Cordiant Digital Infrastructure Limited · LSE:CORD
Cordiant Digital Infrastructure — Investor Presentation (September 2024)
66 slides from Cordiant Digital Infrastructure's investor presentation, September 2024
Slide 1: Introduction to CRA Shareholders & Analysts Presentation
September 2024 Strictly Private & Confidential Introduction to CRA Shareholders & Analysts Presentation
Slide 2: Disclaimer
Disclaimer By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations. This presentation has been issued by and is the sole responsibility of Cordiant Digital Infrastructure Limited (CORD). This presentation con
Slide 3: Agenda
Agenda Table of Contents Speakers 1. Introduction Page. 4 Miloš Mastník - CEO 2. Broadcasting Page. 15 3. Cloud & DC Page. 29 Jiří Černík - CFO 4. Corporate Development Page. 42 Marcel Procházka - 5. Financial Overview Page. 49 Director of Regulation 6. ESG Strategy & Progress Page. 59 3
Slide 4: CRA at a glance
CRA at a glance CRA’s mission We are a provider of a unique television, radio and internet infrastructure that enables our customers to effectively run their business. We transfer technology trends into innovative media, telecommunications and IT infrastructure services that bring value to our custo
Slide 5: History
History Milestones and technological transitions spearheaded by CRA Establishment Fibre optical TV digitization, DVB-T2 pilot launch OTT and HbbTV Second wave DVB- Completing DVB-T2 Acquisition of network transitioning from services launch T2 digitalization transition Cloud4com. DC construction anal
Slide 6: Seasoned management team with deep industry knowledge
Seasoned management team with deep industry knowledge CRA has an industry leading management team with over a century of cumulative experience Miloš Mastník Petr Možiš Jiří Černík CEO CCO CFO 8 years 24 years 2 years 23 years 2 years 26 years ▪ Previously CCO at CRA & CD – Telematika ▪ Previously Sa
Slide 7: Diversified service offering
Diversified service offering A real-world overview of CRA’s infrastructure and service platform in action FM and DAB + Radio Broadcasting DVB – T2 Broadcasting Telecommunication Services PPDR for Mol IoT Hosting DC Cloud This will be Key: presented on the model Broadcast Towers and Telecoms Data Cen
Slide 8: CRA is an independent national champion
CRA is an independent national champion #1 independent digital infrastructure multi-asset platform in Czech Republic, with superior nationwide infrastructure assets High revenue visibility from long-term contracts with 1 a mix of CPI-linked and fixed escalators Unique asset base Leading position in
Slide 9: CRA is going beyond the traditional TowerCo model
CRA is going beyond the traditional TowerCo model Four focus areas for future growth Broadcasting Towers and Telecoms Data centres & cloud ▪ DTT most popular TV platform ▪ Largest independent tower ▪ Leading data centre and cloud (~55% primary & secondary operator with 658 towers player with state-o
Slide 10: A diversified and balanced revenue mix
A diversified and balanced revenue mix Well balanced infrastructure portfolio. With a transformation focusing on DC and Cloud development. 4% 1% 2% 14% 27% Mar-19 Mar-24 48% 68% 36% Broadcasting Towers & Telecoms Broadcasting Towers & Telecoms DC & Cloud IoT & Other DC & Cloud IoT & Other Becoming a
Slide 11: Notable achievements and events in the last 12 months
Notable achievements and events in the last 12 months CRA has grown in all key areas of business, strengthening its position as broadcasting market leader and digital infrastructure provider TV Broadcasting Radio Broadcasting Towers and Telecoms Data Centres & Cloud and IoT ▪ Five new channels launc
Slide 12: Key financial metrics
Key financial metrics A leading position in attractive CZK 2.5bn CZK 1.2bn broadcasting, telecom infrastructure, and data centre & cloud Mar-24 revenue Mar-24 EBITDA markets 4.1x Mar-24 6.3% 48.4% 13.1% Mar-24 Mar-22->24 Contracted Broadcasting Mar-22->Mar-24 EBITDA EBITDA and Towers orderbook over
Slide 13: ESG is embedded in our operations
ESG is embedded in our operations Corporate social responsibility assessed through the lens of ESG CRA’s 2023 ESG performance Green energy 69% Green energy We know that our activities have an impact on the Waste management 65% Reduction in waste produced environment and on people’s lives. That is wh
