Solutions 30 Se · EURONEXT:S30
Solutions 30 — Non-Deal Roadshow (December 2023)
52 slides from Solutions 30's roadshow presentation, Dec 13, 2023
Slide 1: Deep dive into Solutions30 business model
Deep dive into Solutions30 business model Investor Webinar 13 December 2023
Slide 2: Introduction
Introduction Gianbeppi Fortis
Slide 3: Introducing Solutions30
Introducing Solutions30 Connectivity Solutions CAGR 25% Energy Solutions 38% >1000 Technology Solutions 35% 874 905 27% 819 691 800 Customers 458 28 trainings centers 192 275 14 back-offices 30 36 45 55 64 77 94 112 125 Maintenance & Support Deployment & Integration Consulting Management Services 3
Slide 4: Deep dive into Solutions30 Business Model
Deep dive into Solutions30 Business Model ▪ Key factors driving margins and ongoing programs to improve them ▪ Priority geographies with related challenges and opportunities ▪ Key actions per country to increase margins ▪ Tools and solutions to improve efficiency and build a long-lasting client rela
Slide 5: Introduction to the team
Introduction to the team CEO: COO: Group Secretary CRO: CFO: Gianbeppi Fortis Wojciech Pomykala General: Luc Brusselaers Jonathan Crauwels Amaury Boilot 5
Slide 6: Key factors driving margins
Key factors driving margins Wojciech Pomykala
Slide 7: Key factors driving margins
Key factors driving margins Effective recruitment of Projects selectivity – Market employees and Programs subcontractors Standard and cutting-edge Strict control and Competitive advantage IT tools training methodology monitoring at all steps Critical volume as a key to Results and KPI extensive prof
Slide 8: Market Programs: An innovation model from concept to launch
Market Programs: An innovation model from concept to launch Market Programs to standardize & Our stage-gate process speed-up implementation Standardize and speed-up roll-out: ▪ Increase speed of roll-out Go/no go ▪ Lower costs of implementation ▪ Best Practice sharing – first time right Go/no go ▪ I
Slide 9: New resources – recruitment
New resources – recruitment Our industry is facing several challenges: ▪ “Era of People” = global talent shortage + increased mobility of workforce ▪ Changing workforce composition (moving away from payroll staff towards external workforce) ▪ Shortage of skilled people (technicians) ▪ Uncertain econ
Slide 10: New resources – training
New resources – training We have developed a network of training academies to develop first-class talent for our industries: ▪ Practical skills: 2023: → reconnecting a cable in open ground, > 180 000 hours of training → working with an excavator, 25,5 hours of training per person → laying embroidery
Slide 11: Standardization of operations – Group IT Model & Tooling
Standardization of operations – Group IT Model & Tooling B2C B2B General Tickets, Planning, Dispatch, Call Center Project Planning, Logistics, Costing CUSTOMER CONNECTION BUILD & CONSTRUCT ▪ Home Connect ▪ Underground, ducts, façade, poles Finance Payables/Receivables/GL/ ▪ Install, repair ▪ POP, DP
Slide 12: Off-Shore locations – the gate to growth and profitability
Off-Shore locations – the gate to growth and profitability ▪ Operational efficiency requires cost-efficiency of simple services ▪ Growth and volume fluctuations requires flexibility of resource allocation ▪ Quality of service requires stability of service and KPI measurements ▪ Different locations d
Slide 13: Extensive monitoring enabling continuous EBITDA management
Extensive monitoring enabling continuous EBITDA management KPI tracking Margin reports on technicians Continuous EBITDA monitoring MARGIN ON OWN TECHNICIANS REVENUE Revenue [monthly, EUR] Number of own technicians Revenue 1 593 649 1Monthly 572 327 1 879 715 revenue per technician [EUR] 0 Number of
Slide 14: Standardized approach to project's organizational structure
