AdEPT Telecom plc. 1 CONNECTIVITY OUTSIDE THE BUILDING Whatever type of connection you need:

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1 1 CONNECTIVITY OUTSIDE THE BUILDING Whatever type of connection you need: Super-fast connections Up to 10 Gb (10,000Mb) Multi-site data connectivity networks Broadband ADSL and Fibre Voice Traditional and VoIP Desktop phones Call Centre Unified Communications integrate CRM with any device Wi-Fi networks 3 ON-PREMISE OR IN THE CLOUD We can put the equipment either on your premises or hosted in our data centre 2 INSIDE THE BUILDING AdEPT Telecom plc Introduction and strategy LSE AIM ticker: ADT.L

2 Industry overview Residential Market Number of suppliers: Business Market Number of suppliers: Under 2m pa sales c25 Over 20m pa sales Cannot compete in the residential market because of the huge marketing spend The business market is highly fragmented with few large competitors Page 2

3 AdEPT Group 2 sites Head Office Fleet, Hampshire 8.5m revenue 300 customers 23 employees Avaya Aura and Wi-Fi specialists Tunbridge Wells, Kent 20.5m revenue 16,000 customers 40 employees Connectivity products Page 3

4 What do we do Supply chain - how we work with tier 1 network providers Data Calls & lines Broadband SIP Hardware and Wi-Fi AdEPT TELECOM One bill One point of contact for all service issues Let us decide who is best to supply the underlying technology The only infrastructure we own is Avaya Unified Comm s in our Data Centre Page 4

5 Customer Service strategy REVENUE SPLIT Larger Premier customers 70.0% 30.0% Small Business customers PREMIER CUSTOMER SERVICE Personal account management for large and public sector/healthcare customers 1,400 customers spending 5,000+ per annum SMALL BUSINESS CUSTOMER SERVICE Managed via the call centre 16,000 customers Acquisition rather than organic Page 5

6 Product revenue analysis FY15 H1 v FY16 H1 Managed services now 41% of total Includes cloud-based inbound, managed data networks and IP unified communications Increase driven from organic new managed services business and Centrix acquisition 100% 80% 60% 40% 73% 59% Fixed Line Managed Services 20% 27% 41% 0% FY15 H1 FY16 H1 Page 6

7 Extended technical product offering Leading provider of unified communications Unified Communications With over 300 deployed Avaya solutions in the UK and across the world, Centrix has one of the largest Avaya customer bases Smart Buildings Technology for MULTI-TENANT PROPERTY Medusa allows multi-tenanted buildings to take one or more internet connections and Wi-Fi networks and share those connections to multiple companies and then to report and bill those end users Page 7

8 Hold 4 Government Frameworks Growing Public Sector revenues JANET Framework One of a small number of companies approved to sell data connectivity to UK Colleges and Universities ESPO Telecom Framework Sole supplier of calls, lines, broadband, fibre broadband, super fast internet access and SIP to Public Sector and registered charities nationwide CCS Network Services Framework Recommended supplier on the Crown Commercial Service RM1045 telephony services framework G-Cloud 6 Framework Approved supplier on the G-Cloud 6 RM1557vi framework for Software As A Service Page 8

9 Over 30 council customers Growing Public Sector and Healthcare revenues Page 9

10 Public Sector and Healthcare Growing revenue proportion Public sector and healthcare now 24% of total revenue Increase from organic new public sector contracts Now telecoms partner for 32 councils (2014: 18 councils) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 87% 13% FY15 H1 76% 24% FY16 H1 Commercial Public sector Page 10

11 Many top Universities Growing Public Sector and Healthcare revenues Plus hundreds of schools and colleges Page 11

12 Sector specialist High penetration in niche markets PRIVATE HOSPITALS Around 70% 70% of all private hospitals in London HCA Shard Page 12

13 Sector specialist High penetration in niche markets 8 of 15 new 50% London Business Centres in last 18 ToG Shard months Page 13

14 Many other Premier Customers Telephony and connectivity Page 14

15 Financial highlights Trading results and earnings HALF YEAR TO 30 SEPT % revenue increase to 13.9m (2014: 11.3m) 24.7% increase in underlying EBITDA to 2.9m 12 th consecutive half year EBITDA increase to 2.9m (2014: 2.4m) EBITDA% margin increase to 21.1% (2014: 20.8%) 19.7% increase to adjusted PBT Adj. PBT increased by 0.4m to 2.6m (2014: 2.2m) 24.4% increase to adjusted PAT Adj. PAT increased by 0.5m to 2.3m (2014: 1.8m) 23.1% increase to adjusted Earnings Per Share Increased to 10.32p (2014: 8.38p) Page 15 Page 15

