Ovh Groupe Sas · EURONEXT:OVH
Ovh Groupe Sas — Ovh Groupe — FY2024 Earnings Presentation
39 slides from Ovh Groupe Sas's earnings presentation, Oct 24, 2024
Slide 1: FY24 Annual Results
FY24 Annual Results O c t o b e r 2 4 th, 2 0 2 4
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: Key Highlights
Key Highlights FY2024 results in line with guidance 1 Double digit revenue growth combined with increased EBITDA margin and positive unlevered FCF generation New CEO for a new phase - Benjamin Revcolevschi to drive the trajectory towards a more predictable growth 2 and higher cash flow generative mo
Slide 4: FY24 results in line with guidance
FY24 results in line with guidance Net Revenue Revenue Adj. EBITDA Unlevered FCF Retention Rate FY24 results €993m €381m €25m 107% FY24 guidance Positive LFL revenue growth Adj. EBITDA margin Growth Capex Recurring Capex (in % of revenue) (in % of revenue) FY24 results +10.3% 38.4% 22% 13% FY24 guid
Slide 5: New CEO to drive the growth trajectory towards a higher cash-flow generative model
New CEO to drive the growth trajectory towards a higher cash-flow generative model CEO to present detailed initiatives Benjamin Revcolevschi in the coming months CEO Stepping in as CEO of OVHcloud is an exciting ✔ Sales & Marketing efficiency challenge. The company has strong fundamentals, and I loo
Slide 6: +9% to +11% LFL growth in FY25, based on solid growth levers
+9% to +11% LFL growth in FY25, based on solid growth levers Levers factored in Growth levers beyond FY25 to reach FY25 target Key initiatives +10.3% ✓ Consolidate leadership position and LFL growth ✓ Stabilized environment in Europe further enhance private cloud ✓ Leverage strong dynamics in the Be
Slide 7: c.40% adj. EBITDA margin in FY25, with further upsides targeted in medium term
c.40% adj. EBITDA margin in FY25, with further upsides targeted in medium term Levers already factored in Potential levers to generate to reach FY25 target upsides beyond FY25 Adjusted EBITDA c.40% Key initiatives margin ✓ Sales efficiency by focusing on promising products & customers 38.4% segments
Slide 8: Growing unlevered FCF in FY25 vs. FY24
Growing unlevered FCF in FY25 vs. FY24 Levers already factored in Levers to increase cash flow to reach FY25 target generation beyond FY25 Key initiatives Unlevered FCF ✓ Stronger EBITDA generation ✓ Further EBITDA improvements Growing €25m ✓ Lower capital intensity ✓ Working capital initiatives and
Slide 9: Selective investment plan in FY25 focused on revenue-generating hardware capex
Selective investment plan in FY25 focused on revenue-generating hardware capex, while optimising infrastructure Capex increase in absolute value but reduction as a % of revenue Reduction of capital intensity1 Capex plan to support 9% to 11% Recurring Capex 13% revenue growth as a % of revenue -1pt G
Slide 10: Global presence, with major datacenter infrastructure investments behind us
Global presence, with major datacenter infrastructure investments behind us As of August 31, 2024 7 datacenters opened in FY24 +3 +2 +1 +1 Datacenter opening planned in FY25 +1 Existing capabilities FY25 Local Zones openings planned, 43 in 9 44 16 with lower capital intensity 20+ local zones datacen
Slide 11: Our vision for OVHcloud: Sustainable and cash generative growth
Our vision for OVHcloud: Sustainable and cash generative growth 1 Strong and more predictable revenue growth of c. 10% 2 Adj. EBITDA margin structurally above 40% 3 Positive Levered FCF in FY26, growing afterwards FY24 Results 11
Slide 12: New management, new phase and a liquidity option
New management, new phase and a liquidity option Allowing shareholders, who have limited liquidity today, to partially monetize or stay with the new management story Company offering to buyback €350m of shares at €9.0 per share (OPRA) Confidence in the long-term fundamentals ✔ A new management team
