Cordiant Digital Infrastructure Limited · LSE:CORD
Cordiant Digital Infrastructure — FY2023 Earnings Presentation
45 slides from Cordiant Digital Infrastructure's earnings presentation, June 2023
Slide 1: Annual Results Presentation for the year to 31 March 2023
Cordiant Digital Infrastructure Limited Annual Results Presentation For the year to 31 March 2023 June 2023
Slide 2: Disclaimer
Disclaimer By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations. This document has been issued by and is the sole responsibility of Cordiant Digital Infrastructure Limited (CORD). This document contains in
Slide 3: Agenda – Contents and speakers
Agenda – Contents Agenda – speakers Steven Marshall Co-Head and Chairman, HIGHLIGHTS – page 4 Cordiant Digital Infrastructure Chair of the Cordiant Digital Infrastructure Investment Committee FINANCIALS – page 8 Benn Mikula PORTFOLIO UPDATE – page 15 Co-Head, Cordiant Digital Infrastructure Managing
Slide 4: Highlights
Highlights Strong NAV growth and total return performance Underpinned by strength of assets, team and balance sheet Well placed to grow, with cash to invest, better mid-market asset pricing and strong data demand Cordiant Digital Infrastructure Limited 4
Slide 5: Highlights – Strong performance during period of market volatility
Highlights – Strong performance during period of market volatility CORD is a sector-focused specialist owner and operator of Digital Infrastructure that enables modern communications and the internet 10.0% Total return for the year CORD applies a Core Plus 113.4p per share NAV growth to 113.4p per s
Slide 6: Highlights – Continuing positive developments
Highlights – Continuing positive developments £795m Dividend guidance increased to Dividend guidance increased to Emitel raised in equity in acquired the first year 3.0p 4.0p for £353m in November 2022 CRA Hudson €200m ATC Polska acquired Interxchange Eurobond Bolt-On for £306m in acquired raised in
Slide 7: Portfolio & strategy – A highly diversified asset base
Portfolio & strategy – A highly diversified asset base with robust financial results A well-diversified asset mix 7 c. 17MW c. 4,368km 9 data centres of data centre power capacity fibre network multiplexers operated 1,2001 60 4,591 c. 70,000 telecommunications towers broadcast-only towers microwave
Slide 8: Financials
Financials Cordiant Digital Infrastructure Limited 8
Slide 9: Financials – FY 2023 NAV bridge
Financials – FY 2023 NAV bridge NAV increased by 8.6p to 113.4p per share Figures in £m, unless otherwise stated …despite an 81 basis point increase in portfolio average Value movement breakdown discount rate since 31 March 2022, to 9.60% as of 31 March 47.9 4.3 2023 71.4 123.6 123.6 CRA Emitel Huds
Slide 10: Financials – FY 2023 value bridge - Emitel
Financials – FY 2023 value bridge - Emitel Emitel acquired during the year. First valuation as of 31 March 2023 Figures in £m, unless otherwise stated 27.3 (3.0) 20.6 13.2 9.3 429.0 361.6 353.0 £ cost of acquiring PLN Value of cash and FX Cash Net Reduction Other Cash retained Closing value forwards
Slide 11: Financials – FY 2023 value bridge – CRA, Hudson Interxchange
Financials – FY 2023 value bridge – CRA, Hudson Interxchange Figures in £m, unless otherwise stated Figures in £m, unless otherwise stated 26.6 4.7 71.4 2.7 4.2 4.3 (14.4) 389.1 (63.2) 58.2 57.0 351.6 55.8 305.9 Cost Opening value Capitalised Effect of Other value Foreign Closing value Cost Opening
Slide 12: Financials – Performance recap
Financials – Performance recap Strong returns since inception… …with a dividend ahead of IPO schedule Dividend per share NAV return 4.0p 4.0p 10.0% – annualised 3.5p 21.1% – since inception 3.0p 3.0p 2.0p 1.0p Gross asset return 38.2% – since inception FY Mar 2022 FY Mar 2023 FY Mar 2024 FY Mar 2025
Slide 13: Financials – Portfolio debt facilities
Financials – Portfolio debt facilities Strong liquidity position with significant dry powder Conservative debt structure • Eurobond facility of €200 million signed in June 2022 providing additional • Conservative long-term portfolio gearing3 of c.30%, with pro forma firepower for new acquisitions an
Slide 14: Financials – Portfolio revenue analysis
Financials – Portfolio revenue analysis Proportion of portfolio revenue with Revenue diversified across three main Highly contracted revenue base1 inflation-linked escalators3 subsectors2 Revenue from Data centres and contracts likely Not indexed cloud computing to renew and 23% 21% 13% 77% new busi
Slide 15: Portfolio update
Portfolio update Cordiant Digital Infrastructure Limited 15
Slide 16: Portfolio update – Emitel
Portfolio update – Emitel Emitel investment highlights Emitel is the #1 provider of broadcast infrastructure in Poland and is a strong independent mobile infrastructure operator, benefiting from Stable and predictable 1 revenues linked to inflation long-term, inflation-linked contracts with a strong
Slide 17: Portfolio update – Emitel (cont.)
