Infratil Limited · NZX:IFT
Infratil — Investor Day (October 2019)
83 slides from Infratil's investor day presentation, Oct 15, 2019
Slide 1: Infratil 2019 Sydney Investor Day
15 October 2019 For personal use only Infratil 2019 Sydney Investor Day Infratil Limited ("Infratil") has released the presentation materials for its Investor Day held today in Sydney, Australia. Infratil’s objective is to keep its stakeholders well informed about how its businesses are performing a
Slide 2: CDC Data Centres Investor Presentation
CDC Data Centres Investor Presentation For personal use only October 2019
Slide 3: Important notice and disclaimer
Important notice and disclaimer For personal use only This presentation contains confidential, non-public information and has been prepared by Canberra Data Centres Proprietary Limited (ABN 59 125 710 394) (“CDC”). Distribution of this presentation, or of any information contained in this presentati
Slide 4: Contents
For personal use only Contents 1 CDC overview 2 Growth strategy A Key terms B Key risks and mitigants C Introduction to data centres
Slide 5: CDC overview
For personal use only 1 CDC overview
Slide 6: CDC overview
CDC overview For personal use only CDC is a leading Australian operator of secure world-class Data Centre (DC) facilities, guaranteeing the availability of mission-critical systems ⚫ CDC builds, owns and operates world-class facilities across a growing footprint at three campuses in Fyshwick (ACT),
Slide 7: CDC History
CDC History For personal use only CDC has a strong track record of delivering incremental facilities on time and on budget Expansion into Fyshwick site acquired with Sydney with Eastern plans for 39MW capacity Creek site acquisition, CDC begins construction across two DCs (Fyshwick Fyshwick 1 Hume 3
Slide 8: Leading management team
Leading management team For personal use only High quality management team with deep industry expertise in digital infrastructure, and a track record of operational and sales excellence ⚫ Led by Greg Boorer, CEO, since 2007 ⚫ Supported by a capable senior management team across sales, finance, opera
Slide 9: Existing footprint
Existing footprint For personal use only CDC now services its customers across 3 key site locations in Canberra and Sydney Hume Fyshwick Eastern Creek Canberra, established 2007 Installed capacity: 21MW Potential capacity: 71MW 1 Canberra, established 2014 Installed capacity: 39MW Potential capacity
Slide 10: CDC operating model
CDC operating model For personal use only CDC has differentiated itself by designing and building data centres that seamlessly accommodate traditional enterprise, Government and Hyperscale clients all co-located within the same buildings In- house Outsourced to DC Providers DC infrastructure typical
Slide 11: Key differentiators
Key differentiators For personal use only CDC’s unique advantages enable a high level of differentiation and are highly defensible 1 Hybrid Cloud Co-location Ecosystem Whilst close competitors mostly provide either public cloud or colocation DC services, CDC has private and public cloud as well as
Slide 12: Customers and Market Segments
Customers and Market Segments For personal use only Revenue is underpinned by long-term contracts with high quality counterparties. Weighted-Average Lease Expiry (with options) of ~17 years, or ~9 years without options. CDC has a strong pipeline and a modular design capable of supporting all custome
Slide 13: Financial performance
Financial performance For personal use only CDC has delivered a sustained period of both run rate and EBITDA growth ⚫ Strong track record of growth and attractive metrics CDC has built a loyal customer base, comprising Government, ⚫ EBITDA growth forecast on the back of secured, long term contracts
Slide 14: Portfolio overview and growth outlook
Portfolio overview and growth outlook For personal use only CDC has a clear runway for growth within Canberra and Sydney ⚫ Three established DC campuses at Fyshwick (ACT), Hume (ACT) and Eastern Creek (NSW) ⚫ Existing operating capacity of 80MW, with 50MW under construction and 100MW+ capacity for f
Slide 15: Growth strategy
For personal use only 2 Growth strategy
Slide 16: Market Growth Drivers
Market Growth Drivers For personal use only Several long-term drivers underpin growth in the data centre market. The hyperscale DC segment is expected to grow at twice the pace of traditional DCs Traditional Data Centres Hyperscale Data Centres Continuing, robust data growth, on average, 25% p.a.,
