Spark New Zealand Limited · NZX:SPK
Spark New Zealand — Investor Day (March 2021)
41 slides from Spark New Zealand's investor day presentation, Mar 24, 2021
Slide 1: IT & Managed Services Presentation
IT & MANAGED SERVICES PRESENTATION GRANT MCBEATH | CUSTOMER DIRECTOR TESSA TIERNEY | PRODUCT DIRECTOR STEFAN KNIGHT | FINANCE DIRECTOR WEDNESDAY 24 MARCH 2021
Slide 2: Executive Summary: Diversified Business, Sustainable Growth
EXECUTIVE SUMMARY: DIVERSIFIED BUSINESS, SUSTAINABLE GROWTH With a long history as Telecom New Zealand, Spark is • Spark’s growing IT & Managed Services offering synonymous with telecommunications – and the vast majority is supported by a highly-valuable infrastructure asset portfolio, which is uniq
Slide 3: Sector Overview & 3 Year Strategy
SECTOR OVERVIEW & 3 YEAR STRATEGY
Slide 4: What is IT & Managed Services?
WHAT IS IT & MANAGED SERVICES? CUSTOMER NEEDS Cost High-quality, Trusted Cost- Digital trust, Local / effective and Remote and nationwide Access to advice and effective Seamless data privacy regional compliant digital managed global cloud managed technology ‘always on’ and security support from clou
Slide 5: What is IT & Managed Services?
WHAT IS IT & MANAGED SERVICES? CUSTOMER NEEDS Cost High-quality, Trusted Cost- Digital trust, Local / effective and Remote and nationwide Access to advice and effective Seamless data privacy regional compliant digital managed global cloud managed technology ‘always on’ and security support from clou
Slide 6: IT & Managed Services Represent Around 1/3 of Group Revenues
IT & MANAGED SERVICES REPRESENT AROUND 1/3 OF GROUP REVENUES IT & Managed Services, Cloud, $225m ~$1,104m 31% Security, $37m Service Management, $158m Other Business Revenues, 25% Procurement & Partners, $407m Consumer Collaboration, Revenues, 44% $65m Managed Data and Networks, $212m Spark Group Re
Slide 7: Our IT & Managed Services 3-Year Strategy
OUR IT & MANAGED SERVICES 3-YEAR STRATEGY To be New Zealand’s leading agnostic cloud custodian, bringing the best of private and public cloud together with our service expertise, supported by ‘always-on’ connectivity. HOW WE WILL DELIVER Foundations provided by an infrastructure asset portfolio whic
Slide 8: The Growth Opportunity
THE GROWTH OPPORTUNITY
Slide 9: The Market Is Growing at Pace Presenting Opportunities & Challenges
THE MARKET IS GROWING AT PACE PRESENTING OPPORTUNITIES & CHALLENGES Businesses were digitising at pace before COVID-19 – this trend has now accelerated. By 2025, 80% of enterprises globally will migrate entirely away from on-premise digital storage, moving to colocation or cloud(1) • The demand for
Slide 10: Spark Is Well Positioned to Secure Our Share of This Growth
SPARK IS WELL POSITIONED TO SECURE OUR SHARE OF THIS GROWTH • Spark is the only domestic operator who can provide end-to-end IT & Managed Services that incorporates connectivity and mobility. We are best placed to help businesses manage this transformation to the cloud and to continue providing mana
Slide 11: Our Growth Is Underpinned by a Highly Valuable Infrastructure Asset Portfolio
OUR GROWTH IS UNDERPINNED BY A HIGHLY VALUABLE INFRASTRUCTURE ASSET PORTFOLIO • Increased interest in quality infrastructure assets. • Spark has NZ’s largest and fastest growing set of IoT networks. • Spark has a significant infrastructure asset portfolio. • Our aim is to drive greater capital effic
Slide 12: The Growth Opportunity
THE GROWTH OPPORTUNITY We are well positioned to capture growth within the IT & Managed Services market Spark FY20 Spark FY20 Spark FY20 FY20 Market Spark FY21 to FY23 Revenue Revenue Revenue Revenue ($m) Aspiration - CAGR ($m) Share Growth Cloud Similar rate of growth (but ~ $730m $225m ~31% 6% (in
Slide 13: Our Margins Will Change as the Market Evolves
OUR MARGINS WILL CHANGE AS THE MARKET EVOLVES OPPORTUNITIES EXIST TO IMPROVE MARGINS TO OFFSET COMPETITIVE PRESSURE Managed data, Cloud, security and service management Procurement and partners networks and services Service management Cloud (including (including Managed data Security Procurement IT
Slide 14: Responding to the Hyperscale Opportunity
RESPONDING TO THE HYPERSCALE OPPORTUNITY The organic growth pipeline and demand for cloud services is attracting hyperscalers to the New Zealand market. We are managing this risk through the following activities: • Focus on end-to-end product and service portfolio beyond cloud to enable the delivery
Slide 15: Why Spark?
