Slide 1: Gamma 2020 Final Results
Gamma 2020 Final Results Andrew Taylor, CEO Andrew Belshaw, CFO Working smarter, together.
Slide 2: 2020 Final Results Agenda
2020 Business Update 01. Andrew Taylor 2020 Full Year Financial Review 2020 Final Results 02. Andrew Belshaw Gamma 2023 Strategic Plan Update Agenda 03. Andrew Taylor Business Outlook 04. Andrew Taylor Q&A 05. Andrew Taylor & Andrew Belshaw
Slide 3: Business Update
Gamma 2020 Final Results Business Update Andrew Taylor CEO
Slide 4: FY 2020 Business Highlights
Gamma 2020 Final Results FY 2020 Business Highlights • Excellent FY performance reinforced by our robust business model • Rapid and decisive response and leadership of the pandemic crisis • All business units performed well with strong channel and customer engagement - driven by our digital capabili
Slide 5: FY 2020 Business Update – Customer Segments
Gamma 2020 Final Results FY 2020 Business Update – Customer Segments UK Indirect UK Direct Europe Up to Up to Up to £247m £98.1m £48.5m +7% growth +17% growth mostly new 63% of group revenue 25% of group revenue 12% of group revenue • Excellent revenue and margin growth across all customer segments
Slide 6: FY 2020 Business Update – UCaaS Product Performance
Gamma 2020 Final Results FY 2020 Business Update – UCaaS Product Performance Cloud Collaboration SIP Up Up Up 22.5% 37k 17% to 646k cloud seats to 46k seats to 1.18m trunks Europe UK Market Position Up ✓ No.1 SIP (overall mkt) ✓ SIP market grew at 9.9% 92k ✓ No.1 Cloud (sub-50) ✓ No.2 Cloud (overall
Slide 7: FY 2020 Business Update – Our People
Gamma 2020 Final Results FY 2020 Business Update – Our People • Highly talented team of 1,530 people across 7 countries • Targeted recruitment, to support our growth and to accelerate our strategy • Acquisitions strengthening our talent skills and capabilities • Integration of our Acquisitions progr
Slide 8: Market and Customer Drivers - positive growth trends
Gamma 2020 Final Results Market and Customer Drivers - positive growth trends • UCaaS as a key enabler for flexible and remote working across all business types and sizes • CCaaS enabling and optimising the delivery of remote omni channel sales and customer service • Acceleration of Digital at the h
Slide 9: UK Market Characteristics – Cloud communications
Gamma 2020 Final Results UK Market Characteristics – Cloud communications • Acceleration in the shift to cloud-PBX @ 19% CAGR (2021-25) • 2025 PSTN shutdown prompting businesses to plan their move to cloud UCaaS - UK market evolution • Microsoft Teams driving awareness and adoption of UCaaS and SIP
Slide 10: Major UCaaS growth opportunity in Western Europe
Gamma 2020 Final Results Major UCaaS growth opportunity in Western Europe Number of UCaaS seats (m) Cloud Communications Market Penetration 2020-2025 Total seats Country Q2 2020 Q2 2025 CAGR (%) available UK 5.4 13 19.2 20.3 Netherlands 2.2 3.8 11.6 5.6 Spain 1.5 3.9 21.1 10.8 Germany 2.3 6.2 21.9 2
Slide 11: Financial Highlights
Gamma 2020 Final Results Financial Highlights Andrew Belshaw CFO
Slide 12: 2020 Financial Highlights – Strong growth
Gamma 2020 Final Results 2020 Financial Highlights – Strong growth Revenue Adjusted EBITDA Adjusted EPS Up Up Up 20% 24% 26% to £393.8m to £79.0m to 51.3p Cash generated by operations Dividend Cash balance Up Up £53.9m 30% 11% As at 31 December to £70.3m to 11.7p (net funds of £48.0m)
Slide 13: Income Statement
Gamma 2020 Final Results Income Statement Years ended 31 December (£m) 2018 2019 2020 Growth 19 vs 20 • Recurring revenue at 91% - effect of Revenue 284.9 328.9 393.8 19.7% acquisitions Cost of sales -152.7 -162.4 -193.0 Gross profit 132.2 166.5 200.8 20.6% • The COVID effect – Gross profit margin 4
Slide 14: Income Statement – Organic growth
Gamma 2020 Final Results Income Statement – Organic growth Organic 2020 Growth Growth Years ended 31 December (£m) 2019 Organic Acqns Total 19 vs 20 19 vs 20 Revenue 328.9 357.6 36.2 393.8 8.7% 19.7% Cost of sales -162.4 -171.2 -21.8 -193.0 Gross profit 166.5 186.4 14.4 200.8 12.0% 20.6% Gross profi
Slide 15: Indirect