Standardized approach to project’s organizational structure COO External resources Internal resources Project Director 1. Key competences of project delivery internalized. Project Managers Designer (Design Office) 2. Volume increase does not require change of org. structure Own teams (limited) and s
Slide 15: Example 1 – Growth of FTTH Network Deployment (BE)
EXAMPLE 1 – Growth of FTTH Network Deployment (BE) 15
Slide 16: Example 2 – Growth of FTTH Customer Connections (PL)
EXAMPLE 2 – Growth of FTTH Cust. Connect. (PL) 16
Slide 17: Example 3 – M&A: take over of Warsaw business (PL)
EXAMPLE 3 – M&A: take over of Warsaw business (PL) In 2022 Orange Poland (OPL) decided to externalize part of its subsidiary to some trusted partners and S30 got the main part → New contracts for 5 years → Take over of 353 employees (340 from temporary agency) → 340 temporary employees insourced at
Slide 18: Key actions per countries to improve margins
Key actions per countries to improve margins Amaury Boilot
Slide 19: Development of Business lines in mid-term
Development of Business lines in mid-term MID-TERM PLAN FR BeLux NL DE ESP IT PL UK Connectivity Fiber NW constr. Current business lines per country Fiber Cust conn. Legacy Fixed Copper exit Mobile Energy Business lines with significant S Meters growth in mid-term, with well know EVC B2C business mo
Slide 20: Margin improvement challenges differ from country to country
Margin improvement challenges differ from country to country SG & A % Low P BN UK Right place to be: double digit EBITDA S margin G FR I High Direct Costs % High Low 20
Slide 21: Solutions30 has a clear operating strategy to improve margins
Solutions30 has a clear operating strategy to improve margins ► Network density Ongoing optimization of cost structure: ► Level of industrialization 1. Increase process industrialization ► Leverage on shared services 2. Cost optimization 3. Increase diversification of activities ► Market outlook ► S
Slide 22: Solutions30 has a clear operating strategy to improve margins
Solutions30 has a clear operating strategy to improve margins ► Network density Scale up the business and develop economies of scale ► Level of industrialization 1. Increase the volumes of intervention ► Leverage on shared services 2. Develop the workforce 3. Automatize the processes ► Market outloo
Slide 23: Solutions30 has a clear operating strategy to improve margins
Solutions30 has a clear operating strategy to improve margins ► Network density Focus on contractual conditions and costs control: ► Level of industrialization 1. Focus on most profitable contracts ► Leverage on shared services and business opportunities 2. Ensure flexibility of the cost structure ►
Slide 24: Extensive expertise in the integration of new geographies
Solutions30 has an extensive expertise in the integration of new geographies COMMERCIAL OPERATIONAL FINANCIAL ESG CONTROL CONTROL CONTROL STRATEGY ► Meetings with ► Implementation of the ► Implementation of ► Third Party due customers Group’s WFM tool the Group’s diligence process ► Customer contrac
Slide 25: Germany update
Germany update Luc Brusselaers
Slide 26: German FTTX market
German FTTX market (source: Dialog Consult/VATM Daten) IP enabled customer connections • Of 46,6m active customer connects, 37m full IP • FTTX is minor portion of Gigabit enabled HC • HFC (coax) still largest Gigabit provider • HC migration to FTTX at expense of DSL and HFC Room to improve HC take-u
Slide 27: Ability to deliver rapid growth with double digit margins after scale-up
Ability to deliver rapid growth with double digit margins after scale-up Turnkey SDU MDU FTTS In-Home HP+HC NE4 NE4 Solutions 30 advantages • Ability to deliver full turnkey: design => HC X X X X • Access to design & project specialists, field labour • Experience in NE4 - HC for SDU/MDU X X Growth e
Slide 28: Tools and solutions to improve efficiency and client satisfaction
Tools and solutions to improve efficiency and client satisfaction Luc Brusselaers
