Colt Investor presentation

Transcription

1 2015 Colt Technology Services Group Limited. All rights reserved. Colt Investor presentation

2 Forward Looking Statements This presentation contains 'forward-looking statements' including statements concerning plans, future events or performance and underlying assumptions and other statements which are other than statements of historical fact. Colt Group S.A., ("the Group"), wishes to caution readers that any such forward looking statements are not guarantees of future performance and certain important factors could in the future affect the Group's actual results and could cause the Group's actual results for future periods to differ materially from those expressed in any forward looking statement made by or on behalf of the Group. These include, among others, the following: (i) any adverse change in regulations and technology within the IT services and communications industries, (ii) the Group's ability to manage its growth, (iii) the nature of the competition that the Group will encounter and wider economic conditions including economic downturns and (iv) unforeseen operational or technical problems. The Group undertakes no obligation to release publicly the results of any revision to these forward looking statements that may be made to reflect errors or circumstances that occur after the date hereof. No statement in this presentation is intended to be a profit forecast or to imply that the earnings of the Group for the current year or future years will necessarily match or exceed historical or published earnings. This presentation is for information purposes only and does not constitute an offering of securities. This presentation is not intended to provide the basis for any credit or other evaluation of any securities of the Group and should not be considered as a recommendation that any person should subscribe for, dispose of or purchase any such securities or enter into any other transaction with the Group or any other person. 28 April 2015 Colt Investor Presentation 2

3 Colt provides a range of information and communication services to enterprises across cities in Europe, Asia and North America We serve thousands of companies With Colt-owned infrastructure in 28 countries ,000 of the top 25 bank and diversified financial groups of the top 25 companies in both global media and telecoms industries Metropolitan area networks (MANs) Connected cities Direct fibre connected buildings Financial exchanges European central banks Managed data centres globally, 22 in Europe and seven in Asia Connected third party data centres Countries where Colt provides a service to customers 28 April 2015 Colt Investor Presentation 3

4 Business Model Colt directly serves thousands of enterprise and wholesale customers, and indirectly serves SMEs via channel partners Key value drivers for customers are flexibility, security, reliability and seamless delivery across technologies and geographies We focus on: 1. serving information intensive businesses, in key cities; 2. delivering exceptional customer experience; and 3. getting the most from our assets (international breadth and local depth of infrastructure, and our people) We provide a range of individual services to seamlessly integrated solutions in network, voice, data centre and IT Our global operations are supported by shared service centres. As we expand to new cities, this structure provides the opportunity to improve operational efficiency and profitability Our balance sheet can support necessary organic and inorganic investments. Dividends are not a priority as we invest in the full execution of our strategy 28 April 2015 Colt Investor Presentation 4

5 Recent financial evolution 28 April 2015 Colt Investor Presentation 5

6 Our services Network Voice Data Centre IT We provide We provide We provide We provide Access & Bandwidth ethernet P2P link (SDH) high speed services dark fibre, wavelengths internet access broadcast services Managed networking EPN, IPVPN Enterprise Voice voice line conferencing VAS VoIP IN services unified communications Wholesale Voice Colocation from specific rack space to entire data centre halls Infrastructure private, hybrid and multi tenant solutions professional services infrastructure management Platforms Workloads Backed by Backed by Backed by Backed by 47 MANs, 28 countries 205 connected cities >22,000 directly fibred buildings 521 connected third party data centres Over 20 billion voice minutes on TDM platform Both legacy TDM and next generation VoIP platforms, helping customers with the transition 29 Colt managed data centres with 22 in Europe and 7 in Asia 52,500 m 2 built out white space 77% utilised white space 53 MW built out power Most expansive cloud infrastructure in Europe Sites in UK, France, Germany, Spain, Italy, the Netherlands and Hong Kong 99.9% platform availability 28 April 2015 Colt Investor Presentation 6

7 Portfolio mix evolution Cloud services Managed networking (Voice & Data) Ethernet Colocation services Legacy hosting Legacy bandwidth (SDH now <8% of Network Services revenue. High margin product) Legacy voice (MTR/FTR c 23m revenue impact and c 13m EBITDA impact in 2014) 28 April 2015 Colt Investor Presentation 7