Gamma 2020 Final Results Revenue (£m) 300 Indirect 250 200 • Underlying recurring growth business 150 Growth increasing led by SIP and Cloud PBX – 100 Traditional installs down in Q2 due to COVID 50 • Traditional business static 0 2018 2019 2020 • COVID effect: Gross Profit (£m) 140 – Net additions:
Slide 16: Direct
Gamma 2020 Final Results Revenue by Sector (£m) 120 Direct 100 80 60 • Direct business driven by Enterprise and 40 Public Sector solutions 20 • Mid-market static 0 2018 2019 2020 The Loop Mid Market Public Sector Enterprise • COVID effect: Gross Profit (£m) – Less marked in direct as longer sales cy
Slide 17: European
Gamma 2020 Final Results Revenue (£m) European 60 50 • Growth is largely inorganic – Voz (ES) in April, 40 HFO (DE) and gnTel (NL) in July 30 • Overseas contributed 12% of revenue and 11% 20 of gross profit in 2020 – run rate will be higher 10 • Trading EBITDA of £5.0m (6% of total) 0 2018 2019 2020
Slide 18: Balance sheet
Gamma 2020 Final Results Balance Sheet as at 31 December (£m) 2018 2019 2020 Balance sheet Non-current assets (incl. PPE) Receivables and 90.3 69.0 98.9 85.6 163.6 104.4 inventories • Strong cash reserves - £53.9m Cash 35.5 53.9 53.9 Current assets 104.5 139.5 158.3 • Net cash of £48.0m Total assets
Slide 19: Cashflow
Gamma 2020 Final Results Cashflow Cash Flow Statement Year to 31 December • Cash conversion consistent with prior period at (£m) 2018 2019 2020 Adj EBITDA 48.3 63.5 79.0 89% Net Cash inflow from Operations 40.6 54.0 70.3 (pre-tax) • Taxation cashflow higher in 2020 due to Cash conversion 84.1% 85.0%
Slide 20: Gamma 2023 Strategic Plan update
Gamma 2020 Final Results Gamma 2023 Strategic Plan update Andrew Taylor CEO
Slide 21: Strategic vision
Gamma 2020 Final Results Gamma strategic vision
Slide 22: 2023 Key Strategic Priorities
Gamma 2020 Final Results Gamma 2023 Key Strategic Priorities Evolve our strong cloud telephony position into the UCaaS market Expand to Europe to gain continued growth and scale Continue to build on our digital capabilities to assure agility and sustain competitiveness Build on our Fixed and Mobile
Slide 23: European Geographic Expansion
Gamma 2020 Final Results Organic growth supplemented by cash flow funded M&A Accelerating Technology and Product Capabilities M&A Priorities Netherlands Group Technology Group Technology Group Technology Geographic Expansion Date of • Significant market opportunity with low cloud penetration Acquisi
Slide 24: 2021 Multi-market Product Roadmap
Gamma 2020 Final Results 2021 Multi-market Product Roadmap Delivering an exciting roadmap of new and enhanced products and network and technology capabilities
Slide 25: The Gamma Hub – Direct Digital Platform
Gamma 2020 Final results The Gamma Hub – Direct Digital Platform
Slide 26: Business Outlook
Gamma 2020 Final Results Business Outlook Andrew Taylor CEO
Slide 27: Business Outlook
Gamma 2020 Final results Business Outlook Robust business model with >91% recurring Continued focus on the execution of our short- revenue & margin, and good visibility of our term business commitments and our longer-term numbers through 2021 strategic priorities Positive long-term market outlook, w
Slide 28: Q&A
Gamma 2020 Final Results Q&A
Slide 29: Thank you.
Thank you. Working smarter, together.
Slide 30: Appendix
Appendix Working smarter, together.
Slide 31: Investment Highlights
Gamma 2020 Final results Investment Highlights Attractive Target Market Strong Business Model At the early stage of the growth cycle with increasing levels Recurring subscription revenue and margin, with high of cloud adoption across all markets and business segments visibility and quality of earnin
Slide 32: Horizon Contact
Gamma 2020 Final Results Horizon Contact • UK market Launch - 2nd March 2021 • A CCaaS solution “productised” for small businesses • Helps businesses to build and sustain better relationships with their customers • Provides continuity of conversation across multiple channels with tight integration t
Slide 33: Mission Labs
Gamma 2020 Final Results A platform supporting innovative solutions Mission Labs Customers Voice Chat Email Social Video Kumodi • Highly strategic acquisition for Gamma Platform Solutions Collaboration Contact Centre Automation • Supports our 2023 UCaaS and Digital Strategic Priorities Products • Ex
Slide 34: Thank you.
Thank you. Working smarter, together.