Slide 29: Innovation to reduce costs, and increase revenues & customer satisfaction
Innovation to reduce costs, and increase revenues & customer satisfaction Services Innovation ≠ invention. Our innovation focusses on optimizing costs, accelerating revenues & customer satisfaction and enabling new business models. We focus on three types of innovation: Process Service Model Process
Slide 30: SmartFix Visual A.I. for smart meter deployments
SmartFix Visual A.I. for smart meter (E+G+W) deployments Powered by Deepomatic Process 4 of 4 tasks GAS METER GLOBAL 5,1 million Belgian houses of which: Blue sticker Colored card 100% with Electricity meter EAN sticker Seal 68% with Gas meter Retake photo Justify failure Done 42% being rolled out b
Slide 31: Repeat visits down to 0 and gas leak detection accuracy from 45 to 80%
Repeat visits down to 0 and gas leak detection accuracy from 45 to 80% Process SCALED & COST-EFFICIENT REPORTING & SERVICE TECHNICIAN’S QUALITY CONTROL CONFORMITY PRODUCTIVITY ▪ Quick IT implementation, large ▪ Photo conformity 98% ▪ Repeat visit rate down to 0 dataset training takes a few weeks ▪ +
Slide 32: Real-time quality control
REA REAL-L-TIME TIMEQUA QUALITY LITYCONTROL CONTROL Smartfix visual A.I. supporting Fiber roll-out projects Powered by Deepomatic Process REA L- TIME QUA LITY CONTROL TASKSTASKS 20% COMPLETED 20% COMPLETED FIELD FIELD CLOSED BEFORE STREETSTREET CLOSED CABINET WORKWORK BEFORE CABINET 1 of 1 1 of 1 10
Slide 33: Full visibility on quality deliverables, monitoring evolution of the FTTX network
Full visibility on quality deliverables, monitoring evolution of the FTTX network Process STAKEHOLDER DISPUTES FIRST TIME RIGHT EASE OF PROOF ▪ Proof of site status before, ▪ Trenching depth, poles, manhole ▪ As built acceptance made easier during and after works chambers in good condition leading t
Slide 34: SmartFix Remote – optimize intervention time, First time Fix
SmartFix Remote – optimize intervention time, First time Fix Powered by Techsee Process ✓ Reduced intervention time ✓ Remote support by service ✓ Increased First time Fix professional to end-customer ✓ Reduced 2nd line escalations time as pictures have already been taken ✓ Reducing professional onbo
Slide 35: Customer Loyalty Program leads to Continuous Improvement
Customer Loyalty Program leads to Continuous Improvement Service Listen Understanding Act Execs and Country/Regional Managers Direct feedback from our customer Support Customer feedback covering the Relationship Survey Customer Journey: Operations One •Sales & Innovation customer • Service Developme
Slide 36: SmartFix Follow the Tech, real-time customer ETA updates & NPS
SmartFix Follow the Tech, real-time customer ETA updates & NPS Service ✓ End-customer ✓ Realtime tracking of updates of timeslot service professional by to end-customer end-customer ✓ Photo of the ✓ Leading to increased technician end-customer satisfaction ✓ Overall Technician ✓ Customer satisfactio
Slide 37: Customer demand shifting towards turnkey solutions
Customer demand shifting towards turnkey solutions Model Clear shift in customer demand from single service Examples in all three segments transactional solutions to full turnkey solutions Shift from HP focus to turnkey solutions including HC and copper decommissioning Engineering & Engineering & In
Slide 38: Collaboration models: from Reporting for Insight to Innovation for Competitive Advantage
Collaboration models: from Reporting for Insight to Innovation for Competitive Advantage Model + Service Model Innovation Identify waste in COMPETITIVE processes ADVANTAGE Service Efficiency PRODUCTIVITY IMPROVEMENT VALUE COST Service Quality EFFECTIVENESS OPERATIONAL PERFORMANCE - (Supplier) Relati
Slide 39: Vested outsourcing as S30's distinctive collaboration model
