Ovh Groupe Sas · EURONEXT:OVH
Ovh Groupe Sas — Ovh Groupe — H1 FY24 Earnings Presentation
35 slides from Ovh Groupe Sas's earnings presentation, Apr 23, 2024
Slide 1: Half-year FY24 Results
Half-year FY24 Results A p r i l 2 3 rd, 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: H1 FY24 – Key highlights
H1 FY24 – Key highlights €486m Total Revenue ✔ High revenue retention rate 110% +10.8% Revenue Retention Rate H1 LFL revenue growth ✔ High profitability with strong operating leverage €184m 37.9% ✔ Successful Capex optimisation Adj. EBITDA Adj. EBITDA margin ✔ Positive unlevered FCF +€14m 1.9x Unlev
Slide 4: Strategic goals to Shape the Future
Strategic Shaping thegoals to Shape the Future Future Be the Innovate Deliver Maximise cash data sovereignty for next tech sustainable & generation reference revolutions profitable growth H1 FY24 Results 4
Slide 5: Q2 FY24 – Business resilience despite softer momentum than expected in Europe
Q2 FY24 – Business resilience despite softer momentum than expected in Europe Surprisingly mild growth in High customer loyalty with Recent customer wins Europe in Q2 ARPAC growth and limited churn Rebound in the US mid-Q2 ✔ Continued workload optimisation in Europe leading €246m +9.6% to some proje
Slide 6: H1 FY24 - Confirmation of OVHcloud demand-based and cash generative model
H1 FY24 - Confirmation of OVHcloud demand-based and cash generative model Strong execution improving profitability Deliver profitable growth and cash generation Confirmed operating leverage 37.9% +2.5pts ✔ Mostly fixed costs base, driving operating leverage Adj. EBITDA margin vs H1 FY23 thanks to ca
Slide 7: H1 FY24 Business update
Wd OVHcloud H1 FY24 Business update
Slide 8: Public Cloud
Public Cloud H1 FY24 Performance H2 FY24 initiatives and outlook Improving customer acquisition with Freemium strategy and Postpaid process €88.4m +15.8% x3 number of new Public Cloud projects Public Cloud Public Cloud Revenue LFL growth in March 2024 vs H1 average Reaping the fruits of marketin
Slide 9: Private Cloud
Private Cloud H1 FY24 Performance H2 FY24 initiatives and outlook Enhancing partners channel with new incentive plans to €302.5m +12.0% reward top performing partners Private Cloud Private Cloud Refreshing Baremetal offering with a new entry-range Revenue LFL growth generation Launch in Q4 FY24
Slide 10: Webcloud & Others
Webcloud & Others H1 FY24 Performance H2 FY24 initiatives and outlook €95.1m +2.9% Favourable market trends in Domain names, with slightly higher comparison basis in H2 Webcloud & Others Webcloud & Others Revenue LFL growth Strong Domain names with high level of multi-year On-going development o
Slide 11: Difficult macroeconomic conditions, with a recent rebound in the US
Difficult macroeconomic conditions, with a recent rebound in the US France Double digit growth in Public and Private Cloud Strong performance in Webcloud thanks to Domain sub- Reported +11.0% +10.1% 49% segment LFL +10.9% +10.1% Slowdown of Corporate’ spending with continued workload Q2 FY24 H1 FY24
Slide 12: Strategic growth levers
Wd OVHcloud Strategic growth levers
Slide 13: Unchanged focus on Data Sovereignty to keep enhancing Sovereign offering
Unchanged focus on Data Sovereignty to keep enhancing Sovereign offering SecNumCloud offering FY25 Available Public Cloud Private Cloud ✔ ARR reaching €12m at end-February 2024 H1 FY24 achievements ✔ Three Datacenters with SecNumCloud Compute VMware offerings Storage SAP Network FY24 ✔ BareMetal Sec
Slide 14: OVHcloud offers all necessary tools to fuel AI adoption by customers
OVHcloud offers all necessary tools to fuel AI adoption by customers 1 2 3 4 Compute, Storage & Tools for datasets AI platform & Expertise Network transformation Solutions Live ✔ Large range of GPUs ✔ New Sovereign ✔ Dedicated internal offering for GPUs ✔ AI Notebook teams to support ✔ 100% utilisat
Slide 15: Public cloud products – Reinforcing OVHcloud's PaaS offering
Public cloud products – Reinforcing OVHcloud’s PaaS offering AI Notebook AI App Builder AI AI Deploy AI Endpoint AI Training ✔ New PaaS products reaching ARR of Big Data & Analytics Data Processing Spark Data Platform €18m in February 2024 MySQL Kafka ✔ More than 40 Public Cloud products Databases P
Slide 16: Local Zones with gridscale technology: increasing global footprint
Local Zones with gridscale technology: increasing global footprint with reduced capital intensity Data Residency Low Latency International Growth Store and process data Enjoy low latency on Start easily new countries, with locally public cloud offerings multiple Local Zones Already available in Madr
Slide 17: H1 FY24 Financials
Wd OVHcloud H1 FY24 Financials
Slide 18: Delivering sustainable growth in a challenging environment
Delivering sustainable growth in a challenging environment H1 FY24 reported growth +10.6% +2.1% from price increase H1 FY24 LFL growth +10.8% +12 +2.7 +33 481 486 0.4 471 +15.8% 2.9% 439 439 439 439 Public cloud Webcloud & +12.0% LFL growth Others LFL growth Private cloud LFL growth Reported data LF
