 2016

Summary

18

1. Strong FY 2017 result reinforces growing momentum;

• revenue up 17%

• underlying EBITDA up 36%

• underlying EPS up 20%

2. Good growth expected in 2018;

• underlying EBITDA of $41.5m - $45.5M

• underlying EPS of 17.3c – 19.6c

3. Solutions strategy is driving real growth;

• Strong growth vs pcp in solutions revenue;

• 34% in ES and 194% in SMB

• Translating to strong growth in underlying EBITDA;

• 14% in ES and 48% in SMB

growth in solutions in both ES and SMB driving

sustainable growth

Appendix:

Financial Performance

2017 Results

FY 2017 result: highlights

• Delivering on the promise of growth;

• revenue up 17%, underlying EBITDA up 36%, and underlying EPS up 20%

• organic growth in revenue (11%) and reported EBIDTA (7%)

• Digital solutions driving growth;

• solutions revenue up 194% in SMB and 34% in ES

• Enterprise Services driving growth;

• revenue up 35%1 on 2016 and underlying EBITDA up 14%

• Increasing market share - growing at more than 3 times the rate of the market

• Substantial improvement in profitability of Small to Medium Business;

• underlying EBITDA up 48% on pcp – first normalised EBITDA growth (3%) since 20082

• Increased dividend reflects confidence;

• final dividend of 7.5c (fully franked) takes the full year dividend to 11c representing a 38% increase on last year.

201. 29% after normalising for Infoready acquisition

2. after normalising for the impact of acquisitions

consistent execution against a clearly defined strategy

continues to drive strong growth

FY 2017 result: snapshot

Year Ended 31 December 2017

2017(guidance)

2017(actual)

2016(actual)

⇳ %

Revenue ($M) N/A $197.8m $168.4m 17%

Reported EBITDA ($M) N/A $31.9m $28.2m 13%

Underlying EBITDA ($M)[1] $37.5 - $41.5 $38.6m $28.4m 36%

Underlying EBITDA Margin (%) N/A 19% 17%

Underlying EPS (cents per share)[1] 17.0 – 19.0 17.0c[2] 14.2c 20%

Dividends (cents per share) 11.0c 8.0c 38%

21

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. Includes annualized impact of amortisation of acquired WME intangible assets (0.5cps), which weren’t included in the revised guidance following the acquisition

of WME.

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.

FY 2017: MLB reported result

Year Ended

31 December 2017

2017 2016 ⇳ % Notes

Revenue $197.8m $168.4m 17% Contribution from acquisitions (12 months contribution

from InfoReady and 7 months contribution from WME

Group), combined with organic growth in the Group

(11%), partially offset by the sale of the IDNR business

(March 2016).

Reported EBITDA $31.9m $28.2m 13% Organic growth for 2017 of 7%, together with contributions

from acquisitions (as above), as well as a one-off gain on

the accelerated settlement of the Outware option,

partially offset by one-off acquisition and integration costs

and prior period gain on sale of the IDNR business.

Reported NPAT $14.0m $10.7m 31% Organic growth and contributions (as above) as well as

growth in ownership stake of Outware from 50.2% to 75.1%

in August 2016, and to 100% in February 2017.

Reported EBITDA

Margin

16% 17% (6%) Impacted by one-off items including prior year gain on

sale of IDNR business.

EPS (cents) 12.56c 10.86c 16% EPS growth lower than NPAT growth due to more shares on

issue following equity raises in March 2016 and May 2017.

22Figures throughout this document may not be exact due to rounding and includes non-IFRS financial information that is relevant for users understanding the performance of the business.

FY 2017: MLB reported result

23

Figures throughout this document may not be exact due to rounding and includes non-IFRS financial information that is relevant for users understanding the performance of the business.

Year Ended

31 December 2017

2017 2016 ⇳ % Notes

Revenue (excl. interest) $197.7m $168.2m 18% See comments on previous page.

COGS $88.0m $74.2m (19%) Organic growth and contributions (as above).

Gross Margin (excl. interest) $109.7m $94.0m 17% Organic growth and contributions (as above).

Other income $5.8m $3.9m 50% 2017 relates to gain on accelerated settlement of Outwareoption liability, and 2016 relates to other Income and gain on sale of the IDNR business.

Operating expenses $83.6m $69.7m (20%) Contribution from acquisition of WME and growth in FTE.

Reported EBITDA $31.9m $28.2m 13%

Depreciation and amortisation

$9.6m $7.0m (37%) Impacted by higher prior period investment in systems, charges from customer contracts recognised on acquisitions and accelerated amortization of Webcentral brand name intangible.

Net interest expense $2.3m $1.4m (64%) Higher bank borrowings in current period.

Income tax expense $5.7m $7.1m 20% Current period effective tax rate (29%) has benefited from non-assessable income on Outware accelerated purchase. Prior period (36%) was unfavourably impacted by tax on capital gain from the sale of the IDNR business.

Profit attributable to NCI $0.3m $2.0m 85% Growth in ownership stake of Outware from 50.2% to 75.1% in August 2016, and to 100% in February 2017.

Reported NPAT $14.0m $10.7m 31%

FY 2017: MLB underlying EBITDA

24*as if all businesses owned or divested since 1 Jan – i.e. adjusted EBITDA contributions up to completion not already included in Reported EBITDA. Included to assist investors to estimate full

period profit. Figures on this page reflect managements best estimate and have not been audited. They may not be exact due to rounding and include non-IFRS financial information that is

relevant for users understanding the underlying performance.

Year Ended

31 December 2017

2017 2016 Division Notes

Reported EBITDA $31.9m $28.2m

Adjustments to calculate Underlying EBITDA

1. Transaction costs $0.8m $0.6m Corp One off transaction costs incurred for acquisitions.

2. Integration costs $2.7m $3.0m SMB/ Corp One off cost of integrating acquired businesses.

3. One-off brand costs $0.7m One off costs related to re-branding

4. Contribution of IDNR business prior to sale

- ($0.1m) SMB Three months EBITDA contribution from IDNR business sold in March 2016.

5. Other non-operating income ($2.1m) ($0.6m) Corp Relates to the accelerated settlement of the Outware option.

6. InfoReady contingent consideration liability

$1.0m ($1.0m) Corp InfoReady has exceeded forecast for 2017, resulting in a reassessment of the third earn-out payment (due in April 2018).

7. non-operating expenses $0.5m $0.1m

8. Gain on sale of IDNR business - ($2.4m) Corp

9. Additional contribution from acquisitions*

$3.1m $0.6m SMB/ES Contribution prior to acquisition for WME (May 2017) and InfoReady (March 2016).

Underlying EBITDA $38.6m $28.4m