Slide 14: Strong business model support long term attractive value creation
Strong business model support long term attractive value creation The new normality post-Covid has reinforced the criticality of CRA’s infrastructure 1 A leader in an attractive DTT market with high barriers to entry Secure Leading independent telecom infra provider with nationwide revenue & Resilie
Slide 15: Broadcasting
September 2024 Strictly Private & Confidential Broadcasting Shareholders & Analysts Presentation
Slide 16: CRA is a leader in the market of television and radio broadcasting
CRA is a leader in the market of television and radio broadcasting CRA provides providesterrestrial broadcast terrestrial services broadcast to alltoCzech services public all Czech TV and public TVradio and radio 1 broadcasters broadcastersand andcommercial commercial media mediahouses, as well hous
Slide 17: One of the strongest Broadcasting platforms in Europe with growth potential
One of the strongest Broadcasting platforms in Europe with growth potential... CRA’s unique infrastructure supports its leading position in a structurally superior broadcasting market with further growth expected from DVB-T2, OTT & HbbTV and DAB Czech DTT platform is one of the best in Europe Czech
Slide 18: ...Which is supported by a unique and un-replicable infrastructure...
...Which is supported by a unique and un-replicable infrastructure... CRA provides broadcasting through its own unique, non-replicable infrastructure Public DVB-T2 MUX 21 Operated by CRA Population coverage >99% Commercial DVB-T2 MUX22 Owned and operated by CRA Population coverage >99% Commercial DV
Slide 19: ...Providing unrivalled broadcasting offering to our customers
...Providing unrivalled broadcasting offering to our customers CRA has the last 3 positions available for TV stations & All the major media houses broadcast on CRA’s DTT networks CRA has a far superior value proposition than competitors and is the only company in Czechia able to provide services to
Slide 20: Digital Terrestrial Television is the leading platform in Europe
Digital Terrestrial Television is the leading platform in EUROPE... 42% of European households use DTT Top 3 benefits of traditional TV compared to 250 million 42% internet streaming 250 million European households In Europe, penetration of Digital receive Digital Terrestrial TV Terrestrial TV is 42
Slide 21: ...As is the case in Czech Republic
...As is the case in Czech Republic Terrestrial TV Broadcasting is preferred by most households in CR DTT is the primary platform for TV stations to distribute their content Daily TV consumption Total 3h 39m Linear TV Broadcasting 3h 16m xVoD 0h 23m Most watched TV channels & Nationwide coverage >99
Slide 22: DTT market supported by growing TV Ad and stable TV concessionaire fees
DTT market supported by growing TV Ad and stable TV concessionaire fees The value of the advertising market continues to grow, with CRA benefitting from high TV AD spend CRA has been a stable partner for the Public Broadcasting network for decades. Recent discussions to increase the TV concessionair
Slide 23: DTT offers a superior value proposition to broadcasters as well as ESG impact
DTT offers a superior value proposition to broadcasters as well as ESG impact DTT is the most energy-efficient technology for TV content distribution OTT power consumption is ~7x higher and IPTV consumption is ~11x higher than DTT Energy consumption GHG emissions Per device viewing hour (Wh) in Euro
Slide 24: DVB-T2 transition is now completed, with 5G Broadcast on the horizon
DVB-T2 transition is now completed, with 5G Broadcast on the horizon 5G Broadcast is a technology that can deliver multimedia content to mobile devices, with the advantages of broadcast technologies 5G Broadcast is compatible with DVB-T2 broadcasting in frequency planning Curent Standard Fixed Inter
Slide 25: DVB-T2 transition is now completed, with 5G Broadcast on the horizon
DVB-T2 transition is now completed, with 5G Broadcast on the horizon 5G Broadcast is a technology that can deliver multimedia content to mobile devices, with the advantages of broadcast technologies 5G Broadcast is compatible with DVB-T2 broadcasting in frequency planning CRA will leverage existing
Slide 26: Strong track record of delivering growth from OTT/HbbTV