8 Our global network and IT infrastructure 28 April 2015 Colt Investor Presentation 8

9 Our strategic priorities Markets Focus on information intensive industries and geographies Capital markets Business services Media Global cities Fixed line carriers Cloud providers Mobile network operators Customers Making it easier for our customers to do business with us Automate our service and delivery model Operate seamlessly and transparently across technologies and geographies Offer the most flexible and efficient services Assets Better leverage our existing infrastructure Maximise utilisation of our network infrastructure Better fill rates in our existing data centre estate More efficient use of voice platforms for higher margin enterprise voice Optimising IT services on fewer platforms 28 April 2015 Colt Investor Presentation 9

10 Lines of business performance in 2014 Revenue: 1,495.5m EBITDA: 297.1m 19.9% Capex: 245.5m Cash generation** Revenue: 452.1m EBITDA: 60.3m 13% Capex: 11.7m Voice Services Network Services Revenue: 841.5m EBITDA: 234.8m 28% Capex: 164.6m IT Services Loss* Revenue: 77.8m EBITDA: m -33% Capex: 24.9m Cash consumption* * Profit* Revenue: 144.6m EBITDA: 17.4m 12% Capex: 23.1m (all pro-forma numbers) Data Centre Services Revenue: 120.2m EBITDA: 27.4m 23% Capex: 29.2m * Profit / Loss is EBITDA margin as a percentage of revenue ** Cash generation / consumption is EBITDA less capex 28 April 2015 Colt Investor Presentation 10

11 Network Services Financials Managed networking, Ethernet, IPVPN SDH (now <8% of total NS revenue) Profitable and cash generative, but Flat revenue growth Mix evolution impact on margin Underutilisation of our assets Mitigating margin pressures by increasing utilisation of our existing infrastructure Focus on information intensive verticals capital markets and media teams created Growth initiatives Bring cloud service providers on-net Provide mobile backhaul to MNOs first contracts won and discussion with others Expand network footprint to new cities Value proposition Combination of local depth and international breadth means we can provide appropriate solutions from basic point-to-point services and internet access to end-to-end managed network solutions Business grade quality of service and flexibility required by enterprise customers Competitors Incumbents: BT, DT, Orange, TEF Global altnets: Level 3 Regional altnets: eunetworks, Interoute Local altnets: cable operators, Versatel 28 April 2015 Colt Investor Presentation 11

12 Voice Services IP products, IN, apps Legacy TDM voice Financials Focus on cash generation, but Regulatory impact on revenue and profits Opportunity to maximise our platform Withdrawal from low margin business Support customers in migration from TDM infrastructure to converged IP access Growth initiatives Value proposition Increase focus on: Enterprise voice Intelligent networking VoIP / SIP trunking Unified communications Focus on multi-country provision Delivering consistent end-to-end customer experience across Western Europe and Asia to enterprise and wholesale customers Incumbents: BT, DT, Orange, TEF Global altnets: Level 3 Competitors Local altnets: cable, Versatel Mobile players, voice OTT and applications: Skype, Microsoft Lync 28 April 2015 Colt Investor Presentation 12

13 Data centre services Financials Colocation ftec and installations Profitable and cash generative, but Has not invested at the same rate as the market Need to maximise use of our assets Growth impacted by historical defocus from colocation Growth initiatives Vertical focus on financial, business services, media, cloud providers and systems integrators Increased focus on colocation New cities (tier 2 in Europe, tier 1 outside Europe) Development of product and value propositions for Cloud enablement Enhanced carrier neutrality Value proposition Energy efficient, resilient facilities with advanced technology, run by local teams in multiple locations Capacity on demand so customers can scale where needed, with flexible commercial terms Location is key. Colt operates 29 data centres globally, with 22 in Europe and 7 in Asia and Colt also directly connects to a further 521 third party data centres Low PUE of 1.21 in our latest generation data centres Competitors Wholesale: Digital Realty, Coresite, Dupont Fabros Retail colocation: Telecity, Interxion, Equinix Local operators 28 April 2015 Colt Investor Presentation 13