Slide 17: Growth by site
Growth by site For personal use only CDC has successfully grown its portfolio of assets and has a range of ongoing, diversified growth options which now include the expansion of the Eastern Creek campus Capacity Capacity Phase 1: Phase 2: Facility (MW) filled1 Build Fit-out phase Hume 1 6MW >95% Com
Slide 18: Eastern Creek focus
Eastern Creek focus For personal use only Eastern Creek is well-positioned to capitalise on the prolific growth of data held by Hyperscale cloud providers and operators of NCI who require increasingly secure and resilient storage solutions Highlights ⚫ Acquired 145,000 sqm Eastern Creek campus in De
Slide 19: Development philosophy
Development philosophy For personal use only CDC has developed a strong track record of delivery and a world class build strategy Highlights ⚫ Design and construct timeframe is circa 12 months for new data centre builds ⚫ Once the surrounding campus infrastructure is completed, the fit-out of the in
Slide 20: Next months
Next 6 months For personal use only FY20 is progressing well; delivering developments, securing new customers and providing the foundation for future growth • Bring 24MW+ capacity to income producing – On track • Final handover of Eastern Creek 2 in December – On track, 10MW to be handed over within
Slide 21: Key terms
For personal use only A Key terms APPENDIX
Slide 22: Acronym Library
Acronym Library For personal use only Acronym Definition AI Artificial Intelligence CAGR Compound Annual Growth Rate CDC Canberra Data Centres CPI Consumer Price Index CSC Commonwealth Superannuation Corporation DC Data Centre FROR First Right of Refusal HV High Voltage ICON Intra-Government Communi
Slide 23: Key risks and mitigants
For personal use only B APPENDIX Key risks and mitigants
Slide 24: Risks and mitigants
Risks and mitigants For personal use only CDC thoroughly understands the risks involved with the business and industry, and has worked to effectively mitigate these Risk Description Mitigants Termination rights ✓ High switching costs and risks (time, IT risk), timing given embedded infrastructure an
Slide 25: Introduction to data centres
For personal use only C APPENDIX Introduction to data centres
Slide 26: Data Centre
Data Centre 101 For personal use only A data centre is a facility used to house computer systems and associated components, it can be insourced or outsourced Insourced vs. outsourced A data centre’s main purpose is holding and running IT systems that handle Insourced: the core business and operation
Slide 27: Data Centre
Data Centre 101 For personal use only DCs are dedicated, secure locations that house IT hardware (servers) and provide the power, cooling and connectivity needed to operate them DC location and core infrastructure: DC equipment / housing: 25
Slide 28: Data Centre
Data Centre 101 For personal use only DCs can differ in their infrastructure approach and the technologies they employ 26
Slide 29: Data Centre
Data Centre 101 For personal use only Data centre design options are evolving with client needs and new technologies 27
Slide 30: Investor Day – Vodafone NZ
For personal use only Investor Day – Vodafone NZ
Slide 31: Vodafone Investor Day Agenda
Vodafone Investor Day Agenda For personal use only Introduction Marko Bogoievski Vodafone Strategy Jason Paris Q&A Financial Update Kate Jorgensen Business Improvement Programme Matt Crockett Q&A Regulatory Environment Juliet Jones Business and Cloud Lindsay Zwart A 5G future Tony Baird Summary Jaso
Slide 32: Strategy Update – Jason Paris
For personal use only Strategy Update – Jason Paris
Slide 33: We have best-in-class assets to compete
We have best-in-class assets to compete Providing strong potential upsides For personal use only Strong NZ customer base across categories; Well balanced across business including #1 mobile, #2 BB and consumer segments Significant network and Diversified product set; infrastructure assets; Fixed, Mo
Slide 34: Strong New Zealand customer base across all categories
Strong New Zealand customer base across all categories #1 in mobile, #2 in broadband For personal use only Mobile subscriber share1 Fixed broadband connection share1 Others 26% #2 41% #1 59% Others 74% Balanced portfolio mix Traditional Pay TV connection share Revenue Mix2 15% Enterprise & #2 Wholes