Strong track record of delivering growth from OTT/HbbTV CRA has gained a foothold in the OTT market with the launch of a cutting-edge platform for customers looking to offer an OTT product, leveraging CRA’s know-how and cloud infrastructure. CRA’s OTT platform offers broadcasters a complete soluti
Slide 27: DAB radio transition and potential growth
DAB radio transition and potential growth CRA have been awarded the most valuable frequencies in January 2024 Frequency licences are valid until 2040 Nationwide DAB network DAB+ networks rollout plan - National DAB network “B” construction plan Technology Start of ~50% coverage tender construction 1
Slide 28: DAB radio transition and potential growth
DAB radio transition and potential growth CRA will leverage its unique existing infrastructure for the new DAB networks, giving it a competitive advantage Tower 10s of towers Antenna system Feeder 2 nationwide MUXs Combiner Transmitter Shared antenna systems HeadEnd National optical network for conn
Slide 29: Cloud & DC
September 2024 Strictly Private & Confidential Cloud & DC Shareholders & Analysts Presentation
Slide 30: Current data centre operations
Current data centre operations 8 621 3.4 Racks MW DATA CENTRES 73% Utilized 49% Utilized Unique Double-Digit 100% Uptime Proposition Growth Tier III, High SLA, No Fly Zone, Multiple Energy High security, Carrier Neutral, On CRA internet 23% Revenue CAGR Redundancies, DA peering point Mar-22-Mar-24 3
Slide 31: Czechia trails western European countries on data centre density
Czechia trails western European countries on data centre density Benchmark of data centres per 1,000 companies, 2022 Benchmark of data centre capacity per company, 2022 No. of 300 517 522 315 144 34 140 168 15 DCs1 0.23 0.65 Data centres/1000 enterprises 0.17 kW/enterprise 0.39 0.12 0.30 0.09 0.07 0
Slide 32: Czech colocation utilisation increased from outsourced demand growth
Czech colocation utilisation increased from outsourced demand growth Evolution of total colocation demand in Czechia Evolution of total colocation supply in Czechia 25% 26% 27% 81% 84% 22% 76% 78% CAGR CAGR (2019–22) (2019–22) +6% +7% MW MW 253 +4% 240 215 +4% 228 204 220 194 187 +11% 89 96 +8% 72 8
Slide 33: Key growth initiative: DC Prague Zbraslav
Key growth initiative: DC Prague Zbraslav1 Expected to be one of the largest data centres in the CEE region with up to 2,500 potential racks and total potential capacity of up to 26MW DC Prague Zbraslav (concept image) Background ▪ DC Zbraslav is the largest data centre development in Czech Republic
Slide 34: Current cloud operations
Current cloud operations #1 Local IaaS >450 >7000 Cloud provider Customers VMs1 in Czech Rep. Double-Digit CRA CRA 3400 VMs, 160 Servers, Growth 150+ Customers 85 TB RAM, 5900 Cores 28% C4C C4C Revenue CAGR 3700 VMs, 200 Servers, Mar-22-Mar-24 300+ Customers 125 TB RAM, 6200 Cores Note: (1) VM – Vir
Slide 35: CRA's IaaS offering reducing churn and increasing stickiness of customers
CRA’s IaaS offering reducing churn and increasing stickiness of customers Overview of the types of cloud services available Type Infrastructure as a Service (IaaS) Platform as a Service (PaaS) Software as a Service (SaaS) Service focus IaaS gives users access to computing resources (e.g. PaaS gives
Slide 36: Strong economic growth & room for growth in cloud adoption in Czechia
Strong economic growth & room for growth in cloud adoption in Czechia Item Key message Key considerations Growth expected to Mid-single digit GDP growth p.a. is expected in the next 5 years, this despite Economy already low and further slowing population growth accelerate Digital & Despite strong pe
Slide 37: Czech cloud market expected to grow by 15% CAGR in 2027
Czech cloud market expected to grow by 15% CAGR in 2027 Market size for cloud in Czechia, split by public/private (2018-27, CZKbn) Public Private Forecast “Czech and Slovak businesses rely on their IT Commentary partners to make IT decisions, so when these partners develop a better understanding of
Slide 38: IaaS and PaaS are the fast growing segments in the Czech public cloud
IaaS and PaaS are the fast growing segments in the Czech public cloud Public cloud market size in Czechia, split by service model segment (2018-27, CZKbn) IaaS PaaS SaaS Forecast “SaaS market is much larger than IaaS and PaaS Commentary thanks to many service providers switching from the licensing m
Slide 39: C4C growth outlook is robust