16 Financial highlights Free cash, finance costs and dividends HALF YEAR TO 30 SEPT m operating cash flow before tax (2014: 2.3m) Free cash flow of 2.5m before interest and tax EBITDA to Free Cash Flow 99.2% (2014: 97.1%) High levels of EBITDA cash conversion continued Net debt 7.6m (2014: 3.2m) After 7.2m acquisitions; and 0.5m dividend payments 7.2m spent on acquisition consideration 7.0m Centrix acquisition completed in May 2015 Added 8m revenue and 1.2m profit per annum New 5 year 15m RCF bank facility in April 2015 Larger, longer and cheaper than previous facility Page 16

17 999 1,864 2,490 3,280 3,517 3,612 3,624 3,651 3,732 4,043 4,588 2,940 5,950 Financial highlights EBITDA up 24.7% year-on-year EBITDA ( '000s) 6,000 5,000 4,000 3,000 2,000 1,000 0 Mar 04 Mar 05 Mar 06 Mar 07 Mar 08 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 Mar 14 Mar 15 Mar th consecutive year of H1 and full year EBITDA growth 25% increase to H1 EBITDA in last 12 months 41% increase to H1 EBITDA across last 2 years Source: March 2016 forecast Northland Capital research November 2015 Page 17

18 Pence 33% increase to interim dividend Progressive growth Dividend per share Mar 12 Mar 13 Mar 14 Mar 15 Mar 16 Mar 17 Dividend (pence) 0.5p 1.5p 3.0p 4.75p 6.0p 7.0p Dividend cover 22.7x 8.5x 4.7x 3.3x 2.9x 2.5x Gross dividend yield* 0.2% 0.7% 1.4% 2.3% 2.9% 3.4% Source: Northland Capital research November % increase to interim dividend to 3.00p Interim 3.00p (2014 interim: 2.25p) * Calculated on 230p share price Page 18

19 Financial highlights Low level of leverage 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 Net debt ( '000s) 1, ,270 2,965 3,201 7,630 Mar 13 Mar 14 Sep 14 Mar 15 Sep 15 Net debt : EBITDA 0.9x 0.7x 0.7x 0.3x 1.3x Gearing 34% 28% 29% 13% 61% Net debt : EBITDA ratio 1.3x at Sept 2015 Underlying net debt decrease 0.6m in H1 to 1.0m 6.6m net debt increase from Centrix acquisition 7m+ facility headroom to fund further acquisitions Page 19

20 AdEPT Telecom plc Share ownership Chris Fishwick companies* 28.9% Individual Greenwood Investments 15.6% European family office Fiske Private Clients 5.2% Private clients Ian Fishwick* 5.4% Individual Downing LLP 4.7% IHT fund Octopus 3.8% VCT Roger Wilson* 3.5% Individual Pat Wilson 3.0% Individual Hargreave Hale 2.2% Institution Blankstone Sington 2.1% Institution HSBC Private Bank 2.1% Private clients City Financial 2.0% Institution SUB-TOTAL 78.5% Shareholder and management interests aligned Around 40% of AdEPT is owned by the Directors and Family* Page 20

21 Shareholder benefits Low cost of investment Free residential line rental for any shareholder with 250+ shares Worth c 120 per annum Return on investment currently c20% Assuming share price of 230p Page 21

22 AdEPT Telecom plc Contact details Roger Wilson Chairman Ian Fishwick Chief Executive John Swaite Finance Director Page 22

23 Disclaimer No representation or warranty, express or implied, is given regarding the accuracy of the information or opinions contained in this document and no liability is accepted by AdEPT Telecom or any of its directors, members, officers, employees, agents or advisers for any such information or opinions. This information is being supplied to you for information purposes only and not for any other purpose. This document and the information contained in it does not constitute or form any part of an offer of, or invitation or inducement to apply for, securities. The distribution of this document in jurisdictions other than the United Kingdom may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of laws of any such other jurisdiction. Page 23