Slide 13: FY24 Business Highlights
Wa OVHcloud FY24 Business Highlights
Slide 14: FY24 - Double-digit growth driven by Private & Public Cloud
FY24 - Double-digit growth driven by Private & Public Cloud High Revenue Retention Rate with limited and stable churn Private Cloud Public Cloud Webcloud & Other €993m €624m €183m €187m +10.3% +10.7% +11.8% +11.3% +14.2% +18.3% +2.1% +2.3% LFL growth Reported growth LFL growth Reported growth LFL Gr
Slide 15: Successful risk management and new opportunities following VMware price increases
Private Cloud Successful risk management and new forward business opportunities following price increases of VMware products by Broadcom Short term successful negotiation Medium to Long term on price increases business opportunities New VCD offerings with Selected as one Broadcom’s dedicated resourc
Slide 16: OVHcloud named a Major Player for European Public Cloud IaaS by IDC
Public Cloud OVHcloud named as a Major Player for European Public Cloud IaaS according to IDC MarketScape OVHcloud does not charge for data traffic over the internet to keep billing clear and predictable. OVHcloud Digital sovereignty is one of OVHcloud's major strengths, and the vendor can apply thi
Slide 17: Continued development of strategic growth levers
Data Sovereignty & Products Continued development of strategic growth levers SecNumCloud offering Focus on roll-out of Public Cloud Products Already Available FY25 priorities Already Available in FY25 ✔ Increase geographical Available 40+ Public Cloud Products availability Private Cloud Public Cloud
Slide 18: FY24 Financials
Wa OVHcloud FY24 Financials
Slide 19: Improving performance in Q4 FY24 after Q3 FY24 low point
Improving performance in Q4 FY24 after Q3 FY24 low point Double-digit growth in Q4 Recent customer wins Key highlights ✔ A stabilized environment in €256m +10.6% Europe, though not yet Q4 FY24 LFL improving Q4 FY24 Revenue Revenue growth ✔ Continued strong demand in the Q4 FY24 LFL growth US AI tren
Slide 20: Continued acceleration in Rest of the World; challenging macro in Europe
Continued acceleration in Rest of the World thanks to the USA and stable but still challenging macro conditions in Europe France Solid momentum in Hosted Private Cloud and Public Cloud with Reported +9.5% +9.4% 49% acceleration in Q4 LFL +9.5% +9.4% Limited growth in Webcloud mostly due to Telephony
Slide 21: Strong operating leverage leading to +2.1pts Adj. EBITDA margin improvement
Strong operating leverage leading to +2.1pts Adj. EBITDA margin improvement In € million FY23 FY24 Var. Revenue 897.3 993.1 95.8 Revenue ✔ €14m from price increases COGS (107.2) (121.0) (13.8) ✔ Reduced proportion of Web Cloud direct costs Operating costs (233.8) (244.4) (10.6) Gross ✔ Operating lev
Slide 22: Improved operating income margin by +3.9pts vs FY23
Improved operating income margin by +3.9pts vs FY23 In € million FY23 FY24 Var. Recurring EBITDA 317.4 372.0 54.6 Depreciation, amortisation and ✔ Increased commissioning of capitalised (319.1) (343.1) (23.9) impairment expenses development projects D&A ✔ Increased rights-of-use from leased datacent
Slide 23: Unlevered Free Cash Flow of €25m
Unlevered Free Cash Flow of €25m In € million FY23 FY24 Adjusted EBITDA 325.5 381.5 Gross cash flow from operating activities 309.5 377.6 €25m 21.8% 12.7% Unlevered Growth CAPEX Recurring CAPEX Change in WC 29.1 2.8 Free Cash Flow In % Revenue In % Revenue Corporate income taxes (8.9) (12.2) Net cas
Slide 24: Successful capex optimization thanks to our flexible model
Successful capex optimization thanks to our flexible model FY23 FY24 In % Revenue In % Revenue Hardware ➔ Reduced capital intensity of new servers (Servers) 18% 16% ➔ Lower demand in Europe compared to last year ➔ Opening of 7 datacenters in FY24, with major Infrastructure & Network 11% 8% investmen