WHY SPARK? * Spark=
Slide 16: Over the Past 16 Years We Have Scaled Our IT & Managed Services Offering
WE HAVE ACTIVELY PURSUED OPPORTUNITIES & SUCCESSFULLY SCALED OUR IT & MANAGED SERVICES OFFERING OVER THE PAST 16 YEARS Purchase of Divestment of Takanini Data Computer Concepts Ltd MATTR launched Spark Health CCL’s networking Gen-i Davanti consulting Centre Completed (CCL) acquired brand launched di
Slide 17: We Now Have a Diverse Multi-Brand Portfolio
WE NOW HAVE A DIVERSE MULTI-BRAND PORTFOLIO… 1 New Zealand’s most reliable and secure technology backbone for business; network, connectivity, Solutions for verifiable security and ICT services data and digital trust The Spark Group brings together best in class expertise IoT and capabilities to
Slide 18: We Have the Capability to Serve All Business Segments
WE HAVE THE CAPABILITY TO SERVE ALL BUSINESS SEGMENTS PROPOSITION IDEAL CUSTOMER SIZE CHANNEL Spark Direct Reliable and secure technology backbone for Corporate, Enterprise and Higher-touch national channel with account leads business; network, connectivity, security and ICT Government and embedde
Slide 19: Investment: Significant Differentiation and Competitive Advantages
INVESTMENT • Significant network investment – over $200m WITH SIGNIFICANT in FY20 with approximately one third of this DIFFERENTIATION AND invested in IT & Managed Services and the COMPETITIVE ADVANTAGES remainder in telco networks. • IT & Managed Services investment is a key component of over $600m
Slide 20: Capability: Significant Differentiation and Competitive Advantages
CAPABILITY • ‘One stop shop’ for customers – can provide a more WITH SIGNIFICANT integrated experience across products and services. DIFFERENTIATION AND • Extensive telco capability – Managed Data and COMPETITIVE ADVANTAGES Networks, Mobile, Voice, IoT, and leading IaaS and Hybrid Cloud business. •
Slide 21: Local Advantage
LOCAL ADVANTAGE • A market-leading IT service provider brand in NZ and WITH SIGNIFICANT leading player across all major customer segments. DIFFERENTIATION AND • Presence in more than 25 cities and towns with hundreds COMPETITIVE ADVANTAGES of professional service and engineering people across NZ. •
Slide 22: Case Study: Fidelity Life
Financial Services CASE STUDY: FIDELITY LIFE When Fidelity Life approached Spark looking to strengthen security as part of it’s cloud transformation, we saw an opportunity to use our multi-brands to deliver a truly innovative solution. CHALLENGE SOLUTION RESULTS • Fidelity Life is one year into a fi
Slide 23: Products and Services
PRODUCTS AND SERVICES
Slide 24: IT & Managed Services – Product & Services
IT & MANAGED SERVICES – PRODUCT & SERVICES CUSTOMER NEEDS Cost High-quality, Trusted Cost- Digital trust, Local / effective and Remote and nationwide Access to advice and effective Seamless data privacy regional compliant digital managed global cloud managed technology ‘always on’ and security suppo
Slide 25: Cloud Including Datacentres
CLOUD INCLUDING DATACENTRES OPPORTUNITY FOR SPARK TO DIFFERENTIATE BASED ON PROVIDING HYBRID CLOUD SERVICES WITH LOCAL FULL-SERVICE SUPPORT Cloud, security and services management Procurement and partners Managed data, networks and services Cloud Security Service management Procurement IT Partners M
Slide 26: Security
SECURITY CUSTOMERS ARE LOOKING FOR SECURITY AS AN OUTCOME OF MANAGED SERVICES RATHER A STAND-ALONE SOLUTION. THUS IT SUPPORTS CROSS-SELL FOR OTHER OPPORTUNITIES Cloud, security and services management Procurement and partners Managed data, networks and services Cloud Security Service management Proc
Slide 27: Service Management
SERVICE MANAGEMENT KEY DIFFERENTIATOR FOR SPARK BASED ON LOCAL SCALE AND CAPABILITY Cloud, security and services management Procurement and partners Managed data, networks and services Cloud Security Service management Procurement IT Partners Managed data and networks Collaboration What's in this ca
