Ovh Groupe Sas · EURONEXT:OVH
Ovh Groupe Sas — Ovh Groupe — FY2023 Earnings Presentation
39 slides from Ovh Groupe Sas's earnings presentation, Oct 25, 2023
Slide 1: FY23 Annual Results
FY23 Annual Results October 25th, 2023
Slide 2: Forward Looking Statement
FORWARD LOOKING STATEMENT IMPORTANT NOTICE - YOU MUST READ THE FOLLOWING BEFORE CONTINUING The following applies to this document, the oral presentation of the information contained in this document made by OVHcloud (the “Company”) or any person on behalf of the Company and any question-and-answer s
Slide 3: Sustainable growth in FY23
FY23 Sustainable growth in FY23 €897m 13.4% LFL revenue growth Revenue Target: 13-14% €325m 36.3% Adj. EBITDA margin Target: >36% 24% Adj. EBITDA Growth Capex as a % of revenue1 €25m Target: 28-32% Positive unlevered FCF in H2 FY23 16% Recurring Capex as a % of revenue1 Target: 16-20% 1. Based on FY
Slide 4: Q4 FY23 key highlights
Strong Q4 FY23 in Cloud business +22.8% Public cloud +14.5% Q4 LFL revenue growth Q4 FY23 Total Group Q4 LFL revenue growth +16.4% Private cloud key highlights Q4 LFL revenue growth Continued acceleration in Europe Continued ramp-up of PaaS and Sovereign solutions Confirmed high customer loyalty Suc
Slide 5: FY23 Strategic highlights
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Slide 6: Key differentiators to deliver growth & create value
Key differentiators to deliver growth & create value Only European with best-in- class technological offering Market structurally poised for strong long-term growth Sustainable cloud ✓ Data sovereignty by design champion Data Sovereignty as a major ✓ ✓ driver Multi & Hybrid cloud ✓ ✓ Integrated mode
Slide 7: A long-term investment strategy starting to bear fruits
A long-term investment strategy starting to bear fruits Grow Key Client Address Larger Market Geographic Expansion Segments Strengthened customer Enhanced product Expanded geographical mix with larger accounts portfolio footprint Significant investments in Number of locations products since FY21 12
Slide 8: Containers as central piece to move toward Cloud Native applications
Containers as central piece to move toward Cloud Native applications Kubernetes monitors application’s Kubernetes’ offering ramp-up workload and automatically deploy and scale up/down containers with already defined parameters Revenue Hardware Capex Development Capex FY19 FY20 FY21 FY22 FY23 Kuberne
Slide 9: OVHcloud is offering the 4 pillars to serve customers' AI use cases
OVHcloud is offering the 4 pillars to serve customers’ AI use cases 1 2 3 4 Compute, Storage Tools for datasets AI platform & Expertise & Network transformation Solutions • GPU range to cover all • Data Privacy & Sovereignty • AI solutions : AI Training - • Ability to support customers Use Cases, wi
Slide 10: FY23 Business highlights
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Slide 11: FY23 revenue: double digit growth in Public & Private cloud
FY23 revenue: double digit growth in Public & Private cloud FY23 Revenue & FY23 LFL Revenue growth Public Cloud Private Cloud Web Cloud & Other Group €155m €560m €183m €897m +21.0% +15.1% +3.1% +13.4% Cloud business +16.3% 11
Slide 12: Q4 FY23 – Sustained business dynamics in each segment
Q4 FY23 – Sustained business dynamics in each segment • Acquisition of new customers in all geographies Public cloud • Strong ramp-up of existing customers +22.8% 18% • High performance during FY23 of the Enterprise channel Q4 FY23 LFL growth % of Group revenue • PaaS reached €16m ARR in Sep. 2023 •
Slide 13: Continued strong growth in Cloud business with PaaS and Sovereign Products
Continued strong growth in Cloud business with increasing contributions from fast growing PaaS and Sovereign Products Cloud business PaaS 10k PaaS customers €186m +17.7% Q4 FY23 Revenue Q4 FY23 LFL growth €16m x2 Working on cross-sell to increase Sep. 2023 number of products consumed 200 20.0% Sep.