14 Colt recognised as a Leader in Gartner s Magic IT Services Financials Cloud private / hybrid / shared Legacy hosting Asset sales, installations and professional services Unprofitable - in transformation Invested in product components and service capability underpinning our cloudbased platforms in Europe and Asia Cost base too high for revenue Not leveraging our platforms sufficiently Growth initiatives Leverage strong product reputation Narrowing focus of our platforms to match customer propositions Portfolio of reusable standard components Focus on key geographies Rightsize and transform cost base Key propositions only: enterprise application hosting; mission critical webhosting and end user services Quadrant for Cloud-Enabled Managed Hosting, Europe 1 Outsourcers: Infosys, Wipro, Accenture Enterprise hosting: Savvis, Terremark, Rackspace Value proposition Transition customers from capex intensive DIY to flexible, opex-based outsourced IT Integrate cloud with traditional hosting, managing both old and new technologies in one seamless service Customers benefit from our multiple locations across Europe and Asia, meaning customer can ensure their data is where it needs to be, secure and fully compliant with regulations Competitors Public cloud: AWS, Google, Azure Regional App hosting: Phoenix, Attenda, Pironet, Claranet 1 Gartner, Magic Quadrant for Cloud-Enabled Managed Hosting, Europe, Tiny Haynes, Gianluca Tramacere, Lydia Leong, Gregor Petri, Douglas Toombs, Bob Gill; July Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose 28 April 2015 Colt Investor Presentation 14

15 Colt in Asia KVH Asia acquisition completed and consolidated from 22 December 2014 Acquired for 128m cash Adds Asia network and data centre capability to Group: (data centres in Tokyo (x3), Osaka, Hong Kong, Singapore, and Busan) Delivering expected revenue growth and profitability Full run rate annual cost and capex synergies of 8.5m by 2017 millions FY 2014 Revenue (proforma) Consolidated 3.9 EBITDA (proforma) Consolidated 0.4 Capex (proforma) YOY change 145 8% p 17 (12)% q 23 41% p + revenue synergy potential Medium term targets of: mid-to-high single digit % revenue growth and EBITDA to return to historical 20%+ levels 28 April 2015 Colt Investor Presentation 15

16 Looking to the future Network Services Cash generation** Voice Services IT Services Data Centre Services Profit* Cash consumption** * Profit / Loss is EBITDA margin as a percentage of revenue ** Cash generation / consumption is EBITDA less capex 28 April 2015 Colt Investor Presentation 16

17 Continued improvement in reputation with customers Aim to be the most customer oriented business in our industry Year on year improvements but more work to do to become best in class 28 April 2015 Colt Investor Presentation 17

18 Colt Corporate Social Responsibility Colt s CSR programme, 2015 targets: Environment Drive a further 1.5GWh power efficiency Increase audio and video conferencing usage by 5% to mitigate business travel Maintain ISO certification and deliver continuous improvements Customers and suppliers Continue to improve our customer experience, demonstrate through further increase our Net Promoter Score Continued assessment of our top strategic suppliers and share best practices People Conduct annual survey with greater benchmark information and granularity of analysis Maintain alignment to and continue to drive system improvements across our portfolio Community Increase annual volunteering hours to 10,000 by April 2015 Colt Investor Presentation 18

19 Investment history City of London Telecommunications established in 1992, funded by Fidelity Investments. UK PTO licence awarded and 1st customer connected in London in 1993 IPO on LSE and NASDAQ in bn debt raised from m equity raised in 2001 Open offer in 2006 raised $560m Open offer in 2009 raised $253m, final debt repaid Revolving credit facility for 150m raised in 2014 KVH acquired for 128m in December April 2015 Colt Investor Presentation 19

20 In summary, Colt is A seamless provider of information and communication solutions across technologies and global city geographies with scalable assets and systems Focused on information intensive businesses, and geographies (cities) exceptional customer experience efficient utilisation of our assets A growth business we will continue to invest for profitable growth while improving cost control, returns on investment and free cash flow 28 April 2015 Colt Investor Presentation 20

21 For further information Colt website links: Investor relations: Morten Singleton Vice President Investor Relations DDI: +44 (0) Mobile: +44 (0) Colt Technology Services Group Limited, Beaufort House, 15 St Botolph Street, London, EC3A 7QN UK 28 April 2015 Colt Investor Presentation 21

22 For your time Thankyou