26 Nov

Managing Directors Address to AGM

Over the Wire Holdings Limited ABN: 89 151 872 730 Level 24, 100 Creek St, Brisbane, QLD 4000, Australia P: 1300 689 689 I: +61 7 3847 9292 W: www.overthewire.com.au ASX R ELEASE 26 N OVEMBER 2021 A NNUAL G ENERAL M EETING – M ANAGING D IRECTOR 's S PEECH Attached is a copy of the speech to be made at today’s Annual General Meeting by Managing Director , Michael Omeros. This document is authorised for release by the Board. For further information, please contact: Mike Stabb Company Secretary +61 7 3847 9292 Mike.stabb@overthewire.com.au About Over the Wire Holdings Limited Over the Wire Holdings Limited (ASX: OTW) is an ASX listed telecommunications, cloud and IT solutions provider that has a national network with points of presence in all major Australian capital cities and Auckland, NZ. The company offers an integrated suite of products and services to business customers including Data Networks and Internet, Voice, Data Centre co-location, Cloud and Managed Services. Over the Wire Holdings Limited companies include Over the Wire, NetSIP, Faktortel, Sanity Technology, Telarus, VPN Solutions, Access Digital Networks, Comlinx, Zintel Communications, Fonebox and Digital Sense. MANAGING DIRECTOR’S ADDRESS – 2021 ANNUAL GENERAL MEETING Welcome everyone and thank you for joining us. Unfortunately, we are not all able to meet in person, but I do believe we are getting closer to some semblance of normal, with a few of our shareholders in the audience. Today I wanted to take the opportunity to provide a quick review of the last financial year before giving an update on trading in the current year. I would like to start by thanking the incredible team at Over the Wire. The last two years have presented a range of challenges and opportunities, and we would not be in the position we are today without the hard work and diligence of our people. As shareholders, you can be very proud of how they represent our company and work tirelessly to make our business better. A good team means happy customers. We measure customer satisfaction by retention of revenue from each year to the next. I am pleased to report that at the end of June this year we achieved 97.8%. Review of FY21 The 12 months to the end of June was another important period in the evolution of Over the Wire. The investments we have made in recent years in developing our infrastructure, products and service culture are now delivering real results to our customers, helping to grow revenue and deliver solid sustainable profits. Some of the strategic and operational highlights from the year included: • Completion of the Carrier Interconnect project, which enables us to compete effectively against other Tier 1 carriers • Completion of the Zintel, Fonebox and Digital Sense acquisitions • The implementation of new Cloud availability zones in Perth and Adelaide • An increase in our international network footprint; and • Commencement of investment program to significantly upgrade our core network Financially, we continued to focus on building our recurring revenue streams, with total recurring revenue growing 38% to $103.2 million compared to the previous year. This component of revenue represented 92% of overall revenue, up from 85% in FY20. It was particularly pleasing to see the strong growth in recurring revenue throughout the year, with a much stronger second half versus the first half. While total revenue grew 25% in the second half compared to the first half (mainly because of acquisitions), our organic revenue increased 7%. Our EBITDA for the year was $23.5 million compared to $17.4 million in the previous year. Net cash from operating activities in the year was $24.5 million, up 111% from $11.6 million in the previous year. 1 2 Our balance sheet remains strong and is underpinned by our focus on converting revenue and earnings to cash as quickly as possible. Thanks to the strong financial performance, the company declared a final dividend of 2.25 cents per share fully franked, taking the full-year payout to 4.0 cents per share. Overall, it was a very good year and one which has provided a good springboard for the current year and beyond. Strategic Update Our business has evolved rapidly over recent years through the combination of value-adding acquisitions, strong organic growth, and strategic partnerships. Each of the individual approaches has been critical to achieving our goal of building a diverse product offering that provides our customers with a genuine alternative that is designed to suit their needs, not shoehorn them into an off-the-shelf product. This focus on delivering exceptional customer outcomes has firmly established Over the Wire as the “telco of the future”. It has taken many years to build these foundations, but we now have few competitors who can match the breadth or depth of our Cloud. Connect. Collaborate. Solution. Critical to our current and future success has been the completion of the Carrier Interconnect project. It means we now have all the elements of a comprehensive, fully integrated platform. Completing the Carrier Interconnect project was a particular highlight of the year under review. We see a range of opportunities to ramp up the growth of our customer base and revenues in the voice space and begin to challenge the incumbent Tier 1 providers through better solutions and better service. Trading Update Turning to the current year and I am pleased to report that we remain confident of meeting our target of 15% growth in organic recurring revenue. At the time of our full year results I highlighted a number of goals we had set ourselves to achieve this year. Principal among those was to maximise the opportunity from becoming a Tier 1 voice provider. We are well and truly on our way to expanding the number of active numbers on our NetSIP voice network from ~600,000 at the end of last financial year to greater than 1 million by the end of this financial year. We have also been working on a white-labelled voice and cloud PBX offering for the wholesale and partner markets and we will be launching this within the coming weeks, along with a refreshed NetSIP brand. Other strategic priorities for the year include the roll-out of our Digital Sense cloud platform to Melbourne and Sydney and launching an international network offering to the wholesale and partner networks. 3 Thanks Scott Smith and John Puttick I would like to conclude today by thanking Scott Smith and John Puttick for their significant contribution to the success of Over the Wire. We are a better company for Scott’s leadership and John’s guidance and steady influence. On behalf of everyone at the company, I wish them all the best for the future and John, we also wish you a long and enjoyable retirement. I will hand back to Stephe now for the formal part of today’s meeting. ENDS
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