Portfolio update – Emitel (cont.) KEY DRIVERS % OF 2022 REVENUE2 1 TV broadcasting • Recurring revenues from blue chip clients for distribution of their channels on Emitel’s MUXes 60% • Driven by bandwidth used / # of total MUXes slots1 / # of emissions encoded (coverage) Radio 2 broadcasting • Addi
Slide 18: Portfolio update – Emitel (cont.)
Portfolio update – Emitel (cont.) Acquisition of American Tower Corporation’s Polish subsidiary • On 1 June 2023, Emitel announced the acquisition of ATC Polska, American Tower Corporation’s subsidiary in Poland • ATC Polska's portfolio comprises of 65 modern lattice towers which are leased to leadi
Slide 19: Portfolio update – CRA
Portfolio update – CRA CRA investment highlights Stable and predictable #1 independent digital infrastructure multi-asset platform in Czech Republic, with superior nationwide infrastructure assets with high 1 revenues linked to inflation revenue visibility from long-term contracts with a mix of CPI-
Slide 20: Portfolio update – CRA (cont.)
Portfolio update – CRA (cont.) KEY DRIVERS % REVENUE March 20232 TV & radio • Recurring revenues from broadcasters for distribution of their channels on CRA’s MUXes 1 broadcasting • Driven by # of channels and their quality with volume and/or contract length discounts 50% Mobile towers • Site hostin
Slide 21: Portfolio update – CRA (cont.)
Portfolio update – CRA (cont.) Communication Towers Data centres and cloud and fibre Overall corporate • Points of presence (PoPs) increased y-o-y by • Revenue per utilised rack has risen by 26.1% • Revenue and EBITDA (IFRS16) grew in the year c.7.4% to total of 1,324 compared to March 2022 ending 3
Slide 22: Portfolio update – Hudson Interxchange
Portfolio update – Hudson Interxchange Interconnect data centre Financial performance • Hudson InterXchange is located in the most connected building in New York City, 60 • Revenue (non-GAAP) grew, though slightly behind budget due to slower sales Hudson, and offers over 300 carriers to service cust
Slide 23: ESG & impact
ESG & impact Cordiant Digital Infrastructure Limited 23
Slide 24: ESG & Impact – Highlights
ESG & Impact – Highlights Company and portfolio • All portfolio companies working towards increasing the share of renewable energy in energy consumption and the implementation of energy efficiency improvements • 2/3 of assets support Smart City solutions, enabling the development of sustainable urba
Slide 25: ESG & Impact – Portfolio overview
ESG & Impact – Portfolio overview • Launched 30 new photovoltaic installations with a • Reduced carbon footprint of operations through the • Installation of new cooling towers with the latest total capacity of 1,423.35kWp purchase of renewable energy; CRA aiming to technology that minimise water usa
Slide 26: Market context
Market context Cordiant Digital Infrastructure Limited 26
Slide 27: Market dynamics – The good news: demand holds up despite headwinds
Market dynamics – The good news: demand holds up despite headwinds Digital infrastructure The sector remains a beneficiary 3rd largest infrastructure sector of significant tailwinds Global bandwidth usage, Terabits per second2 Average Annual Capex Need: 2017-2035, US$ tn1 4,500 1 Power infrastructur
Slide 28: Market dynamics – New financial conditions favour Buy, Build & Grow
Market dynamics – New financial conditions favour Buy, Build & Grow… Interest rates (5-year swaps) – then and now1 Implications • Infrastructure investing moves to a Core Plus / Value Add model • Acquisitions at lower EBITDA multiples exhibit more resilience to higher 3.777% interest rates 3.341% •
Slide 29: Market dynamics – Leads to some repricing
Market dynamics – Leads to some repricing Drop in multiples for mid-market deals creates opportunities for CORD 10% increase 28.5x 26.0x 14% decrease 23.5x 16% decrease 20.2x 18.8x 18.8x 15.7x Highly competitive 10.6x Less crowded trade CORD 1 Large-cap Large-cap Mid-market 4 Public Towers and Data-
Slide 30: Market dynamics – Value creation model
Market dynamics – Cordiant Digital Infrastructure’s value creation model Traditional infrastructure investing (indicative) Cordiant Digital Infrastructure – Buy, Build & Grow strategy (Core Plus and Value Add, indicative) …driven by a unique marriage of operating and private equity expertise Tuck-un
Slide 31: Pipeline and conclusion
Pipeline and conclusion Cordiant Digital Infrastructure Limited 31
Slide 32: Pipeline – Current opportunities (>€3.2bn)