Vested outsourcing as S30’s distinctive collaboration model Model 5 Vested rules: INTERDEPENDENT 1. Outcome based instead of transactional based 2. Focus on the ‘what’ not the ‘how’ 3. Clearly defined and measurable desired outcomes 4. Pricing model with incentives: ‘cost = cost plus’ model 5. Insig
Slide 40: Margin improvement and financing plan
Margin improvement and financing plan Jonathan Crauwels
Slide 41: The four waves of the FTTH cycle
The four waves of the FTTH cycle Service following FTTH FTTH network network deployment, deployment: highly delivered after or with growing and Homes Connected and dominant service split over number of (2023-2028) years (2023 - ….) Service following FTTH network deployment, split Skills to be used f
Slide 42: Fiber installation project life cycle
Fiber installation project life cycle Installation project life cycle EBITDA margin High 0% Negative Deep dive ▪ Launch, first 6-12 months: low sales volumes and high start-up costs leading to negative EBITDA margins ▪ Growth, around the next 2 years: rising volumes and margins ▪ Maturity, around th
Slide 43: Fiber installation AND maintenance life cycle
Fiber installation AND maintenance life cycle Installation project life cycle EBITDA margin High 0% Negative Deep dive ▪ Launch and growth phases: similar evolutions as in the projection of the deployment life cycle ▪ Maturity: ability to also offer installation and assistance to the clients, allowi
Slide 44: Ways to finance our activities
Ways to finance our activities Retained earnings Debt financing Solid financial position Reinvesting our profits Using dept financing to Our solid financial position instead of paying finance external growth allows us to grow without dividends, allowing the having to increase the company to fund its
Slide 45: Limited cash requirement to finance growth
Limited cash requirement to finance growth Solutions30 is able to finance its ambitious plan without raising extra capital Low cash requirements per EUR growth Leverage ratio net debt/EBITDA under 2 times Limited WC requirements 1.5% to 2% on yearly growth of revenue Low CAPEX requirements 1% to 2%
Slide 46: Several tools to fund the ramp up expenses during the launch phase
Several tools to fund the ramp up expenses during the launch phase Funding tools in launch phase ▪ Advanced payments from clients, to cover ramp up expenses ▪ Own cash used to invest in new projects ▪ External CAPEX funding through banking debts (e.g. Leasing the car park, financing equipment sets o
Slide 47: Strict control of Working Capital Requirement
Strict control of Working Capital Requirement Reducing WIP with 70% ▪ Increasing WIP (Work in Progress) during the Launch phase ▪ 70% reduction of WIP after the first year, thanks to strict focus on invoicing and cash collection WIP deep dive ▪ Average time between the first invoice send and the sta
Slide 48: Evolution margin Benelux 2021 – H1 2023
Evolution margin Benelux 2021 – H1 2023 Margin development Benelux ‘21-’23 Benelux Margin analysis ▪ Margins of H1-2023 going down by 4.1 points compared to H1-2021: ▪ Startup of the Fiber business. ▪ High ramp up costs of new projects: investments in training, hiring, equipping of H1 2023 technicia
Slide 49: Evolution margin France 2021 – H1 2023
Evolution margin France 2021 – H1 2023 Margin development France ‘21-’23 France Margin analysis ▪ Margins in 2022 dropped significantly in comparison with 2021, due to the combination of 2 exceptional factors ▪ Reorganization due to geographical redistribution in the telecom business and bankruptcy
Slide 50: Wrap-up
Wrap-up Gianbeppi Fortis Solutions30 Solutions for New Technologies
Slide 51: Wrap-up
Wrap-up ▪ A proven customer-centric business model, solid execution, standardized operations, and rigorous monitoring of KPIs , now rolled out across Europe ▪ Ability to attract talents, train technicians and expand subcontracting ▪ Clear operating strategy to improve EBITDA margins towards double-d
Slide 52: Thank you
THANK YOU www.solutions30.com 52