Slide 19: Strong LFL growth of Adj. EBITDA at +19.6% vs H1 FY23
Strong LFL growth of Adj. EBITDA at +19.6% vs H1 FY23 In € million H1 FY23 H1 FY24 Var. Strong operating leverage Revenue 439.3 486.1 46.8 COGS (52.0) (55.9) (3.9) ✔ Reduced proportion of Web Cloud direct costs Operating costs (114.1) (123.6) (9.5) Gross ✔ Stable electricity costs compared to H1 FY2
Slide 20: Positive net operating income and improved margin by +2.7pts vs H1 FY23
Positive net operating income and improved margin by +2.7pts vs H1 FY23 In € million H1 FY23 H1 FY24 Var. Recurring EBITDA 151.8 181.2 29.6 Depreciation, amortisation and ✔ Increased commissioning of capitalised (152.5) (172.8) (20.3) impairment expenses development projects D&A ✔ Increased rights-o
Slide 21: Positive Unlevered Free Cash Flow of €14m
Positive Unlevered Free Cash Flow of €14m In € million H1 FY23 H1 FY24 Adjusted EBITDA 156 184 Gross cash flow from operating activities 143 180 €14m 21.1% 12.3% Unlevered Growth CAPEX Recurring CAPEX Change in WC 3 4 Free Cash Flow In % Revenue In % Revenue Corporate income taxes (3) (7) Net cash f
Slide 22: Flexible model, with servers capex adapting to current environment
Flexible model, with servers capex adapting to current environment H1 FY23 H1 FY24 In % Revenue In % Revenue ➔ Reduced capital intensity of new servers Servers 24% 17% ➔ Lower demand compared to last year ➔ Last phase of new datacenters program Infrastructure 8% 5% ➔ Preparing future growth with add
Slide 23: Positive Unlevered FCF as soon as H1 FY24
Positive Unlevered FCF as soon as H1 FY24 Improving FCF generation in the coming years OVHcloud Unlevered FCF & Growth Capex (as a % of revenue) Confirmed trajectory of cash 0.0% generation (10.0)% ✔ Second semester of positive Unlevered FCF generation, one (20.0)% semester ahead of target ✔ Confirm
Slide 24: Deleveraging trajectory with no major repayments before October 2026
Deleveraging trajectory with no major repayments before October 2026 High level of liquidity with first Sound debt profile maturity in October 2026 As of February 2024. Debt schedule, in €m, as of February 2024. 1 000 17 €649m 1.9x 750 390 Net debt Leverage 96% 3.6% 500 30 Hedged at fixed All-in rat
Slide 25: Outlook
Wd OVHcloud Outlook
Slide 26: FY24 and Mid-term financial targets
FY24 and Mid-term financial targets FY2024 FY2024 initial guidance revised guidance Mid-term targets LFL revenue growth 11%-13% 9%-10% Adjusted EBITDA margin >37% >37% Confirmed FY25 trends and FY26 targets Recurring ~16% 12%-14% Capex as a % of revenue Growth ~24% 21%-23% Positive Unlevered Positiv
Slide 27: Q&A
Wd OVHcloud Q&A
Slide 28: Key takeaways
Key takeaways Softer demand in Europe Focus on cash generation Rebound in the US FY24 targets Continued strong growth in LFL Revenue growth between €486m sovereign offerings 9% - 10% Revenue Adj. EBITDA margin >37% Significant improvement in 37.9% profitability Recurring Capex between 12% Adj. EBITD
Slide 29: Appendices
Wa OVHcloud Appendices 29
Slide 30: 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 31: Revenue by segment and geography
Revenue by segment and geography Q1 FY2023 Q2 FY2023 H1 FY2023 Q1 FY2024 Q2 FY2024 H1 FY2024 In € million Reported Reported Reported Reported Reported Reported Private cloud 133.0 139.9 272.9 149.6 152.9 302.5 Public cloud 35.7 38.3 74.0 43.5 44.9 88.4 Webcloud & Other 47.3 45.1 92.4 46.7 48.5 95.1
Slide 32: Reconciliation reported & like-for-like
Reconciliation reported & like-for-like H1 FY23 FX Perimeter Strasbourg H1 FY23 FX Perimeter Strasbourg In € million H1 FY23 LFL In € million H1 FY23 LFL Reported impacts impacts impacts Reported impacts impacts impacts Private cloud 272.9 (3.0) 0.0 0.1 270.0 France 215.6 0.0 0.0 0.1 215.8 Public cl
Slide 33: Consolidated Statement of Income
Consolidated Statement of Income st st 1 semester 1 semester (in thousand euros) 2023 2024 Revenue 439,343 486,091 Personnel expenses (111,905) (116,741) Operating expenses (175,668) (188,109) Recurring EBITDA 151,770 181,240 Depreciation and amortisation expenses (152,487) (172,778) Net recurring o
Slide 34: Consolidated Statement of Financial Position
Consolidated Statement of Financial Position (in thousand euros) 31 august 2023 29 february 2024 Goodwill 43,971 60,004 Other intangible assets 264,779 288,379 Property, plant and equipment 954,342 954,969 Rights of use assets 122,845 132,349 Non-current derivative financial instruments - assets(1)
Slide 35: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows st st (in thousand euros) 1 semester 2023 1 semester 2024 Consolidated net income (loss) (26,585) (17,243) Adjustments to net income items: Depreciation, amortisation and impairment of non-current assets and rights of use relating to leases 152,487 172,778 Change