Pipeline – Current opportunities (>€3.2bn) Pipeline by geography Pipeline by sub-sector North America 11% United Other Digital Infra 11% Kingdom 11% Broadcast Towers 11% 11% Mobile Towers Multi-asset 22% 28% Data Mainland Europe Fibre Centres 78% 17% Commentary • Pipeline is somewhat weighted toward
Slide 33: Conclusion
Conclusion 1 2 3 10.0% annual total return Strong performance during ahead of target demonstrating Dividend covered 1.5x by Adjusted a challenging year robust capital growth despite Funds from Operations increased discount rates 4 5 6 Strong liquidity to support pipeline Highly diversified portfolio
Slide 34: Appendix
Appendix Cordiant Digital Infrastructure Limited 34
Slide 35: Appendix – Returns model
Appendix – Returns model For year ended 31 March 2023 Target return as per prospectus Pro forma Actual return per asset (%) (once fully invested) CRA 10.6% - Hudson Interxchange (9.8%) - Emitel 17.7%1 - Total portfolio company return 12.3% 10.2% Cash 0.4% - Total asset return2 11.8% 10.2% Management
Slide 36: Appendix – AFFO analysis and dividend cover
Appendix – AFFO analysis and dividend cover 12 months to 31 March 20231 (unaudited), £m Portfolio company revenues 200.4 Portfolio company normalised EBITDA 105.0 Company-specific costs (11.6) Net finance costs (18.8) Net taxation, other (14.9) Free cash flow before all capital expenditure2 59.7 Mai
Slide 37: Appendix – Six month value bridge
Appendix – Six month value bridge Figures in £m, unless otherwise stated NAV progression for the six months to 31 March 2023 18.2 50.0 (12.8) (1.0) 4.8 875.7 816.5 Opening NAV Accrued Value FX Fund Net change Closing NAV (ex-dividend) income movement movement expenses in shares at 31 March 2023 Cord
Slide 38: Appendix – Statement of comprehensive income (audited)
Appendix – Statement of comprehensive income (audited) IFRS Statement of Total unrealised Net foreign Comprehensive Income Total Accrued income Fund expenses value movement exchange translation For the year ended 31 March 2023 £m £m £m £m £m Net gains on investments at fair value through profit or l
Slide 39: Appendix – Statement of financial position (audited)
Appendix – Statement of financial position (audited) IFRS Statement of Other assets/ Inter-company Financial Position Total Emitel CRA Hudson Cash Eurobond (liabilities) balances As at 31 March 2023 £m £m £m £m £m £m £m £m Investments at fair value through profit or loss 872.3 429.0 389.1 57.0 20.7
Slide 40: Appendix – Sustainability disclosures
Appendix – Sustainability disclosures As a signatory, the Investment Manager aims to publicly commit to implementing a global standard for managing investments with sustainability in mind. The Investment Manager’s full UN PRI statement, which can be found within CORD’s upcoming Annual Report, UN PRI
Slide 41: Appendix – Key sustainability indicators
Appendix – Key sustainability indicators Sustainability indicators Units 2022 Emitel CRA Hudson Scope 1 GHG emissions Metric tons (t) CO2 -e 3,002 1,838 1,156 8 Scope 2 GHG emissions Metric tons (t) CO2 -e 22,938 8,777 9,917 4,244 Total GHG emissions (Scope 1 and Scope 2 emissions) Metric tons (t) C
Slide 42: Appendix – Cordiant Capital at a glance
Appendix – Cordiant Capital at a glance An Institutional Manager Strong Proprietary True sector specialists in Serving large insurance companies (including deal flow digital infrastructure SIFIs), pension plans, private banking Investment team combines senior operating platforms, multi-asset funds,
Slide 43: Cordiant Capital (Investment Manager)
Cordiant Capital (Investment Manager) Senior Digital Infrastructure team 1 Depth of experience stands out in the market, enabling better buying Steven Marshall Benn Mikula Jean-Francois Sauve Stephen Foss Co-Head Co-Head Investment Committee Managing Director Chairman of Digital Infrastructure Manag
Slide 44: Board
Cordiant Digital Infrastructure Limited Board Shonaid Jemmett-Page FCA Marten Pieters Chairman Non-executive Director • 20 years at KPMG, rising to Partner • 29 years senior international telecoms sector experience • Currently non-executive Director of Aviva plc, • Currently chair of the supervisory
Slide 45: Thank you
Thank you If you have any queries, please contact us INVESTMENT MANAGER Cordiant Capital Inc., Suite 2800, 1002 Sherbrooke, St. W, Montreal, QC, H3A 3L6. Canada +1 (0) 514 286 1142 63 St. James’s Street, London, SW1A 1LY, United Kingdom +44 (0) 203 725 9999 CordiantDigitalTrust@cordiantcap.com MEDIA
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