C4C growth outlook is robust Ample opportunity Ready for another bolt on to grow Experience with merger of similar size CRA IaaS Market Share in Czech Cloud provider (100+ Customers migrated is around 5 % therefore ample opportunity within 1 year) – ready for another bolt to grow. (incl. Hyperscaler
Slide 40: C4C integration update
C4C integration update Integration Progress Virtix Public Primary New joint Cloud proposition for Customers - Virtix Public Primary Joint Customer Cloud portal Merge of Cloud operational Teams Joint sales activity and planning C4C move to CRA office space 40
Slide 41: CRA Data Centre & Cloud Overview
CRA Data Centre & Cloud Overview Building a leading data centre and cloud business. 1 Stable European jurisdiction with very strong growth prospects 2 Leading edge data centre operator consisting of 8 edge owned sites, 3.5MW power capacity and 621 racks 3 FY Mar-24 Revenue of c.CZK354m1 with FY Mar'
Slide 42: Corporate Development
September 2024 Strictly Private & Confidential Corporate Development Shareholders & Analysts Presentation
Slide 43: Stable core business & attractive high growth opportunities
Stable core business & attractive high growth opportunities The new normality post-Covid has reinforced the criticality of CRA’s infrastructure A national champion, provider of critical mission digital infrastructure 1 platforms with high barriers to entry Secure Strong blue chip customer base acros
Slide 44: Stable core business & attractive high growth opportunities
Stable core business & attractive high growth opportunities Everything is connected, everything cooperates, everything supports each other Networks IoT Broadcast Telco AI OTT Infra GPU Infra Cloud Towers Data Centres 44
Slide 45: CRA DC platform can become the market leader in Czech Republic
CRA DC platform can become the market leader in Czech Republic... Edge Data Centres DC Zbraslav opportunity Business as usual New potential Selling out remaining DC Capacity Expand CRA into leading regional DC Player ▪ Steady sell-rate of capacity for small/medium customers at ▪ 2000+ and 26 MW new
Slide 46: Benefiting from owning the largest independent Czech cloud provider
...Benefiting from owning the largest independent Czech cloud provider Cloud Cloud opportunity Business as usual New potential Harmonization of cloud proposition CRA & New services & foreign markets Cloud4Com ▪ Unified cloud services portfolio covering all infrastructure needs ▪ Kubernetes – platfor
Slide 47: Existing tower portfolio could be leveraged beyond the MNO customer base
Existing tower portfolio could be leveraged beyond the MNO customer base IoT (Internet of Things) IoT opportunity Business as usual New potential Efficiency Boost Technology Extension => Multiplatform ▪ Integration into the Netmore Groupe (International partnership) ▪ Long Term Strategy - IoT Multi-
Slide 48: Additional security and value added services strengthen the Telco portfolio
Additional security and value added services strengthen the Telco portfolio Security Security opportunity Business as usual New potential To be between TOP 5 partners for cybersecurity Building the CRA cybersecurity brand on the CZ market ▪ Analyzing the state of customer cyber security (based on EU
Slide 49: Financial Overview
September 2024 Strictly Private & Confidential Financial Overview Shareholders & Analysts Presentation
Slide 50: Summary financials FY Mar' 22-24
Summary financials FY Mar' 22-24 Strong revenue growth, high profit margins and increased investment in the future Figures in CZK millions unless otherwise stated Revenue Gross profit CAGR CAGR +6.1% +6.3% 2,506 1,915 1,700 1,753 2,264 77.4% 2,219 76.6% 76.4% Mar-22 Mar-23 Mar-24 Mar-22 Mar-23 Mar-2
Slide 51: Increased revenue diversification coupled with strong growth
Increased revenue diversification coupled with strong growth Figures in CZK millions unless otherwise stated Data centres, cloud Broadcasting Towers & telecoms & OTT CAGR CAGR CAGR +7.7% +3.3% +24.3% 1,192 360 1,117 1,123 953 879 822 17 98 323 11 312 317 262 Revenue (CZK million) 22 Revenue (CZK mil
Slide 52: CRA's cost structure drives strong operating leverage
CRA's cost structure drives strong operating leverage Mar-24 - COGS mix Commentary Graph ▪ Energy prices currently represent c.31% of total COGS Energy consumption 16% – CRA’s policy is to hedge 1/3 of its power three years in Support services advance and gradually moving to be hedged 100% level by
