TelecityGroup plc First Half 2012 results 6 August 2012
Cautionary note regarding forward-looking statements This presentation includes statements that are forward-looking in nature. All statements other than statements of historical facts could be deemed to be forward-looking statements. By their nature these forward-looking statements involve numerous assumptions, uncertainties and opportunities, both general and specific. Accordingly, the actual results, performance or achievements of the Company may be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements, due to known and unknown risks, uncertainties and other factors. Except as required by the Listing Rules and applicable law, Telecity Group plc undertakes no obligation to update or change any forward-looking statements to reflect events occurring after the date such statements are published. This presentation is neither an offer to sell nor a solicitation of an offer to buy any securities in the United States, or any other jurisdiction. The Company's shares have not been registered in any U.S. jurisdiction and, in particular, will not be registered under the U.S. Securities Act of 1933, as amended, or any applicable state securities laws. 2 / TelecityGroup
MICHAEL TOBIN CEO OVERVIEW 3 / TelecityGroup
Highlights Strong H1 2012 results Revenue up 22.4% to 137.3m, with currency neutral growth of 25.6% EBITDA up 26.6% to 62.6m, with currency neutral growth of 30.4% EBITDA margin up by 150bps to 45.6% Adjusted diluted earnings per share up 36.2% to 15.8p, with currency neutral growth of 41.1% Maiden interim dividend of 2.5p per share declared European growth platform enhanced Available customer power up to 80MW since the period end Total announced capacity up to 130MW since the period end New market position established in Helsinki through the acquisition of Tenue Positive outlook confirmed Demand for carrier-neutral data centres remains strong across TelecityGroup s markets Management are confident that the Group will deliver a strong performance in 2012 The Board continues to focus on demand driven capacity expansion across its European markets into the longer-term, in response to the on-going growth in the digital economy Controlled, sustainable, profitable growth 4 / TelecityGroup
BRIAN MCARTHUR-MUSCROFT GROUP FINANCE DIRECTOR H1 2012 RESULTS 5 / TelecityGroup
Income statement H1 11 ( m) H1 12 ( m) Growth (%) FX neutral (%) Revenue 112.2 137.3 22.4 % 25.6 % Operating costs (62.8) (74.7) Adjusted EBITDA 49.4 62.6 26.6 % 30.4 % Depreciation (15.0) (17.3) Adjusted EBITA 34.4 45.3 31.6% 35.7% Net finance costs (2.4) (3.0) Adjusted profit before tax 32.0 42.3 32.2% 36.8% Adjusted tax charge (8.7) (10.2) Adjusted profit after tax 23.3 32.1 38.1% 42.3% Adjusted diluted EPS 11.6p 15.8p 36.2 % 41.1 % EBITDA margin 44.1% 45.6% The above results are adjusted (see appendix for a full reconciliation of adjusted results) 6 / TelecityGroup
Strong revenue growth Total revenue up 22.4% Significant order wins during period Over 90% of revenues are recurring Geographies UK revenue up 20.3% Rest of Europe revenue up 24.5% By geography ( m) 137.3 112.2 67.8 56.4 55.8 69.5 H1 11 H1 12 UK RoE 7 / TelecityGroup
Significant growth in EBITDA H1 12 EBITDA up 26.6% to 62.6m EBITDA ( m) Responsible pricing Continuous focus on cost control 49.4 62.6 H1 11 H1 12 H1 12 EBITDA margin up to 45.6% EBITDA margin (%) Expected to remain strong whilst continuing to deliver significant capacity growth 44.1% 45.6% H1 11 H1 12 8 / TelecityGroup
m Revenue translates into profit Cost 26% 25% 28% 21% 137.3 19.5 18.8 21.2 15.2 62.6 17.3 45.3 3.0 42.3 10.2 32.1 H1 12 Revenue Power Property Staff Other Adj. EBITDA Dep'n Adj. EBITA Adj. Net Finance Cost Adj. PBT Adj. Tax Adj. PAT 9 / The above results are adjusted (see appendix for a full reconciliation of adjusted results) TelecityGroup
Strong cash flow generation and working capital performance ( m) EBITDA 62.6 Working capital 2.3 Debtor days maintained at 31 (H1 11: 31) Net interest paid (1.7) Tax paid Other (8.4) (1.0) Group transitioning to full tax paying position (H1 11: (2.4)m) Other includes share based payments and FX Operating cash flow 53.8 Operational capex (10.8) Includes sales capex i.e. customer install capex of 3.8m (H1 11: 3.7m) Operating free cash flow 43.0 10 / TelecityGroup
Capex Investment capex of 73.3m Investment in demand driven expansion Investment capex ( m) 73.3 28.3 39.6 26.8 12.8 45.0 UK RoE H1 11 H1 12 Total capex of 84.1m including operational capex of 10.8m 11 / TelecityGroup
Financial strategy Continued emphasis on controlled, sustainable, profitable growth 300m senior debt facility 5 year term signed 6 May 2011 Significant remaining debt capacity post completion of acquisitions strong financial base and focus on returns H1 12 cost of drawn debt of 4.0% (H1 11: 5.3%) ROCE 17.4% (H1 11: 19.4%) the current period includes the effect of significant current activity in the expansion programme and the full effect of acquisitions in H2 2011 At 30 June 2012 net debt was 203.3m with leverage of 1.6 12 / TelecityGroup