Slide 28: Case Study: Client A
CASE STUDY: CLIENT A Client A undertook a large-scale migration of its IT to CCL’s Infrastructure-as-a-Service (IaaS) platform. This was part of a broader digital transformation programme spearheaded by Spark, to help the client redefine its customer experience and achieve its vision of “digital by
Slide 29: Procurement and Partners
PROCUREMENT AND PARTNERS AN AREA WHERE GROWTH HAS BEEN DRIVEN BY COVID-19, AND WHICH SUPPORTS SPARK’S BROADER IT & MANAGED SERVICES OFFERINGS Cloud, security and services management Procurement and partners Managed data, networks and services Service management / Colocation IaaS & Public Cloud Secur
Slide 30: Managed Data & Networks
MANAGED DATA & NETWORKS 4.9G AND 5G ARE OPENING UP NEW OPPORTUNITIES TO REPLACE FIXED CONNECTIVITY INPUTS I.E. THE BUSINESS EQUIVALENT OF WIRELESS BROADBAND Cloud, security and services management Procurement and partners Managed data, networks and services IaaS & Public Cloud Security Service manag
Slide 31: Case Study: VTNZ
Transport CASE STUDY: VTNZ Spark collaborated with VTNZ to deliver an SD-WAN solution for their business that would enable the digital transformation they were looking for 31
Slide 32: Collaboration
COLLABORATION AN AREA OF GROWTH WITH COVID-19 DRIVING DEMAND FOR FLEXIBLE AND COLLABORATIVE WORKING SOLUTIONS Cloud, security and services management Procurement and partners Managed data, networks and services Service management / Colocation IaaS & Public Cloud Security Procurement IT Partners Mana
Slide 33: Case Study: Client B
CASE STUDY: CLIENT B A digital workplace designed to support a radical shift in the way Client B works, enabling them to connect, create, communicate and collaborate from anywhere, anytime. CHALLENGE SOLUTION RESULTS • Client B had undergone some significant • The solution combines IT Services, Desk
Slide 34: Summary
SUMMARY
Slide 35: Diversified Business, Sustainable Growth
• Spark is a more diversified business than broadly recognised • The IT & Managed Services sector is growing strongly both locally and globally, benefiting from supportive macro trends • Spark is uniquely positioned in the market to deliver end-to-end Managed Services DIVERSIFIED • Our success in th
Slide 36: Appendix
APPENDIX
Slide 37: Spark's end-to-end IT & Managed Services offering is locally unique
37 Spark’s end-to-end IT & Managed Services offering is locally unique and creates competitive advantage Product Revenue profile Spark’s position Market trends Professionals Services Non-recurring • Significant capability in business transformation • Growing demand for expertise to deliver cloud sol
Slide 38: Improvements to Spark's disclosures
To provide greater insight into Spark’s IT and Managed Services portfolio, we have made a number of improvements to Spark’s disclosures Updated classification of CCL Expansion of cloud, security and Introduction of new volume and Introduction of two new power solutions and cloud-based telephony serv
Slide 39: Impact on Spark's financial disclosures
The resulting impact on Spark’s financial disclosures is summarised below and is provided in more detail in the accompanying detailed financial workbook Previous Disclosure Updated classification Expansion of cloud, New Disclosure of CCL solutions and security and service cloud-based telephony manag
Slide 40: Glossary
Glossary Term Definition Co-location (co-lo) Co-location refers to providing space in datacentres for customers' equipment and servers Datacentre Datacentres are specialised, centralised facilities where computing and networking equipment is housed The tier rating for a datacentre is a certification
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