Slide 35: Significant network and infrastructure assets
Significant network and infrastructure assets Across Fixed, Mobile, IoT For personal use only Extensive network and spectrum position including 5G leadership • 5G launching December in Auckland, Wellington, Christchurch, Queenstown • Over 1,500 mobile cell sites delivering a mix of 2G, 3G and 4G • 9
Slide 36: Diversified and differentiated product set
Diversified and differentiated product set Across Fixed, Mobile, Cloud and IoT For personal use only TV Mobile Cloud IoT Voice Broadband 7
Slide 37: Vodafone Group's biggest partner market
Vodafone Group’s biggest partner market Gives NZ access to best of both worlds and significant flexibility For personal use only • Global roaming • VodafoneTV • IoT Platform • Security products • Data Analytics • Vodafone Brand • Artificial Intelligence • Vodafone Procurement 8
Slide 38: Industry dynamics can create new opportunities
Industry dynamics can create new opportunities Players looking at ways to grow returns in capital intensive industry For personal use only • Improving the utilisation of existing networks • Looking to enhance wholesale and mobile virtual network operator offering and product development • Vodafone a
Slide 39: Competitive but rational market
Competitive but rational market Underpinned by strong economic fundamentals For personal use only • Industry structure provides strongest correlation to equity returns • Stable 3-player mobile market with multiple retailers and wholesale customers • Relatively stable regulatory environment • Industr
Slide 40: The Vodafone transformation is underway
The Vodafone transformation is underway Decisive action taken on many fronts, with some big ‘work-ons’ For personal use only • Ownership certainty achieved √ • 100% NZ-centric strategy in place √ • Group strategic constraints removed √ • 5G leadership attained √ • Cost reduction delivering ability t
Slide 41: Positive early signs
Positive early signs Solid early indicators and successes For personal use only • New operating model in place and capability step-change underway • On track to deliver $91m of gross cost savings • 10% year-on-year call volume reduction and 70% of queries solved first time • New channel expansion wi
Slide 42: Transforming from old Vodafone to new Vodafone
Transforming from old Vodafone to new Vodafone Turning legacy into opportunity, long-term strategy review underway For personal use only From manual, complex, Digital, simple expensive to… and low cost From lagging on Leading on Customer Customer Experience to… Experience From missing numbers to… Ma
Slide 43: Digital, modern, simple and low-cost
Digital, modern, simple and low-cost An opportunity to be a leading modern Telco For personal use only Complex product, An ambitious but …while stabilising IT architecture and necessary target current state and technical debt to… state… de-risking • Limited velocity, high • Move towards a greenfield
Slide 44: Leading on Customer Experience (CX)
Leading on Customer Experience (CX) Creating a competitive advantage For personal use only • Call volumes continuing to decline year on year • ~70% of calls resolved first time • Calls getting more complex • New partners getting up to speed • Investment in new Case Management team
Slide 45: Long term value creation
Long term value creation From missing our numbers For personal use only • Stabilising commercial performance • Holding churn across all products • Cost reduction to create headroom • Investing in Cloud, Security, VTV, IoT and Procurement • Taking opportunities – e.g. FWA, Multi-brand, 5G, winning ke
Slide 46: Risks to manage or mitigate
Risks to manage or mitigate External and internal factors For personal use only • Market dynamics • Ongoing commoditisation and price downs • Regulatory changes or investment uncertainty • Funding of free VAS and OTT services • Monetising investment in 5G in core telco and adjacencies • Organisation
Slide 47: Our belief
Our belief Our strategy ] use only New Zealand Consumers New Zealand Businesses Digital First >) C Radically Simple ) CAtways Competitive ) (Baisting Customers First loT )) C Vodafone TV ) C Best Networks ) C Data +Al ) (loud & Security with the people, culture and brand to succeed @ = Oo 1) SS (@)
Slide 48: Strong team now in place to deliver on clear plan