MICHAEL TOBIN CEO BUSINESS REVIEW 13 / TelecityGroup
TelecityGroup is at the heart of the digital economy TelecityGroup s infrastructure and services act as the foundation of the digital economy 14 / TelecityGroup
Demand drivers: Internet traffic growth remains strong Aggregated peak European IXP traffic (2003 2012) Source: Euro-IX Growth is being driven by both increasing consumer and business on-line activity 15 / TelecityGroup
Our growth platform Multi-year announced capacity expansion programme* 80MW of operational capacity up from 68MW since last year end 130MW of total announced capacity which is being brought on-line in response to customer demand Organic growth strategy Focus on achieving strong returns on incremental capital expenditure Existing connectivity and customer ecosystems leveraged by opening new capacity close to established sites Acquisition strategy TelecityGroup aims to make acquisitions, either for the purpose of entering new markets or to provide growth capacity in existing markets This enables it to overcome barriers to market entry and shorten the time to market for growth capacity Total customer power (MW) UK Rest of Europe 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 * As at August 2012 Current Announced additions 16 / TelecityGroup
An overview of Tenue A leading provider of carrier-neutral data centres in Finland Unique position between the Eastern and Western European markets Multiple connectivity options including Tier 1 Nordic and Russian operators High quality customer base TelecityGroup s European locations Established 1MW data centre with a further site under construction 4MW of secured capacity expansion Allows TelecityGroup to serve the growing demand generated from the Helsinki internet hub, capturing the strong growth in Russian internet traffic 17 / TelecityGroup
ROB COUPLAND COO OPERATIONAL REVIEW 18 / TelecityGroup
Peering points TelecityGroup is the connectivity leader in Europe TelecityGroup operates several of the world s key internet hubs TelecityGroup hosts nearly 900 private peering points in Europe and key POPs of the world s three largest public internet exchanges: LINX (London), AMS-IX (Amsterdam) and DE-CIX (Frankfurt) Highly connected data centres provide value to customers, in turn enabling strong returns on capital The Group seeks to maintain and expand its position at the heart of the European digital economy 900 850 800 750 700 650 600 550 500 450 400 350 300 250 200 150 100 50 0 Private peering points within European carrier neutral data centres 896 630 TelecityGroup Interxion Telehouse Equinix Source: Peeringdb.com 582 475 19 / TelecityGroup
Our build programme PHASED OPENINGS LONDON AMSTERDAM 17MW of additional capacity at London Powergate 6MW expansion of Harbour Exchange site 7MW of additional capacity at AMS 5 FRANKFURT 5MW of expansion of Frankfurt 1 & 2 DUBLIN 7.5MW expansion of Dublin 3 MANCHESTER 2MW of additional capacity at Manchester 3 HELSINKI New 4MW site 20 / TelecityGroup
Gbps Amsterdam 5: A data centre expansion case study New 9MW data centre opened in February 2012 Directly connected to TelecityGroup s AMS 2 site which is one of the world s top private peering locations and hosts the main POP of the AMS-IX, the world s 2nd largest internet exchange AMS 5 has experienced strong demand and work has already begun on the 2 nd phase of capacity 1,100 1,000 900 800 700 Leading data centre operators: Peak AMS-IX internet exchange traffic 600 500 400 300 200 100 0 TelecityGroup (AMS 2) 2nd 3rd 4th Source: ams-ix.com (June 2012) 21 / TelecityGroup
QUESTIONS 22 / TelecityGroup
Appendix Adjusted results H1 11 Result ( m) H1 12 Result ( m) H1 11 EPS Pence H1 12 EPS Pence Adjusted profit after tax/adjusted diluted EPS 23.3 32.1 11.6 15.8 (Less)/add other finance items 2.9 (0.3) 1.5 (0.1) Less amortisation (1.0) (1.9) (0.5) (0.9) Add tax effect of above 0.2 0.7 0.1 0.3 Statutory profit after tax/diluted EPS 25.4 30.7 12.6 15.1 Other finance items relates to FX on financing items Weighted average diluted shares in issue for the period were 203.3m (H1 11: 201.2m) 23 / TelecityGroup
Appendix FX rates H1 2012 split of revenue: 49.4% GBP / 50.6% EUR/SEK The Group has no material FX transaction risk in each country of operation As GBP is presentational currency, the Group is subject to FX translation variances H1 11 Average H1 12 Average Change % FY 11 Average SPOT 1 Aug 12 Change % EUR average rate 1.153 1.216 (5.5)% 1.153 1.278 (10.8)% SEK average rate 10.311 10.805 (4.8)% 10.414 10.661 (2.4)% Weighted FX index 1.00 1.03 (2.9)% 1.00 1.04 (4.4)% 24 / TelecityGroup
Outstanding data centres. Expertise you can trust. Europe s leading provider of premium carrier-neutral data centres. 25 / TelecityGroup