Slide 14: Continued high customer loyalty and ARPAC growth with limited churn
Continued high customer loyalty and ARPAC growth with limited churn High customer loyalty 110% Net Retention Rate in FY231 Revenue churn compared Unchanged to previous years Recurring growth with existing customers Double YoY ARPAC growth in FY23 digit Continued customer acquisition in cloud busines
Slide 15: gridscale's acquisition - Improved time-to-market and Capex flexibility
gridscale’s acquisition - Improved time-to-market and Capex flexibility gridscale an Edge Computing Accelerate geographical Main financials specialist deployment with lower Capex German company founded in 2014, Immediate capacity to open new Acquisition closed in FY24, consolidated in with a unique
Slide 16: FY23 Financials
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Slide 17: Double-digit growth in all geographies in FY23
Double-digit growth in all geographies in FY23 France Close to +20% LFL revenue Reported +13.7% 49% growth in Public Cloud and LFL1 +12.9% Private Cloud in Q4 FY23 Europe (excl. France) Another quarter of growth Reported +15.4% 29% acceleration, driven by LFL +15.2% Central Europe FY23 Rest of the W
Slide 18: Strong growth fuelled by Cloud business and price increase
Strong growth fuelled by Cloud business and price increase FY23 reported growth +13.9% +2.7% from price increase FY23 LFL growth +13.4% +5 892 897 +27 +3.1% +21.0% 865 Webcloud & Others LFL growth Public cloud +74 LFL growth 4 788 788 792 +15.1% 792 Private cloud LFL growth Reported data LFL1 data P
Slide 19: Persistent cost discipline in FY23 and going forward in FY24
Persistent cost discipline in FY23 and going forward in FY24 In € millions FY22 H1 FY23 H2 FY23 FY23 Var. Revenue 788.0 439.3 458.0 897.3 109.3 FY23 inflation on electricity and Direct costs (273.4) (158.7) (168.1) (326.7) (53.3) continued hedging strategy in FY24 Gross margin 514.6 280.7 289.2 570.
Slide 20: Deep dive – Persistent discipline on expenses
Deep dive – Persistent discipline on expenses Personnel costs – controlled expansion Electricity costs – no shocks Reinforced visibility on electricity costs with Persistent hiring discipline with 227 staff added in active hedging strategy FY 23 the year , up 8% (vs revenue up 13.4%) FY 23 Electrici
Slide 21: Improved Net operating income by €8m compared to FY22
Improved Net operating income by €8m compared to FY22 In € millions FY22 H1 FY23 H2 FY23 FY23 Var. Revenue 788.0 439.3 458.0 897.3 109.3 Recurring EBITDA 277.1 151.8 165.6 317.4 40.3 Activity growth, start of capitalised projects and right of use amortisation for €(39)m Depreciation, amortisation an
Slide 22: Generation of €25m unlevered FCF in H2 FY23
Generation of €25m unlevered FCF in H2 FY23 H1 H2 H1 H2 In € million FY22 FY22 FY22 FY23 FY23 FY23 Adjusted EBITDA 153 155 308 156 169 325 Gross cash flow from operating activities 127 135 262 143 167 310 Change in WC 26 (3) 23 3 26 29 Corporate income taxes (7) (4) (11) (3) (6) (9) Net cash flow fr
Slide 23: Normalisation of Growth Capex generating sustainable unlevered FCF
Normalisation of Growth Capex generating sustainable unlevered FCF as soon as H2 FY23 25 20 Generation of Unlevered FCF in H2 FY23 -30 -22 -53 Normalisation of Growth Capex after -80 2-years of Capex related to Strasbourg, -80 post-Covid supply chain tensions, -86 -86 -90 opening of new DC and devel
Slide 24: Flexible and efficient growth capex
Flexible and efficient growth capex FY22 FY23 FY24 trend In % Revenue In % Revenue In % Revenue Total Capex 59% 40% ➔ Normalisation of Growth Capex ➔ No compromise on future growth ➔ Stock consumption Servers 32% 18% ➔ Flexibility on server production Stable Infrastructure ➔ New sites and expansion
Slide 25: Strong balance sheet with positive trends on cash
