Savvis Investor Update

Transcription

1 Savvis Investor Update Investor Relations, Fourth Quarter 2010

2 Review SEC Filings This document may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of Actual results may differ materially from Savvis expectations. Certain factors that could affect actual results are set forth as risk factors in Savvis SEC reports and filings, including its annual report on Form 10-K for the year ended Dec. 31, 2009, as filed with the Securities and Exchange Commission on March 5, 2010, and all subsequent filings. The forward-looking statements in this document speak only as of the date of initial publication, Feb. 8, Savvis assumes no obligation to update or supplement forward-looking statements. The presentation also includes references to certain non-gaap financial measures that provide additional information for investors. In compliance with the SEC s Regulation G, both Savvis press release and Form 8-K of Feb. 8, 2011, include both the rationale for why non- GAAP information is important in describing operating performance, and the full reconciliation with corresponding GAAP numbers. 2

3 Strategic Update Jim Ousley, Chairman and CEO

4 Annual Review 2010 Plan 2010 Results Grow overall hosting business 11% YoY growth Stabilize network business Grow core network and efficiently manage sustaining network Demonstrate market leadership with our cloud offerings Increase our service offerings and geographical footprint Expand international growth Selectively explore expansion opportunities Enhance and expand our global partner relationships Drive client service through improved Net Promoter Score Managed services 18% Colocation 5% Four consecutive quarters of YoY core network growth of 20%+ Expansion of cloud infrastructure solutions in U.K. and Asia VPDC launched in U.S. and U.K. Best new European cloud service award GSA selection for apps.gov Expanded geographic presence into Canada through acquisition of Fusepoint Continued global expansion of Thomson Reuters collaboration Net Promoter Score increased from -4% in Wave I to over 20% in Wave V 4

5 Other 2010 Highlights Corporate Restructured debt profile Sales Acceleration of successful vertical approach Revamped renewals resulted in 75 bps churn improvement vs Financial vertical Added six more exchange venues, dozens of new exchange feeds 27% of overall revenue Data centers Added ~55,000 sq. ft. in NY metro, Slough, DC, downtown Chicago Awards National environmental accolades Cisco powered network designations InformationWeek 500 Top Technology Innovators 5

6 2011 Expansion on 2010 Success Data center expansions Total cash CAPEX of $69M in 2011 NJ3X, Atlanta, Seattle Hosting Continued double digit growth with focus on managed services Additional builds, in-line with needs Thomson Reuters collaboration Adding ~8 new financial hubs in 2011/12 International Growth due to data center expansions, global channel partnerships Savvis 2011 Network Strong growth in core offset by continued decline in sustaining Global partnerships Launching strategic managed hosting and cloud computing initiative in India with Airtel Cloud Continued global expansion of cloud platform 6

7 Savvis is Positioned in the Leaders Quadrant Magic Quadrant for Cloud Infrastructure-as-a-Service and Web Hosting The Magic Quadrant is copyrighted Dec. 22, 2010, by Gartner, Inc. and is reused with permission. The Magic Quadrant is a graphical representation of a marketplace at and for a specific time period. It depicts Gartner's analysis of how certain vendors measure against criteria for that marketplace, as defined by Gartner. Gartner does not endorse any vendor, product or service depicted in the Magic Quadrant, and does not advise technology users to select only those vendors placed in the "Leaders" quadrant. The Magic Quadrant is intended solely as a research tool, and is not meant to be a specific guide to action. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. This Magic Quadrant graphic was published by Gartner, Inc. as part of a larger research note and should be evaluated in the context of the entire report. The Gartner report is available upon request from Savvis. 7

8 Sales Summary Bill Fathers, SVP, Global Head of Sales and Marketing

9 4Q 10 Overview Sales trends Churn improved 115 bps YoY Churn of 1.4% Better than plan Continued focus on renewals Expect similar metrics in 2011 Bookings hit forecast Strength in EMEA and Asia EMEA up 26% and Asia up 24% over plan Canada on plan New client acquisition rate up QoQ Continued strong interest in cloud Stronger colo bookings Good traction in expansion data centers Great momentum and pipeline into 2011, including large deals Good traction across verticals Early traction in government cloud vertical Wins in U.S. with strong pipeline in EMEA, Asia Latest generation of VPDC in DC4 Making investments in staffing and compliance Consumer brands Bookings up 138% QoQ Increase in ecommerce Clients relying more on websites Savvis providing multiple services, in addition to cloud Winning clients from existing providers 9

10 4Q 10 Overview Cloud trends Excellent avenue for gaining new enterprise clients ~45% of hosting clients using cloud Added new enterprise features Private cloud functionality and API enhancements Based on continual feedback and evaluation from clients Helping cloud clients save 30%+ Clients include Procter & Gamble, Compuware, Dendreon, Carlson Marketing, Thomson Reuters Ability to provide complete converged solutions differentiating Savvis ~90% of top 50 cloud clients also buy traditional hosting services 10