Strong team now in place to deliver on clear plan Focus on execution and cadence For personal use only Jason Paris Kate Jorgensen Matt Crockett Juliet Jones Lindsay Zwart Tony Baird • Chief Executive Officer • Finance Director • Transformation Director • Legal, Regulatory & • Business Director • Tec
Slide 49: Q&A
For personal use only Q&A
Slide 50: Investor Day – Kate Jorgensen
For personal use only Investor Day – Kate Jorgensen
Slide 51: Financial performance overview
Financial performance overview Long-term EBITDA growth achievable, dependent on execution For personal use only • Commercial performance has stabilised, largely through tight operating disciplines and cost reduction • Long-term growth requires execution on business improvement programme, and success
Slide 52: Financial Outlook
Financial Outlook Vodafone on track to achieve guidance metrics For personal use only Summary of Financials ($ Millions) 31 March 2016 2017 2018 2019 2020 F Mobile Revenue 951 953 973 945 Fixed Revenue 841 854 824 793 Other Revenue 171 220 242 248 Total Revenue 1,963 2,027 2,039 1,986 2,000-2,100 Un
Slide 53: Capital Expenditure
Capital Expenditure Vodafone fuelled for growth under new ownership For personal use only Other Capex 275-325 IT Capex Capex Breakdown ($ Millions) Network Capex 253 229 223 244 44 45 40 30 89 67 72 71 117 111 117 120 2016 2017 2018 2019 2020 F
Slide 54: Operational Overview
Operational Overview Balanced portfolio of Vodafone well positioned to deliver For personal use only Balanced Portfolio (Revenue Mix)1 11% Enterprise & Fixed Wholesale Wholesale & Other 52% 49% 51% 49% Consumer 52% Business 38% Mobile Consumer 1 Based on 30 September 2019 unaudited results 25
Slide 55: Revenue
Revenue Strong customer base with the highest mobile ARPUs in the industry For personal use only Subscribers ARPU Prepay 1.4 million $14 Post-pay 1.1 million $47 Broadband 0.4 million $104 1 Based on 30 September 2019 unaudited results
Slide 56: Future Market Growth Trajectory
Future Market Growth Trajectory 1 Vodafone in line with external growth projections for next generation access technologies and mobile post-pay For personal use only Broadband Connections Mobile Connections Market Spend 2020 2021 2022 2023 2020 2021 2022 2023 2020 2021 2022 2023 25% 6% 6% 5% 4% 4% 2
Slide 57: Looking ahead – the important markers
Looking ahead – the important markers What we view as the key medium-term financial performance levers/measures For personal use only • Sustainable industry dynamics/structure • Business Improvement Programme execution • Investment incentives and certainty • Competitive trading performance • Growth
Slide 58: Investor Day – Matt Crockett
For personal use only Investor Day – Matt Crockett
Slide 59: Key beliefs about transformation
Key beliefs about transformation Characteristics of successful transformations For personal use only 1. You can achieve substantial, 20%+ cost reduction through a holistic transformation approach. 2. However, you can’t cost-cut your way to greatness. 3. Execution is critical. 4. “Business-as-usual”
Slide 60: We are building on solid foundations
We are building on solid foundations Focused cost program launched 12 months ago For personal use only 1 Employment costs 2 Migration off legacy 3 Spend rationalisation 4 Procurement and inputs and outsourcing Property $35m savings were delivered in FY19. The program is on track to deliver $56m of i
Slide 61: We recently enhanced the programme
We recently enhanced the programme With a focus on all business improvement levers For personal use only The what: The how: all cash improvement clearer line ownership, levers more regular governance, more dedicated resources
Slide 62: A full potential improvement diagnostic
A full potential improvement diagnostic Highlights substantial opportunities For personal use only Example: tactical Example: transformational opportunities opportunities Build / improve data and Review full product portfolio analytics capabilities to reduce and radically simplify product churn, upl
Slide 63: In FY20 we will launch a full transformation programme
In FY20 we will launch a full transformation programme Addressing four key requirements for success For personal use only Performance Mindset & Capability Expertise Infrastructure Behavior Change Building
Slide 64: Q&A
For personal use only Q&A
Slide 65: Investor Day – Juliet Jones
For personal use only Investor Day – Juliet Jones