Strong balance sheet with positive trends on cash Investment plan more than fully financed In € million H1 FY23 FY23 €100m available from EIB (out of €200m) LTM Adjusted EBITDA 310 325 €370m available from RCF (out of €420m) Total available liquidity1 524 519 €49m cash and cash equivalents Net Debt
Slide 26: Outlook
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Slide 27: FY24 Financial targets
FY24 trends 11-13% Continued strong FY24 Financial ARPAC growth LFL revenue growth Cautious forecasts on targets customer acquisition >37% +1-2% pricing contribution in FY24, mostly in Q1 Adj. EBITDA margin Persistent discipline on Opex Positive ~24% Continued selective unlevered FCF in Growth Capex
Slide 28: Summary of targets for FY24 and FY25
FY2024 targets FY2025 targets LFL revenue growth 11%-13% Improved versus FY24 Summary of Adjusted EBITDA margin >37% Improved versus FY24 targets for Growth ~24% FY24 and FY25 Capex as a % of revenue Recurring ~16% Decreasing compared to FY24 Unlevered FCF Positive in H2 Positive on full-year basis
Slide 29: Save the date – Investor day in London
Save the date – Investor day in London WHERE? London & Live webcast WHEN? January 17th, 2024 29
Slide 30: OVHcloud
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Slide 31: Key takeaways
Key takeaways Sustainable growth Addressing a larger Balanced FY24 targets in FY23 market €897M Strengthened customer LFL Revenue growth between 11% - 13% Revenue mix with larger accounts Adj. EBITDA margin >37% +13.2% LFL Enhanced product Growth & Recurring portfolio €325M Adj. EBITDA Capex around
Slide 32: Appendices
Appendices 32
Slide 33: Glossary
Glossary Like-for-like is calculated at constant exchange rates, constant perimeter and excluding Strasbourg (SBG) direct impacts. Perimeter adjustments correspond to M&A. The net revenue retention rate for any period is equal to the percentage calculated by dividing (i) the revenue generated in suc
Slide 34: ESG – Key Performance Indicators
ESG – Key Performance Indicators FY 2021 FY 2022 FY 2023 Environment 1.29 PUE (Power Usage Effectiveness) 1.1-1.3 1.28 (1.26 at similar scope) WUE (Water Usage Effectiveness) 0.30 0.17-0.20 0.26 in L/kWh IT (0.28 at similar scope) CUE (Carbon Usage Effectiveness) 0.15-0.18 0.20 0.18 in tCO2e/MWh IT
Slide 35: Revenue by segment and geography
Revenue by segment and geography Q1 FY2022 Q2 FY2022 Q3 FY2022 Q4 FY2022 FY2022 Q1 FY2023 Q2 FY2023 Q3 FY2023 Q4 FY2023 FY2023 In € million – by segment Reported Reported Reported Reported Reported Reported Reported Reported Reported Reported Private cloud 113.3 119.3 125.3 127.3 485.0 133.0 139.9 1
Slide 36: Reconciliation reported & like-for-like
Reconciliation reported & like-for-like FX Perimeter Strasbourg FX Perimeter Strasbourg In € million FY22 Reported FY22 LFL In € million FY22 Reported FY22 LFL impacts impacts impacts impacts impacts impacts Private cloud 485.0 -0.5 0.0 2.2 486.7 France 389.3 0.0 0.5 2.2 392.0 Public cloud 126.3 -0.
Slide 37: Consolidated Statement of Income
Consolidated Statement of Income (in thousand euros) FY 2022 FY 2023 Revenue 787 998 897 299 Personnel expenses (211 063) (220 969) Operating expenses (299 867) (358 916) Recurring EBITDA 277 068 317 414 Depreciation, amortisation and impairment expenses (268 705) (319 149) Net recurring operating i
Slide 38: Consolidated Statement of Financial Position
Consolidated Statement of Financial Position (in thousand euros) 31 august 2022 31 august 2023 Goodwill 50 892 43 971 Other intangible assets 223 506 264 779 Property, plant and equipment 949 512 954 342 Rights of use assets 40 345 122 845 Non-current derivative financial instruments - assets(1) - 2
Slide 39: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows (in thousand euros) FY 2022 FY 2023 Consolidated net income (loss) (28 554) (40 320) Adjustments to net income items: Depreciation, amortisation and impairment of non-current assets and rights of use relating to leases 268 705 319 149 Changes in provisions (8 983