Slide 53: Capex investments support CRA future growth
Capex investments support CRA future growth CRA’s high EBITDA margin and cash conversion provide the funds needed to reinvest in the business Figures in CZK millions unless otherwise stated Capex as % of revenue Commentary 20% 17% ▪ CRA’s capex is divided into two main categories 13% 11% 10% – Growt
Slide 54: Robust balance sheet and cash flow generation
Robust balance sheet and cash flow generation Strong free cash flow generation supported by continued investment in growth capex supports significant deleveraging over time Figures in CZK millions unless otherwise stated Cash flow and net debt Credit ratio 9.07 x 8.66 x 8.72 x 3,651 7.83 x 3,300 2,9
Slide 55: Refinancing objectives
Refinancing objectives Six key objectives to support the growth of CRA and CORD Objective Rationale CORD operates a Buy, Build & Grow strategy and will seek to generate new business opportunities Support growth and further 1 diversification of the business with CRA through growth capex and bolt-on a
Slide 56: CRA has just completed a very successful refinancing
CRA has just completed a very successful refinancing Long-term financing package of CZK 5 billion to refinance existing indebtedness and raise additional funding for growth capex and bolt-on acquisition opportunities. CZK 5 billion 6-Year 2% Total refinancing facility Tenor maturity Starting credit
Slide 57: Hedging considerations
Hedging considerations Currently CRA's debt is 86% hedged till March 2025 (at pre-Covid levels) CZ policy rate (%) PRIBOR at lowest level in last 24 months 57
Slide 58: Summary
Summary Stable & predictable revenue New growth High cash initiatives conversion Capex Strong balance investment sheet Secure revenue & cash generation Long-term growth potential 58
Slide 59: ESG Strategy & Progress
September 2024 Strictly Private & Confidential ESG Strategy & Progress Shareholders & Analysts Presentation
Slide 60: CRA's sustainability and profitability product-led approach
CRA’s sustainability and profitability product-led approach We know that our activities have an impact on the environment and on people’s lives. That is why we adhere to ESG principles. ▪ Reducing the carbon footprint of the digital economy: - integrating renewable energy and CRA‘s and Cordiant’s fo
Slide 61: Environment: CRA making progress on climate-related commitments
Environment: CRA making progress on climate-related commitments Increasing share of GHG emissions renewable electricity Figures in t CO2e unless otherwise stated Total accounted for emissions decreased by 38% 17 2024 target 100% 13 1,156 1,024 2022 2023 2023 69% 11,090t 6,820t 9,917 5,783 2022 47% S
Slide 62: Environment: Promoting efficiency across CRA's growth projects
Environment: Promoting efficiency across CRA’s growth projects Repurposing brownfield sites Building a state-of-the-art data centre Decommissioned TV and in particular AM broadcasting sites have a As a brownfield site, the DC Zbraslav site can take advantage of existing number of attractive characte
Slide 63: Covering the entire Czech Republic with DTT
Covering the entire Czech Republic with DTT DTT is the most energy-efficient technology for TV content distribution OTT power consumption is ~7x higher and IPTV consumption is ~11x higher than DTT Energy consumption GHG emissions Per device viewing hour (Wh) in Europe Per device viewing hour (gCO2e)
Slide 64: Social: continued tradition of social responsibility and community engagement
Social: continued tradition of social resposibility and community engagement Active engagement and value-based endorsements New employees Gender diversity 46% who identify as women Continuous knowledge base Community support Upcoming social projects Active participation Organising excursions Company
Slide 65: Governance: Integrated system supported by both processes and people
Governance: Integrated system supported by both processes and people Company-wide integration, risk management, and responsible strategy Upcoming projects Dedicated ESG Team Transparency Fair competition (prevention bribery & corruption) CRA is creating a dedicated ESG Team to better integrate our e
Slide 66: Thank you
September 2024 Strictly Private & Confidential Thank you
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