11 Savvis and Thomson Reuters Collaboration Acceleration in client adoption Number of Clients Surge in addition of collaboration clients Results above expectations with ~110 clients globally Providing ~$2M of MRR across four regions Collaboration bookings 200% ahead of plan More than 300 deals in pipeline US EMEA ASIA Q'09 2Q'09 3Q'09 4Q'09 1Q'10 2Q'10 3Q'10 4Q'10 11

12 Channel Partnerships Channels partnerships performing well Strong new bookings in 4Q 10 New global telcos, ISVs, SIs contributing to success Savvis and Virgin Media Business to develop and market hosted IT services to enterprise clients across U.K. Leverages Savvis' IT services with Virgin Media Business nationwide fiber optic network Will provide integrated, secure, end-to-end solutions Recognized and trusted brands delivering unique proposition High quality IT services Great value for money Excellent service Launching later in

13 Financial Review Greg Freiberg, CFO

14 Quarterly Financials US$ in millions 4Q 10 QoQ Change 3Q 10 YoY Change 4Q 09 Total Hosting $ % $ % $154.7 Colocation % % 86.9 Managed Hosting % % 67.8 Network Services % % 65.1 Core Network % % 31.4 Sustaining Network 28.6 (1%) 28.8 (15%) 33.7 Total revenue $ % $ % $219.8 Gross profit (1) % % 99.4 Percent of revenue 49% ~315 bps 46% ~350 bps 45% SG&A (1) % % 50.5 Percent of revenue 24% ~110 bps 23% ~150 bps 23% Adjusted EBITDA (2) $ % $ % $54.9 Percent of revenue 27% ~215 bps 25% ~185 bps 25% (1) Cost of revenue and SG&A expenses exclude depreciation, amortization and accretion and include non-cash, equitybased compensation. Total non-cash, equity-based compensation attributed to cost of revenue for 4Q 10, 3Q 10 and 4Q 09, was $1.3M, $1.5M, and $1.1M, respectively. Total non-cash, equity-based compensation attributed to SG&A expenses for 4Q 10, 3Q 10 and 4Q 09, was $4.0M, $3.9M, and $4.9M, respectively. (2) Excludes Fusepoint acquisition and integration costs for 4Q 10 and 3Q 10 of $1.1M and $0.5M, respectively. 14

15 Annual Financials US$ in millions FY 10 FY 09 Change Total Hosting $673.4 $ % Colocation % Managed Hosting % Network Services (3%) Core Network % Sustaining Network (23%) Total revenue $933.0 $ % Gross profit (1) % Percent of revenue 46% 45% ~125 bps SG&A (1) % Percent of revenue 24% 23% ~110 bps Adjusted EBITDA (2) $236.2 $ % Percent of revenue 25% 25% ~15 bps (1) Cost of revenue and SG&A expenses exclude depreciation, amortization and accretion and include non-cash, equitybased compensation. Total non-cash, equity-based compensation attributed to cost of revenue for FY 10 and FY 09 was $5.9M and $5.5M, respectively. Total non-cash, equity-based compensation attributed to SG&A expenses for FY 10 and FY 09 was $19.8M and $23.6M, respectively. (2) Excludes Fusepoint acquisition and integration costs for FY 10 of $5.1M. 15

16 Liquidity and Liabilities US$ in millions Issue Date Maturity Date Long Term Current Total Comments Term loan (1) 8/10 8/16 $527.8 $5.5 $533.3 Current rate: 5% + LIBOR floor of 1.75% Revolver ($75M facility) 8/10 1/14 Current rate: 4.75% + LIBOR $12M in letters of credit Convertible notes (2) 5/07 5/12 $2.9 $2.9 3% coupon Total Long-Term Debt $530.7 Leases (3) $216.5 $12.4 $228.9 Current portion of long-term debt and lease obligations $17.9 Total Long-Term Debt and Leases $747.2 TTM adjusted EBITDA $236.2 Gross leverage 3.2 Net leverage Savvis had $120 million in cash as of (1) As of , face value was $548.6M; (2) During 3Q 10, Savvis completed a cash tender offer for its 3% Convertible Senior Notes due May 2012, with ~99% of the outstanding $345.0M Notes tendered. As of , face value of remaining portion was $3.1M; (3) Includes $50.6M deferred gain.

17 Guidance for 2011 Revenue $1,030 to $1,060M Cash interest expense (net) ~$65M Adjusted EBITDA $265 to $290M Cash CAPEX $220 to $240M 08 CAPEX 09 CAPEX 10 CAPEX $246M $133M $203M 11E * CAPEX $230M Expansion Efficient use of CAPEX for targeted vertical and market expansions Global data center expansion plan largely completed in 2008 $144M $22M $49M $69M Growth Success-based Product development/innovation $62M $40M $67M $44M $117M $37M $112M $49M Maintenance Maintaining business standards General systems development * 2011 CAPEX shown at mid-range of 2011 guidance 17

18 2011 Savvis, Inc. All rights reserved. Savvis is the registered trademark of Savvis Communications Corporation.