Gamma Communications Plc · LSE:GAMA
Gamma Communications — FY2015 Earnings Presentation
24 slides from Gamma Communications's earnings presentation, 2016
Slide 1: Gamma Communications plc
Gamma Communications plc Bob Falconer CEO Andrew Belshaw CFO Richard Bligh Coo , “ ( SS) . © © y
Slide 2: Important notice
This presentation is issued on behalf of Gamma Communications plc (the “Company”). This presentation does not constitute an admission document or prospectus, nor does it constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for
Slide 3: Leading provider of integrated voice, data and mobile services
Leading provider of integrated voice, data, and mobile telecoms services and applications to businesses UK market leader in SIP and Cloud PBX – differentiated by software and systems High volume indirect channel model with broad customer base and low customer concentration Ten years of strong organi
Slide 4: Growth and margin by service
SIP Cloud GROWTH PBX Inbound Ethernet Mobile Broadb’d Calls & Lines MARGIN
Slide 5: Indirect and direct channel
Indirect Channel: Increasingly selling the Gamma brand (79% of revenue) Direct Channel (21% of revenue) System Hardware Mobile Resellers Carriers / SME Enterprise Public Sector Integrator Vendors Operators Cloud IT Resellers Voice of (36 of top UK 100 Cisco with Gamma*) Mobile Mitel Avaya, etc
Slide 6: Operational highlights
Strong SIP performance and market share increased Positive Cloud PBX performance and market share increased New Mobile service “on target” for Q2 release Number of new Partners increased by 109 to 834 in total Key brand wins include Taylor Wimpey, Metrobank, Costco, and HMRC
Slide 7: The Financials
The Financials
Slide 8: Financial highlights
Revenue up 11% to £191.8m Adj EBITDA up 22.5% to £28.3m Adj EPS up 19.3% to 17.9p Pre-tax cashflow increased by £5.9m to £25.3m Dividend proposed of 6.6p for year, versus pro forma 5.9p prior year
Slide 9: Income statement 2013-2015
Growth Years ended 31 December (£m) 2013 2014 2015 (14-15) Revenue 148.7 173.2 191.8 10.7% Cost of sales -94.8 -105.6 -109.5 Continued organic growth driven by Strategic services Gross profit 53.9 67.6 82.3 21.7% (SIP, Cloud PBX and Inbound) Gross profit margin 36.2% 39.0% 42.9% Repeating revenues r
Slide 10: Indirect channel results
Positive shift in mix of Traditional and New services at both revenue and gross margin Strong increase in Strategic services– especially SIP Trunking and Cloud PBX Margin increased from 38% (2014) to 42%: mix Adj. EBITDA margin increased from 12.7% to 13.6%
Slide 11: Direct channel results
Direct business growing due to Strategic services Margin increased from 42% (2014) to 46% - due to mix Adj. EBITDA margin increased from 15.7% to 19.3% Order book remains strong
Slide 12: Balance sheet and cash flow
Balance Sheet as at 31 December (£m) 2013 2014 2015 Non-current assets (incl. PPE) 24.6 32.0 35.8 Receivables and 26.9 33.6 37.5 inventories Cash 14.6 13.4 24.8 Significant cash reserves, and remain debt free Current assets 41.5 47.0 62.3 Total assets 66.1 79.0 98.1 Capex: Non-current liabilities 3.
Slide 13: Market Overview
Market Overview
Slide 14: Key market trends
Key market trends Y 3in10 of all broadband connections are now superfast 34" 30Mbit/s or higher in the UK today account between of all fixed 2008-2014 broadband P SIP now approaching halfway stage of ISDN 30 replacement Cloud services being readily adopted by SME's Superfast, better broadband is dri
Slide 15: How do we compete against...?
How do we compete against........? “Scalable, strong channel and complete service” 6 exe “Agile, 28 SOLUTIONS innovative, vodafone and good service” US/Euro market entrants ‘ TalkTalk BT Business Noe The major telcos (W vanilalP “Financially strong, strong channel and complete service” Voiceflex Sma
Slide 16: Market position in SIP Trunking and Cloud PBX
Gamma Market Position in UK Market growth growth UK market size by 2018 Update 2015 2015 and share Market share increasing Installed base over 360,000 SIP Trunking “Business grade VOIP” 54% 25% 19%, No. 1* £819m Still 50% of ISDN 30 market to convert replacing ISDN BT Wholesale and TalkTalk pricing
Slide 17: Operational Review
Operational Review
Slide 18: Partner growth and public sector
Partner growth continues with 109 new FTSE win with Taylor Wimpey partners Public sector Strong growth in Cloud PBX, 80k to – contracted gross profit increased 142k seats – new Framework contract wins Gross margin up from 38% to 42% Mid market continues to improve gross Good performance on long term
Slide 19: New key wins
th ie West New key wins Tavlor ETRO 2 BANK Wimpey HM Revenue Brom & Customs SiXT rent a car JUST EAT 7 ie @ ESTEE LAUDER peaBopy == 8Mericangolf oo0e Gamma
Slide 20: Mobile convergence proposition
Convergence Our core network 4th Mobile operator in UK business market M2M ? Primary radio access from Three The only channel focused operator Enabling consumer MVNO’s ? Access to multiple networks Initial Proposition - 4G, MultiNet, Business Grade service. Future proposition – seamless fixed/mobile
Slide 21: Summary
Summary
Slide 22: 2015 has been a good year for Gamma
2015 has been a good year for Gamma Strong revenue and profit growth SIP and Cloud PBX continue to drive growth Excellent progress on launch of business mobile network Enterprise and public sector gaining traction
Slide 23: Growth drivers and outlook
SIP offers short to medium term growth Cloud PBX offers medium to long term growth Investing to drive down the costs of network access Mobile service full launch in June Growing strength of position in channel Public sector gaining traction Strong and growing reputation in Enterprise and Mid Market
Slide 24: Thank You
Thank You