Slide 25: Financing structure refinanced with earliest maturity extended by 5 years
Financing structure refinanced with earliest maturity extended by 5 years FY24 financing structure New financing structure Financial debt (31 Aug-24) Financial debt (Proforma 31 Aug-24) €m €m EIB Loan 204 EIB Loan 204 Term Loan 499 Term Loan 450 ✔ Extending maturity by 5 years Other debt 5 New Senio
Slide 26: Detailed terms of the share buyback offer
Detailed terms of the share buyback offer Offer terms to shareholders • All shareholders can tender, and should expect a take up ratio of no less than c.53% on their tendered Share €350m shares(1) buyback 39m shares amount 20.4% of outstanding shares • Klaba Family will only partially participate to
Slide 27: Outlook
Wa OVHcloud Outlook
Slide 28: Financial targets
Financial targets FY2024 FY2025 New phase of development LFL revenue growth 10.3% 9%-11% ✔ Strong and more predictable Adjusted EBITDA margin 38.4% c.40% revenue growth of c. 10% ✔ Adj. EBITDA margin Recurring ~13% 11-13% structurally above 40% Capex as a % of revenue Growth ~22% 19-21% ✔ Positive L
Slide 29: Q&A
Wa OVHcloud Q&A
Slide 30: FY24 results – Key takeaways
FY24 results – Key takeaways FY2024 results FY25 targets Entering a new phase €993m LFL Revenue growth between 9% - 11% Revenue New phase of development with c.40% Adj. EBITDA margin new leadership 38.4% Recurring Capex between 11% to Company to offer shareholders Adj. EBITDA margin 13% and Growth C
Slide 31: Appendices
Wa OVHcloud Appendices 31
Slide 32: Key investment highlights
Large & fast-growing cloud market fueled by structural megatrends Sole European at scale with a global footprint and best performance price ratio positioning Data Sovereignty champion with a comprehensive cloud offering Key investment Sustainable growth trajectory with leading positions in highlight
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 2022 FY 2023 FY 2024 Environment PUE (Power Usage Effectiveness) 1.28 1.29 1.26 WUE (Water Usage Effectiveness) in L/kWh IT 0.26 0.30 0.37 CUE (Carbon Usage Effectiveness) in tCO2e/MWh IT 0.20 0.18 0.16 REF (Renewable Energy Factor) 77% 91% 92% Reused components r
Slide 35: Revenue by segment and geography
Revenue by segment and geography Q1 FY2023 Q2 FY2023 Q3 FY2023 Q4 FY2023 FY2023 Q1 FY2024 Q2 FY2024 Q3 FY2024 Q4 FY2024 FY2024 In € million – by segment Reported Reported Reported Reported Reported Reported Reported Reported Reported Reported Private cloud 133.0 139.9 141.9 145.3 560.1 149.6 152.9 1
Slide 36: Reconciliation reported & like-for-like
Reconciliation reported & like-for-like FY23 FX Perimeter Strasbourg FY23 FY23 FX Perimeter Strasbourg FY23 In € million In € million Reported impacts impacts impacts LFL Reported impacts impacts impacts LFL Private cloud 560.1 (2.6) 0.0 0.2 557.7 France 441.1 0.0 0.0 0.2 441.2 Public cloud 154.6 (0
Slide 37: Consolidated Statement of Income
Consolidated Statement of Income (in thousand euros) FY 2023 FY 2024 Revenue 897,299 993,053 Personnel expenses (220,969) (238,852) Operating expenses (358,916) (382,250) Recurring EBITDA 317,414 371,952 Depreciation and amortisation expenses (319,149) (343,059) Net recurring operating income (1,735
Slide 38: Consolidated Statement of Financial Position
Consolidated Statement of Financial Position (in thousand euros) 31 august 2023 31 august 2024 Goodwill 43,971 59,708 Other intangible assets 264,779 295,131 Property, plant and equipment 954,342 972,444 Rights of use assets 122,845 135,617 Non-current derivative financial instruments - assets(1) 22
Slide 39: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows (in thousand euros) FY 2023 FY 2024 Consolidated net income (loss) (40,320) (10,297) Adjustments to net income items: Depreciation, amortisation and impairment of non-current assets and rights of use relating to leases 319,149 343,059 Changes in provisions (294)