Slide 1: Results for the Half Year to 30 September 2014
SN REDCE! RESULTS FOR THE HALF YEAR TO 30 SEPTEMBER 2014 TONY WEAVER - CEO FRASER FISHER - COO TIM COLEMAN - CFO redcentric business technology. managed.
Slide 2: At a Glance
AT A GLANCE Redcentric is one of the UK's leading end-to-end IT managed service providers delivering innovative technology to improve business productivity and efficiency * Borne from the demerger of Redstone in April 2013 and the acquisition of InTechnology Managed Services in December 2013 * Tradi
Slide 3: H1 Summary
H1 SUMMARY * Strong organic revenue growth of 11% to £46.8m * Growing sales momentum * Improved profitability, EBITDA growth of 32% to £10.1m, margin of 21.5% (pro-forma H1 FY14 18.1%) = Integration benefits = Improved revenue mix * Effective business model * Continued solid cash generation = Maiden
Slide 4: Improved Order Intake and Growing Pipeline
IMPROVED ORDER INTAKE AND GROWING PIPELINE • • • • Sales Pipeline • •
Slide 5: Ahead of Plan and Almost Completed
AHEAD OF PLAN AND ALMOST COMPLETED • • •
Slide 6: Financial Highlights
FINANCIAL HIGHLIGHTS FY15 H1 FY14 H1 Pro-forma* £'m £'m £'m Revenue 46.8 21.0 +123% 42.2 +11% Recurring % 80% 67% 80% EBITDA 10.1 3.6 +181% 7.6 +32% EBITDA margin 21.5% 17.1% 18.1% Free cash-flow 4.9 (0.9) Operating cash conversion 82.5% 6.6% Net debt (8.7) (12.1) Net debt/run-rate EBITDA** 0.43x 1.
Slide 7: Growing, Recurring, Profitable Revenue Streams
GROWING, RECURRING, PROFITABLE REVENUE STREAMS Recurring Services Product • •
Slide 8: Income Statement
INCOME STATEMENT redcentric business technology. managed FY15 H1 FY14 H1 FY14 H1 Reported Pro-forma £m £m +/- im +/- Revenue 46.8 21.0 123% 42.2 11% EBITDA 10.1 3.6 181% 7.6 32% EBITDA margin 21.5% 17.1% 18.1% Depreciation (2.5) (0.6) Amortisation (2.6) (0.7) Transaction & integration (0.3) (1.1) Sh
Slide 9: Strong Cash-flow Drives Debt Reduction and Dividends
EBITDA Working capital Capex Transaction & integration Interest FCF Share issues Dividends Net debt reduction • STRONG CASH-FLOW DRIVES DEBT REDUCTION AND DIVIDENDS
Slide 10: Balance Sheet
BALANCE SHEET * Significant owned infrastructure assets creates competitive differentiator * Working capital stable despite back- office integration in H1 * Net bank debt reduced by £3.6m redcentric business technology. managed Balance sheet (£m) Sep'14 Mar'14 Fixed assets 22.0 22.4 Intangible asset
Slide 11: Bank Debt and Facilities
BANK DEBT AND FACILITIES Net debt (£m) Sep'14 _Mar'14 +/- Cash 3.3 3.9 (0.6) Drawn debt (12.0) (16.2) 4.2 Net debt (8.7) — (12.3) 3.6 Run-rate EBITDA* 20.1 7.2 Net debt/EBITDA 0.43x 1.72x *H1x2 £25m = Available facilities £20m m Net bank debt £15m £10m £5m £0m Mar'14 Sep '14 Mar'15 Sep'15 Mar 16 Sep
Slide 12: Earnings and Cash-flow Supports Progressive Dividend
EARNINGS AND CASH-FLOW SUPPORTS PROGRESSIVE DIVIDEND •
Slide 13: Competition & Marketplace
COMPETITION & MARKETPLACE Competitive landscape Sector characteristics drive PE interest redcentric business technology. managed BIG PLAYERS LD vodafone BT amazoncom. fo) Google FUJITSU > accenture —“**<s_ A Xerox €) Compory adapt SBLOGICALIS Basics ened ecko wining eon @ Computacenter % KcCOomM li
Slide 14: Summary
SUMMARY * Organic revenue growth, with strong momentum * 80% recurring revenue with 21% EBITDA margin provides a stable and profitable platform * Cash-generative model supports debt reduction and progressive dividend * Integration ahead of schedule, with cost synergies achieved * High-quality platfo
Slide 15: Appendices
APPENDICES redcentric business technology. managed.
Slide 16: Redcentric's Differentiator
REDCENTRIC’S DIFFERENTIATOR ‘APPLICATIONS "NETWORKS : COLLABORATION ' SECURITY | INFRASTRUCTURE | 1 ‘MOBILE 24/7 DUAL SITE NOC redcentric business technology. managed 16
Slide 17: Services
SERVICES APPLICATIONS Mainframe Services Oracle Services Application Acceleration redcentric business technology. managed COLLABORATION IP Telephony SIP Trunks Unified Communications Video Conferencing Cals & Lines Inbound Services INFRASTRUCTURE DRaaS Hosting & Colocation Data Management laaS SaaS
Slide 18: Data Centre & Network Assets
DATA CENTRE & NETWORK ASSETS Data Centre 1,255 Racks across c50,000 Sq Ft, 867 used, 388 available for growth Reading + £3.2m of investment in 2012 Reading refresh * 10,000 Sq Ft, PUE of 1.25, 420 rack capacity, Embedded in 10Gb network * High capacity supported; 3-8kw per rack, UPS & 3x back up gen
Slide 19: Coverage
COVERAGE ¥ HARROGATE CAMBRIDGE HODDESDON LONDON READING redcentric business technology. managed Redcentric’s Hyderabad Office * NOT acall centre & NOT an outsource * Single team structure between UK & India — Huge skilled resource pool (9m) = Strong work ethic — — 1st, 29d and 34 line technical reso
Slide 20: Harrogate (Head Office)
HARROGATE (HEAD OFFICE) Central House Beckwith Knowle Harrogate HG3 1UG THEALE 2 Commerce Park Brunel Road Theale, Reading Berkshire RG7 4AB CAMBRIDGE Newton House Cambridge Business Park Cowley Road Cambridge CB4 OWZ READING 3-5 Worton Drive Reading Berkshire RG2 OTG redcentric business technology.