Slide 66: A stable and predictable operating environment
A stable and predictable operating environment Relatively stable regulatory settings For personal use only • Market regulation has been predictable and in line with international experiences • National roaming and mobile co-location regulated on a non-price basis • Cost-based mobile termination rate
Slide 67: Mature legislative framework
Mature legislative framework Amendments to laws passed in 2018 For personal use only • Amendments to the Telecommunications Act 2001 were passed in November 2018, covering: • Defined process to set regulated fibre pricing for “last mile” fixed access infrastructure post 2022 • Additional consumer sa
Slide 68: Spectrum matters
Spectrum matters History of stable renewal processes for spectrum For personal use only • Renewal process for rights in 1800/2100MHz which expire in 2021 • 2x20 MHz 1800MHz for renewal, cut back by 2x5 MHz • Vodafone to be offered full 2x25 MHz 2100MHz renewal • Government will consider requests to
Slide 69: Investor Day – Lindsay Zwart
For personal use only Investor Day – Lindsay Zwart
Slide 70: Become NZ's Leading Trusted Digital Partner for Business
Become NZ’s Leading Trusted Digital Partner for Business Helping NZ businesses navigate digital transformations For personal use only Understanding Customer New technology Cutting Shareholder the Gigabit Experience investment costs value world A skilled & passionate team who are recognised by our cu
Slide 71: Vodafone Cloud and Partnering Vision
Vodafone Cloud and Partnering Vision To be NZ’s most trusted digital provider through market leading Cloud Services and Strategic Partnerships For personal use only Strategic customer Cloud Network Partnership International Procurement Relationships Innovation Strategic partner with Network attached
Slide 72: The market opportunity in Cloud is significant
The market opportunity in Cloud is significant IDC: The New Zealand SaaS market is valued $371m with CAGR over 15% For personal use only 43
Slide 73: Vodafone is well placed for the Cloud opportunity
Vodafone is well placed for the Cloud opportunity Excellent partnerships in place For personal use only Exclusive Cloud reseller Xone’s development of agreements with market 5G ecosystem. leading products and Building innovations ready services partners for the future. Access to reselling Proven abi
Slide 74: Investor Day – Tony Baird
For personal use only Investor Day – Tony Baird
Slide 75: Market leadership in 5G
Market leadership in 5G Bringing the best of the world to NZ For personal use only • We are well placed to leverage 5G with our spectrum, fibre and network assets • Switching on a large commercial 5G network in December, starting in parts of Auckland, Wellington, Christchurch & Queenstown • Launchin
Slide 76: 5G is the next generation network technology
5G is the next generation network technology Greater capacity, speed and low latency For personal use only 5G: The Internet of Things (IoT) Era - 2020 and beyond 4G: The Smartphone - SMS Era - Internet -2010s 3G: The Internet Era - HD, 3D & ultra video - SMS - 2000s - 1-10 GB/second - Internet - SMS
Slide 77: 5G unleashes potential of the Internet of Things (IoT)
5G unleashes potential of the Internet of Things (IoT) Vodafone #1 in IoT network connections, with platform advantages For personal use only
Slide 78: 5G builds on the foundation of 4G
5G builds on the foundation of 4G Expanding use cases from 4G to 5G For personal use only 49
Slide 79: Already real 5G use cases have emerged
Already real 5G use cases have emerged Leveraging Vodafone Germany, Spain, Italy & UK as partners For personal use only Buildings & Education & Automotive Manufacturing Health Utilities Integrated Transport Entertainment • 5G V2X A9 Highway • Centralised building • 5G connected robots • Connected •
Slide 80: 5G delivers efficient network economics
5G delivers efficient network economics Offers exciting potential for lower cost delivery For personal use only • Will upgrade/improve existing 4G • Enables decommissioning of legacy (e.g. 3G) • Accommodates ongoing explosion in data consumption • Offers additional wholesale opportunities • Low cost
Slide 81: Summary – Jason Paris
For personal use only Summary – Jason Paris
Slide 82: Q&A
For personal use only Q&A
Slide 83: For personal use only
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